The High Cost of Bad Development

The Thing That Ate Fullerton courtesy of Orange Juice Blog.

Someone once advised that bad design costs just as much as good.

This is particularly true of development that squanders resources, overloads infrastructure, gobbles up energy and foists snarled traffic on the rest of us.

So how come Fullerton has gone head over heels for massive, five-story (and more) apartment blocks the past five years?

At first I thought it was because there was no planning director and that in this void stuff was happening without any sort of adult in the room. Then Karen Haluza came along. Yes, the same Karen Haluza who, as a private Fullerton resident and council candidate, opposed the Amerige Court (now Commons) monstrosity back in 2008. But now Ms. Haluza seems to spend all her time pitching the same ridiculous monsters that were approved when nobody was in charge.

Then it hit me.

These huge projects are moneymakers, and not just for the out-of-town developers that rake in the dough and move on. They are one-time bonanzas for city staff that haul in huge developer fees and massive park dwelling fees. These fees run into the millions.

Now, let’s say that you are a garden variety city manager such as Joe Felz. You have mismanaged the City of Fullerton into a string of unbalanced budgets amounting to over $40,000,000 in just four years. Wouldn’t you be groping for any source of revenue you could find?

Apart from the physical cost of these horrible projects, there is the obvious budgetary problem of relying on one-time sources of revenue to make your budget shortfalls look less bad. But to acknowledge that problem would require honesty and a degree of professional integrity.

28 Replies to “The High Cost of Bad Development”

  1. 100% dead on.

    That’s why city planning staff become positive advocates for projects. A deal has been struck in which the General Fund gets Big Bucks and the rest of us get Big Eyesores.

  2. Good essay. But don’t forget the pro-development mentality of influence peddlers. And our former mayor “Jen” Fitzgerald is one – for the completely amoral Pringle machine. Saying no to massive project entitlements would be BAD for future business.

  3. This is exactly the mindset – and Ms. Haluza was pretty upfront about this fact during the post mortem over the DCCSP plan at the Planning Commission last year. Additional revenue can then be spent to patch up infrastructure without revising our unsustainable pension plan. The bad news is that it is only a temporary solution and as soon as developer’s lose interest we’ll have the same long term fiscal problems we previously did but now have to deal with 200,000 residents instead of just 140,000. It’s the equivalent of trying to cure a hangover by drinking more alcohol the next morning.

    1. Does the money ever end up going towards infrastructure? Looking around town, it would be hard to tell. I’d bet it goes right back to the unions. Didn’t they just get a nice raise?

    2. So why can’t “staunch” conservatives get this? I expect buy-in from big libtards like Flory and Chaffee and Fitzgerald. Whitaker and Sebourn have been all hot and sweaty for this crap, too.

    3. Sean,

      The City wasted $1,00,000 of State grant money spitting up that DCCSDP concept. Do you know if that has to be paid back? This might be a good thing to ask the council. Maybe FFFF can do a post on this incredible waste.

    1. Yes, the election is now past. the rubberstamps have been sworn in. Time to get bizzay.

  4. These are long-tern losers. Like putting your lotto tickets on your credit card.


  5. The problem is that this city has gone from relying on the local population to determine both present and future needs to relying on marketing gurus (aka “visionaries) who are paid by industries that will toss up a high density building, pay us our fees, and walk away. It’s one thing for a pro-high density corporation to have no interest in what future generations need, or in the best interests of the city. But it is inexcusable for our city leaders and staff to be negligent and ignorant of the same and not recognize the vigorous marketing ploys behind the “high density” vision of cities. Let’s call our city leaders what they are: enamored with shiny objects, and overall, ignorant.
    This all ties into our city leaders going to a shopping mall conference in Vegas. It’s the allure of the fast fix. So while our leaders are happy to install shopping centers with minimum wage jobs at less than 20 hours a week, they haven’t figured out just how to find companies that pay someone $8k-10k per month, who can afford these $2500 a month apartments they’re building. And so we become (like the city of L.A.) just another bedroom community.
    There’s an uneasy NIMBYism with our city council members. It’s very much an “I got mine,” attitude, instead of trying to answer the needs of those younger than them, and not comprehending that the largest group leaving our state are those between 35-45 years old. That’s the age where people are buying homes, having kids, and becoming engaging in and investing in the community where they live. If all our city offers them is a $2500 a month apartment and a minimum wage job, or the need to commute long hours to work elsewhere then why should they stay? Why shouldn’t they take that job in Texas, Arizona, or New Mexico, where wages are commensurate, and they can have more of the life they want?
    That’s the challenge before them. Every high density building and shopping mall offering a minimum-wage job, simply means that the city council is remaining willfully ignorant.

