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HomeMy WebLinkAboutMINUTES - 12071993 - H.6 Contra Costa TO: BOARD OF SUPERVISORS County FROM: Harvey- E. Bragdon Director of Community Development DATE: December 7, 1993 SUBJECT: Somerset Affordable Housing Requirements SPECIFIC REQUEST(S) OR RECOMMENDATIONS (S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS CONSIDER Administrative Appeal of Dame' Construction on interpretation of Director of Community Development of Condition of Approval 4 (A) of 2983-RZ/SUB 7763./FDP 3003-92 . FISCAL IMPACT None. BACKGROUND/REASONS FOR RECOMMENDATIONS On March 17, 1992 the Board of Supervisors approved a General Plan Amendment changing the land use designation of a property in the Tassajara area from single family residential high density to multiple family residential low density (Resolution No. .92/161) . The subject property is located on the north side of Camino Tassajara, just east of Camino Blackhawk Road in the Tassajara area near the Blackhawk commercial center. On October 13 , 1992 the Board of Supervisors approved a Final Development Plan and Tentative Map (2983-RZ, Sub. 7763 , FDP 3003-92) for the Somerset Project. The applicant was Dame' Construction Co. , Inc. Among the conditions of approval was CONTINUED ON ATTACHMENT: XX YES SIGNATURE: yeet..'44� A J RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMM TION O BOARD COMM TEE APPROVE OTHER SIGNATURE(S) : ACTION OF BOARD ON December 7 , 1993 APPROVED AS RECOMMENDED x OTHER x_ See Addendum for Board action . VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Jim Kennedy 646-4076 cc: Community Development County Administrator ATTESTED December 7 , 1993 County Counsel PHIL BATCHELOR, CLERK OF GMEDA THE BOARD OF SUPERVISORS Dame' Construction AND COUNTY ADMINISTRATOR JK[lh BY-' CL A 441 DEPUTY sral l/somerset.bos an affordable housing requirement. The relevant conditions are attached hereto as Exhibit A. To implement the affordable housing requirements, the County and the developer entered into a Developer Agreement that restates the requirement and provides contractual guidance with respect to its implementation. A copy of the Developer Agreement is attached as Exhibit B. Dame' Construction has requested clarification relative to staff's interpretation of Condition #4, Subparagraph A. , which defines Low and Moderate Income Households. Low and Moderate Income Households are defined as follows: Households earning 80% to 120% of the area median income for Contra Costa County as adjusted for family size and defined in Section 50093 of the California Health & Safety Code. The current maximum income limits (120% of median) , based on the above definition, are as follows: Household Size Maximum Allowable Income 1 $44, 050 2 $50, 300 3 $56, 600 4 $62, 900 5 $67, 950 6 $72 , 950 7 $78,000 8 $83 , 050 The Dame' Construction position"is that the operative income limit is determined by assuming a family size appropriate for the number of bedrooms in the unit being purchased. Because all of the units in the Somerset development are three bedrooms, a family of four would be assumed, therefore the operative income limit under the Dame' interpretation would be $62,900. The staff position is that qualifying income is based on the actual household size of the buyer. This is based on the explicit language of the Condition of Approval and the subsequent executed Developer Agreement, which stipulates that income is adjusted for family size. This interpretation is consistent with the County's adopted Density Bonus Program, and the State statutes providing for density bonuses for the development of Low and Moderate Income housing. Each of those programs stipulate that eligible household income is adjusted for family size. All prior agreements of this type and agreements currently under negotiation provide for a definition of household income in which an adjustment for family size is provided for. This issue has been the subject of much discussion between staff and developer representatives. In negotiations held in April relative to the maximum sales price for the Developer Agreement (which is now agreed to contractually at $202, 500) , County staff expressed its concern that the agreed-to sales price could impact the potential market for the affordable units because the units would not be readily affordable to smaller families without large down payments. This risk was ultimately accepted. Subsequent to the execution of the Developer Agreement, the developer entered into their marketing program. Based on phone calls that