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HomeMy WebLinkAbout1996-08-06; City Council; 13757; Rancho VerdeAB# 13,957 MTG. ~-lb-sb DEPT. H/RED RECOMMENDED a CITY OF CARbSBAD - AGENDA BILL TITLE: CENTEX REAL ESTATE CORPORATION CREDIT FOR DEVELOPING SECOND UNITS CT 89-18 & CT 85-10 L- DEPT. HD. CITY Al-l-Y. CTION: APPROVE City Council Resolution No. qd -d68 authorizing staff to enter into an agreement with Centex Real Estate Corporation to permit the refund of’Inclusionary Housing Impact Fees based on the construction of Second Dwelling Units. ITEM EXPLANATION: Centex is the developer of projects known as Ranch0 Verde and the Rice Property, both located in the Southeast Quadrant , Zone 11. On August 7, 1990 and July 8, 1986, respectively, these projects received discretionary approvals from the City Council. In addition , on March 26, 1996, City Council approved SDP 95-07, permitting the construction of sixty four (64) Second Dwelling Units on the Ranch0 Verde property. At that time, it was indicated by staff and the developer that it was Centex’s desire to build Second Dwelling Units as an alternative to paying the required Inclusionary Housing Impact Fee. Under the City’s Inclusionaty Housing Ordinance, Centex has no obligation to build affordable units but is required to pay an Impact Fee of $2925 per market unit (at the current rate), or a total of $1,053,000 based on 360 units approved for the Ranch0 Verde and Rice Properties. Staff has drafted an agreement attached as Exhibit “2” which establishes a process whereby Centex pays required Impact Fees at building permit issuance with the provision that a refund may be requested based on the construction of Second Dwelling Units in accordance with the City’s Second Dwelling Unit Ordinance. Centex is given proportionate credit for each Second Dwelling Unit based a requirement to construct a total of 64 units to “work off “ the total Impact Fee obligation. The 64 units is equivalent to what the 15% inclusionary requirement would have been if the projects were required to build units. Staff recommends the proposed agreement as an opportunity to achieve the production of affordable units which are integrated into projects that otherwise would have no obligation to build units. This agreement will support Housing Element Objective 3.7 which calls for “encouraging and facilitating the development of second units.” Units constructed under this program are deed-restricted by way of the requirement to obtain an administrative permit. The City’s Second Dwelling Unit Ordinance would permit use of the unit by a family member, domestic worker or a traditional renter. If the unit is rented , it must be at a rent affordable to a lower-income household. FISCAL IMPACT: By entering into the proposed agreement, the City gives up potentially up to $1,053,000 in Impact Fees in return for 64 Second Dwelling Units. At $16,000 per unit, this is well below the estimated total subsidy of over $60,000 required to build an affordable unit. As in the past, the City could seek to leverage this revenue to achieve greater production, but there is uncertainty with respect finding an appropriate project and additional outside subsidy. EXHIBITS: 1. City Council Resolution No. 96 -&?b 8 2. Affordable Housing Mitigation Agreement between City and Centex Real Estate Corporation 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CITY COUNCIL RESOLUTION NO. 9 6 - 2 6 8 , A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE EXECUTION OF AN AFFORDABLE HOUSING AGREEMENT BETWEEN THE CITY OF CARLSBAD AND CENTEX REAL ESTATE CORPORATION REGARDING THE DEVELOPMENT OF SECOND DWELLJNG UNITS FOR THE PURPOSE OF RECEIVING CREDIT TOWARD THE PAYMENT OF INCLUSIONARY HOUSING IMPACT FEES. CASE NAME: CENTEX REAL ESTATE CORPORATION WHEREAS, Centex Real Estate Corporation, hereinafter to be referred to as Centex, has received approval from the City Council to develop property known as Ranch0 Verde and the Rice ‘Property with a total of three hundred sixty (360) residential units; and WHEREAS, conditions of approval for the subject developments and the requirements of the City’s Inclusionary Housing Ordinance require the payment of Inclusionary Housing Impact Fees (Impact Fees) at the rate of $2925 per market rate unit; and WHEREAS, it is the desire of the City Council and Centex to enter into an agreement which permits Centex to receive credit toward its payment of Inclusionary Housing Impact Fees through the construction of Second Dwelling Units in accordance with the City’s Second Dwelling Unit Ordinance; and WHEREAS, City Council finds that the subject agreement with Centex will advance the City’s Housing Element goals of providing new affordable housing and specifically Second Dwelling Units. