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

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Report to City Council Regarding Satisfaction of Development Impact Fees Agreement with John Reichel March 6, 2001 Page 4 of 5 commercial uses. If a building permit has been issued but the project is not substantially complete at the end of year 4, then the Developer shall be entitled to any remaining fee credits/waivers authorized offset by a liquidated damages assessment of $10,000 per month commencing in year 5 until a Certificate of Occupancy is granted satisfying the definition of substantially complete. If a Certificate of Occupancy is not granted for a 90,000 square foot commercial center by the end of year 5, then all fee credits authorized but not yet realized shall be voided. The Agreement provides $74,154 in traffic impact fee reductions as consideration for the Developer constructing the CFD 89-2 improvements originally budgeted but unfinished as illustrated in Exhibit C attached. Financial Impact The financial impact of the proposed Agreement is summarized in Exhibits D and E. The cost of the Agreement is basically the foregone development impact fees for the respective funds. If all credits are utilized by the Developer in accordance with the terms of the Agreement, the total foregone development impact fees has been estimated to be $898,312. These foregone development impact fees would, in the absence of this Agreement, have accrued to the following funds: Water System Fund $221,952 Sewer System Fund $ 59,710 Park Development Fund $142,238 Storm Drain Impact Fund $168,036 Traffic Impact Fund $306,376 Total $898,312 Exhibit D compares the Developer's claim with staff's ultimate recommendation. The Developer requested $1,585,050 in consideration and staff is recommending $898,312. The final consideration can be allocated as follows: Fees Deemed Prior Satisfied due to CFD 89-2 $602,206 Reimbursement for Oversized Improvements $221,952 Contribution for Work to be Performed $ 74,154 Total $898,312 Exhibit E illustrates where the credits have been allocated by specific property. Three of the four properties are proposed for residential development and the Developer could utilize 51.1 % of the total credits without constructing the commercial shopping center. If the shopping center is not completed by the term of the Agreement, then the only remedy provided in the Agreement is the forfeiture of the balance of the unused fees. Staff has allocated as much of the credits to the commercial site as possible to create the strongest incentive to accomplish that portion of the development.