    1. Very short-term thinking drives our decision makers. Fast buck. Zero regard for the future. None.

  6. The question is: Can we do things differently? We might not have the acreage to build single family homes, but must new housing be relegated to high density rentals? Is the only commercial development going to be a shopping center?
    What made Fullerton grow after WWII, was the ability to have a good, high paying job that allowed people to buy into the middle class and purchase a home. You could work where you lived.
    Regionally, we had the halcyon days of jobs that beckoned engineers and skilled workers for Hughes, Unocal, Chevron, Bechtel, Rosemount and more, who became the middle to upper middle class. Their needs determined what we became: a city with good schools with convenient shopping areas, easy access to healthcare, and affordable tract housing. Today, the jobs are long gone, the industries have changed. Their descendants have found less reason to stay here.
    So, what are we going to do differently in order to retain people of a working age? What does the younger generation desire in terms of jobs and housing (as opposed to the short term, which are bars, tattoo, and hair salons). What do middle class families need in order to stay here, and not move out of state? In a state that is already high density (37 million and growing), how do we preserve a sense of space that so many of us in the west have long valued? How do we cut out commute times of an hour or more? What kinds of industries are our schools preparing future generations for? How will we meet their needs?
    I’m not saying it’s an easy question to answer, or that there aren’t very difficult zoning laws imposed by the county that favor high density development. But we need a council member to at least broach the question, and not insist they have all the answers, but to start the conversation.

  7. High density residential developments bring a one-time infusion of cash into the city coffers, but in the long run they are a money losing proposition for the city. The reason is that they don’t provide much in the way of ongoing income to cover their increased impact on city services and infrastructure. Large scale rental properties are not resold very often, so under Prop. 13 the property tax revenue from these developments does not keep up with inflation. Commercial and industrial developments provide additional tax revenue in the form of sales and business taxes, so they contribute more to the city’s tax base over time.
    When I first moved to Fullerton the city had a fairly good mix of residential, commercial, and industrial properties. However, many of the large industrial businesses are gone. They have been replaced by large residential developments that don’t produce enough tax revenue to maintain the city services they require. Brea has worked aggressively to entice commercial and industrial enterprises, which contribute more revenue to the tax base. A good example is Beckman- Coulter which moved out of Fullerton and opened up a large facility in Brea. Fullerton instead of making an effort to keep Beckman-Coulter or to bring in a new industrial development, decided to zone the old site for residential.
    The high-density residential developments have the most negative impact on city services and infrastructure because they generate a large amount of traffic in a small area leading to major bottlenecks, as well as major parking problems.
    Other cities in the county have done a much better job of attracting industry and commerce, while Fullerton has allowed itself to become a bedroom city. We are paying the price in terms of crumbling infrastructure.

    1. “while Fullerton has allowed itself to become a bedroom city. We are paying the price in terms of crumbling infrastructure.”
      Moreno Valley property taxes pay for good parks and streets. Not much business there

    2. Some of Fullerton College and Cal State Fullerton staff live in Fullerton but even more could be done about it

    3. Here’s a novel idea: get the City out of “economic development” altogether. The problem isn’t that people like Nicole Bernard are no good at it. The problem is that it’s not the role of government to bribe or entice businesses to relocate. It’s a zero sum game. That’s why Redevelopment was bound to fail. It didn’t create wealth it just moved it from place to place, from person to person.

      What the City shouldn’t do, either, is rezone industrial and commercial property for some smart-aleck developer’s quick profit. Without anybody noticing it Fullerton tossed away most of its O-P zoned property over by CSUF. It’ll never come back.

    4. Mark Shapiro,
      There are many ways to promote business without going crazy over development Fitzgerald style. I will show you just one among the several possible. Think of guys like Dan Huges. He is benefiting-and will do so for life- from Fullerton taxpayers’ money . Where is he living and doing his groceries and just about everything else right now? In Anaheim Hills and Anaheim-our money is going somewhere else. A transfer of wealth via taxpayer is taking place from one to another municipality. Solution: a percentage of salary and pension should be given as vouchers redeemable only at Fullerton businesses. Hence, there is a clear commitment to the city attached to being a public servant. The program would of course be more complex than that. For example, if the employee or retiree wants or has to move out, change jobs and so on, a monetary conversion would be applicable;yet, such conversion would be less generous than the voucher benefit.

