HomeMy WebLinkAbout7.3 FairwayRnch AffordProj CITY CLERK
File # 430-80
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 17, 2003
SUBJECT: Fairway Ranch Affordable Project
Report Prepared by: Eddie Peabody, Jr., Community Development
Director and Elizabeth H. Silver, City Attorney
ATTACHMENTS: 1. Staff Report dated April 1, 2003 on Fairway Ranch
2. June 9, 2003 Letter from City Attorney to Masood Sohaili
(attorney for Fannie Mae) and Steven Fayne (GMAC
Commercial Corporation)
RECOMMENDATION:~ Receive report or provide direction.
FINANCIAL STATEMENT: See Below
BACKGROUND:
At the February 18, March 4, and April 1 City Council meetings, the City Council conceptually
considered a proposal by the Lin Family to construct a three-phase, 930-unit project in Dublin Ranch
Area B consisting of senior, multi-family and condominium developments with an aggregate total of 589
affordable units designed to satisfy the inclusionary zoning obligation for the Fairway Ranch project site
for the development of up to 2,655 units in the remainder of Dublin Ranch.
The Council discussed the issue of subordination of the City's Affordable Housing Regulatory Agreement
at the April 1, 2003 Council meeting (see page 10 of the April 1 agenda statement (Attachment 1).
The purpose of this agenda item is to update the Council on discussions staff has had with the Lin
Family's representatives and representatives of potential lenders related to the issue of subordination.
Proposed Multi-Family, Senior, and Condominium Housing Projects
It is staff's understanding that the Lin Family proposes to ground lease their land to two limited
partnerships ("Limited Partnerships") which will, respectively, be the developers of the proposed multi-
family project and the proposed senior housing project.
The Lin Family has proposed to construct 304 multi-family rental units, which would include 243 units
available at affordable rents to households of very low, low and moderate income and 322 senior rental
units which would include 294 affordable units. In addition, the third element in a condominium project
which will have 304 for sale units which 52 will be for moderate-income households. To facilitate the
COPIES TO: In-House Distribution
Dublin Ranch
CiDocuments and Settings\jonip~ly Documents~ssistant City Manager\Council Agenda Stuffi(v2) SEB comments subord.june 16.DOC
ITEM NO.
development, the Lin Family has requested a $4.5 million deferred loan at 3% interest and a waiver of
future commercial linkage fees. In addition, the Lin Family has asked the City to approve a "density
bonus" to increase the density on the entire site from 744 units, which is the maximum permitted by the
zoning, to 930 units. State law and the City's Density Bonus Ordinance (DMC chapter 8.52) require that
20% of the units be affordable for 30 years to low income households and 10% of the units be available
for 30 years to very low income households. In addition, the City's Inclusionary Zoning Regulations
require that 12.5% of the units must remain affordable for 55 years with 50% of the units affordable to
households of moderate income (80% to 120% of median income), 20% of the units affordable to low-
income households (50-80% of median income) and 30% of the units affordable to households of very-
low income (below 50%). The Lin Family has proposed deeper targeting than that required by the
ordinance by offering to restrict the low-income units in the project to households earning no more than
60% of the adjusted median income, and the Council has preliminarily indicated this would be a factor in
waiving some of the requirements of the Inclusionary Zoning Regulations (e.g. allowing the affordable
units to be clustered on the Fairway Ranch site instead of being dispersed throughout Dublin Ranch).
The breakdown of affordable units within each project is shown below:
MULTI FAMILY SENIOR HOUSING CONDOMINIUM
PROJECT PROJECT HOUSING PROJECT
Moderate 90 units 131 units 52 units
Very Low 63 units 64 units 0 units
Low 90 units 99 units 0 units
City's Inclusionary Zoning Regulations and Density Bonus Ordinance
Under the City's inclusionary zoning ordinance and its density bonus ordinance, the affordable units must
remain restricted for 55 years and 30 years, respectively. Both ordinances require the developer to enter
into a regulatory agreement which provides that the project will be operated in accordance with the
specified rent and occupancy requirements for the full term. The ordinances each require a regulatory
agreement to be recorded against the land in order to bind the developer's successors in interest for the
full 55 years (for inclusionary units) or 30 years (for density bonus units).
Proposed Financing
The multi-family project and the senior housing project would be separately owned and separately
financed. The Lin Family has indicated that the Limited Partnerships will ask the California Statewide
Communities Development Authority (CSCDA) to submit an application to the California Debt Limit
Allocation Committee (CDLAC) for an allocation of tax-exempt private-activity bonds for each of the
two projects. The Limited Partnerships will also request an allocation of 4% low-income housing tax
credits. Both the bonds and tax credits have their own regulatory agreements to assure continued
affordability. These regulatorY agreements will include affordability restrictions, but they will be
somewhat different from the restrictions in the City's regulatory agreements, and most importantly, the
affordability restrictions in these agreements may terminate in the event of a foreclosure and redemption
of the bonds, and they will be enforceable by entities other than the City. Thus, the City cannot rely on
the affordability restrictions of the bond and tax credit regulatory agreements to ensure affordability or to
enforce the requirements for the full 55-year term required by the City's inclusionary zoning ordinance.
In order to obtain a lower interest rate on the bonds, and thus reduce the debt service for the project, the
Limited Partnerships will seek a "credit enhancement" for the bonds. Given the size of the project and its
development cost, the Lin Family representatives have indicated that credit enhancement will '$nl~ be.
available if the debt instrument (which will likely be a letter of credit) can be sold on the secondary
633505-2 2
market, and that it will be necessary to either obtain credit enhancement directly from Farmie Mae or to
otherwise make the financing conform to the standards that Fannie Mae requires. Staff has been
informed that Fannie Mae's practice with respect to the provision of credit enhancement for bond
issuances of the size anticipated for these projects has been to require subordination of regulatory
agreements that restrict rents unless state or federal law mandates such restrictions.
What is Subordination and what would its Impact be on the Proposed Fairway Ranch Project?
Under the City's Inclusionary Zoning Regulations and the Density Bonus Ordinance, building permits for
the projects cannot be issued unless and until the regulatory agreements required by both ordinances are
recorded against the land. To ensure compliance with the 55-year affordability requirement, staff has
indicated to the Lin Family that the regulatory agreements must be recorded prior to the ground lease and
any deed of trust for construction or permanent financing for the projects.
Both the construction lender and the permanent lender will require the recordation of a deed of trust
against the property to secure the repayment of their loans. If the City's regulatory agreement is recorded
first, the lenders' interests will be "subordinate" to the regulatory agreement, and in the event of
foreclosure, the lender and any subsequent purchaser would take possession of the property subject to the
restrictions imposed by the regulatory agreements.
However, if the lender wants the option, upon foreclosure, to sell the property without the a_[£ordabili~
restrictions, the lender will ask the City to execute and record an agreement subordinating the City's
regulatory agreement to the lender's deed of trust. The effect would be that in the event of foreclosure
and redemption of the bonds, the regulatory agreement would be eliminated. As a result, at a foreclosure
sale, the lender would be able to sell the property for a higher price (and thus recoup its losses on a loan
default) because the purchaser would be able to operate the project at unrestricted market-rate rents.
If the City's affordability restrictions are not subordinate to the lenders, the lenders will still be able to
foreclose and sell the property, but the property will remain subject to the affordability restrictions.
If Fannie Mae concludes that it will provide credit enhancement for the project without requiring
subordination of the City's affordability restrictions, it may want to protect itself from the possibility of a
foreclosure by decreasing the size of the loan it will support. As a result, the developer may incur
increased financing costs or may be required to invest additional equity into the project.
Status of Discussions Between Lin Family and Staff
Staff has had several meetings with the Lin Family's representatives to discuss a number of issues related
to the proposed Fairway Ranch project. In addition, at the request of the Lins' representatives, staff met
with representatives of Fannie Mae and GMAC Commercial Mortgage. It is our understanding that
GMAC is considering providing permanent financing for the project together with Fannie Mae credit
enhancement if the Limited Partnerships receive an allocation of bonds.
Staff has been informed that Fannie Mae will waive its subordination policy if the affordability
restrictions' are required by state law and cannot be waived. The City Attorney has sent an opinion letter
to Fannie Mae and GMAC explaining why the City' s affordability restrictions cannot be waived
(Attachment 2).
Recommendation
This report is presented for informational purposes. Staff and the City's consultant, CSG Advisors, are
available to respond to any questions related to this issue. Staff recommends that the Council receive the
report or provide direction, as appropriate.
633505-2 3 ~ D
CITY C. LERK
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: April 1, 2003
SUBJECT: PA 03-010 Fairway Ranch Affordable Housing Project
Report Prepared by: Eddie Peabody, Jr., Community Development
Director, Libby Silver, City Attorney and Jeri Ram, Planning
Manager
ATTACHMENTS: I. 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
G:~PAfA2003\03-010Xfairway ranch staffrpt4-l-03final. DOC
ITEM NO.
