SEC. 421.3. APPLICATION OF COMMUNITY IMPROVEMENTS IMPACT FEE.

(a) Application. Section 421.1 et seq. shall apply to any development project located in the Market and Octavia Program Area as defined in Section 401 of this Code, except as provided under Section 406(k) of this Code.

(b) Projects subject to the Market and Octavia Community Improvement Impact Fee. The Market and Octavia Community Improvements Impact Fee is applicable to any development project in the Market and Octavia Program Area which results in:

• (1) At least one net new residential unit,

• (2) Additional space in an existing residential unit of more than 800 gross square feet,

• (3) At least one net new group housing facility or residential care facility,

• (4) Additional space in an existing group housing or residential care facility of more than 800 gross square feet,

• (5) New construction of a non-residential use, or

• (6) Additional non-residential space in excess of 800 gross square feet in an existing structure.

(c) Fee Calculation for the Market and Octavia Community Improvement Impact Fee. For development projects for which the Market and Octavia Community Improvements Impact Fee is applicable:

• (1) Any net addition of gross square feet shall pay per the Fee Schedule in Table 421.3A, and

• (2) Any replacement of gross square feet or change of use shall pay per the Fee Schedule in Table 421.3B.

TABLE 421.3A

FEE SCHEDULE FOR NET ADDITIONS OF GROSS SQUARE FEET IN THE MARKET AND OCTAVIA PROGRAM AREA

TABLE 421.3B

FEE SCHEDULE FOR REPLACEMENT OF USE OR CHANGE OF USE IN THE MARKET AND OCTAVIA PROGRAM AREA

(d) Option for In-Kind Provision of Community Improvements and Fee Credits. Project sponsors may propose to directly provide community improvements to the City. In such a case, the City may enter into an In-Kind Improvements Agreement with the sponsor and issue a fee waiver for the Market and Octavia Community Improvements Impact Fee from the Planning Commission, subject to the following rules and requirements:

-Kind Provision of Community Improvements and Fee Credits.** Project sponsors may propose to directly provide community improvements to the City. In such a case, the City may enter into an In-Kind Improvements Agreement with the sponsor and issue a fee waiver for the Market and Octavia Community Improvements Impact Fee from the Planning Commission, subject to the following rules and requirements:

(1) Approval criteria. The City shall not enter into an In-Kind Agreement unless the proposed in-kind improvements meet an identified community need and where they substitute for improvements that could be provided by the Market and Octavia Community Improvements Fund (as described in Section 421.5). The City may reject inkind improvements if they are not consistent with the priorities identified in the Market and Octavia Area Plan, by the Interagency Plan Implementation Committee (see Section 36 of the Administrative Code), the Market and Octavia Citizens Advisory Committee, or other prioritization processes related to Market and Octavia community improvements programming. No physical improvement or provision of space otherwise required by the Planning Code or any other City Code shall be eligible for consideration as part of this In-Kind Improvements Agreement. (2) Valuation. The Director of Planning shall determine the appropriate value of the proposed in-kind improvements. For the purposes of calculating the total value, the project sponsor shall provide the Planning Department with a cost estimate for the proposed in-kind improvement(s) from two independent sources or, if relevant, real estate appraisers. If the City has completed a detailed site-specific cost estimate for a planned improvement this may serve as one of the cost estimates provided it is indexed to current cost of construction.

(3) Content of the In-Kind Improvements Agreement. The In-Kind Improvements Agreement shall include at least the following items:

(i) A description of the type and timeline of the proposed in-kind improvements.

(ii) The appropriate value of the proposed in-kind improvement, as determined in subsection (2) above. (iii) The legal remedies in the case of failure by the project sponsor to provide the in-kind improvements according to the specified timeline and terms in the agreement. Such remedies shall include the method by which the City will calculate accrued interest.

(4) Approval Process. The Planning Commission must approve the material terms of an In-Kind Agreement. Prior to the parties executing the Agreement, the City Attorney must approve the agreement as to form and to substance. The Director of Planning is authorized to execute the Agreement on behalf of the City. If the Planning Commission approves the In-Kind Agreement, it shall waive the amount of the Market and Octavia Community Improvements Impact Fee by the value of the proposed In-Kind Improvements Agreement as determined by the Director of Planning. No credit shall be made for land value unless ownership of the land is transferred to the City or a permanent public easement is granted, the acceptance of which is at the sole discretion of the City. The maximum value of the In-Kind Improvements Agreement shall not exceed the required Market and Octavia Community Improvements Impact Fee.

(5) Administrative Costs. Project sponsors that pursue an In-Kind Improvements Agreement will be billed time and materials for any administrative costs that the Planning Department or any other City entity incurs in negotiating, drafting, and monitoring compliance with the In-Kind Improvements Agreement.

(e) Option for Financing of Community Improvements or Payment of the Market and Octavia Community Improvements Impact Fee via a Mello Roos Community Facilities District ("CFD"). Applicants may finance InKind Community Improvements (subject to subsection (e) above) or payment of the Market and Octavia Community Improvements Impact Fee (subject to subsection (c) above) through the formation of a CFD.

(f) Timing of Fee Payments. The Market and Octavia Community Improvements Impact Fee shall be paid to DBI for deposit into the Market and Octavia Community Improvements Fund at the time required by Section 402(d).

(g) Waiver or Reduction. Development projects may be eligible for a waiver or reduction of impact fees, per Section 406 of this Article. Additionally, applicants that are subject to the downtown parks fee, Section 139, can reduce their contribution to the Market and Octavia Community Improvements Fund by one dollar for every dollar that they contribute to the downtown parks fund, the total fee waiver or reduction granted through this clause shall not exceed 8.2 percent of calculated contribution for residential development or 13.8 percent for commercial development. (Added by Ord. 108-10, File No. 091275, App. 5/25/2010; amended by Ord. 270-10, File No. 100917, App. 11/5/2010; Ord. 25-11, File No. 101464, App. 2/24/2011; Ord. 50-15 , File No. 150149, App. 4/24/2015, Eff. 5/24/2015; Ord. 83-17, File No. 170003, App. 3/24/2017, Eff. 4/23/2017; Ord. 63-20, File No. 200077, App. 4/24/2020, Eff. 5/25/2020; Ord. 188-25, File No. 250680, App. 10/6/2025, Eff. 11/6/2025) AMENDMENT HISTORY

Division (f) amended; Ord. 50-15 , Eff. 5/24/2015. Division (a) amended; Ord. 83-17, Eff. 4/23/2017. Division (f) amended; Ord. 63-20, Eff. 5/25/2020. Division (a) amended; Ord. 188-25, Eff. 11/6/2025.