City Developer Fees Bottled Up, Many Projects Not Fully Funded

For all the money the city of San Diego needs to take care of "pothole issues", it has millions of dollars to spend on “capital improvement” projects.

Problem is it's taking forever to be spent.

That’s because the money comes from fees that developers pay to cover the financial impact of the "infrastructure" and public services their projects will require.

Right now, upwards of $80 million is going unspent.

Some $25 million is earmarked for downtown projects such as the Bayside Fire Station on Pacific Highway in Little Italy.

As originally envisioned eight years ago, it had a price tag of $24 million – which would virtually exhausting downtown’s entire current allocation.

The Rob Wellington Quigley-designed firehouse since has been scaled back to a $16.3 million budget, because of the recession and loss of redevelopment funding.

That would leave enough to build a new park in East Village, as well as other projects.

But no project can go forward until all the money for it is in hand, and delays often stem from economic slowdowns that keep developers from starting and finishing their construction work.

“That's just the way it works,” says Liam Dillon, who’s been covering the issue for Voice of San Diego since 2011. “ But if there's a secure funding stream – which there hasn't been in ten, twenty, thirty, forty years in this city – then these sorts of problems of fits and starts and not being able to spend money when you have it are just going to continue."

City officials say they've expedited contracts awards and permit processing systems, and that more money will start flowing – but it's lost some purchasing power

"You know, the time to do these projects would've been during the recession when people needed jobs and construction costs were at their lowest,” Councilman Todd Gloria told NBC 7. “Now that we're in a resurging economy, our dollars are not going to go quite as far, and that's a missed opportunity that, again, is very frustrating."

Gloria – with a sidelong dig at Mayor Kevin Faulconer – says there's still room for more reforms by the city’s executive branch.

"I think really, it goes to the top,” Gloria said. “And you have to have a culture at city hall that's really results-focused and really demands that things get done."

The mayor's team points out that 85 percent of the unspent developer fees are fully allocated to waiting projects, and that funding from other sources will be tapped.

"We have spent a lot of time at the city of San Diego playing by the book, and we learning that the book needs to be amended a little bit,” city spokesman Bill Harris said in an interview Thursday. “This mayor is doing that. He's telling us that we need to fix our system and get the money spent. And that's what we're going to do in this budget ahead."

Officials also note that the pace of developer fees has been picking up lately.

A new fee schedule calls for a 78 percent increase as of July 1 to nearly $7,800 per dwelling unit.

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