Development Impact Fees Agreement with John Reichel (dba Sunwest Enterprises)

Browse Search

1 REDEVELOPMENT AGENCY FOR THE CITY OF COLTON For the City Council Meeting of March 6, 2001 TO: Honorable Mayor and Citoun 'Imembers APPROVAL: Henry Garcia, City M anag FROM: Robb Steel, Redevelopment Directo�K� SUBJECT: Consideration and Approval of Satisfaction of Development Impact Fees Agreement with John Reichel (dba as Sunwest Enterprises) DATE: February 27, 2001 Background The City of Colton formed Community Facilities District 89-2 in September, 1989. The purpose of the District was to finance a variety of public improvements required to accommodate the development of approximately 110 acres of residential land near the intersection of Pepper Avenue and San Bernardino Avenue. These planned improvements originally included streets, sewer, water, and drainage facilities. Most of the improvements were completed in the early 1990's. The CFD subsequently issued $3.4 million in tax exempt bonds to finance the improvements. The bonds are repaid with assessments that are levied upon the property owners within the CFD. The average annual assessment per residential unit is $668.14. These assessments are collected with the property tax bill. The CFD 89-2 bonds were refinanced in 1988 to take advantage of lower interest rates and the bonds mature and the special assessments cease in 2019. At the time of CFD formation, the District included 3 property owners (the Pacific Coast Property was subsequently purchased by John Reichel): Property Owner Acres John Laing Homes 44.0 John J Reichel 48.0 Pacific Coast Properties 18.5 Totals 110.5 The property owners agreed to have their properties assessed as a means of reducing the cost of home financing by covering the cost of infrastructure at tax exempt rather than taxable finance rates, usually a 2-3 point advantage. This rate advantage accrues to the benefit of both the builder and the homebuyer in the form of lower housing payments, lower downpayment requirements, and easier mortgage qualifying. The special assessment lien generally reduces the value of the property subject to the lien since the subsequent purchaser factors the lien intoe the total cost of acquisition. I .._ Item #15