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Development Agreements – A Useful Tool for Developers and Government Agencies

A development agreement is an agreement negotiated between a city or county and a developer with regard to a particular development. Development agreements allow a developer to lock into the rules, regulations, and policies governing permitted uses, density, design, improvements, and construction that are in effect at the time the agreement is executed. As such, development agreements are a tool developers may use to gain some certainty regarding the requirements that may be imposed on a proposed development.  This affords a developer the ability to better estimate the scope and cost of a project.

Cities and counties also benefit from development agreements by negotiating development terms that are beneficial to the goals of the public agency.

In 1979 the California Legislature enacted legislation setting forth the procedures by which cities and counties may enter into development agreements with developers. The legislation is codified in the Government Code commencing at Section 65864. The legislation prescribes the following elements and requirements:

(a) Prior to approval of a development agreement a public hearing must be held by the planning agency of the city or county;
(b) Notice of the hearing must be given to the public;
(c) A development agreement must be adopted by a city or county by way of ordinance; and
(d) The development agreement must be consistent with the general plan and any applicable specific plan.

In our next blog, we will review the application of the California Environmental Quality Act (“CEQA”) to development agreements and provide an update on recent case analyzing CEQA’s application to development agreements.

Heather K. Witham
hwhitham@carnaclaw.com