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Home My WebLink About1993-07-13 - AGENDA REPORTS - ECONOMIC DEV DEFERMENT OF FEES (2)AGENDA REPORT UNFINISHED BUSINESS DATE: - July 13, 1993 City Manager Approva Item to be presented Lynn M. Harr!sq� SUBJECT: Economic Development Policy Related to. Deferment of Fees for Non - Immediate Infrastructure Projects DEPARTMENT: Community Development BACKGROUND At Its regularly scheduled meeting of June 22, 1993, the City Council was presented with recommended economic development policy pertaining to development Incentives, Including a 90 - day fee guarantee and the deferment of fees for non -immediate Infrastructure projects. Following discussion, a motion was made to approve policy related to the 90 -day fee guarantee portion and continue the fee deferral portion until tonight's meeting to allow for additional public discussion. At the meeting, the City Council. expressed concern regarding a risk of business failure, which could limit the City's ability to collect required development fees. To address City Council concerns, the following Items have been recommended for consideration. Based on further Internal discussions, staff believes that these additional requirements may reduce the potential loss to the City In the event of a business failure. 1. The developer shall be required to make an Initial fee payment of 10% of the total development fee amount to be deferred. 2. The prospective developer may be required to provide a full financial disclosure statement of the development company prior to entering Into a fee deferral agreement with the City. 3. The fee deferral agreement maytakethe form of either contract ora development agreement with a bond or similar security In the event of a default. 4. The -fee deferral agreement shall beattached to and form a part of the proposed development and full fee payment shall be paid to the City prior to the Issuance of any Certificate of Occupancy or any temporary Certificate of Occupancy. RECOMMENDATION Adopt Resolution No. 93-99, approving the policies for the deferment of fees and/or bonds for non - immediate Infrastructure projects. ATTACHMENTS Resolution No. 93-99 June 22, 1993 City Council Agenda Report eounN�dlrpoLddp Adopieu:7-1#- r3 Agenda Item: i3 9 _ AGENDA REPORT NEW BUSINESS DATE: June 22,1993 City Manager Approval Item to be presented by: Michael K. HavilanW'P- SUBJECT:, Economic Recovery Workshop Recommended Pollcles for Development and Permit Fees DEPARTMENT:. Community Development BACKGROUND The Economic Recovery Workshop convened In October, 1992 as the primary effort uniting private and public leadership for solution of economic problems In the Santa Clarlta Valley. Participants formed Into ad hoc committees and provided recommendations for economic recovery. As a result of these recommendations, Issues were Identified and prioritized In order of Importance. On April 13, 1993, the City Council took formal action to support the recommendations stemming from the workshops. Two (2) policy Issues recommended by the workshop committees Include: (1) 9"ay fee guarantee for projects M the development review process; and (2) deferral of fee and/or bond requirements for non -immediate Infrastructure projects. The scope of work for this report centers on the definition of key Issues, timing Issues, operational Issues and options for consideration. CONCEPTS DEFINED (1) 90•Dev Fee Guarantee:. This concept Is defined as guaranteeing a set fee schedule for 90 days. A prospective developer would request a guarantee based on the assumptions of their development Proposal as submitted. The City would determine a set fee listing for a 90 -day period. Therefore, fees would remain unchanged and allow the developer to approach a lender with [tetter certainty for their financial pro form. (2) Deferral of fee and/or bond requirements for non•Immedlate City Infrastructure arolects• Conceptual policy would allow for a prospective developer to delay payment of required Infrastructure fees (I.e., bridge. and thoroughfare fees) until the City commences specific Infrastructure projects, appropriates budget amounts, and earmarks funds. Any infrastructure projects requiring Bridge.and Thoroughfare fees scheduled within a one-year period of the development project would not be applicable to this Incentive. Further, the fee deferral Incentive program would not apply to residential projects, it would apply to commercial and Industrial projects only. The payment of Quimby (park) fees applies only to residential projects, and therefore, would not be eligible for fee deferral. Agerww Item: 90 -DAY FEE GUARANTEE CONSIDERATIONS (1) From a recommendation, of the Economic Recovery Workshop, the City has previously developed a comprehensive listing of all development fees and this information is available for Interested parties at the Community Development public counters. Pros and