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HomeMy WebLinkAbout7.2 FairwayRanch AffordHse CITY CLERK File# .I'~ (~'~ (~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: April 1, 2003 SUBJECT: PA 03-010 Fairway Ranch Affordable Housing Project Rel2ort Prel2ared by: Eddie Peabody, ~lr., Community Development Director, Libby Silver, City Attorney and~leri Ram, Planning Manager ATTACHMENTS: 1. Staff Report dated March 4, 2003 on Fairway Ranch 2. Memorandum from Dublin Ranch dated 3-25-03 3. Resume of Robert Klein 4. Dublin Ranch Zoning and Inclusionary Requirements RECOMMENDATION: 1. Receive Staff Report . ~.~ 2. Take Testimony from Staff and Applicant 3. Provide direction to Staff on whether to continue processing the Application. If yes, provide direction on whether to: Proceed to complete the financial terms of this proposal as recommended by Staff that consists of: a. Financial assistance (loan) not to exceed $4.5 million for Phases I & II in equal increments b. A 3 percent compounded interest rate c. No waiver of future commercial linkage fees for Dublin Ranch commercial areas d. Other issues that have been agreed to by the Staff and Applicants (Attachment 4) e. Review and resolve whether to provide a loan for the project which will assist the applicant to construct the project without paying prevailing wage rates. f. Review and comment on Applicant's proposal for construction, management and long-term operation of the proposed project. FINANCIAL STATEMENT: See Below COPIES TO: In-House Distribution Dublin Ranch GSPA#k2003\03-010~fairway ranch staff rpt4-1-03final. DOC ITEM NO. ~ BACKGROUND: At the February 18 and March 4 City Council meetings, the City Council conceptually considered a proposal by the Lin Family to construct a 928-unit project in Dublin Ranch Area B with 629 affordable units designed to satisfy the inclusionary zoning obligation for the remainder of Dublin Ranch. The Dublin Ranch representative indicated that in order for this project to be financially feasible the City would need to contribute the equivalent of 6.786 million dollars to the project and complete the project entitlement process prior to the deadline of July 16, 2003 for applying for a State Housing Bond Allocation. In addition, the Applicant requested that the City waive any further inclusionary zoning and future possible commercial linkage requirements for the balance of Dublin Ranch and Wallis Ranch properties. At the February 18th meeting, the City Council directed Staff to prepare a report that would evaluate the financing request, the impact of paying prevailing wage on the project, the issue of affordable housing credits, the potential for the development of affordable housing outside of the Dublin Ranch holdings, the potential for for-sate units, the feasibility of processing the project within the' timeline requested by Dublin Ranch and the impact of the timeline of the proposed project on other City projects. At the March 4, 2003 City Council meeting Staff presented a report (Attachment 1)that included (1) the Entitlement Process and approximate timeframes; and (2) the current Community Development Department (Planning & Housing Divisions) project list as well as impacts to workload on other City Departments. The City Council directed Staff to continue working on the project, deferred work on some other high priority projects until August, 2003. The City Council also directed Staff to return with analysis on several issues as soon as possible as follows: Preliminary evaluation of the Applicant's financing request (including loan vs. grant) and feasibility of fee deferral; The impact of paying prevailing wage on the project; The issue of affordable housing credits; The potential for the development of affordable housing outside of the Dublin Ranch holdings; and · The potential for for-sale units. The analysis of these issues directly relates to the financial feasibility of the project and could result in the project being modified. Therefore, although there are other important issues that will be brought before the City Council within the next few months, this Staff Report provides the preliminary information on the issues identified above as well as other issues relating to the financing package. If the City Council has concerns about the project at the conclusion of the meeting of April 1st, it is important that the Council identify the concerns to Staff and the Applicant and also indicate whether processing of the project should continue as this is an expedited project Since the March 4, 2003 City Council meeting Staff has met with the Applicant to clarify the information needed to complete the City's preliminary evaluation of the proposal. Staff has secured the services of a specialist in Housing Finance, CSG Advisors. CSG Advisors has been working with Staff in the meetings with the Applicant and in the preparation of this Staff Report. This Staff Report will contain: · A brief overview of State and City applicable requirements · A summary of the current proposal from Dublin Ranch Comparison information of the Proposal and minimum City of Dublin requirements and the benefits/impacts to the City Analysis of the following issues relating to the Dublin Ranch Proposal: )~ Preliminary evaluation of the Applicant's financing request; ~' The Applicant's proposal for construction, management and long-term operation of the project; ~Subordination of financing; >Affordable Housing Agreement; >Feasibility of Fee Deferral; and ~The potential for for-sale units. The potential for affordable housing development outside of Dublin/Wallis Ranch holdings The Impact of Paying Prevailing Wage on the Project Update on Status of Site Development Review Application Progress Future Meeting Issues REVIEW OF APPLICABLE REQUIREMENTS: In order to put the applicant's proposal in context, it is important to understand the State and City regulations relevant to the proposal. This requires a careful review of the zoning, the Inclusionary Zoning Regulations, and the Density Bonus Regulations and statute. 1. Zoning and General and Specific Plan Designations The property on which the project is proposed is designated high-density residential in the General Plan and Eastern Dublin Specific Plan. This designation allows 25 units per acre and above, and the site is 23.6 acres. However, the property is subject to a Planned Development zoning ("the PD") and Land Use and Development Plan/District Planned Development Plan ("LUDP/DPDP"), approved in t 997, which limits the number of dwelling units to 744 units, except in certain circumstances. The PD applies to Areas B-E and limits the total number of units in the entire area to 1875, except in certain circumstances. (See Reso. 141-97, § 2.) The LUDP/DPDP breaks down the individual land-use designations by unit counts. The project site is zoned for a total of 744 units. The unit counts shown in the LUDP/DPDP may be increased by way of a site development review approval so long as the total number of units within Areas B-E does not increase. In addition, an increase for a specific project beyond the maximum number of units approved in Area B may be granted as part of a conditional use permit approval "if unique development concepts, project design and/or amenities justify an increase." The PD also notes that a density bonus may increase the unit count on particular sites without affecting the maximum number of units permitted in the entire area. Thus, pursuant to the existing zoning and general and specific plan designations, the applicant has a right to build 744 units on the project site, and the Applicant may increase the amount of units pursuant to an SDR, CUP, or density bonus. 2. Inclusionary Zoning Regulations. Chapter 8.68 of the Dublin Municipal Code requires that at least 12.5% of the units constructed in any residential project of 20 units or more be affordable units. (Although significant revisions to the Inclusionary Zoning Regulations were enacted after the adoption of the Master Development Agreement for Dublin Ranch, the City Attorney's opinion is that the revised Inclusionary Zoning Regulations apply to Area B, where the proposed project would be built.) Of these units, the units must be allocated to three income levels as follows: (a) 30% very low income 3 (b) 20% low income; and (c) 50% moderate income (§ 8.68.030.B.) The Applicant may satisfy a portion of the inclusionary-unit requirement (5% of the total units in the project) by paying a fee in lieu of constructing the units. The remainder, 7.5% of the total units in the project, is a "must-build" requirement. Thus, the property's affordable housing obligation (assuming the 744 units which is the maximum units in the SDR without further approvals) would be one of the scenarios shown on the Chart below: CHART 1 DUBLIN RANCH AFFORDABLE HOUSING OBLIGATION Assuming 12.5% Build - no fee payment (93 Assuming 7.5% Build - payment of 5% fee (56 units) units) A. 28 very low-income units (93 X 0.30 = 27.9); A. 17 very low-income units (56 X 0.30 = 16.8) B. 19 low-income units (93 X 0.20 = 18.6); and B. 11 low-income units (56 X 0.20 = 11.2) C. 46 moderate income units (93X 0.50 = 46.5~) C. 28 moderate income units (28 X 0.50 = 28) Under the Inclusionary Zoning Regulations, .the applicant is entitled to credit for all inclusionary milts constructed above 12.5%, the percentage required. (§ 8.68.060.) Credits are based on income category and number of bedrooms. The Inclusionary Zoning Regulations do not provide for any financial assistance, such as loans or fee waivers, from the City for the required inclusionary units. Section 8.68.040.E allows the Council to waive, wholly or partially, the requirements of the ordinance and approve alternate methods of compliance if the applicant demonstrates and the Council finds that such alternate methods meet the purposes of the Inclusionary Zoning Regulations. The purposes are to enhance the public welfare, ensure that further housing contributes to the attainment of the City's housing goals, and assure that the limited land is utilized in a manner consistent with the City's housing policies. The Applicant proposes the Council apply Section 8.68.040.E and partially waive the requirements of the Inclusionary Zoning Regulations for all of Dublin Ranch. The requirements that would be waived are discussed below and shown on Attachment 4. 3. Density Bonus Regulations and Statute (Government Code section 65915 and Dublin Municipal Code chapter 8.52.) Under the Density Bonus Statute and Regulations, a Applicant meeting the statute's requirements has a right to a density bonus of 30% of the number of units otherwise permitted under the city's regulations and "one other concession or incentive." However, in order to be eligible for the density bonus, the applicant must "agree or propose to construct" either: t Under the ordinance, when calculating the inclusionary unit requirements, decimal fractions equal to or less than 0.50 are disregarded. (8.68.030.A.) 4 (a) 20 percent of the total units for lower income households; (b) 10 percent of the total units for very low income households; or (c) 50 percent of the total units for seniors. (See 9 8.52.040; Gov. Code, 9 65915, subd. (b).) In addition, if an applicant agrees to construct both 20 percent lower-income units and 10 percent very low-income units, the applicant is entitled to one additional concession or incentive or, at the discretion of the City, may receive an additional density bonus. (9 8.52.040.B-C.) Under the regulations and statute, "concessions or incentives" are the following: · Reduction in site development standards, such as a reduction in set back and square footage requirements and a reduction in on-site parking requirements. (8.52.050.A.) The statute also specifically lists these development standards "minimum lot size, side yard setback, and placement of public works improvements." (Gov. Code, 9 65915, subd. (d).) · Approval of mixed use zoning if the inclusion of nonresidential land uses will reduce the cost of the housing development (8.52.050.B.) · Other regulatory incentives or concessions proposed by the Applicant that result in identifiable cost reductions, which may include o waiver of certain city fees (9 8.52.050.C.1); © priority processing. (9 8.52.050.C.2.) (See also Gov. Code, 9 65915, subd. (j).) The statute provides that the provision of direct financial incentives for the housing development, such as the waiver of fees and reduction in dedication requirements, is not required. (9 65915, subd. (j).) Thus, in order to be entitled to a density bonus and one incentive (such as expedited processing), the applicant must propose or agree to construct either .