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HomeMy WebLinkAbout2002-03-26; City Council; 16690; Purchase Affordable Credits for Promenade Project3 CITY OF CARLSBAD - AGENDA BILL m: APPLICATION TO PURCHASE AFFORDABLE CREDITS IN THE VILLA LOMA HOUSING PROJECT DEPT. HD. f@% CITY ATTY. FOR THE CARLSBAD PROMENADE PROJECT CITY MGR. ZzL RECOMMENDED ACTION: ADOPT Council Resolution No. aOa-08 7 APPROVING a request by Carlsbad Promenade Partners, LLC, to purchase 6 Affordable Housing Credits in the Villa Loma combined housing project in order to satisfy the affordable housing obligation of the Carlsbad Promenade project under the City's lnclusionary Housing Ordinance. ITEM EXPLANATION: The Carlsbad Promenade project was approved by the Carlsbad City Council on February 19,2002, allowing for the subdivision of an approximately 31 acre parcel of land located on the northeast corner of Poinsettia Lane and Aviara Parkway. The subdivision will result in 33 residential lots and five open space lots. The project is bordered to the north by the Seaside Heights and Roesch developments, to the east by vacant (fallow) agricultural land, to the south by the Aviara development, and Aviara Parkway to the The property has been used for agricultural purposes in the past and is now fallow. It is on this portion of west. A SDG&E overhead power transmission line passes through the eastern portion of the property. the site that development is proposed. The remainder of the site is constrained by slopes and native vegetation that will not be disturbed. The northern portion of the site, and some remnant portions contain sensitive habitats (10.34 acres) and will remain in open space. Overall, 15.9 acres of the 30.9-acre site is proposed as open space. The applicant is requesting to purchase affordable housing credits in the Villa Loma Project to satisfy the project's 6 unit inclusionary housing obligation. The City Council is the approval body for the purchase of affordable housing credits. The developer has the option to construct on-site affordable units or purchase housing credits. The project is a small subdivision both in terms of the number of units (33) and developable area (15 acres). Due to the small size of the project, it would be difficult to physically and financially integrate the required affordable housing units within the market rate subdivision. Therefore, the developer has submitted a request to purchase housing credits from the City of Carlsbad. The City Council has adopted Policies 57 & 58 that govern the sale of affordable housing credits. The policies examine the feasibility of an on-site proposal, the advantages and disadvantages of an off-site proposal, and whether the off-site project advances the City's housing goals and strategies. In reviewing the applicant's request, the Affordable Housing Policy Team (staff) has utilized the criteria contained in the noted policies and has made a recommendation to the City Council to approve the purchase of the credits. FISCAL IMPACT The Affordable Housing Credit is currently $39,400 per unit. The purchase of 6 credits will result in a payment of $236,400 to the City's Housing Trust Fund. EXHIBITS: 1. City Council Resolution NO. xma-0%7 2. Applicant's Request to Purchase Credits 3. Draft Affordable Housing Agreement 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 10 19 20 21 22 23 24 25 26 27 20 RESOLUTION NO. 2002-087 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY CARLSBAD PROMENADE PARTNERS LLC, TO PURCHASE 6 AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT IN ORDER TO SATISFY THE AFFORDABLE HOUSING OBLIGATION OF THE CARLSBAD PROMENADE PROJECT UNDER THE CITY’S INCLUSIONARY HOUSING ORDINANCE. APPLICANT: CARLSBAD PROMENADE PARTNERS LLC CASE NO: CT 00-19 WHEREAS,. Carlsbad Promenade Partners LLC has received approval of Tentative Lap CT 00-19 for the development of a 33 unit residential development; and WHEREAS, Carlsbad Promenade Partners LLC has requested approval from the City If Carlsbid City Council for the purchase of 6 affordable housing credits in the Villa Loma lousing project to satisfy the inclusionary housing requirement of Tentative Map CT 00-19; nd I WHEREAS, the City Council did hold a public meeting to consider said request for the lurchase of Affordable Housing Credits by Carlsbad Promenade Partners LLC ; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, If all persons desiring to be heard, said Council considered all factors relating to the pplication and request to purchase Affordable Housing Credits: NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of hlsbad, California, as follows: 1. That the above recitations are true and correct. 2. The project is consistent with the goals and objectives of the City of Carlsbad’s Housing Element, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. 3. Based upon the analysis contained within the City Council Staff Report dated March 12, 2002, the City Council finds that the off-site satisfaction of the inclusionary housing requirement is in the public interest. 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 20 4. That based on the information provided within the City Council Staff Report and testimony presented during the public meeting of the City Council, the City Council hereby APPROVES a request by Carlsbad Promenade Partners LLC to purchase 6 affordable housing credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Carlsbad Promenade project under the City’s inclusionary housing ordinance. 5. That the City Council hereby’ authorizes the Community Development Director to execute the Affordable Housing Agreement in substantially the form presented to the City Council as Exhibit 3 of the City Council Staff Report’and to execute such other documents, or take other actions as may be necessary or appropriate to assist the developer in acquiring the Affordable Housing Credits. