HomeMy WebLinkAbout2004-10-12; City Council; 17831; Villa Loma Housing affordable credits applicationCITY OF CARLSBAD -AGENDA BILL
RB# 17,831
MTG- 10’12/04
- TITLE:
APPLICATION TO PURCHASE AFFORDABLE
CREDITS IN THE VILLA LOMA HOUSING
PROJECT FOR THE THOMPSONITABATA
RESIDENTIAL DEVELOPMENT
RECOMMENDED ACTION:
ADOPT Council Resolution No. 2004-326 APPROVING a request by Standard
Pacific Corporation to purchase sixteen (16) Affordable Housing Credits in the Villa Loma
combined housing project in order to satisfy a portion of the affordable housing obligation for the
ThompsonlTabata residential development under the City’s lnclusionary Housing Ordinance.
ITEM EXPLANATION:
The ThompsonlTabata residential development was approved by the City Council in February,
2002, allowing for the development of 238 single family homes and a 24 unit condominium
development afford able to low income house holds.
The ThompsonlTabata development is required by the City’s lnclusionary Housing Ordinance to
provide 40 units of housing affordable to lower income households. The developer originally
proposed to meet the obligation by provide some on-site condominium units (15 units), some
second dwelling units (15), and some credits (10). Staff was not supportive of the original
proposal but agreed to support an alternate arrangement of 24 on-site, for-sale affordable
condominium units with the purchase of 16 off-site affordable housing credits in the Villa Loma
Project.
The City Council has previously approved the on-site condominium development. The Council is
now being asked to approve the purchase of the off-site affordable housing credits. Staff
recommended approval of the unique arrangement to the Housing Commission. The
Commission subsequently reviewed the request on September 9, 2004 and also recommended
approval of the proposed arrangement to satisfy the requirement both on-site and off-site.
The City Council has adopted Policies 57 & 58 to 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. Staff and the Housing Commission have reviewed these policies and recommended
approval of the credit purchase for the reasons outlined below.
The project has constraints in terms of locating all of the affordable housing on-site. The
development is an in-fill development. The area to provide on-site affordable housing that would
be compatible with the future and existing surrounding low-density development is relatively
small. The site would not accommodate a 40 unit condominium project. Therefore, staff
supported the development of a 24 unit condominium project on site with satisfaction of the
remaining requirement off-site.
In exchange for approval to satisfy some of their affordable housing requirement off-site, the
Developer has agreed to provide larger bedroom units (3 and 4 bedroom) within the on-site
condominium development. The Developer has also agreed to accept no public subsidy for the
on-site development. The units will be affordable to households at 80% of the Area Median
Income and will have no financial impact on the City.
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Page 2 of AB# 17,831
FISCAL IMPACT:
The Affordable Housing Credit is currently $43,000 per unit. The purchase of 16 credits will
result in a payment of $688,000 to the City’s Housing Trust Fund. There will be approximately
40 credits remaining for purchase following the sale of the subject 16 credits to Standard Pacific
Corporation for the Thompsonnabata development.
EXHIBITS:
1. City Council Resolution No. 2004-326 approving purchase of 16 credits in the Villa Loma
Project to satisfy a portion of the inclusionary housing obligation for the Thomsponnabata
residential development.
2. Housing Commission Staff Report dated September 9, 2004, including the draft Affordable
Housing Agreement.
3. Draft Housing Commission Minutes, dated September 9, 2004
DEPARTMENT CONTACT: Debbie Fountain (760) 434-281 5, dfoun@ci.carlsbad.ca.us
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CITY COUNCIL RESOLUTION NO. 2004-326
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY
STANDARD PACIFIC CORPORATION TO PURCHASE SIXTEEN
AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA
HOUSING PROJECT IN ORDER TO SATISFY A PORTION OF THE
AFFORDABLE HOUSING OBLIGATION OF THE THOMPSON
TABATA RESIDENTIAL DEVELOPMENT UNDER THE CITY’S
INCLUSIONARY HOUSING ORDINANCE.
APPLICANT: THOMPSONmABATA DEVELOPMENT
CASE NO: CT 98-14
WHEREAS, Standard Pacific Corporation has received approval of Tentative Map CT 98-
14 for the development of 238 single family homes and a 24 unit for-sale condominium
development affordable to low income households; and
WHEREAS, Standard Pacific Corporation has requested approval from the City of
Carlsbad City Council for the purchase of sixteen affordable housing credits in the Villa Loma
housing project to satisfy the inclusionary housing requirement of Tentative Map CT 98-14 in
combination with the construction of a 24 unit for-sale condominium development; and
WHEREAS, the City Council did hold a public meeting to consider said request for the
purchase of Affordable Housing Credits by Standard Pacific Corporation; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of
all persons desiring to be heard, said Council considered all factors relating to the application and
request to purchase Affordable Housing Credits:
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, 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.
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Page 2 of CC Resolution No. 2004-326
3. Based upon the analysis contained within the Housing Commission Staff Report dated
September 9, 2004, the City Council finds that the off-site satisfaction of the inclusionary
housing requirement is in the public interest.
4. That based on the information provided within the Housing Commission Staff Report,
the staff report presented to the City Council and testimony presented during the public
meeting of the City Council, the City Council hereby APPROVES a request by Standard
Pacific Corporation to purchase sixteen affordable housing credits in the Villa Loma housing
project in order to satisfl a portion of the affordable housing obligation of the
ThompsodTabata residential development project under the City’s inclusionary housing
ordinance.
Ill/
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Page 3 of CC Resolution No. 2004-326
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 Housing Commission 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 the 12th day of October, 2004 by the following
vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Council Members Lewis, Finnila, Kulchin, Hall, and
None
Pac ka r d
ATTEST:
Karen R. Kundtz, Assistant City Clerk
(SEAL)
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%!he City of C-lsbad Houshs& Redevelopment Department
AREPORT TO THE
HOUSXNG GOMMXSSXON
Sfaff: CraJLg;Ruiz
Management Analyst
I Xtem No. 1
DATE: SEPTEMBER 9,2004
SUBJECT: CT 98-14 - THOMPSONKABATA REQUEST TO PURCHASE
AFFORDABLE HOUSING CREDITS - RECOMMENDATION OF
APPROVAL TO THE CITY COUNCIL TO APPROVE THE REQUEST
TO PURCHASE SIXTEEN AFFORDABLE HOUSING CREDITS IN
THE VILLA LOMA AFFORDABLE HOUSING DEVELOPMENT TO
SATISFY A PORTION OF THE REQUIREMENT OF THE
INCLUSIONARY HOUSING ORDINANCE FOR THE
THOMPSON/TAE!ATA RESIDENTIAL DEVELOPMENT.
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 2004-03, recommending
APPROVAL to the City Council to allow the purchase of sixteen affordable housing
credits in the Villa Loma affordable housing development to satisfy a portion of the
requirement of the inclusionary housing ordinance for the ThompsodTabata residential
development.
11. PROJECT BACKGROUND
In February 2002, the City Council approved the ThornpsodTabata residential development.
The project approval allows for the development of 238 single-family homes and a 24-unit
for-sale condominium development affordable to low-income households. The single-family
homes will range in size from 2,700 to 4,200 square feet on parcels of 6,000 and 7,500 square
feet. The project is generally located both north and south of Poinsettia Lane, between Aviara
Parkway and Snapdragon Drive.
The Thompsoflabata subdivision is required to provide 40 units of housing affordable to
lower income households as required by the City's Inclusionary Housing Ordinance. The
developer proposes to satisfy its inclusionary housing requirement through a unique
combination of 24 on-site, for-sale affordable condominium units and the purchase of 16
offsite affordable housing credits.
The condominiums will contain 1,129 square foot three bedroom units and 1,872 four-
bedroom units. Of the 24 for-sale units, 16 will contain four-bedrooms. These units will serve
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CPO3-03 - THOMPSON/TABATA AFFORDABLE HOUSING CREDIT PURCHASE
SEPTEMBER 9,2004
PAGE 2
large family households, which are identified as a special needs group in the City’s Housing
Element.
As required by the Inclusionary Housing Ordinance, the project is conditioned to enter into an
Affordable Housing Agreement. This agreement (Exhibit 3) will establish the specifics of the
project including the exact level of affordability of the units (based upon the current San
Diego County Median Income figures), the schedule for production of the units and purchase
of the off-site credits, the tenure of affordability of the units, and resale restrictions.
The City’s Inclusionary Housing Ordinance permits off-site satisfaction of an inclusionary
requirement through participation in a Combined Inclusionary Housing Project (“Combined
Project”) if the City Council determines that it is in the public interest. Purchase of credits in
the Villa Lorna project constitutes participation in a Combined Project. All requests to sell or
purchase affordable housing credits for transactiodpurchases of ten credits or more to satisfy
an inclusionary housing obligation must first be reviewed by the Housing Commission.
