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ELF Financing Strategy San Mateo County ELF Study‐2016 February 21, 2017 Prepared by Brion Economics Team Final Report 26  Ability to offer development incentives that will increase project value;  Market demand for the additional development capacity that the incentive would create;  Vacant or underused sites where development can occur; and  Sufficient additional economic value created by the incentive to cover cost of desired benefits.27 Therefore, community benefits programs are ideal in high real estate value areas such as San Mateo County. Development Agreements Development agreements (DAs) are contractual agreements between a developer and a jurisdiction that set standards and conditions that govern the development of a property. The developer gets certainty that the project won’t be subject to any changes in zoning laws over the course of the development and in return, the developer is contracted to provide benefits, such as infrastructure improvements, public open space, or payment into funds such as “in lieu” fees.28 DAs do not require nexus or any defined formula for what is included; rather it is completely negotiated and up to the two parties involved to define what is included and required. Given the time and expense in negotiating DAs, only large projects typically include this method. Jurisdictions in San Mateo County could require larger‐scale projects to provide child care facilities or pay an in‐lieu fee to help fund child care facilities through the DA process. Employer‐Based Care Given that San Mateo County is home to large tech‐sector companies, employer‐based care is something that could occur on a larger scale. As discussed above, there are a number of large companies or agencies that provide child care for their employees now. If employers of a certain size could be required through DAs, CBPs, or other mechanisms to provide on‐site or off‐site care for their employees (and even non‐employees), the formidable capital costs that child care operators face could be somewhat alleviated. Bright Horizons, which has over 1,000 centers in 42 states and the District of Columbia, has succeeded because it has convinced employers to “invest over a billion dollars, in either capital investments or subsidies, for their working families," according to Bright Horizons CEO Dave Lissy in an NPR interview that aired on January 3, 2017. Some employers that Bright Horizons has partnered with have established child care centers primarily for their workers, with the employers paying most, or even all, 27 http://www.redwoodcity.org/departments/community‐development‐department/planning‐housing/planning‐ services/partnership‐redwood‐city 28 Article, The Rise of the Development Agreement, January 11, 2015. http://www.planetizen.com/node/73227/rise‐ development‐agreement 8.C. - Page 45