(a) 74 very low-income units (744 X 0.10 = 74.4) or (b) 149 low-income units (744 X 0.20 = 148.8). If the applicant wants a right to receive a density bonus and t~o incentives, the applicant must propose or agree to Construct both 74 very low-income units and 149 low-income units SUMMARY OF CURRENT PROPOSAL FROM DUBLIN RANCH: The proposed project has been modified in terms of the distribution of market rate and affordable units based on discussions with Staff. The breakdown of units as originally proposed on February 18th and the current proposal is shown on the Chart below: CHART 2 DUBLIN RANCH CHANGES FROM PRIOR PROPOSAL PROPOSAL BY FEBRUARY 18 APRIL 1 DUBLIN RANCH Total Number of Units 928 928 Third Phase Rental Homeownership Total Units 629 587 Inclusionary (68%) (63%) "Excess" Inclusionary 204 162 Units Inclusionary Units: Family Rental 234 243 Elderly Rental 161 292 Homeownership 234 52 629 - 587 Phase I Phase II Phase III Family Elderly (Family) (Senior) (Family) Rental Rental 1-bedroom 152 240 152 104 156 2-bedroom 152 80 152 83 136 3-bedroom 0 0 0 56 0 Total 304 320 304 243 292 Very-Low 127 127 Income Low Income 341 187 Moderate 161 273 629 587 City Financial $6,786,000 $4,500,000 Assistance City subsidy and/or fee waiver. Loan paid in two equal increments of $2.25 million ~ Phase I and Phase II Fixed payment schedule from years 4 to 6. Repaid in increments of 1/3 the principle of each year and interest. 6 The Applicant has also submitted a 7-page memorandum (Attachment 2). This information includes the following: · A discussion of proposed affordable units and number of bedrooms · Dublin Ranch's understanding of the terms and structure of the proposed City loan · The method of Dublin Ranch's financing including requests for bond allocations from the California Debt Limit Allocation Committee (CDLAC) · A history of projects in recent years dealing with the increase of construction cost for prevailing wages and an estimate of additional costs for the phase I family project and phase II senior project if prevailing wages are required · A list of the project team and their experience in the design, construction and management of mixed income projects Analysis of Issues: Preliminary evaluation of the Applicant's proposal Attachment 4 includes specific ordinance requirements, the Applicant's proposal and the Staff recommendations, based on meetings Staff and the Applicant have had since the last Council meeting. There is general agreement between Staff and the Applicant on the proposed financing package issues for Fairway Ranch shown in Chart 3. There are some differences between Staff and the Applicant as shown in Chart 4: CHART 3 FINANCIAL PACKAGE AREAS OF CONSENSUS BETWEEN CITY STAFF AND DUBLIN RANCH ISSUE CITY ORDINANCE DEVELOPER PROPOSAL STAFF REQUIREMENTS (Current) PROPOSAL City Loan $4.5 million 6~year loan in Reduces borrowers cost for project and May limit City's two increments, defers need for cash equity, ability to assist other affordable projects. Or if City wishes to commit to other projects, before loan repaid, City may be asked to "guarantee" repayment. Units permitted in Phases 744 units No change No change I, II and III without density bonus 25% density bonus permitted 186 units No change No change Total number of units permitted with 930 units No change No change density bonus Mix of Distributed throughout 535 clustered in Phases I and II (86% Same as Applicant Affordable/Inclusionary Dublin Ranch project of Phases I and II) Units - Location 52 in Phase III (20% of Phase III) 7 ISSUE CITY ORDINANCE DEVELOPER PROPOSAL STAFF REQUIREMENTS (Current) PROPOSAL Bedroom mix of affordable Same as market units in Rental Units: Same as Applicant units each Phase of Dublin Ranch 260 1-bedroom 219 2-bedroom 56 3-bedroom 535 Mix of Family/Elderly per No requirement Rental Units Same as Applicant Phase: (other than bedroom size) 55% Elderly 45% Family Families Elderly Total Phase I 1 br 104 0 104 2 br 83 0 83 3 br 56 0 56 Subtotal 243 0 243 Phase I Phase II 1 br 0 156 156 2 br 0 136 136 3 br 0 ___QO 0 Subtotal 0 292 292 Phase II 1 br 104 156 260 2 br 83 136 219 3 br 56 __Q0 56 Both Phases Subtotal 243 292 535 Both Phases Income Mix Inclusionary Total Same as Applicant Very Low-Income 128 127 Units (50% of median income) (30%) Low-Income 85 187 Units (80% of median income) (20%) (alt at 60% of median income) Federal Tax Credits Moderate 212 (120% of median income) (50%) 273 Total 425 587 Pro rata as market units All in initial Phases Same as Applicant Timing of Affordable Units built and fewer units (7.5%) (on average, estimate 7-years earlier could be built with payment than pro rata) of in lieu fees for 5% Key A~eement Provisions When market units are built Market units can only be Building permits can only be issued for built as inclusionary units market units when Same as Applicant are built building permits issued for inclusionary units In General, Staff supports the Applicant's proposal. Consensus has been reached, as noted above on Chart 3 above on the following issues: · City loan amount and the majority of the terms; · Affordable and market rate unit and bedroom totals for the project; and · When the market units are to be built in relation to required affordable unitsl However, there are two issues where there is not agreement between Staff and the Applicant on the financing of the project. These issues are addressed in summary on the Chart below: CHART 4 ISSUES REMAINING FOR DISCUSSION ON FINANCIAL PACKAGE ISSUE REQUEST BY BENEFIT TO DUBLIN FINANCIAL IMPACT TO THE DUBLIN RANCH RANCH CITY Interest Rate 3% simple interest. Lowers effective rate to 3% compound interest needed so of Proposed borrower to about 1.5% normal Inclusionary Fund can keep pace City Loan interest for affordable project, with inflation. The City's consultant indicates a loan at simple intereSt is The Applicant believes that 3% unusual. simple interest is appropriate because the funds are affordable housing funds which would otherwise be loaned at such advantageous interest rate. Commercial Waive for Dublin Applicant is providing 162 Inclusionary units only meet Linkage Fee Ranch commercial "excess" inclusionary units, residential requirements. properties. The Applicant believes this is The Staff believes a waiver of an appropriate given there will be unrelated potential fee in an 162 excess affordable units, unknown amount is unwarranted, given that the Applicant' s proposal includes other benefits to the Applicant in recognition for the excess 162 units Applicant also asking, for these 162 "excess" units, for: · $4.5 million loan · 186 Density bonus units · Concentration of units · Different mix of bedrooms · Expedited processing The issues on Chart 4, above, are the key areas of disagreement between Staff and the Applicant on the financial package. Analysis of the issues in the Chart should be factored into the total financial package contained in Attachment 4. Staff requests that the City Council review these issues and provide direction to the Staff (while taking into account that the issues above, should be factored and weighted along with the entire financial package to date, Attachment 4). There are other issues relating to the financial package that Staff believes are significant issues regarding the project. Staff and the Applicant are continuing to work on these issues. The following discussion is an update and introduction to these issues. 1. Design, Construction and Management of the Project The Applicant's proposal for construction, management and long-term operation of the proposed project is included in Attachment 2. Quality long-term management is in the best interests of both the owner of the proposed project and the City. The Applicant has proposed that Klein Financial will be a partner with a financial interest in the project and that Klein has extensive experience in these types of projects (Attachment 3). The proposed arrangement involves a different type of management thm~ what City Council has selected for the new Senior Housing Project. In that project, there is a non-profit specializing in senior housing. That non-profit is involved in the design, construction and long-term management of the facility. Dublin Ranch's proposal involves several contractors and the concept of a "project team of contractors" that would design, construct and manage the facility. If the City Council has any concerns regarding this proposal, please provide Staff and the Applicant with direction at the meeting. 2. Subordination The Applicant has indicated it believes it may be difficult for it to obtain financing unless the City agrees that the affordable housing agreement, which includes what is called an "affordability covenant" assuring the units will remain affordable for 55 years, is made subordinate to Applicant financing. This would mean that a lender could take over the property in the event of a default and turn the units into market rate units. Staff has indicated to the Applicant that this is not acceptable because it would not assure that the requirements of the Inclusionary Zoning Regulations are met. The Applicant is contacting potential lenders to discuss this issue. Staff has contacted other cities with inclusionary zoning ordinances regarding their experiences with subordination of the "affordability covenant." All cities contacted have reported that they have not permitted their affordability covenants to be subordinated with rental inclusionary units. They have found that, although some lenders insist on subordination such as Fannie Mae, other lenders are able to provide loans without subordination of the "affordability covenant." Staff is bringing this issue forward at this point in the process to keep the City Council informed, because if the Applicant is not able to obtain financing which is subordinate to the "affordability covenant", the proposal would be inconsistent with the Inclusionary Zoning Ordinance, 3. Necessity of an Affordable Housing Agreement This project will include an Affordable Housing Agreement which will ensure that the elements required by the City's Inclusionary Zoning Ordinance are set forth in Agreement form. While this is not an issue of disagreement between the City and Applicant, Staff is providing this information so that the City Council will understand how the project will be implemented over time. The Inclusionary Zoning Regulations generally require that at the tentative map stage the City impose conditions that set forth the Applicant's inclusionary zoning obligations. The conditions must detail the number of affordable units required, specify the schedule of construction of affordable units, set forth the applicant' s manner of compliance, provide for a management plan for rental inclusionary units, and marketing plan for "for sale" units to comply with inclusionary ordinance selection priorities and require the execution of an agreement imposing appropriate resale controls and/or rental restrictions on the affordable units. 10 In this case, since the Applicant is asking the Council to waive certain of the requirements of the Inclusionary Zoning Regulations, an affordable housing agreement which assures the Council that the purposes of the Inclusionary Zoning Regulations will be met will be required. The affordable housing agreement will address the following issues: Inclusionary Housing Credits. The agreement would set out the number affordable units proposed to be constructed and the number of units constructed in excess of the Inclusionary Zoning Requirements for which the Applicant would receive credits. The agreement would note that the Applicant is entitled to use the credits to satisfy its obligations for this project and the estimated buildout of the rest of the Lins' holdings which would be 2,657 units. The Applicant would not be entitled to a credit for the 162 units in excess of the obligation. · Use of credits. The agreement would establish when the credits could be used for the remainder of Dublin Ranch. · Dublin Ranch Projects in the Pipeline. The agreement would also provide for a manner of dealing with Dublin Ranch projects that may receive certain entitlements before credits are created. For instance, the Applicant expects to receive tentative map approvals for Area F prior to the creation of inclusionary credits from the Fairway Ranch. Ordinarily, the Inclusionary Zoning Regulations would require that the Applicant's obligations be set forth in the conditions for the tentative map approval. The Applicant would like to defer these obligations on projects in the pipeline (such as the anticipated Area F tentative map approval) until the building-permit stage, so that the Applicant can satisfy Area F requirements with the Fairway Ranch project. 