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HomeMy WebLinkAboutRevision to City's Development Impact Fees - Resolution No. o Ae CITY OF HUNTINGTON BEACH City Council Interoffice Communication To: Honorable City Council Members From: Connie Boardman, Mayor Date: January 7, 2013 Subject: CITY COUNCIL MEMBER ITEM FOR JANUARY 22, 2013, CITY COUNCIL MEETING- REVISION TO TIME CITY'S DEVELOPMENT IMPACT FEES STATEMENT OF ISSUE: On June 18, 2012, the City Council adopted Resolution No. 2012-23 - Establishing New and Revised Development Impact Fees for all development within the city. In order to mitigate the impact of increasing the Law Enforcement Facilities Fee, Fire Suppression Facilities Fee, Circulation System Fee, and the Park Land Acquisition and Park Facilities Development Fee, the resolution incorporated a "phased" implementation for the various fees. While the goal was to generate adequate funding to serve the increased demands of development, the phased implementation allowed for a more gradual increase over a three-year period. Fees were scheduled to increase 30% each year for three years reaching 90% of the consultant's recommended fee. Over the past two years, the city has seen a large influx of new projects being developed. It appears that the development economy is improving at a faster rate than anticipated. Therefore, it is recommended that new development pay their full fair share of the proportional costs required for expansion of all development within the city of Huntington Beach. RECOMMENDED ACTION: Direct staff to bring forth Resolution No. 2012-23 moving Development Impact Fees to 100% as outlined in the Development Impact Fee Calculation Report. xc: Fred A. Wilson, City Manager Bob Hall, Deputy City Manager Scott Hess, Director of Planning & Building e0/UT7XJa,---Z 7Z) cZlyZla0l.3 Recommended Action: Adopt Ordinance No. 3969, "An Ordinance of the City of Huntington Beach Amending Chapter 9.22 of the Huntington Beach Municipal Code Relating to Sex Offender Prohibition" in parks. Approved 6-1 (Hardy— No) PUBLIC HEARING 10. Approve General Plan Amendment No. 11-001 (Circulation Element Update) by adopting Resolution No. 2013-07 Planning Commission and Staff Recommended Action: Approve General Plan Amendment No. 11-001 by adopting Resolution No. 2013-07, "A Resolution of the City Council of the City of Huntington Beach Approving General Plan Amendment No. 11-001 (Circulation Element Update)." No Speakers Approved 7-0 as amended directing staff to modify the final version of the Circulation Element to reflect the deletion of the extension of Banning Avenue from Brookhurst Street to the Santa Ana River ADMINISTRATIVE ITEMS 11. Adopt Resolution No. 2013-05 approving and adopting the 2012 Water Master Plan and Financial Plan; approve for introduction Ordinance No. 3970 amending Municipal Code 14.12.010 to replace the 2005 Water Master Plan; and, adopt Resolution No. 2013-06 identifying specific water projects on which monies can be expended Recommended Action: A) Adopt Resolution No. 2013-05, "A Resolution of the City Council of the City of Huntington Beach Approving and Adopting that Certain Report Entitled "2012 Water Master Plan and Financial Plan Update, City of Huntington Beach;" and, B) Approve for introduction Ordinance No. 3970, "An Ordinance of the City of Huntington Beach Amending Chapter 14.12 of the Huntington Beach Municipal Code Pertaining to Water Fees," to replace the 2005 Water Master Plan; and, C) Adopt Resolution No. 2013-06, "A Resolution of the City Council of the City of Huntington Beach Identifying the Specific Water Projects from the Approved Water Master Plan on which Capital Facilities Charge Monies and Capital Surcharge Monies Can Be Expended." Approved 7-0 COUNCILMEMBER ITEMS 12. Submitted by Mayor Boardman - Revision to the City°s Development Impact Fees Continued from January 22, 2013 meeting City Council/PFA Regular Meeting February 4, 2013 -6- Recommended Action: Direct staff to bring forth Resolution No. 2012-23 moving Development Impact Fees to 100% as outlined in the Development Impact Fee Calculation Report. Approved 4-3 (Sullivan, Harper, Carchio - No) as amended to change year three date - 90% fee identified in Exhibit A of Resolution 2012-23 from September 2, 2014 to January 1, 2014, and bring back to Council on March 18, 2013 13. Continued from January 22, 2013 meeting, Mayor Boardman and Councilmember Shaw item regarding the Single-Use