ATTACHMENT
At the February 18 and March 4 City.Council meetings, the City Council conceptually considered a
Proposal by the Lin Family to consln'uct 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-sale 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-sate 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 Staffhas met with the Applicant to clarify the information
needed to complete the City's preliminary evaluation of the proposal. Staff has secured the services ora
specialist in Housing Finance, CSG Advisors. CSG Advisors has been working with Staffin 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 °fthe 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 DublinfWallis 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 at'fecting 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 mount 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% tow 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 I
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 tow-income units (56 X 0.30 = 16.8)
B. 19 low-income units (93 X 0.20 = 18.6); and B. 11 Iow-income units (56 X 0.20 = I 1.2)
'
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 units
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:
~ 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 § 8.52.040; Gov. Code, § 65915, subd. Co).) 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. (§ 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 ofpublic works improvements." (Gov. Code, § 65915, sub& (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 regulatoH incentives or concessions proposed by the Applicant that result in identifiable
cost reductions, which may include
o waiver of certain city fees (§ 8.52.050.C.1);
c> priority processing. (§ 8.52.050.C.2.)
· '(See also Gov. Code, § 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. (§ 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 two incentives, the applicant must propose or agree to Construct both 74 very Iow-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 Homeow~nership
Total Units 629 587
Inclusionary (68%) (63%)
"Excess" Inclusionary 204 162
Units
Inclusi0nary Units:
Family Rental 23.4 243
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 t 52 83 136
3-bedroom 0 0 0_ '56 _0
Total 304 320 304 243 292
Very-Low 127 127
Income
Low Income 341 1.87
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 ofprop°sed 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
Califorrfia 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 ~ro~osal
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 IH 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 tlu'oughout 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
2 t 9 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 Etdertv. Total
Phase I I 1 br 104 0 104
} 2 br 83 0 83
3 br 56 0 56
Subtotal 243 0 243
Phase I
Phase II t br 0 156 156
2 br 0 136 136
· . 3br __QO 0 0
Subtotal 0 292 292
" Phase II
1 br t 04 156 260
2 br 83 136 219
3 br 56 __Q0 56
Both Phases Subtotal 243 292 535
Both
Phases
Income Mix tnclusionary TotaI 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)
~ cost covered by value of
Federal Tax Credits
Moderate 212
(120% of median income) (50%) 273
Total 425 587
Pro rata as market units ' Ail 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 Agreement Provisions
V~rhen 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
8
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 units:
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 mount 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/he 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 than what City
Council has selected for the new Senior Housing Project. In that project, there isa 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 ora "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 eould 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 Ordinance2
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. Prevailin~ Wa~e
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 payingprevailing 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
Ovmers Annexation Area
Dublin Land Company 300 23
Pirm Brothers (Silveria 259 19
Property)
Vargus, et al. 236 / 18
Moeller 11.9~! 9
Mission Peak 120 i 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 t86 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.units 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 Prow'ding Inclusionary 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 oft_he 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 Income 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 otherwise 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
built by the Applicant, instead of the City needing to find sites.
13
STATUS OFSITE DEVELOPMENTREVIEWAPPLICATION: } ~l~ C:~~'~
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 financing 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
· . , ,,. . AGENBA. S~ATEMEN~
~ , ci~ CouNC![i~.EYING. DATE~· 'March 4; 2003
3. Site Development Review Ap:p~cafiOn
~CO~~A~ON: t. Ree~ive'-S~g~ ma ~fieipmd ~o~bie' ho~s~g
' pro~e~ sched~e. ·
2. ~eVle~.e0m~Y Deve'lopmem Work Pm'~m
provide dkecfion on presmt ~ priorities ~d proposed
ch~ges.
3. Dete~e if S~ shoed eo~enCe expected processing of
~e D~a ~Oh ~ordable HOUS~g project when a
compIete appelation is r~eivea.
4. ~mct S~fto re~ at ~e. M~ch 18~ m~g
. prelim'report ~a ad~esses 6~er O~ Co,oil
F~Ci~ STAT~NT: Delay ofce~ 2002-03 Oo~s ~d Objectives ~1 occ~ ifps
· . ~ ~0ject. is ~e ~eSt pfi~fi~. Proposed speoffie CiW f~c~g ~om
~'?;::.': " ~e hct~'io~ Hous~g ~d ~ no~ be ~o~
Applier sUb'ts a f~ propos~ ~d ~c~g pl~ ~d St~h~
c0mpte~ed its evM~fion of'~e pmposM. .
BACKGROUND:
At the City Council meeting of Febrtmry ! 8, 2003, the City CoUncil heard a proposai from a
representative o~ Dubl~ Ranch for a high-density 928-urdt multifamily pr~ject-~Cith a si~'eant
affordable housing component.
The Dublin Ranch representative indicated that in order for this project to be 5nan¢i~y feasible the City
wOUld need to' contribute the equivalent of 6.,786' million dollarS, m the projeet and oomptete the projeet
mfitlement process prior to the deadline of July 16; 2003 for app!ying for a state Ho~ing Bond
Allocatiom In addition, the Applicant requested that the City to waive any further inclusionary zoning
COPILES TO: Ia-House Distribution .
Dul~iin Ranch
m,~i.~'t.-~e, po~!~ie...com~iaI linkage requirements for ~e b~ce 0f Dub~n ~ch
ofp~g p~ev~g w~ge. on ~e p~ojee~ ~,.i~'e 9f.~0~g~!~ ~s~g cream, ~e patenfi~ f0~ ~e
~e ~eHfie 0f ~e p~opOgefi, project on o~ Ci~ projecm.
App~c~f pr6vide~ ~b ~6~fiO'n ~q~ted 'b'y f~i'~:.~' fi~by'Feb~ 2g, 2003):
Pre~~' ev~on 6f~eAp~e~Ps ~mcing fequ~t;'
~e iSS6~.ofaffOrdable houg~g
~e pote~fi~ for ~e development of~°rdable ~g' outside 0f~e'Dubl~ ~ch holdings;
~e pote~al for for-s~e ~ts.
~ addition, Stuff my idenfi~ o~er isles ~at ~e.~po~t for City Co~cfl comiderafion when
ev~uathg ~e to~ package proposed bY ~e
~s S~'Repo~ ~&eSses ~e ~o issues'~t St~h~eated co~d be provided by ~e M~ch 4~ Ci~
Co~eg mee~g ~ follows:
1. ~e Emifiement Process ~d appmx~ate ~e~meS; ~d
2. ~e c~ent Co~~ Developmen$ Dep~ment
well as ~pac~ to wor~oad on oth~ CiW Dep~ents.
1. Entklem~ Process ~d Time~meS for ~oeessing the Lin Proposah
~e project, ~ c~entty-~o~ wo~d req~e ~e CiW m process ~e foBo~ng entitlements:
· SiteDeveIopment Renew Approv~
' Density Bonus ApproV~ .
· Development A~eement
· ~0rdabte Hous~g A~eement
- CiW to [S~ue:bofids
o ~eluaes ~g fin~ci~~ad~ser
o ~oludes ~g bond co--scl
'o. ~clUdeS ~g mder~iter
Gener~lY~ a project of ~s eomple~W f~t-~aCked wo~d t~e ~e CiW approx~mety 8 - 1.2 mon~
~om s~ t.0;.bond isSue~ ~e entffiemehts would be plmed over ~e one-ye~ period. ~ ~s ~smce ~e
A~Sc~t h~ requested ~t ~e Site Development Review Appro~
De~elapment A~eement ~DA) be eomptet~'br::~Ja~g:~;~2O.0g~,0"~). ~e o~er enfitlemenm' coda
inyo~m'aS~ :ve~ea to. ~o~ess SO~ ~n~ OZ
~.ord= to be~ pr°cessNg of = SDK ~d DA yew ~'eeific items ~e n=eded.' A COPY of~e S~R':
Chee~st (~ ~e items checked ~ n~cess~y for a. Predeve!opment SDk
A =~c smdy.mus:l be per. fo~ea by a ciW.aom~t~t. ~s Study p~ovia~s ~e ~o~ation nreded to
prep~0 a. Si~e~t po~on of me DA. ~e ~fie ~ry'..~eS a ~~-6f:'6 weekS, to prep~e
(~eiu&g ~review):
Neg.o~atiom m~f ~e place 0~ the Developme~..Agcemem. ~s NO!~ge~ si~'~t aaention ~om
b0~ ~e Cfw ~or ~d. Ci~ Aaomey. U~o~tefy; ~e timeff~es '6~g:.WNeh ~e Development
A~er~eat ~ be..aegofi~ed ~e place a~g ~e ~ s~ges of~e City B~dget.p~oeess wNeh req~es
a silent occident of ~e CiW M~ger's
aDP' and DA T~.efr~m~
S~has experience N pro~ssNg eomphcated Site Development Renews N ~e Ci~. Some of~e more
complex mulfi-fmily projects ~d associated ~ek~es ~e ~ follows:
7 -
[ To~ ~= G 5(m~ff~Iy p?0ject coming of lOne
[ 1,396"nits in 4 projects) . I · ~ ' '
[ Waterford Apmmem~ .(3 90 ,~its) } g monks
~oth of these projects were processed with expedited ~me~amex; ·
The Table below iS ~ ~ysis of~e request by ~e Apptic~t ~at St~procesS ~e SDK ~d firg
rea&g of~e D~ by 5~y 16, 2003. ~s ~ysis ~smes tMt Staff~li have'a complete sub~ by
M~ch 5, 2003. Addition~ly, ~t ~ Developer ~11 work cooperatively ~ St~d m~e revisions
~equested N ~ expected maker. It sh0~d be noted that there is no room for slipuaae
schedule.
