FULLERTON : Builder Wants Buyers to Fund Roads, Sewers

The Unocal Land & Development Co. has asked the city’s permission to charge future homeowners for the cost of building roads and sewers in a 164-acre parcel off Rolling Hills Drive.

Creation of the district would be the first time the city has let a developer pay for infrastructure by levying an assessment, council members said.

The council voted unanimously this week to set public hearings to consider Unocal’s request, but Councilman Chris Norby expressed caution. “If we approve this one, it will be difficult not to approve future ones,” he said.

Assessment districts can be set up to pay for building, maintenance and other projects.

Under Unocal’s proposal, the city would levy an additional 0.2% in property taxes for each homeowner in the district to pay for installation of roads and sewers. The assessment would probably be levied over 20 years, according to Robert Hodson, the city’s director of engineering. The tax money would go to the city and then be passed on to Unocal. For a $200,000 home, that would be an additional $400 annually in property taxes.

Unocal is planning to build about 500 single-family houses north of Rolling Hills Drive, near the intersection with Placentia Avenue. As part of the approval of the project, the city required the company to extend Placentia Avenue northward and widen Rolling Hills Drive.

In 1983, according to Councilman A. B. (Buck) Catlin, the council proposed making the entire city of Fullerton an assessment district to pay for street lights and tree maintenance. Catlin said each property owner would have had to pay about $15 yearly. The idea was loudly criticized at public hearings and died, Catlin said.

Normally, residents within a proposed assessment district would be invited to attend public hearings on whether they would be willing to pay the new fees. But as Catlin pointed out at Tuesday’s council meeting, no one yet lives on the Unocal land. “Where’s the public that will ultimately pay for it?” Catlin asked.

Catlin said that with a bad economy, the city could seek to set up more assessment districts to pay its own operating costs. “In a way, it’s a fair thing, because people could see what was being done,” he said.

Unocal has asked the city for $3.8 million, which the city would raise by selling bonds. Hodson said future property owners in the assessment district would then pay off the bonds through the special levy. However, if the project is never built, Unocal will have to pay off the bonds.

The assessment would be disclosed when prospective buyers are shown the homes. Hodson said it is a creative way to pay for required improvements.

“If Unocal did not go for the (assessment) district, they would probably be charging more for the homes,” Hodson said.