HomeMy WebLinkAboutCT 98-14; Thompson/Tabata; Tentative Map (CT) (90)STANDARD PACIFICHOMES
October 14, 1999
Ms. Deborah K. Fountain
Housing and Redevelopment Director
City of Carlsbad
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Subject: Thompson/Tabata Poinsettia Properties - Request to Purchase Off-site
Affordable Housing Credits - CT 98-14
Dear Ms. Fountain:
This letter serves as a formal request by Standard Pacific Homes, acting on behalf of the
property owners of the Thompson/Tabata Poinsettia Properties CT 98-14 sites, to purchase
off-site affordable housing credits in the existing Villa Loma development. Upon approval by
the City, this request 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 Inclusionary 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 Policies 57 establishes procedures for the City to use in determining if a
proposed development meets the criteria to satisfy Inclusionary Housing Ordinance
obligations at an alternative site or sites. Further, City Council Policy 58 sets forth
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 Loma project (a "Combined Inclusionary Housing Project").
The options available to Thompson/ Tabata Poinsettia Properties CT 98-14 to satisfy its
inclusionary housing obligations, other than constructing affordable units on-site, are: 1)
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, or 2) enter into an agreement with the City to
purchase credits from the Villa Loma Combined Inclusionary Housing Project in accordance
with City Council Policy 58 dated September 12, 1995.
9335 Chesapeake Dr., S4n Diego, CA 92123-i010
TEL (6/9) 292-2200 FAX (619) 292-2260
Ms. Deborah Fountain
October 14, 1999
Page two
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 Loma project. The
analysis shows that there are sufficient excess credits to satisfy the potential demand of the
Quadrant.
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. Significant issues restrict the feasibility of
developing on-site affordable housing on the subject parcels. First, the development site is an
infill location surrounded by existing established neighborhoods principally consisting of
detached single family homes. An on-site high-density attached affordable housing complex
would not be compatible with the land use and character of the existing surrounding
neighborhoods. Second, the Thompson/ Tabata Poinsettia Properties site is comprised of
multiple parcels with multiple ownerships. Standard Pacific Homes may develop some or all of
the parcels depending upon final arrangements with the participating property owners.
Placement of attached affordable housing on any specific owner's parcel or parcels within the
Thompson/Tabata Poinsettia project would unfairly diminish the value of that owners' property
to the benefit of other owner's property. Alternatively, constructing small clusters of affordable
housing buildings on each owner's parcel or parcels in proportion to the respective mitigation
requirements of each parcel for an equitable burden to owners is clearly not practical or
advisable for numerous reasons.
This proposal to purchase credits in the Villa Loma project will result in increased public
benefit by returning City funds currently tied up in the Villa Loma project, which funds would
then be available for use in other City assisted inclusionary projects located in the City. 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 City Council. Our analysis of
the Thompson/ Tabata 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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Ms. Deborah Fountain
October 14, 1999
Page three
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,
STANDARD PACIFIC HOMES
Gregg Linhoff
Vice President, Acquisition & Development
Enclosure
cc: Mr. Jack Henthorn, Jack Henthorn & Associates
Mr. Craig Ruiz, Housing and Redevelopment Department
Mr. Mike Grim, City of Carlsbad, Planning Department
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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:
Owner/Applicant:
Standard Pacific Homes
Attn: Gregg Linhoff
9335 Chesapeake Drive
San Diego Division
San Diego, CA 92123-1010
619-292-2200
Owner
David & Karen Thompson Revocable Trust
& DKST Limited Liability Company
Attn: David & Karen Thompson
7040 Rose Drive
Carlsbad, CA 92009
760-438-1189
Owner
William E. Engler
10468 Hot Mineral Spa Road
Niland, CA 92257
760-354-1533
Owner
Evelyn M. Weidner, Richard John Dennis
& Kathleen M Dennis
P.O. Box
Cardiff By The Sea, CA 92007
Applicant's Representative:
Jack Henthorn & Associates
Attn: 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
Tabata Family Trust
Attn: Noboru & Evelyn Tabata
& Isokazu Tabata
P.O. Box 943
Carlsbad, CA 92018
760-438-0280
2. Off-site/Combined Project Name:
VILLA LOMA APARTMENTS
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3. Description of Project with Inclusionary Housing Obligation:
The Thompson/Tabata Poinsettia Properties, CT 98-14, is a proposed 253-lot, 249-unit, single-
family development 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 37.35-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 Engler
Tabata Family Trust, Noboru & Evelyn
Tabata, Co-Trustees (1/2 interest) and
Isokazu Tabata (1/2 interest)
Evelyn Weidner, Richard & Kathleen
Dennis
Total
Title Rep.