~e Scherzo ~SO ~smes ~at ~e Ci~ Co'oil ~tI delay other N~ priority p~ojec~.N order that
development S~'c~ be'm~signed'~tit AU~ to ~s project., I~ s~Oatd be noted, however, ~at
~min~s~ativc S~ who play a key r01e N ~e' development a~demem pr~on 0f~s project c~ot be
keed up ~om ~e~ n6~ t~ - ~efrfore ~g project ~!1 be
concen~amd a~ention d~Ng ~s time period, such ~ ~e budge~ etc.
FAST PRocESS:L' XSS~ .U~O~'i',~T~ COOPE~ON BY' PARTmSOF ~JOR tSS~S
March S /Pp!i~fit fi'!~ ~}-e'Ap~n0aaon with detailed
site'plans (see filled oat Cheeklist-
A~Shment 3), Sta'~ Tr~e Repo~ (6~
Ho~g
A~e~n~; rou~g~ or application t0' ~mcies'
m~ Be resolved ~d he~gs c6nclUded by above or pmje~ stops
ciw.comcfi on ~ese ~sues.
Jme 17. co~plefi0n 6~ s~rep0n ~d a~eeme~ by
AppHc~t ~.Con~om of Approv~ for
J~e 18 He~g fi6~de (i4~s pfi0~) for
July 8 Pl~ifig Co~ssi0fi he~g on SDK ~d DA
mad~g on DA. t¢~er m CDLAC wi~ Ci~'s commi~ent on
Jffiy 16 Sab~ ofapDr0vals to CDLAC by apPlic~t'
Au~ 5 ~ Ci~ Comcit (2~D he~g on D~vel0pment
I A~eement for proj¢~ .
Au~st 6-t 0 Sub~i~ of D~Ve[°Pmem A~emem to Notice of awed of fi~ohg by CDLAC to
CDLAC by applic:~t . applicmt; ifhot.appmv¢~ project
R~ofU~on of Other C~ Counc~ Concerns that may effect Ti~table:
As norad above reg~g kem~ s~hed~ for ~e. M~ch' 18, 2003,. CiV Co~e~l meeting, ~ere ~e issues
~at mint. ~so be mat. yzed wM~e~'i's be~nping m procesS ~e.SDR ~d DA. ~e resolution of ~ of
~ese isles ~H not ~e-plaee pfi~r to ~e ~e~.'i 8, 2003, CiV ComeH m~g ~d may, ~efore,
delay ~e prQeet beyond ~e schedule limed ~ ~e Table above. ~ese issues ~e Hmed on A~ae~ent 1.
~ese ~ecifie Co,tit conce~ must be mmpteted or ~e process M~ stop ~d ad~tio~ ~e beyond
J~y 16 ~11 be req~ed~ ~e S~ ~iI b~n'g ba.¢k -~ brief ~ys~:'~f ~e,i~sge8 .id0ntified above on'
M~eh '! 8, .g00$.~ ~t is mfieipgt0d ~ fh~re ~1t b~ s.ever~! ~.~fionM ~'~epo~.
key policy ma ~m,i~ issues be~oen April· i 5m ma Mag 19~ so ~aZ.~e Ap~iich~t
~te~ate ~e issues ~ both ~e Hous~g Fin~cing ~d B!.~g approvMs..
it is St~s belief, b~'~d on' p~t mMfi~f~Iy Pmj eels ~f have been processed ~ ~e ci~, ~at
~ikely ~f ~S e~po~ed t~el~00f-¢ monks) as.n~ed ~ ~e Table ab'o~e will be succeedS. It is
St~s e~edence that issues rose w~e processing ~ ~foje'ct ~at cause. ~e delays. However, shoMd'~e
City Co, oil d~dire Staffto m~e ~is project its nmber one pfiofi~; St~fis'prep~ed to be~ ~e
d~g ~e ~6~meS for ~e"L~ ~of~ble.. P. rdj e~. sU~a.~ prepm~on ct me
Co~Cii s~ee ~e Go~s ~d Objectives were app~0ved;
· Deveiope~ ~¢~ted.mdiee~'- ~-i~ ~¢igdes p~0jec~ sub~ea
~Im ~e'n~e~ts), ~ well' ~. p~j'~ ~i ~e mb~ed by app~e~ts
ee~ ~me~ames ~or proeess'~g ruder. State LaW;
, ' ......... '" ~ ~s ~ ~6tudes ke~ doe~enm updated, code e~orcement,
prolog data"to o~e~ dep~enU ~d ag~eieS.-~ojeefio~ for ~AG, C~ ~d v~ous
· Ci~ sm~es - i.e., P~k M~ter Pi~) ~ wdil ~ prep~tio~ of~e next fise~ ye~s Budge.
h order to ~semble a St~tem to work on the L~ ~ordable' Ho~g project~ City S~ff ~ll need to
' ei~er be re~si~ed mmpo~Iy ~om some of~e projeem ~ey ~e e~ently wor~ng on or slow do~ on ·
-. - oth~ PrQeets to ~ee up ~e m Work on ~e proposed ~ord~le prQ eet. B~ed on ~ysis of S~ s
wor~oad ~d ~e ~s of s~lls neces~ to process the proposed app~cafion, St~is recommen~ng
~m ~e work prO,ams for ~e ~llo~g items be pos~on~ mill AU~ (a sehed~e delay of 5 mon~s)
DUbl~ Rm¢h ~ea F
W~Iis Anne~on ~ub~.~eh West)
R~ Or~ee (onsite) ~te~tive~-
· Co~erei~ Ne~ Study (slowed 6o~, not postponed)
tn addition, St~ reeo~ends ~m ~y prQects on A~c~e~t 2 ~at ~cate no pro~ess ~d my new
projecB proposed for ~fiafion by ~e ci~ be.automfie~ly ~s¢oned mill m le~ Au~ 2003. ~ese '
new prQeets Would ~en be placed ~to ~e 'schedule folloMng ~ose items t~t were eider pos~oned by
~s app~cmion or showed no' pro~ess. ~ o~er words, sho~d ~e Ci~ Comcil ~fiate a new prQeet
Smffwould not beg~ work on it mt~ ~ Au~st 2003. ~s wo~d ~clude ~ose
~e FY 2002-2003 Oo~s. ~d Objectives Est, but show n0 pro~ess, such
as well ~ ~ projecm ~at ~e li~ed as not yet ~fimed at ~e md of ~e ~st (A~e~t 2).'
S~ expl0red ~e ~temafive of ~g t~m~ted tern S~f so ~t prQects co~d.proceed ~out
po~o~emmt. However, b~ on ~e shod-tom need ¢ - 5 mon~)..for s~g md ~e ~e~me for
~ .) ~g ~d ~ng, it is no~ a fe~ibie ~temafive.
~ough S~ believes ~at ~s massi~ment ofwor~oM Mll ~e up ~e 8~tem to work on the
' proje~ ~ ~ ex~emely expedited m~er, ~e success of~e obtaining ~ SDR approval by~e Ci~ ~11
.4;p~H~ti.'6~i. ~d fi~ fma~cin~'p~opes~, i~ ~c ~el~ {ud~d'md abo~e.; ~ ~en,as
CONCLUSi6N:
~at r~ae~{~ere ~H be Ci~ ~e!~. c0n~bado~ 6f.m ~Om motor. .
C-~ S~'h~ ~ed.~e i~gues, of e~e~ing ~e pr0ce~sNg of~e appelation m a ~effme ~at is.
ApP!i~mt~ ~ a~fion, ~ ~i. ~e~ Co~ibufion ~d m~ys'~ a ~e~ ~ o~e~ Ci~ iSmes'maY not be
acccptabi'~ t¢ ~e O¢~ of i~i¢i~; ~e ~o*es~g o'f ~s. en~ifi'ement c0~d wa~e' City.' fe~o~ee~ ~at co~d
Mve been sp. em on ot~er' ~r0~e~.
h order f~r ~e Ci.~ m' b'~n work on ~s proj.ee~, o~er ~ pfiofi~ p[oj.~B Mil ~ve.m be p~oned
or slowed do~. ~. addifio~ o~r-proje, e~g ~a~ have not yeI be.~ ~ be ~.~r a ayea w~e me
complete, facu, policy. ~d ~ane~'~piieafi~S. ~e exp!or~d md mM.~.ea so. ~at CiV Comoil e~ m~e
m i~o~ed decision as to whe~er' or not ~ey wish to fi~e~y p~cipme ~ ~s project.
If ~e City ComciI de~e~i.nes ~at ~s project shoed no~ be processed ~ m e~edited m.~er, S~
co~d process k ~der ks n0~ fime~m~s..w~ch would ~ve ~e CiV C6~cfl md S'~.m~re time to
explore ~e issues rela~g t0)~e Proje,t, w~.le, oon~u~g to work on the o~er ~ Pfiofi~ projecm ~at
- were idenfifi~ in. the CiW Co~cfl's Go:~s ~d Obje,fives.
~CO~~ATiON:
It is re~o~ended ~at'~e CiW Co~cil:
I. Receive Smffr~o~ ~d ~ticipated .~or~bi~om~g prQect schedule. .
2. Review Co~iV DeveloPment Dep~en~ ~d provide dkecfion to Mgh priorities.
· 3. Deteme if S~ shoed, co--eh'ce expected processing of~e Dubl~ ~eh Affordable Ho~g
PrQeet when a complem application is received.
4. I~mct S~fto re~ at ~e M~ch 18m mee~g M~ a prelimin~ rePo~ ~at ad&esses o~er City
Comeil con~.