4. Fee Deferral The Applicant has indicated that they are working on possible reductions or deferral of regional impact fees relating to water, sewer, schools and the TVTD fee. The City's TVTD fee includes an exemption for subsidized housing developments developed by public agencies, limited dividend housing corporations or non-profit corporations which are exclusively affordable. The applicant is not asking for deferrals or waivers of any other local City impact fees, other than a complete waiver of the proposed commercial linkage fee. 5. Potential for for-Sale Housing The Applicant has stated that in order to accommodate moderate, for-sale units that the project's third phase will be designed for a for-sale condominium project with 52 units of the 304 total units in the moderate-income category. 6. Prevailing Wage The Applicant is asking for expedited processing and City assistance in obtaining bond financing in order to take advantage of a statute that exempts such projects from payment of prevailing wage if funding is obtained this year. The Applicant estimates a 15% increase in the cost of the construction cost of the project. The developer can address whether it can construct the project as proposed if it does not meet this time limit. Based on the information that we have received from our consultant as well as the Applicant, the difference in cost between prevailing wage and non-prevailing wage is estimated to be approximately 15 percent of the construction cost of the project or 7 percent of the total cost. The City Council will recall that the expedited processing of this application was so that the Applicant could secure bond financing in July and thereby avoid paying prevailing wage for the project. However, the Applicant has 11 indicated that should they only get bond financing on one phase in July, the remaining project could continue to be feasible if bond financing or other sources of funding were secured at a later date (construction would be under the prevailing wage requirements). The Applicant also indicated that the second and third phases of the project could be substantially delayed. THE POTENTIAL FOR DEVELOPMENT OF AFFORDABLE HOUSING OUTSIDE THE DUBLIN RANCH HOLDINGS: The City Council requested that Staff provide information on the affordable units that would be built outside Dublin Ranch or Wallis Ranch. The following chart indicates the development potential of the remaining build out of the Eastern Dublin Specific Plan and Central Dublin areas excluding the Dublin Ranch holdings: CHART 5 POTENTIAL INCLUSIONARY UNITS ON NON-DUBLIN RANCH PROPERTIES Project/Property Owner Approximate Total Units at Required Affordable Units Build out (under Inclusionary Zoning Ordinance assuming 7.5% Built) Eastern Dublin Property 2,526 189 Owners Annexation Area Dublin Land Company 300 23 Pinn Brothers (Silveria 259 19 Property) Vargus, et al. 236 18 Moeller 11.9 9 Mission Peak 120 9 Greenbrier Phase III 193 14 Bancor (Dublin Blvd.), 247 19 Bancor (Alcosta) 60 4 Legacy (Corovan) 300 23 Downtown Core Specific 100 8 Plan TOTAL 4,460 337 The following analysis of benefits and~ impacts is the analysis that Staff used to formulate its position in relation to the Chart attached as Attachment 4 as well as Chart 4 above. Benefits For Applicant Bridge Loan. Since the loan is to be repaid with interest, the City recognizes that the value of the loan is not the face amount, but rather the value of the reduced interest rate compared to the expected rate of return on Applicant equity. At the terms and amounts described below, this benefit might have a present value of about 1.6 million if at 3 percent compound interest, or approximately 2 million if at simple interest. Density Bonus. The Applicant would receive a density bonus of 186 units without having to increase affordability. In other words, the same units would count toward meeting both inclusionary credits and the density bonus, so the density bonus has no offsetting cost. The effect would be to allow 186 12 additional units in the overall Dublin Ranch with the same amount of land. If rental mnits have a (modest) land value of $40,000 each, the value of this benefit might be $7.5 million less some marginal construction cost for the higher density, say a total of $6 million. Reduced Cost to Dublin Ranch of Providing Inclusiona~T Units. The Applicant's cost of providing the required inclusionary units for Dublin Ranch on this site rather than spread over the entire Dublin Ranch properties built out over a longer period of time will be much lower because the: · The average size of the inclusionary units may be significantly smaller than the potential market units that can be built on the rest of the Ranch. · By clustering the affordable units, the City would make it Possible for the Applicant to efficiently use tax-exempt bonds and 4% Low Income Housing Tax Credits. This significantly lowers the cost of providing inclusionary units. The Applicant's estimated value of Low- Income Tax Credits for just the required Very Low-Income units is approximately $6.5 million. · The City inclusionary funds would be provided as a loan and the City would assist in applying for bond allocations this year. This maximizes, in accordance with State law, the potential number of units that can be built with public participation but without higher construction costs. · The extremely expedited proposed processing enables the Applicant to construct one or possibly two phases without being subject to prevailing wage requirements. Marketability of Dublin Ranch. By clustering all the inclusionary units, the Applicant will be able to market all the other land parcels without any inclusionary requirements, including the minimum 7.5% building requirement. This significantly enhances land value and marketability. Requested Exemption From Commercial Linkage Fee. Applicant requests exemption, estimated to have the same value as an additional $2 million grant of City affordable funds. Benefits For City Additional Affordable Units. The Applicant would provide 162 units in excess of those required under the Inclusionary Ordinance. These would consist of 102 additional low-income units and 8 moderate-income units in the first two phases and 52 moderate-income units in Phase III. Deeper Affordability on Low lncome Units. All the low-income units would be provided to tenants at 60% of median income rather than 80% of median income. Earlier Affordable Development. The affordable units at Dublin Ranch 'would all begin construction by the end of 2004 (to comply with the site development review time limits of 12 months from this summer plus a 6 month extension). Otherwise inclusionary units might only be developed pro rata as each phase of the Ranch is developed. This earlier approach would provide such units on average up to 7 years before they might otherwise be built. Built Affordable Units. The Applicant could other~vise satisfy the ordinance by meeting 40% of the inclusionary requirement (5% of 12.5%) through fees, for which the City would then have to find sites and interested Applicants. Under the suggested approach, these 170 affordable units would be directly buik by the Applicant, instead of the City needing to find sites. 13 STATUS OF SITE DEVELOPMENT RE~EW APPLICA TION: Staff has been meeting with the Applicant on a regular basis to discuss Site Development Review application issues. Staff has not received a complete pre-application packet that was required to be submitted by March 5, 2003. As was noted in the previous Staff report (Attachment 1), the Applicant has already slipped from the expedited time frames. In addition, Staff is concerned about the length of time that it is taking to work out issues related to the site. Issues of major concern that remain unresolved are fire access and on-site parking. Staff has been working with the Applicant for over two weeks to resolve fire access issues and has developed solutions that meet the standards required by the Fire Department; however, the Applicant has yet to make a decision as to which solution to employ to provide proper fire access. The expedited nature of this Application does not allow for these types of time delays by the Applicant. The second major issue of concern is on-site parking. Preliminary findings from the traffic study discussed parking ratios for the senior housing component of the project and indicate a lower parking ratio than what Staff believes would be appropriate for the project. A large portion of the senior component includes two-bedroom units and dual master units. Based on the floor plan issues combined with the minimum age restriction of 55 years old, Staff believes that a parking ratio of .8 parking stalls per senior unit for the 320 unit senior portion of the project would not meet the parking needs of future residents of the senior project. Additional studies still need to be completed to determine appropriate parking ratios for the remainder of the project and the final £mancing plan may need to be modified if the site plan has to be changed to reflect more parking on-site. Future Meeting issues: Prior to May 19, 2003, Staff will be preparing analysis for the City Council on the following issues: Parking Standards for the project Any changes to the financial plan Additional information on project experience by the Applicant of managing and operating additional projects that are 10 years or older. RECOMMENDATION Receive Staff Report, take testimony from Staff and Applicant, and provide direction to Staff on whether to continue processing the Application. If yes, provide direction on whether to: 1. Proceed to complete the financial terms of this proposal as recommended by Staff that consists of: A. Financial assistance (loan) not to exceed $4.5 million for Phases I & II in equal increments B. A 3 percent compounded interest rate C. No waiver of future commercial linkage fees for Dublin Ranch commercial areas D. Other issues that have been agreed to by the Staff and Applicants (Attachment 4) E. Review and resolve whether to provide a loan for the project which will assist the applicant to construct the project without paying prevailing wage rates. F. Review and comment on Applicant's proposal for construction, management and long-term operation of the proposed project. 14 C.I?~ C. LERK File. # ~--JL~~[~' AGENDA STATEMENT CITY COUNCIL MEETING DATE: March 4, 2003 , Dublin RanCh Affordable Housing Processing SUBJECT.: Report Pre~ki?ed bY'.'. Eddie' PeabOdy, Jr.,, Communiry DeveloPment Dir~ctot and Jeri Ram, Planning Manager ATTACHMENTS; 1. List Of.City CoUncil kerns to be Resolved between April 15th 2. . Comm~itY Dcvei0Pment Dep~ent (CDD) W°rk Program -~ February' 26, 2003 3. Site Development RevieW ApPlication Checklist RECOMMENDATION: 1. Receive' Staff report and anticipated affordable housing project schedule. / Q/ 2. RevieW.COmmunity Development Work Program and provide direction on present high priorities and proposed changes. 3. Determine if Staff should commence expedited processing of the Dublin Ranch Affordable Housing Project when a complete appheafion is received. 4. Instruct Staff to remm at the March 18t~ meeting with a preliminarY report that addresses other City CoUncil ,,. - concerns. FINANCIAL STATEMENT: Delay of certain 2002-03 Goals and Objectives will occur if this project is the highest priority. Proposed specific City financing from the Inclusionary Housing Fund will not be known until the Applicant submits a final proposal and financing plan and Staffhas completed its evaluation of the proposal. BACKGROUND: At the City Council meeting of February 18, 2003, the City Council heard a proposal from a representative of Dublin Ranch for a high-density 928-unit muttifamity project-With a significant affordable housing component. The Dublin Ranch representative indicated that in order for this project m be financially feasible the City would need to contribute the equivalent of 6.,786 million dol}arS.m the project and complete the project entitlement process prior to the deadline of July 16, 2003 for applying for a State Housing Bond Allocation. In addition, the Applicant requested that the City to waive any further inclusionary zoning COPIES TO: In-House Distribution Dublin Ranch 05AgendaSX2003\CCSRLINN,ljr.doc Ar'rACHIV]ENr & and:)~ture possible cormmercial linkage requirements for the- balance of Dublin Ranch and Waltis~anch pr~p.e~es. The: :City Comeil dir'ee~ted Sm2ff.to prepare a report'that would evaluate the financing requesl:, the impact of paYing prevailing wage on the projec,~ the issue of affordable houskng credits, the potential for the development of affordable housing outside of the Dublin RanCh holdings, the potential for for,sale units, the feasibility 0f proCess~g the project.within the timeline requested by Dublin Ranch and the impact of the timeline of the proposed, project on other City projects. Sinc~ ~ie'Feb~y 18, 2.003 City couneii, meeting- Staff met With the Applicant to clarify the infomation ~ ..