12 ma hattan beach markincdermott I newseditor [email protected] 1/15/26 - L INFRASTRUCTURE J
Pester
City of MB may add $61 million in new developer fees
by Mark McDermott the issue in personal terms, asking
The Price of Growth: Developer impact Fees Hanna who bears the costs of develop- Jhe Manhattan Beach City Coun
cil has been grappling with an (Estimated per 1,000 sq. ft. Multi-Family Unit) ments under cur ent fee structures onslaught of new multifamily "So if my next-door neighbor housing projects that are being fast- expanding their house and doubling Santa Monica 25,000-38,000
tracked via state laws intended to ad- the square footage... I would eventu- dress California's housing crisis. Lo- ally have to pay or the increase in her cally, an estimated 2,326 new housing Manhattan Beach (Proposed) 15,530 - 21,600 usage, her burden to the system?" she units are projected to be built in the asked.
next 14 years, mostly in the form of "Essentially, yes," Hanna said.
El Segundo 12,000 - 18.000
large, multi-family developments along Councilmember Steve Charelian, the Rosecrans Avenue and Sepulveda Bou- city's former finance director, said that levard as part of the state-mandated Huntington Beach 10,000-15,000 the impact fees are long overdue.
Residential Overlay District, or ROD. "I wish we had done this 10 years There is little the city can do to block ago," Charelian said.
Manhattan Beach (Current) $700
or modify these developments. But Mayor Pro Tem Joe Franklin used the on Tuesday night, the council took its fire department's recent acquisition of first step towards ensuring at least one Redindo / Hermosa $0 a 107-foot ladder truck as an example aspect of this growth spurt is within of infrastructure needed to serve taller the city's control. The council consid- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45.00) buildings. ered an array of new developer fees "At this point we're going to need - Estimated Total Impact Fee ($) you know, like in Jaws, 'We need a big- that in total would generate $61 million
De relopment impact Fees (DIFs) cover infrastru ture growth (Police, Fire, Water, Sewers in revenue to help pay for infrastruc- itar card permit and plan check fees still apply in sil ger boat,' correct?" Franklin asked. ture, transportation, and public safety Marston confumed that the study PAYING FOR GROWTH: Under proposed fees, Manhattan Beach would jump from $700 per unit accounts for such stepped-up infra- impacts of new developments. to up to $21,600—second only to Santa Monica's $38,000. Hermosa and Redondo Beach charge 10, Financial services manager Emy- leaving taxpayers to cover infrastructure costs. Graph generated through Gemini structure needs, and was developed by Rose Hanna told the council that the meeting with staff from every City of infrastructure costs associated with the or 50% ($30.8 million). per 1,000 square feet, depending on the MB department. developments are coming with or with- However, that $61.6 million rep- The lack of roust public comment out the new fees. resents only a portion of the total projections driving Tuesday night likely reflected the tech- "If the proposed fees are not adopted, infrastructure costs the city will face. these fees are substantial: 127 new nical nature of the study session. The the alternative would be that the tax- According to the staff report, Manhat- single-family units, 2,200 multifamily real debate is expected to material- ayer-supported general funds anc tan Beach anticipates $265.9 million units, 134,000 square feet of new corn- ize at the February 3 public hearing, ther utiitv funds would end up hav in capital improvement needs through mercial space, and 106,000 square feet when the council will consider actu- ing to pay for the increased infrastruc- 2040, meaning existing residents of new office space by 2040. This trans- ally adopting the fees. If adopted, the ture costs borne by the new develop- would still bear $204.3 million in costs lates to an alditional 4,500 residents fees would take effect 60 days later, on ment " she said. through the General Fund, enterprise and approximately 90 new workers, April 18, 2026.
The proposed development impact funds, and grants- even with the bringing the city's total service pop- Manhattan Beach's move reflects a fees represent Manhattan Beach's first impact fees in place. lation from just over 41,300 to near y broader statewide trend of cities profes- comprehensive effort to link growth to Finance Director Libby Bretthauer sionalizing their development impact increased infrastructure costs. Under emphasized the city's current infra- Marston noted that the fees are fee structures to withstand legal chal- the current fee structure, the city col- structure shortfalls during her opening "locked in and vested at the time of a lenges and shift infrastructure costs lects only $700 per new residential unit remarks. building application" under recent sta e from taxpayers o developers. Santa plus $1,817 for subdivisions. The new "The city already has unmet infra- legislation (SE 937), but cannot be cel- Monica has become the gold standard fees would be far more substantial and structure funding needs, and these new lected until a certificate of occupancy is for this approach, charging between would be calculated based on building developments could worsen this inan- issued - potentially two to three years $25,000 and $38.000 per multifamily square footage, water meter size, and cial position over time," Bretthauer later. Water, wastewater, and storm unit through a tiered system that tar- said. gets larger projects for significantly
impervious surface area. drainage fees are the exception and can 1. cr..., hallanted at then lia. c....