County staff was receiving, it was evident that the developer did not correctly understand the affordable housing requirements, because they appeared to be using the four person income limit in qualifying all households for the low and moderate income affordable units. In a discussion in mid-August with the developer's staff and sales people, County staff clarified the operative low and moderate income limits. The developer nonetheless proceeded to execute purchase agreements for low and moderate income affordable homes with buyers who did not meet the maximum allowable income requirements of the Developer Agreement. ADDENDUM TO H.6 DECEMBER 7, 1993 This is the time heretofore noticed by the Clerk of the Board of Supervisors for hearing on the Administrative Appeal by Dame construction from the decision of the Director of Community Development concerning the interpretation of Condition of Approval 4 (A) of 2983-RZ/Sub 7763/Final Development Plan 3003-92 in the Danville area. James Kennedy, Redevelopment Department, presented the staff report on the appeal. He advised that the issue is in the interpretation of the language relative to the affordable housing provision, specifically Condition 4 (A) a definition of qualifying income. The public hearing was opened and the following persons appeared to give testimony: Michael Rupprecht, representing Dame Construction Company, presented his interpretation of the condition to the Board, and he presented a brief history of the project. Supervisor Powers requested clarification on the consequences of going along with Mr. Rupprecht's interpretation. Mr. Kennedy responded that that would be inconsistent with all of the previous agreements of a similar type that this County has entered into and are currently negotiating. Richard Robinson, Sales Director, Dame Construction Company, explained his experience with affordable housing. Supervisor Bishop commented on the terms in the development agreement and the interpretation of affordable housing. Supervisor McPeak spoke on the efforts by Dame Construction Company and Mr. Kennedy to reach resolution on this matter, and she commented on the need to move forward to allow the closings to move forward, and she proposed to allow the closings of the units that today have been qualified and are in progress and for the remaining units they must meet the definition, to get a total of ten to meet the definition of low to moderate income as opposed to the housing price. Supervisor Bishop commented that any that do not close should come in under the qualification but not to exceed 23. Supervisor Smith requested clarification on the number of units. Supervisor McPeak responded that Dame would have to mark down approximately six more market priced homes. Supervisor Powers commented on the unusual circumstances surrounding this subdivision being under affordable housing. The Board discussed the matter. Supervisor Smith suggested a contribution to the Affordable Housing Trust Fund in lieu of fulfilling the requirement of affordable housing. Supervisor Bishop expressed support for the alternative as stated by Supervisor McPeak to set aside an additional six units for affordable housing. Mr. Rupprecht proposed that he sell four more that qualify as staff interprets, new ones that qualify or ones that fall out from the 22, for a total of eight. Supervisor Bishop moved to set aside an additional four units as affordable units, and that any of the remaining 19 units that fall out of escrow shall qualify under the development agreement as is now understood. Supervisor McPeak seconded the motion and clarified the numbers. Supervisor Bishop amended the motion to a cap of 23. Supervisor McPeak clarified that the motion was to approve the closing of escrow on the 22 units that have been qualified, recognizing that of those 22 three do meet the staff interpretation, and further in order to close the 22, that the company will assure that the 23`d is sold at the interpretation of staff plus another four that can come from the escrows of the 22 that fall out but not of the three that qualified under the staff interpretation. IT IS BY THE BOARD ORDERED that the interpretation of Condition 4(a) is AGREED upon for 2983-RZ, Sub 7763 and FDP 3003-92 in the Danville/Tassajara area. I r, e I �—�— t 3 " • 6 Phil Batchelor The B?ard of Supervisors Contra 3:00 M Clerk of theBoard j Cuunty Administration Building Costa County Administrator 651 :Ptine St., Room 106 c510l646-2371 'Martinez, California 94553 County Tom Powers,1st District Jeff Smffh,2nd District Gayle Bishop,3rd District Surma YVtlyht McPsak 4th District ;� ` .