Item 18 - Central Pointe Mixed-Use Development Fee Deferral Request (1801 E. Fourth Street)

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Central Pointe Mixed-Use Development Fee Deferral Request (1801 E. Fourth Street) December 5, 2023 Page 2 3 8 7 1 DISCUSSION Jason Silver, on behalf of Ledcor and Central Pointe Phase I Development Partners LP, is requesting approval of a fee deferral agreement for the Central Pointe mixed-use development located at the vacant site collectively known as 1801 E. Fourth Street. The request is being presented to the City Council for consideration pursuant to California Government Code 66007 et seq. Project and Entitlements Background On November 9, 2020, the Planning Commission unanimously approved Site Plan Review (SPR) No. 2020-04 by adopting Resolution No. 2020-38 for the Central Pointe mixed-use development, which consists of 644 residential units and 15,130 square feet of commercial space for the property located at 1801 East Fourth Street in the Metro East Mixed Use (MEMU) Overlay Zone. Taking into account the results of the global COVID- 19 pandemic and its effects on securing funding, labor, and construction materials, and increases in interest rates, the City Council has approved two requests by the applicant for one-year entitlement extensions on July 19, 2022 and again on September 19, 2023. Entitlements for the project are now extended to November 9, 2024. Request for Fee Deferral With the extended entitlement expiration looming, the applicant began to explore additional means to ensure the viability of the project in summer 2023. Among these steps was extending the entitlements until November 2024. However, the applicant has submitted a request to defer the payment of impact fees (Exhibit 1). The request is for the City to defer the collection of the development impact fees until prior to occupancy permit issuance instead of requiring payment of the fees at the time of building permit issuance. Analysis 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, the Owner has submitted their request under California Government Code Section 66007 and the City is required to consider the request. If approved, key terms of the agreement (Exhibit 2) would include: •Fee Deferral and Amount. The deferred collection of the Development Impact Fees in the estimated amount of approximately $5.2 million. •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.