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<br />8A <br />Page 1 <br /> <br />REPORT <br /> <br /> <br />March 27, 2006 <br /> <br />Subject <br />Transportation Impact Fee Ordinance Amendment - Deletion of the Three Year <br />Vacancy Limit for Credits <br /> <br />Recommendation <br />Approve the recommended amendment to Section 18.249 C.1 of the City Code, which <br />would delete the requirement that existing structures must have been occupied within <br />the past three years to receive a credit for prior use in determining Transportation Impact <br />Fee payment. <br /> <br />Background <br />In April of 2000, the City Council approved the Transportation Impact Fee Ordinance, <br />Article XV of the Municipal Code. The Ordinance assesses a fee on new development <br />for its proportionate share of the cost of transportation improvements attributable to <br />increased traffic generated by such new development throughout Redwood City. A <br />study was prepared that detailed transportation projects, financing, and related fee <br />calculations based on the additional PM peak hour trips generated by new <br />development. <br /> <br />The Ordinance provisions for calculating a fee include a credit for the existing use of a <br />site based on the actual or estimated PM peak hour trips generated by the existing use. <br />The impact fee for a development is then based on the net increase for the new use as <br />compared with the prior use. However, these Ordinance provisions also state: <br />"Developments including buildings or structures that have been vacant or not used for <br />more than three years shall not receive any credit." The Ordinance was drafted by <br />modeling a dozen similar ordinances from California and Washington, and this three- <br />year vacancy limit for credits was part of the initial draft. <br /> <br />Reasons for including such a vacancy time limit for credits may have been as follows: <br />1. Formulation of the fee program was based on a baseline analysis of traffic <br />conditions in 1999. Any site or building vacant at that time was not generating <br />traffic, so any subsequent occupancy would generate additional traffic that was <br />not accounted for in the baseline analysis, the same as a brand new <br />development would. Allowing a credit for the prior (to 1999) use in this situation <br />might not be entirely consistent with the basis of the fee formulation. In the early <br />years of the City's initial traffic fee program, the three-year limit on vacancies <br />would tend to reduce the number of credit allowances that might not be <br /> <br />Page 1 of 4 <br />