~ . - . '. ,~ ,... . . .:'o.,. ~ . .:.-' .; ... .. · :.. needed, to complete. ~e City's pmlmun~ evaluation of the proposal, Staff has also worked at securing the services of a financialftiouS'mg cormulmt to assist the Staff in evaluating the proposal, As requeSted 'by the City Council at its Feb~ ! 8, 20'03~ meefmg, Staff is working on the following items and wilt present, ar~ analysis to the COuncil a~ its MatCh 18, 2003 meeting (Provided that the AppliCanf provides the fnfo'rmati0n requested'by the' City Staff by 'February 28, 2003): PreliminarY evaliiafion Of the Applicant's financing request; o The impact of paying prevailing wage on the project; The issue.of affordable housing credits; The potential for the development of affordable housing outside of the Dublin Ranch holdings; and · The potential for for-sale units. In addition, Staff may identify other isSues 'that are-important for City Council consideration when evaluating the tOtal package proposed by the Applicant. Th/s Staff Report addresses the two issUes'th/~t Staff indicated could be provided by the March 4th City Council meeting as follows: 1. The Entitlement Process and approximate timeframes; and 2. The current Community Development Department (Planning & Housing Divisions) project list as well as impacts to workload on other City Departments. 1. Entitlement Process and Timeframes .for Processing the Lin Proposal: The project, as currently known, would require the City to process the following entitlements: Site Development Review Approval Density Bonus APproval Development Agreement AffOrdable Housing Agreement City to issue bends o Includes hit/rig financial adviser o Includes hiring bond counsel o Includes h/ring underwriter Generally, a project of this complexity fast-tracked would take the City approximately 8 - t2 months from start to .bond issue. The entitlements would be phased over the one-year period. In this instance the Applicant has requested that the Site Development Review Approval '(SD.R) and first reading of the Dex, elopment Agreement. (DA) be comptet~d"by 4July~I6,:200'3;¢ '~6'nths). The other entitlements could be.i~d,-}~ri f0!!~r~g!, these ~v~o approves, Tt~erefore, Staff eXmed the request'i~ ~elation to' ~i~ ~st t~e~e~ ,~t ~i~si~. fo~lows~ · Information Needed to Process ~DR and DA h order to beg~ process~g of ~ SDR ~d DA veu specific items ~e needed. A copy of the SDR Chec~ist (~ the items checked as necess~y for a Predevelopment SDR ~d DA Application) is a~ached ~ A~ac~em 3. T~s checklist contains ~1 of the site ~d des~ i~omafion ~at is needed .m~yze the site is'Sue~:'relating to ~e pioj oct.. If th's i~omtion is not s~Pp!ied by ~e Applic~ by M~eh.5., 2003i St~ ~o~ 5'e~ Wo~i on ~e project ~d M~ not be able 'to'complete ~e project ~e expe~¢ed time ~me. A ~affic study must be perfo~ed by a Ci~,com~t~t, T~s Study provides the ~fomation needed to prep~e a-si~ffic~t potion of the DA. The trifle smdy.~es a m~m.df 6 weeks to prep~e (~ctuding st~ffreview). Negotiations must ~e place on the Developmen~ A~eemenr. This includes s~fie~t a~ention ~om bo~ ~e Ci~ M~ager ~d Ci~ A~omey. U~omatety, ~e fime~mes d~g whch ~e Development A~eemenr Mil be. negotiated t~e place d~ng the ~t stages of the City BUdget process w~ch requires a si~fic~t co~itment of the City M~ager's rime. SDR and DA Timeframes S~has experience, in processing complicated Site Development Rehews ~ the Ci~. Some of the more complex multi-family projects ~d associated timeffmes ~e ~ follows: Toll ~ea G (m~a~ty project comisting of lOne year 1,396 inks in 4 prQects) Waterford Ap~mems (390 units) ~ 8 monks Both of these projects were processed with expedited time, ames. The Table below is ~ ~ysis of~e request by the Applic~t ~hat Staff process ~e SDR md first reading af~e DA by JUly t6, 2003. T~s ~alysis assmes that StaffMll have a complete submittal by M~ch 5, 2003. Addition~ly, ~at the Developer Mil work cooperatively wi~ St~d m~e revisions requested ~ ~ expected ma~er. It shOuld be noted that there is no room for slippage ~ schedule. ~e Schedule also assmes that the Ci~ Co~cil will delay other hgh pfioffiy prQects ~ order that development Staff'can be reassigned' mtit Aunt to ~is project. It should be noted, however, ~at a~i~swative Smffwho play a key role ~ the development a~eement p0~ion oft~s prQeC~ c~ot be ~eed up ~om thek no~al tasks - ~eiefore ~g project will be ~ addition t0 kerns thru requke concen~ated aUention d~h~g ~s time period, such ~ ~e budget, etc. T~T~I,EFOR PRoCESS~G 1,~ ~FO~LE PRO,CT FAST PROCESS Z ASSu~ CO~I',ETE COOPE~TION BY pARTIES OF ~JOR ISS~S M~ch 4 Oi~ ·. Ci~ Co~cil approves' M~dat0w.~rOcess~g- Co~=cil ~eet~g . T~embte, review of S~ Work grogrm ~areh 5' Applidant files ~re A~Plication with detailed site'plans (see filled out Checklis~- ~ A~aehment 3). Sta~ Traffic Repo~ (6- ~ - wee~) March 18 C~ty '1 City Goundit evalUates Pfeliminar~"is;0jedf financial Council Meeting I pian ' _ ' April 1, 2003 APPlicant submits final Financial Package ro the':'~i~'f0r ;e~iew.· No m°~afi0ns to ~e p~ick~ge ~'.be aCCepted this 'date Or the sehedtiie vciii..~i¢.. ' April 15 C0misl~fi6~ 0f'~f~pPligation Proee'Ss bY Staff/App!icant/ciw Council resolution of SPorts apiSi~afit/sta~'(slX' ~eeks) inci~ding PKC p~k dedication{exact. City ~aing, credits, subsidy meeting requested;_ for: Sale uni~.~ otc Aprii 'i5' to ~ay Council meetings) - See AttaChment 1 ~pril 22 Filiiig offinai application ~or SDR; start of De¢~top.m~i~t A~;ei~nt} A~0rdabte HouS'~g Agreemen,; routing or application tO agencies ifinal, date for filing) .. May I, 2003 All F~iht i~U~ mu/t be re'gdt'~e:~'by and t~e Applieant. Ma.v 19 Date that atl:i.~'~ues ideiifified 0n'A~ctnUent t Final completion City, Council. action on issues mUSt be resolved and hearings concluded by above or project stops City Council on these issues June 17 Completion of staff report and agreement by Applicant on Conditions of ApprovaI for hearing. June 18 Hearing notice (14-days prioi9 for Planning Commis'sion and City Council July 8 - Planning Commission hearing on SDK and DA July 15 CitY CoUncil'-hg~fing ~d '~/P~/~6~fl.'-~~ SDRi 1~ c0unC'iI final approval of all funding requests' and reading on DA. letter to CDLAC with City's commitment on financing july 16 Submittal of approvals to CDLAC by applicant Augusx 5 ~ City Council (2~) hearing on Developmen~ I Agreement for prqject August 6- t 0 Submittal of Development Agreement to Notice of award of financing by CDLAC to CDLAC by applicant applicant; if not approved, project stops September 5 DevelOPment Agreement in effect Resolution of Other City Council Concerns that may effect Timetable: As noted above regarding items Scheduled for the. March 18, 2003, City Council meeting, there are issues that must. also be analyzed while Staffis beginning to process the.SDR and DA. The resolution of all of these issues will not take place prior to ff~e March 18, 2003, City Couneit meeting and may, therefore, delay the project beyond the schedule listed in the Table above. These issues are listed on Attachment t. These .s~ecific Council concerns must be completed or the process will stop and additional time beyond July 1.6 will be requ/red. While Staff Will bring back .~ b~ef analys~s'vf the iss~ue~ identified above on' March 18, 2003., it is anticipated that there wil'l be several additional staff reports askk~g for direction on key policy and financial issues between April 15th and May 19th sO that the Applicaiit and ~he City can inte~are the issues in both the Housing Financing and Planning approvals. It is Staffs belief, based on past mulfi-farnily projects that have been processed in the City, that it is unlikely that 'this expedited timeline of (4 months) as noted in the Table above witI be succeSSfUl. It is Staffs experience that iSsues arise While processing a project that cause t~me delays. However, should the City Council d~sire Staff to make this proj eot its number one priority, Staff is prepared to begin the 4 ~ ~ p~oces~.t6~ act on'~he 'Ap~5~li~ani"s request as: soon-as specific information can be filed and.to move thi~ 2. Present Corhnmnitv Development Work Pr0cr~m as well aS Other De~)artment Imf)acts Although the list below relates to the Community. Development Work Program; it should be noted that many Of.~ese Projects req~e sigfiificant time. commi:tment. S from other City DeParunents. Those Deplores are als0 Subject to' mainti~ certain deadlines for o~er pr0jeets that C~0t be postponed during the timeframes for the'Din Afford~tble Pr0j oct, sUCh as preparation of the City Budget and fiVe year CIP. staff has c.ompi!ed' a list. of'~e e~ent-proj eets and major ongoing, rusks thatfl~ Planning: and Homing Divisions are currently Woi~g On (Attaehrnent 2). This list has been. org~zed by: City PrOiects - ~s list represents projeets 'that were assigned by ~e City Council as part Of the FY'~002,2003 Goals and ObjeCtives as well as additional projects assigned by'the City' Council since the Goals and Objectives were approved; and · DevelopeJt Initiated PrOjects - This'list inClUdes projects submitted b~/Developers that reqUired inifi~fi°n b~th~ City CO~Cil (legislatiVe changes such as General Plan Amendments, Specific Plan Amendments), as well as projects thai are submitted by applicants that must adhere to certain fimeframes for processing under State Law; and; · Other On,Going Tasks - This:list includes keep.ing doCUmentS updated, code enforcement, implementation 0f approved Projeccs (plan checking for building permits, field checks, etc.) providing data to other departmems and agencies (projections for ABAG, CMA and various City studies - i.e., Park Master Plan) as well as preparation of the next tisCal year~s budget. In order to assemble a Staff team to work on the Lin Affordable Housing project, City Staff will need to either be reassigned temporarily from some of the projects they are currently working on or slow down on other projects to free up time to Work on the proposed affordable project. Based on analysis of Staff's workload and the types of skills necessary to process the proposed application, Staff is recommending that the work programs for the folloWing items be postponed until AUgust (a schedule delay of 5 months) · Dublin Ranch Area F · Watlis Annexation (Dubtin Ranch West) · R¥ Ordinance (onsite) alternatives. - Commercial Nexus Study (slowed down, not postponed) In addition, Staff recommends that any projects on Attachment 2 that indicate no progress and any new projects proposed for initiation by the City be automatically postponed until at least August 2003. These new projects would then be placed into the schedule following those items that were either postponed by thi.s application or showed no' progress. In other words, should the City Council initiate a new project, Staffwould not begin work on it until after August 2003. This would include those projects that are on the FY 2002-2003 Goals and Objectives Ii'st, but show no progress, such as the Parks RFTA master plan as well as the projects that are listed as not yet initiated at the end of the list (Attachment 2). Staff explored the alternative of hiring limited term Staff so that projects could proceed without postponement. However, based on the short-term need (4 - 5 months) for staffing and the timeframe for hiring and tra/ning, it is not a feasible alternative. Although Stuff believes that this reassignment of workload will free up the staff team to work on the project in an extremely expedited manner, the success of the obtaining an SDR approval by the City Mil depend ~0n the ability of the APplicant to.submit, a comprehensive SDR Preapplication~. f'mM SDR,, g ~ 5 7 ApPliCation. ~nd final £man¢ing'proposat in the timeline indicated above; aS well as quick response~m staff'S requests for revisions to the apPlicatiOn materialS, if needed. CONCLUSION: A represemative of Dubtin RanCh. has asked the City.Council to consider the exPedited processing of a hJgh,densi~ty 928,unit' mUlfifami!y projeCi with a significant affordable'housing component. As .pan of that reqUeSt there will be City £manclal cOntribUtions Of-an unknown mount. City Staff has analyzed the issues of expediting the processing of the application at a timeframe that is faster, by more than ,½ the time of/ts rnos~ acce!