February 21, 2005

Request for Building Permits Slows in Santa Barbara


A slowdown in building permits has resulted in a $300,000 shortfall in expected revenue halfway through the fiscal year. Santa Barbara's officials are stumped over why developers aren't pulling building permits at the rate expected.

Officials claim at least 140 permits -- for approved projects ranging from time shares to house remodels -- are ready to go. Typically, the department has only about 40 permits at any one time waiting to be pulled.

"We're $300,000 short and we're surprised," said Paul Casey, the city's Community Development Director. "It's unique and unusual."

City officials have sent letters to about 140 developers reminding them to pull their building permits.

If the trend continues, the city's current shortfall could double by the end of the fiscal year, leaving the City Council to dig into its reserves to balance the budget.

Santa Barbara has a $192 million budget and an $87 million general fund. The city had expected to make about $3 million from building permits this year.

Officials are not panicking yet.

Developers and city officials say the most likely culprit is the rain.

"You don't want to open up the ground and be digging a giant hole and getting 22 inches of rain," said Jeff Bermant, president of Bermant Development Company, who expects to pull a permit soon for Paseo Chapala, the company's downtown commercial and residential project.

"I don't think there is anything in the economy that is slowing things down. Business is brisk for housing. It's not the market," he said.

The developer said he won't be ready to pull his building permit until late March, but explained that if the city wants developers to pull permits faster it ought to speed up the review process.

"For us, part of the dragging has been going through the process," Mr. Bermant said. "You go back time after time after time."

He said his project has been before the city's Historic Landmarks Commission 16 times.

Developer William Levy also claims to be just "a couple of weeks" from pulling the first of three building permits for the downtown Ritz-Carlton Club Santa Barbara timeshare project, which will dramatically transform three blocks on lower State Street.

"We're cooking along," Mr. Levy said. "Ritz is ready."

Mr. Levy said a "last-minute" traffic plan for his $185 million Ritz-Carlton project contributed to the delays. The 62-unit time-share village includes restaurants, shops, wider sidewalks and parking, and was approved in 2001.

Mr. Levy has another project that he says he's near pulling a permit for -- 46 condos, mostly market-rate, at the corner of Chapala and Gutierrez streets, a project he calls "Chapala One"

He suggested the slowdown in issuing permits is probably an aberration because of the weather. "From a capital and financial standpoint the economy is actually very good," Mr. Levy said. "I can't imagine that any of these projects is being held up because of financing."

Like Mr. Bermant, Mr. Levy said the larger problem is the speed of the city's review process. While he said the extensive review process helps make a project better, it does slow the developer down.

Santa Barbara's high cost of living also plays a role, he said.

"They have the problem that we all have, and that is finding adequate staff people to come in and do the work that needs to be done," Mr. Levy said.

Santa Barbara City Councilman Das Williams, a member of the city's Finance Committee, said he hopes to address developers' concerns by looking at raising developer fees so more planners can be hired, which should speed up the review process. It's an idea that Mr. Bermant said he supports.

But for now, Mr. Williams says he is not concerned about the slowdown.

"Right now, it doesn't concern me," he said. "These fees will eventually come in. I think it's the rain, and I think on some of the biggest projects, it's financing and other complications of getting things done."

Posted by gandlwoods at February 21, 2005 06:37 AM