• Tom Tortakson,5th District 07�•., :. •.mac C l r+o.... •'cT rrq.Co.N;�y December 1, 1993 Dame' Construction Company P.O. Box 1007 San Ramon, CA 94583 Attn: Mr. Michael W. Rupprecht Vice-President - Counsel Dear Mr. Rupprecht : Pursuant to Section 14-4 .006 of the County Ordinance Code, notice is given that December 7, 1993 at 3 : 00 p.m. at 651 Pine Street, Room 107, Martinez, California has been set as the time and place for .hearing by the Board of Supervisors of your appeal from the decision of the Director of Community Development Concerning the interpretation of the affordable housing requirements for the Somerset project (2983-RZ, Sub 7763) . If you challenge this matter in Court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the County, at or prior to, the public hearing. Very truly yours, PHIL BATCHELOR, Clerk of the - Board of Supervisors and County Administrator By Ann Cervelli, Deputy Clerk cc: County Counsel County Administrator Community Development Director • * 5 HOMES BY DAME DAME CONSTRUCTION COMPANY, INC. RECEIVED �C'\V/CCD P.O.BOX 1007 SAN RAMON,CA 94583 (510)837-0544 n' MICHAEL W. RUPPRECHT I 1993 VICE PRESIDENT-COUNSEL CLERK BOARD OF SUPERVISORS CONTRA COSTA CO. December 1, 1993 Tom Torlakson, Chairman HAND-DELIVERED Board of Supervisors 300 E. Leland Road, Suite 100 Pittsburg, California 94565 Re: Somerset Project (2983-RZ Sub 7763) Dear Chairperson Torlakson: The Dame' Construction Company intends for this letter to act as an Administrative Appeal by Dame' of the Determination by the Community Development Department on the Somerset Project taken by the County concerning the interpretation of the affordable housing requirements for the Somerset project. Our appeal is from the administrative decision of the County that is taking into account the income of the proposed affordable home buyer relative to the number of persons in the household size as opposed to the number of bedrooms. It is our contention that the qualifying income for an affordable unit is based upon the number of bedrooms. The Somerset project has 150 town homes. All of the town homes are 3 bedrooms, 2:2 baths with an attached 2-car garage. All of the town homes are exactly alike in size and amenities. The Somerset project is located adjacent to Blackhawk Shopping Plaza on Camino Tassajara. Twenty-three of the 150 town homes were earmarked as affordable units. The desirable aspects of the Somerset project was that the affordable units were to be built the same as all the other units with the philosophy being that when the affordability terminated, there would be no stigma in the neighborhood as to smaller or substandard units that would adversely affect the value of the project in future years. Our company has never been involved in an affordable housing project before. We relied upon the County's expertise in this area. What we focused on in conjunction with the County. staff was Tom Torlakson, Chairman Board of Supervisors December 1, 1993 Page Two the ultimate sale price of the unit and interest rates, not how many people actually occupied the unit. The sale price was a focal point because of the high cost of land in that area. This was so critical because of the high cost of land in that area. At this time, the affordable units are selling for approximately $15, 000 under our overall total construction costs per unit. Our main focus with the . staff continued to be the highest allowable sale price and the lowest affordability term. From the beginning, we worked off a document identified as Appendix F. Our discussions with the staff focused in on the fact that there 3 bedrooms which would allow a qualifying income of four potential individuals living in the unit. This then corresponded to income as well as total sale price. The staff sent me a letter dated March 2 , 1992 , copy of which is attached as Exhibit A and made a part hereof. That Exhibit includes Appendix F. You will note from the high- lighted portion in paragraph one of that letter that the reference is to number of bedrooms and an assumption is reached as to family size. That is exactly how this was approached with Somerset. Because all of the units were 3-bedrooms, the assumption was based on a four-person occupancy for determining qualifying income and sale price. There is nothing in that letter or the attachment that would lead one to believe that qualifying income is based on the number of persons occupying the unit. I also received the document described in Exhibit B attached hereto and made a part