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SR-08-28-2012-4ACity Council Meeting: August 28, 2012 Agenda Item: To: Mayor and City Council From: David Martin, Planning and Community Development Director Subject: Discussion of a proposed Transportation Impact Fee to facilitate developer contributions to transportation network improvements and achieve no net new trips in the afternoon peak hour. Recommended Action Staff recommends that the City Council review and comment on the Nexus Study and proposed Transportation Impact Fee, and direct staff to proceed with preparation of an ordinance to establish the fee. Executive Summary During preparation of the Land Use and Circulation Element (LUCE) which was adopted in July 2010, the City Council directed staff to pursue the creation of a transportation impact fee on new development as one of the means to achieve the transportation goals of the LUCE. The fee has been a long anticipated implementation measure of the LUCE, being identified early in the process, including in the Initial Outreach, Assessment, and Emerging Themes document. The fee would help offset the costs of building a robust transportation network, including improvements for those who walk, bicycle, and use transit, along with congestion management. This network is critical to achieve the vision of no net new automobile trips in the PM peak hour with a Santa Monica origin or destination and, with other funding sources, can be built using fees on new development, complementing project features supporting alternative transportation and any required mitigation measures. Based on a nexus study and draft ordinance prepared by staff, the Planning Commission voted unanimously on March 14, 2012 to recommend Council establish the proposed Transportation Impact Fee. The transportation impact fee would partially fund the costs associated with improvements to the bicycle, walking, transportation demand management, parking, transit, and auto networks necessitated by new development. Background Transportation improvements are consistently identified as a top priority for Santa Monicans and the adopted LUCE outlined a comprehensive approach for providing greater transportation choice for traveling to and within Santa Monica. It identified specific goals, objectives and actions for walking, cycling, driving, transit, parking and 1 transportation demand management and an integrated approach with land uses throughout the City. The action items included physical changes, modified policies, and new programs; it also included methods to achieve them. Significantly, it included a recommendation to create and implement a transportation impact fee. On September 23, 2008 City Council directed staff to proceed with the development of a transportation modeling tool and a nexus study. On December 2, 2008 Council authorized an agreement with the consulting team of Fehr & Peers with Nelson /Nygaard to create the citywide Travel Demand Model that is tailored to Santa Monica and to prepare a nexus study using the model that would support a transportation -based development impact fee. A central tenet of the LUCE is the commitment to no net increase in vehicle trips during the evening peak hour with a Santa Monica origin or destination. The City is working to expand travel choices to encourage a shift of some existing and new trips from single - occupancy vehicles to other, more sustainable modes of travel, including transit, bicycling, walking, and shared rides in order to achieve the no net new trips goal. Coordinated with the LUCE land use strategy to focus activity near high- frequency transit corridors and future Expo stations, strategic transportation investments are key to creating more travel choices for both residents and visitors. With the arrival of the Expo line, Santa Monica is receiving a regional investment in transit with light rail connecting through the Westside to Culver City and Downtown Los Angeles. By providing a fixed alignment, reliable, inexpensive and comfortable alternative to driving alone, transit will become an increasingly appealing and reliable mode of travel, building on the existing ridership of both Big Blue Bus and Metro bus service. This will mean an increase in demand for connections by the Big Blue Bus as well as an increase in pedestrian and bicycle trips as people make the first and last mile connections to and from the three light rail stations in Santa Monica. 2 As a healthy, fun and emissions -free alternative, bicycling has grown in popularity in recent years. The LUCE builds on this momentum to increase the mode share of bicycling. To this end, the Bicycle Action Plan, approved by Council in November 2011, identifies a transformative 5 -year implementation strategy and a 20 -year vision that prioritize investments in facilities and education. New lanes, paths and bike racks will provide crucial last -mile connections to goods, services, jobs and transit. The facilities include a range of treatments to appeal to all types of cyclists. Education campaigns will empower cyclists and instruct both cyclists and motorists in the rules of the road. Bikeshare will supplement trips made by walking and transit. Santa Monica has long been devoted to investing in pedestrian infrastructure, including sidewalks and enhanced crosswalks. Examples of this investment can be seen on Wilshire Boulevard, with its many marked crosswalks and landscaped medians. The LUCE identified sidewalk improvements along the boulevards to complement the mixed use housing and land use strategy and accommodate demand generated by past and future investments. This is also true near the future Expo Light Rail where creating walkability to serve walkers and to address the need for direct pathways in former industrial areas underscore this support. Walking should continue as both a functional and recreational activity for Santa Monicans, providing opportunities for health and wellness, access to community resources for youth and seniors and convenient provision of goods and services. Additionally, the recently initiated Pedestrian Action Plan is anticipated to identify strategic investments and prioritize future actions. Transportation Demand Management (TDM) is also a key piece of the transportation strategy to reduce single occupancy vehicle trips and improve air quality. Development Agreements are being negotiated that include strong TDM measures to incentivize reduced automobile dependence, including providing free or low -cost transit passes, unbundled parking, and carpooling. The City's current trip reduction ordinance is being revised in parallel with the Zoning ordinance update. 3 A viable future network for auto drivers, pedestrians, cyclists and transit users would rely on investment by the private sector and the public sector. As proposed, the Transportation Impact Fee would offset part of the costs associated with the identified transportation improvements, but not cover the full cost of these improvements. City funds and County transportation funds, such as those from Proposition A, Proposition C and Measure R would need to be applied for and awarded. Not all transportation changes will need to occur in the public right -of -way through capital improvement projects; new buildings will need to provide the infrastructure to support walking, cycling and riding transit on their own property through changes in the zoning ordinance and as negotiated through development agreements. These continued investments in the future of Santa Monica will help ensure the community's on -going economic health and vitality. Impact fees, contributions and taxes are something that the City Council has adopted into the Municipal Code over time to ensure that community values are reflected in new development. Adopted fees include affordable housing, parks, arts, and childcare. The Council has recently requested the evaluation of an update to the open space fees, and affordable housing fees for non - residential development. The proposed Transportation Impact Fee reflects Council's direction from 2008, incorporates the policy and project priorities from the adopted LUCE, and pursues community priorities for access, mobility and pro- active congestion management in Santa Monica. Discussion The City of Santa Monica is continually investing in the transportation network to meet changing demands, maintenance and safety standards. Past investments have yielded improvements, from optimizing the auto flow by upgrading traffic signal technology to creating the Santa Monica Bike Center, from creating an internationally recognized transit system with the Big Blue Bus to making it easier for pedestrians to cross the street by building median refuge islands and curb extensions. Continued investment is needed for autos, transit, walking and cycling to achieve community goals for livability, access, and no net new trips. The City alone does not have the resources to build this 4 improved network, and new land uses and development needs to participate in the completion of transportation systems necessary to serve future demand. Cities throughout California increasingly rely on impact fees justified by nexus studies to ensure that the costs of infrastructure and services necessary to support new development are not born disproportionately by existing residents, businesses and /or property owners. Santa Monica currently has fees and requirements to make sure that new development projects offset their demand for new services in the community. The existing project mitigation fee for parks and housing predates the Mitigation Fee Act; the current Child Care Linkage Program was adopted in compliance with its terms. The City collects fees in the form of a Private Developer Cultural Arts contribution. The City has prepared a Transportation Impact Fee nexus study (Attachment A) that outlines the purpose, rationale, and structure of a proposed transportation impact fee for new development including a detailed description of the projects and programs to be funded by the potential fee revenues. The study: • Establishes the need for the fee by forecasting future traffic conditions that would result from future development without the transportation improvements and trip reduction strategies contained in the LUCE; resulting in failure to achieve the no net new trips goal. • Identifies a capital projects list based on LUCE transportation action items and programs and the LUCE FEIR (e.g. sidewalks, car - sharing, bike facilities, bus stops and mobility centers) that does not duplicate costs associated with developer or employer TDM programs or improvements required for project mitigations. • Estimates the total cost of construction for the capital project list, including project administration, design and contingency at approximately $134 million based on conceptual project costs. • Assesses multi -modal transportation impact by development type (multi - family residential, retail, etc.) as measured by PM peak hour vehicle trip generation and accounting for differences based on location and mix of land uses. • Identifies a maximum potential fee by development type (using square footage or residential unit count) proportional to the multi -modal transportation impact of that use, with the goal of accounting for 74 percent of the new trips (26 percent of new trips are attributed to regional pass- through and cannot be assessed to new development). 