Area Ref.
A, B&E
C
D
F
G, H&l
J&K
L
APN's
21 4-1 70-75 & 36
21 4-1 70-09 por.
21 4-1 70-09 por.
&47
214-170-73
21 4-1 70-58 & 59
214-140-44 and
214-170-74
214-170-46
Proposed
Du's
5, 9 & 37
6
54&18
24
6&5
12&51
22
249
Indus. Hsg
Du's Oblig.
7.65
.90
10.80
3.60
1.65
9.45
3.30
37.35
4. On-site Affordable Housing Description:
If an on-site inclusionary housing project were required, it would require a reduction of 10 to 12
proposed single family lots in order to provide usable land for the inclusionary project. Thus, the
inclusionary housing required unit count would be reduced to approximately 35 units, and would
consist of 1, 2, and 3 bedroom units. The units would be offered in a maximum rent 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 $1,788,321 (assuming a fully
constructed pad is provided by the developer and unit revenues are based on a 95% occupancy
rate factor).
5. 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.
Villa Loma was financed with assistance from the City of Carlsbad and the Carlsbad
Redevelopment Agency. The city 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
Inclusionary Housing Ordinance, and developers may participate in this as an "off-site" method of
satisfying affordable housing obligations. (This is also an approved site for Greystone Cove,
Ocean Bluff, Lohf, Carnation, Hadley, Roesch and other projects in the vicinity.)
The proposed purchase of Villa Loma Affordable Housing Credits to mitigate the inclusionary
requirements of the Thompson/ Tabata Poinsettia Properties application is consistent with the
terms established by City Council Policies 57 and 58. If the applicant is afforded the opportunity to
purchase credits as proposed, the combined properties in the Thompson/Tabata Poinsettia
Properties tentative map shall require the purchase of an estimated 37.35 credits to satisfy the
inclusionary housing requirements for the project.
6. Description of On-site Project Constraints:
Specific site and ownership constraints exist at the Thompson/ Tabata Poinsettia Properties site
that greatly diminish the feasibility of producing on-site affordable housing. These constraints
consist of the independently owned parcel configuration within the project and the significant
product type difference between high-density attached units associated with inclusionary projects
and the existing single family homes in the neighborhoods surrounding the subject site.
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THOMPSON/TABATA POINSETTIA PROPERTIES
OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT
ASSESSMENT WORKSHEET
1. 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?
• Given the multiple ownerships within the proposed project area it is clear that on-site affordable projects
apportioned to each ownership will not be of sufficient size to be viable. Given the small size of the
potential individual projects and restricted rental structure, on-site management and maintenance would
be difficult to arrange efficiently, and land planning would be awkward at best.
• A combined on-site inclusionary 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.
• The small scale of a combined 35+/- unit on-site inclusionary housing project would make it difficult to
attract necessary interest from needed funding sources.
• The market units in this project would be required to absorb almost $7,200 per unit so that land value
could be contributed by the applicants. This figure would rise to over $17,200 per unit if the applicants
were required to build the units on-site and close the post land development gap of approx. $1,788,300.
• Based on the estimated restricted rental prices, the affordable units would require an average subsidy of
approximately $48,300 per unit, above and beyond land contributions. This would result in each unit
being subsidized with almost $116,000.
b. Will an affordable housing product be difficult to integrate into the proposed market development
because of significant price and product type disparity?
• Price disparity is substantial between low-income rental apartment units restricted at $695-$1,062 rent and
proposed higher-end single-family detached homes with estimated base prices ranging from the upper
$300,000's to the mid $500,000's.
• The integration of approximately 35 affordable apartment units, sized at 725 to 1,100 sq. ft., with the
proposed new homes ranging from approximately 2,800 to 4,300 square feet on 5700 to 39,000 sq. ft. lots
will result in major product type disparity on-site. A similar disparity with surrounding neighborhoods would
occur because the area is principally developed with single-family detached homes consistent with the
existing RM and RLM land use designations. An on-site project would, therefore, also result in product
disparity with the surrounding region.
