Development
Fee Mitigation
Los Angeles Department of Transportation
A tenant leased and was making tenant improvements to a former coffee shop in Century City. The ink on the lease had dried, and the tenant applied for a building permit which was put on hold pending an unexpected fee totaling nearly $130,000.00.
The tenant’s use constituted a change of use, and because of little known district maps that affected the property, a Traffic Impact assessment (TIA) was required. The fee was significant and altered the tenant’s deal economics significantly. Construction halted.
While there are mechanisms in place that typically diminish the scope of the assessment and the severity of the fee, the property had suffered a long and abnormal vacancy due to Covid-19 that precluded the tenant from qualifying. The tenant and landlord worked together for 8 months to mitigate the fee without any success.
In early December, Erickson was brought onto the team to help mitigate the fee and manage construction. The following steps were taken to explore routes to mitigate the fee:
Met and discussed situation with the landlord.
Discussed the situation with the previous listing agent.
Met many times with assigned engineers from LADOT.
Leveraged relationships with Los Angeles-based developers to make contact with a seasoned expediter.
Met with expeditor to discuss the issue and identify key decision makers in the city.
Reviewed all municipal code.
Reviewed all sub-zoning districts and discovered that the property was subject to two (2) traffic districts. This allowed us to reverse engineer the fee and understand how it was being calculated – and why.
Developed an 80-page brief on the city’s municipal code and traffic districts, arguing that the aggravating factors were unforeseen by the city’s code, warranting an exception.
Delivered copies of the brief to the district councilwoman (with a letter) and LADOT leadership.
Reached out to the city attorney.
Lobbied the state senator.
Within 30 days of commencing the project, LADOT waived the entire fee. This lobbying effort was conducted in the month of December, spanning across Christmas.
IMPACT – Entire fee waived.
Photo Credit: CoStar