5 • Presents a reduced fee that would recover approximately one -half of the allowable capital project costs based on a review of comparable transportation impact fees from other Southern California communities. The study meets the requirements of state law by demonstrating the reasonable relationship between the proposed fee and the projected transportation needs of development that the fee - funded transportation projects and programs are intended to address. In doing so, it explains the mechanism to ensure that new development would pay towards the costs of providing transportation infrastructure necessary to implement No Net New Trips and the sustainable transportation policies and goals of the LUCE. This report presents the nexus study as well as key components of the proposed Transportation Impact Fee which was reviewed by Planning Commission on March 12, 2012 and recommended for approval. Since the hearing, comments and concerns have been raised by the Chamber of Commerce and business groups. In considering the enclosed information, the City Council may want to consider some of the following questions and concerns raised: • Rates: Has the rate for the transportation impact fee been set appropriately? The report explains the methodology for how rates were developed, based on the estimated trip generation impacts of net new development for a variety of land use types in Santa Monica. This report contains information regarding how rates compare with other cities. The proposed rates are on the high end of the range of fees charged by other California cities. It should be noted that the City of Los Angeles is in the process of updating the West LA Transportation Improvement and Mitigation fee program and it is expected that these fees will be increased. The Chamber has raised concerns that the combined effect of City fees could push development away to other cities and /or disincentivize desirable uses. Staff has agreed to evaluate this issue through an economic impact study before returning to City Council. • Affordable Housing Exemption: The Planning Commission recommended exemption for affordable housing units that include public funding (exemptions for recreation, religious and government uses are currently included). Additionally, all affordable housing for very-low and low income households could be exempted. In response to these suggestions, staff recommends that all publicly- funded and all very -low and low income affordable housing units be exempt. 2 • Other Exemptions: Should additional exemptions be included such as outdoor dining? Staff agrees that outdoor dining in the public right -of -way should be exempt. • Credit for Existing Structures: Should the TIF fee provide a credit for existing land uses? The proposed TIF includes a credit for existing land uses that are removed. The fee is based on net changes so that prior uses in place for 12 continuous months of the past five years receive full credit for those trips, and those uses in place for 6 continuous months receive partial credit for those previous trips. • Intensifications of Use: Should the transportation impact fee be applied to additions, or changes of use that intensify use? Additions as well as conversions to an intensified use generate more trips. The fee should apply to the net change for additions or conversions that generate more trips. Changes of use within the same category or between categories that do not create a net increase in trips would not pay a TIF fee. • Extended Vacancies: Should the transportation impact fee be applied to spaces that have been vacant for an extended period (years)? The initial recommendation was that spaces that have been vacant for a continuous 12 month period would trigger the TIF fee when re- occupied. The recommendation has been modified to extend the potential vacancy period. No TIF fee would be triggered if the space was in continuous use for any 12 month period over the prior 5 years. • Capital Projects List: Does the capital projects list reflect the LUCE actions and programs adequately? The development of the list of capital projects is explained in this report, and was generated from the LUCE and the LUCE Final Environmental Impact Report. The package of capital projects is defined explicitly to address projected growth and to help achieve the goal of no net increase in PM peak hour vehicle trips through 2030. In compliance with nexus study requirements, no operating or maintenance costs were included. Projects that would not contribute to a reduction in peak hour vehicle trips were not included. • Retail Category: Should the TIF categories be more fine - grained for special uses? Two examples provided by the Chamber include auto sales and neighborhood - serving uses. This suggestion presents administrative challenges in tracking different types of retail for a given space. Broad land use categories are considered the best practice for this type of fee as similar land uses are included in a single type, allowing for flexibility and simplicity for landowners, tenants and City administrators. For example, the broad categories allow the space to change from retail to restaurant and then back to retail over time without payment of additional fees or administrative barriers. In addition neighborhood - serving uses will depend upon the multimodal network improvements funded by the fee program and implemented by the City for neighborhood access. A specific trip generation rate for auto sales was not initially included in the travel demand model but has been successfully calibrated with the retail rate, at 2.10 -3.01 trips per 1,OOOSF, which is within the lower range of the ITE trip generation manual for auto sales (0.94 to 5.81 trips per 1,000SF). Y Auto Storage: Should the fee exclude vehicle storage for Auto Dealers? The Chamber of commerce has requested that vehicle storage for auto dealers be excluded from the area used to calculate the TIF fee. Auto Dealer facilities combine a range of auto service, sales and storage uses that include some high trip generating uses such as auto service and test - driving and some lower trip generating uses such as storage. Like other combined facilities, a blended rate was identified to address trip making characteristics. Staff will evaluate this issue prior to returning to Council. • Additional Pmiect TDM measures: Should the TIF fee be reduced for projects including additional TDM measures? LUCE establishes that all projects provide a significant TDM program as a base requirement. A more aggressive TDM program above the base can be considered a Community Benefit. The TIF is also a base requirement. However, as noted below, these elements are negotiable through the development agreement process. • Development Agreement projects: Should the City take into account other factors including the magnitude of community benefits or should the TIF be treated as a given? As noted in this staff report, Development Agreements will use the TIF as a guideline, and development agreements are always negotiable. • Timing of Payment: Should the fee be collected with other exaction fees during Building Permit issuance or be due at Certificate of Occupancy? Staff recommends that the fee be collected at issuance of the building permit so that the improvements can be underway or completed and provide improvements to the transportation network by the time the project is completed. This is consistent with the timing of payment in City of Los Angeles districts. • Refund of Payment: Should the City refund the TIF fees that have been collected in the event a project is not constructed? Because it is anticipated that some improvements may be initiated once the payment is made, staff recommends a 50% refund. D Nexus Study The nexus study and proposed multimodal transportation impact fees both start with the data from the City's travel demand forecast model and therefore are carefully calibrated to account for PM peak hour vehicle trip generation typical for Santa Monica. The model accounts for differences based on location (especially proximity to transit), mix of land uses, and type of uses and uses a horizon year of 2030, consistent with the LUCE and the LUCE FEIR. The model enables the City to more accurately predict trip- making characteristics including trip length, mode and generation factors, and to account for conditions such as proximity to transit and locally serving retail, both of which have been demonstrated through empirical research to be inversely correlated with vehicle trip generation. For these studies, both vehicle trip generation rates for comparable land uses as well as the fee per dwelling unit and square foot are tailored for two different areas in the City of Santa Monica: • Area 1 includes Downtown Santa Monica, the Special Office District, and Bergamot