~rated, multi,family project. The four,month time period that has. been requested will be a cha!!enge for City development and a~strative 8taft as well as the Applicant. In addition, the fUll financial contribution and analysis as well as other City issues may not be kn~wn Until M~aY !9~hi~.ha!f w~Y through th, e: pr°Cess~ If-for- any re,son the fmau¢in!g fOr this Project is nor acceptable to the City or feasible, the processing o'fthis entitlement could Waste City resources that could have been spent on other projects. In order for the City to begin work on this project~ other high pfioriV projects will have to be postponed or sloWed down. In addition, other projects that have not-yet begun Will be ~er delayed while the complete facts, policy and financial implications are explored and analyzed so that City Council can make an informed decision as to whether or not they wish to financially participate in this project. If the City Council determines that this project should not be processed in an expedited manner, Staff could process it under its normal fimeframeS, which would give the City COuncil and Smf:f more time to exr)lore the issues relating tothe project, while continuing to work on the other High Priorky projects that were identified in the City Council's Goals and Obi ectives. RECOMMENDATION: It is recommended that the City Council: 1. Receive Staff report and anticipated affordable/housing project schedule, . 2. Review Community Development Department and provide direction to high priorities. 3. Determine if Staff should commence expedited processing of the Dublin Ranch Affordable Housing Project when a complete application is received. 4. Instruct Staff to return at the March 18th meeting with a prelim/nary report that addresses other City Council concerns. LIST OF CITY':CO~Cm'ITE~ TO BE RESOLVED STAFF EVALUATIONS · Actual entitlement necessary for submittal of financing and CitY process~tiea!, dates o'sal: alt.~e, ephases) · Financial anatysis~, of Lin prop ( · What credit proced~e (non'teSide:nfial,-ae~attesidential) · - Cost differential prevailing wage/n0"nxprevaiI~g wage issue · The sUbSidy requested' and credit issues · Stares of all presen;~/and potential aff0i'dable' credits and impacts onother East Dublin... Prop~ Owners and newly annexed areas · A definite .~ub~al for each phase (number:'.¢f~ts, mod/low/very low totals) · (Minor) parking'standards · More family units (3 bedrooms) in each affordable category -* · Loan/grant/funding ofproposedaffordable units by City (over Inclusionary t2.5% requirements, as requested by Apptic~t, etc.) · Grading requirements (Areas F and B) to fil~ site ATTACHMENT 1 Community Development Department Plann~ng & Housin~ Divisions Project List (2/19/03) City Projects: Project Title Goals & Objective Level Current Status or or Initiated After FY Estimated Completion 2002-2003 G&O Meeting Date or other Reason 5 year Affordable Housing High March 18, 2002 City Plan CoUncil Open Space Implementation High APril 2003 .City Council Mtg Scarlet Court SP High Tabled Until 10/03 Resolve Final boundaries of High Priority (Parks & In progress Sports Park in Eastern Community Services) DubIin S.P. area Necessary for other high priority ptarming projects - A2 & A3 Development Agreements cannot be approved prior m location 'being determined (hence no building permits) Historic Specific Plan High RFP for Survey is out for Proposal Community Facilities Task High Study Completed - March, Force and development of 2003 meeting to determine policy Task Force composition Streetscape Master Plan Higth Development of Work Program in progress Downtown Monument CIP Projects (funded) Going to bid in March, Project 2003 Intersection Improvement CIP Projects (funded) Preparation of bid docs. Design '(Lewis & Village Pkwy Draft received on 2/26 for. staff review F :~Administration~Projects&Assignfor Council3-4-03.doe ATTACHMENT 2 Project Title Goals & Objective Level. [ Current Status or or Initiated After FY Estimated Completion 2002-2003 G&O Meeting / Date or other Reason Housing Element Update Assigned by City Council [leceived comments from [-ICD on draft Housing Element- drafting revisions Sen/or Housing Project Assigned by CiTY Council 20 hours per week till July - . time increases towards July Garage Conversion Assigned by Cky Council March 18 City Council Ordinance Meeting Heritage Tree Ordinance Assigned by City Council Address comments by Mr. David Bewley- March 18, 2002 City Council Meeting ..... Transit Corridor GPA Initiation Scheduled-for 3/4/03 Investigate Parking and Medium No progress access alternatives' for Village Parkway S.P. Area Update'City's General Plan Medium No progress Develop City Low No progress Telecommunications Policy beyond Zoning Ordinan/e for Wireless Communications .. View and Solar Access Low No progress' Orcl~nance i Develop Ordinance to'limit Low No progress amount of square footage' increase on remodel of existing houses Zoning Ordinance Amendments required by No progress Amendments: Second Unit, State law Emergency Shelter & Density Bonus CDBG administration Auditing - 6 hours per week through July Toll Brothers Affordable 4 hours per week though Regulations (must be JulY completed to allow units to be sold in Area G) 2 Developer Initiated- Projects: Project Title Goals & ObjeCtiVe Level Current Status or or Initiated A~fter FY 2002 Estimated Completion - 2003 G&O Meeting or Date other Reason EDPO RMP - part of total High Development of RFP in project listed in Status as progress (developer EDPO Annexation changed process after Proposals were received) EDPO Land Use Plan - part High Wilt begin approximately 6 of total project listed in months after start of RMP Status as EDPO Annexation preparation Pirm Annexation, PD/SDR High Annexation complete, (referred to as Sitveria PD/SDR in presubmitral Annexation in G&O) Juverdle Hail, East County High 6 months - 12 .months from Hall of Justice Project submittal (currently in (SDR) preaPlotication procesS) Juvenile Hall, East County High County Board of Hall o£Justice Project Supervisors schedule shows (EIS/EIR that they plan to take action in May, 2003 Valley Christian Center Assigned by City Council Waiting for issues on GPA Downtown TIF - Admin draft Final EIR under t review Bancor Pak &Sav Assigned by City Com~cil ' Information not provided by · projectappticant to begin work on 3 Project Title Goals & Objective Level Current Status or or Initiated After FY 2002 Estimated Completion - 2003 G&O Meeting or Date other Reason Evaluate D.ublin ~¢h Assigned by City Council In progress- March 4 & 18 Affordable Housing - reports to City Council Project/Proposal (This is not work on the processing oft he actual project- see below under projects not yet submitted) Site 15 A Transit Center Required by Transit Center Planning commission GPA Approval (Park and Grant Meeting - March, 2003 Issue) Transit Center Master DA Required prior to any September, 2003 ' development in Transit Center Transit Center Avalon Bay One Transit Center project Presubmittal PD/SDR (690 units) is required to be approved and construction begun prior to September, 2003, so that City remains in compliance with MTC Grant requirements l T}ansit Center BART One Transit Center project Presubmittal Garage. is required to be approved and construction begun prior to September, 2003, so that City remains in compliance with MTC Grant requirements Lennar 1 Affordable Project One Transit Center project Presubmittal - Transit Center (114 units) is required to be approved and construction begun prior to September, 2003, so that City remains in compliance with MTC Grant requirements. Project Title Goals. &'.ObjectiVe LeVel Current Status or or:,I,nitiated After FY2002 Estimated Completion - 2003 G&OMeefing or Date other Reason . . Lennar 2 Project- Transit One.Transit center proje~(' Presubmi~l Center (2.80 units) is required to be approved and construction begun prior To September, 2003, so that City remains in compliance with MTC Grant requirements . Toll A2 and A3 Must be approved prior to In progess - Need location Development Agreement ~the issuance of any building of Sports Park fled down. 'permits . Bancor Alc0sm ~rojec~ Medium APplicatiOn received in Feb. (listed in G&O as explore 2003 options for San Ramon Village Shopping Center) Complete Parks RFTA Medium No progress GPA Bart/Orix BART station In preapplication stage by and residential Project (at 0ri~ west Dublin BART station) Legacy PD/SDR (at west Developer Delay- Dublin BART station) ~: preparing new submittal 1197 Brittiiey Lane SDR ~ Recen(ly .submitted- (Lot 6) l estimated completion approximately 3 months Quarry Lane SDR t Developer delay Honda PD/SDR Developer delay Greenbrier Phase 91,. presubmittat - PD/SDR approximately 6 months to hearing Black Mounm/n Miscellaneous questions by Implementation property owners (10 hours per week) Lot 7 Black Mountain SDR Recently submitted, estimated completion 3 months Bukari TPM/SDR .Developer Delay Project Title Goals & ObjeCtive Level Current Status or or Initiated After FY 2002 Estimated Completion. - 2003 G&OMeeting or Date other Reason Miscellaneous CUPs/SDRS: Various - depends on · Tri Valley Marshal developer submittals Arts · Dublin Theatre. · Parkway Autobody shop .~ · Volkswagen MSP/SDR · BMW MSP/SDR · Dance StUdio CUP · Jaliscos SDR · Casa Orozco SDR · Gallucci Collision Center CUP/SDR Other Ongoing Tasks: Project/Tasks status/Completion CMA - Document Letter sent on Tier 2 compliance with Tier 1 and requirements, quarterly Tier Tier 2 requirements 1 compliance report in progress, Annual land use survey completed Projections for budget In progress Budget preparation May, 2003 General Plan Circulation / Need to amend for No progress MapI consistency with Land Use Document does not No progress Downtown Specific Plans Integrate Amendments currently reflect am endm ents Update Zoning Maps for Inprogress consistency .with General  Plan and current zoning rdiBan ce ~Pdate EDSP Text completed - maps in i progress Code EnfOrcement Ongoing , ,proj ectfrasks Status/ComPletion Implementation of approved Ongoing projects such as plan checks and'field checks for Area G, Armstrong Garden Center, Areas A, Black Mountain,' etc. Counter and Phones Ongoing Preparation of Ongoing environmental documents for other City proj ecls - Park Master Plan Environmental Doc - currently in progress . Projects Not Yet Submitted: 1. Moller GPA/SPA Annexation-Approximate submittal March - April, 2003 2~ Dimanto GPA - March 18m CC meeting for initiation - project Includes a proposal by Pacific Properties for a multi-family project 3. Dublin Security Storage GPA 4. Vargas Annexation 5. Lin Affordable Proj eot-. If approved by'City Council on March 18, 2003 6. Dublin Ranch Detention Basin SDR - expected after 404 permit approval. 7. Bank of America at Koll Center 7 ~ ~~ planner ,. Date 19 ' ~ PKE -APPLICATION SUB~TTAL ~Q~~S FOR SITE DEVELOPMENT R~yIEW (SDR) · thats ecific informationma~not.be.neeAedm pmcessap . . .... .- .~.. information, the Planner will initial the ~mved information and kc~0 a copy of the roma for C~W · · It is Ci olicy not to accept ineonip!~te ~pp~n.s~} ,}pl~ ~:?~s~?l!~:j~tifie.d ~..se itc. m, s waxy.ed b.y wn ,t~ug N/A and th~7'~'tials next to them. Please note g ~.inComP!~te ai~plicati°n is r~iYed..b.y'mml pr returned to the applicant Inoomple~ or.inaocmte,~tio!,.ma~(~t m processing.delays or demal of the project, r 7vie of the submittal ~or.oo;n~pl~tenes$ ann ~n.v!r. ~+=~+~,.--~,~,. a notice to you within 30 days.,liSting theite~iS, necess~ to complete the ~pphcatiom To comply with. State la~, the follo~g ;r~aents a comprehensive list of informati0nwhich must be submittext prior to acceptance of the application for a Site DeveloRment Review. gENERAL INFO~ATION ProjeCt' Street. AddrassfLocation:' ~' ~Are~ I-/~ ~).~lin ~n£h ero~e~tsme: Lin..~A£fordable H°using~o/a~t roject DesoriPtion: .... Zoning District: APN: O~neral Plan Designation: Specific. Plan Designation: Applicant Name: Phone: S~rrr~t QmCK REQUIRED CHECK TYPE OF SUBMITTAL REQUIRED Completed Application For,m including the address': ~d~.§igna~es of Applicant(s) and Property ' · C~i~le~ed En~onmental ii/f0rmation Form (Ini/iii Study) including signatures of Applicant(s) Application. Fee snd Processing Deuosit (Cash or ~heck pa:yable to City of Dublin) An ])~ets ~ $~4o · $~4o .... - EnvifonUie~t~l Fiiing"Fees/De~OsitS CouuW Administrative Fees ($25.00) ·..~ ':Environmental Impact Report ·Deposit N/A (payable to City of Dublin) ..: Speeial:S0~rt~es.DePosit.(mffic.'