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Escondido Councilmember John Masson’s company has been tasked with helping the Ritz Theater proposal clear legal and regulatory hurdles. File photo
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With imminent development, Escondido searches for deficiency solutions

ESCONDIDO —City Council debated how the city will finance $11.34 million of priority infrastructure improvements in Escondido’s North Broadway Deficiency Area as it approves more new homes for construction.

At their Wednesday night meeting, City Council approved Pacific Land Investors’ (PLI) proposal to build 32 new homes in the mostly undeveloped area north of Lehner Avenue, south of Stanley Avenue, and between Conway Drive and Ash Street.

The future development is located in the North Broadway Deficiency Area, a portion of the city that officials have determined is in need of infrastructure improvements to support health and safety standards its current and future residents.

“There’s very few sidewalks… There’s water lines that are undersized. We have some water pressure issues,” explained Bill Martin, the principal planner handling the project.

To pay for such enhancements, the city established a deficiency fee for every new home built in an area with insufficient infrastructure. By paying the fee, developers can move forward with a project without having to wait for the city to obtain the needed funds and construct the needed infrastructure.

“If residential development is to go forward before we (the city) have an opportunity to address these deficiencies, then (the developers) are going to need to help us move that along,” Martin said.

PLI is working towards obtaining city approval to construct about 125 total homes in the North Broadway Deficiency Area. After City Council’s most recent vote, PLI has secured authorization for 59 of those homes.

When PLI came forward in December with proposals to construct 27 homes along Lehner Avenue, city staff determined that the priority street and drainage improvements needed in the North Broadway Deficiency Area would cost about $11.34 million. Staff divided the total cost by the 668 units that could potentially be built in the area and calculated the deficiency fee to $17,000 per house.

But PLI argued that a $17,000 deficiency fee was cost prohibitive. The majority of city council decided to set the fee lower than staff’s recommendation to $12,500 per unit instead.

Following city council’s previous direction, staff recommended a $12,500 deficiency fee for each of PLI’s 32 units proposed on Wednesday night.

Martin stated that staff would have put forth a $12,500 fee even if the proposal came from a different developer.

But on top of the deficiency fee, PLI is additionally required to construct or pay thousands of dollars per unit for multiple water line and street improvements directly impacted by the new homes.

These improvements include a new 12-inch water line, street enhancements at two intersections, a traffic signal at North Ash Street and Vista Avenue.

If PLI elects to pay for the improvements, its fees could rise to $20,307 per unit.

Per the agreement, PLI is also required to build frontage improvements on Stanley Avenue, sidewalks on Ash Street and Conway Drive, and a 24-inch water line.

According to some city councilmembers, the requirements cover the developer’s obligation to compensate for the impacts of the new homes and pay for a portion of the area’s overall infrastructure improvements.

“I’m satisfied that these types of developments are paying their way and then some,” said Michael Morasco. He emphasized that new homes enhance the value of existing properties nearby.

Commenting on the infrastructure requirements in the development agreement, Morasco added, “This is above and beyond the $17,000 that staff had recommended, significantly more than that.”

“We need quality housing in Escondido,” councilmember John Masson added. “This provides that need.”

Though Deputy Mayor Olga Diaz said that she doesn’t object to the development, she raised concerns about how the city is going to pay for the infrastructure improvements needed throughout the North Broadway Deficiency Area and other portions of the city like it.

She opposed setting the deficiency fee below the recommended $17,000 in December.

“How are we actually going to finish adding the amenities that are necessary? I’m not saying that this development needs to do it,” she said.

Public works director Ed Domingue said that thanks to the development agreement, the project proposed by PLI would cover the health and safety impacts of the 32 homes and would not negatively impact the rest of the neighborhood.

But he explained that without sufficient funds, the city would have to delay constructing some of the priority infrastructure fixes. If those improvements are delayed, the city may have to deny future proposed development in the area.

Diaz pressed staff to study how the city could address the deficiencies throughout Escondido before it gets to the point of having to deny projects.

“I would like the city to figure out exactly what it’s going to do,” she said.

Council approved PLI’s proposal for the 32 homes unanimously.