hereof. You will notice in paragraph B of that Exhibit that it discussed the sale price based upon " . . .unit size and Prevailing Interest Rate. " On or about May 19, 1992 , I met with the staff and prepared a Memorandum after that meeting; the memorandum was dictated on May 14, 1992 and typed on May 19, 1992 . The Memorandum recorded my impressions and understandings of the meeting. Again , we were focusing on number of bedrooms, interest rates and total sale price. Also attached hereto and made a part hereof is Exhibit D is a letter from the undersigned dated May 26, 1992 . On the second page, reference is made to Appendix F dealing with three bedrooms that translates to a qualifying income at that time of $56, 160, translating that into various interest rates and sale prices. There was never an understanding that qualifying income would be based on the number of person in a unit as opposed to the number of qualifying bedrooms. The income levels and sale price increased from the time the attachment F was prepared due to cost-of-living. However, at no N • 1 Tom Torlakson, Chairman Board of Supervisors December 1, 1993 Page Three time during the discussions was there ever any understanding on my part that income levels would be based on persons rather on bedrooms. On at least one occasion, Rick Dame' attended a meeting with staff and witnessed the discussions focused again on the number of bedrooms, the total sale price and the qualifying income based on four individuals because of the 3-bedroom units. The focus was never on the number of persons--it was always on the number of bedrooms and total sale price. Currently, we are selling the market-rate units for $225, 000 and the affordable units at $202 , 500. At no time were we advised that we would be limited to families of four qualifying to purchase the town homes. At no time were we advised that a single person could only have an income of $44 , 000 per year. At that rate, it would require a down payment of $150, 000 to qualify for a loan for the affordable unit--that is simply absurd. This issue was first brought to my attention on or about November 22nd. By that time, we had all of the affordable units under contract and one of them ready to close escrow within days. Under the County's interpretation of the Developer Agreement setting forth the affordable housing, only three of the buyers would qualify. All of our buyers have been qualified regardless of the number of persons at the current $62 , 880. It makes no sense to, discriminate among buyers based upon their family unit. Generally, that is not something that a person has any control over. All of the units are completed. Had we known that the County was going to interpret the affordable housing requirement in this fashion, we would never have agreed to it nor would we have ,built these units. Under the present proposal of the staff, it would take years to find just the right set of four-member families as buyers for these town homes. When I determined that this was their interpretation, I contacted the staff and was advised that the single buyers with the $44 , 000 yearly income requirement could obtain co-signers. Then I was told that they could not obtain co-signers. But even if they did obtain co-signers, it does not make much sense in accomplishing affordable goals allowing people to buy homes if the only single people who could afford to live in Somerset are those who have relatives wealthy enough to co-sign loans or make cash advances to come up with the $150, 000 down payment that would be necessary. I do not V r� t � ♦ r . 1 Tom Torlakson, Chairman Board of Supervisors December 1, 1993 Page Four see how that satisfies any affordable housing goals but I do definitely see that it will destroy the economic opportunity, if any remains, in the Somerset project. The Board of Supervisors should note that no density bonus was requested by this company for this project. Had we known that the staff was going to interpret the County's affordable housing program in its present configuration, we would have definitely required density bonus and could never have built all of the town homes the same size with the same amenities. We cannot lower our sale price any further and lose any more money. At this time, families of four have a choice at $202 , 500. They can live in a town home in Danville or move to the outskirts of the County and a larger single-family home with a yard. The families of four are choosing the latter. I have enclosed a copy of the Developer Agreement attached hereto as Exhibit E and made a