Transit Village. Vehicle trip generation rates in these districts account for their accessibility by transit and the presence of a diversity of complementary land uses and activities, both of which tend to reduce vehicle travel demand. • Area 2 includes all remaining areas of the City of Santa Monica. Figure 1: Santa Monica: Transportation Impact Fee Areas 1 & 2, and Half -Mile Walk Shed to Expo Light Rail Stations 0 The package of capital projects in the nexus study is designed explicitly to address projected land use changes and to help achieve the goal of no net increase in PM peak hour vehicle trips through 2030. The determination of capital projects which may be funded by the transportation impact fee is based on the policies and actions identified in the Land Use and Circulation Element, which were used in the trip generation modeling conducted as part of the LUCE EIR. Improvements identified include projects such as creating a path for bicycles from the Expo Light Rail Station at 17th Street to Santa Monica College, enhancing crosswalks along major boulevards, and real time information for travelers. Part of the development of the model was identifying the expanded improvements for walking, cycling and transit. The improvement cost estimate for capital projects is approximately $93 million based on a conceptual definition of each project scope. This estimate was based on cost estimates for similar projects recently completed or in the planning stages in Santa Monica. Figure 2 summarizes total project costs by project category; an itemized list can be found in Figure 4 -2 of the nexus study. Legal constraints limit project costs to primarily capital costs, excluding most City operating costs from the project list. Figure 2: Summary of Project Costs Over 20 Year Period ' e •ee •e ,e e Bicycle Actions $33,708,781 Pedestrian Actions $25,024,000 TDM Actions $6,127,075 Transit Actions $10,177,750 Auto Network Actions $11,594,000 Project Management' $3,000,000 Fee Administration $3,000,000 Subtotal $92,631,606 Engineering /Design' $9,263,161 Contingency4 $32,421,062 Total $134,315,829 Project Management covers the annual salary cost of one staff person to oversee capital projects for a 20 year period. 2 Fee Administration covers the annual salary cost of one staff person to oversee the administration of the fee for a 20 year period. n A 10% engineering and design fee is added on to the subtotal of physical improvements only. 4 A 35% contingency fee is added on to the subtotal of physical improvements only. 10 Also included are the cost for a project management position to oversee these capitals projects and a fee administration position to oversee this separate set of responsibilities. Lastly, a 10 percent design and engineering fee is added onto the subtotal of physical improvements, and a 35 percent contingency cost per industry standard .5 With these additional costs, the total capital projects list totals approximately $134.3 million. Using the methodology described above in which transportation fees are allocated proportionally based on trip generation rates (trip generation rates by land use category are listed in Figure 5 -3 of the Nexus Study), the maximum legally justifiable Transportation Impact Fee based on the project costs and trips attributable to new development would be as follows in Figure 3. While these are the maximum justifiable fees, a lower level is proposed to be more consistent with other jurisdictions. Figure 3: Maximum Potential and Pronosed Imnact Fee by Land use Land Use Category Maximum Impact Fee (per sq. ft. or dwelling unit) Area 1 Proposed Impact Fee (per sq. ft. or dwelling unit) Area 1 Maximum Impact Fee (per sq, ft. or dwelling unit) Area 2 Proposed Impact Fee (per sq. ft. or dwelling unit) Area 2 Residential (d.u.) Single Family $12,540 $7,600 $12,870 $7,800 Multi - Family $4,290 $2,600 $5,445 $3,300 Non - Residential (sq. ft.) Retail $34.65 $21.00 $49.67 $30.10 Office $16.01 $9.70 $17.82 $10.80 Medical Office $46.37 $28.10 $49.17 $29.80 Hospital NA NA $24.26 $14.70 Lodging $5.94 $3.60 $5.94 $3.60 Industrial $1.98 $1.20 $2.15 $1.30 5 Caltrans Project Development Procedures Manual specifies including a contingency of between 30% and 50% as part of the project cost estimation phase. Caltrans Project Development Procedures Manual, Chapter 20 pg. 11. 11 Given that the cost estimate for capital projects is almost $134.3 million, the revenue generated by the transportation impact fee would not be sufficient to fully cover the cost of all capital projects. The remaining 55 percent of the total project cost is expected to be covered by regional, state and federal grants, City General Fund, and other sources, for which the Fee may provide a local match. Historically transportation improvements have been financed entirely by outside and City General Fund sources, and the fee would be a new revenue source for funding these much desired transportation improvements. Establishing a Transportation Impact Fee would not obligate the City to complete the projects listed in Figure 2 if other revenue sources are insufficient to fill the gap in funding between fee revenues and total project costs. Individual projects will be brought to Council for appropriation of available funds prior to the construction of each project. The proposed transportation impact fee is intended to capture projects that result in changes from one type of land use category to a land use category with a greater trip generation rate, such as from office to medical office or office to retail. Development agreements would not be subject to the ordinance; staff intends to use the fees that the project would be subject to as a guideline for the transportation contribution amount acceptable under the terms of negotiated agreements for future development agreements and development agreements currently being negotiated. Recent development agreements approved by the City Council include contributions similar to those recommended in the Transportation Impact Fee. Development Impact Fee Comparison A summary of transportation impact fees for new development projects in selected California cities follows. Most communities in California that collect transportation fees use general descriptions of land uses to define fee categories. Several land use categories are recommended to be exempted from the fee as they are provided by the City, including recreation, government and religious uses. The residential categories include both market rate and deed restricted low income residential uses, the Planning Commission also recommends that deed restricted affordable housing be exempt. 12 Figure 4 presents a comparison of the proposed fee to other jurisdictions throughout California. Figure 5 provides a comparison with jurisdictions in Southern California. While the nexus study calculated the maximum justifiable fee, such a fee would be higher than other California and Los Angeles jurisdictions. Staff is recommending a lower fee more comparable to other jurisdictions. Figure 4: Transportation Impact Fees in Selected California Jurisdictions6 6 Data collected in 2009 and 2010 13 Single Family Detached House (per unit EF ) General Office (per square foot) Industrial (per square foot) Retail per square foot) Irvine $7,175 $20.28 $5.85 $20.28 Pasadena $2,556.88 $3.84 $3.20 $8.89 San Luis Obispo $3,220 $2,858 $6.48 $1.87 $6.78 Santa Barbara County $1,945 per development per peak hour trip (within urban planning areas), $523 per development per peak hour trip (other locations in Santa Barbara County) West Hollywood $447.92 $1.85 $1.85 Palo Alto $2,861 /peak hour trip $4.26 Emeryville $943.24/p.m. peak hour trip San Joaquin County $3,001.29 $1,801.08 $1.51 $0.90 $1.20 Redwood City $1,501.59 $1,021.08 $3.45 $0.90 $4.97 San Francisco Not subject to fee $11.34 Santa Monica Staff Recommended Fees Santa Monica — Proposed Area 1 $7,600 $2,600 $9.70 $1.20 $21.00 Santa Monica — Proposed Area 2 $7,800 $3,300 $10.80 $1.30 $30.10 6 Data collected in 2009 and 2010 13 Figure 5: Transportation Impact Fee for Select Los Angeles Area Peers 14 Los An eles EI Se undo Santa Monica Warner West Coastal Central City} Culver City Zone 1 ' Zone 2 Zone Average Proposed. Proposed Center* LA** Corridor* West 3 Zonal Zone 2 Retail (per 1,000 sq. $23,882 $7,087 $46,683 $12,706 $1,000 $9,615 $391 $431 $12,298 $21,000 $30,1000 ft.) Office (per 1,000 sq. $10,632 $6,450 $22,194 $11,547 $1,000 $3,820 $155 $171 $6,645 $9,700 $10,800 ft.) Industrial (per 1,000 sq. $3,109 $2,740 $6,888 $5,754 $1,000 $2,513 $102 $113 $2,824 $1,200 $1,300 ft.) Single - family Exempt Exempt Exempt Exempt n/a n/a $105 $116 $926 $7,600 $7,800 (per unit) Multi- family $2,673 Exempt Exempt Exempt n/a n/a $63 $69 $1,340 $2,600 $3,300 (per unit) 14 Proposed Transportation Impact Fee The nexus study recommends the following impact fees by land use. A complete list of sub- categories of the land uses is included as Figure 5 -1 of the study. Broad land use categories are considered the best practice for this type of fee as similar land uses are included in a single type, allowing for flexibility and simplicity for both landowners and City administration. For example, a new building usually does not know which exact type of use will be included in the first floor of a mixed use building, and the payment of one fee allows the space to be either as retail or a restaurant. The payment of the initial fee also allows the space to change from retail to restaurant and then back to retail over time. Based on the proposed fee structure, the total potential revenue estimated to be generated by the proposed Multimodal Transportation Impact Fee by 2030 is approximately $60 million. The Fee is based on net changes so that prior uses in place for 12 continuous months of the past five years receive full credit for those trips, and those uses in place for 6 continuous months receive partial credit for those previous trips. Because the City of Santa Monica is largely urbanized with limited vacant land areas, and the LUCE preserved the prevailing patterns of residential neighborhoods and commercial boulevards, the LUCE FEIR projected land use changes are primarily along the future Expo light rail stations and along the transit -rich commercial boulevards. New housing units as part of mixed -use projects represent the greatest proportion, with associated service and retail uses at the ground floor. Some creative arts and office uses are projected near the future Expo light rail stations and a modest net increase in citywide hotel use. Industrial land uses were projected to decrease during the 20 -year projection period. Proposed Ordinance Other potential elements of a transportation impact fee ordinance include: • Fee Amount: Establishes the Transportation Impact Fee on a per square foot basis as described previously. For mixed use projects, separate fees are determined per use and the total fee shall be the sum for all uses in the building. 