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HomeMy WebLinkAboutReso 205-13 Inclusionary Units Method of Comp RESOLUTION NO. 205 - 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 AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT, AMEND THE AGREEMENT, AND TAKE OTHER NECESSARY AND APPROPRIATE ACTIONS AND AUTHORIZING THE COMMUNITY DEVELOPMENT DIRECTOR TO APPROVE DEVELOPER'S CHOSEN METHOD OF COMPLIANCE WITH ITS INCLUSIONARY HOUSING OBLIGATIONS WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the City of Dublin Zoning Ordinance (the "Ordinance" or "Regulations"), the City of Dublin (the "City") and Moller RE Investors, LLC, a California limited liability company by Braddock & Logan Inc., a California corporation, ("Developer"), wish to enter into an Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In Lieu of Constructing Certain Inclusionary Units (the "Agreement") for the Moller Ranch Project ("Project"); and WHEREAS, Developer has determined that it is infeasible to construct forty-six (46) affordable units, and it has, following discussions with City staff, proposed the following alternate methods to satisfy its 46-unit obligation for the Project: 1. Developer will pay fees in lieu of constructing 46 inclusionary units in the amount of $85,000 per unit, for a total of $3,910,000, payable within 30 days of recordation of the final map; or 2. Developer will pay fees in lieu of constructing a to-be-determined portion of inclusionary units, payable within 30 days of recordation of the final map, and construct 437 sq. ft. moderate-income affordable units that include a living area, bedroom, bathroom, and kitchen area to satisfy the remainder of its 46-unit obligation. WHEREAS, Developer has agreed to notify the City as to which alternative it will pursue, at least 30 days prior to the planned recordation of the first final tract map; 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, 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 the City Council hereby finds that the proposal by Developer to either pay fees in-lieu of constructing forty-six (46) Inclusionary Units or a portion of said units and construct 437 sq. ft. moderate-income secondary affordable units, as an alternate method of complying with the Inclusionary Zoning Regulations is consistent with the purposes of the Inclusionary Zoning Regulations for the reasons that follow: 1. The location of the Project is not in close proximity to shopping, transportation, and other amenities that are important factors for the residents 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. 2. In addition, if units are constructed, the 437 sq. ft secondary units, because of their smaller size relative to other affordable units in the City, provide housing opportunities to a specific, and often underserved portion of the community, including single adults and elderly individuals. 3. Furthermore, low-income families would have difficulty qualifying for financing and paying the high costs required to live in a single-family home of the size contemplated for the Project (including homeowners' association dues, geologic hazard abatement district assessments, landscaping and lighting assessments, landscape maintenance on the property, utilities, and long term maintenance.) Developer's proposal to provide smaller secondary units would alleviate some of this difficulty. BE IT FURTHER RESOLVED that the City agrees waive Section 8.68.040.A of the Regulations stating that a developer can pay fees in lieu of constructing a maximum of 40% of its inclusionary-unit obligation, and BE IT FURTHER RESOLVED that the City agrees to waive the requirement forth in Resolution 56-02 effective May 7, 2002, establishing the annual methodology for the fee in lieu of constructing an inclusionary unit ($109,573 effective July 1, 2013), and agrees, given Developer's agreement to make the payment earlier than otherwise required, to accept payment of$85,000 per Inclusionary Unit required but not constructed, and BE IT FURTHER RESOLVED that the City agrees to waive that portion of Section 8.68.040.E of the Regulations, stating that all affordable units shall reflect the range of numbers of bedrooms provided in the project as a whole. In doing so, the City and Developer agree that all Inclusionary Units will be 437 sq. ft., and include a living area, bedroom, bathroom, and kitchen area, and BE IT FURTHER 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"), and 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, and Page 2 of 3 BE IT FURTHER RESOLVED that the Community Development Director or his or her designee, as specified in the Agreement, is authorized to approve the Developer's chosen method of compliance with its inclusionary housing obligations. PASSED, APPROVED AND ADOPTED this 17th day of December 2013, by the following vote: AYES: Councilmembers Biddle, Gupta, Hart, Haubert, and Mayor Sbranti NOES: None ABSENT: None ABSTAIN: None Mayor ATTEST: DEPIT City Clerk / Reso No.205-13,Adopted 12-17-13, Item 4.12 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 Moller RE Investors,LLC, a California limited liability company By Braddock&Logan Services,Inc., a California corporation Moller Ranch Property THIS AGREEMENT is hereby entered into this_day of ,2013 by and between the City of Dublin(the"City")and Moller RE Investors,LLC,a California limited liability company,by Braddock&Logan Services,Inc. a California corporation, (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.In lieu of constructing 40%of the Inclusionary Units that the Regulations would otherwise require,the Regulations authorize developers to pay a fee of$109,573 for each affordable unit that is 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 216 acres of real property in the City of Dublin generally located to the east of Tassajara Road within the Eastern Dublin Specific