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Deferring fees goal: Luring more jobs & affordable housing units

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POSTED July 20, 2009 12:57 a.m.

Civic leaders are being asked Tuesday to put in place a citywide development fee deferral program in a bid to retain and attract employers to Manteca.


The program is aimed at commercial, industrial, and affordable housing. It doesn’t reduce fees. Instead, it gives municipal staff – the city manager or his designee – the power to hammer out arrangements of between 5 and 10 years to allow the deferral of growth-related fees for things such as major roads, government facilities, and parks.


Upfront growth-related fees have long been cited as a big issue for firms trying to locate in California communities as putting up large amounts of capital - often in the hundreds of thousands of dollars - in addition to spending millions on a building can be a deal killer.


B.F. Funsten – as an example – is proceeding with an 86,000-square-foot addition to the 108,000-square-foot distribution center at Main Street and Industrial Park Drive. They are also adding 6,500 square feet to their office.


The growth fees are coming in at just under $400,000.


A firm like B.F. Funsten would be able to defer full payment of those fees for five to 10 years depending upon agreements that are forged.


The deferred fees would have an annual interest rate equal to the 11th District cost of funds established by the Federal Reserve plus 1 percent paid in annual installments.


Prior to issuance of a building permit, 10 percent of the infrastructure development fees must be paid plus all other fees that are due.


The unpaid balance of deferred fees and accrued interest are due and payable in full upon the sale, transfer, conveyance or assignment of the property or a change in control of ownership.


City Manager Steve Pinkerton in a staff report to the council noted that the “development deferral fee program does not alter the amount of infrastructure fees charged, but merely the date of receipt of the funds. The balances of these funds, combined with anticipated dates of infrastructure construction mean that a five-year deferral on a limited number of projects will not have a significant impact.”


To qualify for consideration, projects must have a requirement of at least $20,000 in infrastructure development fees.


The program would be examined on a case-by-case basis to either attract new employers, retailers, or affordable housing to Manteca. It can also help retain existing companies that wish to expand such as B.F. Funsten that is a wholesale distributor of flooring products employing 130 people.


The City Council meets at 7 p.m. Tuesday at the Civic Center, 1001 W. Center St.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com

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