Homebuilders are nervously eyeing an Irvine proposal that would more than double city fees for putting up homes in the area around John Wayne Airport to nearly $70,000 per home.
The city proposal is part of a bid to finalize plans for homebuilding in the Irvine Business Complex, where developers and businesses are at odds over growth.
The area around the airport, long known for its offices, plants and warehouses, is slated for up to 14,000 condominiums, townhomes and apartments.
Among the largest fee increases would be a $25,000 per home “infrastructure fee,” which would raise about $100 million for sewer, electrical and street work needed in the Irvine Business Complex.
Builders now pay about $34,000 per home in fees. The city uses the funds to build parks and schools, and encourage affordable housing. This general fee would rise by $11,000 under the proposal.
Irvine officials are “currently in negotiations with the development community to establish an infrastructure fee” for the Irvine Business Complex, city communications manager Judy Pal said.
Some developers fear higher upfront fees will end up nixing some of the nearly 40 housing projects on the books for the Irvine Business Complex.
About 20 applications for projects in the area, totaling 6,700 homes, have yet to be approved by the city. They would be affected by the fee changes.
Another 12 projects, totaling about 3,700 homes, have been approved and are in various stages of development. These homebuilders could be affected by a fee hike if they haven’t yet paid their development fee to the city.
“At the end of the day, this could keep a number of projects from breaking ground,” said Bill Montgomery, president of Irvine-based developer Sares-Regis Group.
Developers and others tracking the development fee proposal in Irvine say it’s early in the discussion. The $70,000 per unit figure is likely to fall once Irvine gets more input from builders, they say.
The Irvine City Council had planned to debate the issue at a hearing last Monday, but pushed it off to June 27.
For more on this story, see the June 19 edition of the Business Journal
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