Carryout Bag Reduction Ordinance and Environmental Impact Report No. 2011-002, requesting continuance for City Council consideration to the March 18, 2013 meeting. Recommended Action: Direct staff to schedule the Single-Use Carryout Bag Reduction Ordinance and Environmental Impact Report No. 2011-002 for consideration before the City Council at the regularly scheduled meeting on Monday, March 18, 2013. Approved 4-3 (Sullivan, Harper, Carchio - No) 14. Submitted by Councilmembers Carchio and Shaw -Video Camera System for Downtown Recommended Action: Direct the Police and Information Services Departments to explore the feasibility and cost of installing a video camera system in Downtown Huntington Beach and prepare a report for the City Council with their findings and recommendations. Approved 6-1 (Harper— No) 15. Submitted by Councilmember Carchio - Proposal to establish a Sustainable Innovation Team for Huntington Beach Recommended Action: Establish an ad hoc committee, co-chaired by Mayor Boardman and myself, made up of council member appointments, and representatives from our schools, non-profits, Marketing and Visitors Bureau, sustainability experts, and sustainable businesses that would work collaboratively with the Environmental Board, the Chamber of Commerce's Sustainable Surf City program and Golden West College's Recycling and Resource Management program and report back to Council on the resources necessary to develop and implement a plan to become a zero-waste City. No Action Taken— Mayor Boardman, as liaison to the Environmental Board, shall request that the Board examine working towards becoming a zero-waste city. City Council/PFA Regular Meeting February 4, 2013 -7- , Lugar, Robin From: Flynn, Joan Sent: Friday, January 18. 2O1311:25AM To: CITY COUNCIL; Boardman, Connie; Hess, Scott; Hall, Bob Co: Esparza, Patty; Lugar, Robin Subject: Fw: City Council Agenda Item 11 Attachments: 2O13-01-15 Huntington Beach- Request for Condnuanoa[1].odf Importance: High Hello Victor. I am happy to forward your information and request to the listed individuals asking for a continuance to Agenda item 11. As Patty explained, this is not an action to consider resolution, but a request to have the city attorney return with a resolution at future meeting, at which time the city council would discuss, consider and cast their vote on the full share of the development impact fees--when that staff item is prepared for the agenda,you will receive notice 14 days in advance according to your written request on file with our office. Regards--Joan Joan L. Flynn, CIVIC Huntington Beach City Clerk From: Victor Cao [maUto:vcao@biaoc.con ] Sent: Friday, January 18, 2013 10:43AM Pacific Standard Time To: Flynn, Joan Cc: Esparzo, Patty Subject: SUPPLEMENTAL ����kNY� �� ����mm�mm�o�w'�^�` mw���m Dear Ms. Flynn, on behalf of our membership, please provide a copy of our letter to: Meefing Date Mayor Boardman Item No City Council - City Manager Fred Wilson Deputy City Manager Bob Hall Planning Director Scott Hess We appreciate your assistance in this matter.We are asking for a continuance for the item due to the absence of mailed notifications that the resolution was being brought forward.We understand the item was added in at the last minute by Council. Our highlights to Government Code gGGOlG provides our reasoning: "...a local agency shall bold at least one open and public meeting' at which oral or written presentations can be made' as Dart of a regularly scheduled meeting. Notice of the time and place of the meeting' including a general explanation of the matter to be considered, and a statement that the data required by this section is available, shall be mailed at least 14 days prior to the meeting to any interested party who files a written request with the local agency for mailed notice of the meeting on new or increased fees or service charges. " Considering that this is the first public meeting when the resolution is being brought forth and will be discussed,the BIA/OC and other stakeholders are entitled to 14 days notification. BIA/OC has a certified mailing of our written request tobenotified of any discussion of fee adjustments. Thank you for your time and service. z Sincerely, Victor Cao Government Affairs Assistant BIA of Southern California, Orange County Chapter (949) 553-9500 x120 office (714) 202-7122 mobile z January 17, 2013 The Honorable Connie Boardman Mayor City of Huntington Beach A 2000 Main Street