Council adopts fee‑deferral policy to delay some development fees until certificate of occupancy

The El Segundo City Council adopted a resolution May 6 establishing a fee‑deferral program that allows qualifying projects to postpone payment of certain development impact fees and specified building permit fees until prior to issuance of a certificate of occupancy or final inspection.

Director Allen (Building/Development) told the council the item responds to economic pressures on development—high financing costs and delays—and is intended to spur projects that might otherwise be delayed. "We're not looking to waive any fees or exempt any fees or or reduce the fees in any way," Allen said, explaining that the program only changes payment timing.

The ordinance change modifies El Segundo Municipal Code Title 15, Chapter 32 to allow fee deferral in specified circumstances; a companion resolution authorizes an administrative agreement form and the process for deferral of certain building permit issuance fees that are not tied to immediate staff services. Staff said the deferral would generally apply to fees connected to long‑term capital improvements rather than inspection or permit processing costs.

Council members asked how the city would ensure deferred fees were ultimately paid. Allen said staff considered liens but had not included an automatic lien provision in the ordinance because that process can be complex. He said the council's primary leverage is withholding a final certificate of occupancy: "With the certificate of occupancy the idea is you can build it but if you don't pay your fees you don't get that piece of paper that allows people to actually go inside your new building," he said. Councilmembers discussed additional legal remedies and the practical leverage exerted by lenders and tenants, who typically require a certificate of occupancy to take possession or to convert construction financing.

Staff provided an illustration: in a recent large project the combined cultural development, permit and impact fees totaled roughly $1.5 million; deferral could ease developers' short‑term cash needs, staff said. After public hearing, the council adopted the resolution authorizing the fee‑deferral program by a 5‑0 vote and introduced the implementing ordinance for first reading; the ordinance will return on May 20 for second reading.