15 • Timing of fee amount and payment: The fee amount is calculated and must be paid prior to issuance of a building permit. • Fee adjustment or waivers: An applicant may request a credit for existing square footage at the time the developer files an application if the existing use was in continuous use for any 12 month period over the prior 5 years and a 50% credit if the use was in continuous use for any 6 month period over the prior 5 years. This differs from the recommendation to the Planning Commission, but is consistent with how the fee is administered in the City of Los Angeles' Coastal Transportation Corridor Specific Plan. • Accounting: The ordinance establishes a separate Transportation Impact Fee Reserve Account to be used solely for the purposes of collecting and disbursing the Transportation Impact Fee on projects identified in the nexus study. • Use of Funds: The ordinance establishes the parameters for the disbursement of funds so that they are spent on the uses identified in the Nexus Study. The fees should be spent typically within five years of receipt. • Automatic Annual Fee Adjustment: The fee annually adjusts on July 1, beginning in 2013, by a percentage equal to the appropriate Engineering Construction Cost Index. • Annual report: A required annual report will be submitted for review by the Council. • Fee Revision: The Council may periodically revise the amount of the linkage fee or the automatic adjustment by resolution. • Implementation Schedule: The fee applies to all development applications meeting the criteria for applicability that are submitted or determined complete after the effective date of this Ordinance. Legal Considerations The California Legislature passed Assembly Bill (AB) 1600 in 1987, the California Mitigation Fee Act. As defined in AB 1600, a development impact fee is not a tax or special assessment, but rather a fee that must be reasonably related to the cost of the service provided by the local agency for the purpose of defraying all or a portion of the cost of public facilities related to the development project (Gov. Code § 66000(b).) The nexus study and proposed fee is consistent with the Mitigation Fee Act, including the amendment added by AB 3005 in 2008. AB 3005 applies to new housing that meets the specific requirements relating to distance to transit, convenience retail and provision of parking. The proximity of transit would encompass certain residential areas in Area 2. 16 Therefore, the residential fees established for Area 1 would be used to charge reduced fees for qualifying housing in Area 2 as specified in AB 3005. A more complete analysis is included in the Nexus Study. Commission Action The Planning Commission considered the nexus study and the proposed Transportation Impact Fee at their March 12, 2012 meeting. After comments from the public and discussion, the Planning Commission unanimously voted to recommend that the Council adopt the Transportation Impact Fee as proposed with one amendment. The Commission recommended that deed restricted low- and very low- income rental housing units built by a non - profit developer which receives some funding from the City be exempt the fee. The proposed staff recommendation includes this low- income housing exemption in the ordinance before the Council. City funding for this type of project typically fills the gap between funding available from other sources and the cost to complete the project. The fee would increase the total cost of the project and the City would essentially be paying itself the fee. Combined with the policy goals of the City to encourage low- and very low- income housing opportunities, staff recommends the projects be exempt from the Transportation Impact Fee. In order to recommend the proposed text amendment to the City Council, the Planning Commission found that the amendment is consistent with the City's General Plan and that it promotes public health, safety and general welfare. The proposed amendment is consistent in principle with several of the goals, objectives and policies of the General Plan, and is explicitly called for in one policy, including: • LUCE Goal T19 states that the City should create an integrated transportation and land use program that seeks to limit total peak period vehicle trips with a Santa Monica origin or destination to 2009 levels. • LUCE Policy T19.7 calls for the City to perform a nexus study and a implement transportation impact fee to mitigate negative transportation impacts of new development. 17 Public Outreach The Transportation Impact Fee has been discussed in concept for many years. Some discussion of it has been included in community outreach as part of the community benefits discussion occurring as part of the zoning ordinance update. In general, members of the community have been supportive of the adoption of such a fee. Additionally Planning and Community Development staff presented the concept and details of the Transportation Impact Fee to the Santa Monica Chamber of Commerce's Land Use Committee at their April 5, 2012 meeting; participants expressed support for such a fee but expressed concern about the perceived high price relative to surrounding jurisdictions and the timing of the adoption of the fee. Financial Impacts and Budget Actions There is no immediate fiscal impact or budget action necessary as a result of the recommended action. If Council proceeds with a fee as proposed, the Transportation Impact Fee is estimated to collect a total of $60 million in revenue over the next 18 years. Projects to be built using Transportation Impact Fee revenue would be brought to Council for review and expenditure allocations on an individual basis prior to their construction. Prepared by: Beth Rolandson, AICP, Principal Transportation Planner Approved: Forwarded to Council: David Martin, Direct6r Rod Gould Planning and Community Development City Manager Attachments: A. Transportation Impact Fee Nexus Study 18 ATTACHMENT A Transportation Impact Fee Nexus Study 19 Transportation Impact Fee Nexus Study I Draft City of Santa Monica This report defines the purpose, rationale, and structure of a new multimodal transportation impact fee on new development in the City of Santa Monica including a detailed description of the projects and programs to be funded by fee revenues. We provide evidence of the "reasonable relationship," in both intended use and amount, between the proposed fee and the projected transportation impacts of development that the fee - funded transportation projects and programs are intended to address. Purpose of the Transportation Impact Fee The purpose of the Multimodal Transportation Impact Fee is to ensure that new development, projected through the year 2030 in the Environmental Impact Report (EIR) for the Land Use and Circulation Element (LUCE) of the Santa Monica General Plan, pays its fair share of the costs of providing the transportation infrastructure necessary to implement the policies and achieve the goals of the Plan. Transportation is not an end in and of itself, but rather a means of gaining access and maintaining connections to people, places, goods, and services. The transportation policies, projects, and programs called for in the Land Use and Circulation Element (LUCE) of the Santa Monica General Plan are in turn a means for the City to achieve goals for improving public health, economic and community development, equity of access, and environmental sustainability. The Community Vision Statement in the LUCE notes that, "Reducing emphasis on the automobile and bolstering walking and bildng is paramount to the Santa Monica community. The modest, targeted growth in housing and commerce must be balanced with specific initiatives to calm traffic and reduce congestion".' The LUCE identifies a number of policies and programs that will encourage walldng, bildng and transit usage which in turn will help reduce PM peak hour vehicle trips.2 Consistent with this vision, a primary goal of the LUCE is to accommodate modest growth and development and improve access and mobility with no net increase in vehicle traffic volumes.3 The adopted metric for evaluating progress towards this goal is the volume of PM peak hour vehicle trips destined to and from City lands. Need for the Fee To confirm the need for the transportation improvements to be funded by the multimodal transportation impact fee and to estimate the effects of future development on the transportation system, the Santa Monica travel demand forecasting model (TDFM) developed for the LUCE EIR was used to forecast Year 2030 conditions assuming future development patterns anticipated with the LUCE but without the LUCE transportation improvements and trip reduction strategies contained in the LUCE. These forecasts were compared to conditions as forecast in the LUCE EIR with the LUCE land use scenario and the LUCE transportation improvements /trip reduction strategies. The scenario with the LUCE transportation improvements /trip reduction strategies is I City of Santa Monica Land Use and Circulation Element, Executive Summary, p.2 2 For a full analysis of the impacts of bicycle, pedestrian, transit, and TDM programs on vehicle trip generation please refer to the Santa Monica LUCE Final EIR 3 This goal is articulated as part of LUCE Framework Element 3: Pro - Active Congestion Management. Santa Monica LUCE, Executive Summary, p. 10 NelsonlNygaard Consulting Associates Inc. I ii Transportation Impact Fee Nexus Study I Draft City of Santa Monica industry standard.4 With these additional costs, the total capital projects list totals approximately $134 million. Figure E -1 Summary of Project Costs over 20 Year Peri p. I' f 9. 