Manhattan Beach studies broad development impact fee package, sets Feb. 3 public hearing

The Manhattan Beach City Council held a study session Jan. 13 on a proposed development impact fee program that would charge new development for a share of capital costs for public facilities, infrastructure and equipment.

Finance Director Libby Bretau opened the session and introduced Harrison & Associates, which presented the nexus study methodology and preliminary fee recommendations. Consultant Adam Marston said the study follows the Mitigation Fee Act (Gov. Code §66000) and AB 602’s requirements for fee calculation. He summarized headline fee figures and methodologies: residential fees calculated on a per-square-foot basis (proposed at about $612 per square foot for single-family and $153 per square foot for multifamily), while commercial and office fees are calculated on a per‑1,000‑square‑foot basis (approximately $9,774 per 1,000 sq ft for commercial and $11,469 per 1,000 sq ft for office). Utilities and drainage use different bases (water by meter size; storm drainage by impervious acre).

Marston described the three calculation methods the study uses by category: the existing‑inventory method for general government facilities, police and fire; the system‑plan method for transportation, water, wastewater and storm drainage; and a plan‑facilities approach where appropriate. He said the city’s existing service population (residents plus weighted workers) is slightly more than 41,300 and projected build‑out would add about 4,642 service population through 2040.

Examples illustrated how the fees would apply. In one scenario, a single‑family home adding a 2,000 sq ft second story would see an estimated impact fee of about $12,240 (based on the $612 per‑sq‑ft residential factor and no new water or storm charges when meter size and impervious area do not change). In a commercial‑to‑multifamily redevelopment example — demolishing 30,000 sq ft retail to build 200 multifamily units — the net impact fee was shown at roughly $4.36 million after crediting the existing use.

Financial services manager Emmy Rose Hannah summarized fiscal implications: the study aggregates a 15‑year buildout CIP estimate of roughly $265.9 million, of which staff attributed about $61.6 million to new development (the portion that could be recovered through impact fees). Staff noted anticipated fee revenues at buildout across categories (for example, water fees ~ $18.2 million; wastewater ~ $16.1 million; transportation ~ $5.76 million) and emphasized fees would cover only a portion of total future needs.

Staff outlined outreach and schedule: a virtual community meeting held Dec. 4 drew about 12 members of the public; mass emails and mailed notices were sent to stakeholders; the draft nexus study will be posted on or before Jan. 20; a public hearing and first reading is scheduled for Feb. 3, 2026, with a second reading Feb. 17; if adopted the ordinance would become effective after a 60‑day period with an anticipated effective date of Apr. 18, 2026. Staff also noted Senate Bill 937 (effective Jan. 2025) affects timing by vesting fee levels at the time of application but delaying collection until certificate of occupancy for most fees, which could complicate cash flow and collection timing.

Council members and the public focused questions on definitions and practical impacts. Requests and concerns included clearer definitions of "square footage" (livable area vs. gross building area), whether the multifamily category includes townhomes versus large apartment buildings, more realistic scenario examples tied to recent local projects and three‑year averages for common remodels, comparisons with neighboring beach cities, and how fees would be indexed for inflation. Developer and industry questions included whether parkland/Quimby fees or new parks fees are included in this package and whether affordable housing units would receive exemptions or carveouts.

Staff committed to include a comprehensive FAQ and clearer unit definitions in the Feb. 3 packet and to publish the draft nexus study Jan. 20. Council did not take action to adopt the fees at the study session; the Feb. 3 meeting will include the public hearing and the first reading of the ordinance.