On the backs of builders

The City Council in April passed an ordinance to charge developers $1 for every square foot of development - money that will be squirreled away to pay for child care centers. Now the city is also thinking about asking developers to take part in a "Percent for Arts" program; that would require developers pursuing projects more than $5 million to donate 1 percent of project costs to the creation of public art throughout the city.

Officials also want to ante up requirements for affordable housing.

Earlier this year, city officials said things like public art raise the stature of a city - thus benefiting the businesses that do business in the area. Still, officials are cautious of ushering in all the fees. In fact, the City Council rejected a similar proposal in the past in fear it would discourage development.

"There's a point where developers will say it's not going to pan out [economically]," Asbury said.

Although Councilman Jack Matthews supports the idea of the various fees, he said he's not sure how much the city should ask for.

"There is definitely a concern," Matthews said. "When you start adding up all those fees, it gets to be a more significant burden."

The running idea is to have such fees in place as a number of projects big and small get under way. Specifically, the Bay Meadows Land Company is considering tearing down the race track to create a massive transit corridor complete with a retail strip, office space and 1,250 new housing units.

"Generally, any time cost of business goes up, it's going to have an impact on amount of people who can pay," said Adam Alberti, spokesman for the Bay Meadows Land Company.

The City Council first considered upping requirements for affordable housing in 1992. The idea was tabled because the city was experiencing a drought in development and the economy was suffering.

A flurry of development followed in subsequent years, however.

If the city had implemented the program in 1992, more than $13 million in fees could have been reaped by now. Meanwhile, conservative estimates show the $1 child care fee passed this year could generate between $1 million and $2.25 million over the next 10 years. Despite the enormous benefits these fees could bring into the city, Asbury said it could end up boomeranging.

"If we keep adding and adding to the costs, it's not going to be good for continued growth," Asbury said.

"It's not fair to make one industry foot all the bills."

Yunmi Choi can be reached by e-mail at yunmi@smdailyjournal.com or by phone: (650) 344-5200 ext. 109. What do you think of this story? Send a letter to the editor: letters@smdailyjournal.com.