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HomeMy WebLinkAboutReso 69-13 Afford Housing Agmt Amend • RESOLUTION NO. 69 - 13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AN AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE PAYMENT OF FEES IN-LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS BETWEEN THE CITY OF DUBLIN AND SHEA HOMES AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND TAKE OTHER NECESSARY AND APPROPRIATE ACTIONS WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the City of Dublin Zoning Ordinance (the "Ordinance"), on October 19, 2005, the City of Dublin (the "City") and Pfeiffer Ranch Investors, Inc. ("Pfeiffer"), entered into an Affordable Housing Agreement for the Construction of Inclusionary Units (the "Original Agreement") for the construction of 233 residential units known as the Tralee project, including the construction of 13 Inclusionary Units on certain property it owned ("Phase I") and 16 Inclusionary Units in mixed use buildings to be developed on adjacent property ("Phase II"); and WHEREAS, subsequent to the issuance of the Development Approvals, the City amended the Ordinance to (i) eliminate the requirement to construct very low-income ownership units; (ii) change the income ratios for Affordable Ownership Units to 40% low-income units and 60% moderate-income units; and, (iii) change the method by which sale prices for the Inclusionary Units are calculated; and WHEREAS, subsequent to execution of the Original Agreement, Pfeiffer was unable to complete the project which remained in a partial state of construction for a number of years; and WHEREAS, Dublin Tralee II, LLC, a Delaware limited liability company ("Dublin Tralee II, LLC"), acquired the Phase I property from Pfeiffer with the intention of completing the development of Phase I (the "Project"); and WHEREAS, upon acquiring Phase I, Dublin Tralee II, LLC's Inclusionary Zoning obligation was to provide thirteen (13) Inclusionary Units, allocated as follows: construction of five (5) low-income units and eight (8) moderate-income units; and WHEREAS, Dublin Tralee II, LLC requested an amendment to the Original Agreement consistent with the amended Ordinance to construct 7.5% of the Inclusionary Zoning obligation and pay fees in-lieu of constructing 5% of the Inclusionary Zoning obligation; and WHEREAS, on August 16, 2011, Dublin Tralee II, LLC entered into an Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and Payment of Fees In-Lieu of Constructing Certain Affordable Ownership Units (the "Current Agreement") with the City of Dublin for the construction of eight (8) Inclusionary Units (three low-income units and five moderate-income units) and the payment of fees in-lieu of constructing five (5) Inclusionary Units consistent with the Ordinance; and Page 1 of 3 WHEREAS, on January 23, 2013, Dublin Tralee II, LLC paid in-lieu fees for one (1) Inclusionary Unit and assigned the Affordable Housing Agreement to Shea Homes who paid in-lieu fees for four (4) Inclusionary Units, as anticipated under the Current Agreement; and WHEREAS, to date, two (2) Inclusionary Units have been sold by Dublin Tralee II, LLC to moderate-income households and six (6) Inclusionary Units (three low-income and three moderate- income) remain to be constructed and sold; and WHEREAS, Shea Homes has proposed to amend the Current Agreement to provide that it will satisfy its obligations through its predecessor's previous production of two moderate-income units, it and its predecessor's previous payment of in-lieu fees for five units and the payment of fees in-lieu of constructing the remaining six (6) Inclusionary Units; and WHEREAS, Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council, at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of the Inclusionary Zoning Chapter; and WHEREAS, the purpose of the Inclusionary Zoning Regulations are to enhance the public welfare and assure that further housing development contributes 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 and assure that the limited remaining developable land in the City's planning area is utilized in a manner consistent with the City's housing policies and needs; and WHEREAS, the City Council hereby finds that the proposal by Shea Homes to pay fees in-lieu of constructing the remaining six (6) Inclusionary Units is an alternate method of complying with, and is consistent with the purposes of, the Inclusionary Zoning Regulations as follows and hereby waives the requirement that 7.5% of the units in the project be affordable: (1) Shea Homes will pay fees, in-lieu