Commentary: Banning’s costs to Costa Mesa are likely higher

Re. “Councilmen should explain their Banning votes,” (July 29):

Jeffrey Harlan, in his otherwise very fine column accepts without question the Costa Mesa City Council’s assumption that the developer of the Banning Ranch project would legally owe the city only $1.7 million in trip fees to mitigate the adverse impacts on the city’s traffic circulation system.

This calculation was evidently based on the standard trip fee that Costa Mesa charges to city-approved projects within the city. However, it makes very little sense to use the same calculation of trip fees for Banning Ranch, which is entirely outside Costa Mesa’s boundaries.

The reason is that the council sets the amount of fees per trip for developments in Costa Mesa well below the actual cost of constructing the improvements needed. This is done partly because the city expects to gain additional revenue from the development over time, in the form of more gas tax, sales tax, property tax and sometimes hotel tax, and partly because other developments contribute to the increased traffic and also pay trip fees.

The Banning Ranch project, in contrast, won’t provide Costa Mesa any tax revenue; it will generate revenue only for Newport Beach.

The published estimate in the staff’s agenda report for the cost of required improvements is $8 million to $10 million, assuming the project has an entry-exit on West Coast Highway. In that case, 65% of project traffic will pass through Costa Mesa.

But if the California Coastal Commission denies permission for a Coast Highway entry-exit, then 100% of project traffic will be borne by Costa Mesa streets, and the cost to the city will increase significantly.

One way to calculate a reasonable mitigation fee would be to charge the full amount needed to construct the required improvements, minus any trip fees from other development projects paid toward the same improvements.

The resulting mitigation fee is sure to be far higher than the $4.4 million offered by the developer. But there should be no problem collecting an appropriate amount because Newport Beach has imposed a condition on the project that the developer must mitigate the adverse impacts of the project on the city of Costa Mesa.

The council should take another look at this project and do the right thing for Costa Mesa.

ELEANOR EGAN is a council critic and longtime Costa Mesa resident.