City Extends Development Fee Deferral Program

ONTARIO, CA-The mayor and city council here have unanimously approved a year-long extension of a program that defers development fees for commercial and residential developers in an effort to encourage new projects. Called the Development Impact Fee deferral program, the measure is designed to foster continued investment and development in the community, according to a city announcement regarding the DIF extension.

The DIF programs for residential and non-residential development allow developers to enter into an agreement with the city to defer the payment of DIF from the time of building permit issuance until final inspection. Deferring the development impact fee payments until the completion of the project, "alleviates the burden imposed on development of having to pay development impact fees at the building permit stage," the city says, adding that the program is also designed to provide some "certainty and relief" during uncertain economic times.

Ontario’s commercial development impact fees range from $3 per square foot of pad area to $12 per square foot of pad area, depending on the type of commercial usage. The residential fees range from $17,000 to $26,000 per unit. Ontario officials say that the fee deferral program is one of a number of measures the city has implemented "to build the critical infrastructure needed to create a complete community for its residents and businesses." As examples, it cites projects that city officials are working on with their development partners, such as Milliken Grade Separation, the Historic Guasti District, Piemonte at the Ontario Center and the New Model Colony.

Ontario Mayor Paul S. Leon commented in a statement regarding the extension of the DIF Deferral Program that the program "creates opportunities for developers to defer their development impact fees, thus improving their cash flow at critical phases of development.”

The Ontario City Council created a temporary DIF Deferral Program in May of 2008 for residential development. The initial period for the program was eight months through Dec. 31, 2008. The residential development program was extended in August 2008 for an additional 12 months through Dec. 31, 2009. In May 2009, the DIF Deferral Program was expanded to include commercial and other non-residential development and the DIF Deferral Programs were extended through Dec. 31, 2010. The new programs, which began Jan. 1, will run until Dec. 31 this year.