RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt resolutions approving fee deferrals for the Terracina North and South Apartments.
| BACKGROUND
The City of Roseville offers a fee deferral program through the Economic Development Department as an incentive to encourage development. The Terracina North and South Apartments projects are requesting fee deferrals of certain City-controlled impact fees. The fee deferrals require City Council approval and that development impact fees are paid prior to the issuance of a Building Permit Occupancy/Final permit as applicable to each permit.
The Economic Development Department received the attached request from USA Properties Fund, Inc. on September 29, 2023, requesting approval of fee deferrals for the Terracina North (Parcel C-40) and South (Parcel C-43) Apartments. Both apartment complexes will be located within the Creekview Specific Plan area, with Parcel C-40 at 3440 Westbrook Drive and Parcel C-43 at 1040 Lower Bank Road. As shown on the attached plans, Parcel C-40 proposes construction of 168 residential units within two buildings with a community room, fitness center, site parking and outdoor community area. 90 of the 168 units will be affordable units (48 very-low and 42 low income). Parcel C-43 proposes construction of 116 residential units within one building with a community room, fitness center, site parking and outdoor community area. 111 of the 116 units will be affordable units (53 very-low and 58 low income).
Fee estimates have been prepared for the apartment complexes based on the fees for Fiscal Year 2023-24. Only City-controlled impact fees are eligible for deferral. The fee deferral types and amounts are identified below:
City Fee
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C-40/North
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C-43/South
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Fire Service Construction Fee
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$87,031.47
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$59,898.03
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Public Facilities Fee
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$446,208.00
|
$308,096.00
|
Water Connection Fee – Domestic
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$803,544.00
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$554,828.00
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Drainage Fees (Pleasant Grove Creek)
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$88,536.00
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$61,132.00
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Traffic Mitigation Fee
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$919,883.83
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$254,063.15
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Public Benefit Fee
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$141,960.00
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$98,020.00
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Solid Waste Fee
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$24,788.50
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$17,457.48
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Electric Backbone Fee
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$164,032.47
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$128,674.74
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Approximate Deferral Amount
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$2,675,984.27
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$1,482,169.40
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The list of fees eligible for deferral has been vetted by the applicable City departments and only those determined to have no impact to the budget have been included above. As shown above, the total eligible fee deferral for Parcel C-40 is $2,675,984.27 and the total eligible fee deferral for Parcel C-43 is $1,482,169.40. The total amount of deferrable fees could change if building permits are pulled outside of FY2023-24, however, the list of deferrable fees would not change following Council action on this item.
Pursuant to Roseville Municipal Code (RMC) Section 4.04.040, all non-residential fee deferrals greater than $100,000 dollars are required to be approved by the City Council. The typical construction and inspection timeframe for apartment complexes is 12-24 months. In an effort to cover lost interest resulting from the City fee deferrals there is an interest charge of 1.35% that will be paid upon building permit occupancy or the issuance of a final permit for each project. The RMC additionally identifies an administrative processing fee of $924.90 to be charged per building permit to cover staff's time of processing requests.
| FISCAL IMPACT
The requested deferrals will not result in a loss of impact fees nor earned interest income. The development impact fees are required to be paid prior to issuance of building permit occupancy/final permit. To ensure that the City will not have any loss of interest income, the RMC requires that interest be charged on monies deferred. Specifically, the City's Finance Department identified that the City's ten-year average pooled interest rate is approximately 1.35%. Therefore, interest at a rate of 1.35% will be charged on the monies deferred to cover the City's cost of loss of interest income on the fee deferrals. Additionally, the RMC identifies an administrative processing fee of $924.90 to be charged to each building permit.
The City's fee deferral program is an important economic development tool that facilitates new development that may not otherwise be financially feasible without this program. As a result, this program has the potential to increase impact fees and investment that directly increase property values that may not otherwise occur if this program was not available. Construction of these housing developments will create temporary construction jobs and permanent full and/or part time jobs. In addition, construction of the affordable units assists the City in meeting its Regional Housing Needs Allocation (RHNA) from the State of California and offers affordable housing opportunities to the local workforce and community.
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ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15061(c)(3) and §15378. These fee deferrals meet the above criteria and are not subject to CEQA. No additional environmental review is required.
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CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal D - Enhance economic vitality
Goal F - Invest in well-planned infrastructure and growth
| Respectfully Submitted,
Gina McColl, Economic Development Analyst
Melissa Anguiano, Economic Development Director | | ![](ImageLibrary.ashx?path=ROOT/ImageLibrary/Dom.jpg)
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Dominick Casey, City Manager
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