Huntington Beach, CA 92648 Orange County Chapter Re: Request for Continuance of Item 11. Revision to the City's Development _1ndL1,,,,,A,,,C;,-n Impact Fees .'Sm_',amC-;I.Fcre,, 17744 Sky Park Circle Suite 170 Dear Mayor Boardman: Irvine,California 92614 Y 949.553.9500 fax 949.553.9507 www.biaoc.com On behalf of the membership of the Building Industry Association Southern California, Orange County Chapter(BIA/OC),we respectfully request a continuance of the Revision to the City's Development Impact Fee.BIA/OC is a PRESIDENT DAVE BULLOCH non-profit trade association of nearly 1,000 companies employing over 100,000 STANDARD PACIFIC HOMES people affiliated with the home building industry. The Orange County Chapter VICE PRESIDENT DONNA KELLY represents the largest member base within BIA/OC.Our mission is to champion LENNAR housing as the foundation of vibrant and sustainable communities. TREASURER JOAN MARCUS-COLVIN THE NEW HOME COMPANY On June 18, 2012 the Council, after a substantial negotiation, adopted a fee schedule SECRETARY based on an agreement with the business community. The fulfillment of the BRIAN GEIS resolution brought forward would breach that agreement and should not be an item BROOKFIELD HOMES of consideration. IMMEDIATE PAST PRESIDENT MICHAEL McCANN ALLIANCE RESIDENTIAL Per Government Code§ 66016, the City of Huntington Beach is required to provide TRADE CONTRACTOR COUNCIL V.I a minimum of 14 days notification prior to a public hearing related to an TOM RHODES Y P P g Y TWR ENTERPRISES adjustment in development fees. Enclosed is a copy of our written request for ASSOCIATE VICE PRESIDENT mailed notifications that was renewed on January 2, 2013. At this time, the City has MARK HIMMELSTEIN not met their obligations under the Statute to notify stakeholders that the resolution NEWMEYER&DILLION,LLP was beingbrought forward. Our membershipwould appreciate ade uate time for MEMBER LARGE g pp q MIKE WINNTER public review. SARES-REGIS GROUP MEMBER-AT-LARGE JIM YATES Background RANCHO MISSION VIEJO BIA/OC has been an active participant in advocating for equitable policies with CHIEF EXECUTIVE OFFICER regard to the City's Nexus Study (Study) first published in October 2011.We MICHAEL BALSAMO appreciate the hard work of the City Council and staff to seek compromise and balance the interests of key stakeholders in the community. As you may recall on March 12, 2012, we provided official comments that outlined several flaws within the Study. By June 18, we had reached a consensus on an agreement to phase in the fee increases. BIA/OC has been deeply involved in the fee study process. The absence of proper notification at this time raises concerns about the City's intentions. Commitment to Compromise City Council adopted Councilman Carchio's "30-30-30" resolution as a balanced compromise toward development.The Carchio proposal provides home builders with a reasonable certainty of their fees during unpredictable economic conditions. Additionally, the phased approach was responsive to the business community in light of the extremely challenging market conditions. The recent move to renege on our compromise is troubling and we implore the City to respect the integrity of its past agreements. Economic Uncertainties The internal memorandum from the City cites improving conditions in the economy to rationalize raising fees. However, multiple market reports continue to cite fragile economic conditions. According to the U.S.Bureau of Labor and Statistics, unemployment in the County remains at 7.2% in contrast to the historical average of 4.4%.The Orange County Register reported, "Although the market appeared to find a price bottom amid waning foreclosures, the recovery remains fragile, and home prices and sales remain subpar." New home sales volume is still well below historic norms in Orange County.While it is evident that the economy has made progress, home building is one of many industries that have only just begun to recover. Any interference in the form of increased fees may jeopardize construction of new homes,job creation, and the fiscal well being of the residents of Huntington Beach. Our membership is committed to working collectively with you, city staff, and other stakeholders. We remain a resource to the City on important issues that are related to the prosperity of our local communities. It is our sincere request that the City table this item. Thank you for your time and thoughtful