Cons: Advantages to offering a 90 -day fee guarantee Include the certainty for development proposal fee structure for the prospective developer. Additionally, the policy sets forth the City's responsiveness to the business and development community. Disadvantages jnclude the lack of flexibility should modifications. occur to the proposed development. Further, this Incentive would apply only to larger scale commercial and Industrial projects and would not apply to residential subdivision projects. Recommended Poli A. GUARANTEE OF FEE AMOUNT AFTER PLANNING COMMISSION / DIRECTOR APPROVAL OF PROJECT Should the City consider to secure fee amounts, only projects that have received Planning Commission or Director approval would quality for a guarantee. B. OPERATIONAL CONSIDERATIONS A standard written agreement, with similar Intent to a development agreement would be the Ideal implementation tool for a 90 -day fee guarantee. Adoption of a resolution would ratify the agreement between the City and the prospective applicant. C. RESPONSIBLE AGENCY FEES The City does not have authority over development fees required by outside agencies and therefore would not be able to guarantee fees; however, the City would be able to assist the developer In estimating these fees. DEFERRAL OF FEES AND BONDS FOR NON -IMMEDIATE PROJECTS (2) Currently, no provisions exist for deferring development fees for non -Immediate Infrastructure Improvements. Building permits may be Issued for a project once all development fees are paid and all responsible agencies' approvals are obtained. The number of approvals required depends on the size and scope of the project. Staffs objective Is to structure an Incentive policy regarding long -tern capital projects that the City has control over without Incurring additional expenses on the City. Both Community Development And Finance Department Staff are exploring options in regards to fee discounting or a deferment program for prospective developers. Pros and Cons: Advantages Include potential Increase In commercial and industrial development and benefits to developers include a Increase In working capital for project commencement. Disadvantages include the limited nature of this policy. The fee deferment policy would apply to larger scale commercial and Industrial projects offering a substantial public benefit to the City and would not apply'to residential developments. Recommended Policy: . A. OPERATIONAL CONSIDERATIONS A development agreement would be the operative mechanism with an Insurance for adequate security In the event of default. Approval by the City Council would be required to Implement the development agreement. B. TIMING Fees and/or bonds for non-immedlate Infrastructure improvements would be considered after Planning Commission/Director approval. C. . PROJECT SIZE AND TYPE The City would require a project to be a commercial or industrial use and require that the Project provide a substantial public benefit for the City (minimum 2s permanent jobs to be created over a two year period, Investments over $1,OOO,OOo In land, building, and equipment, and revenue enhancement for City). D. DEFERRAL INCENTIVE PROGRAM LIFE The program would be In place for a three-year period. After three ysais; the City Council would have the option to cancel or renew the Incentive policy. CITY ATTORNEY REVIEW The City Attorney's Office has reviewed the Incentive policy as has approved It as to form and concept. RECOMMENDATION Adopt Resolution No. 93418, approving policies for guaranteeing fees for 90-d8ys and the deferral Of fees and/or bonds for nondmmediate Infrastructure projects. ATTACHMENT Resolution No. 93-88 LMH:MH Aro RESOLUTION NO. 93-88 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA ADOPTING ECONOMIC DEVELOPMENT INCENTIVE POLICIES FOR DEVELOPMENT AND PERMIT FEES RELATED TO COMMERCIAL AND INDUSTRIAL PROJECTS WHEREAS, the Economic Recovery Workshop was convened In October 1992 to unite private and public leadership In an effort to solve economic problems In the Santa Clarlta Valley; and WHEREAS, participants of the workshop provided recommendations for economic recovery In the Santa Clarita Valley; and WHEREAS, the City Council took formal action on April 13, 1993, to support these recommendations; and WHEREAS, the City Aftomey's Office has reviewed this incentive policy and has approved It as to form and concept. THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA does resolve as follows: SECTION 1. The Council does hereby adopt t Guaranteehe following policies for a 90 -day Fee : 1. The City and prospective applicant may enter Into a written agreement to Implement Council I Resolution Would ratify the greement betweenntee Of Project development fees for a 90 he Citeriod.y andthe pplicantion of a t 2• Only development projects that have received formal Planning Commission or Community Development Director approval shall be able to quality for a fee guarantee agreement. 