After months of confusion, two businessmen have resolved a
struggle with the city over the amount of water they can use for
Gilroy’s first downtown self-service laundry facility.
By Chris Bone Staff Writer
Gilroy – After months of confusion, two businessmen have resolved a struggle with the city over the amount of water they can use for Gilroy’s first downtown self-service laundry facility.
The city has scaled back a demand for Bruce Rhett and John Burks, owners of the soon-to-be cleaners at 7777 Monterey St., to pay more than $580,000 in so-called “impact fees.” Instead, the pair will only have to pay $34.
“They really didn’t have to pay very much at all,” said Kristi Abrams, Gilroy’s Development Center manager, referring to the $34 Rhett and Burks owe for equipment that monitors seismic activity.
The squabble over fees comes as city officials grow increasingly anxious about multimillion dollar subsidies for new development. While freeing developers from so-called “impact fees” has been central to breathing new life into downtown, it has added up to more than $2 million. That money was originally planned for roads and emergency services, so officials are considering a narrower focus for such incentives as the area revives and as the city struggles to plug up multimillion dollar budget shortfalls.
The laundry resolved its water usage dispute with the city by agreeing to receive less than half of its original requests in exchange for the city waiving $613,366 in fees.
While this seems like a lot of money for one business not to pay, the figure approached $1 million three months ago when Rhett asked for 32,250 gallons per day in sewer and water allocations. After negotiations, the city is allowing his store 15,000 gallons with a wiggle room of 1,500 gallons over the next two years as the business grows, according to Wendie Rooney, director of Gilroy’s Community Development Department.
“I believe it’s a reasonable amount after doing our diligent research,” said City Engineer Rick Smelser, who arrived at the 15,000 figure after studying other laundry facilities, washing machine manufacturer information and the city’s water history.
Capacity at Gilroy’s water treatment plant, which also serves Morgan Hill, factored in as well, according to Abrams.
Rhett declined to comment, but Rooney said the matter revolved around confusion.
“The 32,250 figure was a misunderstanding because [Rhett was] trying to get an allocation for the entire building,” Rooney said, referring to 7777 Monterey St., which will also include a taco stand and a pizza parlor that Rooney said will receive fee waivers under the program.
The program offers financial incentives to businesses to hasten redevelopment along the Monterey Street corridor between First and 10th streets. Rooney said Gilroy has waived $2.5 million in impact fees under the program since the beginning of 2004.
The City Council planned to replace the financial incentive program with the Downtown Specific Plan in late 2005, but it has extended the waiver program to December 2008.
Rooney said the laundry provides an important service, but she will not endorse another one downtown since “many of the personal services uses provide little to no additional city revenue,” she wrote in her memo to Baksa. “This raises the question of whether the city should continue to incentivize all downtown uses.”
