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Irvine City Council Tuesday night slashed a schedule of developer fees for the Irvine Business Complex by nearly 75 percent, an action that a representative with developers says made at least one project “pencil out.”
Council also postponed an increase for another set of fees by six months after an industry lobbyist argued that the fees do not accurately reflect current construction costs.
However, council members — most notably Councilman Larry Agran — were cool to the idea of what amounts to another fee cut without assurances that it would spur development.
A mixed-use vision plan for the business complex calls for as many as 8,000 new homes. But representatives of the developers have made it clear that there would be more reluctance to build with the fees in place. The fees would pay for new and improved roads and sidewalks and amenities like a new library.
Council drastically reduced the fees for traffic impact mitigation after city staff scrapped major projects the fees would have paid for, including widening projects involving Alton and Von Karman roads.
While developer representatives were very appreciative of the fee cut, Bryan Starr, deputy executive officer for the Orange County chapter of the Building Industry Association of Southern California, criticized a separate proposed 14-percent increase for a set of fees that would pay for neighborhood infrastructure.
The methodology for calculating the fee was based on the engineering news record construction cost index, which, according to city staffers, are based on a “rolling average” and includes “out years” where construction costs were higher. Starr said a CalTrans index provided a more accurate account because it was a snapshot of today’s costs.
“During the worst construction industry crash we’ve seen in a very long time, if not ever, it’s very hard to believe that,” construction costs have gone up that much, Starr said.
Starr proposed that the council stick with the 2006 level fee, which, at its highest, comes to $13,000 for in-lieu-of affordable housing fees. With the increase, that fee would be $14,820 per unit.
Council was at best lukewarm to Starr’s proposal. Councilman Larry Agran said he wanted to see a direct nexus between lowering the fee and spurring development in the area.
“Are we going to get a speed up of development as a result of that? If we are than I’m interested, if we aren’t, then what are we doing here?” Agran said.
Council ended up postponing implementing the fee increase, and Agran hoped the window would act as a stimulus to get developers moving quickly. But he stressed that, because city staffers expressed confidence in the calculation index, he didn’t want to abandon it.
“I don’t want the impression left that we’re altering it because it was a bad methodology,” Agran said.
In other council action that night, council appointed a subcommittee comprised of Agran and Councilman Jeff Lalloway to tackle Gov. Jerry Brown’s proposal to eliminate the state’s 425 redevelopment agencies, which would have stark consequences for the Great Park.