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, held on the26thday of-, 2002 by the following vote, to wit: AYES: Council Members Lewis, Kulchin, Finnila, Hall NOES: None ABSENT: Council Membe ABSTAIN: None ATTEST: r, Lo M. WOOD, City Clerk CC RES0 # 2002-087 PAGE 2 Exhibit 2 LAND USE / COASTAL PLANNING LANDSCAPE ARCHITECTURE. U~Y(YI POLICY AND PROCESSING ’ RECEIVED ENVIRONMENTAL MITIGATION NOV OC, 2001 November 8,2001 Ms. Debbie Fountain Housing and Redevelopment Director CITY OF CARLSBAD 2965 Roosevelt St. Suite B Carlsbad, CA 92008-2389 RE: CARLSBAD PROMENADE REQUEST TO PURCHASE VILLA LOMA CREDITS Dear Debbie: Thank you for your consideration of the request by the Carlsbad Promenade proponents for purchase of Villa Loma Affordable Housing units/credits in satisfaction of the indusionary housing requirement for their 33-unit subdivision in southwest Carlsbad. We have received your letter of October 29, including the assessment worksheet form, and offer the following and attached responses to your questions. Affordable units/credits. We a-owledge your note that affordable housing be provided at a rate of 15% of the market-rate units, and an additional 15% affordable housing for the affordable housing units. As a result, we amend our request for Villa Loma units/credits to six total affordable units/credits requested. bd use feaslblktJr . The proposed project involves only 33 standard single family lots, on a highly environmentally constrained site. Only a single, central portion of the property (47%) is considered developable. The balance of the site is restricted by biological considerations (gnatcatcher-occupied coastal sage scrub, southern maritime chaparral and southern willow scrub), steep natural slopes, electrical transmission corridor, and prohibited access from Poinsettia Lane. The developable area is served off a single access, on a single local residential street which forms a long, single cul-de-sac. The site is highly visible, sitting on the top of a prominent plateau, observable from many public areas west. It is our opinion that the inclusion of an additional, less costly, inclusionary residential product on the project would pose compatibility and visual land use concerns. v. The subject site was purchased by Koll Development Co. at a value assuming that a 10% encroachment into the LCP-restricted “dual criteria” slopes (slopes in excess of 25% gradient also containing coastal sage scrub and/or chaparral vegetation) would be allowed. This assumption was believed valid because routine allowance for such encroachment is permitted pursuant to the . .. . .. 1530 FARADAY AVENUE - SUITE 100 CARLSBAD, CA 92008 * (760) 931-0780 * FAX (760) 931-5744 planningsystems@nctimes.net 4 Ms. Debbie Fountain November 8,2001 Page 2 Mello I1 LCP, and had been historically granted by the Coastal Commission in this area of the City. A subdivision design with a 10% encroachment accommodated up to 40 lots. Subsequent to the land purchase however, the City placed wording into the Draft Habitat Management Plan (HMP) which has been interpreted to disallow impacts to any gnatcatcher-occupied sage scrub on this site. In addition, the City Planning Department has indicated their opposition to any project design which includes dual criteria encroachment. As a result of these new City policy factors, the original purchase price value of the site, based upon the assumption of 40 lots is no longer valid. This decreased value of the site (now 33 units) renders infeasible the potential of covering the affordability gap (if on-site affordable units were required) with potential sales profits. As a result of these factors, we conclude that the subject project is a good candidate for purchase of off-site Villa Loma units/credits. Per your request, attached is a filled-out assessment worksheet form for your review. Sinnely, Paul OMVF J. Klukas I cc: van Lynch J. R. Pearce Eric Johnston Enclosure L 5 a. Are there significant feasibilitv issues due to factors such as project size, site constraints, amount and availability of required subsidy, and competition from multiple projects that make an on-site option impractical? Brief Narrative: The Carlsbad Promenade project involves development of only 33 single family lots over 30.9 acres. The project is located within the Mello II LCP segment, which restricts all development from slopes in excess of 25% which contain native habitat. This restricts the development potential of the site significantly. In addition, the project is bisected by two existing arterial roadways, and access is limited to only one location, resulting in a cul-de- sac design situation. The development area of the site is restricted to one central area of development because of significant price @ intearate into the proposed market and product type disparity? Brief Narrafive: An atfordable housing product would be difficult to integrate into the proposed market development due to the restricted development area of the site, and the resulting small number of units proposed. The project is proposed as single family detached product lots, consitent with the General Plan and LCP land use for the property. Due to the fact that few homes are proposed, on relatively large lots, highly visible from the beach and areas to the west, the introduction of an additional product would constitute poor planning. c. Does the on-site development entity have affordable housing on-site? the capacitv to deliver the proposed K I I I Brief Narrative: Development of affordable housing on-site would result in a significant financial hardsgp to the landowner, due to &e on@ cost of the property, and the highly restricted development area of the site. Several of the lots (eventual houses) would have to be sold at a financial loss, significantly below-market rates. This would necessitate a landowner request for financial assistance from the City to recoup the loss in value. 