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HomeMy WebLinkAboutReso 151-13 Afford House Agmt Fees In Lieu RESOLUTION NO. 151 - 13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AN AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN-LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the City of Dublin Zoning Ordinance (the "Ordinance"), the City of Dublin (the "City") and Rancho Silvera Ventures, LLC ("Developer"), wish to enter into an Affordable Housing Agreement for the Construction of Inclusionary and the Payment of Fees In Lieu of Constructing Certain Inclusionary Units (the "Agreement") for the Silvera Ranch Phase III Project ("Project"); and WHEREAS, the Project was part of a larger 254-unit development project consisting of four phases. The Planning Commission, on September 23, 2003, approved Site Development Review (PC Reso. no. 03-48) for the larger project. Within Phase III, the previous owner completed 5 of the 15 proposed structures, consisting of a total of 28 units; and WHEREAS, Developer's predecessor had entered into an affordable housing agreement that specified the manner in which it would satisfy its thirty-two (32) affordable unit obligation for the larger project. In particular, the Developer's predecessor agreed to construct 19 affordable units and pay fees in lieu of construction for another 13 units; and WHEREAS, Developer's predecessor satisfied its obligations under the previous affordable housing agreement as to 24 of the 32 units in the larger 254-unit project; and WHEREAS, the previous affordable housing agreement expired, and the Developer still has an obligation to satisfy the terms of the Regulations by producing the remaining eight (8) Inclusionary Units; and WHEREAS, Developer has proposed to satisfy its obligations through payment of fees in- lieu of constructing the remaining eight (8) Inclusionary Units; and WHEREAS, Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council, at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of the Inclusionary Zoning Chapter; and WHEREAS, the purpose of the Inclusionary Zoning Regulations are to enhance the public welfare and assure that further housing development contributes to the attainment of the City's housing goals by increasing the production of residential units affordable by households of very-low, low and moderate-income and assure that the limited remaining developable land in the City's planning area is utilized in a manner consistent with the City's housing policies and needs; and Page 1 of 3 WHEREAS, the City Council hereby finds that the proposal by Developer to pay fees in- lieu of constructing the remaining eight (8) Inclusionary Units is an alternate method of complying with, and is consistent with the purposes of, the Inclusionary Zoning Regulations for the reasons that follow and hereby waives the requirement that 12.5% of the units in the project be affordable: 1. If the Developer were to be required to produce the Inclusionary Units, it would prove difficult because of currently prevailing market conditions for the Developer to sell the units at prices that approach the current maximum affordable price, since the market prices for units with deed restrictions are less than the affordable prices. Such a requirement would place an unfair burden on the Developer that is not consistent with the purpose of the Regulations. 2. If the Developer were required to produce the Inclusionary Units, the future buyers of those units would have difficulty reselling the units, for the foreseeable future, because of the likely-to-be small difference between the affordable price and the market price for similar units without deed restrictions. Such circumstances would be inconsistent with the purposes of the Regulations. 3. Buyers who wish to re-sell their home to market are required to verify and assure the prospective buyer meets inclusionary requirements, plus attend workshops and cover all costs associated with qualification and sale. Again, because of the minimal price differential between market rate and affordable units, these requirements would make it difficult for the Developer to find appropriate buyers for the Inclusionary Units. 4. Furthermore, the location of the Project is not in close proximity to shopping, transportation, and other amenities that are important factors for the buyers of affordable units. Therefore, the units that would be produced with the in-lieu fees are likely to be more suitable for potential buyers than would be affordable units within the Project. WHEREAS, the Project has been found to be Categorically Exempt from the California Environmental Quality Act (CEQA); and WHEREAS, a Staff Report setting forth in further detail the background and terms of the Agreement has been submitted to the City Council for consideration of this request. