Combating the High Cost of Doing Business in San Juan Capistrano

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San Juan Capistrano is so laden with fees to businesses that operating a hotel in the city would cost more than three times as much as operating the same hotel in Oceanside, according to a city staff report.

Operators of a 130-room hotel in San Juan Capistrano would pay $1.3 million in sewer, traffic, water and systems development fees compared to $383,000 in Oceanside. This reality has Councilwoman Laura Freese spearheading a drive to temporarily lower sewer, traffic, water and systems development fees by 50 to 75 percent.

Freese said a cutting the fees would encourage more businesses to open up shop and bring in more revenue to the city than would be lost by cutting the fees. “We’re not going to get the business into town if we charge them up the ying-yang for coming to town,” Freese said.

The proposal comes on the heals of a decision by council to close $302,000 gap in the budget with money from the Capital Improvement Fund.

It isn’t just hotels that are expensive to open in the city, auto dealers have to shovel out $228,000 per acre for a traffic mitigation fee. If a 6-acre wide auto dealer were to open up a showroom in the city, it would cost them $1.2 million in traffic mitigation fees alone.

Councilman Tom Hribar agreed with Freese, saying that these fees impede businesses from coming into town. The businesses would seek to set up shop wherever it is more convenient.

“You gotta strike quickly or they’re gone,” Hribar said.

Mayor Londres Uso said the comparison to Oceanside made in the staff report was not a valid comparison and that the city needs data from other South Orange County cities before making a decision.

“I need to know how to be competitive around here,” Uso said.



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