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Developers See Fee Relief in Irvine Business Complex



RESIDENTIAL

Development fees in the Irvine Business Complex are going down,at least for the time being.

Irvine’s City Council late last month approved a plan to decrease development impact fees,onetime charges to offset the city’s cost of development,in the mostly commercial area around John Wayne Airport.

Under the latest plan, impact fees soon will be cut by 26%, largely due to the economy, officials said. Fees based on an increase in land value are being kept flat. They had been expected to go up 5% a year.

The changes mean housing development fees will be cut from $10,373 to $7,175 per unit, accor-ding to city documents. Office fees will be reduced from $29.27 per square foot to $20.28 per square foot, the city said.

The reductions come as plans for thousands of condominiums, apartments and offices largely have been put on hold.

The changes are being well received by developers, especially after prior years when IBC development fees jumped considerably.

Increases in prior years’ impact fees had been tied to an index that tracked changes in construction materials.

In the past five years, the index had jumped as high as 39% annually. A rolling average of prior years’ indexes is expected to be used going forward.

Irvine “is sending a positive message to an industry that has been severely punished by the economic crisis,” said Kristine Thalman, chief executive of the Orange County chapter of the Building Industry Association.

The decision “couldn’t have come at a better time,” Thalman said.

The cuts are a big change in thinking for the city. Irvine officials had drawn complaints in 2006, when the city floated a plan to add a number of one-time fees that could have increased total development fees to more than $70,000 per home. Most of those suggestions have fallen by the wayside.

In the future, annual IBC land fees are expected to be adjusted using an appraisal assessment completed every three years, with a new appraisal done this year.

That appraisal should show IBC land values dropping “tremendously,” according to officials with Irvine-based consultancy Starpointe Ventures Inc.






Irvine Business Complex: development fees reduced


Standard Sublease

Standard Pacific Corp. has consolidated its local operations and put space at its Irvine headquarters up for sublease.

The homebuilder, which is restructuring amid the recession, had been occupying space at two buildings in the Irvine Spectrum, where its headquarters, OC operations and financial services subsidiary were based.

Kenneth Campbell, Standard Pacific’s chief executive, late last month told trade publication Big Builder that the company had moved its slimmed-down operations into a smaller, less expensive building next to its old headquarters.

“So now it’s a crowded, busy space,” Campbell said.

Standard Pacific has 33,000 square feet of space and a lease running into 2012 at 15326 Alton, an Irvine Company-owned building.

That space is listed as available for sublease at monthly rents of $1.25 per square foot, according to CoStar Group Inc. Jones Lang LaSalle is handling the listing.

Campbell also talked to Big Builder about the company’s recent decision to replace its chief financial officer and general counsel with younger, less expensive employees.

The company’s new chief financial officer, John Stephens, is 40, while its new general counsel, John Babel, is 38. They have base salaries of $400,000.

Stephens and Babel, promoted from within the company, have skills better in line with the current size of Standard Pacific’s business, Campbell told the magazine.

“These are really good, sharp, young people,” he said “These people are eager.”


COMMERCIAL

Irvine’s La Jolla Pacific Ltd. is the latest local business offering services to companies with portfolios of bank-owned properties and other distressed real estate assets.

The construction risk management company said it has formed two separate units, which will be based in Irvine.

A construction division, headed by construction and risk mitigation professionals, will specialize in construction management and general contracting services for distressed real estate assets.

A separate management division will provide continuing customer and warranty services, claims management, property management and ongoing maintenance obligations for bank-owned buildings where builders have stepped out of the picture.

Offering a “package of pre-construction, during construction, and post-construction services, we can better help our clients stabilize and maintain these assets,” said Don Neff, La Jolla Pacific chief executive, in a statement.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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