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Daily Pilot

Commentary: Look at general plan measure with skepticism

By Dorothy Kraus

9:18 AM PDT, July 2, 2014

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On July 8, the Newport Beach City Council will consider placing on the November ballot a measure amending the general plan — a plan that voters adopted after extensive outreach and input in 2006.

The proposed amendment would reduce allowable development in certain areas of the city, while increasing development elsewhere, primarily at Newport Center/Fashion Island and in the airport area.

Voters would be right to wonder how they would benefit from a yes vote.

The developers requesting these expanded building opportunities must assume that the results will be profitable to them, but will they financially benefit the rest of us?

For that, one can look to the fiscal impact analysis, a document whose preparation is required by the current general plan. The analysis compares the expected revenues to the city in fees and taxes — including expected sales-tax generation — to what it would cost to provide police, fire, infrastructure and other services.

Although one can raise questions about the care and accuracy with which the city-funded analysis was prepared, its conclusion is that everything that the developers are promising not to build would have generated net revenue for the city, whereas most of what they are promising to build will be burdens on taxpayers.

Changing from the current general plan to the amended plan, should the council members vote their approval July 8, would produce a net loss to the city treasury of $6 million every year. The numbers were presented to the city by consulting firm Applied Development Economics Inc.

For example, the development already permitted under the existing general plan in the Newport Coast area, if built, is predicted to produce $5.7 million per year of net revenue to the city treasury.

Yet the city, on behalf of the developer, is proposing to promise not to build that revenue-generating development, and instead add new development in the Newport Center/Fashion Island area, which is predicted to impose a net cost to the city of nearly $900,000 per year.

That's a net loss to taxpayers of $6.6 million per year to enable the developer to build something that is profitable to the developer.

One has to ask why?

Some may question the preceding interpretation, suggesting that before allowing anything related to the new proposals to actually be built, city negotiators would extract public benefit fees through development agreements. However, such fees are one-time, while the burden on taxpayers would be permanent.

There are many reasons to be skeptical about the wisdom of making the proposed changes to the 2006 general plan, including concerns about traffic, pollution and an increasingly congested and less pleasant environment. The negative fiscal impact of the changes is another.

There may be valid reasons for forgoing development that would make money for the city.

It is much harder to understand why taxpayers would vote to encourage for-profit commercial development that will cost them money. Why would we want to do this to ourselves?

Go to the Stop Polluting Our Newport (SPON) website, http://www.SPON-newportbeach.org, or the city's website, for more information. Let the council know what you think.

DOROTHY KRAUS lives in Newport Beach.