1 - • - e wr. r e , 'i i'171' ! �t�i i li i lilt t . r ur, a •li v'e Bicycle Actions $33,708,781 Pedestrian Actions $25,024,000 TDM Actions $6,127,075 Transit Actions $10,177,750 Auto Network Actions $11,594,000 Project Managements $3,000,000 Fee Administrations $3,000,000 Subtotal $92,631,606 Engineering /Design 7 $9,263,161 Contingency8 $32,421,062 Total $134,315,829 Method for assessing fees in proportion to project impacts The method for assessing multimodal transportation impact fees is carefully calibrated to traffic volumes in Santa Monica to account for the different transportation system impacts (as measured by PM peak hour vehicle trip generation) of each new development project in the city, by accounting for differences based on location (especially proximity to transit), and the type and mix of land uses predicted in 2030, the build out year for the Land Use and Circulation Element. This method is consistent with Assembly Bill 3005 which requires fees to be adjusted based on proximity to transit and locally serving retail, both of which have been demonstrated through empirical research to be inversely correlated with vehicle trip generation. For this study, both vehicle trip generation rates for comparable land uses and the fee per dwelling unit and square foot are different for each of two different areas: • Area 1 includes Downtown Santa Monica, the Special Office District, and Bergamot Transit Village. These districts have lower vehicle trip generation rates due to their accessibility by transit, and the presence of a diversity of complementary land uses and activities, both of which tend to reduce vehicle travel demand. • Area 2 includes all remaining areas of the City of Santa Monica, not included in Area 1. 4 Caltrans Project Development Procedures Manual specifies including a contingency of between 30% and 50% as part of the project cost estimation phase. Caltrans Project Development Procedures Manual, Chapter 20 pg 11. s Project Management covers the annual salary cost of one staff person to oversee capital projects for a 20 year period. 6 Fee Administration covers the annual salary cost of one staff person to oversee the administration of the fee for a 20 year period. 7 A 10% engineering and design fee is added on to the subtotal of physical improvements only. 8 A 35% contingency fee is added on to the subtotal of physical improvements only. NelsonlNygaard Consulting Associates Inc. i iv Figure E -3, below, shows the different vehicle trip generation rates (vehicle trips that begin or end at a location within the City of Santa Monica) per residential unit or per thousand gross square feet during the weekday PM peak hour in Area i and Area 2 for eight distinct land use categories. Trip generation rates by land use are based on calibrated PM peak hour rates from the Santa Monica Travel Demand Forecasting Model (TDFM).9 The land use categories are comprised of groups of related land uses. Land uses with similar trip generation characteristics are grouped together to simplify nexus fee administration and compliance monitoring. It should be noted that several land use categories that were evaluated as part of the LUCE EIR are not included in the categories above, including fire and police, recreation, and government office, as development of these types of uses are not anticipated to pay the fee since they are uses provided by the City of Santa Monica and the share of these costs associated with these trips will be born directly by the City of Santa Monica. The trips generated by these uses as part of the LUCE EIR are not included in the impact fee analysis and calculation. Fee Structure and Fee Rates The fees have been calculated based on cost estimates of capital improvements, which in combination with trip reduction programs are, required to reduce the additional vehicle trips generated by growth in Santa Monica such that no new net vehicle trips are generated in the PM 9 For a detailed discussion of the trip generation rates established as part of the Santa Monica Travel Demand Forecasting Model refer to Fehr & Peers Santa Monica Travel Demand Forecasting Model Trip Generation Rates report, October 2011. 10 Multi- family zero cars, one car, and two or more cars have been combined, and trip rates have been averaged 11The trip generation rates for Lodging are empirically derived. NelsonlNygaard Consulting Associates Inc. I vi Transportation Impact Fee Nexus Study I Draft City of Santa Monica By creating a proportional relationship or ranldng between the various land use categories, this ensures that land uses with a lower PM peak hour vehicle trip generation rate will be charged a lower fee, while land uses with a higher trip generation rate will be charged a higher fee. Similarly, some land uses in Area 2 will be charged a higher fee due to higher PM peak hour vehicle trip generation rates as compared to the rate for the same land use in Area 1. Based on the land use growth projections described in Chapter 2, a total potential revenue of approximately $6o million could be generated by the proposed Transportation Impact Fee if all predicted development were to occur, which represents 45% of the total project cost. Given that the cost estimate for capital projects is approximately $134 million, the revenue generated by the transportation impact fee will not be sufficient to fully cover the cost of all capital projects. The remaining 55% of the total project cost is expected to be covered by regional, state and federal grants, City General Fund, and other sources, for which the Fee may provide a local match. Legal Considerations Local jurisdictions are authorized to assess impact fees in California by the Mitigation Fee Act (AB 1600, 1987, Gov. Code § 66000), while the expenditure of such fee revenues is both supported and limited by legal precedent. Local government authority to regulate land uses, including the exaction of impact fees, derives from the "police power" to protect the public health, safety, and welfare. As defined in AB 1600, a development impact fee is not a tax or special assessment, but rather a fee that must be reasonably related to the cost of the service provided by the local agency for the purpose of defraying all or a portion of the cost of public facilities related to the development project. This report makes all of the required findings of the Mitigation Fee Act that (a) identify the purpose of the fee, (b) identify the use to which the fee is to be put and the facilities (if any) to be financed, (c) determine how there is a reasonable relationship between the fee's use and the type of development project on which the fee is imposed, and (d) determine how there is a reasonable NelsonlNygaard Consulting Associates Inc. I viii Cities throughout California frequently rely on impact fees to ensure that the costs of infrastructure and services necessary to support new development are paid by the development and not born disproportionately by existing residents, businesses and /or property - owners. Santa Monica already has an impact fee; since December 2oo6, the City of Santa Monica has levied a Child Care Linkage Program Impact Fee on the majority of new commercial and multiunit residential developments in proportion to the demand they generate for additional child care services in the City. The recently adopted LUCE establishes a citywide goal of No Net New PM Peak Hour trips either starting or ending in the City of Santa Monica. Meeting the goal will require that as the City evolves and changes that it focus on the right kind of development, in the right locations, coordinated with the right management tools and careful public investment. New development must do more to reduce its own trips, including malting the City more walkable, bikeable and transit friendly. As one step toward that goal, LUCE policy T19.7 states "perform a nexus study and implement a transportation impact fee to mitigate negative transportation impacts of new development." This impact fee would enable new development to pay its fair share of the costs of providing needed transportation infrastructure and services in the City. This report describes the purpose, rationale, and structure of a new multimodal transportation impact fee on new development in the City of Santa Monica. We provide evidence of the reasonable relationship, both in intended use and amount, between the proposed fee and the projected transportation impacts of development that the fee - funded transportation projects and programs are intended to address. This report is intended to satisfy the requirements of the California Mitigation Fee Act (AB 1600, 1987, Gov. Code § 66000), and is consistent with legislative precedent, as necessary to permit expenditure of fee revenue on the specific transportation projects and programs identified as necessary to implement the land use and circulation policies of the General Plan. California Mitigation Fee Act — AB 1600 In 1987 the California Legislature passed Assembly Bill (AB) 1600, the California Mitigation Fee Act. As defined in AB 1600, a development impact fee is not a tax or special assessment, but rather a fee that must be reasonably related to the cost of the service provided by the local agency for the purpose of defraying all or a portion of the cost of public facilities related to the development project (Gov. Code § 66000(b).) NelsonlNygaard Consulting Associates Inc. 11-1 Transportation Impact Fee Nexus Study I Draft City of Santa Monica active pedestrian- oriented neighborhoods that allow people to meet their daily needs locally and with a variety of mobility choices. The LUCE recognizes the crucial role that transportation plays in reducing greenhouse gases and achieving the community's