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 3 3 8 7 1 •Extension. An extension of the Agreement may only be granted by the City Council. •Payment Security. Payment of fees are 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. Upon the execution, the Agreement will be recorded in the Official Records of the County of Orange and the Agreement shall contractually bind Owner to pay the development impact fees and shall constitute a lien against the Property. Santa Ana Municipal Code (SAMC) Sections 8-1967(A)(3) and 35-111 require payment of permit fees and residential development fees at the time of building permit issuance. California Government Code Section 66007(a) states that "any local agency that imposes any fees or charges on residential development for the construction of public improvements or facilities shall not require the payment of those fees or charges, notwithstanding any other provision of law, until the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first." This section generally provides that the City shall not require the payment of development impact fees until the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. However, pursuant to Government Code Section 66007(b)(1), “the local agency may require the payment of those fees or charges at an earlier time if (A) the local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy or (B) the fees or charges are to reimburse the local agency for expenditures previously made.” Pursuant to Government Code Section 66007(b)(2)(A), the City is required to approve fee deferral requests only for projects containing onsite affordable housing units. As the subject project does not contain onsite affordable housing units, the City Council may exercise its discretion when considering the applicant’s request. While the City Council has approved fee deferral requests for projects containing onsite affordable housing units, the applicant’s request is unique in that the project is entirely market-rate (no onsite affordable housing units). Moreover, the City has recently processed similar market-rate, multi-family residential developments that have confronted rising interest rates, such as the Fourth and Mortimer mixed-use development (409 & 509 E. Fourth Street), Cabrillo Crossing (1814 E. First Street), Haphan Residential (3025 W. Edinger Avenue), Legado at the Met (200 E. First American Way), Santa Ana Lyon Townhomes (717 S. Lyon Street), and The Row at Redhill (2300 S. Redhill Avenue). All of these projects were able to successfully pull permits and commence site activities during the period in which interest rates began to increase. Approval of the fee deferral would set precedence for requests from similar