111. POLICIES FOR THE PURCHASE OF AFFORDABLE HOUSING CREDITS
The City Council has adopted two policies that deal with off-site or Combined Projects and
the sale of Affordable Housing Credits. Council Policy 57 was developed to establish the
criteria to be utilized in order to make the necessary finding that off-site satisfaction of an
inclusionary housing requirement, when proposed through a Combined Project, is in the
public interest. Council Policy 58 was established to determine the price of credits and the
mechanism to satisfy a developer’s obligation under the City’s Inclusionary Housing
Ordinance.
The Council Policies require staff to evaluate the request for off-site satisfaction of the
inclusionary housing obligation and the purchase of credits based upon three primary criteria.
The criteria includes: 1) feasibility of on-site proposal; 2) relative advantages/disadvantages of
an off-site proposal; and 3) the advancement of housing goals and strategies. The following is
a summary of staffs analysis of the criteria for the project.
Feasibilitv of On-site Proposal
With the exception of the multifamily development along the project’s
northwestern side, the land uses surrounding the project site are single-family with
intermittent open space along a portion of the eastern boundary. In addition to
satisfjmg the inclusionary housing ordinances preference to provide on-site
affordable housing, there is also the issue of neighborhood compatibility with the
existing and proposed single-family residences. While the overall site is relatively
large (80+ acres), the area to provide on-site affordable housing that would be
compatible with the future and existing surrounding low-density development is
relatively small. Staff therefore supported the developer’s proposal to locate the
affordable project within the interior of the overall project site and gains access off
of Rose Drive, a future public street that forms a signalized intersection with
Poinsettia Lane. Because of the small size of the affordable housing location, it
would be impractical to design a 40-unit project that is compatible with the
CPO3-03 - THOMPSONRABATA AFFORDABLE HOUSING CREDIT PURCHASE
SEPTEMBER 9,2004
PAGE 3
surrounding neighborhood while at the same time being a desirable place to live.
Thus a smaller scale multi-family project and the purchase of affordable housing
credits is a more reasonable alternative solution.
Relative AdvantagesDisadvantages of an Off-site. Proposal
0 The participation in the off-site project will allow the City to recover the costs
associated with the development of excess affordable housing units.
0 The proposal meets both the objective of providing on-site affordable housing
while also attempting to be compatible with the design and density of the
surrounding single- family neighborhoods.
0 By allowing the developer to purchase some credits and reduce the on-site
obligation, the 24 condominiums will be produced with no financial assistance
required from the City.
Advancing Housing Goals and Stratepies
0 The recovery of the City’s investment in the Villa Lorna Project will provide for
additional financial resources which are needed to further affordable housing
development in the community.
Based upon the analysis of the above criteria, it is the Affordable Housing Policy Team’s
(staffs) opinion that adequate justification has been provided to make the finding that the off-
site satisfaction of the inclusionary housing requirement is in the public interest. Therefore,
staff is recommending that the request to purchase credits be recommended for approval by
the Housing Commission.
IV. EXHIBITS
1. Housing Commission Resolution No. 2004-03
2. Applicant Request to Purchase Credits
3. Affordable Housing Agreement
4. Vicinity Map
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HOUSING COMMISSION RESOLUTION NO. 2004-003
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE CITY
COUNCIL TO ALLOW THE PURCHASE OF SIXTEEN AFFORDABLE HOUSING
CREDITS IN THE VILLA LOMA AFFORDABLE HOUSING DEVELOPMENT TO
SATISFY A PORTION OF THE REQUIREMENT OF THE INCLUSIONARY HOUSING
ORDINANCE FOR THE THCMPS3NITABATA RESIDENTIAL DEVELOPMENT.
APPLICANT: STANDARD PACIFIC CORPORATION
CASE NO: CT 98-14
WHEREAS, Standard Pacific Corporation has received approval of Tentative Map CT
98-14 for the development of a 262 unit residential development; and
WHEREAS, said subdivision of land requires the developer to provide 40 units of
housing affordable to lower income households as required by Carlsbad Municipal Code Section
21.85 of the City’s Inclusionary Housing Ordinance; and
WHEREAS, the Villa Loma housing project was conceived and developed with City
participation based on the creation of 184 excess affordable housing units which would be
available to satisfy other developers inclusionary housing obligation; and
WHEREAS, Standard Pacific Corporation has received approval to develop a 24 unit for-
sale condominium project to satisfy a portion of their overall inclusionary housing requirement;
and
WHEREAS, Standard Pacific Corporation has requested to purchase Affordable Housing
Credits as a means to satisfy the remainder of their affordable housing obligations as permitted
by Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance and
consistent with City Council Policies 57 and 58; an d
WHEREAS, the request to purchase Affordable Housing Credits has been submitted to
the City of Carlsbad’s Housing Commission for review and consideration; and
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WHEREAS, said Housing Commission did, on the 9* day September, 2004, hold a
public meeting to consider said request for the purchase of Affordable Housing Credits by the
Standard Pacific Corporation; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of
all persons desiring to be heard, said Commission considered all factors relating to the
’ application and request to purchase Affordable Housing Credits;
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the
City of Carlsbad, California, as follows:
1.
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3.
4.
5.
Iff
Iff
The above recitations are true and correct.
The project is consistent with the goals and objectives of the City of Carlsbad’s
Housing Element and Consolidated Plan, the Inclusionary Housing Ordinance, and the
Carlsbad General Plan.
Based upon the analysis contained within the Housing Commission Staff Report, the
Housing Commission finds that the off-site satisfaction of a portion of the
inclusionary housing requirement is in the public interest.
That based on the information provided within the Housing Commission Staff Report
and testimony presented during the public meeting of the Housing Commission on
September 9, 2004, the Housing Commission recommends that the City Council
APPROVE a request by the Standard Pacific Corporation to purchase 16 affordable
housing credits in the Villa Loma housing project in order to satisfy the affordable
housing obligation of the ThompsodTabata project under the City’s Inclusionary
Housing Ordinance.
That the Housing Commission recommends that the City Manager or his or her
designee be authorized to execute the Affordable Housing Agreement in substantially
the form presented in the Exhibit 3 for the Housing Commission 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.
HC RESO. NO. 2004-03
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PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing
Commission of the City of Carlsbad, California, held on the 9th day of September, 2004, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
EDWARD SCARPELLI, CHAIRPERSON
CARLSBAD HOUSING COMMISSION
DEBORAH K. FOUNTAIN
HOUSING AND REDEVELOPMENT DIRECTOR
HC RESO. NO. 2004-03
PAGE 3
Jack Henthorn & AssociateF
5375 Avenida Encinas, Suite D
Carlsbad, California 92008
Fax (760) 438-0981
(760) 438-4090
January 12,2000
Ms. Deborah K. Fountain
Housing and Redevelopment Director
City of Carlsbad
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
EXHIBIT 2
Subject: ThompsonITabata Poinsettia Properties - Request to Purchase Off-site
Affordable Housing Credits - CT 98-14
Dear Ms. Fountain:
This letter sewes as a formal request by Standard Pacific Homes, acting on behalf of the
property owners of the Thompson/Tabata Poinsettia Properties (CT 98-14) to satisfy their
affordable housing obligations through: 1) purchase of off-site affordable housing credits in
the existing Villa Loma development, 2) construction of 15 for-sale town-home units on site
and, 3) construction of 15 second dwelling units. Upon approval by the City, this proposal
will satisfy the inclusionary housing obligations associated with the proposed subdivision.
This request complies with City Ordinances and City Council policies previously adopted by
the City Council as explained below:
The City’s lnclusionary Housing Ordinance (CMC Chapter 21.85) establishes certain
requirements under which residential developers must provide housing that is
affordable to lower-income households as a condition of project approval and permit
issuance. The ordinance provides that “circumstances may arise in which the public
interest would be served by allowing some or all of the inclusionary units associated
with one project site to be produced at an alternative site or sites.’’
City Council Policy 57 establishes procedures for the City to use in determining if a
proposed development meets the criteria to satisfy lnclusionary Housing Ordinance
obligations at an alternative site or sites. Further, City Council Policy 58 sets for the
specific evaluation and ranking procedures for the City to use when authorizing
proposed developments to satisfy inclusionary housing obligations by the purchase of
credits in the existing Villa Lorna project (a “Combined lnclusionary Housing Project’’).
