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Home My WebLink About1984-04-10; City Council; 5779-12; Public Facilities Fees (Condo Conversion). . CIT.:JF CARLSBAD - AGENDA-JILL ?/ 2 49 0 /I/ AB# .rly?- *f/;z P TITLE: DEPT. HD. - MTG. 4/10/84 REVISION OF COUNCIL POLICY 17 PUBLIC FACILITIES FEE FOR CITY AmY= DEPT. CM CONDOMINIUM CONVERSIONS CITY MGR.+ ~ RECOMMENDED ACTION: That the City Council approve an amendment to City Council Poli,cy No. 17 to adopt rules for the application of the Public Facilities Fee to condominium conversions and authorize release of the note and trust deed for CT 81-41 upon payment of the revised PFF for the project. ITEM EXPLANATION The City Council at your meeting of June 7, 1983 approved the final map for the Grove Apartments condominium conversion CT 81-41. As a part of that action the City Council also approved a letter agreement deferring collection of part of the public facilities fees for that project. A copy of the agreement is attached as Exhibit 1. Pursuant to that agreement the developer paid a PFF of $9,000 based on the value of the new parking structure which was constructed to accommodate the conversion. He also executed a note and a deed of trust in favor of the City against the condominium project in an amount of $62,000, the estimated balance due for PFF if the fee was found applicable to the preexisting apartment building. Attorneys for Mr. Sheldon, the Grove developer, have now asked that the City make a decision on the applicability of the fee to condominium conversions and take action to release the note and deed of trust. Because of concerns expressed by developers of the Grove and the proposed Ranch0 Carlsbad mobile home park conversion about the applicability of Council Policy No. 17 to condominium conversions, the City Manager undertook a review of the policy. As a result of that review the City Manager has determined that Council Policy No. 17 should be clarified. The City Manager recommends that the Council adopt a new paragraph 8 as an addition to Council Policy No. 17 to deal with condominium conversions. That paragraph would provide in pertinent part: "If the building or park being converted was constructed before August 29, 1979 the fee to be paid shall be limited to 2% of the total cost of any new construction, renovation, improvement, remodeling, or other work done or proposed to be done as a part of the conversion including, but not limited to, landscaping, additional parking, accessory buildings or structures, storage area, club houses, pools, spas, fences, patios, and garages. The City Manager shall estimate the cost A h Agenda Bill # 577$'-&& Page 2 of such work and the fee to be paid shall be based on that estimate. If the building or park being converted was constructed after August 29, 1979 a fee of 2% of building permit valuation at the time of construction shall be paid plus a fee of 2% of the building permit valuation of any new construction .done as a part of the conversion." Under the revised policy condominium conversions built prior to August 29, 1979 would only pay a PFF on the value added as a part of the conversion. This recommendation is based on the fact that when the City Council adopted Policy No. 17 on August 29, 1979 the Council found that public facilities were adequate for buildings existing on that date. If the building or mobile home space being converted was in existence prior to that date then the Council has already found that public facilities are adequate for that building or mobile home space. Since no new finding is required no fee should be due. Conversions built after that date will pay regular fees. Since the Council did not find that facilities were available for such structures and must make the finding before the conversion can be approved the fees must be paid. If the City Council approves the revision to Policy No. 17 I also recommend that the City Council by motion approve the release of the note and deed of trust and their return to T. L. Sheldon Enterprises. Mr. Sheldon has already paid the PFF on the building permit valuation of the new construction done as a part of the conversion. In additon, he has agreed to pay the sum of $3,400, 2% of the approximately $170,000 of other improvements done to the site as a part of the conversion. Since the Grove Apartments was constructed a number of years prior to August 29, 1979 his agreed payments would be in compliance with the recommended policy for condominium conversions. FISCAL IMPACT This recommendation should not have a significant revenue effect on the City. Since the City Council has adopted the additional business license tax on new construction all apartments constructed now and in the future will pay the PFF at building permit time. Since the adoption of the tax it is no longer possible to pull an apartment permit without paying the PFF and then attempt to evade the fee by converting later to a condominium. Since that "loophole" has now been closed it is unnecessary for the City to continue taking a hard line on the applicability of the PFF to condominium conversions which were constructed prior to the adoption of Policy No. 17. EXHIBITS Exhibit 1 Exhibit 2 - Agreement - Revision to Council Policy No. 17 a TEONAS ~.GADE L.sUSAN CiNlE RKHAFUI J RAYNIILJR OF cxwN*~L EDWARD J.Lmvxn DANIEL R.KEINSKY LAW OFFICES GADE AND HAYNIE SUITS 1706.T~~ bAMBSB BUILDINQ 110 WEST*c"!hlEBT !hN DIEQO,CALIFOENIA BOIOI May 10, 1983 Vincent F. Biondo, Jr. City Attorney City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008-1989 TELEPHONE 233-6221 Amu CODE 610 Re: Grove Apartment Condominium Conversion CT 81-41, CP-187 (T. Sheldon) Dear Mr. Biondo: This letter is pursuant to our prior conversations and corre- spondence in the above-referenced matter and our meeting of April 26, 1983. It also relates to your letter to me of March 11, 1983, on this project. This is to confirm that we will pay the following fees pursuant to the staff report of April 22, 1983. (1) Duplicate Tracing Deposit (2) Drainage Fee (3) Public Facilities Fee (Based on the value of new construction) Total ;32 2;?:70 $ 9:ooo:oo $41,349.97 This amount will be tendered at the time we come before the City Council. We have agreed no park-in-lieu fees are required because land previously dedicated for this project as a part of the overall master plan approval was more than adequate to cover those fees. My client has agreed to tender a Promissory Note secured by a Deed of Trust on one of the units of this project in the amount of $62,000.00 as security for the balance of the City's public facilities fee. It is understood that this Deed of Trust would not be recorded by the City until after such time as the "Final Map" has been recorded and all "blanket" or general encumbrances have been Exhibit 1 3 . THOMAS A.GADE ATTORNEY AT Law 4 Page two Vincent F. Biondo, Jr. Hay 10, 1983 released from the unit in question. It is also understood that if and when demand has been made for the satisfaction of this Promissory Note that payment can be made in another form and that the note and Deed of Trust would be returned unrecorded to my client. We have agreed that before the City Council makes a decision on Policy 17 and its applicability to my client in this case, we would have an opportunity to present our case to the City Council as to why the fee should not apply to this condominium conversion project constructed prior to 1979. If successful, the note and Deed of Trust would be returned to my client unrecorded. We have agreed that our request to be heard on Council Policy 17, will be presented to the City Council when the City Manager has completed his review of the subject. If the City Council determines that the fee must be paid and it is in fact paid, there is nothing in this agreement which would prevent my client from litigating the matter at that time. This is with the understanding that the. City's position is that legal challenges to conditions of approval for tentative subdivision maps must be made within the applicable statute of limitations and in any event prior to final map approval and that an action challenging the public facilities fees condition, after the fact, would not lie in your opinion. Your position is that nothing in this agreement tolls the statute or otherwise constitutes a waiver of your position. As indicated above, copies of the proposed note and Deed of Trust referred to are included with this agreement for your review and approval. Pursuant to your letter of March 11, 1983, I have asked my client to sign a copy of this letter to be forwarded to you to indicate his assent to the terms set forth herein. c . THOMAS A. GADE hTORNEY AT LAW 4 Page three Vincent F. Biondo, Jr. May 10, 1983 Thank you for your continued cooperation and courtesy in this matter. If you have any questions regarding any of the above, please advise. Sincerely, GADE AND HAYNIE 3L@AAA Thomas A. Gade TAG:pf Enclosures Dated: .?-/%*a3 Terry L. Sheldon cc: Frank Aleshire, City Manager (w/enc.) Ron Beckman, Assistant City Manager, Developmental Services Terry L. Sheldon (w/enc.) Charles B. Christensen, Esq. l-4/27 4 REVISION TO COUNCIL POLICY NO. 17 “8. On August 29, 1979 the City Council adopted Policy No. 17. In so doing the Council found that public facilities were adequate for existing uses but not for any new development. Policy No. 17 shall apply to projects involving the conversion of an existing building or mobile home park to a condominium, planned unit development, stock cooperative or other similar form of ownership as follows: If the building or park being converted was constructed before August 29, 1979 the fee to be paid shall be limited to 2% of the total cost of any new construction, renovation, improvement, remodeling, or other work done or proposed to be done as a part of the conversion including, but not limited to, landscaping, additional parking, accessory buildings or structures, storage area, club houses, pools, spas, fences, patios, and garages. The City Manager shall estimate the cost of such work and the fee to be paid shall be based on that estimate. If the building or park being converted was constructed after August 29, 1979 a fee of 2% of building permit valuation at the time of construction shall be paid plus a fee of 2% of the building permit valuation of any new construction done as a part of the conversion." Exhibit 2