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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />FEBRUARY 7, 2011 <br />TITLE: <br />PUBLIC HEARING - ORDINANCE <br />TEMPORARILY DEFERRING COLLECTION <br />OF DEVELOPMENT IMPACT FEES <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />? As Recommended <br />? As Amended <br />? Ordinance on I" Reading <br />? Ordinance on 2nd Reading <br />? Implementing Resolution <br />? Set Public Hearing For_ <br />CONTINUED TO <br />FILE NUMBER <br />Adopt an ordinance amending various sections of the Santa Ana Municipal Code to temporarily defer <br />collection of development fees until the issuance of certificates of occupancy/compliance. <br />DISCUSSION <br />Development activity in Orange County continues to experience the effects of the economic slow- <br />down. Although there have been recent indications that development activity is beginning to <br />increase, it is anticipated to be a slow recovery. <br />In 2008, the City Council adopted a one-year development impact fee deferral program to help <br />stimulate development. Programs similar to Santa Ana's were adopted by a number of cities in <br />Orange County and more than 75 jurisdictions statewide. Santa Ana, like most cities, collects various <br />fees to offset impacts created by new development. These impact fees provide funding for both new <br />infrastructure and for improvements to existing infrastructure, including street circulation and park <br />development. <br />Development impact fees can represent a sizable up-front cost, and in some cases be the deciding <br />factor in the financial feasibility of a project. Allowing these fees to be deferred until the project is <br />nearly complete provides a valuable incentive to both the developer and lender by reducing the time <br />between the investment of money into a project and realizing a return on that investment in the form <br />of sales or leasing of the building and/or units. <br />Allowing construction to commence with a deferment has the potential to benefit the City in a variety <br />of ways including: (a) accelerating increases in property tax valuation due to assessment as <br />improved land; (b) collection of sales tax on building materials purchased locally; (c) revenue from <br />business license taxes from contractors and design professionals; and (d) employment of <br />construction personnel and their spending in the local area. <br />75C-1