Plan area and more specifically described in Exhibit 1 (the"Property").The development project is a residential project consisting of 371 single-family residential units (the "Project"). The Planning Commission, on November 27, 2012 approved Site Development Review(PC Reso. No. 12-45)for the project. E. Developer has determined that it is infeasible to construct forty-six(46)affordable units,and it has,following discussions with City staff,proposed two alternate methods to satisfy its 46-affordable-unit obligation for the project.Developer's two proposed alternatives are as follows: Affordable Housing Agreement Moller Ranch Property -2- 1. Developer will pay fees in lieu of constructing 46 inclusionary units in the amount of$85,000 per unit, for a total amount of$3,910,000,payable within 30 days of recordation of the final map, or; 2. Developer will pay fees in lieu of constructing a portion of the 46 inclusionary units at the rate of$85,000 per unit and construct the remaining units as attached secondary Inclusionary Units. Developer has agreed to notify the City as to which alternative it will pursue, at least 30 days prior to the planned recordation of the first final tract map. F. 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 Regulations and approve an alternative method of compliance if the applicant demonstrates, and the City Council finds,that such alternate method meets the purposes of the Regulations; and G. In the resolution approving this agreement,the City Council found that the Developer's alternate methods of complying with the Regulations for the Project, as set forth herein, meet the purposes of the Regulations; and H. 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 23 of PC Resolution No. 12-45, 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 Affordable Housing Obligations. a. Developer will satisfy its 46-unit inclusionary zoning obligation for the Project by, at Developer's election, either(a)paying fees in lieu of construction at a rate of $85,000 per unit or(b)constructing up to 46 moderate income,437 square-foot secondary units that include a living area,bedroom, bathroom, and kitchen area("the Inclusionary Units")and paying in lieu fees at a rate of$85,000 per unit on the difference between 46 and the number of units to be constructed. Developer shall identify its election at least 30 days prior to the proposed date for the City's approval of the final map for the project. b. If Developer elects to construct the Inclusionary Units, it shall identify in a diagram for the Community Development Director's approval the number and location of the Inclusionary Units by income level. In approving the diagram, the Community Development Director shall find(a)that the diagram depicts the number of units specified by the Developer; (b)that the identified units are"reasonably dispersed"throughout the Project, as required by Section 8.68.030.E of the Regulations; and(c)that the income levels of the Inclusionary Units are consistent with Section 8.68.030.B of the Regulations. Once approved,the diagram shall be Affordable Housing Agreement Moller Ranch Property -3- incorporated into this agreement as an exhibit as though fully set forth herein. Developer hereby agrees that it will not assert the provisions of Government Code section 66458 to require the City to approve final maps until such time as it has satisfied the requirements of this Subsection. c. Section 8.68.030 of the Regulations requires that all Inclusionary Units in a project be constructed concurrently with a project or phase of a project. If the City Building Official or City Community Development Director determines that the Inclusionary Units have not been or are not being constructed concurrently with the market-rate units in the Project as required by this Section 2,the Building Official shall withhold further issuance of building permits in the Project until construction of the Inclusionary Units has been completed to the satisfaction of the Community Development Director. 3. In-Lieu Fees. If Developer,when it makes its election, elects to pays fees in lieu of constructing any portion of the Inclusionary Units,Developer will pay a sum of$85,000 per inclusionary unit for which it elects to pay fees. Thus, if it elects to pay fees for the entire 46- unit obligation, Developer would pay$3,910,000. The entirety of the fees be paid within 30 days of the recordation of the first final map for the project. If the payment is not made when due,the City may withhold any further city approvals for the project, such as occupancy authorizations or building permits. 4. Inclusionary Unit Design. Location, and Size. a. Exterior Materials and Exterior Architectural Design. Section 8.68.030.E of the Regulations provides that Inclusionary Units shall not be distinguished by exterior design, construction, or materials. Although the proposed Inclusionary Units are smaller than the units in the project as a whole, the City Council in approving this agreement found that, due to the architectural treatment and configuration of the Inclusionary Units, the Inclusionary Units are not distinguished by exterior design, construction, or materials. The exterior materials and exterior architectural design of the Inclusionary Units shall be consistent with the market-rate units within the Project as reviewed and approved through the Site Development Review by the Planning Commission;provided,however,that minor changes to unit size may be approved by the Community Development Director through a Site Development Review waiver. b. Unit Location. Section 8.68.030 of the Regulations requires that Inclusionary Units be dispersed throughout the individual phase in which they are constructed. If Developer elects to construct Inclusionary Units, the Community Development Director will be required to approve a diagram that shows the location of