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In-Lieu of Constructing Certain Inclusionary Units Between the City of Dublin and Developer, as described in Exhibit A ("Agreement"). BE IT FURTHER RESOLVED that the City Manager is authorized and directed to execute the Agreement and such other documents, and to take such other and further action, as necessary and appropriate to carry out the Intent of this Resolution. BE IT FURTHER RESOLVED that the Community Development Director is authorized and directed to modify the approved Planned Development Zoning and Site Development Review by administrative action to maintain consistency between the Agreement approved Planned Development Zoning and Site Development Review. Page 2 of 3 PASSED, APPROVED AND ADOPTED this 17th day of September 2013, by the following vote: AYES: Councilmembers Biddle, Gupta, Hart, Haubert, and Mayor Sbranti NOES: None ABSENT: None ABSTAIN: None Ze,,.sit Mayor ATTEST: C City Clerk Reso No. 151-13,Adopted 9-17-13, Item 4.3 Page 3 of 3 AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN-LIEU OF CONSTRUCTING CERTAIN INCLUSIONARY UNITS Rancho Silvera Ventures,LLC, a California limited liability company. Silvera Ranch Phase III Project THIS AGREEMENT is hereby entered into this 17th day of September, 2013 by and between the City of Dublin (the "City") and Rancho Silvera Ventures, LLC, a California limited liability company(the"Developer"). Recitals A. Chapter 8.68 of the Dublin Municipal Code contains Inclusionary Zoning Regulations (the "Regulations"). The Regulations were adopted pursuant to Strategy I.B. of the City's General Plan Housing Element, the purpose of which is to create affordable housing opportunities in the City of Dublin for low- and moderate-income households. B. The City of Dublin adopted the Regulations recognizing that the cost of new housing is so high that persons with very low-, low- and moderate-incomes are increasingly unable to locate affordable housing in the City. The purpose of the Regulations is to achieve a balanced community with housing available at all income levels. C. Accordingly, the Regulations require that residential projects with 20 or more for sale units/lots contain at least 12.5% low- and moderate-income units/lots. The Regulations require that the for-sale units be constructed in the following proportions: 40% low-income, and 60% moderate income. Previous to 2012, the Regulations had required 30% very low income, 20% low income, and 50% moderate income. In lieu of constructing 40% of the Inclusionary Units that the Regulations would otherwise require, the Regulations authorize developers to pay a fee, currently set by the City through June 30, 2013 at $107,005 per unit required but not built. If developers opt to pay the maximum allowable fees in lieu of construction, they are still required to construct 60%of the obligation. D. Developer is the owner of approximately 3 acres plus 18 condominium units of real property in the City of Dublin generally located northeast of the Tassajara Road and Fallon Road intersection and more specifically described in Exhibit 1 (the "Property"). The Property was part of a larger 254-unit development project known as Silvera Ranch consisting of four phases. The Planning Commission, on September 23, 2003, approved Site Development Review (PC Reso. No. 03-48) for the project. The Property consists of a portion of the 102-unit Phase III. Within Phase III, the previous owner completed 8 of the 15 proposed structures, consisting of a total of 52 units. E. Developer now desires to complete the construction of the remaining 50 for-sale units (collectively "the Project"). Affordable Housing Agreement Silvers Ranch Phase III F. Developer's predecessor had entered into an affordable housing agreement that specified the manner in which it would satisfy its 32 affordable unit obligation under the Regulations. In particular, the Developer's predecessor agreed to construct 19 affordable units and pay fees in lieu of construction for another 13 units. G. Developer's predecessor by constructing and selling affordable units, and paying fees in lieu thereof, has satisfied the obligations under a previous affordable housing agreement as to 24 of the 32 units in the larger 254-unit project. Within Phase III, Developer's predecessor completed and sold 3 affordable units (a 3 bedroom low-income unit, a 3 bedroom very low- income unit, and a 2 bedroom very low-income unit). H. The previous affordable housing agreement expired, and the Project still has an obligation to satisfy the terms of the Regulations as originally contemplated in the SDR by producing the remaining 8 units. The Regulations were amended in 2012 to eliminate the requirement to produce very low income units. I. Accordingly, consistent