The options available to ThompsonlTabata Poinsettia Properties (CT 98-14) to satisfy its
inclusionary housing obligations are: 1) construct affordable units on-site, 2) participate in an
off-site combined inclusionary project within the southwest quadrant in accordance with the
requirements set forth in Chapter 21.85 of the Carlsbad Municipal Code and City Council
Policy 57 dated August 8, 1995, 3) enter into an agreement with the City to purchase credits
from the Villa Loma Combined lnclusionary Housing Project in accordance with City Council
Policy 58 dated September 12, 1995, or 4) provide a combination of :he previous
alternatives.
The Housing Commission has reviewed a report that analyzed the projected inclusionary
housing requirements of undeveloped property within the Southwest Quadrant of the City.
The report examined whether ultimate build-out of the Quadrant would result in a demand for
off-site credits exceeding the number of available credits in the Villa Lorna project. The
analysis shows that there are sufficient excess credits to satisfy the potential demand of the
Quadrant, including that associated with these properties.
In the case of the Thompson/Tabata Poinsettia Properties application, there are particular
circumstances that warrant this project’s participation in the purchase of credits in the Villa
Loma project, pursuant to Council Policy 58 criteria. The primary circumstances relate
primarily to the economics of constructing a small affordable housing project and have driven
the formulation of the hybrid approach contained in this request. Secondarily, the proposed
combination of 15 townhomes and 15 secondary dwelling units with the remainder of the
inclusionary housing obligation being met through the allocation of credits in Villa Loma
allows for an equitable solution to the obligation requirements. This results in the production
of 30 affordable housing units (over 75% of the requirement) on-site, while minimizing the
required public subsidy. This combined approach was specifically designed to eliminate the
necessity for the City to pay out substantial hard-dollar subsidies that would be required to
satisfy the entire inclusionary obligation by building affordable apartments on-site.
This proposal to purchase credits in the Villa Loma project will result in increased public
benefit by reducing the level of housing fund subsidy to a level where current fund balances
would be available for use in other City assisted inclusionary projects. We understand that a
staff Project Review Committee will evaluate this request to determine its compliance with
the criteria defined in Policies 57 and 58, and that staff will then take the Committee’s
recommendation to the Housing Commission and the City Council. Our analysis of the
Thompsonmabata Poinsettia Properties’ compliance with criteria set forth in City Council
Policies 57 and 58 is attached to this letter for your use and reference.
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Please call if you need additional information or if we may be of any other assistance. We
look forward to receiving your response to this request.
Very truly yours,
JEH:wpc
Enclosure
cc: Craig Ruiz, Housing and Redevelopment Department
Mike Grim, City of Carlsbad, Planning Department
Gregg Linhoff, Standard Pacific Homes
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THOMPSON/TABATA POINSETTIA PROPERTIES
OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT
ASSESSMENT WORKSHEET -- BACKGROUND
The following background information is provided to assist you in your assessment.
1. Owner/Applicant Information:
0 wner/Applicant:
Standard Pacific Homes
Attn: Gregg Linhoff
9335 Chesapeake Drive
San Diego Division
San Diego, CA 921 23-1 01 0
858-292-2200
Owner
David & Karen Thompson Revocable Trust
& DKST Limited Liability Company
Attn: David & Karen Thompson
7040 Rose Drive
Carlsbad, CA 92009
760-438-1 189
Applicant’s Representative:
Jack Henthorn & Associates
Attn: Mr. Jack Henthorn
5375 Avenida Encinas
Suite D
Carlsbad, CA 92008
760-438-4090
Owner
Mendivil Family Partnership
Attn: Consuelo Duncan &
Carmel Verodi Frees
21241 San Miguel
Mission Viejo, CA 92692
949-830-3386
Owner Owner
William E. Engler
10468 Hot Mineral Spa Road
Niland, CA 92257
760-354-1 533 P.O. Box 943
Tabata Family Trust
Attn: Noboru & Evelyn Tabata
& lsokazu Tabata
Carlsbad, CA 92018
Owner 760-438-0280
Evelyn M. Weidner, Richard John Dennis
P.O. Box
Cardiff By-The-Sea, CA 92007
& Kathleen M Dennis
2. Off-sitelcombined Project Name:
VILLA LOMA APARTMENTS
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3. Description of Project with lnclusionary Housing Obligation:
The Thompsonnabata Poinsettia Properties, CT 98-14, is a proposed 248-lotI 243 single-family
unit development (with fifteen attached second dwelling units) with a 15-unit affordable town-
home complex on 80.64 acres incorporating nine individual parcels under six different
ownerships. The table below demonstrates the inclusionary housing responsibilities of each of
the ownership parcels/entities. These individual obligations result in a total 38.7-unit affordable
housing obligation for the proposed subdivision.
Owners
Standard Pacific Corp.
David B. Thompson & Karen R.
Thompson Revocable Trust, Trustees
DKST Limited Liability Company
The Mendivil Family Partnership
William Enaler
4.
5.
APN’s Title Rep.
Area Ref.
A, B & E 214-170-75 & 36
C 214-170-09 por.
D 214-170-09 por.
& 47
F 214-1 70-73
214-170-58 & 59 G. H & I
24 3.60
8. 15 & 37
6&5
54& 18 10.80
1.65
Tabata Family Trust, Noboru & Evelyn
lsokazu Tabata f1/2 interest)
Tabata, Co-Trustees (1/2 interest) and
J & K- ~ 214-140-44 and
2 1 4- 1 70-74
12 & 51 9.45
On-site Affordable Housing Description:
The ThompsonlTabata Poinsettia Properties on-site inclusionary housing project would consist of
15 attached for-sale town-home units (requiring a reduction of 6 proposed single-family lots in
order to provide usable land) and 15 restricted second-dwelling units dispersed throughout the
project site on the single-family residential lots. The units would be offered in a maximum
saledrent range that is affordable to households earning incomes of 80% of the Area Median
Income. To achieve financial feasibility, the project would require a net subsidy of approximately
$400,415 (assuming a fully constructed pad is provided by the developer and unit revenues are
based on a 95% occupancy rate factor) which the developer is requesting in the form of a fee
credit against the purchase of housing credits in Villa Loma. These rates also assume a set base
market price for the for-sale affordable units. A reduced purchase price below the assumed
market rate would result in the necessity of additional hard dollar subsidy from the public.
Evelyn Weidner, Richard & Kathleen
Dennis
Proposed Off-site Project Description:
The Villa Loma project is a 344-unit apartment development in which all units are restricted and
affordable to households with incomes not exceeding 60% of the San Diego County Median. Villa
Loma was developed by La Terraza Associates, with Bridge Housing Corporation as the
Managing General Partner. The complex contains 1, 2, 3, & 4 bedroom units.
L 214-1 70-46 22 3.30
Villa Loma was financed with assistance from the City of Carlsbad and the Carlsbad
Redevelopment Agency. The assistance was structured to create affordable unit credits that are
now marketed exclusively by the City to other developers to satisfy affordable housing obligations.
The Villa Loma Apartment complex is a Combined Project according to the lnclusionary Housing
Ordinance, and developers may participate in this as an “off-site” method of satisfying affordable
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housing obligations.
Carnation, Hadley, Roesch, and other projects in the vicinity.)
(This is also an approved site for Greystone Cove, Ocean Bluff, Lohf,
The proposed purchase of 8.7 Villa Loma Affordable Housing Credits as a part of the approach to
mitigate the inclusionary requirements of the Thompsonmabata Poinsettia Properties application
together with the provision of 15 for-sale affordable units and 15 secondary rental units on-site is
consistent with the terms established by City Council Policies 57 and 58 and the inclusionary
housing ordinance.
6. Description of On-site Project Constraints:
Site specific and ownership constraints exist at the Thompsonrrabata Poinsettia Properties site
which diminish the feasibility of producing the full inclusionary obligation with on-site affordable
housing. These constraints include the independently owned parcel configuration within the
project and the significant product type difference between a large high-density attached
apartment complex and the existing single-family homes in the neighborhoods adjacent to the
subject site. The applicant is proposing to buffer the on-site town-home project with single-family
homes to be built immediately north of the proposed site. The site is further buffered by
Poinsettia Lane on the south and the parking area for the adjacent multi-family project located
immediately west of the proposed site. The use of second dwelling units and Villa Loma credits
reduces these conflicts and provides for integration of the units into the total project.
The costs of providing a 39-unit affordable housing apartment project on-site to satisfy the full
inclusionary housing obligation would result in substantial subsidies being required from public
sources, including the City. The proposed allocation of off-site credits combined with the
provision of for-sale units and secondary units on-site, maximizes construction new on-site
affordable housing units, while minimizing the amount of subsidy required. The construction of a
full 39-unit affordable facility on-site would require additional public subsidy of over a million
dollars .
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THOMPSON/TABATA POINSETTIA PROJECT
OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT
ASSESSMENT WORKSHEET -- WORKSHEET
I. Feasibility of the On-site Proposal
a. Are there significant feasibility 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?
