421.3

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

Residential Non-residential $9.00/gsf $3.40/gsf

TABLE 421.3B

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

Residential to Residential or Non-residential; or Non- residential to Non-residential Non-Residential to Residential PDR to Residential PDR to Non-Residential $0 $5.60/gsf $7.30/gsf $1.70/gsf

(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: (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 in-kind 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 In-Kind 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. SEC. 421.4. IMPOSITION OF COMMUNITY INFRASTRUCTURE IMPACT FEE. (a) Determination of Requirements. The Department shall determine the applicability of Section 421.1 et seq. to any development project requiring a first construction document and, if Section 421.1 is applicable, the number of gross square feet of each type of space subject to its requirements, and shall impose these requirements as a condition of approval for issuance of the first construction document for the development project to mitigate the development impacts. The project sponsor shall supply any information necessary to assist the Department in this determination. (b) Department Notice to Development Fee Collection Unit at DBI. After the Department has made its final determination of the net addition of gross square feet of each type of space subject to Section 421.1 et seq., it shall immediately notify the Development Fee Collection Unit at DBI of its determination in addition to the other information required by Section 402(b) of this Article. (c) Sponsor's Choice to Fulfill Requirements. Prior to issuance of a building or site permit for a development project subject to the requirements of Section 421.1 et seq., the sponsor shall elect an option under Section 421.3 to fulfill the requirements of Section 421.1 et seq. and notify the Department of their choice. (d) Department's Notice to Development Fee Collection Unit of Sponsor's Choice. After the project sponsor has notified the Department of the choice to fulfill the requirements of Section 421.1 et seq., the Department shall immediately notify the Development Fee Collection Unit at DBI of the project sponsor's choice. (e) Development Fee Collection Unit Notice to Department Prior to Issuance of the First Certificate of Occupancy. The Development Fee Collection Unit at DBI shall provide notice in writing or electronically to the Department prior to issuing the first certificate of occupancy for any development project subject to Section 421.1 et seq. that has elected to fulfill all or part of the requirement with an option other than payment of a fee. If the Department notifies the Unit at such time that the sponsor has not satisfied the requirements, the Director of DBI shall deny any and all certificates of occupancy until the subject project is brought into compliance with the requirements of Section 421.1 et seq. (f) Process for Revisions of Determination of Requirements. In the event that the Department or the Commission takes action affecting any development project subject to Section 421.1 et seq. and such action is subsequently modified, superseded, vacated, or reversed by the Department or the Commission, Board of Appeals, the Board of Supervisors, or by court action, the procedures of Section 402(c) shall be followed. (Added by Ord. 108-10, File No. 091275, App. 5/25/2010; amended by Ord. 55-11, File No. 101523, App. 3/23/2011; Ord. 50-15 , File No. 150149, App. 4/24/2015, Eff. 5/24/2015) SEC. 421.5. MARKET AND OCTAVIA COMMUNITY IMPROVEMENTS FUND. (a) Purpose. There is hereby established a separate fund set aside for a special purpose entitled the Market and Octavia Community Improvements Fund ("Fund"). All monies collected by DBI pursuant to Section 421.3(b) shall be deposited in the Fund maintained by the Controller. The receipts in the Fund shall be appropriated in accordance with law through the normal budgetary process to fund public infrastructure and other allowable improvements subject to the conditions of this Section. (b) Use of Funds. The Fund shall be administered by the Board of Supervisors. (1) Infrastructure. All monies deposited in the Fund shall be used to design, engineer, acquire, improve, and develop neighborhood open spaces, pedestrian and streetscape improvements, bicycle infrastructure, childcare facilities, and other improvements that result in new publicly-accessible facilities and related resources within the Market and Octavia Plan Area or within 1,250 feet of the Plan Area. Funds may be used for childcare facilities that are not publicly owned or publicly-accessible. The improvements, where applicable, shall be consistent with the Market and Octavia Civic Streets and Open Space System as described in Map 5 of the Market and Octavia Area Plan of the General Plan, and Market and Octavia Community Improvements Program. The funds shall be allocated in accordance with Table 421.5A.