2. RelativeAdvantaaeslDisadvantaaes of the Off- site Proposal. a. Does the off-site option offer greater feasibility and cost effectiveness than the on-site local public assistance? alternative, particularly regarding potential 2 I I I Brief Narrative: The off-site Villa Lorna location provides residents with greater access to employment because it is directly adjacent to the industrial business park, and to Aviara Oaks School. It also is located along the El Camino Real transit corridor, and posesses a bus stop immediately along its froniage. The Villa Lorna site is approximately 1/2 mile from two neighborhood commercial centers, whereas the on-site location is in excess of c. Doeg%e%#&%8'8pFhE de^' entity with the capacitv to deliver the proposed project? Brief Narrative: I The Villa Lorna alternative is existing. d. Does the off-site option satisfy to satisfy with multiple projects? developer obliaations that would be difficult .Brief Narrative: I N/A a. Does the off-site pruposal advance and/or support City housing goals and policies expressed in the Housing Element, CHAS and lnclusionary Housing Ordnance? Brief Namiive: The Villa Lorna project has been found to support the City housing goals and policies. 3 late Considered bv Review Committee: Q17Iod. 4 Exhibit 3 RECORDING REQUESTED BY City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad City Clerk’s Office A&: City Clerk 1200 Carlsbad Villaee Drive Carlsbad, California-92008 (Space above for Recorder’s Use) AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT (“Agreement”) is entered into this- day of , 2002, by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as the “City”), and Carlsbad Promenade Partners LLC (hereinafter referred to as the “Developer”), is made with reference to the following: RECITALS A. Developer is the owner of certain real property in the City of Carlsbad, County of San herein by this reference, and which is the subject of a Tentative Map (CT00-19), which provides Diego, State of California, described in “Attachment A”, which is attached hereto and incorporated conditional approval of the construction of 33 single family dwelling (“Project”). B. Chapter 21.85 of the Carlsbad Municipal Code requires that this Affordable Housing Agreement shall be entered into between the City and the Developer as a means of satisfying the Developers’ affordable housing obligation (“Affordable Housing Obligation”), as such is defined under Chapter 21.85 of the Carlsbad Municipal Code. The Affordable Housing Obligation for this project is determined to be six (6) units and will be satisfied by applying the requirements set fortb in this Agreement. NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual covenants contained herein, the parties agree as follows: 1. THE RECITALS ARE TRUE AND CORRECT. 2. SATISFACTION OF AFFORDABLE HOUSING REOUIREMENTS THROUGH THE PAYMENT OF AFFORDABLE HOUSING CREDITS. housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land covered by Carlsbad (a) Performance under this Agreement satisfies the Developers’ obligation for affordable Tract No. 00-19 by reason of the approvals of the Tentative Map of CTOO-19, and any other applicable approval. (b) The Developer shall pay for six (6) Affordable Housing Credits as established by the City paid prior to the Developer receiving a building permit for the project. and as required by Condition No. 14 of Planning Commission Resolution No. 5137. The fee shall be 3. REMEDIES satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and Condition No. 14 of Failure by the Developer to perform in accordance with this Agreement will constitute failure to Planning Commission Resolution No. 5137. Such failure will allow the City to exercise any and all remedies available to it including but not limited to withholding the issuance of building permits for the lots shown on Carlsbad Tract No. 00-19. 4. HOLD HARMLESS Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as “Indemnitees”), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands suits, actions, defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with obtained, allegedly caused by, arising out of or retaining in any manner to Developers’ actions or respect thereto. 5. NOTICES All 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 to receive such notice at the address set forth below: TO THE CITY: City of Carlsbad Housing and Redevelopment Department Attn: Housing & Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-2389 TO THE DEVELOPER Carlsbad Promenade PartnersLLC Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. 6. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 7. DURATION OF AGREEMENT This Agreement shall terminate and become null and void upon the payment of the Affordable Housing Credits, or the repeal, termination, or modification of any applicable ordinance which act would render the Affordable Housing Obligation unnecessary or unenforceable. 8. SUCCESSORS This Agreement shall benefit and bind the Developer and any successive owners of Affordable Housing Lots. 9. SEVERABILITY In the event any provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless, be and remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year first above written. DEVELOPER CITY Carlsbad Promenade PartnersLLC City of Carlsbad, a municipal corporation By: By: (NamdTitle) SANDRA L. HOLDER Community Development Director By: (NarneRitle) APPROVED AS TO FORM: RONALD R. BALL CITY ATTORNEY ATTACHMENT A LEGAL DESCRIPTION OF SUBJECT PROPERTY Legal Description will be available for Final Map.