0
The applicant's proposal incorporating three avenues, credit purchase, secondary units and new rental
product increases the feasibility of on site construction.
The net gap of the proposed 15 unit affordable town-home project results in over $400,000 after
developer site dedication. Credits can be granted in the existing Villa Loma to offset a large portion of
this gap. This approach would result in no additional cost to the City beyond fee revenues that would
otherwise been paid and reinvested into the project. The combined proposal reduces the need for
outside subsidy.
The construction of the full 39-unit obligation (24 for-sale units and 15 second dwelling units) on-site
could require an additional approximately 1 million-dollar contribution by the City.
The construction of the 15 affordable town-home units and 15 secondary units on-site results in the
project's market units being required to absorb about $4,650 per unit so that land value could be
contributed by the applicants. This figure rises to approximately $6,300 per unit if the applicants are
required to build the units on-site and close the post land development gap of approximately $400,400.
The proposed combined approach, while producing over 75 percent of the project's requirement on-site,
greatly reduces the potential burden that would entail if the entire obligation of 39 affordable units had to
be built on-site. For example, the addition of 9 units in the proposed for-sale affordable project would
result in a greater than 50% increase in both the private and public subsidies required.
Given the multiple ownerships within the proposed project area, an on-site affordable project apportioned
to each ownership would not be of sufficient size to be viable. A large on-site inclusionary apartment
project located on a particular parcel in the CT 98-14 project area would unfairly burden certain property
owners to the unearned benefit of other property owners.
b. Will an affordable housing product be difficult to integrate into the proposed market development
because of significant price and product type disparity?
The proposal of 30 integrated on-site affordable units composed of for-sale town-homes and secondary
rental units will provide affordable units that better blend in with the existing higher-end single-family
detached homes in the vicinity.
The combined town-home, secondary unit, and credit request proposal provides for the most effective
use of the City's affordable housing budget by reducing required subsidies while providing over 75% of
the inclusionary units on-site, integrated within the proposed development.
The applicant is proposing to buffer the on-site town-home project with single-family homes to be built
immediately north of the proposed site. The site is further buffered by Poinsettia Lane on the south and
the parking area for the adjacent multi-family project located immediately west of the proposed site.
A larger affordable housing project could raise greater price, product type disparity, and land use
compatibility opposition with regard to the existing larger lot, higher-end detached single-family homes in
surrounding developments. This could also occur with the proposed new homes in this development
ranging in size from 2,800 to 4,300 square feet on 5,700 to 39,000 square foot lots with estimated base
prices ranging from the upper $300,000'~ to the mid $500,000'~.
0
0
7
..
C.
2.
a.
b.
C.
d.
Does the on-site development entity have the capacity to deliver the proposed affordable housing
on -s i te?
The ability to obtain off-site credits for the proposed combined development, in lieu of the subsidies that
would be required from the City, greatly enhances the economic viability of providing the inclusionary
housing project on-site, for the applicant and the City.
Standard Pacific Homes is a reputable company with a long history of development success in this area.
Standard Pacific Homes is working with an affordable housing development team that are experienced in
Carlsbad, as well as with the requirements and procedures of State and Federal affordable housing
agencies.
Relative AdvantageslDisadvantages of the Off-site Proposal.
Does the off-site option offer greater feasibilitv and cost effectiveness than the on-site alternative,
particularly regarding potential local public assistance?
0
Villa Loma is built and has proven its feasibility; no additional assistance is required.
The CT 98-14 project participation in Villa Loma will minimize the expenditure of City funds to the
amount that the associated with the proposed Villa Loma credits. Future collected funds could then be
used to provide additional affordable housing in other developments and locations. Conversely, an on-
site inclusionary project meeting the full 39-unit obligation at this location would create demand for
significant additional subsidy from the City.
The ability to obtain off-site credits allows for 15 new affordable for-sale units and 15 new affordable
rental units to be built onsite while minimizing additional subsidy impacts to the City.
Does the off-site proposal have location advantages over the on-site alternative, such as proximity
to jobs, schools, transportation, services, less impact on other existing developments, etc.?
The combined proposal has the advantage of dispersing the affordable housing obligation across the
project and within the Villa Loma development, which also results in less impact to surrounding single-
family neighborhoods.
The combined proposal also allows for the dispersing of affordable units within Zone 20 as the proposed
development is located further to the west from Villa Loma, adjacent to Palomar Airport Road.
The Villa Loma development is located within close vicinity of public transportation, jobs (in the nearby
business parks and shopping centers), schools, library, shopping, parks, as well as, other amenities and
services due to its location along a major thoroughfare, El Camino Real.
Villa Loma is a self-contained affordable development in an area designated for higher density
residential development such as condominiums and townhomes. A 157-unit multi-family residential
project, Manzanita Apartments located just to the south of Villa Loma recently received City approvals.
Does the off-site option offer a development entity with the capacity to deliver the proposed project?
The Villa Lorna project is an existing project, developed and managed by a highly experienced and
specialized affordable housing developer.
Does the off-site option satisfy multiple developer obligations that would be difficult to satisfy with
multiple projects?
The Villa Loma project was originally established as a Combined Project specifically to address this
purpose.
0 The obligation to provide all inclusionary units on-site would result in an affordable housing project that
would potentially be one of several projects in the southwest quadrant competing for scarce financial
assistance. Villa Loma has already been financed and built and thus, is not competing for subsidy
financing. The combined proposal on-site minimizes the competition for outside financial assistance.
8 i4
3. Advancing Housing Goals and Stratew
a. Does the off-site proposal advance andlor support City housing goals and policies expressed in the
. Housing Element, CHAS and lnclusionary Housing Ordinance?
General Plan Housing Element and CHAS Goals:
The Villa Loma Apartment affordable project is targeted to the highest priority need identified, larger
rental units for low-income households. The recovery of the City’s investment in the Villa Loma Project through the applicant‘s participation will
provide for additional resources that are needed to sustain the city’s affordable housing activities.
Villa Loma provides a large quantity and diversity of affordable housing stock with its 344 units, including
a generous supply of different site units to meet various housing needs of the community.
lnclusionary Housing Ordinance Policies:
Consistent with the City and public interests to use existing “excess” affordable units before supporting
additional new construction.
In conjunction with the combined Villa Lorna project, the Thompsonmabata Poinsettia Properties will
provide for 15% of the total units for affordable (lower income) residential units. The project also
complies with the lnclusionary requirements as contained in the General Plan Housing Element.
Growth Management Zone, Ord. No. NS-257 Guidelines:
The combined proposal to construct 30 affordable housing units on-site with the opportunity to obtain off-
site credits for the remainder of the affordable housing obligation associated with the proposed project is
consistent with the guidelines.
The proposed on-site affordable housing is coordinated within the proposed development and with surrounding properties and provides access to Palomar Airport Road, as well as circulation and
pedestrian access to public facilities.
Villa Loma is coordinated with surrounding properties by providing direct access to a major Circulation
Element Roadway, El Camino Real, as well as circulation and pedestrian access to public facilities.
9
THQMPSOWABATA POINSET71A PROPERTIES 1/1Q/oo '
.-.I
REVENU E ANALYSB
PLAN 2 - 2 BEDROOM
PLAN 3 - 3 BEDROOM
GROSS REVENUE
PLAN 5 - 3 amRom
MND DEVELOPMENT COS TS
LANO
ON SITE IMPROVEMENTS
FEES AND TECHNICAL
OESIGN/CONSULTANTS
IMPROVED SITE COST
LAND CARRY 18MO
LANO DEVELOPMENT COST
INClUSlONARY HOUSJNG
COMPARATIVE PRO FORMA
PRICE UNITS REVENUE
$1 4a,ooo 5 mo.aoo - -I--- sm,ooo 5 $840,000
$1 73.400 5 sass, ooc
$2,445,000
s1,125,000 w30,aoo
$500,000 $as,oco
$2.1 40,000
5172,000
$2.31 2,000
UNlT CONSTRUCTION COSTS 2BR. 3 0R 3 3R
UNIT SIZE 1129 1362 1542
SQUARE FEET (project) SE4S6 1381 0 771 0 20.155
STRUCTURE COST S51.GO sza7,895 $347,310 sm,zio $1,028,415
ON SITE INDIRECTS $1 48,000
OVERHEAD $1 45,000
SALES B MARKETING (include closing costs) $225,COO
C 0 NS TR UC TI0 N COSTS $1,548,415 $1,548.4:5
CONST FINANCING $1 12.000
PROJECT C03T 53,970,415
TOTAL GAP
Oeveloper land contribution
NET GAP
PER UNIT NET GAP
PER UNIT GROSS SUBSIDY
Page 1
$1,625,415
$1 ,I 25,000
$400,413
$16,694
$1 01,694
JACK HEPJTitORN ASSOCIATES
MKNAtfordable Froforrna - 15 THs.xl3
*
EXHIBIT 3
RECORDING REQUESTED BY:
City of Carlsbad
WHEN RECORDED MAIL TO:
City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad. California 92008
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
IMPOSING RESTRICTIONS ON REAL PROPERTY
This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON
by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as
the ("City"), and Standard Pacific Corp., a Delaware Corporation, (hereinafter referred to as the
("Developer"), is made with reference to the following:
REAL PROPERTY ("Agreement"), entered into as of the day of 200-9
A. Developer is the owner of certain real property in the City of Carlsbad, in
the County of San Diego, California (hereinafter referred to as the ("subject property") descried
in Exhibit "A", which is attached hereto and incorporated herein by this reference.
