General Plan Amendment Will Cost Newport Taxpayers Millions Each Year

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As you may have heard, 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 will likely ask what benefit does a “yes” vote have for me and my fellow residents?

One aspect of that is economic: the developers requesting these expanded building opportunities must assume 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 Fiscal Impact Analysis compares the expected revenues to the City in fees and taxes – including expected sales tax generation – to what it costs the City 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 every one of the entitlements developers are promising not to build would have generated net revenue for the City, whereas most of the new entitlements they are promising to build, will be burdens on taxpayers.

Changing from the current General Plan to the amended Plan, should the City Council vote to approve the Plan recommended to it on July 8, would produce a net loss to the City treasury of $6,066,332 every year.

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, if built, is predicted to impose a net cost to the City of $0.9 million 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 them. 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 will extract public benefit fees through development agreements. However, such fees are one-time, while the burden on taxpayers will be permanent.

There are many reasons to be skeptical about the wisdom of making the proposed changes to the 2006 General Plan including 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, SPON-newportbeach.org or the City’s website, for more information. Let the council know what you think.

Dorothy Kraus

Newport Beach

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2 COMMENTS

  1. This sudden “strategic” general plan amendment drive, who’s really pushing this? Not staff, not council, its the same above us all… developers and real estate giants playing their “Golden Monopoly Board”. But why or how do they get so much control over our City? Every time I hear this “Quality of Life” jargon a red light goes off.
    Thank goodness we have many folks in Newport with their eye’s more open and remember what we’ve learned from past tactics like this.
    Welcome to “Irvine World” or what?.
    FYI: The “Quality of Life” jargon really came from those back-East big environmental groups and political leaders trying to disconnect “disguise” from being labeled as Environmentalists so they might appear less radical or liberal for selling the greening of the planet to anyone.
    Its too bad because it really has a nice ring to it.

    • Who is behind it… Some prime suspects mentioned last night. The meeting pretty clear as to who wanted to ram it through by trying to slip in appeasements – ie “cut a deal” Watch the meeting at the city hall website. Does not take an einstein to see who the developers lap dogs are.