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WILL FEES KILL RETAIL?

Council fears major road fee may also cost jobs

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WILL FEES KILL RETAIL?

The proposed McKinley Avenue/120 Bypass interchange is one of six interchanges growth fees are needed to cover the cost of growth-related work.

HIME ROMERO/The Bulletin/


POSTED July 17, 2017 12:47 a.m.

A major supermarket chain wants to build a store on the southwest corner of Main Street and Woodward Avenue in South Manteca

If it is a typical 45,000-square-foot store, it will cost the grocery firm $1,538,010 alone for a proposed major road fee.  

That’s a bargain compared to the proposed 750-room hotel that’s part of a 60-acre plus destination resort including an indoor waterpark, conference center, outdoor waterpark, and other outdoor amusements such as go-cart racing that Manteca is reportedly getting down to the wire in negotiations. At a proposed $4,844 charge per room for major roads, that fee alone would come to a $3,633,000.

The proposed major road fees for a single family home range from $2,661 for the central district to $7,896 south of Woodward Avenue and east of Union Road to $13,800 east of Highway 99 and north of East Highway 120.

And if the 404,000-square-foot 5.11 Tactical distribution center now under construction along Airport Way near Roth Road were subject to the proposed fees — which it is not — they would be charged $944,956. It is costing $29.3 million to construct the distribution center.

Once you pile on the other city fees for growth costs as well as water and sewer connections and toss in the cost of the land and construction, city leaders like Mayor Steve DeBrum fears Manteca may end up pricing itself out of the market for retail and business park growth.

It is why they balked at adopting the new major road fees at the July 5 meeting and requested staff return to Tuesday’s meeting with options of possibly reducing the fees. The council meets at 7 p.m. at the Civic Center, 1001 W. Center St.

 

Major road fee hasn’t

been current since 1993

The fee for major roads has not been current since 1993. That means development that has occurred in the past 24 years has not been covering 100 percent of their fair share of major road needs. State law prohibits cities from charging growth beyond what impacts they occur. That means the fee can only reflect the cost growth incurs and not pick up the tab for existing development. Once new construction is built at fees lower than what could have been justified, the city can’t go back and collect them from that growth nor can they pass it on to new growth.

Staff has suggested council could tap into general fund undesignated reserves, bonus bucks collected for sewer allocation certainty for new home construction, or general fund economic revitalization services.

The over major road fees that are part of the Public Facilities Implementation Plan (PFIP)  as developed by the consultant are designed to generate $306 million over the next 20 years for major thoroughfares, intersection upgrades and partially fund work on six interchanges and two freeway overcrossing widening projects.

Part of the problem is just over half of the $306 million is going for costly interchange work. Most cities have one or two interchanges they need to pay for but Manteca has six. It would have eight but state funds, bond money and Measure K receipts paid. Take out the freeway interchange work and the fees would be halved. 

There is also the possibility the expensive Raymus Parkway interchange between Jack Tone Road and Austin Road wouldn’t be needed if state plans to improve safety and traffic operations at the 120 Bypass and Highway 99 interchanges goes with an option to keep ramps at Austin Road in such a manner it significantly increases traffic volume. In all options being considered, Austin Road would also have a bridge structure that would go across the railroad tracks as well as Highway 99. The Austin Road work is on the state’s dime.

If Austin Road is upgraded to a fully functioning interchange it would likely eliminate the pressing need to build an interchange for Raymus Parkway reducing the $306 million needed from the fees by roughly 10 to 20 percent

The council is being asked to increase the consultant’s budget for the PFIP fee work from $624,900 to $754,900 to conduct further calculations and look at various strategies to soften the impact of the road fee on retail and business parks.

State law prohibits the city from having one category such as new homes subsidize another category such as new retail.

 

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com

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