Report Prepared by: Julie Nelson, Acting Planning Manager, Development Services Department
Title
SUBJECT: Approval of a Public Facilities Impact Fee Credit Agreement Between the City of Merced and Gateway Park Development Partners, LLC, to Provide Credit of the Public Safety Portion of the Public Facilities Impact Fee in Exchange for the Dedication of 1.5 Acres of Land at the Southeast Corner of Gerard Avenue and Pluim Drive (Extended) for a Future Fire Station
REPORT IN BRIEF
Considers approving a Public Facilities Impact Fee Credit Agreement to provide credit for the Public Safety portion of the Public Facilities Impact Fee in exchange for the dedication of 1.5 acres of land for a future fire station.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Public Facilities Impact Fee Credit Agreement between the City of Merced and Gateway Park Development Partners, LLC; and,
B. Authorizing the City Manager or the Deputy City Manager to execute the agreement.
Body
ALTERNATIVES
1. Approve as recommended by Planning Commission and staff; or,
2. Approve, subject to modifications by the City Council; or,
3. Deny; or,
4. Refer back to staff for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in motion).
AUTHORITY
Administrative Policy A-32
CITY COUNCIL PRIORITIES
Not applicable.
DISCUSSION
In 1995, the City annexed approximately 322 acres of land generally bounded by SR 140 to the north, Mission Avenue to the south, the Hartley and Doan Laterals to the east and Coffee Street to the west. This annexation was known as the Weaver Annexation. As part of the Pre-Annexation Development Agreement and Conditions of Approval, the developer was required to dedicate land for a future fire station at the time of development. In exchange for the dedication, the developer would receive credit for the value of the land against any public safety fee adopted by the city.
In 1998, the City adopted a Public Facilities Financing Plan (PFFP) which created impact fees to be paid upon development of property within the City Limits. A portion of this fee is dedicated to public safety (Police and Fire). Merced Municipal Code Section 17.62.080 requires the City Council to adopt administrative guidelines to provide procedures for the calculation, reimbursement, credit or deferred payment of the public facilities impact fee. Administrative Policy A-32 provides those guidelines.
When the Gateway Marketplace Shopping Center (Attachment 1) was approved, a condition was included requiring the dedication of 1.5 acres of land for a future fire station. This land was originally identified to be along Gerard Avenue, approximately midway between Coffee Street and Pluim Drive (extended). It was later decided that the fire station would have better access if it were located at the corner of Gerard Avenue and Pluim Drive (extended). The developer agreed to the new location and has recently dedicated the land to the City (Attachment 2). Since the dedication has been made, the developer is now entitled to the credit established by the Pre-Annexation Development Agreement.
The Pre-Annexation Development Agreement stated that the value of the property would be determined in accordance with City ordinances relating to park dedication. Because of reductions in the value of park land established since the time of the execution of the Pre-Annexation Development Agreement, and the fact that the developer had a recent appraisal of the land showing a higher value, staff negotiated a value for the land to establish the credit as allowed by the Ordinance. The negotiated amount is $154,666 per acre for a total credit of $232,000. If approved, the developer would be entitled to a credit toward the public safety (Police and Fire) portion of the Public Facilities Impact Fee assessed with each building permit for new construction within the Gateway Shopping Center development. This credit would be available until exhausted, or development has been completed. Although development has already occurred within the shopping center, the buildings completed were not eligible for this credit because the dedication of the fire station land had not been made. Once the dedication is made, any future development would be eligible for the credit, including the Chipotle building which is currently under construction. The impact fees for new development are not required to be paid when permits are issued. These fees are required to be paid prior to the issuance of a certificate of occupancy. Because the dedication of the land for the fire station will have been completed prior to the certificate of occupancy being issued for the Chipotle building, this development would be eligible for the credit.
As described above, the Pre-Annexation Development referenced a credit for a future “Public Safety” fee, but this term was not defined in the agreement. In 2007, City staff developed preliminary plans for a fire station at this location which included a small police substation. Therefore, staff has determined that the public safety fee referenced in the agreement would include both the police and fire portions of the PFFP impact fee. The credit given would be based on the impact fee in effect at the time a building permit is submitted. It should be noted that no cash reimbursement would be given, only a credit towards the police and fire portion of the PFFP impact fees. If the entire credit amount has not been used by the completion of the development, the developer would not be eligible to receive any cash reimbursement for the remaining balance.
City Staff is recommending approval of the Public Facilities Impact Fee Credit Agreement at Attachment 3.
IMPACT ON CITY RESOURCES
There are no impacts on City resources.
ATTACHMENTS
1. Location Map (Gateway Shopping Center)
2. Fire Station Land Dedication
3. Public Facilities Impact Fee Credit Agreement