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Appropriation Adjustment, Density Bonus and Development Impact Fee Deferral Agreement for FX Residences December 7, 2021 Page 9 • Deferral Period: The development impact fees will be deferred until the final inspection or issuance of a certificate of occupancy for the Project, whichever comes first. • Extension: An extension of the Agreement may only be granted by the City Council. • Payment Security: Payment of fee is a personal obligation of the owner, or any successor secured by the property, and if left unpaid, shall be collected as a special lien against the property. • Recordation of Agreement and Lien against Property: The Agreement will be recorded in the Official Records of the County of Orange and the Agreement shall contractually bind the owner to pay the development impact fees and shall constitute a lien against the property. The intended goal of the collection of development impact fees at the time of building permit issuance is to ensure that the payment of the fees is completed prior to the vesting of development rights by a project developer. Development impact fees for development projects include customary fees to defray costs for the City to provide development services under the permit, outside agency fees as applicable, and established development impact fees. While deferral of collection of development impact fees is not a routine practice, HomeAid submitted their request under California Government Code Section 66007 and the City is required to consider their request. The collection of the development impact fees for a new residential development is to generally fund planned acquisition and development of parks and open space within the City to mitigate the impacts that new developments will have on the demand for parks and open space within the City. While the request will defer the collection of the development impact fees to a later time in the development process, it will not waive or prevent the City from collecting the fee through protections and securities provided to the City under the agreement. Furthermore, the fees will be paid prior to the actual impact, as no residents will be allowed to occupy the Project until payment is received by the City. The Development Impact Fee Deferral Agreement has been signed by HomeAid to acknowledge their acceptance of the terms. Subordination Agreement As a public lender for an affordable housing project such as this, the private market senior lender typically requests a subordination agreement for the Housing Authority's loan agreement in order to ensure the senior lender will be paid back before the Housing Authority's loan. In this case, staff is uncertain if a subordination agreement is going to be requested by the private market senior lender or another lender. If necessary, the City Council 16 — 9 12/7/2021