For the proposed 273-unit develon- Adam Marcton nenient mArith be collected at the time of application. higher fees to fund affordable housing Adam Marston, project manager with and open space.
For the proposed 273-unit develop- Harris & Associates, the consulting firm Paiwei We, representing Abundant Under the proposed fees, Manhattan ment at the former Fry's Electronics that conducted the development impact Housing LA and South Bay YIMEY Beach would move into what devel- site cn Sepulveda Boulevard, the fees fee study walked the council through (Yes In My Backyard), urged the coun opment consultants call the "Tier 1" under the current system would total the methodology behind the proposed cil to ensure the fee structure suppo: ts category of high cost development cit- $191,100. Under the housing affordability goals. Wei said he ies in California. At $15.53 per square approximately fees. The study evaluated existing city was moved to advocate for affordable proposed structure, that sare project facilities, equipment valuations, the foot for multifamily projects - or would pay an estimated $5.9 million in funded five-year capital improvement housing after witnessing a neighbor's roughly $15,530 to $21,600 per typi impact fees. plan, unfunded infrastructure needs, "In October, I looked outside my win- cal 1,000-square foot unit - Manhat- A 200-unit, multifamily residential and muliple master plans for water, tan Beach's fee: would exceed those project - the example used repeat- dow, there was a couple crying because in El Segundo ($12,000-$18,000 per sewer, ard storm drainage. they just got evicted by their landlord, unit and Huntington Beach ($10,000- edly in the staff presentation - would "Development impact fees are one- pay 54.36 million under the proposed and all their stuff was just put or a $15,000. per unit), though remaining fees, compared to $140,000 under the time fees collected from new develop- • driveway next to the apartment com- below Santa Monica's rates. current structure. Even modest sin- ment and significant redevelopments to plex," Wei said. "And this is one of The proposed fees place Manhattan mitigate the impacts that they create on my neighbo: s, and it really moved me Beach in stark contrast to its immediate gle-family home expansions would see public facilities," Marston said. "These to really lock into the affordability of increased costs. A homeowner dou- fees only include the costs attributable South Bay neiglibors. Hermosa Beach bling their home. from 2,000 square development and significant Manhattan Beach residents." and Redondo Beach currently have feet to 4,000 square feet by adding a including expansion Wei cited Austin, Texas, where rents zero development impact fees, mean- second story would pay $12,240 in new projects The fees can only be used for dropped 20%% due to increased housing ing taxpayers in those cities have been supply, as a model for market-based subsidizing infrastructure costs for impact fees. capital expansions and capita. costs. affordability through increased devel- The fees would be collected across They cannot fund existing deficiencies, new development for decades. Among eight categories: general government ongoing maintenance or salarier." regional compa ison cities, El Segundo facilities, police protectior, fire pro- For residential projects, the fees "Our hope is that the impact lees has 11 different: impact fee categories tecton, transportation, sewer, storm break down to $6.12 per square foot would be kased on some metric hat and last updated its study in 2022, drainage, water, and for single-family homes and $15.53 would be fair and equitable for people while Santa Monica, Newport Beach, who do decide to add more housing to Huntington Beach, and Torrance each istrative per square foot for multifamil devel-
designed to generate $61.6 million at opments - a disparity that reflects the Manhattan Beach area," Wei said. have five impact fee categories. full buildout through 2040 if adopted Council rembers expressed general at 100% of the recommended amounts. the higher infrastructure demands of support for the new fee structure. • See DEVELOPER FEES page 16 The council could also choose to adopt denser housing. Commercial projects Councilmember Nina Tarnay franed then at 75% ($46.2 million in revenue) would pay between $4,173 and $11,469 <12 m with the citys lagging infrastructure
needs long before state-housing mar.-
Developers Fee dates made it a more pressing issue.
"As much as it is about housing.
The shit from Manhattan Beach's it's really about more than that " Tar- current $700 flat fee per unit to a com- nay said. "We're seeing pipes burs.- prehensive fee structure represents ing, water mains breaking. We have a one of the most dramatic increases in degraded system, and the more that we the South Bay. For context, a 200-unit develop, the more strain on our infra- structure."
$140,000 n Manhattan Beach. Under She framed the issue as one of furi- the proposed structure, that same proj- damental fairness across generations (f ect would pay $4.36 million-a 3,014%
residents.
increase. "Who shoul i bear that cost?" Tarnay NO
In an interview after Tuesday's asked. "Should it be my 85-year-old meeting, •Carnay emphasized that the neighbor whe's lived in the same bun- Developers fees address a broader infrastructure galow? I don't think so. If I'm remode - challenge beyond new housing clevel- ing my house, I should bear that cost." opments. She said city staff have been ONLY
working to align costs of development