'STAFF EVALUATIONS
· Actual entitlement n~essary for submi~al of financing and Cit~:
· What credit pro¢~d~e (n~'~e~id~-~al;'~M''~esidential)
· Th~ s(/bsYa~'r~a~f~''and credit issues' . '
·smms of~ p~/s~',~d potefitial affoi'd~bl~::='.'.~ts and ~pacts on.other
Hast ~b!~. PmlO~ Owners' and newly annexed areas
· A' a¢fi~ite. ~~ -for each Phase(n~mber,.'i~i~nits, mod/low/very low
totals)
· (Minor) parking'standards
· More family units (3 bedrooms). J~ each:afror:dable category
7~ . Loan/grant/funding ofproposed~:a~or~bI~ ~!n~s by City (over Inclusionary
12.5% requirements, as requeSted'Sy A~Ii~fi: etc.)
· Grading requirements (Are~ F ann"B) to
ATTAC1tMENT 1
community Development Department
City Projects:
Project Tire 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 lV~arch t 8, 2002 City
Plan Council
Open Space Implementati°n High April' 2003 .City CoUncil
Mtg
Scarlet Court SP High Tabled Until.I0/03
Resolve Final boundaries of High Priority (Parks & In progress
Sports Park in Eastern Community Services)
Dublin S.P. area Necessary for other high
priority ptarming projects -
A2 & A3 Development
Agreements cannot, be
approved prior to location
'being determined Cnence 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 I-rAg;h Development of Work
Program in progress
Downtown Monument CIP PrQects (funded). Going tO bid in March,
Project 2003
Intersection ImprOvement CIP Projects (funded) PreparatiOn °fbid docs,
Design '(Lewis & Village
Draft received on 2/26 for.
staff review
F:XAdministrafion~pr°J~cta&A~signfor Counoi134-03.doe
" ATTA~CHMENT 2
Project Title t Goals & Objective Level. Current S~O_~s or
or Initiated After FY ' ' Estimated Completion
2002-200.3 G&O Meeting Date
or 'other Reason
Housing Element Update. Assigned by City Council Received comme~nm from
· HCD on draft Housing
Element- drafting revisions
Senior Housing Project Assigned by CkY'Council 20 hours per week fill July -
time increases
Garage Conversion Assigned by City C0unciI March 18 City CountS1
Heritage Tree Ordinance Assigned by City Council Address comments by Mr.
· David Bcwley- March 18,
2002 City Council Meeting
Initiation Scheduled -for
Transit Corridor GPA 3/4/03
Investigate parking and Medium No progress
access alternatives' for
Village Parkway S.P. Area
gpd~te"CiW's General plan Medi~,m ~ No progress
Develop City Low No progress
Telecommunications Policy
beyond Zoning Ordinance
for Wireless
Communications .
View and Solar Access Low ' No progress'
Ordq~anee
Develop .Ordinance to' limit Low No progress
amount of square footage'
increase on remodel of
existin g l~ouses
Zoning Ordinance Amendments required by No progress
Amendment: Second Unit, State law
Emergency .Shelter &
Densit~ Bonus
Auditing- 6 hours per
CDBG administration week through JUly
-Toll Brothers Affordable 4 hours per week though
RegulaTions (must be July ..
completed to allow unim to
be sold in Area G)
2
D'e;~eloper Initiated Projects:.
Project Title Goals & ObjeCtiVe Levd Cu.rre~t Status or
or Initiated Alter FY 2002 Estimated Completion
- 2003 G&O Meeting or Date
other Reason
'EDPO RMP - part of rural High Development of RFP in
project listed in Stares as progress (developer
EDPO Annexation changed process after :
Proposals were received)
EDPO Land-Use Plan-part High Will begin approximately 6
of total pr~ect listed in months after start of RMP
Status as EDPO Annexation preparation
Pinn Annexation, PD/SDR High Annexation complete,
(referred to as Silveria PD/SDR in presubmittat
g~exation in O&O)
Juvenile Hail, East County High 6 months - 12 months from
Hall of Justice ?roject submittal (currently in
(SDR)... i preapPlication prgceSS)
Juvenile Hall, East County High County Board of
Hall of Justice Project I Supervisors schedule shows
0EISfEIR that they plan to take action
in May, 2003
VglleY Christian Center Assigned by City Counc~ Waiting for issues on ·
GPA Downtown TIP - Admin
draft Final EtR under
review
Bancor Pak & Say. Assigned by City Council Information not provided by
~' projectappticant to be~n work on
Project Title Goals & Objective Level Current Status or
' or Initiated After FY 2002 Estimated Completion
L 2003 G&O Meeting or Date
other Reason
Evaluate D. ublin Rajah Assigned by City Council In progress- March 4 & 18
Affordable Housing - reports to CiW. Council
Project/Proposal (This is
not work on the processing '
of the 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 bc approved
· and construction begun
prior to September, 2003, so
that City remains/n
compliance with MTC
Crmnt requirements
...... 2~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 requiremems
Lennar t 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
comphance with MTC
Grant requirements.
4
P~0'j6ei"Ti~ie. ..... ." : G6~i~'&'.Obj~e~eL~el curr~nt sta~'s or
. . .. or~ed~e~.~.2002. Es~ated Completion
- 2003 :G&O:Me~g or:-- Date
Cemer.(280 ~ts) is req~ed m be approved
prior to Septem~r, 2003, so
· at Ci~ rem~ in'
compli=ce ~ MTC
Toll A2 ~d ~ M~ be approved prior m M progess- Need location
D~velopment A~eem=t ~c is~ce of ~y b~l~g of Spots P~k fled do~.
B=~:%!~.~'~.~ojee~. ..- ] Me.~m ... Applieafon ~eceived in Feb.
Village Shopp~g Comer)
Compt~e P~;~TA Me~m, No.~m~ess
GPA
B~ ~T ~fion ~ prgappiieafion s~ge by
~d residenti~ Projee~ (at 0fi~
west DublM B~T ~mfion)
~gaey PD/SDR (at west .: DeVeloper Delay-
DublM B~T ~tion) ...... ..: prep~ng new sub~
1197 B'fi~ey L~e SD'K Kecenfl~,Snb~d -
~ot 6) crated completion
' approximately 3 mont~
Q~y L~e SDR ~' . ' , '. ~ Developer delay
Honda PD/SDK [ Developer delay
~e=brier Ph~¢ ~. Presub~l-
PD/SDR approximately 6 mon~
he~ng
Mo=~
~scen~eo~
que~o~
by
~pl~enmfion prope~ o~ers (10 ho~s.
pc week)
Lot 7 Black Mo~ SDR Keoenfly sunred,
es~ated completion 3
monks
B~ ~SDK .Developer De'ia3
Project Title ' ' Goals & Objective Level i Current Status or
or Initiated After FY 2002 ·Estimated Completion
- 2003 G&O.Meeting or Date
other Reason' .: .....
' 'M~scelIaneous
CUPslSDRS: Various - depends on
· Tri Valley Marshal devei~per submittals
Arts
· Dublin Theatre.
· Parkway Autobody
shop ..
· Volkswag~'n
MSP/SDR.
· BMW MSP/SDK
· Dance StUdio CUP -i
· . Jaliscos SDR ·
· CasaOrozco SDR "
· Gallucci Collision
Center CUP/SDK
Other Ongoing Tasks:
Project/Tasks t Status/Completion
CMA - Document · Lett~ sent on Tier 2
compi~ance with Tier 1 and requirements, quarterly Tier
Tier 2 requirements 1 compliance report in
progress, Annual land use
survey completed
Projectirms for budget In progress ,,
Budget preparation May; 2003
General Plan Circulation Need to amend for No progress
Map consistency with Land Use
Map
Downtown .Specific Plans Document does not No progress
Integrate Amendments currently reflect
amendments
Update zoning Maps for in progress
t consistency with General
~ Plan' and current zoning
or,inch ce , ,
~Update EDSP ~ Text completed - maps in
progress
Co(~e Enforcement t Ongoing
6
·.Project/T~ks . I .......... Status/Completion
Implementation of aPproved. ' Ongoing
projects such as plan checks
and'field checks for Area G,
Armstrong Garden Center,
Areas A, Biaok Mountain;
etc.
Counter and P~ones ..... Ongoing
PreparatiOn of Ongoing
environmental documents
for other CityProjecSs -
Park Master Plan
Environmental Doc -
currentl, y in progress
Projects Not Yet Submitted:
1. Moller GPA/SPA Annexation-.Approximate submittal March - April,
2003
2; Dimanto GPA - March '18t~ 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 Project-.If approved byCity Council on March 18, 2003
6. Dublin Ranch Detention Basin SDR - expected after 404 permit
approval.
7. Bank of America a¢ Koll Center
. · plauner Date
· ~ OF.DUBLIN
~R~ -~?!~OA~QN SL~M~TTAL ~Q~S
FOE
SITE DEVELO.PME'NT REVI'E~' (SDR)
~ ffordable HO.usin~ ':
Applic~t Nme: Phone: · ·
....
S~~ QmCK
~Q~ED C~CK ~E OF S~T~ ~Q~
Comple~d ~pUc~fion Fora ~c~ding ~ i~s~;~ ~((~:~ of A~t(s) md Pro~
~ AppUcafion F~ and Process~g.De~osit
214199 ATTAC~NT 3
Completed Processln~ Fee Am'cement Fo.tm
Written .Statement (1 ~py) des~r~be the reqUested u~o'in detz~l.'.' ~d g~ve reaSOns Why the
app~iva~ion should b~ approved. Provide facet informa~on suppqr~/~g th~ following:
a_.., What tYPe of business, activity or use are you proposing?