consideration. Respectfully, Michael Balsamo Chief Executive Officer Enclosure Cc. City Council Fred Wilson, City Manager Bob Hall, Deputy City Manager Scott Hess, Director of Planning January 2,2013 .; City Clerk � � City of Huntington Beach Orange County2000 Main Street Chapter Huntington Beach,CA 92648 Buia�&rJ h,Jr,�:y i y.ntSti,u� a(�:z�r.Lim C>}tl£aeni:i Dear Sir or Madam: 17744 Sky Park Circle Suite 170 Irvine,California 92614 On behalf of the members of the Building Industry Association of Southern California, 949.553.9500 fax 949 553,9507 Orange County Chapter(BIA/OC),I am writing to officially request advance Wn"V.biamxorn notification prior to proposal of development related fee increases per CA Government Code Section 66016. PRESIDENT DAVE BULLOCH In the event of a development related fee adjustment or new development related fee STANDARD PACIFIC HOMES ordinance,we renectfuliy request notification sixty days prior any,public hearing_, VICE PRESIDENT DONNAKELLY This information will allow us to communicate proposed changes to our members that LENNAR do business in your jurisdiction. TREASURER JOAN MARCUS•COLVIN THE NEW HOME COMPANY Please send all notifications to: SECRETARY BRIAN GEIS Victor Cao BROOKFIELD HOMES Government Affairs Assistant IMMEDIATE PAST PRESIDENT BIA/OC MICHAEL MCCANN ALLIANCE RESIDENTIAL 17744 Sky Park Circle#170 TRADE CONTRACTOR COUNCIL V Irvine,CA 92614 TOM RHODES TWR ENTERPRISES I have also included die BIA/OC Fair Share Principles. This document is a Board ASSOCIATE VICE PRESIDENT MARK HIMIZELSTEiN Policy that we ask Orange County jurisdictions to consider when examining their fee NEWMEYER 8 DILUON,LLP schedules. As always,feel free to contact me at anytime if I may be of assistance. MEMaER-AT-LARGE MIKE WINTER SARES-REGIS GROUP Thank you for your thoughtful consideration. 14EMBER•AT-LARGE JIM YATES Sincerely, a - E - RANCHO MISSION VIEJO �� C���.;- .p ;. J ., d'�,� CHIEF EXECUTIVE OFFICER - "�#< _ MICHAEL BALSAMO Cr Michael Balsamo ru - Chief Executive Officer,BIA/OC 'n Postage S e r3Cenff"ai Fsa r3 Rn±ssrn Reclept Fee d / b Zfbr Y^J r3 (Endorseme:u Required) t,.. ( � We r3 Re--&:ad Cevvr:.°y Fart _n (&rctor""lent RAZ roa? g Tota{Pa5t31a 8 Fees S p Serr To v / ....._..,1.......:.......... :._...._... .._._..._.... Sncet.Apt.AW.; or aG Box Ah - CiA„Slato,7.JP�d //j Esparza, Patty From: Jim Ivory[JIVORY@Sares-Regis.com] Sent: Tuesday, January 22, 2013 12:24 PM To: Villasenor, Jennifer Cc: Broeren, Mary Beth; Esparza, Patty; Flynn, Joan; Mike Winter Subject: SRG Letter to Council Re: Boardwalk Attachments: Letter to Council Re Fee Increase_13 01 22.pdf Jennifer I wanted to copy you on this. We put together a letter to Council just reinforcing the need Boardwalk has to remain grandfathered. I appreciate the update that you were able to provide last week. We are fairly confident that the grandfathered projects will remain grandfathered and for that are very appreciative. Thanks so much, Jim Ivory I Multi-Family Development Division jivory@sares-regis.com I P. 949 809 2530 F. 949 253 0475 SARES-REGIS Group 1 18825 Bardeen Ave. Irvine, CA 92612 SUPPLEMENTAL, COMMUNICATION Meeting Date• �01 _ _J Agenda Item NO-_ � — 1 Market-proven performance January 22, 2013 Hon. Mayor Boardman Hon. Mayor Pro Tem Harper Councilmembers Katapodis, Carchio, Shaw, Hardy, and Sullivan City Clerk Joan L. Flynn City Council Chambers 2000 Main Street Huntington Beach California, 92648 Re: January 22,2013 Meeting Of The City Council/Public Financing Authority And The Huntington Beach Housing Authority;Agenda Item No. 11: Revision To The City's Development Impact Fees Dear Honorable Nlavor Boardman, Mayor Pro Tem Harper, City Council members, and City Clerk: On behalf of the SARES-REGIS Group, I am writing to you concerning Item 11 in the Agenda for the Council's January 22, 2013 meeting, entitled "Revision to the City's Development Impact FUS." By way of background, SARLS-Rl (4IS is actively developing the 12-acre property located at 744 I,,dinger avenue with a mixed-use project consisting of 487 apartment units (including; 57 affordable units), 10,000 square feet of commercial/retail uses, 4,500 square feet of office leasing area, and 9,000 square feet of residential recreation area. Our project has been fully entitled since 2011 and project completion is currently scheduled for August of 2015. In May 2012, the City adopted Resolution 2012-23. That Resolution established new and significantly increased