the Inclusionary Units as proposed by the Developer and find that the units as shown are reasonably dispersed throughout as required by Section 8.68.030.E of the Regulations. Developer shall construct the units in the locations identified in the diagram,which will ensure compliance with Section 8.68.030 of the Regulations. After the diagram has been approved,the Community Development Director may administratively approve changes in the location of the Inclusionary Units provided that he or she finds that the units are reasonably dispersed as required by Section 8.68.030.E. In so doing, the Community Development Director shall in writing approve a revised diagram, and upon such approval it shall be deemed to replace the existing diagram. Affordable Housing Agreement Moller Ranch Property -4- c. Unit Bedrooms and Size. Section 8.68.030.E requires that the Inclusionary Units reflect the range of numbers of bedrooms provided in the project as a whole. The Developer proposes to provide up to 46 moderate-income Inclusionary Units that include a living area, a bedroom,a bathroom, and a kitchen area. The City Council in approving this agreement found that,while this breakdown does not reflect the range of numbers of bedrooms provided by the units in the Project as a whole, as required by Section 8.68.030.E of the Regulations,the Developer's alternate method of compliance meets the purposes of the Regulations. 5. Ensuring Affordability. a. Regulatory Agreements. Developer shall, if it elects to construct Inclusionary Units, require the initial buyer of each parcel on which one of the Inclusionary Units is located to execute,and record against the parcel,a Secondary Unit Regulatory Agreement in substantially the form attached hereto as Exhibit 3. Developer shall ensure that the initial buyer attends an orientation session,provided by the City, or City approved third party, that describes the requirements of the Secondary Unit Regulatory Agreement. b. City Administrative Fee. Prior to the City's execution of each Secondary Unit Regulatory Agreement,Developer shall pay the City a City Administrative Fee, in an amount to be established from time to time by the City Council and which is currently set at $1,500 per transaction. c. Term. This Agreement shall be effective until all in-lieu fees have been paid,and all Inclusionary Units are constructed,sold, and a Secondary Unit Regulatory Agreement has been recorded against each property on which a Secondary Unit is located. Developer shall have no further obligations under this Agreement. Notwithstanding any provisions of this Agreement to the contrary, the burdens of this Agreement shall terminate as to any parcel that is individually (and not in"bulk")sold to the purchaser or user thereof and thereupon and without the execution or recordation of any further document or instrument such parcel shall be released from and no longer be subject to or burdened by the provisions of this Agreement. 6. Memorandum of Agreement to be Recorded. Developer and City shall execute and acknowledge a Memorandum of this Agreement("Memorandum")substantially in the form attached hereto as Exhibit 4, and City shall cause the Memorandum to be recorded in the Official Records of Alameda County upon its execution. 7. Agreement Runs with the Land. All of the provisions,rights,terms, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective heirs, successors and assignees, representatives, lessees, and all other persons acquiring the Property, or any portion thereof, or any interest therein,whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitude and shall constitute covenants running with the land pursuant to applicable laws, including,but not limited to, Section 1468 of the Civil Code of the State of California. Each covenant to do, or refrain from doing, some act on the Property hereunder(a)is for the benefit of the Property and is a burden upon the Property,(b)runs with the Property, and(c)is Affordable Housing Agreement Moller Ranch Property -5- binding upon each Party and each successive owner during its ownership of the Property or any portion thereof, and shall be a benefit to and a burden upon each Party and the Property hereunder and each other person succeeding to an interest in the Property. 8. Assignments and Transfers. a. Right to Assign. Developer may wish to sell, transfer or assign all or portions of its Property to other developers(each such other developer is referred to as a "Transferee"). In connection with any such sale,transfer or assignment to a Transferee, Developer may sell, transfer or assign to such Transferee any or all rights,interests and obligations of Developer arising hereunder and that pertain to the portion of the Property being sold or transferred,to such Transferee,provided,however,that no such transfer, sale or assignment of Developer's rights, interests and obligations hereunder shall occur without prior written notice to City and approval by the City Manager,which approval shall not be unreasonably withheld or delayed. b. Approval and Notice of Sale, Transfer or Assignment. The City Manager shall consider and decide on any transfer, sale or assignment within thirty(30)days after Developer's notice thereof,provided all necessary documents, certifications and other information are provided to the City Manager to enable the City Manager to determine whether the proposed Transferee can perform the Developer's obligations hereunder. Nothing herein shall be deemed to limit the right of Developer to freely alienate or transfer all or any portion of the Property,provided however,Developer shall not be released from liability under this Agreement unless and until the proposed Transferee shall have agreed in writing to be bound by and to comply with the requirements of this Agreement and any recorded Second Unit Regulatory Agreement and the City Manager has