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disproportionate to the actual degree of impact associated with the project. As noted <br /> above, staff believes a reduction is warranted. <br /> Further, while not a factor the City Council is required to consider, the applicant has <br /> indicated that payment of the full fee amount would render this project financially <br /> infeasible. If the project did not move forward, it would not only not contribute any <br /> additional impact fees, but it would not bring the benefit of the proposed investment and <br /> upgrade to the site as described in Attachment 4. <br /> Option 2 outlined by staff aligns with past approvals. While staff cannot affirm the <br /> methodology from 1997 and 2002 nor why 77-78 percent reductions were approved, it <br /> is assumed some analysis was conducted to support the proposal. The precedents may <br /> therefore provide a basis for a similar reduction in fees. However, it would likely reflect a <br /> smaller reduction than may be warranted based on actual employee generation. <br /> Option 3 reflects the applicant's request and would approve a fee reduction of 98.8 <br /> percent for the entire project, inclusive of both the storage and office components. <br /> Option 4 as noted, represents a hybrid approach. This would include no fee reduction <br /> for the office portion of the project, only for the storage element. The office portion of the <br /> project generates employees and creates a need for affordable housing. No fee <br /> reduction for the office is also consistent with past Affordable Housing Fee reduction <br /> approvals. Option 4 does, however, support a fee reduction of 98.8 percent for the <br /> storage portion of the project only (consistent with that requested by the applicant), and <br /> in alignment with the actual impact/generation of employees (i.e., 1.2 percent of that <br /> assumed in the EPS study). <br /> Option 5 aligns with the SANDAG-developed employee generation ratio that is widely <br /> used by other cities and public agencies in developing nexus studies for calculation of <br /> impact fees and evaluating project impacts for the storage component, and retains the <br /> office component at 100 percent of the standard fee rate. Although assuming a <br /> somewhat higher employee generation rate than stated by the applicant, the reduction <br /> would nonetheless be in alignment with commonly used methodologies and <br /> assumptions used to calculate fees for storage projects in other communities. <br /> CONCLUSION AND RECOMMENDATION <br /> Staff does not recommend Option 1 (no reduction) since it would be significantly out of <br /> proportion with the project's actual employee generation, and would not correspond to <br /> past precedent, or common practice in calculating impact fees for these types of <br /> projects. <br /> Although the applicant's requested Option 3 is supportable based on its employee <br /> generation, staff finds there is also a supportable basis for Options 2, 4, or 5. Each of <br /> these options would provide an additional increment of benefit to the City in helping to <br /> meet its affordable housing needs. <br /> Page 12 of 14 <br />