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California that: 1. The above recitations are true and correct. 1. / 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. The Mayor of the City of Carlsbad is authorized to execute an agreement with Centex Real Estate Corporation which is substantially in the form presented to and approved by the City Council on the date of this resolution with such modifications as may be deemed necessary and appropriate by the City Attorney. 3. The Community Development Director is authorized to act on behalf of the City in administering and monitoring the agreement with Centex. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, on the 6th day of AUGUST , 1996. AYES: Council Members Lewis, Nygaard, Kulchin, Hall NOES: None ABSENT: Council Member Finnila ABSTAIN: None ATTEST: Mayor ALETHA L. RAUTENKRANZ City Clerk CC RESO NO. 96-268 2. Recordinq Requested by: City of Carlsbad When Recorded Mail to: City of Carlsbad City Clerk’s Office Attn: Citv Clerk 1200 Carlsbad Village Drive Carlsbad, California 92008 AFFORDABLE HOUSING IMPACT FEE REFUND AGREEMENT THIS AFFORDABLE HOUSING IMPACT FEE REFUND AGREEMENT (“Agreement”) is entered into as of September 3 1996, by and among the CITY OF CARLSBAD, a municipal corporation (“City”) and CENTEX HOMES, a Nevada General Partnership (“Centex”), with regard to the following facts: A. This is an Affordable Housing Impact Fee Refund Agreement entered into pursuant to Chapter 21.85 of the Carlsbad Municipal Code (“Code”). B. Chapter 21.85 of the Code establishes requirements for providing housing that is restricted to and affordable by lower-income households for all approved residential units. This chapter also establishes requirements for certain classes of projects which may pay an lnclusionary Housing Impact Fee (“Impact Fee”). These requirements are generally referred to as “lnclusionary Housing Requirements.” C. Centex is the owner and developer of certain real property legally described on attached Exhibit “A” that is located in Local Facilities Management Zone 11 of City of Carlsbad (“Centex Property”). The Centex Property is subject to and has received discretionary approvals from City for Tentative Subdivision Maps (CT 89-18 and CT 85 10) commonly known as Ranch0 Verde and the Rice Property, respectively. The approvals and conditions are contained in City Council Resolution No. 90-274, dated August 7, 1990, and City Council Resolution No. 8661, dated July 8, 1986, respectively. D. Pursuant to Chapter 21.85 of the Code and the approvals and conditions referred to in Recital C above, Centex must pay to the City an lnclusionary Housing Impact Fee (currently $2925 per market rate unit developed on the Centex Property). Based on the above referenced approvals, the Centex obligation to pay impact fees is currently estimated to be a total of $1,053,000 based on 360 approved units on the Centex Property. E. Pursuant to Section 21.85.040 of the Code, the City Council has approved construction of up to sixty-four (64) Second Dwelling Units in accordance with the requirements and restrictions of Section 21.10.015 of the Code by approving the Site Development Plan for Ranch0 Verde (SDP 95-07) on March 26, 1996. F. Centex and City desire that Centex satisfy its impact Fee requirement and cbnditions of approval by building up to sixty-four (64) Second Dwelling units (“Second Units”) in the Ranch0 Verde subdivision, in accordance with Section 21.10.015 of the Code. Sixty-four (64) Second Units represent 15% of the total units approved for both subdivisions within the Centex Property, inclusive of the Second Units. Notwithstanding this desire to build Second Units, Centex will have the obligation to pay Impact Fees to City. City will have the contingent obligation to refund some