of constructing six (6) Inclusionary Units, in the amount of $642,030 which will be deposited into the City's Inclusionary Zoning In Lieu Feed Fund and such fees will be used for the purposes of providing affordable housing in the City of Dublin. This will fully satisfy the remaining six (6) Inclusionary Unit requirement but it will not result in 7.5% of the units in the Project being Inclusionary Units as required by the Regulations. (2) The Phase I project meets affordability goals by providing Medium-High Density Residential units of certain sizes that will promote the City's affordability and Housing Element goals. The City hereby finds that certain types and sizes of townhome units in the project are likely to meet the affordability standards for moderate-income units based on the current market for similar units in the Tri-Valley. The remaining portions of the project include 12 units that are of a size that is likely to result in sales prices, under currently prevailing market conditions, that are very near, at, or below the moderate-income affordability standard. The existence of these "affordable by design" units mitigates the reduced number of deed- restricted Inclusionary Units in the project. (3) Based on currently prevailing market conditions, if the Developer were to be required to produce the six (6) Inclusionary Units it would prove difficult for the Developer to sell the units at prices that approach the current maximum affordable price, since the market prices for units without deed restrictions are less than the affordable prices. Such a requirement would place an unfair burden on the Developer that is not consistent with the purposes of the Regulations. Page 2 of 3 (4) Furthermore, if the Developer were required to produce the Inclusionary Units, the future buyers of those units would have difficulty reselling the units because of the likely-to-be small difference between the affordable price and the market price of similar units without deed restrictions. Such a circumstance would be inconsistent with the purposes of the Regulations. WHEREAS, the Project has been found to be Categorically Exempt from the California Environmental Quality Act (CEQA); and WHEREAS, a Staff Report setting forth in further detail the background and terms of the proposed Amended and Restated Agreement has been submitted to the City Council for consideration of this request. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In-Lieu of Constructing Certain Affordable Ownership Units between the City of Dublin and Dublin Tralee II, LLC, as described in Exhibit A. BE IT FURTHER RESOLVED that the City Manager is authorized and directed to execute the Amended and Restated Agreement and such other documents, and to take such other and further action, as necessary and appropriate to carry out the Intent of this Resolution. BE IT FURTHER RESOLVED that the Community Development Director is authorized and directed to modify the approved Planned Development Zoning and Site Development Review by administrative action to maintain consistency between the Amended and Restated Agreement and the approved Planned Development Zoning and Site Development Review. PASSED, APPROVED AND ADOPTED this 4th day of June 2013, by the following vote: AYES: Councilmembers Biddle, Gupta, Hart, and Mayor Sbranti NOES: None ABSENT: Councilmember Haubert ABSTAIN: None VA-- Li ' Mayor ATTEST: a,42 C City Clerk Reso No. 69-13,Adopted 6-4-13, Item 4.2 Page 3 of 3 RECORDING REQUESTED BY: CITY OF DUBLIN When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Fee Waived per GC 27383 Space above this line for Recorder's use FIRST AMENDMENT TO AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN-LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS PA 02-062, Shea Homes, Inc., a Delaware corporation. (Tralee Townhomes Project) This First Amendment("Amendment")to the Amended and Restated Affordable Housing Agreement, dated August 16, 2011, for the Tralee Townhomes Project ("Agreement") is entered into this 4th day of June, 2013 ("Effective Date") by and between the City of Dublin, a municipal corporation(the "City"), and Shea Homes, Inc., a Delaware corporation (the "Developer"). Recitals I. Developer is the owner of portions of real property located in the City of Dublin, County of Alameda, State of California generally located at the northwest corner of Dublin Boulevard and Dougherty Road, more particularly described in Exhibit 1 attached hereto and incorporated into this Agreement by reference (the "Property"). 