sustainability goals. The LUCE proposes the creation of a complete multi -modal transportation system that builds upon the City's major investment in transit including the Expo Light Rail. The LUCE identifies local strategies that manage trips, treating the entire City as an integrated transportation management system with aggressive requirements for trip reduction, transit enhancements, pedestrian and bike improvements, and shared parking. Transportation demand management (TDM) programs that reduce automobile travel demand and incentivize alternative modes such as carpool, vanpools, and shuttles, walking, bicycling, and shared parking are all encouraged. Pro - active demand management for new automobile trips will be implemented in concert with strategies for large existing employers such as schools, hospitals, and other large institutions. The LUCE serves as the basis for creating the nexus between new development and impact fees, and it helps define the capital project list that will be funded by the impact fee. The LUCE clearly identifies the establishment of fees as a tool to manage vehicle trips and increase alternative transportation options for Santa Monica residents. The LUCE states that "New projects will be required to minimize the trips they generate and contribute fees to mitigate their new trips. To achieve the No Net New Trips goal, developers cannot be expected to have every project generate zero trips by itself. Rather, developers will pay mitigation fees that will fund capital improvement projects citywide, such that the net impact of each development project ultimately is zero. Fees will be used for improvements that benefit the City's transportation system overall, such as additional buses to increase frequency, improved walking routes and new bike lanes." t3 Purpose of the Transportation Impact Fee The purpose of the Transportation Impact Fee is to ensure that new development pays its fair share of the costs of providing the transportation infrastructure necessary to implement the no net increase in vehicle trips originating or ending within the City during the PM peak hour goal of the Plan. By supporting this goal, it also supports LUCE goals of reducing vehicle trips and promoting walking, bicycling, carpooling, and use of public transit, in order to accommodate some desired growth and development. Use of the Transportation Impact Fee The LUCE contains a list of transportation policies, projects, and programs that are necessary to accommodate projected growth with no net increase in PM peak hour vehicle trips through 2030. More specifically these new trips must be offset through the development of new transportation infrastructure providing alternatives to automobile travel, including public transit, bicycling, ridesharing, and walking. The package of capital improvements projects to be funded by the fee includes completion of the sidewalk network, and enhanced pedestrian crossings along major boulevards, striping and signage of new bike lanes, bike paths, and bike boulevards, and installation of new bus pads, bus benches and transit only lanes. 13 Santa Monica Land Use and Circulation Element p. 4.0 -12 NelsonlNygaard Consulting Associates Inc. 11-3 As part of the EIR process for the Land Use and Circulation Element (LUCE), the City of Santa Monica projected potential net new development that could occur through 203o based on the polices of the LUCE. These projections represent the potential amount of future development; however, actual development may occur at lower levels and varying proportions. Almost all of the land in the City of Santa Monica is developed, with existing uses including established residential neighborhoods, commercial mixed -use corridors, parks, schools, and other community serving facilities, and public services and utilities. Opportunities for new uses are limited and are primarily confined to the redevelopment of existing properties. In order to minimize the disruption of established residential neighborhoods and to link housing and commercial uses to transit opportunities for new land uses according to the LUCE FEIR, the new development "would be focused in areas around planned transit stations, along the future Exposition light rail line, and at nodes along primary commercial and transit corridors in the City ". �4These transit and commercial corridors are along the Wilshire, Santa Monica, and Pico Boulevards, in Downtown Santa Monica, and in the vicinity of the proposed Exposition Line rail stations, including Bergamot Station and Memorial Park Stations. Housing with ground floor retail and services are focused on the corridors, with a mix of housing and employment at the stations. The LUCE FEIR states that, "Compared to today, the modest land use changes allowed under the proposed LUCE could result in a net increase of residential units (emphasizing affordable and workforce housing), retail space, local- serving office uses, creative arts spaces, medical space, hotel space, and recreational space". 15 The time horizon for these changes is 2030. Land use projections are included in this study for the purpose of estimating the proposed impact fee. As shown in Table 2 -1 of the LUCE FEIR, the projected net change in land uses includes approximately: 14 Santa Monica LUCE FEIR p. 2 -3 15 Santa Monica LUCE FEIR p. 2 -3 NelsonlNygaard Consulting Associates Inc. 12-1 a.� This chapter identifies the anticipated effects of new development on the city's transportation system, which a Transportation Impact Fee (TIF) could be used to mitigate. Effects of New Development To confirm the need for the transportation improvements and trip reduction strategies to be funded by the transportation impact fee, the Santa Monica Travel Demand Forecasting Model (TDFM) was used to estimate the effects of future development on the transportation system. Using the TDFM, year 2030 transportation conditions were forecast assuming future development patterns anticipated with the LUCE land use scenario but without the transportation improvements /trip reduction strategies contained in the LUCE. This forecast was compared to conditions as forecast in the LUCE EIR with the combined LUCE land use scenario and the LUCE transportation improvements /trip reduction strategies which is the same LUCE scenario that was analyzed in detail in the LUCE EIR. As shown in Figure 3 -1, using the Santa Monica TDFM, there are currently approximately 6o,1oo existing PM peals hour vehicle trips generated within the City of Santa Monica. As discussed in the LUCE EIR, the number of PM peak hour vehicle trips generated within Santa Monica under the LUCE land use scenario with transportation improvements and trip reduction strategies is projected to decrease to 59,500, thus achieving the LUCE goal of no net new evening peak period vehicle trips generated within Santa Monica. However, the model estimates that if the development projected by the LUCE occurred without the implementation of LUCE transportation improvements /trip reduction strategies, the number of PM peak hour vehicle trips would increase to 64,700, thus violating this basic objective of the LUCE transportation policy. NelsonlNygaartl Consulting Associates Inc. 13-1 Figure 3 -2 LOS Summary Table NelsonlNygaard Consulting Associates Inc. 13 -3 0 a ®- ® o- 6 Ocean Ave & Colorado Ave 13.0 0.569 B 31.7 0.682 C 13.6 0.578 B 36.1 0.703 D Ocean Ave & Pacific Coast 7 Highway /MoomatAhiko 23.6 0.751 C 35.4 0.989 D j 24.7 0.826 C 36.3 0.999 D 8 Ocean Ave & Pico Blvd 16.7 0.741 B 51.6 0.819 D 16.4 0.775 B 50.9 1.085 D 9 Neilson Way & Ocean Park Blvd 6.7 0.601 A 10.4 0.708 B 7.0 0.652 A 52.5 1.315 D 11 Second St & Wilshire Blvd 11.1 0.339 B 13.3 0.485 B 12.0 0.379 B 13.8 0.510 B 13 Second St & Santa Monica Blvd 13.4 0.327 B 15.8 0.588 B 14.0 0.397 B j 16.7 0.654 B 30 Fourth St & Wilshire Blvd 17.0 0.636 B 21.0 0.793 C j 18.0 0.699 B 28.4 0.918 C 32 Fourth St & Santa Monica Blvd 13.2 0.642 B 23.9 0.924 C 15.3 0.661 B j 17.1 0.686 B 34 Fourth St & Colorado Ave 22.6 0.628 C 1 26.7 0.780 C 28.2 0.864 C j 33.6 0.912 C 35 Fourth St & 1 -10 Wb Off -Ramp 15.9 0.631 B 19.9 0.780 B 15.9 0.584 B 20.6 0.808 C 36 Fourth St & 1 -10 Eb On -Ramp 15.0 0.634 B 42.8 1.006 D 17.4 0.730 B 60.3 1.072 E 37 Fourth St & Pico Blvd 25.8 0.853 C 44.9 0.935 D 28.2 0.888 C 75.5 1.128 E 38 Fifth St & Wilshire Blvd 13.1 0.513 B 14.0 0.610 B 13.6 0.537 B 14.0 0.592 B 40 Fifth St & Santa Monica Blvd 13.4 0.347 B 14.7 0.496 B 13.9 0.397 B 15.3 0.552 B 48 Seventh St & San Vicente Blvd 26.6 0.812 C 24.0 0.732 C j 38.6 0.971 D j 34.8 0.926 C 49 Seventh St & Montana Ave 14.4 0.549 B 15.2 0.637 B 14.5 0.577 B 173 0.728 B 56 Lincoln Blvd & Wilshire Blvd 43.4 1.137 D j 37.7 1.201 D j 59.6 1.275 E 27.4 0.995 C 58 Lincoln Blvd & Santa Monica Blvd 15.3 0.742 B 17.8 0.724 B 1 24.8 0.967 C I 32.0 1.105 C 61 Lincoln Blvd & 1 -10 Wb Off -Ramp 25.4 0.847 C j 27.2 0.876 C j 25.9 0.851 C 30.9 0.923 C NelsonlNygaard Consulting Associates Inc. 13 -3 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Nelson \Nygaard Consulting Associates Inc. 13-5 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Figure 3 -4 Change in Travel Time on North /South Corridors during the PMPM Peak Hour 240 120 200 80 60 40 20 0 -20 Ocean /Neilson Main 4th Lincoln /7th 20th Cloverfield /23rd 26th (@LUCEw /olmp. Northbound aLUCE Northbound ®LUCEw/o Imp. Southbound m LUCE Southbound NelsonlNygaard Consulting Associates Inc. 3 -7 Figure 3 -6 140 120 100 80 60 c 40 0 2 O a 20 N -20 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Change in Travel Time on East/West Corridors during the PM Peak Hour San Vicente Montana Wilshire Santa Monica Olympic 1 -10 PCH Pico Ocean Park 12 LUCE w/o imp. Eastbound EJ LUCE Eastbound E3 LUCE w/o Imp. Westbound MLUCEWestbound Nexus for the Transportation Impact Fee The adopted Santa Monica LUCE provides the framework necessary to integrate land use and transportation to reduce vehicle trips, encourage walking, bicycling and transit use, and to create active pedestrian - oriented neighborhoods that allow people to meet their daily needs locally and with a variety of mobility choices. The LUCE