IRVINE — Developers of the Irvine Business Complex this week won sizeable decreases in fees the city had been charging to help offset the costs of building supporting roads and infrastructure.
Builders had been asked to help offset the costs of road and other projects required to support the project.
Under the old fee structure, commercial and office builders were assessed $20.28 per square foot; hotel builders, $9,383 per room; and residential builders, $7,175 per unit. There were also charges for warehouses, manufacturing centers and extended-stay hotels.
The decreases, which the City Council approved Tuesday, range from about 72% to 74%.
"[The fee reduction] is an actual economic stimulus to our industry," Kristine Thalman, chief executive for the Building Industry Assn. of Orange County, told the council. "…Our membership is extremely pleased that Irvine has made the necessary adjustment to IBC transportation funding plan and the associated fee program."
The reduction for the 2,600-acre workforce housing area roughly bounded by Barranca Parkway, Red Hill Avenue, Campus Drive and Jamboree Road, was possible because of several now-canceled road improvements that had been included in the 2009 fee structure, according to a city staff report.
Among those improvements, which the report cited as no longer necessary, were a grade separation at Jamboree Road and Barranca Parkway, a widening project at Alton Parkway and Von Karman Avenue, and fewer costs associated with a planned crossing at Alton and the Costa Mesa (55) Freeway, according to the report.
The adjusted fee program is expected to cover 90% of the costs of improvements, with the remainder coming from grants.
Separate from the transportation fee decrease, the council also unanimously approved — albeit with a stipulation of a six-month delay — a neighborhood infrastructure fee increase of 14%. The fees had been included in the so-called Irvine Business Complex Vision Plan OK'd by the council in 2006.
However, BIA Deputy Executive Officer Bryan Starr expressed concerns about "over-charging."
"We are definitely not opposed to the neighborhood infrastructure fee, nor are we opposed to what the fee represents," Starr said. "However, we are opposed to the notion that construction costs have increased by 14% since 2006."
Also voicing concern over the method in which the effect of inflation was calculated, Mayor Sukhee Kang suggested holding off on imposing the infrastructure fee increase for one year in order to give current developers a fair warning and to entice future prospects.
Three developers have already submitted applications and will be reviewed by the city in the next 12 months. These developers would receive the benefit of the city holding off of the fee increase, city staff said.
"That strikes me as not a very smart public policy," Councilman Larry Agran said, suggesting six months instead.
"Developers coming in now get a big break, and I'm happy that they do on the transportation mitigation fees because we have found ways of addressing those concerns," Agran continued. "I want to make sure that when it comes to the IBC neighborhood infrastructure improvements that we're going to have enough money to do this stuff … I would just not be too eager to depart from that methodology without some careful forethought."