.noise. etc,) N/A ~ (paYable to City of Dublin) · TOTAL FEE TOTAL DEPOSIT Kevised 2/4/99 ATTACHMENT 3 TYPE OF SUBMITTAL i~QUIR_gD Completed Proeessin~ Fee Affreement Form Written Statement (1 copy) describe the requested tree in detm'.'l and give reasons Why the application should be approved. Provide factual information supporting the following: a_.~ What type of business, activity or use are you proposing? ~ ' How many emploYees will you have or propose to have? c. What are the proposed hours and days of operation? d. Are there any ways in which your business, activity or use have a negative effect on the health or safety of persons residing or v~orking in the vicinity, or be detrimental to the public health, safety or general weffare. (~ Describe how the design of the project inelu .ding site layout, structures, vehicular access, circulation and parking etc. will provide a desirable environment for the future development. (~] Is the site physically suitable for the type and intensity of development proposed? Describe howthe proposed development may impact views. Describe the physical characteristics of the site including existing slopes and topographic . features. ~] Describe the architectural design/theme of the development including character, scale and quality of the design, and explain how the project .will relate to and be compatible with the existing site and the character of adjacent buildings, neighborhoods and uses. O Describe how the landscape features have been designed so as to insure visual relief and an attractive environmen~ for the public. (~) Is the proposed project located on a hazardous waste and substances site pursuant to Government Code Section 65962.5? (A list is of these sites is available in the Department of Community Development). Preliminary Title Report/Propertw Proffie (i copy) to document ownership, prepared within three months of application submittal. Public. Notice Materials: a. Reproduced copy of Alameda Cqgnty Assessor's Parcel Map showing the project parcel(s) outlined in red and a .300-foot radius in blue drawn from the perimeter of the parcel(s), b. ,Two sets of maiting labels; one set addressed to current property owners by name; and another set addressed to all current occupants/tenants on the propert/es contiguous to the project site. The labels need to show the addresses and Assessor's Parcel Number's within 300 feet of the parcel(s) typed on 8¼" x Il" sheet labels. (Example of how these labels should be typed:) ~I. Doe (Property Owner) Occupant/Tenant APN: 941-042-0003 APN:. 941-012-3456 1010 Main Street I010 Dublin Blvd. Anytown,. CA 91234 Dublin, CA 94568 c. Plain envelopes (1 set) 4¼"x9½" with first class postage (stamps only, metered mail wilt not be accepted, no return address) with labels a~xed on envelopes. -2- g:~forms~appsubr~q/sdr SUBlVI1TTAL QUICK REQUIRED Cm~CK ' TYPE'OF sUBt~ITTAL REQUIRI3D ~ . yieimitg.Map,. (1 copy) showing the site in relation to nearest cross Streets. site Plan (10 copies) drawn to 1" = 20' scale and fully dimensioned (folded, 9" x 11" maslmum ~ s-ize). The plans must be prepared and signed by a licensed civil engineer, surveyor, architect, or designer. The Plans must. graphically and understandably describe the proposal. The plans must show the following: a. North arrow and scale;. b. Dimensioned property lines, existing.and proposed easements and adjacent sweets'. c. Location, setback and dimensions of all existing and proposed structures on the site;. d. Parking information, including: - parking ratio (i.e. parking spaces/1000 sq. fL of building), - parking provided, - parking required, - handicapped spaces, - total project, - number of parking spaces per row (indicate compact spaces with 'c'), - typical parking stall dimensions, - parking aisles dimensioned, - entrance drives dimensioned, - adequate back-up dimensions - striping details ~; - lighting fixtures - cart corrals, ff required, ' e. Loading/receiving areas: - dock location and m~ck access - mack well ' - turnaround area dimensions - trash compactor - porte eochere f. Location, setback and dimensions of all existing and proposed: - driveways, - median openings, o loading areas, - handicapped ramps, - sidewalk/pathways, - pedestrian circulmon, - landscaped areas, - f~ces, - retai~ing walls, - signage, - trash enclosures, and - utility connections on site; g. Location, setbacks and dimensions of all existing and propoSed structures, parking, driveways, walkxvays, landscape areas, fences, retaining walls, signage and trash enclosures within 50 feet of the project site; -3- g:\forms~appmbreq/sdr S~Mrrr~ QmCK REQUIRED Ct~ECK '~ TYPE OF SUBMITTAL REQUIRED h. S~ of dovelopment c~c~afiom ~clu~g: - site ~ea (~oss ~d net, each floor ~d total) - floor ~g of ~ buil~ngs ~d - number of p~g s~s (req~ed md proposed), . - lot ~ea cov~age'{~ow~ ~d proposed), - perc~t of t~cap~g - ~en a~ropfiate, nmber ofb~, smd~m, d~nlng seats, au~tofi~ch~ch scaB, occupm~, e~loye~ of l~gest work sM~ or squ~e feet of ~sembly floor ~a. . ~ Pre~a~ Gra~ng~rainag~ Plan {10 copies, folded, 9" x 11" m~m s~e) sho~g: a. ~is~g mpo~aphy (~shed ~e) - one-foot ~te~als (slopes 3:1 or ~eater sh~ be five-foo~ ~s) b. Proposed or ~ni~h ~ade centers (so~d ~e) -.one-foot b. Bo~d~es of ~ cut ~d ~1 c. Cross-sectiom of si~ wh~e topograpMc c~ges exce~ 5% d. D~cfion ~d pa~ of ~mge on, ~ough ~d off~e site (~dicate ~y proposed md e~g ~amge catchbas~ and pipe) e. Kem~g w~s ~ critical spot citations f. Pad elevafiom for appune~ces (Lc. ~fomer, generator, em.) g. F~sh floor elevafiom ~ Pre~a~ Utffi~ Plan (10 copies, f01de~ 9" x 1 I" mm s~e) sho~ng: m Elea~c Se~ce r0ut~g ~om e~g supply to bufl~g (~clu~g poles, ~y ~es, cond~ts (rain. 54"), conductors (nmb~ md. size) etc. b. Trireme, genmtor, prop~e rack enclose (a~oss ~om ethic room) c. Gas s~ice d. Water se~ce, location ~d s~e ~clud~g, dome~c ~ter ~ meter, back flow prevent~ ~or detector v~ue locafio~ ~e hy~ts ~ promcfion, ~e d~ent co~ecfion ~d P.I.V. e. S~it~ Sewer location ~d s~e ~clu~g, m~otes md ~te~outs (100' O.C.) f. Tel~hone se~ce g. E~m~m (e~g md proposed) E Critical cross~gs c~culated for cle~ce (encasement ffreq~ed) L A~romm H~t pole locations . j. Stem ~m systm (~ mve~ elevafiom) k. B~g fie-~ ~ s~ s~er ~d sm~ ~ 1. Stub out tooa~om for ~e Pa~, ff ~y m. F~nigh floor elevafio~ -4- g:k%rms~appsubreq/sdr CHECK ~E OF S~~~ ~Q~D con.tent wi~ ~e site pl~ ~d ~o~teo~ p~ for ~e proposed project, The p~ sh~ demom~ate ele~Iy ~e e~aeter,' m~s~g ~d site compafib~W of ~e proposed l~&caping pro~ ~d s~ ~clude ~e ~o~°~g: m D~ layout ~o~ ~e desked ~cap~g proem ~ m~ of 1co.ion of propos~ lm&cap~g md ~c~e, ~ Pl~t p~ette ~ ~e locatio~ s~e ~d ~me of ~e proposed pl~ ~d ~ees (bo~ co--on ~d bo~o~ b. ~catio~ of proposed, be~, concre~ c~bs, pa~, fenc~g, ~d ~ce~eous s~es (~clud~g above ~ade u~liW s~c~es such as PG&E ~fo~ers). c. Percent ofl~&cap~g (~d how it is allocated) & Smt~t of ove~I desi~ ~emo e. ~eas proposed for outdoor ~e f. Ou~oor ~ demos g. Li~t~g pI~ ~clu~g p~es~an level, sec~W ~d pg~g lot li~g Building Elevations ( 10 copies) fully dimensioned and drawn to a 1/8" = 1' scale of all sides of alt proposed stractures, Elevations must include building materials, colors, trash enclosures, fencing, roof screening details and signage. Colored Building Elevations. (1 set, full size and mouaxted) Color and Material Palette (1 set) indicating the proposed finishes of all exterior m~terials (including roof and walls) and color samples of paint or manufactured products to be applied on the building exterior (including fascia and trim). Scale Model of Project A model is required only if the proposal is for two or more commercial buildings.: The scaled model shall be submitted at least 2 weeks prior to a decision being made by the Community Development Director or within one month of a public hearing, (check with planner for additional information) Floor Plans (10 copies) fully dimensioned, drawn to scale, showlag oxte~ior doors and windows, stairways, mechanical rooms and hallways (folded, 9" x 11", maximum size). Roof Plan ( 10 copies) drawn to scale show~ the direction of slope of roof element.~ and location of mechanical equipment, ducts and vents (folded, 9" x 11" maximum size). :. Reduced Cooies (10 copies, 11" x 17") of eaohplan. Traffic Data specific to the site or proposed project: traffic gen=iZdon rates, pea_k hour .counts, trip distnnoution and s~milar information~ (Applicant must check with Public Works Dept. for additional information,) $~ecial Information or information m such foi-m and number as may be required by the Department g:~forms~appsubreq/sdr OFFICE USE ONLY Planner ~ Date. . The Quick Check has determined that the application submittal is ineoml~lete and cannot be a¢celate~. The Quick Check has determined that the application appears to contain rife'items required by this eheckll~t · (completeness as defined by Section 65943 will be determined within 30 days of application) and processing will be~in. For assistance or questions regarding this form, please contact: PLA_N~rING DEPARTtVIENT STAFF, CITY OF DUBLIN, 100 CMC PLAZA, DUBLIN, CA 9456t1~ (925) 833-6610. g :'fformskappsubreq/sdr Fain~my Ranch Affordable Housing Proposal- City of Dublin March 25, 2003 Page 1 of? Date: March 25, 2003 Re: Fairway Ranch Affordable Housing Proposal- City of Dublin The purpose of this memorandum is to summarize the current Fairway Ranch Affordable Housing Proposal in the City of Dublin and to outline the applicant's proposal with regard to a variety of outstanding issues. This memorandum is the result of numerous discussions with the Staff and the perceived direction of City Council from prior meetings. We have made this proposal in o~der to take advantage of existing financing oppommities and available land to meet the overall purposes of the City's inclusionary zoning regulations. It is our sincere belief that this project when approved and built, will contribute significantly to. the attainment of the City's housing goals by increasing the production of residential units affordable by households of very low, low and moderate income. It is important to emphasize that the comrm'tment to produce these units now will eliminate the risk that financing will no longer be available in the future as the project develops over time and/or that the Iand will no longer be available. While it is mae that the proposal may result in mailer units that might otherwise be produced and that they will not be as widely dispersed as might otherwise occur under the terms of the ordinance, the project will result in substantially more units and they will be produced at a broader level of affordabitity; thus, resulting in a much greater number of households that can be accommodated and at a much more diverse income mix than would otherwise be accommodated. This project applies for a waiver of the specific requkements of the inclusionary zoning regulations pursuant to Section 8.6g.040E which reads as follows: "The City Council, at its discretion, may waive, wholly or partially, the requirements of this ordinance and approve alternate methods of compliance with this Chapter if the applicant demonstrates, and the City Counc'fl finds, that such alternate methods meet the purposes of this Chapter." Attachment 1 summarizes the Fairway Ranch affordability mix by phase. The first chart shows the distribution of units as presented to the Council on February 18, 2003 and the second chart shows the current proposal. You will note that we have held the number of very tow-income units constant at 127 (they will be equally divided between the family rental project and the senior project). We have reduced the number of units in the low income category fi-om 341 to 187 (they are similarly divided roughly equally between the ATTACHMENT 2. Fairway Ranch Affordable Housing Proposal- City of Dublin -MarCh 25~ 2003 Page 2 of 7 family rental and senior projects). The numb~ of moderate units has be~n increased fi.om 161 to 273 units with 90 of those units in the family rental project and 13I in the senior project. In order to accommodate moderate for-sale units we have proposed to convert the third phase of the' project into a for-sale condominium project restricting 52 of the units to the moderate category. There have been a number of other design changes to go along with these modifications in order to accommodate a broader mix .of units as between one-, two-, and three-bedroom units. Specific~y, at the City's request, we have added $6 affordable three-bedroom units, whereas our original proposal had no three-bedroom units. The chart also provides an easy comparison as between the current project proposal (both as to the total number of units and as to the potential affordability mix) and the City ordinance assuming application of the City's ordinance at 12.5% and 7.5%. As can be seen, the project, wffi' exceed the maximum-requirements of the City's ordinance in the low category by 102 units and the moderate category by 60 units. It should be noted, however, if Dublin Ranch were to build out under the terms of the existing ordinance it is more likely that hmlusionary units would be built at the rate of 7.5% and that fees would be paid in lieu of the remaining 5% units, This, I believe, emphasizes the significance of this proposal in terms of producing actual affordable units for the City, The production of these additional units will have no impact outside of' Dublin Ranch because we do not seek credit to "sell" to other builders and developers. Rather, our request is limited to meeting:' full compliance for Dublin Ranch, both residential and non- residential. The request for participation by the City of' Dublin in this proposal has been reduced to a request for assistance in the application for bond allocations this year and a $4.5 million loan which would be paid back with imerest over six years. .S~mctnre. of. City Loan t. Two loans from the City in the aggregate amount of $4.5 million, allocated evenly between the PhaSe 1 family and Phase 2 senior projects, i.e., a $2.25 million loan for Phase 1 family project and a $2.25 re!Ilion loan for Phase 2 senior project. 