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Development Fee Discussion Far From Over: Actual Amounts Yet to Be Determined

The Santa Clara City Council may have voted at the July 15 meeting to replace the city’s 1965 $15/bedroom development fee, but there remains significant disparity of opinion about the proper amount of the fees, and the extent of the need for new and refurbished parks. The Council will set the fees next month, based on fair market land value. The city’s standard is 2.4 acres of park/1,000 residents; lower than any neighboring city which range from 3.0 to 5.0 acres, according to the agenda report.

While the new fees address future needs, they do nothing to provide more parks to serve the rapidly rising new residential developments in the city.

“I want to point out the hundreds and thousands of new residents [that] are coming into the city under the old rules,” said resident Clysta Seney. “I would ask that the private, open space offsets be reviewed to see if our public parks are suffering residents [now]. We need open space that doesn’t meet concrete fountains and concrete benches. We need quality public parks.”

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“When I was on the Parks and Rec commission, we started discussing this eight years ago,” said Council Member Jerry Marsalli, “and acquiring new acreage, especially north of 101. This is about our future and our kids and our grandkids. It’s a quality of life issue”

“A lot of those parks were brought online in the housing boom of the 60s and 70s. Look at what the population increase has been, and we’ve only added a very small amount of park.” Added Council Member O’Neill, noting that the 50 year-old parks are deteriorating and “just like with our homes, if you don’t invest you have a degraded asset.” Santa Clara’s population grew from 11,000 in 1960 to 116,468 in 2010

Council Member Patricia Mahan has consistently said that the proposed fees were way too high, and that the one thing that Santa Clara should not be known for is the highest development fees in the area. (The comparisons showing Santa Clara potentially imposing the highest development fee are based on prior years’ assessments).

“The thing that I didn’t see: that we used to take pride in was [being] a low-cost city,” Mahan said. “I hope we remember that when it comes to the implementation of this fee.” Because that percentage is set by the state laws that allow cities to impose the fees, Santa Clara can’t arbitrarily change how the fee is calculated.

“If there was a $30,000 fee on a new apartment, that’s $500 a month more to live here,” she continued. “We want to keep our prices in the median range. I really hope we strike a balance when this comes back to us [and] phase it in in a way that makes sense for our development community.” Mahan also suggested exempting small infill developments so that developers aren’t pressured to crowd more units onto the land to cover the development fees.

“There are a number of developments on the board that will bring several thousand new units on the market. When those new residents come to Santa Clara they are going to compete with existing taxpayers, [and] people who have been here for years and made significant contributions through their tax dollars into the system. This fee will help balance out that level of contribution.”

Likewise, Council Member Pat Kolstad wanted a fee that would put Santa Clara at the top of the list. “I always thought we had an outstanding portfolio of parks, from the Senior Center to the Youth Activity Center,” he said. “Before we go forward with that, how many acres of parks exist in Santa Clara? We should have a good understanding of that.

“City councils for 50 years have been building new parks, but we never hid this fee but we could do it somehow within our resources without taxing developers,” he continued. The decades of park-building were before Prop 13 slashed property taxes, and with them municipal revenues. Cities only receive about 20 cents of every property tax dollar.

“Do we really need a bunch of new parks,” Kolstad said. “Are we the best in the county or the worst? We should know this. We should know those answers before we proceed with this ordinance.”

Santa Clara currently has 295 acres of parkland – 2.53 acres per 1,000 residents. Between now and 2025, Santa Clara expects to add 8,000 new residents. “The need that that translates to is 97 to 115 acres to meet the current standard,” said Parks and Rec Director Jim Teixeira. Currently, all park maintenance comes from the city’s general fund, with no additional revenue stream.

Council Member Lisa Gillmor disputed that a developer fee wouldn’t make Santa Clara any less competitive.

“We really have equipment [and] have parks that need refurbishing,” she said. “The developers have enjoyed building in our city for decades without paying this fee. Now need to put money back into our parks, fund new parks. We need to start providing more recreation. We’re going to be competitive as every other very city around us. Everyone’s used to paying these fees. Businesses will continue to invest in our city as they always have.”

“I’m within walking distance of the three play structures I wouldn’t want my children to play on,” said one resident.

Perhaps the greatest enthusiasm for new parks was expressed by two year-old Enzo Vulanvic who stole the show with his cheers and chatter as his father, Igor, presented the case that the new fees would actually improve Santa Clara’s desirability as a place to live.

“We take our kids and drive to other cities’ [parks] on a regular basis,” he said. “Good parks are a huge factor that drive real estate values. If the parks are good, people will come.”

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