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New homes picking up 68% of growth cost for roads

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POSTED October 5, 2017 1:28 a.m.

An updated major road fee that is weighted heavily on the back of residential growth is now in place.
The Manteca City Council Tuesday updated the fees required to help pay for growth’s share of needed freeway interchange and major road improvements. It is the first time the fee has been adjusted in 24 years. Going forward the fee will be adjusted annually based on construction inflation.
Building Industry Association of the Delta CEO John Beckman told the council that setting fees for roads is “part science and part art.”
Beckman pointed out that while the limits of what fairly could be charged off to residential trips had to be stretched to the max, home builders were supportive of the effort due to how critical business park job growth and retail is to Manteca’s future.
New residential homes will pay 68 percent of the $215 million projected to be needed over the next 20 years to help pay for interchange and major road work compared to 32 percent for commercial and industrial.
By “stretching” the justification for residential based on trip generation, the city was able to make Manteca more appealing for commercial, office and business park growth. Two months ago when the first updated fees were rolled out, the cost burden was so high on commercial that the developers of the proposed SaveMart shopping center on the southwest corner of Woodward Avenue and South Main Street indicated it would likely kill the project.
Last week they sent correspondence to the city indicating the fees Manteca ended up adopting would make the project pencil out.
They will be paying $6,550 per 1,000 square feet of community commercial for a 45,000-square-foot store. While that fee is still 13 percent higher than the average charged in Lathrop, Modesto, Stockton, and Tracy, Community Development Director Greg Showerman noted Modesto and Lathrop are in the process of updating their fees that haven’t been increased in 10 years.
The new road fees
Manteca’s new road fees and how they compare to the region average are:
u$8,300 for single family residential, or 2 percent higher than the $8,118 regional average.
u$5,900 a unit for multi-family residential or 4 percent higher than the $5,597 regional average.
u$7,125 per 1,000 square feet for medical offices or 25 percent lower than the $9,563 regional average.
u$2,180 per 1,000 square feet for general/professional offices or 48 percent lower than the $4,228 regional average,
u$6,550 per 1,000 square feet for community commercial or 13 percent higher than the $5,802 regional average.
u$9,950 per 1,000 square feet for regional commercial or 37 percent higher than the $7,272 regional average.
u$1,495 per hotel room or 62 percent lower than the $3,964 regional average.
u$1,495 per 1,000 square feet for industrial park/research and development or 19 percent lower than the $1,839 regional average.
u$795 per 1,000 square feet for distribution/high cube spec building or 20 percent lower than the $990 regional average.
Councilman Richard Silverman noted the new fees plus Manteca’s centralized location to Tracy, Modesto, and Stockton should give it an edge in competing for regional medical officers and general offices. It was noted the advantage would likely improve even more once Lathrop and Modesto update their fees.

Overall project list
$99 million less after
dropping 2 interchanges
Initially the updated fees were based on work costing $306 million that the city had identified through 2040. Dropping new interchanges on Highway 99 for the proposed Raymus Expressway south of Austin Road and an envisioned extension of Lovelace Road midway between French Camp Road and Lathrop Road eliminated most of the $99 million for the reduced project list. Interchange work had accounted originally for $159 million of the proposed fee hike. The fee had originally includes six interchange projects and work on two freeway overcrossings. That is significantly more interchange work than Tracy, lathrop, and Modesto are facing.
“We had to pay a price,” Silverman said in reference to the two interchanges on Highway 99 being dropped.
He noted if at some point the city decides to go forward with either interchange they’d have to find a way to fund the entire tab.
The fees being collected on growth will not pick up 100 percent of the costs of needed projects, just $215 million worth of the tab. That’s because California law makes it illegal for growth to pay for more infrastructure than it actually needs.
Councilman Mike Morowit was pleased that the update fee includes annual adjustments for construction inflation.
“A lot of money was left on the table,” Morowit said of the city not adjusting he road fee for growth over the last 24 years.
Councilman Gary Singh said he wanted to see either an annual or once every two year review of the fees and projects to see if they are still on target for what is needed.
City Manager Tim Ogden noted staff would be asking the council sometime over the next month to prioritize road projects — including the Atherton Drive gap between Union Road and Airport Way — at one time.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
 


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