recognizes the crucial role that transportation plays in reducing greenhouse gases and achieving the community's sustainability goals. The LUCE proposes the creation of a complete multi -modal transportation system that builds upon the City's major investment in transit including the Expo Light Rail. The LUCE identifies local strategies that manage trips, treating the entire City as an integrated transportation management system with aggressive requirements for trip reduction, transit enhancements, pedestrian and bike improvements, and shared parking. Transportation demand management (TDM) programs that reduce automobile travel demand and incentivize alternative modes such as carpool, vanpools, and shuttles, walking, bicycling, and shared parking are all encouraged. Pro - active demand management for new automobile trips will be implemented in concert with strategies for large existing employers such as schools, hospitals, and other large institutions. The LUCE establishes the goal of achieving no net new PMPM peals hour vehicle trips. A primary strategy of the LUCE in order to achieve this goal is vehicle trip reduction. Achieving the level of automobile trip reduction anticipated in the LUCE EIR for both new development and existing development generated within the City requires both provision of improvements to the alternate modal networks citywide (bicycle, walls, transit) as well as measures to be implemented by individual developments and employers in accordance with the TDM requirements of the LUCE NelsonlNygaard Consulting Associates Inc. 3 -9 23 12 13 9 ! 15 13 11 8 8 8 9 1 0 2 5 6 1 6 - 2 2 4 5 1� 0 2 5 San Vicente Montana Wilshire Santa Monica Olympic 1 -10 PCH Pico Ocean Park 12 LUCE w/o imp. Eastbound EJ LUCE Eastbound E3 LUCE w/o Imp. Westbound MLUCEWestbound Nexus for the Transportation Impact Fee The adopted Santa Monica LUCE provides the framework necessary to integrate land use and transportation to reduce vehicle trips, encourage walking, bicycling and transit use, and to create active pedestrian - oriented neighborhoods that allow people to meet their daily needs locally and with a variety of mobility choices. The LUCE recognizes the crucial role that transportation plays in reducing greenhouse gases and achieving the community's sustainability goals. The LUCE proposes the creation of a complete multi -modal transportation system that builds upon the City's major investment in transit including the Expo Light Rail. The LUCE identifies local strategies that manage trips, treating the entire City as an integrated transportation management system with aggressive requirements for trip reduction, transit enhancements, pedestrian and bike improvements, and shared parking. Transportation demand management (TDM) programs that reduce automobile travel demand and incentivize alternative modes such as carpool, vanpools, and shuttles, walking, bicycling, and shared parking are all encouraged. Pro - active demand management for new automobile trips will be implemented in concert with strategies for large existing employers such as schools, hospitals, and other large institutions. The LUCE establishes the goal of achieving no net new PMPM peals hour vehicle trips. A primary strategy of the LUCE in order to achieve this goal is vehicle trip reduction. Achieving the level of automobile trip reduction anticipated in the LUCE EIR for both new development and existing development generated within the City requires both provision of improvements to the alternate modal networks citywide (bicycle, walls, transit) as well as measures to be implemented by individual developments and employers in accordance with the TDM requirements of the LUCE NelsonlNygaard Consulting Associates Inc. 3 -9 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Some of the improvements in the fee program (such as the Advanced Traffic Management System and widening the 4th Street bridge) will address both regionally - generated and Santa Monica - generated traffic increases. Others (such as specific bicycle and pedestrian improvements to help support reduced vehicle tripinaldng) are directed more at trips generated locally within Santa Monica. For these latter improvements, the share attributable to development in Santa Monica could be closer to loo %. For purposes of the fair share calculation the Nexus Study relies on the 74% of trips generated within Santa Monica. Existing Versus Future Deficiencies To assess the possibility that new transportation improvements and trip reduction strategies were addressing existing deficiencies rather than future deficiencies, a simple test was performed. If the LOS at study intersections were poor under existing conditions and improved under future conditions with transportation improvements and trip reduction strategies, then a portion of the LUCE transportation improvements and trip reduction strategies might be addressing an existing condition at these locations rather than solely a future condition. The results of the test did not suggest that this was occurring. The five LUCE study intersections operating at LOS E or F under existing conditions were reviewed, and all five locations have the same LOS under existing and future conditions. Effects Not Mitigated The mitigation program proposed by this report is designed to mitigate the citywide effects of automobile trips associated with new development within the City of Santa Monica. A primary objective of the LUCE is to coordinate land use and transportation planning and emphasize non- motorized tripmaking in order to achieve the goal of no net new PM peak hour vehicle trips generated within the City. Nevertheless, development projects can generate an increase in traffic at intersections immediately surrounding the projects and on the streets directly feeding the projects. These localized effects can occur even though the citywide effects of increased trips are mitigated by the proposed program. Localized development impacts will continue to be mitigated through site specific exactions or conditions tied to project -based traffic studies, in compliance with the requirements of the California Environmental Quality Act. NelsonlNygaard Consulting Associates Inc. 13-11 Transportation Impact Fee Nexus Study i Draft City of Santa Monica Figure 4 -1 Summary of Project Costs over 20 Year Period For a complete list and description of the capital projects and their associated costs please refer to Figure 4 -2. 10 Project Management covers the annual salary cost of one staff person to oversee capital projects for a 20 year period. 19 Fee Administration covers the annual salary cost of one staff person to oversee the administration of the fee for a 20 year period. 20 A 10% engineering and design fee is added on to the subtotal of physical improvements only. 21 A 35% contingency fee is added on to the subtotal of physical improvements only. Caltrans Project Development Procedures Manual specifies including a contingency of between 30% and 50% as part of the project cost estimation phase. Caltrans Project Development Procedures Manual, Chapter 20 pg 11. NelsonlNygaard Consulting Associates Inc. 14-2 Bicycle Actions $33,708,781 Pedestrian Actions $25,024,000 TDM Actions $6,127,075 Transit Actions $10,177,750 Auto Network Actions $11,594,000 Project Management1s $3,000,000 Fee Administration19 $3,000,000 Subtotal $92, 631,606 Engineering /Design20 $9,263,161 Contingency21 $32,421,062 Total $134,315,829 For a complete list and description of the capital projects and their associated costs please refer to Figure 4 -2. 10 Project Management covers the annual salary cost of one staff person to oversee capital projects for a 20 year period. 19 Fee Administration covers the annual salary cost of one staff person to oversee the administration of the fee for a 20 year period. 20 A 10% engineering and design fee is added on to the subtotal of physical improvements only. 21 A 35% contingency fee is added on to the subtotal of physical improvements only. Caltrans Project Development Procedures Manual specifies including a contingency of between 30% and 50% as part of the project cost estimation phase. Caltrans Project Development Procedures Manual, Chapter 20 pg 11. NelsonlNygaard Consulting Associates Inc. 14-2 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Bike Action Plan 5 Year Implementation Plan22 Bikeways and greenways. $1,330,511 Bicycle Transit Centers See TDM pedestrian signals, audible pedestrian devices, pedestrian Bikesharing See TDM push buttons, and tree grates. Bike Racks Install 3,350 bicycle racks throughout the City $670,000 Countdown Indicators Install 948 countdown indicators throughout the City $948,000 Bike Detectors Install bike detectors at 130 intersections $5,200,000 Bike Boxes Install approximately 220,000 square feet of bike boxes $2,220,270 Subtotal $33.708.781 Pedestrian Projects Enhanced Pedestrian Crossings Improvements include decorative concrete crosswalks, along Major Boulevards pedestrian signals, audible pedestrian devices, pedestrian push buttons, and tree grates. $4,268,000 Complete Sidewalk Network Complete gaps in the sidewalk network. $1,121,000 Pedestrian Network Improvements Improvements include curb ramps, sidewalk extensions, curb and gutter extensions, and traffic signal relocations resulting from curb extensions. $19,635,000 41h Street Bridge See Auto Network Subtotal $25,024,000 TDM Bicycle Transit Centers Two, 150 space bike - transit centers that offer bicycle parking, bike rentals, bike repair shops, lockers, showers and transit information and amenities. $4,000,000 Bikesharing Provide public bicycle rental in "pods" located at 10 locations throughout the city. $9,570,075 Carsharing Provide start-up funds for capital expenses to a third party operator to run carsharing program in the city. $50,000 Mobility Centers Provide start -up materials such as computers and furniture for mobility centers located in each TDM district.. Mobility centers will serve as a one -stop shopping center for residents, employees, and visitors to get information on travel options. $120,000 Real -time Wayfinding Create a