San Diego Builders Cry Foul Over Road Fee
Joining a lawsuit against the San Diego County Board of Supervisors, the Building Industry Association of San Diego County is attempting to make changes to a recently adopted Transportation Impact Fee (TIF) that its opponents contend is a “fatal blow” to the area’s economic development.
In some places, the retail fee that was adopted on April 13 by a four-to-one vote will be as high as $62 per square foot, which represents a tax of $2.48 million on a typical 40,000 square-foot grocery store, making its construction infeasible.
By comparison, the two building trade associations in the suit complain, fast-growing Riverside County charges $2.83 per square foot for its transportation fee and Phoenix assesses just 35-cents to $4.50 a foot for the same purpose.
“This is a serious offense by government,” said Paul Tryon, chief executive officer of the San Diego BIA. “We’re talking about nearly $1 billion in new taxes, over and above what residents and businesses are already paying for roads.”
“The county gave us no alternative because this fee, as proposed, is unfair and puts our industry out of business,” said Mike McNerney, president of the San Diego Chapter of the National Association of Industrial and Office Properties (NAIOP-SD), which is the other plaintiff in the suit.
McNerney’s association reported that one of its members who paid $5 million for unimproved retail land abandoned the project it had been planning after it calculated that the new fee would have added $5.6 million in costs.
Even though the county has just finished designating lands for commercial and industrial development in its general plan for 2020, the transportation fee, according to San Diego’s builders, will put a moratorium on development that will kill off job creation and new economic activity in the area.
The litigants have charged that the fee is not reasonably related to the actual impacts of commercial and residential development, as required by state law. Further, builders said, senior county staff ignored information and analysis that were presented by engineering experts and made assumptions based on flawed data and overly exaggerated estimates of the impacts of growth.
“Our engineering experts have found that the county is trying to burden future development with 70% of the cost of future roads, but that development will only use up to 35% of the new capacity created,” said Tryon. “This fee wrongly doubles development’s appropriate share of the cost.”
“This lawsuit is not an effort to avoid a fee,” he added, “but a necessary action to secure a fee that is equitable and workable. The building industry is a good corporate citizen with a solid track record of paying for and building the region’s roads, and will continue to do so to offset it impact on roads.”