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Draft – For Discussion Only
East Whisman Precise Plan Development Impact Fee Study Economic Analysis
Methodology
Willdan collected development impact fee data for the City of Mountain View, including draft impact fees in the East Whisman Precise Plan (EWPP) and current impact fees in the North Bayshore Precise Plan (NBPP) and four comparison cities the greater Bay Area. These comparison jurisdictions are:
• Fremont (Warm Springs Community Plan)
• Milpitas (Transit Area Specific Plan)
• Santa Clara (Lawrence Station Area Plan)
• Sunnyvale (Peery Park Specific Plan)
These cities were selected for use in this comparison because they have specific plan areas with similar development types to the EWPP. As such, they can be considered competitors to EWPP and differences in the cost of development between these areas may affect development decision making. Note that not all the planning areas impose additional impact fees on development occurring in those areas.
Willdan collected data regarding all fees used to fund infrastructure and facilities related to new development by a jurisdiction and a specific planning area. The comparison included all impact fees used to fund facilities, except for school impact fees. These fees were excluded because the fees do not vary significantly, and the cities do not set the rates.
Impact fees are not standardized and are assessed by various units of development by different jurisdictions. To create a meaningful comparison of impact fees, Willdan calculated the fees for three prototype projects. The prototype project characteristics are based on examples identified in a residential financial feasibility analysis performed in 2019 by Seifel Consulting Inc. and an office pro forma analysis from the same year by Strategic Economics specifically for the EWPP. Total development costs from those analyses have been adjusted to 2022 dollars for the purposes of this analysis. Table 1 presents the project prototype assumptions used in this analysis.
For each prototype, the total impact fee burden was compared to the estimated market value of each development project. The resulting impact fee percentage of market value can be compared to assess the relative impact fee burden amongst competing jurisdictions.
Attachment 5
April 29, 2022
Draft – For Discussion Only
Table 1: Prototype Assumptions
Residential
Apartments
Ground Floor Residential
Land Use Retail Condominiums Office
Dwelling Units (Total) 340 262 -
Studio 102 26 -
1 Bedroom 102 118 -
2 Bedroom 136 118 -
Net Building Area 272,000 272,480 196,020
Gross Building Area 362,780 363,394 217,800
Demolished Office Space 35,000 35,000 75,000
Ground Floor Retail Square Feet 5,000 - -
Bonus Floor Area 259,129 259,567 130,680
Acres 2.5 2.5 5.0
Water Meter Size 2" 2" 2"
Water GPD2 325 n/a 14,157
Sewer GPD3 750 n/a 32,670
Construction Cost (Excluding Land)4 170,505,000$ 179,330,000$ 147,143,000$ 1 Net building area show n for residential prototypes. Gross building area show n for office prototype. 2 Assumes 65 potable gallons per day per 1,000 square feet for nonresidential product types. 3 Assumes 150 gallons per day per 1,000 square feet for nonresidential product types. 4 Construction costs from 2019 memorandums adjusted for inflation to current 2022 dollars using the Engineering New s Record's Building Cost Index, an increase of approximately 25%. Rounded to nearest $1,000.
Sources: Mountain View East Whisman Residential Development Financial Feasibility Analysis, October 28, 2019, Seifel Consulting Inc.; Pro Forma - Mountain View East Whisman Precise Plan, Strategic Economics, 2019; Willdan Financial Services.
Market Value
Table 2 lists the assumed market value of each prototype for each jurisdiction. The market values were estimated using recent sales comparison data from Zillow for the condominium projects, market analytics from CoStar for the value per multifamily unit in apartment prototype and current rents and cap rates for Class A office space as reported by Colliers for the office prototype. These market values should be considered approximations for the current market value, as site specific characteristics can influence the market value and cannot be captured in this high-level analysis.
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Table 2: Estimated Market Value
Fremont Milpitas Santa Clara Sunnyvale Mountain View
Office Prototype1 65,717,000$ 70,871,000$ 126,697,000$ 230,796,000$ 282,705,000$ Apartment Prototype2 225,760,000 305,660,000 283,560,000 340,000,000 336,940,000 Condominium Prototype3 326,190,000 315,710,000 379,114,000 381,734,000 449,854,000 1 Market value estimate assumes 200,000+ square foot building, Class A office space. 2 Average market sales price for multifamily units, excluding condos and co ops, per Costar. 3 Based on the average market sales price for condominiums 3 bedrooms and less built since 2018, per Zillow .
Sources: CoStar; Zillow .com; Silicon Valley 22Q1 Market Report, Colliers; Willdan Financial Services.
Results
Tables 3 through 5 display the fee comparisons and fee burden as percentage of estimated market value for each prototype, respectively.
