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City report: Fresno has waived $9.9 million in developer fees over the last decade

Buildings in downtown Fresno.
Larry Valenzuela
CalMatters / CatchLight Local
Downtown Fresno on June 17, 2022.

Over the last decade, the city of Fresno has waived a total of nearly $10 million in developer fees under policies designed to boost projects in disadvantaged or underdeveloped areas, a new city report shows.

In 2023, the city waived a total of $1.8 million in fees, according to an annual report released in December. The largest benefactor was Crossroads Village, a motel-turned-affordable housing project at Blackstone and Dakota avenues, that saw about $749,098 in fees waived.

The city has four official programs under which developers can request waivers of fees that otherwise would fund infrastructure and services to support the new developments, such as roads or increased public safety. Waivers typically are granted for projects with the potential to benefit nearby neighborhoods, such as “infill” housing to build on vacant lots or industrial projects that create jobs and positive economic impact.

One of the largest waivers in the last decade came in 2016, when the city council agreed to wipe out $1.35 million in fees for a 900,000-square-foot Amazon warehouse in south central Fresno. In 2017, a nearby Ulta Beauty warehouse won a $705,535 fee waiver.

Granville Homes, the local housing development company owned by the Assemi family, has received waivers worth $830,000 for four projects over the past decade.

The impact fees assigned to developers are meant to fund police and fire services, streets, traffic signals, water and sewer infrastructure, and parks. But they can be “a blunt tool,” according to David Garcia, policy director at the Terner Center for Housing Innovation at UC Berkeley.

If too high, impact fees can stymie much-needed new housing development, according to research co-authored by Garcia. In California, many cities have relied heavily on impact fees to pay for new growth.

“Oftentimes impact fees can be a significant impediment for a project to pencil out,” Garcia told Fresnoland. “But it’s challenging to follow up on how they work in practice, to make sure the project wouldn’t have been built if not for getting rid of the fees.”

“Ultimately,” posed Garcia, “this is a question of values for cities.”

Different fee waiver programs have different goals - some to spur new housing in older neighborhoods, some to help create jobs, others to jumpstart economic development in disinvested neighborhoods, like the Ventura/Kings Canyon corridor, a 4.5-mile stretch in southeast Fresno where the city is encouraging development of a “Main Street” character, according to a city report.

The city’s Kings Canyon fee waiver program, however, has yet to benefit any small businesses in southeast Fresno, according to the report. Only a Taco Bell franchise hasbenefitted.

Federal, state infrastructure grants reduce developer fee burden

The city’s report on waivers also included a list of publicly funded grants that have offset fees developers otherwise would have paid to build infrastructure near their projects.

Over the last decade, about $29 million in impact fees have been offset through a mix of state, federal, and Measure C funds.

To fund Veterans Boulevard, a new road and interchange along Freeway 99, funds from the state and the city’s Measure C sales tax were used to offset $10.6 million in developer fees. The project costs nearly $140 million overall.

A million-dollar federal grant, along with $1.2 million in Measure C dollars to widen Willow Avenue between Nees and Shepherd avenues helped wipe out $2.2 million that developers of nearby projects would otherwise have contributed to the city.

Developers also were given a $2.49 million fee break to widen Herndon in northwest Fresno, between Brawley and Valentine, also courtesy of a federal grant and Measure C funds.

This article first appeared on Fresnoland and is republished here under a Creative Commons license.