Staff Report
PREPARED BY: MATT MORLEY
Director of Parks and Public Works
Reviewed by: Town Manager, Town Attorney, and Finance
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 03/21/2017
ITEM NO: 6
DATE: MARCH 13, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: APPROVE THE RESOLUTION ADOPTING THE POLICY COMMITTEE
RECOMMENDATION TO MODIFY SECTION IV OF THE TRAFFIC IMPACT FEE
POLICY SPECIFIC TO CREDITS FOR VACANT PROPERTY
RECOMMENDATION:
Approve the Resolution (Attachment 1) adopting the Policy Committee recommendation to
modify Section IV of the Traffic Impact Fee Policy specific to credits for vacant property (Exhibit
A to Attachment 1).
BACKGROUND:
At the February 16, 2017 Policy Committee meeting, the Committee received a report on the
Traffic Impact Fee Policy specific to spaces that have been vacant for more than five years.
After reviewing the policy language, the Policy Committee recommended modifications to the
Policy.
DISCUSSION:
Section IV of the Policy specifies that properties that sit vacant for more than five years are
subject to the full traffic impact fee. This was put in place for one specific reason, namely as
developments occur within the Town, those developments must incorporate the traffic imp act
from that development as well as the existing traffic load. When properties sit vacant for a
period of time, the traffic from that vacant property does not contribute to that overall traffic
load analysis as other properties develop, resulting in an o verall undercounting of the traffic
impact.
Although applicability of this Policy section is rare, a recent application for a building permit
triggered the fee. The building permit was submitted for a 4,048-square foot space at 640
Blossom Hill Road, adjacent to Chipotle, to construct tenant improvements for a medical office
use.
PAGE 2 OF 3
SUBJECT: APPROVE THE RESOLUTION ADOPTING THE POLICY COMMITTEE
RECOMMENDATION MODIFYING THE TRAFFIC IMPACT FEE POLICY
MARCH 13, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Traffic Impact Policy\Staff Report -Traffic Impact Policy Final.docx 3/16/2017 10:53 AM SH
DISCUSSION (cont’d):
This is a portion of the space previously occupied by Hollywood Video. Because the space has
been vacant for more than five years, a fee in excess of $1 00,000 applies per the Policy.
At the time of the original development, impact fees were paid at the rates in effect at that
time for retail use. Since that time, a portion of the space has been used (Chipotle) and a
portion has remained vacant in excess of five years. Any future occupant of the vacant space
will be required to pay traffic impact fees based on the current Policy. The fees are outlined in
the table below.
Use Average
Daily
Trips
Fee ($902/trip) Fee with Credit
Restaurant – High Turnover 265 $239,030 $136,202
Restaurant - Fast Food 801 $722,502 $619,674
Office – General 45 $40,590 $0
Office - Medical 146 $131,692 $28,864
Shopping Center 114 $102,828 $0
Specialty Retail 114 $102,828 $0
The property owner at 640 Blossom Hill Road has informed the Town that these fees will make
leasing the space very difficult, resulting in potential continued vacancy.
The trade off in this situation is the potential future collection of impact fees to mitigate traffic
in Town weighed against the risk of high profile vacant space continuing, the economic impact
of vacant space, and any future tax revenue potential from that space.
Attachment 3 provides the information on how the fees are applied in various scenarios,
assuming the recommended revisions are implemented. The fee structure is set up to capture
additional impact fees as the use intensifies over the base use, including over shopping center
use.
CONCLUSION:
Approve the Policy Committee recommendation to modify Section IV of the Traffic Impact Fee
Policy specific to credits for vacant property.
PAGE 3 OF 3
SUBJECT: APPROVE THE RESOLUTION ADOPTING THE POLICY COMMITTEE
RECOMMENDATION MODIFYING THE TRAFFIC IMPACT FEE POLICY
MARCH 13, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Traffic Impact Policy\Staff Report -Traffic Impact Policy Final.docx 3/16/2017 10:53 AM SH
ALTERNATIVES:
Alternatively, the Council could choose to leave the Traffic Impact Fee Policy as it currently
reads.
COORDINATION:
This report has been coordinated with the Community Development Department and the Office
of Economic Vitality.
FISCAL IMPACT:
There is no direct identifiable fiscal impact from this action.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Resolution Modifying the Traffic Impact Fee Policy
2. Traffic Impact Fee Policy – redline
3. Traffic Impact Fee Implementation Instructions