B. Developer wishes to construct 238 residential housing units for sale at
prevailing market prices ("Market Units") and 24 residential housing units for sale at affordable
prices ("Affordable Units") on the subject property. The City has approved Zone Change ZC98-
08, Local Coastal Plan Amendment LCPA 98-04, Carlsbad Tentative Tract Map CT 98-14,
Planned Unit Development 98-05, Condominium Permit CPOO-02, Hillside Development Permit
HDP 98-15, Coastal Development Permit CDP 98-68 and Site Development Plan 99-06 for the
proposed development (Development). The City issued these approvals subject to certain
Conditions of Approval, including a condition requiring the Developer to enter into an
Affordable Housing Agreement in which Developer agrees to provide 24 dwelling units
affordable to lower-income households and to purchase sixteen (1 6) Affordable Housing Credits
within the Villa Loma Apartment project.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as
follows:
1. Satisfaction of Affordable Housing Obligation and Conditions of Atmroval. In
order to satisfy the Conditions of Approval and requirements of the City's Inclusionary Housing
> 'j REV. 02/05/03 L.
Ordinance, Carlsbad Municipal Code Chapter 21.85, Developer shall provide a total of twenty-
four (24) Affordable Units that shall be restricted and affordable to lower-income households. Jn
addition, the Developer shall purchase sixteen (16) Affordable Housing Credits within the Villa
Loma Apartment project. This Agreement is an Affordable Housing Agreement pursuant to
Section 21.85.140 of the Carlsbad Municipal Code. Developer shall submit this Agreement to
City and Agreement shall be executed prior to the approval of the final map for the subject
property.
2. Terms Governing Provision of Affordable Units.
2.1. Obligation to Provide Affordable Units.
,,,
2.1.1. Developer shall provide the twenty-four (24) Affordable Units in
relation to Market Units ("Market Units") on the Subject Property. The Affordable Multifamily
Units shall include three and four bedroom units in the numbers and with the square footage
indicated in "Attachment B" to this Agreement. The maximum allowable income level of buyers
of the affordable units shall be restricted to a maximum of 80% of the area median income.
2.2 Schedule for DeveloDing Affordable Units.
2.2.1. Prior to the approval of any Final Map for the Development: (i)
this Agreement shall be duly executed and recorded; (ii) the developer of the Affordable Units
shall have received approval of a Site Development Plan for all of the Affordable Multifamily.
2.2.2 Prior to the release of any building permits for the
Development, the Developer shall purchase 16 affordable housing credits in the Villa Loma
Apartments.
2.2.3 Upon satisfjmg the applicable conditions stated in Sections 2.2.1
and 2.2.2, building permits can be released for a total of eighty (80) market rate units and twenty-
four (24) Affordable Units.
2.2.4 Once building permits have been released and the foundations for
the twenty-four (24) Affordable Units are complete, inspected and approved, an additional
seventy-nine (79) building permits for market rate housing shall be released at Developer's
request.
2.2.5 Once the final Certificate of Occupancy is issued for the last of the
twenty-four (24) Affordable Units to be constructed, the building permits for the remaining
seventy-nine (79) market rate housing units shall be released at Developer's request.
2.3 Terms for Sale of Affordable Units.
2.3.1. The Schedule of Maximum Eligible Buyer Incomes and Affordable
Subsidized Purchase Prices (the "Schedule") attached hereto and incorporated herein as Exhibit
1 e3 REV. 02/05/03
8 1
D sets forth the City's requirements for determining the maximum household income of buyers of
the Affordable Units ("Eligible Buyers") and the methodology for calculation of the subsidized
purchase prices of Affordable Units which will be affordable to each of the Eligible Buyers (the
"Affordable Purchase Prices"). The Schedule also includes initial estimates of Eligible Buyer
actual incomes and the corresponding Affordable Purchase Prices. The Final Schedule shall be
established prior to sale based on the San Diego County Area Median Income and the cost factors
applicable at the time. The Final Schedule shall be submitted by the Developer and approved by
the City's Housing and Redevelopment Director prior to the marketing of the Affordable Units.
2.3.2. The Developer shall sell the Affordable Units only to Eligible
buyers whose household incomes have been verified by the Developer. The purchase price for an
Affordable Unit (the "Market Purchase Price") shall be the market price charged for a
comparable unit (and not to exceed fair market value); provided, however, that the Developer
shall cany back financing equal to the difference between the Market Purchase Price and the
Affordable Purchase Price for the particular Eligible Buyer (the "Primary Affordability
Subsidy"). The carryback financing shall be assigned by the Developer to the City, and shall be
evidenced by a promissory note from the Eligible Buyer to the City, secured by a second
mortgage deed of trust on the Affordable Unit (the "City Second Mortgage"). The balance of the
Market Purchase Price shall be paid by the Eligible Buyer to the Developer in cash, utilizing
downpayment monies and first mortgage proceeds.
2.4 Terms for Re-sale of Affordable Units. After the initial sale of the inclusionary for-
sale units at a price affordable to the target income level group, inclusionary for-sale units shall
remain fiordable to subsequent low income eligible buyers pursuant to a resale restriction for a
minimum term of fifteen (15) years. Beginning sixteen (16) years after the initial purchase of an
Affordable Unit, for-sale units may be sold at a market price to other than targeted households
provided that the sale shall result in the recapture by the City or its designee of a financial interest in
the units equal to the amount of subsidy necessary to make the unit affordable to the designated
income group and a proportionate share of any appreciation. Funds recaptured by the City shall be
used in assisting other eligible households with home purchases at affordable prices. To the extent
possible, projects using for-sale units to satisfy inclusionary requirements shall be designed to be
compatible with conventional mortgage financing programs including secondary market
requirements.
3. City Amroval of Documents.
3.1. The following documents, in form and substance acceptable to the City,
shall be used in connection with the sale of Affordable Units. Documents to be prepared by the
Developer shall be submitted to the Housing and Redevelopment director for review and
approval no later than the start of construction of the Affordable Units.
3.1.1. A marketing plan establishing the process for seeking, selecting
and determining the eligibility of buyers of the Affordable Units shall be prepared by the
Developer.
3.1.2. An educational program informing Affordable Unit purchasers of
the obligations of home ownership and the specific features of this program shall be prepared by
the Developer.
3.1.3. Purchase and Sale Agreements for sale of the Affordable Units
shall be prepared by the Developer.
3.1.4. City Second Mortgage promissory note, deed of trust, and
borrower disclosure form shall be provided by the City.
3.2 Any of the documents identified in this section 3.1 may be revised by
Developer fkom time to time with the prior Written approval of the Housing and Redevelopment
Director.
4. Mortgage Credit Certificate Promam. Buyers of the Affordable Units may qualify
for income tax credits pursuant to Mortgage Credit Certificate (MCC) Program, for a portion of
the annual interest paid on a first mortgage used to acquire the Affordable Unit. City shall
cooperate with Developer in obtaining and providing to prospective buyers Mortgage Credit
Certificates fkom allocations that it may receive.
5. Reportinn and Compliance Monitoring. A report verifjmg compliance with the
requirements of this Agreement covering the initial sales of the Affordable Units shall be
provided to the City by the Developer and approved by the Housing and Redevelopment
Director. Developer shall provide the City with other reports as reasonably required by the City
to verify compliance with this Agreement.
6. Default. Failure of the Developer to cure any default in the Developer's
obligations under the terms of this Agreement within (90) days after the delivery of a notice of
default fkom the City (or where the default is of the nature which cannot be cured within such
ninety (90) period, the failure of the Developer to commence to cure such default within the
ninety (90) day period or the Developer's failure to proceed diligently to complete the cure of
such a default within a reasonable time period but in no event not greater than 180 days) will
constitute a failure to satisfy the Conditions of Approval with respect to the Subject Property and
the requirements of Chapter 21.85 of the Carlsbad Municipal Code and void the approval of the
Final Map and Site Development Plan; and the City may exercise any and all remedies available
to it with respect to the Developer's failure to satisfy the Conditions of Approval, including but
not limited to, the withholding of building permits for the Market Units within the Subject
Property until such cure is completed.