Development Impact Fees for new developments within the City. Importantly, Resolution 2012-23 contains an express exemption for qualifying;projects that the City had approved on o.r before May 7, 2()12. Our Edinger. Avenue project is exempt under this grandfather provision. Resolution 2012-23 calls for the increased impact fees to be phased in over three years for non-exempt projects. Agenda Item 11, and the other publicly-available documents discussing that item, all state that it concerns solely the elimination of the phase in so that non-exempt projects would immediately be subject to the full fee increase. Our conversations with some of you and City, staff have confirmed this limited purpose for Agenda Item 11. Importantly, neither Agenda Item 11 nor any other information we have received in any way suggests that the grandfather provision in Resolution 2012-23 will be reconsidered or modified. 18802 Bardeen.Avenue/Irvine.CA 92612-1521 ?949.756.5959 J Fax 949.756.5955'www.sares-regis.com Serving the West with offices in Irvine® San Francisco Bay Area o Sacramento e Ventura/Los Angeles Denver o Phoenix Market-proven performance Therefore, Agenda Item 11 should have no impact on our development of the Edinger .venue project. We appreciate the City's continuing commitment to its promise in Resolution 2012-23 not to increase Development Impact Fees for pre-approved projects such as ours. In an abundance of caution, however, we feel it is important for the City to understand our reliance on that promise and the devastating effects on our project should its exemption be eliminated. In reliance on the exemption and the City's promises that the increased fees would not apply to our project, SARI_.S-REGIS has spent millions of dollars on, among other things, (1) securing debt and equity financing of over one-hundred million dollars, including a significant investment in the project by C:alPERS, (2) paying; consultants to prepare plans for the project, (3) securing a demolition permit and completing demolition of the prior building on the site, (4) grading the site, (5) going through the expensive plan check process with the City, and (6) other development activities and costs, including; construction, insurance, marketing, financing;, and interest fees. Moreover, we have hired a project manager and a project superintendent, and we arc currently interviewing; for site administrative assistant and assistant project manager position. It is also important for the City Council to understand the devastating effect of subjecting; our project to the increased fees. Simply put, substantially increasing the impact fees by eliminating the exemption would make the project not economically viable,putting our substantial investment at great risk. Under these circumstances, and given SARES-REXAS ' enormous investment in the project, eliminating; the exemption now would not only raise legal objections — estoppel, due process, and C:EQA — doing so would be wrong. We urge the City Council to keep its promise and maintain the exemption. Again, SARI S-RLGlS thanks the City, both for its consideration of our comments, and for its continued commitment to the grandfather provision in Resolution 2012-23. Respectfully submitted, Michael.). Winter Senior Vice President SARI~S-REGIS Group 18802 Bardeen Avenue/Irvine.CA 92612-1521 r'949,756.5959 f Fax 949.756.5955 i www.sares-regis.com Serving the West with offices in Irvine e San Francisco Bay Area e Sacramento e venturaa/Los Angeles Ucnver e Phoenix Print Request Page 1 of 1 Request: 13236 Entered on: 01/21/2013 12:45 PM Customer Informatio Name:Dianne Thompson Phone:714.698.0202 Address:7402 Yellowtail Dr#102 Alt. Phone:714.814.3103 Huntington Beach, CA Email:dianne@diannethompson.net 92648 Request Classification Topic:City Council -Agenda & Public Request type:Comment Hearing Comments Status:Closed Priority:Normal Assigned to:Johanna Stephenson Entered Via:Web Descriptio I am very concerned that increasing the Development Impact Fees on an earlier schedule than previously voted upon sends an alarming message to anyone who is considering a project in HB. The fact that we could change such an important part of the costs associated with a development from a previously agreed upon schedule will cause some who are considering HB to reconsider. Just because we see some projects moving forward doesn't mean that we couldn't cause them to stop when the costs exceed previous