~ ' How'_m_s,:y 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 neg:~tive
effect on the health or safety of per~0us residing or w. orking in the vicinity, or
be de~'.~enta! to the public health, safety or g .en. eral welfare.
(~) Describe how the design of the p'roj ect inctu .di~.g s~te layout, structures, vehicular access,
eirculafion and parking etc. wilt provide a desirable environment for the future
development.
(~) Is the site physically suitable for the type and intensity of development proposed?
(~' Describe how.the proposed development may impact views.
(~) Describe the physical characteristics of the site ineltrding existing slopes and. topographic
. features.
~) Describe the architectural design/theme o3 the developmentineludlng character, scale
and quality of the desi~, and expi'ain how fl~e Project.will relate to and be compatible
with the existing site and the character of adjacent buildings, neighborhoods and uses.
~) Describe how the landscape features h~ve been desired 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 Depar~en~.
of Community Developmen0.
Preliminary. Title ReoortfPropertv Profile (1 copy) to document ownership, prepozcd wi~ three
mon~ of applica~ion submittal
Public. Notice Materials:
~. P~eprodu~ed c0. py o~'Alameda Co. ~Umy Ass.e~Sor's Parco[ M~p showing the project parcel(s)
ouClh~ed in r~[ and ~ 300-foot radius in blue dr~w~, fi'om the per]meter of~e parcel,s),
b. .Two sets o£rno~l~r~g Iabels;.one set addressed to ~rent property owners by ~c; and
another set addressed to all current oc~upants/te~z, nts on the prooerfies cont~g'aous to
project site. 'The labels need to show tho addresses and Assessor's Parcel Number's within
300 feet o£th¢ parcel(s) typed 0~ 8~" X-I~" .~h~et labels. (ExampIe of how these labels
should be typed:)
J. Doe (Proper0y owner) Occupant/Tenant
APN: 941-042-0003 A~N:. 941-012~-34~6
1010 Main Street 1010 Dublin Bird.
Anytown,. CA 91234 . D~bli~n, CA 94568
c. Plain envelopes (1 set) 4~"xg~A'' wi~ first class postage (stamps only, metered mail wili
not be accepted, no r~varn address) with labels affixed on envelgp..~.
~:Leorm~pp su~oreq/s~
~ ,
~ (t ~opy) showing the sim in mtatio~ to n~est ~ross ~.
site Pla~ (10 copi~) ~w~ to I" = 20' sc~e
S~O. ~e p!~n~ mint ~ ~ ~d ~ by a ~c~ed ci~ ~, ~or~"~ or
d~si~er. ~e P~ ~ ~p~c~ty md ~rs~bly des~be ~e ~pos~ ~ p~ mu~$
show ~e
a. ~o~ ~ow ~
- p~ ~o (i.e. p~g spac~lO00 sq.
. p~g pro~de~
- ~ proje~
- n~ber ofp~g spa~es ~r ~w (~ca~e comp~ ~accs
- ~ic~ p~ s~ ~e~iom, .
- p~g ~les
- ~mce ~v~
'~ ~e~ b~k-~ ~i~
- s~ing d~
e. Loa~rec~g ~:
- ~k 1ooa~on ~ ~k a~e~
- po~e eoehere
f. ~ea~ se~aek ~g d~o~ of
- ~veways,
. ~ ~gs,
- ~o~g ~,
- ~ca~ ~ps,
- ~pa~,
. pedes~
- ~C~,
- si~gc, '
- U~ CO~dO~ On site; .
~cado~ setb~'~d dlme~om of aH e~s~g ~d ~opos~ s~, p~, ~veways,
g.
~, l~cape me~, fmcs,
~ -.
~ - sim ~ea ~oss.~d neq e~h floor ~ mini)
~ - floor ~ Of ~ b~ng~ md ~,
J - lot ~ cov~ge'(~w~ ~d pr~esed),
~ occup~u, e~loye~ of~e~ work s~ or s~ ~et of ~s~blyfloor
~ ~re~a~ Gr~ng~rainage ~1~ (10 ~ies, folded, 9" x 1F' ~ ~e) sho~g:
~ ~s~ ~o~hy (~h~ ~e) - one-foot ~t~ (sl~ ~: 1 or ~
~ b. . ~opos~ or ~-igh ~e conm~ (so~d ~) -.one-foot ~
c. Cross-seo~o~ of si~ ~h~e topogr~c o~gcs ~o~ 5%
d. D~on ~d pa~ of ~o o% ~ ~d off~e sffe (~ca~ ~ propos~ ~d
~ catchb~ ~d pipe)
~ ?~ ele~6om for ~p~ces (Le. ~go~or, g~e~, e~.)
~ F~sh floor
. ~ ~c S~ce r°U~g ~om e~g supply to b~g (~Clu~g poles, ~y
(min. 5~'3, ~ct~s (n~ ~d-s~) etc.
b. T~fo~, ge~tor, propme ~ck ~cl~ (~o~ ~om ~i~ mom)
c. G~ s~ce
& Wa~ s~, location ~d s~e ~c1~g, dotage ~ter ~ meter, b~kflow ~even~
e. S~ S~w~ lo~afion md s~e ~e~g, manhot~ ~d ete~outs (100' O.C.)
f, Tel~hone se~ce
: g. ~~ (e~g ~d proposed)
~ k CH~e~ ~oss~gs c~cuta~ for cle~e (~c~em~ ~
~ . t. Stub out loca~ for ~ Pa&, ~ ~y
m. F~h floor
-4-
. c.,rc . o, . .....
~ ..praBmlna~ L~fls~u~g Pi~'.'(iO o~i~, fol~ 9" x 11 ~ s~e) T~ p~ s~ bo
~ Oo~t~t ~ ~e si~o pl~ ~ ~o~tec~ p~ for ~e p~posed project. ~e p~ ~
~o~a~ ole=ty ~e o~o~r~ ~s~g ~d site c~pa~b~W of ~e proposed ~&cap~g
a D~ ~yout ~o~ ~e d~d ~p~ pro~ ~ ~ o~lo~on of ~opos~
lm&cap~g ~ ~&c~e,
(~ciu~g ~ov¢ ~ udhW s~c~es ~h as PO~ ~fo~ers).
c. P~cent ofl~cap~g (~d how it ~ ~oca~d)
e. ~ p~sed for o~door ~e
g. Li~g pl~ ~l~g p~ level sec~W ~d pg~g lot
B~d~g Ele~o~. (10 c~i~) ~y ~e~ioned ~d ~ to a 1/B" ~ 1' scMe of ~ sid~ of
~ proposed s~c~es. El~a~ m~t ~cl~e bu~g ~t~, colo~, ~h ~clo~es,
.... Colored B~g El~a~on~. (1 s~, ~ siz~ ~d'mo~t~)
........ Color a~d Mate~M Pale~ (1 set) ~cat~g ~e proposed ~hes of ~ exte~or
(~cl~g roof ~d ~) ~d color s~pl~ ofp~t or ~~ed p~duc~ to be app~ed on
b~d~g ext~or (~clu~g ~c~ ~d ~).
S~le Model of Proi~t A model ~ mq~ed ~y ff ~e propos~ k for ~o or mom
b~gs.: ~e sc~ model s~t bc sub~ atl~t 2 wee~ p~or ~ a decision berg ~e by
~¢ Comm~W DeveI~t D~ector or ~ one mon~ of a p~Iic he~. (ch~k ~pl~er
for ad~6on~ ~o~6on)
Floor P~ns (10 c~i~) ~y d~ioned, ~ to scMe, 'sho~g exm~o~ doors md w~dows,
~ ~ys, m~ba~c~ roo~ ~d ~ys (fol&d, 9" x 11", m~ s~e).
R~f Pl~ (10 ~i~)' ~ to sc~e ~o~ ~ ~on of slope of roof ei~ ~d l~a~on of
~ mec~c~ eq~P~q &cra ~d v~ts (fot~d, 9" x i 1" ~ s~e). :- ..
Reduced Copies (10 copies, 11''~ x 17") of~chpl~. "
Traffic Data specie ~ ~e site or P~pos~ pmje~ W~c genemdon m~s, pe~ ho~ po~,
~' ~on ~d similg ~o~ (~h~* ~ ~eck ~ Pub~ Wo~ D~t. for ~c~
~o~o~ )
D~ent
g:~~s&
USE ON/,Y ~ ~ ~
Planner ,, ~ .Date ~
· Thc Quick Check has d~fmmlnocl.that the application submitIaI is incomplete and cannot be accepted.
Tho Qui~k Che~k has determined that the application appears to.contain theltems requir.ed by this. checklist
(~omplet~ness as defined by Sectio~ 65943 will by determi.ed within 30 days of application) and processing will be~in.
For assistance or questions regarding this form, please contact: PLAtNNING DEPARTM~ENT STAFF, CITY OF DUBLIN,
100 CMC PLAZA, DUBLIN, CA ~4568; (925') 8:33-6610.
g:~'o~ppsubr~I/sdr
lvla~h 25, 2003 ....