7. Appointment of Other Agencies. At its sole discretion, City may designate,
appoint or contract with any other public agency, for-profit or non-profit organization to perform
the City's obligations under this Agreement.
8. Release of Subiect Property From Agreement. The covenants and conditions
herein contained shall apply to and bind the Developers and its heirs, executors, administrators,
..-.
~ L... REV. 02/05/03 .L -3
I
successors, transferees, and assignees of all the parties having or acquiring any right, title or
interest in or to any part of Subject Property and shall run with and burden the Subject Property
and shall run with and burden the Subject Property until terminated in accordance with the
provisions hereof. Prior to the issuance of building permits, the Developer shall expressly make
the conditions and covenants contained in this Agreement a part of any deed or other instrument
conveying any interest in the Subject Property. Notwithstanding anything to the contrary set
forth in the Agreement, individual purchasers of units pursuant to an approved public report in
compliance with the California Subdivided Lands Act, and mortgage lenders holding deeds of
trust on such individual units after sale to such purchasers, shall not be subject to the terms of
this Agreement; and the terms of this Agreement shall be of no further force or effect with
respect to such completed unit on the date of the recordation of a deed to the individual
purchaser. Upon issuance of certificates of occupancy for all of the Affordable Units, the entire
Subject Property, with the exception of the property subject to the approval Site Development
Plan SDP99-06, shall be released from the burdens of this Agreement. The burdens of this
agreement shall remain in full force and effect and recorded against the property subject to the
approval Site Development Plan SDP99-06 for the duration of this agreement.
9. 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 '7ndemnitees"), 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, judgments and executions for damages of any and
every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of
or relating in any manner to Developer's performance or non-performance pursuant to this
Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. The
provisions of this section shall survive expiration or other termination of this Agreement or any
release of part or all of the Property from the burdens of this Agreement: and the provisions of
this Section 9 shall remain in full force and effect
10. Insurance Requirements: Developer shall obtain, at its expense, comprehensive
general liability insurance for the development of the Subject Property naming Indemnitees as
additional named insureds with aggregate limits of not less than five million dollars ($5,000,000)
for bodily injury and death and property damage, including coverages for contractual liability and
products and completed operations, purchased by Developer or its successors or assigns from an
insurance company duly licensed to engage in the business of issuing such insurance in the State,
with a current Best's Key Rating of not less than A-:V, such insurance to be evidenced by an
endorsement which so provides and delivered to the Housing and Redevelopment Department
prior to the issuance of any building permit for the Subject Property..
11. 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 addressed set forth below:
-_ -3. REV. 02/05/03
I
TO THE CITY OF CARLSBAD
CITY OF CARLSBAD
Housing and Redevelopment Department
Attn: Housing and Redevelopment Director
2965 Rooseveit Street, Suite B
Carlsbad, California 92008-2389
TO THE DEVELOPER:
STANDARD PACIFIC COW.
Attn:
9335 Chesapeake Drive
San Diego, CA 92123-1010
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.
12.
the parties and no modification hereof shall be binding unless reduced to writing and signed by
the parties hereto.
Integrated Agreement. This Agreement constitutes the entire Agreement between
13. Duration of Agreement. This Agreement shall terminate and become null and
void upon the earlier of: (a) the closing of the sale of the last of the Affordable Units to an
individual purchaser pursuant to a sale on an approved public report in compliance with the
California Subdivided Lands Act, or (b) upon the granting of a written release by the Community
Development Director. This Agreement, and any section, subsection, or covenant contained
herein, may be amended only upon the written consent of Developer and the Community
Development Director.
14. Recording of Agreement. The parties hereto shall cause this Agreement to be
recorded against the Subject Property in the Official Records of he County of San Diego.
15. Severability. In the event any limitation, condition, restriction, covenant, or
provision contained in this Agreement is to be 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.
? 7 REV. 02/05/03 -
IN WITNESS WHEREOF, the parties hereto have caused 1
executed as of the day and year first above written.
.is agreement to be
DEVELOPERS CITY
City of Carlsbad, a Municipal corporation
By: By:
Todd Palmer, President
Standard Pacific of San Diego,
a Division of Standard Pacific Corp.,
Authorized Representative
Sandra L. Holder
Community Development Director
By:
Brian Utsler, Vice President,
Standard Pacific of San Diego,
a Division of Standard Pacific Corp.,
Authorized Representative
Proper notarial acknowledgment of execution by contractor must be attached. If a Corporation,
Agreement must be signed by one corporate officer from each of the following two groups.
*Group A.
Chairman, Secretary,
President, or
Vice-president
**Group B.
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under
corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
RONALD R. BALL, City Attorney
By:
Assistant City Attorney
REV. 02/05/03 : 1 -3
ATTACHMENT A
LEGAL DESCRIPTION OF SUBJECT PROPERTY
. "
REV. 02/05/03 27
ATTACHMENT B
LOCATION, SIZE, AND BEDROOM COUNT
OF AFFORDABLE UNITS
REV. 02/05/03 3 6
ATTACHMENT C
BUILDING PERMIT PHASING PLAN
Action Required/ 1 # of Building I Phasing Permits & Type
Released
80 Receive Approval of an SDP for
the affordable housing project,
execute and record the
Affordable Housing Agreement
approved by the Housing and
Redevelopment Director, affordable
purchase 16 affordable housing condominium
credits. units
All building permits issued and
foundations complete, inspected market rate
and approved for all 24
affordable condominium units.
market rate
building permits.
24
79
building permits
Final Certificate of Occupancy 79 I issued for all 24affordable market rate
262 Units I I
% of Total Comments
Permits for
Project
3 1% Final maps allowed for a
total of262 units. A total of
and 104-building permits could
be issued at this point in
9% time; 40% of total permits
I
30% At this point, 159 market
rate units (67% of the
market rate units) could be
under, or begin
construction. I
At this point, all 238 market
rate units could be under, or
begin construction.
3 0%
100% Allows for a total of 238
market rate and 24
affordable units.
3,
REV. 02/05/03
ATTACHMENT D
MAXIMUM ELIGIBLE BUYER INCOMES
REV. 02/05/03 3z
Exhibit 4
CT98-I 4
ThompsodTa bata
DRAFT
Minutes of: HOUSING COMMISSION
Time of Meeting: 6:OO P.M.
Date of Meeting: September 9,2004
Place of Meeting: HOUSING AND REDEVELOPMENT OFFICE
CALL TO ORDER
Vice Chairperson Huston called the Meeting to order at 6:OO p.m.
PLEDGE OF ALLEGU~CE
The Pledge of Allegiance was waived because there wasn’t a flag at the Housing and Redevelopment Office.
ROLL CALL
Present: Commissioners: Renee Huston
Doris Ritchie
Margaret Schraml
Bobbie Smith
Absent: Edward Scarpelli
Staff Present: Housing and Redevelopment Director: Debbie Fountain
Management Analyst: Craig Ruiz
APPROVAL OF MINUTES
Minutes of March 1 1,2004, were approved as written.
VOTE: 4-0
AYES: 4-0
NOES: None
COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA
There was no audience in attendance, who wished to speak at this time.
NEW BUSINESS
Vice Chairperson Huston stated we would be reviewing CP 03-03, Bressi Ranch Financial Assistance. A
recommendation of approval to the City Council to provide $2,000,000 in financial assistance and approval of the
borrower loan documents for development of one hundred affordable condominium units to satisfy the requirements
of the inclusionary housing ordinance for the Bressi Ranch Master Plan.
Craig Ruiz gave a verbal presentation. Bressi Ranch is a Master Plan Community on the comer of Palomar Airport
Road and El Camino Real. There will be a total of 623 residential units. As part of that, 523 of those units will be
single-family homes, which will be market rate units. There will also be a condominium project of 100 for-sale units
that will be available to low-income households. That will satisfy their inclusionary housing requirement. Out of the
100 units, they will be two and three bedrooms, ranging from 900 to a little over 1,100 square feet. In exchange for
that, they are asking for $2,000,000 in financial assistance. The Staff Report breaks down the subsidy analysis on
page 3. The average cost of the units are about $2 15,000. The units will sell for about $177,000. That average cost
is just the cost of construction. It will not include the cost of the land.
The total revenues for the project would be about $17,700,000 if all the units sold. The project cost will be about
$21,500,000 so that leaves a shortfall. That gap doesn’t include the land so the proposal is to fill that 3.7 million
dollars contribution from the developer of $1,700,00 and the City’s contribution would be $2,000,000. In the past,
the assistance has been given to the builder during construction, which is a construction loan, and then the obligation
to repay the loan is transferred to the buyer of those units.