comprehensive multi -modal wayfinding system for the City that includes trip planning tools, real -time traveler information systems, dynamic signage, and static signage for bicyclists and pedestrians. $1,000,000 22 These improvements are listed in more detail on page 4 -15 of the Santa Monica Bicycle Action Plan NelsonlNygaard Consulting Associates Inc. 14-2 Transportation Impact Fee Nexus Study j Draft City of Santa Monica Projects Considered but Not Included When reviewing the policies and actions identified in the Land Use and Circulation Element, which were used in the trip generation modeling conducted as part of the LUCE EIR to compile a list of capital projects for the TIF Master Capital Project List, a number of applicable projects were considered but not included for several reasons. First, policies and programs identified in the LUCE that only had an operating or maintenance cost component were not included. Examples include the creation of Transportation Management Organizations, the development of a transit pass program for new development, and the development of pedestrian design guidelines for encouraging walking. Second, policies and programs that would not contribute to a reduction in peak hour vehicle trips were not included. NelsonlNygaartl Consulting Associates Inc. 14 -4 Transportation Impact Fee Nexus Study I Draft City of Santa Monica The land uses shown in Figure 5 -1 represent the land use categories identified by the City of Saint Monica, thus if new land uses are introduced the City will need to determine which of the primary land use categories is most appropriate based on the type of land use and trip generation characteristics of that land use. It should be noted that several land use categories that were evaluated as part of the LUCE EIR are not included in the categories above, including fire and police, recreation, affordable housing and government office, as development of these types of uses are not anticipated to pay the fee since they are uses required by or explicitly encouraged by the City of Santa Monica. Trip generation rates by land use are based on calibrated FM peak hour rates from the Santa Monica TDFM and reflect trip generation expected from developments that comply with all LUCE development standards and policies. �4 Trip generation rates from the TDFM model have taken into account the effects of density, diversity, design, and destinations associated with the built environment as well as the effects of transportation demand management policies identified in the LUCE. Two sets of trip generation rates were established for each land use category based on what area of the city development occurs in. This method is consistent with Assembly Bill 3005 which requires fees to be adjusted based on proximity to transit and locally serving retail, both of which have been demonstrated through empirical research to be inversely correlated with vehicle trip generation. 24 With the exception of lodging all rates are from the Santa Monica Travel Demand Forecasting Model. For a detailed discussion of the trip generation rates established as part of the Santa Monica Travel Demand Forecasting Model refer to Fehr & Peers Santa Monica Travel Demand Forecasting Model Trip Generation Rates report, October 2011. The trip generation rates for Lodging are from the 710 Wilshire Transportation Study, May 2011. NelsonlNygaard Consulting Associates Inc. 15-2 Restaurants - Sit -down (C16) Retail Durable goods (C17) Retail Food, Markets (C18) Retail Mixed (C19) Retail Non -Food C20 Creative office (105) Financial institutions & offices (C06) Office Office, General (C11) Office, Medical, including medical clinics, and offices for medical Medical Office professionals (not hospital space) (C12) Hospital Hospital (full - service, not including medical clinics) (P05) Lodging Hotels, motels and other overnight accommodations (C08) Auto Inventory Storage (surface or structured) (102) City maintenance facilities & bus yards (P01) Heavy industrial, manufacturing (106) Light industrial (107) Utilities (108) Warehouse, self- storage (109) Industrial Wholesale distribution /shipping (110) The land uses shown in Figure 5 -1 represent the land use categories identified by the City of Saint Monica, thus if new land uses are introduced the City will need to determine which of the primary land use categories is most appropriate based on the type of land use and trip generation characteristics of that land use. It should be noted that several land use categories that were evaluated as part of the LUCE EIR are not included in the categories above, including fire and police, recreation, affordable housing and government office, as development of these types of uses are not anticipated to pay the fee since they are uses required by or explicitly encouraged by the City of Santa Monica. Trip generation rates by land use are based on calibrated FM peak hour rates from the Santa Monica TDFM and reflect trip generation expected from developments that comply with all LUCE development standards and policies. �4 Trip generation rates from the TDFM model have taken into account the effects of density, diversity, design, and destinations associated with the built environment as well as the effects of transportation demand management policies identified in the LUCE. Two sets of trip generation rates were established for each land use category based on what area of the city development occurs in. This method is consistent with Assembly Bill 3005 which requires fees to be adjusted based on proximity to transit and locally serving retail, both of which have been demonstrated through empirical research to be inversely correlated with vehicle trip generation. 24 With the exception of lodging all rates are from the Santa Monica Travel Demand Forecasting Model. For a detailed discussion of the trip generation rates established as part of the Santa Monica Travel Demand Forecasting Model refer to Fehr & Peers Santa Monica Travel Demand Forecasting Model Trip Generation Rates report, October 2011. The trip generation rates for Lodging are from the 710 Wilshire Transportation Study, May 2011. NelsonlNygaard Consulting Associates Inc. 15-2 R a R r R O 2 R m N L LL i-U ^^W W u., x 'Olt NO Me, MEN, ►. ® ®`I r.. " Eft no II ®1 EEC ,.�,,+ 111► -• .1111. go .... :� MW �,1' 111 � ■' ■® -� `� �i I I limmmlillimill ■®®® ®11111111'®®® IIm 1 mi- i-U ^^W W u., Transportation Impact Fee Nexus Study I Draft City of Santa Monica The fees shown in Figure 5 -4 represent the maximum fee that could be charged by the City of Santa Monica capturing 74% of the total project cost. The maximum fees were calculated by dividing 74% of the total project cost by the trip generation rate rates in Figure 5 -3 to generate a per unit /square foot maximum rate for each land use in Area 1 and Area 2. However, full cost recovery was deemed inconsistent with the collection of similar fees statewide and it would be anticipated to have a deleterious effect on some desired land use change in Santa Monica. The proposed fee levels are comparable with other Southern California communities, are expected to be acceptable to the community, and will provide substantial funding for the proposed capital projects. The trip generation rates shown in Figure 5 -3 reflect the proportional difference in trips generated by land use and by area. Figure 5 -5 below shows the proposed impact fee on a per square foot or dwelling unit basis by land use. For example, in Area t retail land uses have a per square footage fee that is approximately more than twice that for office land uses in this same area due to the fact that the trip generation rate for retail land uses is approximately 116% greater than the trip generation rate for office land uses during the PM peak hour (Figure 5 -5). For some land uses the fee per square foot is greater in Area 2 than Area 1 due to the fact that the higher densities and transit service levels in Area 1 result in lower vehicle trip generation rates in Area 1 than in Area 2. NelsonlNygaard Consulting Associates Inc. 15-6 Transportation Impact Fee Nexus Study I Draft City of Santa Monica Given that the cost estimate for capital projects is approximately $134 million, the revenue generated by the transportation impact fee will not be sufficient to fully cover the cost of all capital projects. The remaining 55% of the total project cost is expected to be covered by regional, state and federal grants, City General Fund, and other sources, including developers' public benefit contributions for transportation above the standard fee amount, for which the fee may provide a local match. Fee Reduction for Housing within a Half -Mile of Transit Stations The proposed nexus fee is consistent with the Mitigation Fee Act, including the amendment added by AB 3005 in 20o8. This amendment applies to new housing that meets the following requirements: 1. The housing development is located within one -half mile of a transit station and there is direct access between the housing development and the transit station along a barrier - free, walkable pathway not exceeding one -half mile in length. 2. Convenience retail uses, including a store that sells food, are located within one -half mile of the housing development. 3. The housing development provides either the minimum number of parking spaces required by the local ordinance, or no more than one onsite parking space for zero to two bedroom units, and two onsite parking spaces for three or more bedroom units, whichever is less. The amendment uses the following definitions: • Transit station: "a rail or light -rail station, ferry terminal, bus hub, or bus transfer station... includes planned transit stations otherwise meeting this definition whose construction is programmed to be completed prior to the scheduled completion and occupancy of the housing development." NelsonlNygaard Consulting Associates Inc. 15 -8 Figure 5 -7 AB 3005 Santa Monica Transit Station Walkshed FEHRt PEERS Legend Expo Phase II Stations Santa Monica Transit Mall Area Type 1 Half Mile Walkshed City of Santa Monica Freeway Streets 0 0.1250.25 0.5 OMiles