• The on-site proposal could lead to undesirable land use conflicts that typically occur when higher density
development is permitted adjacent to larger lot existing single-family development.
c. Does the on-site development entity have the capacity to deliver the proposed affordable housing on-
site?
• Affordable housing developers have advised the applicant that affordable housing projects of this size are
significantly more difficult to finance than appropriately sized projects approaching 100 units or more.
• Small affordable housing projects lose economies of scale, therefore requiring much higher subsidies from
federal, state and local city sources.
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2. Relative Advantages/Disadvantages of the Off-site Proposal.
a. Does the off-site option offer greater feasibility and cost effectiveness than the on-site alternative,
particularly regarding potential local public assistance?
• Villa Loma is built and has proven its feasibility; no additional assistance is required.
• The CT 98-14 project participation in Villa Loma will permit the intended recovery of City funds by the
utilization of excess housing credits. These funds can then be used to provide additional affordable
housing in more feasibly sized developments in suitable locations. Conversely, an on-site inclusionary
project at this location would create demand for significantly above average additional subsidy from the
City.
b. 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 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.
c. Does the off-site option offer a development entity with the capacity to deliver the proposed project?
• The Villa Loma project is an existing project, developed and managed by a highly experienced and
specialized affordable housing developer.
d. Does the off-site option satisfy multiple developer obligations that would be difficult to satisfy with
multiple projects?
• Villa Loma project was originally established as a Combined Project specifically to address this purpose.
• An on-site affordable housing 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 subject site includes 9 parcels held in 6 separate ownerships.
Standard Pacific Homes may develop some or all of the parcels dependent upon negotiations with the
participating property owners. With this being the case, on-site construction of units may not be feasible
due to the small size of the individual owners' obligations.
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3. Advancing Housing Goals and Strategy
a. Does the off-site proposal advance and/or support City housing goals and policies expressed in the
Housing Element, CHAS and Inclusionary Housing Ordinance?
General Plan Housing Element and CHAS Goals:
• 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 size units to meet various housing needs of the community.
Inclusionary 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 Loma project, the Thompson/Tabata Poinsettia Properties will
provide for 15% of the total new units for affordable (lower income) residential units. The project also
complies with the Inclusionary requirements as contained in the General Plan Housing Element.
Growth Management Zone, Ord. No. NS-257 Guidelines:
• 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.
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THOMPSON/TABATA POINSETTIA PROPERTIES 10/14/99
INCLUSIONARY HOUSING
COMPARATIVE PRO FORMA
REVENUE ANALYSIS RENT UNITS REVENUE
1 BEDROOM $695 11 $7,645
2 BEDROOM $888 22 $19,536
3 BEDROOM $1,062 4 $4,248
37 $31,429
95% OCCUPANCY $29,858
OPERATING COSTS @ 30% ($8,957)
NET OPERATING INCOME $20,900
DEBT SERVICE INCOME (1.2) $17,417
* Note: The remainder unit obligation of .35 will be met by purchase of offsite credits in the Villa Loma project.
INCOME SUPPORTED DEBT $1,983,702
LAND DEVELOPMENT COSTS
LAND 10 Lots $2,500,000
ON SITE IMPS $750,000
PUBLIC FEES $721,500
DESIGN/CONSULTANTS $50,000
IMPROVED SITE COST $4,021,500
LAND CARRY 18MO $375,000
LAND DEVELOPMENT COST $4,396,500
UNIT CONSTRUCTION COSTS
UNIT SIZE 1 BR 2 BR 3BR
SQUARE FEET (project) 7975 18700 4400 31,075
STRUCTURE COST $45.00 $358,875 $841,500 $198,000 $1,398,375
ON SITE INDIRECTS 10% STRUCT. $108,763
OVERHEAD .04 $160,860
MARKETING .02 $80,430
CONSTRUCTION COSTS $1,748,428 $1,748,428
LOAN FEES .02 $39,674
CONST FINANCING $87,421
SUBTOTAL FINANCING $127,095
PROJECT COST $6,272,023
GAP $4,288,321
Developer land contribution $2,500,000
NET GAP $1,788,321
PER UNIT NET GAP $48,333
PER UNIT GROSS SUBSIDY $115,901
JACK HENTHORN ASSOCIATES
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