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Draft – For Discussion Only
Table 3: 340 Unit Apartment, 5,000 Retail Square Foot Prototype Facility Category EWPP1 NBPP1, 2 Fremont3 Milpitas4 Santa Clara5 Sunnyvale6 Citywide Impact Fees
Capital Facilities -$ -$ 703,939$ -$ -$ -$ Fire Facilities - - 133,421 - - - Transportation 867,195 867,195 824,747 - - 756,065 Parks 20,808,000 20,808,000 5,359,363 - 12,916,713 18,127,930 Affordable Housing7 8,000 8,000 46,350 40,000 27,800 46,500 Water 945,822 945,822 2,422,500 397,700 39,050 1,308,159 Sewer 260,841 260,841 2,752,650 484,430 406,933 2,043,965 Public Art - - - 852,525 - - Storm Drain - - - 41,928 - 20,680 Subtotal 22,889,858$ 22,889,858$ 12,242,970$ 1,816,583$ 13,390,496$ 22,303,299$ Specific Plan / Precise Plan Fees
Transit Area Specific Plan -$ -$ -$ 4,632,868$ -$ -$ Transportation 569,484 - - - - - Water 90,711 - - - - - Sewer 243,470 - - - - - Recycled Water 436,093 - - - - - Public Benefit Values 859,537 - - - - - Specific Plan - - - - - - Sense of Place - - - - - 471,240 Subtotal 2,199,295$ -$ -$ 4,632,868$ -$ 471,240$ Subtotal 25,089,153$ 22,889,858$ 12,242,970$ 6,449,451$ 13,390,496$ 22,774,539$ Less Credit for Demolished Uses 657,895$ 281,645$ 748,055$ 2,131,079$ 820,693$ 880,538$ Net Impact Fee Cost 24,431,258$ 22,608,213$ 11,494,915$ 4,318,372$ 12,569,803$ 21,894,001$ Estimated Market Value 336,940,000$ 336,940,000$ 225,760,000$ 305,660,000$ 283,560,000$ 340,000,000$ Impact Fees as Percent of
Market Value 7.3% 6.7% 5.1% 1.4% 4.4% 6.4%
1 Transportation and parkland fees are not charged to inclusionary units. 2 The North Bayshore Precise Plan does not include residential land uses. 3 Inclusionary units are charged 50% of parks and transportation impact fees. 4 Fees in-lieu of park dedication assume a fair market value of $92 per square foot and 2.66 residents per multifamily unit. 5 Park fees vary by zip code. The average fee among the three zip codes was used to estimate park fees in Santa Clara. 6 Sense of place fee shown is for Tasman Crossing and Fair Oaks Junction. Park fees not charged to inclusionary units in rental projects. 7 Assumes that development project will include affordable units onsite rather than pay in-lieu fee. Fee shown is for ground floor retail.
Sources: East Whisman Precise Plan Development Impact Fee Nexus Study, Final Draft, April 22, 2022; City of Mountain View; City of Fremont Master Fee Schedule; Rate and Fee Schedule for 2022, Alameda County Water District; Annual Report of Development Fees and Expenditures for the Fiscal Year ended June 30, 2021, City of Milpitas; FY 2021/22 Adopted Municipal Fee Schedule, City of Santa Clara; SB 330 Development Impact Fees, FY 2021-22, City of Sunnyvale; Table 1 and 2 , Willdan Financial Services.
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Table 4: 262 Unit Condominium Prototype
Facility Category EWPP1 NBPP1, 2 Fremont3 Milpitas4 Santa Clara5 Sunnyvale6 Citywide Impact Fees
Capital Facilities -$ -$ 576,950$ -$ -$ -$ Fire Facilities - - 108,337 - - - Transportation 646,944 646,944 607,705 - - 558,060 Parks 16,034,400 16,034,400 4,475,429 - 9,953,467 16,434,317 Affordable Housing7 - - - - - - Water 723,382 723,382 1,866,750 304,968 19,525 1,002,412 Sewer 64,793 64,793 2,103,860 368,372 310,994 1,548,944 Public Art - - - 896,650 - - Storm Drain - - - 41,928 - 20,680 Subtotal 17,469,518$ 17,469,518$ 9,739,031$ 1,611,918$ 10,283,986$ 19,564,413$ Specific Plan / Precise Plan Fees
Transit Area Specific Plan -$ -$ -$ 1,153,036$ -$ -$ Transportation 406,973 - - - - - Water 71,906 - - - - - Sewer 194,168 - - - - - Recycled Water 334,247 - - - - - Public Benefit Values 859,537 - - - - - Specific Plan - - - - - - Sense of Place - - - - - 363,132 Subtotal 1,866,831$ -$ -$ 1,153,036$ -$ 363,132$ Total 19,336,349$ 17,469,518$ 9,739,031$ 2,764,953$ 10,283,986$ 19,927,545$ Less Credit for Demolished
Uses 657,895$ 281,645$ 748,055$ 2,131,079$ 820,693$ 880,538$ Net Impact Fee Cost 18,678,454$ 17,187,873$ 8,990,976$ 633,874$ 9,463,294$ 19,047,007$ Estimated Market Value 449,854,000$ 449,854,000$ 326,190,000$ 315,710,000$ 379,114,000$ 381,734,000$ Impact Fees as Percent of
Market Value 4.2% 3.8% 2.8% 0.2% 2.5% 5.0%
1 Transportation and parkland fees are not charged to inclusionary units. 2 The North Bayshore Precise Plan does not include residential land uses. 3 Inclusionary units are charged 50% of parks and transportation impact fees. 4 Fees in-lieu of park dedication assume a fair market value of $92 per square foot and 2.66 residents per multifamily unit. 5 Park fees vary by zip code. The average fee among the three zip codes was used to estimate park fees in Santa Clara. 6 Sense of place fee shown is for Tasman Crossing and Fair Oaks Junction.