part hereof; this is the only copy we have received and it included no exhibits. No where in that agreement does it explain to my understanding that the affordability is based upon household size. The only references that we used in our dealings with the staff was the attached Appendix F. It has been reported to us by our buyers and their lenders that conflicting information has been coming from the staff concerning the affordable housing policies. In one instance, they are allowing co-signers and loans from family and in another time they are not. In one instance lenders and buyers are advised that children cannot be counted as a part of the numbers in determining household totals and in other instances they are saying that they do. When I read the general intent of the County's affordable housing guidelines, I read that the program need to be acceptable to the developer so that it would work economically; I assume that was the philosophy behind density bonus. Neither the Planning Commission or the neighbors wanted a high-density project. We conformed to all requests of the Planning Commission and the Board with the understanding that we would have a sale price of $202 , 500 and could qualify based on the number of bedrooms and not the number of persons. To do otherwise, will put this affordable housing project in serious economic jeopardy. Our company wants to be able to complete the project but it will be prohibited from doing so under the present ruling of the staff. �f • Tom Torlakson, Chairman Board of Supervisors December 1, 1993 Page Five You must understand that you are dealing with one of the most expensive land areas in Northern California. There was tremendous local opposition to this town home project and specifically to the idea of affordable housing. However, you must also understand that in an area where the cost of the raw lot equals the value of many houses in other areas of the County, that higher incomes are a necessity if a project such as Somerset is to built where all the units are over 1, 600 square feet. In conclusion, we request that the affordability requirement be .based on the number of bedrooms for qualifying income and not the number of persons. Very truly yours, Michael W. R precht v Vice President--Counsel MWR:giw Enclosures I declare under penalty of perjury that the foregoing is true and correct. Dated on December 1, 1993 at S Ramon, California. i i icliael pprecht Facsimile copies to: Sunne McPeak Gayle Bishop Tom Powers Jeff Smith Community 0 Contra Harvey E. Bragdon Director of Community Development -Development Costa Department County County Administration Building 651 Pine Street 4th Floor, North Wing Martinez, California 94553-0095 Phone: (510) 646-4076 March 2, 1992 Michael Rupprecht, Vice President Dame' Construction Company P. O. Box 1007 San Ramon, CA 94583 Dear Mr. Rupprecht: RE: SOMERSET PROPERTY Enclosed for your review are model documents that could be used as a contract form relative to your firm's provision of affordable housing in the above project. These forms are utilized in .the County's Density Bonus Program and would have to be modified to fit the present circumstance. The Developer Sales Agreement is between the County and the Developer. The Agreement 'f or Density Bonus Units is between the Developer and the buyer of the "affordable unit", for the benefit of the County. It includes the resale restrictions. The Agreement for Density Bonus Units is relatively simple in .concept, but somewhat more complicated in form. It provides for the County, or a designee, to have the right of first refusal to purchase an "affordable unit" at a price determined pursuant to the Agreement. It is the County's intent to act more as a broker and locate a qualified family (a low or moderate income homebuyer) to purchase the home. We have had some success with this in projects completed to date, although it is easiest with a cooperative real estate agent. The right of first refusal runs for thirty years, or 'fifteen years if occupied continuously by one family. With respect to your proposal, I would like to indicate: 1. The affordable home price would be determined when the project is complete and units are for sale. vA schedule similar to that attached as Exhibit A would -be used. Note that 2-bedroom units assume a family of three. The affordable ,price today, using a 9% mortgage rate is $159,400. EXHIBIT A. Michael Rupprecht March 2, 1992 Page 2 2 . You have proposed that 10% of the total units be affordable to low and moderate income households. The Town of Danville has been