with the Regulations, Developer has proposed to pay fees in-lieu of constructing four(4)low income and four(4)moderate income units. J. The purpose of this Agreement is to set forth the manner by which Developer satisfies any and all inclusionary housing obligations applicable to the Project under the Regulations. NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin Municipal Code, condition 98 of PC Resolution No. 03-48 and in consideration of the City's approval of the Project, Developer and City for themselves and their respective successors and assigns hereby agree as follows: 1. Definitions and Interpretations. Terms used in this Agreement shall be defined as set forth in Chapter 8.68 of the Dublin Municipal Code. 2. Developer's Compliance with Affordable Housing Obligation. Consistent with its approved alternative method of compliance with the Inclusionary Zoning Regulations, Developer will satisfy its obligation for the remaining 8 inclusionary units by paying fees in lieu of construction. 3. In-Lieu Fees. Developer will satisfy its obligation for eight(8) Inclusionary Units by paying fees in-lieu of constructing said units. Accordingly, Developer will pay $107,005 per unit, a total of$857,040 to fulfull the obligation to construct Inclusionary Units required by the Ordinance. The entirety of the fees shall have been paid prior to the issuance of any further city approvals for the project, such as occupency authorizations or building permits, and in no event later than October 18, 2013. 4. Attorneys' Fees. If legal action is necessary to enforce any provisions of this Agreement,the prevailing party shall be entitled to reasonable attorneys' fees and legal costs. Affordable Housing Agreement Silvera Ranch Phase III -2- 5. Amendments. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in interest and duly recorded in the Official Records of the County of Alameda, California. In the event that Developer is unable to perform its obligations under Section 2 of this Agreement due to significant changes in circumstances, such as unanticipated delays in construction within the Project, the City shall confer with Developer in an effort to reach a mutually acceptable resolution, consistent with the terms of the affordable housing conditions in the Approvals. If an agreement is reached, this Agreement shall be amended accordingly. Developer shall pay the City its reasonable costs, including attorneys' fees, incurred in such negotiations and in amending this Agreement, and Developer shall, if requested by the City, provide the City with a reasonable deposit to cover the City's reasonable costs, upon Developer initiating such negotiations. 6. Corporate Authority. If either party is a corporation, each individual signing this Agreement on behalf of that corporation represents and warrants that each of them is duly authorized to execute and deliver this Agreement on behalf of the corporation and that the Agreement is binding on the corporation in accordance with its terms. 7. Notices, Demands and Communications Between the Parties. Any and all notices, demands or communications submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the address of City and Developer, as applicable, as set forth below. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate as provided in this Section. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail as heretofore provided. If to Developer: Rancho Silvera Venture,LLC 8226 Rinconada Ct. Newark, CA 94560 Attention: James Wang Phone: (510) 745-8826 Fax No.: (240)208-7757 If to City: City Manager City of Dublin 100 Civic Plaza Dublin, CA 94568 8. Entire Agreement. This Agreement contains the entire understanding between the parties relating to the transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein Affordable Housing Agreement Silvery Ranch Phase III -3- and shall be of no further force or effect. No provision of this Agreement may be amended, waived, or added except by an instrument in writing signed by the Parties hereto. 9. Incorporation of Exhibits. All exhibits referred in this Agreement are incorporated herein by reference. 10. Counterparts. This Agreement may be executed in counterparts, which when taken together shall constitute a single signed original as though all parties had executed the same page. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. Dated: CITY OF DUBLIN By: City Manager Attest City Clerk Dated: RANCHO SILVERA VENTURES, LLC, a California limited liability company By: James Wang Its: Manager Affordable Housing Agreement Silvera Ranch Phase III -4- EXHIBIT 1 Property Description The real property of the Project is currently described as follows, subject to modifications that may occur in the future: SEE ATTACHED DESCRIPTION ENTITLED "To Deed Legal Description"