To appear both prudent and strong, the city council voted to
continue luring developers downtown while also showing them that
they cannot indefinitely milk the city’s financial incentives, or
else they’ll disappear.
Gilroy – To appear both prudent and strong, the city council voted to continue luring developers downtown while also showing them that they cannot indefinitely milk the city’s financial incentives, or else they’ll disappear.
While downtown developers who want generous discounts now have more time to secure financial incentives for their projects during initial planning phases, this does not mean they’ll have more time to file building applications by the end of 2009 if they want to keep their monetary perks.
Not having to pay development fees in the downtown has attracted many new businesses to the area that will ultimately enliven it and produce tax revenue, the council has repeatedly argued. But Community Development Director Wendie Rooney said this has cost the city $2.5 million in waived fees since the beginning of 2004.
Such generosity encouraged the council to pair incentives with application timetables to “prevent a [developer] from simply using [them] as added value for purposes of selling their building site,” wrote Rooney in a memo to City Administrator Jay Baksa. Councilmen have expressed concern that idle builders could wait for the housing market to improve and the fee-waiver program to expire before selling.
Rooney and city staff followed previous Council directives to recommend a Feb. 1, 2008, deadline for developers to submit their planning documents for projects to be built in the near future, but Mayor Al Pinheiro convinced the city council Monday night to give developers until June 30, 2008. The council stuck with its original Dec. 31, 2009 deadline for building applications, though, which means developers have a year and a half to get a building permit after their initial architectural and site planning goes through.
The motion passed 5-1 with Councilman Paul Correa absent and mayoral candidate Craig Gartman voting “No.”
Baksa cautioned that shortenining the window to a year-and-a-half could put pressure on city staff to hastily conduct research and reports on downtown projects.
Any projects received after the ordinance goes into effect Nov. 1 will have to abide by the new deadline rules.
If a developer misses either the planning or construction application dates, then their project will have to pay “impact fees.” The city usually levies such fees – which often total hundreds of thousands of dollars for a single project – against developers to offset the impact of their projects, but not in the downtown area. The fees help pave roads, upgrade the sewer plant and install new water mains, among other things.
But Pinheiro said the new June deadline would give developers just a little more time to get moving.
“The last thing I’d like to see happen is come March or April, buildings are being sold on account of the fact that they didn’t finish their plans.”
That’s their fault for taking too long, though, said Councilman Peter Arellano.
“We’ll always have those people, you know, somebody will come in November 2009, saying, ‘This is the biggest [project] that will happen to downtown Gilroy,'” Arellano said, “but if we have dates down and fixed, then that’s all there is to it.”
Assistant City Administrator Anna Jatczak seemed to agree when she said the original February deadline was flexible and designed with the “unusual and unforeseen in mind” and that extending it to June could lead to more developers asking for more extensions.
“[But] it’s worth making an exception if [a project] has that much of an impact on the downtown,” Pinheiro said.
Local developer James Suner warned that “as soon as the impact fees are back in place, we’re done, dead in the water.”
The ordinance also emphasizes restaurants, retail, residential and entertainment projects over other types of development allowed within downtown zero fee area, which includes Monterey Street between Second and 10th streets, Eigleberry Street between Third and Sixth streets, and Railroad Street between Lewis and Old Gilroy streets.