or all of said Impact Fees to Centex by entering into this Agreement. NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration, Centex and City agree as follows: 1. CENTEX CONSTRUCTION OF SECOND UNITS Centex may fully satisfy the lnclusionary Housing Requirements and the conditions of approval applicable to the Centex Property by constructing sixty four (64) Second Units in the Ranch0 Verde subdivision in accordance with SDP 95-07 concurrently with the development of market units. Second Units will be constructed in accordance with the requirements of Chapter 21.10.015 of the Code. 2. PAYMENT OF IMPACT FEES AND REFUND OF IMPACT FEES FOR SECOND UNIT CONSTRUCTION A. Centex will pay the City at the time of building permit application the Impact Fee then in effect on each market rate unit as constructed on the Centex Property (currently $2925 per unit). The construction of Second Units by Centex will enable Centex to recover Impact Fees in the manner described in this paragraph and to the extent that Centex is able to construct the Second Units. 6. Each year on the anniversary date of this agreement, Centex may submit a written request to the Community Development Director for a refund of Impact Fees. The refund, if any, will be equal to the lesser of: (1) the number of Second Units completed during the preceding year times the “Credit for Second Units” or (2) actual Impact Fees paid. If (1) exceeds (2), the difference will be carried over to the next calculation. The “Credit for Second Units” is currently estimated to be $16,453, determined by dividing the Centex total impact fee (currently estimated at $1,053,000) by sixty-four (64) the maximum number of Second Units which is acceptable to the City in lieu of the total Impact Fee. In no event will Centex be reimbursed in an amount greater than the total Impact Fees actually paid. C. Upon receipt of the Centex refund request and appropriate documentation acceptable to the Community Development Director, the City will promptly refund Impact Fees to Centex in accordance with the above. D. Except as limited by paragraph 5 hereof, after Centex has drawn building permits, and accordingly paid Impact Fees, for all authorized market rate units on the Centex Property, and the final calculation of Centex refunds pursuant to this paragraph, City will retain all remaining Impact Fees, if any. 2 . - 3. SATISFACTION OF CENTEX’S INCLUSIONARY HOUSING REQUIREMENTS AND CONDITIONS OF APPROVAL Centex shall fully satisfy the lnclusionary Housing Requirements applicable to the Centex Property as set forth in the Code and the conditions of approval of their Tentative Maps (CT 89-18 and CT 89-10) and condition No. 9 of SDP 95-07 by entering into this Agreement and performing according to its terms. Failure of Centex to perform according to the terms of this Agreement will be a failure to satisfy the Tentative Map Conditions with respect to the Centex Property and Chapter 21.85 of the Code; and the City may exercise any and all remedies available to it with respect to the Centex’s failure to satisfy the above conditions of approval including but not limited to, withholding the issuance of building permits for the Centex Property. 4. FUTURE OBLIGATIONS OF CENTEX A. Centex shall require all purchasers of Second Dwelling Units constructed pursuant to this Agreement to apply for, obtain, and maintain in good standing for the useful life of the main dwelling, a Second Dwelling Unit Administrative Permit provided for in Section 21.10.015 of the Code. This obligation shall apply to all successors and assigns, and run with the land. B. Except as provided fo’r in this Agreement, Centex shall have no responsibility or any other obligation whatsoever as to the lnclusionary Housing Requirements. Upon execution of this Agreement, Centex waives any right to pursue other options or provisions of Chapter 21.85 in satisfying its lnclusionary Housing Requirements. 5. TERM This Agreement shall expire 60 days after the completion of the last market rate unit on the Centex Property or four (4) years from the effective date of this Agreement, whichever event occurs first. In the event this Agreement expires, the City is no longer obligated to provide Credit for Second Units, and Centex shall remain obligated to pay remaining Impact Fees, if any. 6. INDEMNIFICATION Centex shall defend, indemnify and hold harmless City and its officers, employees and agents from any claim or liability arising out of this Agreement. 