expectations. We are still at a perilous point in our economic recovery. We would be subjecting that recovery to an uncertainty that was partially responsible for the slowdown to begin with. I respectfully request that the fee schedule remain the same as voted upon in 2012. My business has been dramatically affected by the recession and it is slowly recovering. I have had to make tough choices to keep each of my employees and not lay them off. There are no further options if the recovery to HB is stifled or reversed. Reason Close Thank you for taking the time to send your thoughts to the City Council. A copy of your comments will also be forwarded to the City Clerk to be included in the record on this item. Thank you very much for writing. Date Expect Closed: 01/31/2013 Date Closed: 01/22/2013 08:08 AM By: Johanna Stephenson Enter Field Notes Below Notes: SUPPLEMENTAL COMMUNICATION Meeting Date: /-era -ald/3 Agenda Item No. Notes Taken By: Date: http://user.govoutreach.com/surfcity/printrequest.php?curid=1215373&type=0 1/22/2013 SUPPLEMENTAL COMMUNICATION PE�E� I sing Otte:���o ._ IC®® Agonds Item No. February 4,2013 Hon. Mayor Boardman Hon. Mayor Pro Tern Harper Councilmembers Katapodis, Carchio,Shaw,Hardy,and Sullivan City Clerk Joan L. Flynn City Council Chambers 2000 Main Street Huntington Beach, CA 92648- Re: February 4,2013 Meeting Of The City Council/Public Financing Authority,Councitmember Item No. 12- Revision To The City's Development Impact Fees (Continued from January 22,2013 Meeting) Dear Honorable Mayor Boardman,Mayor Pro Tern Harper, City Council members,and City Clerk: On behalf of Pedigo and the developer, we are writing you to object to Councilmember Item 12 in the Agenda for the Council's February 4, 2013 meeting, entitled "Revision to the City's Development Impact Fees." This proposed revision would throw out the balanced "30-60-90" plan for impact fees in Resolution 2012-23 passed last June (upon which we all relied), and instead retroactively increase the fees to the 100% level, a devastating and uncalled for increase. Pedigo is the owner of a 6.2-acre property located at the comer of Gothard and Edinger. The developer has entered into an agreement to purchase that property from Pedigo as well as an adjoining 2.2-acre parcel. The developer plans to redevelop the combined property from its current industrial uses into, a multifamily housing complex - . consisting of.510 apartment,units (the "-Project"). The Project-is consistent-with the Beach and Edinger Corridors Specific Plan,which the City adopted in March.2010. In fact,back in 2010,the City approached Pedigo and encouraged it to redevelop the property with a project that would be consistent with the new Specific Plan. As the Project is consistent with that plan, Pedigo's.sale of its land for that purpose complies with the City's request and desires. Unfortunately,item 12 threatens that sale and the Project as a whole. At the January 22, 2013 City Council meeting, when this item was first raised, several interested parties described the disastrous effects increasing development impact fees would cause to projects that have already begun development, including the Project ,Indeed for— this reason we oppose item 12 and any other increase in impact fees under Resolution 2012- 23. www. .. go-usa.com P I GOO In response, we understood the Mayor to say that her proposal would not affect pending projects,which we hope would include any projects that are already being processed by the City such as our developer's Project. To do otherwise would be grossly unfair. In proceeding with the Project, we relied on the impact fees in Resolution 2012-23, and increasing the fees retroactively would not only be contrary to that Resolution but would kill the Piet to the detriment of us all,including the City. As you may recall,in June 2012, the City passed Resolution 2012-23 over substantial objection from the community and business leaders. The Resolution established new and significantly increased impact fees for new developments within the City. However, to lessen the impact as part of a balanced plan, Resolution 2012-23 implemented the increase over time, by 30% each year for three years. Based on this phased increase, Resolution 2012-23 has since'become generally known as the "30-60-90 plan." Based on the Project's status at the time the Resolution was passed, we anticipated the Project would be subject to a 60% increase. However, even at