approved of such Transferee in accordance with this Section 9(b). Notice of any such approved sale,transfer or assignment(which includes a description of all rights, interests and obligations that have been transferred and those which have been retained by Developer) shall be recorded in the official records of Alameda County, in a form acceptable to the City Manager, concurrently with such sale, transfer or assignment. In the event the City Manager fails to make such determination within such thirty(30)day period, City shall be deemed to have approved the assignment and assumption of this Agreement by the proposed Transferee and Developer shall be released pursuant to Section 9(c)below. c. Effect of Sale,Transfer or Assignment. Developer shall be released from any obligations and liability hereunder sold,transferred or assigned to a Transferee pursuant to Section 9.a of this Agreement,provided that: a)such sale, transfer or assignment has been approved by the City Manager pursuant to Sections 9.a and 9.b; and b) such obligations are expressly assumed by Transferee and provided that such Transferee shall be subject to all the provisions hereof. 9. Successors. Except as specifically provided in this Agreement, this Agreement shall bind and inure to the benefit of all successors and assigns of the parties and any associates in interest, and their respective directors,officers, agents, servants, and employees, and the Affordable Housing Agreement Moller Ranch Property -6- successors and assigns of each of them, separately and collectively. Developer shall provide notice to the City of the names and mailing addresses of any such successors or assigns. 10. Hold Harmless. Developer shall hold City, its elective and appointive boards, commission, officers, agents and employees harmless from and against any or all loss, liability, expense, claim, costs, suits, damages of every kind,nature and description directly or indirectly arising from the performance of the obligations or undertakings of Developer pursuant to this Agreement. Developer shall defend City and its elective and appointive boards,commission, officers,agents and employees from any suits or actions at law or in equity for damages caused or alleged to have been caused,by reason of any of the obligations or undertakings of Developer pursuant to this Agreement. It is further provided that this hold harmless agreement shall apply to all damages and claims for damages for every kind suffered, or alleged to have been suffered,by reason of any of the obligations or undertakings of Developer pursuant to this Agreement provided however,that the foregoing indemnity shall not be construed to apply to any liability or claims related to administering any provisions of the Secondary Unit Regulatory Agreement for any Inclusionary Unit following the sale of such Inclusionary Unit to an initial Qualified Purchaser. 11. Enforcement. If the Developer defaults in the performance or observance of any covenant,condition,restriction or obligation of the Developer as set forth in this Agreement, and such default remains uncured for a period of thirty(30)days after notice thereof is given by the City(or such longer period as may be necessary to cure the default,provided that Developer commence the cure within the thirty(30) day period and diligently prosecutes the cure to completion),the City may take any one or more of the following steps: a. By specific performance or other action or proceeding at law or in equity, require the Developer to perform its obligations under this Agreement or enjoin any acts or things which may be unlawful or in violation of the rights of the City hereunder. b. Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants, conditions and restrictions of the Developer under this Agreement. If Developer transfers any portion of the project in bulk and a Transferee defaults under this Agreement, the City shall exercise the foregoing remedies only with respect to the defaulting Transferee and its portion of the project;and so long as Developer has not otherwise defaulted hereunder, the City shall not seek to exercise any rights and remedies against Developer. 12. Amendments. a. 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. b. 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 Affordable Housing Agreement Moller Ranch Property -7- 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. 13. 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. 14. 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. 15. 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 aly return receipt is received by the sender or the date set forth on such return receipt,on the day{hat 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: Jeff Lawrence Moller RE Investors,LLC by Braddock&Logan Services,Inc. 4155 Blackhawk Plaza Circle, Suite 201 Danville,CA 94506 FAX No. (925)648-5700 If to City: City Manager City of Dublin 100 Civic Plaza Dublin, CA 94568 16. 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 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. Affordable Housing Agreement Moller Ranch Property -8- 17. Incorporation of Exhibits. All exhibits referred in this Agreement are incorporated herein by reference. 18. 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. [signatures page follows immediately] 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 Moller RE Investors,LLC,A California limited Dated: liability company By: Braddock&Logan Services, Inc. a California corporation Its:Manager By: Name: Its: Affordable Housing Agreement Moller Ranch Property -9- EXHIBIT 1 Property Description (Attach legal description.) EXHIBIT 2 Guideline to the Inclusionary Zoning Ordinance Regulations, (Attach document.) -2- EXHIBIT 3 Secondary Unit Regulatory Agreement (Attach agreement.) -3- EXHIBIT 4 Memorandum of Agreement (Attach agreement.) 2207794.1 -4-