      1. @Lisa: I think that’s a solution, heavily reliant on creating an infrastructure that would take administrative time and its own bureaucracy. I’m not interested in that. Having a public servant live elsewhere is a sad reality in California. If you look at Silicon Valley, public servants can rarely afford to live where they work because of the cost of housing. Fullerton is not immune from this reality. In order to provide a city clerk with a house they can afford we’d either have to enter into a disastrous scheme like the CSUF condo debacle, or we’d have to greatly raise their salaries.
        @CleanTheRecord: Is providing housing to CSUF and FCC employees the city’s responsibility or is it the college’s responsibility? I say the colleges are free to do what they want, but it shouldn’t involve city time or financial expenditures.
        @Dr Mark: As for rental apartment homes never or rarely being sold –I know of at least one that was built by a REIT. That will never be sold unless they can get a vote of their shareholders. If it is sold it would be to raise quick liquid assets, or because it’s a money-losing investment.
        @Harpoon: Agreed, and I’ve voiced before on this blog that what’s zoned commercial or industrial should never be rezoned for residential. Case in point: The property over by St. Jude on Bastanchury. That needs to stay commercial.

        Regarding economic development: We have an all-appointed Economic Development Commission, however, they seem to be an extension of the Chamber of Commerce. If anything, we expect them to be answering the questions I’ve posted in my previous replies above, and having a meaningful discussion about localism, and meeting the needs of middle class families who are poised to leave the area, and generations who we are or have educated from K-12 and maybe beyond, who have no plans to ever live here due to the costs and lack of opportunity. I am sure that this blog would welcome a column by any of them if only they could get over their “Bushala fear.”

        What we’re talking about is addressing long term concerns that has localism as its axis. In other words, using both the present and future needs of its residents as a means of gauging and influencing the decisions we make for the city. Instead, we have leaders who prefer to listen to “ten marketing gurus bearing swag,” paid by corporate concerns to drum up support for their high density apartment homes and shopping centers. That’s what needs to change.

        1. CANM
          I strongly agree with your last two paragraphs. As to my example, you must understand that something like this can not be properly explained here, nonetheless it would not require an army of bureaucrats. The colleges can do whatever they want, but whether you like it or not, they shape the city for better and for worse. For instance I doubt the night bar businesses would be this influential in downtown Fullerton without the colleges. The city can work with the colleges and create incentives to,overtime, increase the % of staff that becomes an integral part of Fullerton. One CAN NOT CHOKE A BUSINESS OR ORGANIZATION, YET THEY ARE NOT ISOLATED UNITS WHO SHOULDN’T BALANCE THEIR ENDS WITH THE LONG TERM LIVING IMPROVEMENT OF THE CITY & ITS RESIDENTS. I’m with you the condominiums CSUF plan sucked from the very outset

        2. CANM
          “@CleanTheRecord: Is providing housing to CSUF and FCC employees the city’s responsibility or is it the college’s responsibility?”
          How about one’s work provides for housing and basic needs? There was once a time when one’s work paid for it. I believe your question and rest of comments talk for themselves. Asking if an organization should provide the worker with a house means that working for the organization is not enough to pay for it. Something must be wrong here

        3. CANM
          “You look at Silicon Valley, public servants can rarely afford to live where they work because of the cost of housing. Fullerton is not immune from this reality”
          That’s why thousands commute for hours from home to work. Very efficient and nice living, ….not. Is that reality of the same kind as you and I are going to die?

    5. Could not agree more. What is going on in that huge property just North of Costco. If it’s more condos or apartments, I will launch or be part of a protest. We can barely get from point A to C without feeling like we are in stop and go traffic on the freeway. On top of that, our streets here in Fullerton are the worst I have ever seen. Our once awesome and desirable city is going down the tubes in a big way.

      1. What’s going in is a 700 ft. long prison block that was rejected by the City’s own “town architect” but approved by Whitaker & Co. anyway.

  8. Let’s see if I’ve got this right. Developers come in, give money to political campaign, get big approvals, and the elected politicians get a short term infusion of cash to make the budget disaster look better.

    Got it.

    Reminds me of Trump Jr’s video. He was talking from the Trump hotel suite in Panama …He was talking about how businesses were flourishing and were very profitable in Panama. During his speech, one third of streets in Panama City became flooded with shit , urine and toilet paper coming out from the sewage system underneath.

  10. high density, apartments renting for over $2000 a month, cracker box houses rhat sold for less than $20,000 in 1955 now demand half a million or more to buy. Wages have dramatically increased since 1955, and the cost of living has tripled since 1955, strip malls, office buildings festooned with for lease banners and signs, add to this list the shift to online shopping empties out department stores; Sears, Macys, KMart. And a Joe Felz’s Fullerton can’t say no to the next quick fix revenue scheme.

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