GROWTH CONTROL MEASURE

At the time of this writing, we will soon be going to the polls to vote for the 44th President of the United States of America. We are so inundated with endless political commentaries, tons of e-mail blasts, an abundance of jokes (some of them really are quite funny) and soon we can look forward to lots of recorded phone calls telling us who and what to vote for. Oh, ‘tis the season.

Let’s take a moment to have a quick overview of another new local Growth Control Measure Initiative here in our city. Are you ready to digest another initiative to impose more limits on new commercial projects in Santa Monica? Could there actually be any more limits? This initiative is called “Residents’ Initiative To Fight Traffic or RIFT.”

RIFT will be placed on the November ballot by residents who want to reduce traffic. The initiative would limit commercial development for 15 years at a total of 75,000 square feet per year. That equates to a typical three to four story office building and encompasses just about all retail, office, hotel and restaurant development. Integral facilities such as hospitals are supposedly excluded from the cap as well as projects that are less than 75,000 square feet.

RIFT is being opposed by a coalition of apartment renters, environmentalists and some local businesses saying that it will do very little to reduce the traffic problem in Santa Monica, circumvent efforts for long term planning, increase leasing rates and ultimately drive lenders and developers from even doing business in Santa Monica. Last month the Santa Monica Chamber of Commerce also voted to oppose the measure. Additional opposition to the measure has been voiced outside the city of Santa Monica from the Beverly Hills/Greater Los Angeles Board of Realtors and the Los Angeles County Business Federation. The Business Federation consists of 73 business organizations throughout the county and has addressed concern that this may lead to similar measures in other cities and sites these types of measures as simply job killers. The Board of Realtors says the measure will ultimately dry up construction lending in the city of Santa Monica. Naturally, the initiative is also being fought by developers, but you have to wonder why would a developer even consider developing here?

Should this measure pass, it would limit the amount of new space. This would make it much more difficult for businesses to expand, and most would ultimately encounter tremendous rent increases when their leases come up for renewal. The measure is retroactive to the beginning of the year; therefore it would postpone many projects that are currently going through the approval process with the city. Do you think the city will refund any of the money already paid for those who are currently going through the approval process?

Stay tuned on this initiative and the quality of our lives, businesses and apartment buildings in Santa Monica. How can the traffic possibly get any worse? Traffic and density issues have been major factors affecting the city, businesses and all who reside here for quite some time. Did we ever have a general plan? If so, what happened to it? Do we really want to drive more businesses out of our community? These are very serious issues, but is this the proper initiative to address them with? We know the answer on November 5. Fortunately, it looks like this ill-conceived initiative will not pass.

The apartment market here in Santa Monica will most likely feel the ramifications of initiatives like this, yet there is still demand for rental housing in the city. It is common knowledge that the sales activity in apartments has slowed downed just like everything else, however buildings that are priced right are still selling. And while they may not be at last year’s prices, the values are still here. Naturally, buyers are a bit more cautious and are kicking the tires a little more, but that’s to be expected in this type of market. Large apartment brokerage houses are reporting that their sales are down 50% and the local ReMax office on the Westside is closing its doors; the volume is just not there. Of course, we’re in an election year with a troubled economy and another season is passing.

Speaking of the seasons, Thanksgiving, Christmas and Channukah will be here before we know it. Where does the time go? And for those honoring the Jewish Calendar, we say L’Shanah Tovah, which means that we wish you a sweet and good new year.. We reflect on the years gone by with heartfelt thanks and remain very grateful to be serving you for over 30 years now.