Commercial development fees (city)

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Location: San Diego, CA

Commercial development fees (city)

Postby tdelamater » Wed Aug 15, 2012 11:45 am

Just had a bomb dropped on me by the city regarding the new development fees on my 69 room motel project.

Total fees come out to 460k. Mostly in water and sewer fees.

I'm hoping someone out there with commercial development experience can point me in the right direction here.

I know every city is different, but how can I find out if these fees are fair and reasonable? My issue is I don't really even know how to formulate a good search for doing research in this area. Can anyone point me to some resources that could help?

I can probably make an appeal to the city and negotiate a little since they seem to want new development in this area. But to do this I need to do my homework!

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Joined: Wed Sep 23, 2009 9:01 am

Re: Commercial development fees (city)

Postby DoingHomework » Wed Aug 15, 2012 7:37 pm

The number seems high but I'm sure you figured out that it works out to about $6667 per unit. That is not too outrageous. Not far from where I live new residential houses incur similar fees, often even larger. Given that yours is commercial, I'm not too surprised.

Hotels are supposed to get 55% occupancy to break even. So that fee only works out to $33 per night spread over 1 year or about $6 a night spread over 5. You'll spend more on laundry. And that's probably why they want to charge you big sewer and water fees - because you will have a bigger impact than you seem to think.

I feel for you bro' but I don't really think the fees are unreasonable.

Good luck with your business.

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