3c1
0
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 2 of 8
Instead of providing the money during construction, we are going to give the money to the buyer of the affordable
unit as part of the escrow process. It will be more of a first-time homebuyer program in that no real money will be
coming to the buyer. It will be delivered into escrow; part of the sales transaction. That assistance as well as the
developer’s assistance is recorded as a second deed of trust. The buyer must stay there for fifteen years. If they do
sell within the fifteen years, they have to sell it to another affordable household. If they sell it after year fifteen, they
can sell it at a market price, but the subsidy and the builder’s subsidy is recaptured, plus there is a share in the equity.
In addition to recommending approval of the money, there is also the loan documents the borrower will actually use
which is a typical promissory note, the deed of trust and a resale agreement. Also a disclosure statement that
explains in plain English explain the process to each of the buyers.
Roughly a third of someone’s monthly income who is low income can go toward the total of their household cost.
Household cost consists of paying the loan, the principal and interest, but it is also the property taxes, HOA fees.
Usually the HOA fees pick up the insurance requirement, but if there is a separate insurance requirement, then it goes
into the housing cost.
The recommendation is the $2,000,000 in financial assistance as a homebuyer assistance program and then
recommending approval of all related documents.
Vice Chairperson Huston said she had a little difficulty understanding the documents and asked for clarification. Is
the recommendation of $2,000,000 in financial assistance from the Housing Trust Fund in the form of low-income
buyer down payment assistance?
Craig Ruiz said that is correct.
Vice Chairperson Huston continued, of the $2,000,000, you have down payment money and approval of the
borrower loan document for construction of 100 affordable condominiums.
Craig Ruiz said he understands and it is a little misleading. He said the loan documents that are attached are separate
from the money. All 100 households that buy those units are going to use these loan documents. Then the money
plus the documents, are all to allow for the building of those 100 affordable units.
Vice Chairperson Huston said she noticed it also said the developer of Lennar Homes is not receiving a developer
fee for the development of this project. How much would the developer fee be?
Craig Ruiz answered that some developer fees for past projects, primarily on rental projects, have brought anywhere
from 7% to 15% of the hard construction cost.
Vice Chairperson Huston asked what the reason was that they didn’t get a developer fee.
Craig Ruiz replied that on one hand, there is Lennar and then affiliated with Lennar is Greystone Homes, another
subsidiary. Greystone will be building the units, and there is a profit that Greystone will earn when building them.
There is some money that is being earned there, It is not in addition to the developer fee. If you hired a general
contractor, there would be the cost of construction plus their profit. It would be reasonable to charge a developer
fee, but it just adds to the cost and there is only so much money we will fill. Basically we just add to the subsidy
amount needed to the project.
Vice Chairperson Huston asked if the developer fee was waived then?
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Craig Ruiz said in a sense, yes. There is only so much money you can make on the sale, and if 10% is added, that
would just widen the gap between the revenues and cost. There is no other subsidy sources out there for these types
of for-sale projects.
Vice Chairperson Huston asked the Commissioners if there were any questions.
Commissioner Ritchie asked where the $2,000,000 comes from.
Craig Ruiz replied that the City has an Affordable Housing Trust Fund that when builders build small projects, they
pay in-lieu fees. Also, money from other affordable housing loans have been paid back with interest; that money
goes into the Housing Trust Fund. Also, with the Villa Loma Project, there are all the extra units there. It was built
with 183 extra units and we sell credits in those to smaller developments so people pay us that way. The fund has a
total value of $14,000,000 when you add in all the loans. There is over $8,000,000 in money available to lend to
projects.
Commissioner Ritchie asked about the cost per square foot. How does that compare with what we have dealt with
previously?
Craig Ruiz said it is hard to compare. The last for-sale project that we saw was in 1999 and the costs are so
dramatically different we didn’t really go into that.
Tom Sakai, Principal for Springbrook Realty Advisors, said from the developer’s perspective, these costs are the
equivalent of what are seen for other market rate projects, not affordable projects, in Orange and San Diego County.
This reflects the high quality of this project.
Commissioner Smith asked if the two bedroom, one bathroom units are one bath or half a bath?
Tom Sakai answered it is one bathroom in the two bedroom floor plan. For a three bedroom affordable unit, two
bathrooms are provided. It is hard to serve all people on a limited construction budget.
Vice Chairperson Huston stated that the fund currently has a balance of 9.1 million dollars. If we take $2,000,000
out, that leaves it at 7.1 million dollars. With all the projects that are out there, is that an adequate remaining balance
to do what is needed?
Craig Ruiz replied that yes it is. We look at what projects are out there and what they can possibly request. It is hard
to judge since a lot of the loans that have been done are called residual receipts. That is the profit left over after
paying expenses and paying the other loans that are ahead of us. It is an estimate so it is a revolving fund. There
should be enough money for all of the projects. There could be some timing issues or there may never be an issue.
Vice Chairperson Huston said she understood, we are in the safety zone.
Craig Ruiz said yes, definitely.
Tom Sakai and Keith Reinhawn showed a drawing of the plans. Keith Reinhawn is from Greystone Homes. He said
they are building ten, ten-plex units. They are two and three bedroom. Each building is identical. It has been
incorporated into the Master Plan for Bressi Ranch and will have access to amenities throughout the community.
There is a recreation center and a pool and other amenities.
Vice Chairperson Huston asked where the parkmg units are?
Mr. Reinhawn said they have garages. There will be additional parking for guests throughout the community.
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Commissioner Ritchie commented that Mr. Reinhawn said a pool. Commissioner Ritchie understood there wouldn’t
be a pool in Bressi Ranch.
Mr. Remhawn said there is a pool being built at Bressi Ranch. The buildings will have a Spanish-type architecture.
It blends in nicely with the community. It is being built with high speculation levels. For an affordable community,
it is something that the City of Carlsbad can be proud of. The neighborhood of Bressi Ranch is a high end, upscale
community that will fit in this neighborhood very nicely.
Commissioner Ritchie asked where it is located.
Mr. Remhawn pointed it out on the plans. It will be in the center of the community up on the hill and has some
ocean views. The recreation building and the pool is within walking distance.
Commissioner Ritchie asked where the Boys and Girls Club will be located.
Mr. Reinhawn pointed out where the Boys and Girls Club will be, which is close to the affordable housing units. He
shared the different elevation drawings of the project.
Vice Chairperson Huston said she noticed the vegetation shows full grown trees. She asked if they will be planting
full-grown trees?
Mr. Reinhawn said no, probably not.
John Slatton, Director of Operations at Lennar Homes, commented further on the vegetation and said there will also
be planters. On the original Bressi Ranch, there were several mature trees saved and boxed and have already been
replanted. This is a high-end affordable community. The exterior elevations are typical of any condominium
project.
Commissioner Schraml asked if there has been any discussion about the buildings being in the flight path of the
airport? Any foreseen problems?
Craig Ruiz said that was addressed when the master plan was approved through the planning process. There is a
flight path adjacent to it. This is why you see the commercial and industrial along the major roads and the residential
is further in.
Commissioner Schraml asked if the future buyers will be aware that they are on a flight path?
Craig Ruiz said yes, when a project is approved anywhere in the City, that is one of the things they have to disclose.
Then there is something they have to sign as well stating they are aware of it.
Commissioner Smith commented that when Bressi Ranch was submitted to the San Diego Awards Committee, she
happened to have been on it. She said it is a beautiful project and an honor to have them in Carlsbad.
Vice Chairperson Huston asked if there were any other questions or comments.
Vice Chairperson Huston asked for a recommendation of approval to the City Council to provide $2,000,000 in
financial assistance and approval of the borrower loan documents for development of one hundred affordable
condominium units to satisfy the requirements of the Inclusionary Housing Ordinance for the Bressi Ranch Master
Plan. Commissioner Ritchie moved and Commissioner Smith seconded the approval.
VOTE: 4-0-0
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PAGE 5 of 8
AYES:
NOES: None
ABSTAIN: None
Huston, Ritchie, Schraml, and Smith
Vice Chairperson Huston continued with the second item, CT 98-14, Thompsoflabata request to purchase
affordable housing credits. It is a recommendation of approval to the City Council to approve the request to
purchase sixteen affordable housing credits in the Villa Loma Affordable Housing Development to satisfy a portion
of the requirement of the Inclusionary Housing Ordinance for the ThompsodTobata Residential Development.
Craig Ruiz said the Thompsoflabata Project was approved in 2002 by the City Council and it allows for 238
single-family homes and 24-unit for-sale condominium development. The single-family homes, like the last project,
will be market rate units, and the condominiums are to satisfy a portion of their affordable housing requirement.