imposing an inclusionary requirement of 15%. The County would like to achieve the same. Have you explored alternative unit sizes and amenity packages for the' affordable units that would facilitate realizing this goal? 3 . Other affordability options can be explored that might be more preferred by the County. We would like to discuss them. I look forward to hearing from you on this matter. If you have questions, please call me at (510) 646-4076. Sincerely, Jim Kennedy Deputy Director - Redevelopment JK/jb Enclosure cc: Kathleen Hamm Jim Cutler SRA23/ruprecht. ltr L 4- APPENDIX F yi MAXIMUM PRICE OF A HOME AFFORDABLE FOR A LOW TO MODERATE INCOME HOUSEHOLD HOUSING AS 33% OF INCOME May-91 MODERATE INCOME $39,312 $44,928 $50,544 $56,160 $59,670 $63 ,180 $66,690 $70,200 FAMILY SIZE 1 2 3 4 5 6 7 8 INTEREST RATE 6% $157,100 $181,000 $205,000 $229,000 $244,000 $259,000 $274,000 $289,000 7% $143,800 $165,800 $187,800 $209,700 $223 ,500 $237,200 $250,900 $264,700 8% $132,200 $152,400 $172,600 $192,800 $205,500 $218,100 $230,700 $243 ,300 . 9% $122,100 $140,700 $159,400 $178,000 $189,700 $201,300 $213,000 $224,600 10% $113,100 $130,400 $147,600 $164,900 $175,700 $186,500 $197,300 $208,100 11% $105,200 $121,200 $137,300 $153,400 $163,400 $173,500 $183 ,500 $193,500 12% $98,200 $113,200 $128,200 $143,200 $152,500 $161,900 $171,300 $180,600 13% $91,900 $106,000 $120,000 $134,100 $142,800 $151,600 $160,400 $169,2,00 14% $86,400 $99,600 $112,800 $126,000 $134,200 $142,400 $150,700 $158,900 15% $81,400 $93,800 $106,300 $118,700 $126,500 $134,200 $142,000 $149,800 16% $76,900 $88,700 $100,400 $112,200 $119,500 $126,900 $134,200 $141,500 ASSUMPTIONS 1. MODERATE INCOME BASED ON U. S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT PUBLISHED ESTIMATES OF MEDIAN INCOME, OAKLAND PMSA (ALAMEDA & CONTRA COSTA COUNTY) . 2. DOWN PAYMENT OF 10% 3. MONTHLY HOUSING EXPENSE COST OF 33% OF MONTHLY INCOME. 4. TAXES ARE CALCULATED AT 1.25% OF THE MARKET PRICE OF THE HOME. HOMEOWNERS ASSOCIATION DUES ARE ESTIMATED AT $70 MONTHLY. 5. MORTGAGE INSTRUMENT IS A 30 YEAR FIXED RATE MORTGAGE. 6. APPROPRIATELY SIZED UNITS ARE AS FOLLOWS: 0 PERSONS 1 2 3 4 5 OR MORE UNIT SIZE STUDIO 1 BEDR"i 2 BEDRM 3 BEDRM 4 BEDRM • iV *Pursuant to Policies 6-1 , 6-6, & 6-9 of the Housing Element of the General Plan ( 1990-2005) the applicant shall, contemplating a for sale development, enter into a Developer Sales Agreement with the County at least 90 days prior to the filing of a Final Map (form to be approved by the County) , which ensures that a number of units equal to al least 150 of the approved units ( 157) are affordable to and occupied by Low to Moderate Income Households . For purposes of this condition, the following definitions apply: A. Low to Moderate Income Households - Household earning 80-120% of median income for Contra Costa County as defined in Section 50093 of the California Health & Safety Code; and B. Affordable Sales Price - A price determined pursuant to Appendix C of a letter dated from the Director of Community Development or his designee to Michael Rupprecht, Vice-President, Dame' Construction Company, taking .into .account unit size and Prevailing Interest Rate. *Affordable-units shall be provided throughout the development, and placed throughout the development in a manner such that the size and quality of Affordable Units reflect the proportions in the total developmen, and that the Affordable Units be spatially disbursed. Prior to filing a Final Map the applicant shall submit to the Zoning Administrator a plan for review and approval setting forth the proposed location of Affordable Units . __ EXHIBIT B MEMORANDUM TO THE FILE To: Somerset From: Michael W. Rupprecht Date: May 19, 1992 I met with Jim Kennedy at the County Redevelopment to discuss the finalizing of the affordable housing component for Somerset. The number of units will be 15% and the County offered affordable housing at 110% of the median area income. I have asked for 120% and they are now proposing 115%. At 115%, a three-bedroom unit would dictate an income of $53 ,820 and at an interest rate of 6%, it would allow a $206, 600 price, at 7% $189,200, and at 8% $174, 000. I told them we need $186, 000 and he said that we could accomplish that by agreement now and that we would reference the Contra Costa Times interest rates this coming week and get together again next week to discuss this and then tie-down the prices. MWR:giw EXHIBIT C HOMES BY DAME DAME CONSTRUCTION COMPANY, INC. P.O.BOX 1007 SANRAMON. CA 94583 (510)837.0544 MICHAEL W. RUPPRECHT VICE PRESIDENT-COUNSEL May 