the 60% level, it added $4.1 million in impact fees, stretching the project to its economic limits. The purchase agreements on both parcels lapsed and eventually the parties made the economics work. Simply put, there is no more eeonQmjr. UW. Had the Project been hit with the full 100% impact fees, the developer would not have proceeded—there would be no Project. With the fee increase behind us,and in ice on the 30-60-90 plan fee structure,we all invested substantial money and time into the Project. Among other things, Pedigo allowed a 50,000 sq.ft. lease on one of its three buildings to expire, and has not marketed that building or its other vacant building for new tenants. Lost rents alone are in excess of $400,000 as of today. In addition, the developer has spent over$1.8 million on the Project, $1.5 million of which was after and in reliance on the fee structure in Resolution 2012-23. In addition, in reliance on that fee structure, both Pedigo and the developer have spent a substantial amount of time preparing plans, preparing and submitting its development application,working with City staff and performing other development activities. We have a good working relationship with staff and appreciate the substantial time they have devoted. It is imperative that the City Council understand the devastating effect of subjecting the Project to the increased impact fees at this late juncture. Raising the fees from the already high 60% increase in Resolution 2012-23, to the full 100%,would add an additional $3.2 million in impact fees—raising the impact fees from $12.5 to $15.7 million. Simply put, the Project cannot withstand such a whopping increase, and in all likelihood it would force the developer to abandon the Project. The losses would be enormous for all: 1. P-mpr,=Qm=Losses. In addition to all of the owiners' time gone to waste, Pedigo would suffer lost rents of over $800,000 (assuming it could re-let the vacant space within 6 months). a WWW.p o-usa:com /PPtECO1GO` 2. developer Losses. The developer will lose its investment of over$1.8 million plus the large number of hours of employee and consultant time. 3. The Ci 's Losses. The City would lasc the most It would not receive the $12.5 million in impact fees the Project would generate as well as increased property tax revenues, the City's staff time and resources spent on the Project would go to waste, the existing industrial uses would remain contrary to the Specific Plan, it will lose important housing inventory including affordable housing units, and the City would lose the betterment to.the community offered by the Project and the new residents it would bring to the City and its businesses. And with the increased fees, new development at this location would be deterred if not precluded all together. Given our enormous investment in the Project in reliance on the 30-60-90 plan in Resolution 2012-23, increasing the impact fees as proposed is not only unfair, it also raises legal objections including estoppel, due process and CEQA. And it would deter future positive and beneficial development in the City, not only because of the exorbitant impact fees, but also because the business community could not rely on the City's process in adopting resolutions,a very bad precedent indeed For all these reasons, we strongly urge the City Council to keep its promise and vote against item 12. We thank the City for consideration of our comments. Respectfully, Dated: February-J�,2013 Pedigo Products, Inc. By: kN- Name: Its: .t 4. Dated: February , 2013 Archstone New Development Holdings, LP By: Name: K e.,A e: "I,. e� c Its: 6E W Gc i,-S�Je✓\4 e,, WWW. gO-UiG—.COM Impact Fee Implementation Staff's Original Recommendation 70%, 80% 90% over three years vs . 30% increase over each year over 3 years approved by Council in June 2012 Overall Impact fee revenue 2012-2014 30% yearly implementation (current policy) $ 28, 5711033 If staff recommendation had been approved $ 33,572,666 Current policy represents a loss of $ 51001, 633 Source: Page HB 362 of June 4, 2012 City Council agenda packet (Adjusted to include Pacific City DA) Park Revenue from fees 2012 -2014 Staff recommendation would have generated $ 221750;972 vs. $ 18,783,491 generated from current policy. Current policy represents a loss of $ 3,967148 -IL in revenue that could be used for park improvements. Source: Page HB 362 of June 4, 2012 City Council agenda packet (Adjusted to include Pacific City DA)