Page 1
Date: March 25, 2003
Re: Fairway Ranch Affordable Housing Proposal - City of Dublin
The purpose of this memorandum is to ~_~rnarize the currera Fairway Ranch Affordable
Housing Proposal in the City of'Dublin and to outline the applicant's proposal with regard
to a variety Of'OUtStandlng issues. This memorandum is the result of numerous discussions
with the Staff and the perceived direction of City Counet~ from prior meetings, We. have
made this proposal in o?der to take advantage of existing ~ opportunities 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 gods by increasing the production of
residential traits affordable by households of very low, tow and moderate income. It is
important to emphasize that the commitment 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 true that the proposal may
result in smaller 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 wilt
result in substantially more ur~ts 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 requirements of the inclusionary zoning
regulations pursuant to Se~ion 8.68.040E 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 t 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 ehar~ 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 from 341 to 187 (they are s'tmilarty divided roughly eqUally between the
$.25d~c
-Ma~h 2~,~. 2003.
Page 2 of 7
family rental and senior projects). The number of moderate units has been increased f~om
161 to 273 units with 90 of those units in the fan~ 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 moder~te category. There have been a number of other design ch_auges to go
along with these modifications in order to accommodate a broader mix of units as between
one-, two-, and thre~-bedroom units. Specifically, at the 'City's reqneSt, we have
added 56 affordable three-bedroom maits, whereas our original proposal h2d 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 poteritiat affordability mix) and the City
ordinance assuming application of the City's ordinance at 12.5% and 7.5%;. As cma be
seen, the projeet will' exceed the maximum-reqnirement~ of the City's ordinance ia
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 inclusionary units would be built at the rate of 7.5% and
that fees would be paid ha lieu of the rem_a, inlng 5% units. This, I believe, emphasizes the
significance of this proposal in terms of producing actual affordable traits for the City,
The produaion 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 t° 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/'or assistance in the application for bond' allocations this year and a $4.5 rn/llion
loan which would be paid back with interest over six years.
· stye.tare, of Citr Loan
t. Two Ioaaq 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 t family project and a $2.25 million loan for Phase 2 senior project.
2. The loan term would be 6 years, commencing at the dosing of the cons'auction
loan for each project.
3. The loan will accrue interest at a fixed, simple interest rate o/'3% untg repayment.
4. Prineipat and aeemed interest on the loan will be repaid in three equal installments,
with 1/3 repaid by the end elyear 4, 1/3 repaid by the end of year 5, and i/3 repaid
by the end of year 6. This repayment, schedule avoids a large, sudden cash eat1 on
the project (which could upset the financial stability of the project, and would be
unacceptable 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 fi.om the property.
3.25doe
DR- 26.4
Fainvay Ranch A~ordable- Housing Pl~uosal - City of Dublin -
lvim'ch 25, 2003
5. The loan would be secured by a deed of trust on a parc~I(s) of Commercial land in
Dublin Ranch that has a cui'ren~ market equity value (as undeveloped ~d) 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 mast on the collateral property to a lender's first deed of
mist, provided the net value of the collateral is at least 3 times the aggregate
amount of the City loan and lender's debt.
nnoact of, SB 97s
1. If both the Phase 1. family project and Phase 2 senior project receive tax-exempt
bead allocations from CDLAC in the third round of 200~ (with applications due
July 16, 2003), both projects would qualify for an exemption from the payment of
prevailing wages under the affordable housing exemption in SB 975. The bonds
would close by Deemnber 31,. 2003 and the both projects would commence
construction in the' first quarter of 2004, subject to the re~ipt 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 CMifomia Housing and Community
Development Multifamity Housing Program loan 0VIHP. loan) to cover the
additional costs imposed by the payment of prevailing wages.
bl The construction of the second phase, and the timing for the funding of 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 proje0t by as
much as 3 years.
c, If one of the two projects does not receive a bond allocation, the City of
Dublin would lose that bond allouation to an affordable multifamily housing
project in another city.
3. If neither of the two projects receives a bond allooation, we would abandon the
current' proposal and comply with the minimum requirements set forth in the City
of Dublin's Iudusionary Zoning Ordinance. We would not be able to provide the
number of affordable units nor the depth of affordability proposed here.. The
timing of'the development of the affordable units would be extended throughout
the time period required for the build out Dublin Ranch (approximately ? to 15
years). As a result, fewer affordable units would actually be built (because we
would build 7 ~ % of'the 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
following:
3.25do~
DR- 26.4 .
Fairway Ranch Affordable Ho,-~. 'rig Proposal - City of Dublin
March. 25, 2003
Pag~ ¢ of 7
a. Pacific Union "Apartments is currently oonstmoting two mixed income
mulfif~_mity rental apanme~ projects (112 and 206 units,.rcspectively) in
Santa Cruz. Payment of prevailing wages on these projects in accordance
with SB 975, as estimated by the general conlxactors (Sitveri Construction
and Bogart Construction, respectively), would have added t8% to the hard
construction costs. .
b. Pacific Union Apartments is currently entitling an appmximately 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%.
¢. Klein Financial Corporation, in conjunction with Callahan Property
Company and Protech Development Corporation, are currently
constra~ling 250 units of mixed income multifamity rental hous'mg for
seniors that will provide congregate care and ass'reed living services, The
general contr~tor (Sundt Constru~n) es6mates that payment of
prevailing wages would increase construction costs by approximately 10%.
d. USA Properties, a Koseville-based commercial d~veloper, estimates that
payment of prevailing wages would increase construction costs on its
multifamily affordable rental housing projects by 20°/6,
e. Mid-Peninsula Housing Coalition, a Redwood City-based nonprofit
housing developer, estimates that payment of prevailing wages would
increase the constm~ion costs of a 71-unit 100% affordable multifamily
rental housing project in Santa Clara by 27%.
f. Community Housing Opportunities 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 mulfifamily
rental housing project in Winters (west of Davis).
g. Lisa Bates, Director of Community D~velopment for th~ Sacramento
Hous'mg and Redevelopment Agency, expects payment of prevailing wages
to ino~ase const-mction costs for afford_able multifamily rental hous'mg
proj~,cts by I5% to 30%.
h. Public agencies estimate that payment of prevailing wage~ will increase the
costs of providing affordable housing by 20% to 30°,4 (Floor
California State Assooiation of Counties, League of C_~tifornia Cities).
3,2~do~
DR- 26.4
Fairway ~eh Affordable Ho~,~ng Proposal - City o/Dublin
Ma~ch 25, 2003
Page 5 of 7
~ro,ie~ Te~m
The project te~-n combines expertise in all phases .of the developmen~, financing and
opexations of mutti~_mily 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 seaxior projects are descnq:n~d below.
A Lin Family Entity and Charter Properties will each own one of the two mulfifamily
remal projects.
,l~mes Tong and Martin W. Inderbitzen will sot 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 Finsncisl Corporation will provide development and financial consulting services
for both projects. Klein. Financial has provided, development and. 6n~ncial advisory
services to private sector developers of multifamitY 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 tall!ion in
bond, tax credit and/or equity financing for approxi~aately 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 multifanfily property. A summary of representative
examples of these properties is attached.
Navy Bsnvard of Van Tilb'urg~ Banvard'& Soderbergh~ will be the Projea 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 matexials that will be an asset to the City over the life of
the projects. This ~ 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 t° the project design
and unit mix based on their analyses of the demand for and absorption rates for the
projects~ 1Viike Conion of ESG is preparing the initial market study for the Develope~ to
verify tho demand for se~iior units.
Bovis Lend Lease or its equivalent will be the construction manager for both projects.
Bovis will solicit and re.view bids.from §enexal contractors, to constru~ the projects,
3.25doe
DR - 26.4
Fairway Ranch Affordable Hou.~ng Proposal - City of Dublin
lynch 25,' 2003
Page 6 of 7
oversee the general contractors' and architect's work, and work with the Developer to
ensure that Lhe projeCtS are built to the Sl~ecifications and delivered on ~me and within
budget. The construction contracts will guaranty a maximum price for the construction of'
each project. The payment and performan, ce bonds required by the construction lender
and tax credit investor for each project will ensure that construction of eaCh project is
completed and. that ttmds are ava~able for completio~ Boris ranks as one of the world's
leading project aud construction management companies, is the third largest construction
manager in the United States and is a premier builder of'luxury condominh_~m~ apartment
buildings and senior residential projects in the United States. It employs 7,500 employe~s
world-wide, and operates in 38 countries spa~ing six continents. Approximately 30% of
Boris' current and past clients are in the Fortune 500 list of the world's leading
businesses. Bovis is currently working with the Developer aud the City on the
cons~on of the Dublin Ranch fire
A general contractor experienced in the consU'uction of the subject project types with
substantial tlnancial capaCity will be retained for these projects. We are attempting to
iden~y a general contractor a~ early in the process as possible.
Legacy l~roperties or its equivalent w~ 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 h'~luc~nce
project design. Upon completion of' the projects, Legacy will rent the unit~ manage the
units and have primary responst~ility for compliance with the City's, bond and tax credit
affordability requirements. Legacy has sp .eciSc 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 currency
manages in excess of 33,000 apartments.
A~ affiliate of l~arsmount Financial Group wilt be the tax credit investor in both
projects. Paramount will raise the' tax credit equity to be invested in the project
(approxima~ly ~0% of which will be invested during the construction of the projects, with
the balance invested at aud. shortly after achievement of' stabilized operations and
conversion to permanent financing), monitor the construction of the projects, and oversee
the projects' compliance with the Cky's, bond and ~ax credit affordability requirements.