26, 1992 BY FACSIMILE Jim Kennedy, Deputy Director, Redevelopment Community Development Department Contra Costa County 651 Pine Street, North Wing, 4th Floor Martinez, California 94553 Re: Somerset Affordable Housing Plan Dear Jim: This letter is a follow-up to our meeting in your office on May 14 , 1992 . The Somerset project is planned for 157 townhomes. As part of the General Plan Amendment, the County Board of Supervisors imposed a 15% affordable housing requirement on our Final Map. As you know, the site is located just east -of the Behring Auto Museum which is part of the Blackhawk Plaza Shopping Center. The property abuts the Danville town limit boundary to ,the south along Camino Tassajara and is within Danville's Sphere of Influence. To the immediate east of the site is the -•Bettencourt Ranch, which is a 469 single-family home project which is being built by this company. The Blackhawk Plaza is one of the finest upscale commercial centers in the Bay Area. The present General Plan for the property is multiple-family residential low-density: While a higher density range might be considered preferable in terms of maximizing the amount of "affordable" housing produced, current market conditions appear to indicate that a higher density project is not marketable at this location or in the foreseeable future. Our plan is to have 157 townhouses, 1, 650 square feet each, with no distinction between affordable homes and market-rate homes. Because of favorable interest rates, we believe that time is of the essence in obtaining our approvals. To give you a bit of history of affordable housing .fin the immediate vicinity, on July 9, 1991, the Danville anning Commission approved a 13 . 3 acre site for Lincoln perties that included affordable housing. In its Staff Report 3nville EXHIBIT D Jim Kennedy May 26, 1992 Page Two Page that as part of their 1990 housing element, Staff request the applicant to attempt to provide 15% of the total units in the project as affordable. It stated that the United States Department of Housing and Urban Development considers a - "moderate" income range to be 80% to 120% of the area's median income. Their Staff Report indicated that the maximum income for a moderate-income household based on four persons was $56, 160. The Staff accepted the applicant's proposal to have 10% of the units made available to moderate-income households. Danville allowed 5% of the total units to be reserved for households earning incomes of 120% to 140% of the median income; this allowed a maximum price of $214, 000. The Danville Staff Report indicated that the 120% to 140% of the median income level is not recognized by the State as providing affordable units, however, compared to Danville housing costs, a unit price of 140% of the income range will likely be less than the market value of the unit. On March 2, 19921 you wrote to me concerning the Somerset property and included an attached "Exhibit All that was further identified as Appendix F. Appendix F was a Maximum Price of a Home Affordable for a Low to Moderate Income Household Housing as 33% of Income for May 1991. Appendix F reflects a' moderate income for a three-bedroom home housing fourpeople to. be $56,160. At an interest rate of 0, the sales price could be $229, 000, an interest rate of 8% a price $192,800, and interest ,of 9% a price of $178,000. We find Appendix F acceptable and believe that the general intent of the County's affordable "housing program will be 'met. As you know, we have not requested density bonuses for affordable housing for the Somerset project. We believe, and it is substantiated by our market research, that that project location will best be served with the size of homes i! that we are proposing- for Somerset without differentiation for . affordable housing homes. Paragraph X of your Procedures to Implement Affordable Housing deals with High Cost Areas/High Cost Projects. The Somerset development is both in a high-cost area and is a high-cost project. That paragraph allows for low- and moderate-income units to use Appendix F to determine sale prices. I have verified interest. rates for conforming loans, i.e. under $202, 300, with Residential Network Mortgage, Inc. , in Pleasant Hill. Residential Network Mortgage advised me that there is i presently a 5/25 program that is a fixed-rate loan for five years at 7,% FNMA, fully amortized, that becomes adjustable after five years; this loan has 1� points. I have also been advised by that mortgage company that this loan is available through many sources Jim Kennedy May 26, 1992 Page