The Ridgecrest City Council on Wednesday unanimously agreed to defer an estimated $979,206 in development impact fees for up to four years with interest for Son Land Apartments, a proposed 192-unit multi-family complex on East Bataan Avenue and South Sunland Street. All five council members were present.
The rationale for deferring the fees is to help provide housing for an expected influx of several hundred new engineers to be hired by NAWS China Lake, the city’s largest employer.
The project is planned in two phases. The agreement allows deferral of an estimated total $979,206 in impact fees for both phases of the project: Phase 1 at $542,406 and Phase 2 at $436,800. According to a staff report, the fees will be deferred for up to four years at the interest rate of 4 percent or fair market rate per annum and the developer will still be required to pay all applicable permit fees.
The project is being developed by Metcalf Construction LLC (Terry Metcalf and Kelly Smith Metcalf).
Development fees will be due within four years of the date the first building permit is pulled and security for the city will be a lien on the property, according to City Manager Ron Strand.
Strand said with word that the base has hired approximately 600 new engineers and is looking at losing as much as 11 percent of their workforce to retirement next year and thus hiring more, city staff was tasked with working with developers to find a way to bring more multi-family housing to the area. Also helping with this effort have been local realtors and the Indian Wells Valley Economic Development Corporation.
Strand said staff has been in working with this developer to reduce their upfront costs, at least temporarily to allow them to start building their project.
Mayor Pro Tem Michael Mower asked if the impact fees will be paid after the project is final.
Strand said yes.
“They are going to pay it within four years whether they make a profit or not?” Mower asked.
“Correct,” Strand replied.
Strand added that the project would presumably have a quick start date if the deferral were to be approved.
“The developer is very interested in breaking ground shortly. They want to get moving. We are just doing everything we can to do it to where this thing is moving forward. The issue is that if they don’t build we don’t get the impact fees anyway, and we do have the base that needs this housing.”
According to Assistant City Attorney Lloyd Plichen, the deferral of impact fees is specifically allowed in the city’s municipal code.
Mayor Peggy Breeden said she approved of the idea, particularly since the city would be protected by the lien on the property. Breeden asked, however, what the criteria would be for evaluating similar requests from other developers in the future.
“I would never do it without securing council permission and some sort of security that we would get repaid,” Strand said. “If we have a specific need, as in this case, I think we are justified to ask Council to do it.”
“I have no problem approving this given that the impact fees are secured with a lien on the property and that we have reasons we can justify why this is OK,” Breeden said. She added that she would like each similar request in the future to be evaluated on an individual basis.
Strand noted that a similar arrangement was made with the Red Rock Villas development and another upcoming development may lead to a similar request.
There was no public comment.