Investing tax credit .equity in mult~family affordable housing projects is Paramount's core
business. Because Paramount will have a substantial invc~anent in these projects
(approximately SI5,300,000 in aggregate) and has long-standing relationships with ks
investors, it has extremely strong incentives to assure that consm~ction of' the projects is
completed, the proje.~ts are leased-up according tO schedule, and the projects comply with
the affordability re, fictions. Paramount has funded more than $100,000,000 o£ equity to
Klein Financial Corporation-sponsored (as the Cteveloper or consultant) projects. It is one
of' the nation's largest tax credit syndicators, placing over $400,000,000 in equity
~nvestmem's last year alone. Paramount has more than $1.7 billion c~' real estate assc~s
under management, inclnding more than 24,000 apartment units. Paramount's
3.25d~
D~ - 26.4 '
March 25, 2003 ..
Page 7 of 7
e~xtraordinarily successful record in affordable housing led to GMAC's Commercial
Division acquiring the company, approximately two years ago. tt now operates as a
.subsidiary of GMAC Commercial Holding Company.
Novogradac and Company will be the independent CP-& 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 management .personnel, as neede~t, 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 development team will be prepared and delivered'to the City
within the next two weeks.
3.25do~
DR - '2
Elizabeth X. Sliver
~y ~t ~w
VIA FACSIBILE & U.S. BAIL'
'March 24, 2003
February 18, 2003 ProPosal
Phase I Phase H Phase lTl
Affordability Family Senior Family Total Affordable City Ordinance
Current Proposal Based On Staff Discussions
Phase I Phase II Phase m
Affordability Family Senior Condo Total Affordable City Ordinance
' ~ · 12.5% . 7.
Robert N. Klein
Development History Summary
Repre~ent_n_t!ve Exe._mp!e~ of __~._n_jor Res!dentla! Projects
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 u.nit 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.
1
ATTAC N1ENT * 3
1993 to 1995, development of 188 townhouse and stacked flat
apartment project in Orange 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 Cotton, 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
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 capital required of the Holly Street
Development Corporation partner, in the Pasadena, California, ' project.
DUBLIN RANCH
ZONING AND INCLUSIONARY
ORDINANCE REq}UIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL
Total Units
Units permitted in Phases I, II 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~ lf,,,N,.0 Deusity Bonus
Inclusionary requirement for Dublin 1.2.5% 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 (162 "excess" units) (162 "excess" units)
density bonus units not subject to
12.5% inclus[onary 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
G:\PA#~2003\03-010\SlatcrZoning 1 .doc
DUBLIN RANCH
ZONING AND INC'LUSIONARY
ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL
Assistance From City
Processing Normal Expedited processing Expedited processing
Financial assistance for providing None * $2.25 million loan for 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)
~Vaiver 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, p!u~
different bedroom sizes and mix of
units
G:\PA#k2003\03 -010\SlaterZoning 1 .doc
DUBLIN RANCH
ZONING AND INCLUSIONARY
ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL
Mix of Inclusionarg/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 1-bedroom
2 l 9 2-bedroom
56 3-bedroom
535
Family/Elderly No requirement Rental Units Same
(other than bedroom size) 5.5% Elderly
45% Family
Phase t Families Elderly,, Total
I br 104 0 104
2 br 83 0 83
3 br 56 ~ 56
Subtotal 243 0 243
Phase I
Phase II 1 br 0 · 156 156
2 br 0 136 136
3 bt' .__Q _0_ 0
Subtotal 0 292 292
Phase II
G:LPA#~003\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 __q0 56
Subtotal 243 292 535
Both
Phases
Key Agreement 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 Inchsionary 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
-4- ~ :~'
G:2'A#~2003\03-010\SlatcrZoning [ .doc ~'?~2"'
DUBLIN RAN'CH
ZONING AND INCLUSIONARY
ORDINANCE REQUIRMENTS DEVELOPER PROPOSAL STAFF PROPOSAL
Income Mix Inclusionary Density Total~ 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
212 units 0 213
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
Tinning 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 {he Inclusionary requirement and requested 2 concessions
under the Bensity 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.
G:\PA#~2003\03-0 t 0\SlaterZoning l'.doe
Elizabeth H. Silver
Attorney at Law
510,808.2000
June 9, 2003
Masood. Sohaili, Esq.
O'Melveny & Myers
400 South Hope Street
Los Angeles, CA 90071-2899
Steven Fayne, Managing Director
GMAC Commercial Mortgage
550 California Street, 12th Floor
San Francisco, CA 94104
RE: Proposed Fairway Ranch Multi-family and Senior Housing Project in City of Dublin
Dear Mr. Sohaii and Mr. Fayne,
As you will recall, we met on May 29 with representatives of the Lin Family, Klein Financial Corporation and
the City of Dublin to discuss the Lin Family's proposed Fairway Ranch project and the financing for that
project, in particular.
It is the City's understanding that the Lin Family will ground lease their land to two limited partnerships
("Limited Partnerships") which will, respectively, be the developers of the proposed multi-family project and
the proposed senior housing project. The Lin Family has proposed 304 multi-family rental units, which
would include 243 units available at affordable rents to households of very low, Iow and moderate income
pursuant to the City's Inclusionary Zoning Regulations (Dublin Municipal Code ("DMC"), § 8.68.030.A.). The
senior housing project is proposed to include 322 multi-family rental units which would include 292 units
available at affordable rents to households of very Iow, Iow and moderate income pursuant to the
Inclusionary Zoning Regulations. In addition, the Lin Family has asked the City to approve a "density
bonus" to increase the density on the entire site from 744 units, which is the maximum permitted by the
zoning, to 930 units. The breakdown of affordable units within each project is shown below:
MULTI FAMILY PROJECT SENIOR HOUSING PROJECT
Very Low 63 units 64 units
Low 90 units 97 units
Very-low income is defined by the City's lnclusionary Zoning Regulations as 50% or less of adjusted median
income. Low income is defined as 50% to 80% of the adjusted median income. Rents shall not exceed
30% of maximum income level, adjusted for household size. (Dublin Municipal Code §8.68:020.) The Lin
Family has proposed, however, to define Iow income levels to 60% or below the adjusted median income,
rather than 50% to 80% as part of their application.
ATTACHMENT
Masood Sohaili, Esq,
Steven Fayne, Managing Director
June 9, 2003
Page 2
The Lin Family has indicated that the Limited Partnerships will ask the California Statewide Communities
Development Authority to submit an application to the California Debt Limit Allocation Committee for an
allocation of tax-exempt private-activity bonds for each of the two projects.
Under the City of Dublin's inclusionary zoning ordinance and its density bonus ordinance, both discussed
below, the affordable units must remain restricted for 55 years and 30 years, respectively. You have
indicated that Fannie Mae's practice with respect to the provision of credit enhancement for bond issuances
of the size anticipated for these projects has been to require subordination of regulatory agreements that
restrict rents unless state or federal law mandates such restrictions.
The City has explained to the Lin Family that the proposed affordable units must remain restricted for 55
years. The purpose of this letter is to provide you with my opinion regarding the legal requirements within
the City of Dublin.
I. ISSUE
A. Does state law require that inclusionary units constructed in the City of Dublin be
maintained as affordable units for a period of 55 years?
B. Does state law require that units constructed within the City of Dublin to obtain a density
bonus be maintained as affordable units for a pedod of 30 years?
!1. CONCLUSION
A. Yes. The requirements in the City's Inctusionary Zoning Regulations requiring affordability
restrictions for a 55-year period are requirements of state law.
B. ' Yes. State law requires that the City "ensure" that the units for which a density bonus is
granted remain affordable for at least 30 years.
II!. DISCUSSION
A. The Requirements in the City's Inclusionary Zoning Regulations that Subject
Inclusionary Units to Affordabilit¥ Restrictions for a 55-year Period are Requirements
of State Law
1. Summary of Inclusionary Zoning Regulations
The City's Inclusionary Zoning Regulations are zoning requirements that apply to all residential projects over
20 units. (Dublin Municipal Code ("DMC"), § 8.68.030.A.) They generally require that 12.5% of the units
constructed be affordable units. (DMC, § 8.68.030.A.) Of the affordable units,
a. 30% must be affordable to very Iow-income households;
b. 20% must be affordable to Iow-income households; and
632930-3
Masood Sohaili, Esq.
Steven Fayne, Managing Director
June 9, 2003
Page 3
c. 50% must be affordable to moderate-income households.
(DMC, § 8.68.030.B.) Conditions of approval on the residential project must require the execution of an
agreement imposing appropriate resale restrictions or rental restrictions on the affordable units. (DMC, §
8.68.030.C; see also DMC, § 8.68.050.A [requiring agreement before issuance of building permits].) Those
resale controls and rental restrictions require that affordable units be affordable to very Iow-, Iow-, or
moderate-income households, as applicable, for a period of not less than 55 years. (DMC, § 8.68.030.E.)
With respect to rental units, rent restrictions are imposed in the form of a regulatory agreement recorded
against the applicable property. (DMC, § 8.68.030.E.)
2. The Inclusionary Zoning Regulations Implement State Law
The inclusionary zoning regulations are derived from and imposed to implement the obligations imposed on
cities by California statutes relating to the production of affordable housing. State law requires each City to
adopt a General Plan. (Gov. Code, § 65300.) All zoning regulations and other land-use regulations must be
consistent with the general plan. (See Gov. Code, § 65860.) The Housing Element is among the elements
of the general plan required by state law. (See Gov. Code, § 65302, subd. (c).)