3. The City does not . have authority over development fees required by outside agencies and therefore, is not able to guarantee such fees. The City is able to assist the developer In estimating these fees. - 4. This guarantee shall apply to larger scale commercial and industrial projects and would not apply to residential projects. SECTION 2. The City Council does hereby adopt the following policies for the deferral of tees and bonds for non-Immedlate infrastructure projects: 1. The City and the prospective applicant shall enter Into a development agreement with an Insurance for adequate security In the event of a default. 2• Only development projects that have received formal Planning Commission or Community Development Director approval shall be eligible for deferment of fees and/or bonds for non -Immediate Infrastructure projects. Reso. 93-88 Page Two 3. Only commercial or industrial projects which provide a substantial public benefit for the City (minimum 25 permanent jobs to be created over a two-year period, Investments of over $1,000,000 In land, building, and equipment, and revenue enhancement for the City) shall be eligible for a development agreement pursuant to this policy. SECTION 3. The resolution shall be effective for a period of three years from the date of adoption. Atter this period, the City Council shall have the option to cancel or renew the Incentive policy. PASSED, APPROVED AND ADOPTED this day of 1993. Mayor ATTEST: City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) § CITY OF SANTA CLARITA ) 1, DO HEREBY CERTIFY that the above and foregoing Resolution was duty adopted by the City Council of the City of Santa Clartta at a regular meeting thereof, held on the day of 1993. by the following vote of Council: AYES:. COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: City Clerk .0u,mV.**"9 dP RESOLUTION NO. 93-99 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA ADOPTING AN ECONOMIC DEVELOPMENT INCENTIVE POLICY FOR DEFERRAL OF DEVELOPMENT FEES RELATED TO COMMERCIAL AND INDUSTRIAL PROJECTS WHEREAS, the Economic Recovery Workshop was convened in October 1992 to unite private and public leadership in an effort to solve economic problems in the Santa Clarita Valley; and WHEREAS, participants of the workshop provided recommendations for economic recovery In the Santa Clarlta Valley; and WHEREAS, the City Council took formal action on April 13, 1993, to support these recommendations; and WHEREAS, the City Attorney's Office has reviewed this Incentive policy and has approved It as to form and concept; and WHEREAS, the City Council reviewed this policy at the regularly scheduled meeting of June 22, 1993, and continued discussion of this policy until the regularly scheduled meeting of July 13, 1993 to allow for additional public discussion. THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA does resolve as follows: SECTION 1. The City Council does hereby adopt the following policies for the deferral of fees and bonds for non -Immediate Infrastructure projects: 1. Commercial or Industrial projects which provide a substantial public benefit for the City (minimum 25 permanent jobs to be created over a two-year period, investments of over $1,000,000 in land, building, and equipment, and revenue enhancement for the City) only shall be eligible for a development agreement pursuant to this policy. 2. The City and the prospective applicant may enter Into a .written contract or development agreement with a bond or similar security for adequate security In the event of a default. 3. Development projectsthat have received formal City Council; Planning Commission or Community Development Director approval may be eligible for deferment of fees or bonds for non -immediate infrastructure projects. 4. The developer shall be required to make an initial fee payment of 10% of the total development fee amount to be deferred. 5. The prospective developer may be required to provide a full financial disclosure of the development company prior to entering Into a fee deferral agreement with the City. 6.' The fee deferral agreement shall be attached to and form a part of the proposed development and full fee payment shall be paid to the City prior to the Issuance of any Certificate of Occupancy or temporary Certificate of Occupancy. Reso. 93-99 Page Two SECTION 2. The resolution shall be effective for a period of three years from the date of adoption. After this period, the City Council shall have the. option to cancel or renew the Incentive policy. PASSED, APPROVED AND ADOPTED this ATTEST: City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) § CITY OF SANTA CLARITA ) day of 1993. Mayor 1, . DO HEREBY CERTIFY that the above and foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of , 1993 by the following vote of Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: City Clerk GAC:LMH ....JW039 .a,