This project is unique in that they are going to build some affordable units and then they are seeking to purchase
credit. The requirement would be a total of forty units; 24 units would be built and 16 credits would be purchased.
The site is unique in that it is more of an infill development. Around it are existing homes and existing communities.
This project will have streets that will be going into these existing communities. Because this project is unique, we
have come to this proposal and to be more compatible with the existing neighborhood. The condominiums have
already been approved. All the units will be three and four bedroom units, which is another reason we have
supported this unique project. We don’t have a lot of large family units; that is one of our largest needs. Large for-
sale units are unique to any project that we have seen.
The reason this project is before you for the credit is because anytime a project is seeking to purchase ten or more
credits, it has to come before the Housing Commission for a recommendation to the City Council. As part of the
Staff Report, it is unique because it is within an existing community; more of an infill project. Staff is supportive of
this proposal because it is compatible with the community.
Vice Chairperson Huston asked what the reason is if they are building 24 units, then why do they need to put the
other sixteen somewhere else.
Craig Ruiz answered it was a combination of a negotiation between the City and the builder. It is also based on a lot
of community input about where to put the affordable units.
Vice Chairperson Huston asked if he was saying that the community didn’t want it. Was that it?
Debbie Fountain, Director of Housing and Redevelopment, said they have a unique situation in that they have
property on both sides of Poinsettia so when we were trymg to fmd the location for the affordable housing, it was
difficult to figure out where the best location was. It was constrained on how many total units can be produced there.
Because they said they would do larger bedroom sizes, we agreed they could do a portion of&e units on site and
portion of the units off site. Originally they wanted to do for-sale town homes and second dwelling units, but at the
time all of that was going on, the second dwelling units were getting a lot of criticism because people felt llke they
really didn’t meet the affordable housing need. At that time, they wanted to do a split; some credits, some second
dwelling units and some town homes. We agreed if they did the larger town homes, we didn’t really want to get the
second dwelling units at that point so we agreed that we would just let the rest of them be the credits. They were
going to originally do the 24 units and then incorporate the second dwelling units in the homes, but we said we
would rather them buy into Villa Loma rather then give us a second dwelling unit. Because all of that was designed
and it worked well and they were giving us the larger units, we agreed that we could accept that as a deal.
Vice Chairperson Huston asked if Villa Loma has sixteen units to spare?
Debbie Fountain said yes.
Vice Chairperson Huston asked how many units are available there.
HOUSING COMMISSION MINUTES
SEPTEMBER 9,2004
PAGE 6 of 8
Craig Ruiz said there is over 60 credits still available.
Vice Chairperson Huston said then by credits, you mean units?
Craig Ruiz said yes.
Vice Chairperson Huston commented that this would bring them to 44.
Debbie Fountain we have determined to make sure that we have an adequate number and we have always included
this number in that.
Vice Chairperson Huston continued that by the time we get to the City's build out and add all the affordable units in,
will that 44 be enough?
Debbie Fountain answered that staff thinks so. Staff also has another project that they are looking at across the street
from Villa Loma that will give us additional credits. They are looking at doing a 56 unit affordable housing project
that is not being done as an inclusionary housing project. We will be able to have some extra credits in there if we
needed to.
Craig Ruiz stated that is a project we will see before the end of this year.
Debbie Fountain agreed and said they would be coming back for financial assistance.
Joanne Watanabe, Standard Pacific Homes, stated they are currently building at Poinsettia. The affordable units and
the single family homes will all belong to one homeowner's association and they will all share the common
amenities. Whether the amenities are near the affordable site or intermixed within the single-family homes, they are
all equally shared by every resident.
Commissioner Ritclue asked if they are on both sides of the road?
Joanne Watanabe said most of the amenities are on the south side of the road where the affordable units are. The
north side is constrained because it is not a big site. The majority of the amenities are on the south side.
Vice Chairperson Huston asked for a recommendation of approval to the City Council to approve the request to
purchase sixteen affordable housing credits in the Villa Lorna Affordable Housing Development to satisfy a portion
of the requirement of the Inclusionary Housing Ordinance for the ThompsodTobata Residential Development.
Commissioner Ritclue moved and Commissioner Schraml seconded the approval.
VOTE: .4-0-0
AYES:
NOES: None
ABSTAIN: None
Huston, Ritchie, Schraml, and Smith
CHAIRPERSON'S REPORT
No reports.
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SEPTEMBER 9,2004
PAGE 7 of 8
DIRECTOR REPORT:
At the October 14, 2004 meeting, we are going to start having some workshops to get some community input on
what the needs in Carlsbad are. The decision has been made that a good place to have those workshops is with the
Housing Commission. This will be the first workshop and housing applicants will be invited to attend the meeting,
the Planning Department will make a presentation and attain some feedback. We have hired a consultant to do the
housing element where in the past the staff has always done the housing element, but we’ve decided this time to hue
a consultant, Bridges. Veronica Kemp, the lead, will be at that meeting getting input from the Housing Commission.
If you want to think about any thoughts you might have about affordable housing and what the needs are within the
community, we’ll be hearing from the advocate as well. There will probably be some more workshops to follow up
that because there will be a lot of interest we believe. This time around it will be for housing for the disabled,
moderate-income housing, and the ongoing demands for housing for low-income groups. Senior housing will be
another topic. Our housing element needs to address all of the different types of special needs groups. It is a fairly
lengthy process.
As mentioned previously, we have a 56-unit apartment project that has already been approved by the City Council,
but we need to present the financial assistance for that project to the Housing Commission. It is unique because it is
the first project being built that is not being built as a result of the inclusionary housing. It is an affordable housing
developer that identified a piece of property and wants to come in and build a project. Though the structure of the
deal is going to be a little different. It will not only be financial assistance, but we are going to look at other ways to
assist the project. That project will probably not be October, more like November or December.
We also have a project on Roosevelt Street that has been mentioned before. It is an eleven-unit apartment project
and that financial assistance will need to come to the Housing Commission.
Vice Chairperson Huston asked if they are only building eleven units, are they subject to inclusionary housing?
Debbie Fountain answered that it is going to be a hundred percent affordable project. This is the property the
Redevelopment Agency purchased so we are actually initiating the project. We partnered with Wakeland Housing
who will actually be developing and owning and operating the apartment project. We are doing it for two fold
reasons. One, the Redevelopment Agency itself has requirements to build affordable housing and most of the time
we are going to include the inclusionary end with that project. There have been projects that have been prior to the
inclusionary housing being implemented but the Redevelopment Plan was in effect so we have some need to provide
some units.
Commissioner Ritchie asked where that development is located.
Debbie Fountain answered it is down toward the end of Laguna, next to Brittany Court office building. The property
used to be used for storage and there was an abandoned house that was boarded up. We have cleaned up the site and
we are working on the permit to get that project built.
Everyone received invitations for the Mariposa Grand Opening. It would be a good idea to go up to the site as it is
beautiful. Some of the units have ocean views. Villages of La Costa is under construction and doing their affordable
housing. Their project overlooks the golf course. Bressi Ranch is moving forward. ThompsodTabata project is
moving forward. The Summit, which is a mixed income project, across from El Camino Real, and it is under
construction.
Commissioner Ritchie asked about the property being built on Cannon Road and Faraday; do we have anythmg in
there?
Debbie Fountain answered that it is called Pacific View and yes there are 11 1 affordable units in there.
Vice Chairperson Huston asked how many units there were total?
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HOUSMG COMMISSION MINUTES SEPTEMBER 9,2004
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Craig Ruiz said there are 450 total units.
Debbie Fountain continued that they have luxury units and the affordable units. They are very nice.
Commissioner Smith asked if that also has a home development?
Debbie Fountain said yes.
Vice Chairperson Huston asked if there was going to be another grocery store on that commercial property? On the
east side of El Camino Real?
Debbie Fountain was not aware of that. She did say Sunny Creek or Robertson Ranch is supposed to have a grocery
store in it.
Commissioner Smith asked if Bressi Ranch was supposed to have a movie theatre and a shopping area?
Debbie Fountain did say they are supposed to have a shopping area, a commercial area, but I don’t know what has
been proposed. They are still working on it, but I don’t thmk it is supposed to have a theater though I may be wrong.
Commissioner Smith also said they are supposed to have a school.
Debbie Fountain did say there is a shopping area next to the affordable project along with the Boys and Girls Club.
In addition, Craig Ruiz, Management Analyst, will be leaving the City of Carlsbad.
ADJOURNMENT
By proper motion, the meeting of September 9,2004 was adjourned at 6:45 p.m.
Respectfully submitted,
Debbie Fountain
Housing and Redevelopment Director
PATRICIA CRESCENT1
Minutes Clerk
MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.