The statutorily mandated Housing Element must contain (Gov. Code, § 65583) the following:
a. An assessment of housing needs and inventory of constraints and resources
relevant to meeting those needs. (subd. (a).)
b. A statement of community's goals, quantified objectives, and policies relative to
the maintenance, preservation, improvement, and development of housing.
(subd. (b).)
c. A five-year schedule of actions the city is undertaking or intends to undertake
to implement the policies and achieve the goals and objectives of the housing
element through the administration of land use and development controls.
(subd. (c).)
Each jurisdictions' share of the regional housing needs is determined by the Council of Governments, in
Dublin's case the Association of Bay Area Governments. (See Gov. Code, § 65584, subd. (a).) The "need"
for each jurisdiction is broken down into the various income categories: very iow-, Iow-, moderate-, and
above moderate-income. The schedule of actions to implement the goals and objectives of the housing
element requires the City to make adequate provision for the housing needs of ail economic segments of the
community through various means. (See Gov. Code, § 65583, subds. (c)(1)-(c)(6).)
Furthermore, the policy statements preceding the Housing Element Law direct cities to use their powers to
create housing for all segments of the community. The provision states that cities "have a responsibility to
use the powers vested in them to make adequate provision for the housing needs of all segments of the
community." (Gov. Code, § 65580.)
632930-3
Masood Sohaili, Esq.
Steven Fayne, Managing Director
June 9, 2003
Page 4
Following from this statutory requirement to exercise its powers to create housing for all segments of the
community, in the 1990 Housing Element the City set forth a requirement that the City adopt and implement
an inclusionary zoning ordinance. (pp. 46-47.) Subsequently, the City adopted the Inclusionary Zoning
Regulations as required by the 1990 Housing Element. In 2002, the City Council amended the Inclusionary
Zoning Regulations, but did not change the basic requirements. The amendment included increasing the
percentage of required affordable units and prohibiting the option of payment of an in lieu fee for 60% of the
required affordable units. The City's recently adopted 2002 Housing Element continues the requirement that
the City require development of lower-income housing through the implementation of an inclusionary
housing ordinance. (See 2002 Housing Element, p. 27-28 [Policy 3, Program B.3.1].)
The Inclusionary Zoning Regulations require all affordable units to be restricted for 55 years through a
regulatory agreement (DMC §8.68.030.C, 8.68.050). This provision implements §65583(b)'s requirement
that the city adopt policies for the maintenance of affordable housing and §65583(c)'s requirement that the
city take actions to implement such policies through land use and development controls. Although it is
possible that the City Council could amend the Inclusionary Zoning Regulations to eliminate the requirement
of a regulatory agreement as the action that implements the policy of maintaining affordable units, the City
Council would have to replace the requirement of a regulatory agreement with some otheriegally-binding
mechanism. One such optional mechanism could be a requirement that conditions, covenants and
restrictions be recorded against the property to assure that the affordable units remain affordable for the
required 55 years.
3. The City's Inclusionary Zoning Regulations Have the Force and Effect of State Law
Within the City of Dublin
California's Constitution broadly delegates the power to regulate to cities. The Constitution provides:
A... city may make and enforce within its limits all local, police, sanitary, and other ordinances and
regulations not in conflict with general laws.
(CaI.Const., art. XI, § 7.) In turn, the Government Code provides that a city council "may pass ordinances
not in conflict with the Constitution and laws of the State and the United States." (Gov. Code, § 37100.)
The courts have made clear that cities' regulatory authority under the police power is very broad. For
instance, the California Supreme Court stated:
[C]ities have plenary authority to govern, subject only to the limitation that they exercise this power
within their territorial limits and subordinate to state law. Apart from this limitation, the police power.
·. is as broad as the police power exercisable by the legislature itself.
(Candid Enterprises, Inc. v. Grossmont Union High Sch. Dist. (1985) 39 Cal.3d 878, 886.)
Ultimately, properly enacted City ordinances constitute state law within the City. It has long been the law
that an ordinance passed by a city within the scope of its authority has the same force within the City that a
statute passed by the legislature has throughout the state. (Exparte Roach (1894) 104 Cal. 272, 274;
Marculescu v. City Planning Commission of City and County of San Francisco (1935) 7 Cal. App. 2d 371,
632930-3
Masood Sohaili, Esq.
Steven Fayne, Managing Director
June 9, 2003
Page 5
373.) Thus, "[t]he adoption of the ordinance, being the exercise of a delegated legislative power, is to be
construed with the same effect as if it had been adopted by the legislative power itself." (Ex parte Roach,
supra, 104 Cal. at p. 275.)
The Inclusionary Zoning Regulations are a zoning requirement adopted pursuant to the police power.~ (Cal.
Const., art. XI, § 7.) Thus, much like one could not build a commercial structure or operate a commercial
use in a residential zone (see Cooper v. County of Los Angeles (1946) 75 CaI.App.2d 75 [restraining
construction of commercial use in residential zone]; Jones v. Robertson (1947) 79 CaI.App.2d 813 [real
estate office in residential zone]), all development subject to the Inclusionary Zoning Regulations' terms
must include the construction and maintenance of affordable units as required by the zoning regulations.
Because the Inclusionary Zoning Regulations were adopted by an ordinance passed by the City of Dublin
within the scope of its authority, the requirements of the City's Inclusionary Zoning Regulations have the
same force as state law requirements within Dublin.
4. Summary
To summarize, it is my opinion that the City's Inclusionary Zoning Regulations have the force and effect of
state law within the City of Dublin and that the provisions requiring affordability restrictions for a 55-year
period implement the City's Housing Element, a requirement of state law.
B. State Law Requires that the City "Ensure" that the Units for which a Density Bonus is
Granted Remain Affordable for At Least 30 Years.
If an applicant seeks the benefits of the density bonus statute, state law requires the applicant to agree to
restrictions that ensure the continued affordability of the units for which the density bonus is sought,
Subdivision (c)(1) of Government Code §65915 states:
An applicant [that meets the requirements for a density bonus and/or other incentives] shall agree
to, and the city.., shall ensure, continued affordability of all lower income density bonus units for
30 years or longer period of time if required by the construction or mortgage financing assistance
program, mortgage insurance program,, or rental subsidy program.
Thus, state law requires that the City "ensure" that the units for which a density bonus or other incentive is
granted remain affordable for at least 30 years.
The requirements of the Density Bonus statute are implemented by the City of Dublin in its Density Bonus
Regulations (see DMC, ch. 8.52), which have the effect of state law within the City. The regulations require
that the restricted units "must remain affordable .... for 30 years from the date of final occupancy
clearance .... "(DMC, § 8.52.070, subd. A.) The restrictions are implemented through an Affordable
Housing Agreement that creates deed restrictions. (DMC, § 8.52.070, subd. C.)
~ California courts have held that local inclusionary zoning regulations substantially advance the important state interest in
providing housing to Iow- and moderate-income families. (See Home Builders' Association of Nor. Calif. v. City of Napa (2001) 90
CaI.App.4th 188, 195-196.)
632930-3
Masood Sohaili, Esq.
Steven Fayne, Managing Director
June 9, 2003
Page 6
As noted above, the Lin Family has applied for a density bonus to increase the density from 744 to 930
units. They have also requested two "incentives" in accordance with §65915, subd. (b) and DMC, Chapter
8.52. In order to be eligible for the density bonus and two "incentives", however, the applicant must "agree or
propose to construct" either.
1. 20 percent of the total units for lower income households;
2. 10 percent of the total units for very Iow income households; or
3. 50 percent of the total units for seniors.
(See DMC § 8.52.040; Gov. Code, § 65915, subd. (b).) Thus, to qualify for a density bonus for both the
multi-family project and receive two incentives, as requested,2 the applicant must restrict 20% of the units for
Iow-income households and 10% of the units for very Iow income households. These units must remain
restricted for 30 years pursuant to Government Code §65915 and the City's density bonus ordinance, which
as discussed above, has the effect of state law.
C, Conclusion
The City of Dublin cannot agree to subordinate those provisions of the regulatory agreement for the
proposed Fairway Ranch project that restrict the affordable units for 30 years, in the case of the units which
must be restricted by the density bonus law, and 55 years, in the case of the units which must be restricted
by the zoning. The City recognizes that in order to grant a waiver from its general policy, Fannie Mae will
need to approve the underwriting of the proposed project based on the City's regulatory requirements.
These affordability restrictions are legally required for the development of the proposed project and should,
therefore, be taken into account by Fannie Mae or any lender.
The City will continue to work with the Lin Family in their efforts to finance the proposed Fairway Ranch
project, to the extent possible.
Please let me know if you have any questions about the matters contained in this letter.
Very truly yours,
MEYERS, NAVE, RIBACK, SILVER & WILSON
Elizabeth H. Silver
City Attorney
City of Dublin
EHS:rja
2 The two incentives requested by the Lin Family are priority processing and the inclusion of 5,000 square feet of commercial
development on land otherwise zoned to prohibit commercial development. (See {}65915, subd. (j) and DMC §8.52.050.B).
632930-3
Masood Sohaili, Esq.
Steven Fayne, Managing Director
June 9, 2003
Page 7
c: Martin Inderbitzen
Robert Klein
Terry Freeman
James Tong
Steven Ryan
Richard Ambrose
Eddie Peabody
Julia Abdala
Gene Slater
632930-3