(Cindy Chew/2006 S.F. Examiner)

Debate persists as development transit fee advances to Board of Supervisors

San Francisco’s proposal to impose a transit fee on residential development advanced to the full board Monday, but the debate is far from over.

During the Board of Supervisors Land Use and Economic Development Committee hearing Monday, leaders of the largest nonprofit hospitals in town turned out to criticize how they won’t be exempted from the transit fee.

“This ordinance, if adopted, will decrease the resources for hospitals to do their charitable giving and spread out and increase the cost of health care,” said David Serrano Sewell, regional vice president of Northern California Hospital Council.

That issue is expected to remain a point of contention. The committee decided to send the legislation to the full board for a vote on Nov. 3, which is Election Day, giving more time for discussions involving Kaiser, St. Francis, Chinese Hospital and California Pacific Medical Center.

But that’s not the only issue in play. The board’s more left-­leaning members, like Supervisor John Avalos, continue to argue The City is not getting an adequate amount of money from the developers and would like the impact fee rates to increase more than they are currently proposed. Developers have been quick to push back, arguing that going any higher would have a chilling effect on housing development. A debate on amendments to the proposal are expected at the full board. After the Oct. 6 hearing, when the committee had made some changes to the proposal, Avalos said, “I feel like we left a lot of money on the table today.”

Speaking about the nonprofit hospital issue, Dee Dee Workman of the San Francisco Chamber of Commerce said not granting exemption to the nonprofit hospitals — the only provision of the proposal the chamber is not supporting — “is a little bit of a breach of faith” when it comes the “coalition” discussions around transit issues, like supporting a previous transportation bond.

The proposal to impose a transit impact fee on residential development was introduced to the board under a scheme to generate $14 million annually a year for Muni. Changes made to the proposal during the committee hearings increased the amount by about $4 million annually with one-time revenues of $7 million for grandfathering provision changes. Avalos had proposed rate hikes to generate an additional $13.5 million annually and one­time revenues of $35 million in changes to grandfathering provisions.

The residential fee rate supported by the committee kept the proposed rate at $7.74 per square foot for residential developments under 99 units but increased it to $8.74 for every unit in excess of 99 units. The City’s nexus study found that transit impacts caused by development could legally justify a residential fee of $30.93 per square foot.

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