2. The loan term would be 6 years, commencing at the closing of' the construction loan for each project. 3. The loan will accrue interest at a fixed, simple interest rate of 3% until repayment. 4. Principal and accrued interest on the loan will be repaid in three equal installmems, with 1/3 repaid by the end ofyear 4, 1/3 repaid by the end of year 5, and 1/3 repaid by the end of year 6. This repayment schedule avoids a large, sudden cash call on the project (which could upset the financial stability of the project, and would be unac~eptabfe to the lenders and tax credit investors), while providing certainty and a predictable schedule for repayment to the City. The repayment is not dependent on cash flow from the property. 3.25doc DR - 26.4 Fairway Ranch Affordable Housing Proposal - City of Dublin March 25, 2003 Page 3 5. The loan would be secured by a deed of trust on a parcel(s) of commercial land in Dublin Ranch that has a current market equity value (as undeveloped land) of at least 3 times the amount of the City loan. Property substitutions would be allowed during the term of the loan, provided the substituted property has an equity value of at least 3 times the amount of the City loan. The City would agree to subordinate its deed of trust on the collateral property to a lender's first deed of trust, provided the net value of the collateral is at least 3 times the aggregate amount of the City loan and lender's debt. Impact of~,SB 97S 1, If both the Phase 1 family project and Phase 2 senior project receive tax-exempt bond allocations, from CDLAC in the third round of 2003 (with applications due July 16, 2003), both Projects would quatigy for an exemption from the payment of prevailing wages under the affordable housing exemption in SB 975. The bonds would close by December 31, 2003 and the both projects would commence construction in the first quarter o1` 2004, subject to the receipt of final building 2. If only one of'the two projects receives a bond allocation from CDLAC in the third round of 2003: a. The developer would apply for a California Housing and Community Deveiopment Multifamity Housing Program loan (MHP loan) to cover the additional costs imposed by the payment ogprevai{ing wages. b. The construction o1` the second phase, and the timin~ for the funding o£the $2.25 million City loan, would both be delayed by the time required to obtain the MHP loan, This could delay the second phase project by as much as 3 years. c, Ii' one oi' the two projects does not receive a bond allocation, the City o1' Dublin would lose that bond allocation to an affordable multifamily housing project in another city. 3. If neither of' the two projects receives a bond allocation, we would abandon the current' proposal and comply with the minimum requirements set forth in the City o1`Dublin's InclUsionary Zoning Ord'mance. We would not be able to provide the number of affordable units nor the depth o1` affordability proposed here. The timing of'the development of the affordable units would be extended throughout the time period required 1`or the build out Dublin Ranch (approximately 7 to 15 years). As a result, fewer affordable units would actuaIly be built (because we would build 7 ½ % ogthe inclusionary requirements and pay affordable housing fee for the remaining 5%). 4. SB 975 would result in an estimated 15% increase in construction costs (i.e., garage, site work and building costs) and associated costs. This equates to a $4,335,000 cost increase for the Phase 1 Family project, and a $4,068,000 cost increase for the Phase 2 senior project. The 15% estimate is based on the f°IIowing: 3.25do~ DR - 26.4 Failway Raueh Attordable Housing Proposal - City of Dublin March 25, 2003 Page 4 of 7 a. Pacific Union Apartments is currently constructing two mixed income multifamily rental apartment projects (112 and 206 units,, respectively) in Santa Cruz. Payment of prevailing wages on these projects in accordance with SB 975, as estimated by the general contractors (Silveri Construction and Bogart Construction, respectively), would have added 18% to the hard construction costs. b. Pacific Union Apartments is currently entitling an approximately 200-unit 100% affordable (to households at 50% and 60% of'Area Median Income) multifamily rental project in Livermore. The contractor estimates that payment of prevailing wages would increase construction costs by 25%. c. Klein Financial Corporation, in conjunction with Callahan Property Company and Protech Development Corporation, are eurremly constructing 250 units of mixed income multifamity rental housing for seniors that will provide congregate care and assisted living services, The general contractor (Sundt Construction) estimates that payment of prevailing wages would increase construction costs by approximately 10%. d. USA Properties, a Rosevilte-based commercial developer, estimates that payment of prevailing wages would increase construction costs on its multifamily affordable rental housing projects by e. Mid-Peninsula Housing Coalition, a Redwood City-based nonprofit housing developer, estimates that payment of prevailing wages would increase the construction costs of a 71-unit 100% affordable multifamily rental housing project in Santa Clara by 27%. f. Community Housing Oppommities Corporation, a Davis-based nonprofit housing developer, estimates that payment of prevailing wages would add 12% to the costs of renovating a 44,unit 100% affordable multifamily rental housing project in Winters (west of Davis). g. Lisa Bates, Director of Community Development for the Sacramento Housing and Redevelopment Agency, expects payment of prevailing wages to increase construction costs for affordable multifamily rental housing projects by 15% to 30%. h. Public agencies estimate that payment of prevailing wages -Mll increase the costs of providing affordable housing by 20% to 30% (Floor Alert, California State Association of Counties, League of California Cities). 3,25doe DR - 28.4 Fairway Ranch Affordable Housing Proposal -City of Dublin Match 25, 2003 Page 5 of 7 ~ ~ro,|ec~ T~m The project team combines, expertise in att phases of the development, financing and operations of muttifamily rental mixed income projects. The members of the project team, their areas of expertise, and representative examples of their experience relevant to the Phase 1 family and Phase 2 senior projects are descn'bed below. A Lin Family Entity and Charter Properties will each own one of the two muttifamily rental projects. James Tong and Martin W. Inderbitzen will act as the Developer for both projects. In this capacity they will direct and oversee the entitlement process, including working with the City and Project Team to design the projects, set objectives for financing, engage and oversee the construction manager and general contractor, engage and direct the property manager, and implement the Owners' objectives for the projects. Klein Financial Corporation will provide development and financial consulting services for both projects. Klein. Financial has provided, development and financial advisory services to private sector developers of multifamily affordable housing projects for the 'past 30 years. It has obtained an aggregate of more than $2.5 billion in financing for private developers and governmental agencies, including approximately $575 million in bond, tax credit and/or equity financing for approximately 8,300 units of affordable multifamily rental housing in the past five years. A summary of these projects is attached. Klein Financial has also developed, as a principal/owner and/or development consultant, more than 10,000 units of residential multifamily property. A summary of representative examples of these properties is attached. Navy Banvard of Van Tilburg, Banvard & Soderbergh~ will be the Project Architect. Navy will work with the Project Team to design the projects so that they meet the needs of the tenants, can be financed, are marketable, can be operated efficiently and feature quality designs and construction materials that will be an asset to the City over the life of the projects. This firm has jointly worked with Klein Financial Corporation on mixed income apartment with affordable components, starting in 1990. These projects included 1,000 units with a value exceeding $200,000;000. Professional market analysts and appraisers selected by the construction and permanent lenders based on their expertise in the project type will provide input to the project design and unit mix based on their analyses of the demand for and absorption rates for the projects. Mike Conion of ESG is preparing the initial market study for the Developer to verify the demand for senior units. Boris Lend Lease or its equivalent will be the construction manager for both projects. Bo~s will solicit and review bids from general contractors to construct the projects, 3.25doe DR - 26.4 Fairway Rauch Affordable Housing Proposal - City of Dublin ~ March 25, 2O03 Page 6 of 7 oversee the general contractors' and architect's work, and work with the Developer to ensure that the projects are built to the specifications .and delivered on time and within budget. The construction contracts will guaranty a maximum price for the construction of' each project. The payment and performance bonds required by the construction lender and tax credit investor for each project will ensure that construction of eaCh project is completed and that tim& are available for completion~ Bovis ranks as one of the world's leading project and construction ma~gement companies, is the third largest construction manager in the United States and is a premier builder of'luxury condominiums, apartment buildings and senior residential projects in the United States. It employs 7,500 employees world-wide, and operates in 38 countries spanning six continents. Approximately 30% of' Bovis' current and past clients are in the Fortune 500 list of' the world's leading businesses. Bovis is currently working with the Developer and the City on the construction of the Dublin Ranch fire station. A general contractor experienced in the construction of the subject project types with substantial financial capaCity will be retained for these projects. We are attempting to identify a general contractor as early in the process as possible. Legacy Properties or its equivalent will be the property manager for both projects. Legacy will be retained on a consulting basis during the predevelopment phase of' the projects to advise the Project Team on marketing and operational issues that influence project design. Upon completion of' the projects, Legacy will rent the units, manage the units and have primary responsibility for comptianc~ with the City's, bond and tax credit affordability requirements. Legacy has specific expertise in Norther California in managing large scale, mixed income apartments that are bond financed and that utilized federal ,tax credits. Legacy has developed more than 55,000 apartments, and currently manages in excess of 33,000 apartments. An affiliate of Paramount Financial Group wilt be the tax credit investor in both projects. Paramount will raise the tax credit equity to be invested in the project (approximately 50% of which will be invested during the construction of the