Sources: East Whisman Precise Plan Development Impact Fee Nexus Study, Final Draft, April 22, 2022; City of Mountain View; City of Fremont Master Fee Schedule; Rate and Fee Schedule for 2022, Alameda County Water District; Annual Report of Development Fees and Expenditures for the Fiscal Year ended June 30, 2021, City of Milpitas; FY 2021/22 Adopted Municipal Fee Schedule, City of Santa Clara; SB 330 Development Impact Fees, FY 2021-22, City of Sunnyvale; Table 1, Willdan Financial Services.
7 Assumes that development project will include affordable units onsite rather than pay in-lieu fee. All cities included in this analysis require that 15% of new units be affordable.
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Table 5: 217,800 Square Foot Office Prototype
Facility Category EWPP NBPP Fremont Milpitas Santa Clara Sunnyvale1 Citywide Impact Fees
Capital Facilities -$ -$ 231,957$ -$ -$ -$ Fire Facilities - - 137,432 - - - Transportation 1,204,434 1,204,434 1,288,723 - - 957,884 Parks - - - - - - Affordable Housing 4,081,636 4,081,636 2,019,006 1,742,400 4,839,516 3,799,300 Water 37,771 37,771 68,467 84,517 19,525 318,816 Sewer 548,203 548,203 977,922 278,348 146,035 1,476,031 Public Art - - - 735,715 - - Storm Drain - - - 107,810 - 54,080 Subtotal 5,872,044$ 5,872,044$ 4,723,506$ 2,948,791$ 5,005,076$ 6,606,111$ Specific Plan / Precise Plan Fees
Transit Area Specific Plan -$ -$ -$ 10,776,744$ -$ -$ Transportation 1,165,448 3,744,216 - - - - Water 65,122 1,058,148 - - - 985,320 Sewer 201,029 197,064 - - - 485,520 Recycled Water 909,751 - - - - - Public Benefit Values2 3,267,000 10,200,000 - - - - Specific Plan - - - - - 120,657 Sense of Place - - - - - 344,148 Subtotal 5,608,350$ 15,199,428$ -$ 10,776,744$ -$ 1,935,645$ Total 11,480,394$ 21,071,472$ 4,723,506$ 13,725,535$ 5,005,076$ 8,541,756$ Less Credit for Demolished
Uses 1,409,775$ 603,525$ 1,602,975$ 4,584,564$ 1,736,313$ 2,159,490$ Net Impact Fee Cost 10,070,619$ 20,467,947$ 3,120,531$ 9,140,971$ 3,268,763$ 6,382,266$ Estimated Market Value 282,705,000$ 282,705,000$ 65,717,000$ 70,871,000$ 126,697,000$ 230,796,000$ Impact Fees as Percent of
Market Value 3.6% 7.2% 4.7% 12.9% 2.6% 2.8%
1 Specific plan and sense of place fees shown for Peery Park Specific Plan, which only includes nonresidential development. 2 Public benefit values for North Bayshore determined case-by-case for bonus FAR projects.
Sources: East Whisman Precise Plan Development Impact Fee Nexus Study, Final Draft, April 22, 2022; City of Mountain View; City of Fremont Master Fee Schedule; Rate and Fee Schedule for 2022, Alameda County Water District; Annual Report of Development Fees and Expenditures for the Fiscal Year ended June 30, 2021, City of Milpitas; FY 2021/22 Adopted Municipal Fee Schedule, City of Santa Clara; SB 330 Development Impact Fees, FY 2021-22, City of Sunnyvale; Table 1, Willdan Financial Services.