2. Chapter 8.68 of the Dublin Zoning Ordinance ("Ordinance")requires developers of residential projects consisting of 20 units or more to set aside 12.5% of the units in the project as Inclusionary Units (defined below) and to execute and record an affordable housing agreement against the project property prior to the issuance of building permits. 3. Developer's predecessor in interest had entered into the Agreement so as to document its means of complying with the Ordinance. In particular, the Agreement provided —1— Amendment to Affordable Housing Agreement PA 02-062 Tralee Townhomes that Developer's predecessor would satisfy its obligation to produce 13 affordable units on the property by: a. Paying fees in-lieu of construction to satisfy the obligations for 5 units. b. Constructing 3 low-income units and 5 moderate income units, in locations as specified. 4. On June 4, 2013, the City Council approved the Developer's proposed alternate method of complying with the Ordinance. 5. The purpose of this Amendment is to set forth the manner by which Developer will satisfy its inclusionary housing obligations for Inclusionary Units in the Project pursuant to the Ordinance. NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin Municipal Code, conditions 121 & 122 of CC Resolution No. 143-04 and in consideration of the City's approval of the Project, Developer and City for themselves and their respective successors and assigns hereby amend the Agreement as follows: Section 1. Paragraph 2 of the Agreement is amended to read as follows: "2. Developer's Compliance with Affordable Housing Obligation. a. Developer shall provide thirteen(13) Inclusionary Units, allocated as follows: five (5) low-income units and eight(8) moderate-income units; provided, however, Developer may pay fees in lieu of constructing eleven(11)Inclusionary Units, pursuant to Section 3 of this Agreement. b. Developer intends to complete the Project in two phases. The location of the phases is shown on the Diagram of BMR Locations, attached hereto as Exhibit 2. Section 8.68.030 of the Ordinance requires that all Inclusionary Units in a project be constructed concurrently with a project or phase of a project. Developer has proposed, and the City hereby approves, subject to the conditions contained in this paragraph, the following phased schedule for the construction of the Inclusionary Units. Total Low-income Moderate- units units income units Phase I(A) 50 0 (3-bdrms) 2 (3-bdrms) Phase 1(B) 53 0 (3-bdrms) 0 (3-bdrms) Project Total 103" —2— Amendment to Affordable Housing Agreement PA 02-062 Tralee Townhomes Section 2. Paragraph 3 of the Agreement is amended to read as follows: "3. In-Lieu Fees. Developer will satisfy its remaining obligation for eleven (11) Inclusionary Units in Phase I by paying fees in lieu of constructing said units. Accordingly, Developer shall pay in-lieu fees in the amount of$1,177,055 (or $107,005 per unit) to fulfill the obligation to construct eleven(11) of the thirteen (13) Inclusionary Units required by the Ordinance. The entirety of the fees shall have been paid prior to the issuance of any further city approvals for the project, such as occupancy authorizations or building permits, and in no event later than June 21, 2013. Developer and City both acknowledge that as of the date of execution of the First Amendment to the Amended and Restated Agreement, the Developer had previously satisfied the obligation for Phase I(A) in full through delivery of two (2) moderate income units, and had satisfied the obligation for five (5) of the remaining eleven(11) Inclusionary Units in Phase I(B) in January of 2013 when the City received fee in lieu payments totaling $535,025 (or$107,005 per unit)." Section 3. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Section 4. Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. Section 6. Entire Agreement. The Agreement, together with Exhibits 1 through 5, and this Amendment contain the entire understanding between the parties relating to the transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. No provision of this Agreement may be amended,waived, or added except by an instrument in writing signed by the Parties hereto. The exhibits attached hereto are incorporated herein by this reference. Signature Page Follows —3-- Amendment to Affordable Housing Agreement PA 02-062 Tralee Townhomes IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written. CITY OF DUBLIN By:• City Manager Attest: City Clerk SHEA HOMES, INC. a Delaware corporation By: Name: • Its: By: Name: Its: 2081283.3 —4— Amendment to Affordable Housing Agreement PA 02-062 Tralee Townhomes