projects, with the balance invested at and. shortly after achievement of stabilized operations and conversion to permanent financing), monitor the construction of the projects, and oversee the projects' compliance with the City's, bond and tax credit affordability requirements. Investing tax credit equity in multifamily affordable housing projects is Paramounfs core business. Because Paramount will have a substantial investment in these projects (approximately $I5,300,000 in aggregate) and has long-standing relationships with its investors, it has extremely strong incentives to assure that construction of the projects is completed, the projects are leased-up according to schedule, and the projects comply with the affordability restrictions. Paramount has funded more than $100,000,000 of equity to Klein Financial Corporation-sponsored (as the developer or consultant) projects, tt is one of the nation's largest tax credit syndicators, placing over $400,000,000 in equity investments last year alone. Paramount has more than $1.7 billion of real estate assets under management, including more than 24,000 apartment units. Paramount's 3.25doc DR. - 26.4 March 25, 2003 Page 7 of 7 extraordinarily successful record in affordable housing led to GMAC's Commercial Division acquiring the company approximately two years ago. It now operates as a subsidiary of GMAC Commercial Holding Company. Novogradac and Company will be the independent CPA for both projects. Novograda¢ will prepare audits of the compliance of both projects with the. City's, bond and tax credit affordability requirements. Novogradac will also provide training, to Legacy on-site property managemem personnel, as needed, in the finer points of compliance with the tax credit requirements. Novogradac is highly respected as a national leader in the affordable housing field. A full set of resumes for the developmem team will be prepared and delivered to the City within the next two weeks. 3,25doe DR - 26,4 Elizabeth H. Silver Attorney at Law 510.351.4300 VIA FACSIMILE & U.S. MAIL' i~arch 24, 2003 February 18, 2003 ProPosal Phase I Phase H Phase IH Affordabili~ Family Senior Family Total Affordable City Ordinance Current Proposal Based on Staff Discussions Phase I Phase H Phase IH Family Senior Condo Total Affordable City Ordinance DR- Affordability3.25a ~y~ - March 25, Robert N. Klein Development History Summary Representative Examples of Major .R_e_~identia! Project-~ Robert Klein has served as the Managing Partner, the Managing Member of. the General Partner LLC, as a Director of the Corporate General Partner, and/or as the Development Consultant for more than 10,000 units of residential multifamily property. Highlighting only representative examples of major residential projects, the bullet point summaries, presented below, provide insight into the extensive time period and the complex scope of the properties where Robert Klein has played a key or central development role in driving project development. The summaries below, spanning from 1976 through 2002_, indicate the development period and a brief project description, as follows: · In 1976 to 1979, as the Managing Partner of Huntington Park Apartments I and II, Robert Klein developed 220 units of bond-financed residential apartments in Fresno, California; an additional 88 condominium units were concurrently developed, as a part of this project, for a total unit count of approximately 308 units. These were the first bond-financed apartments in the history of California. · 1981 to 1983, Robert Klein - through Klein Financial Corporation - served as the Managing Partner of the development of 422 condominium units in Fresno, California. After the successful build-out of the first 210 units, Klein Financial Corporation sold its interest in the final 212 units to its partners. This project was financed with a Fannie Mae-Ginnie Mae tandem plan, condominium mortgage take-out loan program. · 1987 to 1991, development co-venture with Watt Housing of 600 + residential apartment units for Cai State Northridge on a turnkey development agreement with the California State University System. This is a bond-financed project for student housing. · 1991 to 1995, development of 374 apartments and 15,000 square feet of related retail in Pasadena, California, with Robert Klein serving as a Director of the Holly Street Development Corporation and as the Development Consultant to the partnership of which the Holly Street Development Corporation was the Managing General Partner. This project also included the shell construction for a light rail station. This is a bond-financed project with tax credits. ATTACHMENT · 1993 to 1995, development of 188 townhouse and stacked flat apartment project in ©range Cove, California. This is a 9% tax credit project, proving large project feasibility in rural cities. · 1996 to 1998, development of 250 apartments in San Jose, California, where Klein Financial Corporation served as the Development Consultant and as a co-developer - in the initial stages. From acquiring the development rights, the project redesign, land lease restructuring, public works structuring, construction pricing direction, and all of the other stages of development, Klein Financial Corporation took a project which had been stalled for 4-1/2 years into a construction loan recording, with a recapitalization, and a restructured development team in 9 months. · 1997 to 1999, the acquisition-rehab of 600 units of apartments was accomplished in Colton, California, where Klein Financial Corporation served as the Development Consultant and the Financial Consultant. Klein Financial Corporation directed unit redesign; seismic retrofit; project amenity construction program; project construction budgeting; project operational budgeting; utility systems analysis and restructuring; and numerous other general development functions, while structuring and implementing the funding of construction, equity, and permanent financing. · 1998 to 2002, Bayport Apartment Project was an acquisition-rehab project of 402 units in Garden Grove, California. Klein Financial Corporation, as represented by Robert Klein, served as the Managing Partner of this acquisition/development partnership. This is a bond- financed project. · 2000 to 2002, Livermore Senior Apartments is a congregate and assisted living project of 250 units in Livermore, California. This project is in construction; Robert Klein has personally guaranteed the construction loan and the Bank of America is the construction lender. Robert Klein has a local co-development partner, who has no previous experience as the lead developer of residential apartment units. · 2002 to 2003, River Run Apartments in Corona, California, is a 360-unit senior apartment project which went into construction in February, 2003; Klein Financial Corporation served as the Development Consultant and the Financial Consultant. The lead developer, for whom Klein Financial Corporation served as the Development Consultant, had not done a residential new construction project for approximately 12 years. Klein Financial Corporation provided the development expertise from land acquisition, through development design, value engineering, site plan development, financing, operating budget design, infrastructure on-site and off-site structuring and financing. 2 Fina_n.~in~ and Equity Capita! Regardless of whether it is specifically discussed above, Klein Financial Corporation structured all construction financing, permanent financing, and equity capital funding, as well as implementing that funding, for the above- listed projects, except for the equity capitat required of the Holly Street Development Corporation partner, in the Pasadena, California, project. DUBLIN RANCH ZONING AND INCLUSIONARY ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL Total Units Units permitted in Phases I, I1 and III 744 units No change No change without density bonus 25% density bonus permitted 186 units No change No change Total number of units permitted with 930 units No change No change density bonus Inclusionmw Units~ If No Density Bonus Inclusionary requirement for Dublin 12.5% 12.5% 12.5% Ranch (min. 7.5% built on-site) ' (all built on-site) (all built on-site) Number of inclusionary units for 425 required 587 587 3,399 total units (assuming 186 ( t 62 "excess" units) (162 "excess" units) density bonus units not subject to 12.5% inclusionary requirement) lnclusionary units required Very Low Income 128 127 - 1 127 Low Income 85 187 + 102 187 Moderate Income 212 273 +61 273 Total 425 587 162 587 ATTACHMENT 4 - 1 - G:\PA#L2003\03-010\SlatmZoning 1 .doc DUBLIN RANCH ZONING AND INCLUSIONARY ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL Assistance From City Processing Normal Expedited processing Expedited processing Financial assistance for providing None · $2.25 million loan fbr each Phase I · 3% compound interest (to help inclusionary/density bonus units (Family) and II (Elderly) keep up with inflation (for needed · To be repaid in years 4, 5 and 6 housing assistance) · Interest rate 3% simple · interest (about 1.5% normal · other terms the same interest) Waiver of Commercial Linkage Fee No waiver Waiver of Commercial Linkage Fee No waiver on Dublin Ranch Commercial for all commercial development in Development Dublin Ranch (est. $2 million cost to Rationale: City) · Inclusionary units only meet residential requirements Rationale: Developer is providing 162 "excess" units · Developer also asking for $4.5 million loan for 162 "excess" units plus 186 density bonus units, plus concentration of units, plus different bedroom sizes and mix of units G:\PA#X2003\03-010\SlaterZoning 1 .doc DUBLIN RANCH ZONING AND INCLUSIONARY ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL Mix of Inclusionarv/Affordable Units Location Distributed throughout Dublin Ranch 535 clustered in Phases I and II (86% Same as Developer project of Phases I and II). 52 in Phase Ill (20% of Phase III) Bedroom size Same as market units in each Phase of Rental Units: Same Dublin Ranch 260 t-bedroom 219 2-bedroom 56 3-bedroom 535 Family/Elderly No requirement Rental Units Same (other than bedroom size) 55% Elderly 45% Family Phase I Families Elderly,, Total 1 br 104 0 104 2 br 83 0 83 3 br 56 0 56 Subtotal 243 0 243 Phase I Phase II 1 br 0 156 156 2 br 0 136 136 3 br 0 0 0 Subtotal 0 292 292 Phase II G:\PA#L2003\03-010~SlaterZoning I .doc DUBLIN RANCH ZONING AND INCLUSIONARY ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL Both Phases 1 br 104 156 260 2 br 83 136 219 3 br 56 0 56 Subtotal 243 292 535 Both Phases Key A~reement Provisions When market units are built Market units can only be built as Building permits can only be issued Same inclusionary units are built for market units when building permits issued for inclusionary units What happens if foreclosure Inclusionary zoning requirements Concern that lenders may only lend Inclusionary Zoning requirements remain for 55 years money if they can convert all units to remain for 55 years market rate Package Agreement as a whole must provide Assumes all requirements must be If only Phase I built, receive City loan an alternative way of satisfied to receive all benefits, for $2.25 million and credit for satisfying ordinance that inclusionary units built. provides at least as much affordability Density bonus only provided for Dublin Ranch (e.g., extra 186 units) if all inclusionary units provided G:\PA#X2003\03-010\SlatcrZoning I .doc DUBLIN RANCH ZONING AND INCLUSIONARY ORDINANCE REQ UIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL Income Mix Inclusionary Density TotalI Total Bonus Units ~ 128 units 74 202 127 Units Very Low-Income (30%) Same as Developer (50% of median income) 85 units 148 133 187 Units Low-Income (20%) (all at 60% of median income) (80% of median income) . cost covered by value of Federal Tax Credits 2t2 units 0 21.2 Moderate (50%) 273 (120% of median income) 425 74 - 222 499 - 647 587 Total Pro rata as market units built and fewer All in initial Phases Same as Developer Timing of Affordable Units units (7.5%) could be built with payment (on ave., est. 7-years earlier of in lieu fees for 5% than pro rata) ~ These totals reflect if the Applicant were to not receive a benefit as a result of counting the Density Bonus Units towards the Inclusionary requirement and requested 2 concessions under the Density Bonus Ordinance. If one concession was requested, the total Density Bonus Units would be either 74 very Iow- income or 148 Iow-income units with the combined Inclusionary and Density Bonus Units totaling 499 or 573 under each respective scenario. - 5 - G:\PA//L2003\03-010\SlaterZoning 1 .doc