7. CONTRACT ADMINISTRATOR Each party designates the individuals listed below as said party’s Contract Administrator, who is authorized by said party to represent them in the routine administration of this Agreement. City’s Administrator is authorized to extend the time within which Centex is required to perform any provision of this ,Agreement, and/or waive any technical default in the performance of this Agreement. 3 CITY OF CARLSBAD: CENTEX HOMES: MARTIN ORENYAK Community Development Director 8. BINDING EFFECT: ASSIGNMENT This Agreement shall be binding upon Centex and City and their respective successors-in-interest. Centex shall not have the right to assign this Agreement or any interest or right hereunder without the prior written consent of City, which consent may be withheld in City’s sole and absolute discretion. 9. ATTORNEYS’ FEES AND COSTS In the event of any controversy, claim or dispute between or among Centex and City arising out of or relating to this Agreement or breach thereof, the prevailing party shall be entitled to recover from the losing party reasonable expenses, attorneys’ fees and costs. 10. SEVERABILITY In the event any limitation, condition, restriction, covenant or provision contained herein is held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect. II. NOTICES Any notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party at the address set forth below. Addresses for notices may be changed by written notification thereof to the other party: TO CITY: City of Carlsbad Housing & Redevelopment Department Attn: Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-2389 . . . . . . . . . . . . - TO CENTEX: Centex Homes ’ San Diego Division 5962 La Place Court Suite 250 Carlsbad, California 92008 12. INTEGRATED AGREEMENT This Agreement constitutes theentire agreement among the parties and no modification hereof shall be binding unless reduced to writing and signed by all parties hereto. 13. APPLICABLE LAW All questions pertaining to the validity and interpretation of this Agreement shall be determined in accordance with the laws of the State of California applicable to contracts made and to be performed within the State of California. 14. RECORDATION This Agreement shall be recorded ,in the Officials Records of San Diego County, California. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of , 1996. 9,/b APPROVED AS TO FORM: ..lt c RBNALD ;. B CITY ATTORNEY ATTEST: ALETHA L. RAUTENKRANZ CITY CLERK 5 CENTEX HOMES A Nevada General Partnership By: Printed Name: Title: CentexAgree.Word (ar - 7196) - STATE OF CALIFORNIA > ) ss. COUNTY OF%otn * - td?,&& before me, 6& M - /&$zGQJ~, d0 personally appeared k;sQ CM,;, / , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she?tbey executed the same in his/M/the% authorized capacity(ies), and that by hislber/tbeir signature(s the instrument the person@), or the entity upon behalf of which the person(H acted, executed the instrument. WITNESS mv hand and official al. Lb- / I .I A J3- . t-w-- STATE OF CALIFORNIA COUNTY OF ) ) > ss. NO~W Public -- Colifomia :.. SAN DiEGO CO1 1NI-v SHAWN IV. PETERSON SAN DIEGO COUNl’f On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. 1 ) ss. STATE OF CALIFORNIA COUNTY OF 1 ’ On before me, 9 personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. STATE OF CALIFORNIA > ) ss. COUNTY OF ) On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. l EXHIBIT “A” LEGAL DESCRIPTION OF CENTEX PROPERTY (RANCH0 VERDE AND RICE CANYON) RANCHOVERDE Portions of Lots 8, 9 and 15 of the subdivision of Ranch0 Las Encinitas, in the City of Carlsbad, County of San Diego, State of California, according to map thereof No. 848, filed in the office of the County Recorder of said San Diego County, June 27,1898. RICE CANYON The easterly half of Lot 14 and a portion of the westerly half of Lot 14, and the south 60 feet of the west half of Lot 14 of Ranch0 Las Encinitas in the City of Carlsbad, County of San Diego, State of California, according to map thereof No. 848, filed in the Office of the County Recorder of San Diego County, June 27,1898.