Three at this time. I also have received information from the Bank of America who has an adjustable rate mortgage that is convertible at 5z% for li points that is a six-month adjustable. We need to have a mininmum sales price on the affordable homes at Somerset of $186,500. Using Appendix F will clearly allow us to achieve those results with interest rates as high as nearly 8;%. Further, my discussions with mortage brokers indicate. that persons interested in homes under $200; 000 right now are seeking the adjustable rate loans because they offer greater flexibility in purchasing larger homes and also ,have greater flexibility in down payments and income qualifying ratios. It is my understanding that the Planning Commission will be hearing the Tentative Map application at its last meeting in June. Therefore, I would like to meet with you as soon as possible to complete the affordable housing program for Somerset. Very truly your Michael W. Rupprecht Vice President--Counsel i MWR:giw r When Recorded, Mail To: Contra Costa County Community Development Dept. 651 Pine Street, 4th Floor/N. Wing Martinez, CA 94553 ATTN: Senior Housing Planner DEVELOPER AGREEMENT . This Developer Agreement (this "Agreement") is made and entered into as of ?I-,'\ 2 F 199 3 , by and among the County of Contra Costa, a political subdivision of the State of California; and Dame Construction Company, Inc. ( "the Owner") , and is dated as of (� ,prtl 2 $�� gS3 WITNESSETH: This agreement is predicated on the following facts: 1 . Owner is owner of property located on the north side of Camino Tassajara, just east of Camino Blackhawk Road in the Tassajara area near the Blackhawk Commercial Center (Parcel Number 203- 050-0950 . Owner proposes to develop the property by constructing and selling a maximum of 150 townhomes (the proposed "Project") , subject to County approval. 2 . On March 17, 1992, the Board of Supervisors approved a General Plan Amendment changing the land use designation of the Project from Single Family Residential High Density to Multiple Family Residential Low Density (Contra Costa County Board of Supervisors Resolution No. 92/161) . 3 . On October 13, 1992, the Board of Supervisors approved the Final Development_ Plan and Tentative Map for the Project (reference file: Sub 7763/FDP 3003-92) . This approval contains a number of conditions, including those which are reflected in this Agreement. Owner has indicated his willingness to accept conditions imposed on the use of the property by the County. It is the purpose of this Agreement to set forth the conditions under which the County approved the General Plan Amendment, the Final Development Plan, and the Tentative Map for the Project, and to impose enforceable restrictions on the use and occupancy of the property. Both parties recognize that the General Plan Amendment and the Project would not• have been approved without the assurance that this Agreement would be executed by Owner. 4 . Conditions on the Project include all of the following: a. Not less than 15 percent of the housing units constructed by the Owner on the Project site must be affordable to and occupied by low and moderate income households as their EXHIBIT E principal place of residence. For purposes of this condition, the following definitions apply: i. Low and Moderate Income Households - Households earning 80 to 120 percent of area median income for Contra Costa County as adjusted for family size and defined in Section 50093 of the California Health and Safety Code; and ii. Affordable Sales Price - The maximum initial sales price for the affordable units shall not exceed $202,500 . b. Owner shall be responsible for designating the affordable housing units and for assuring that these units are spatially dispersed throughout the proposed Project in a manner which reflects their overall proportion in the total Project. Prior to filing a Final Map, the Owner shall submit a plan setting forth the proposed location of affordable units to the Zoning Administrator for review and approval. c. Affordable units shall be comparable in size and quality to the market rate units. d. Affordable units shall be made available in a timely manner equivalent to the production and sale of the market rate units . 5 . The County finds that Owner's Project will benefit the County by providing housing for low and moderate income households . 6 . The Owner hereby represents, warrants and covenants that it will cause this Agreement to be recorded in the real property records of Contra Costa County, California, and in such other places as the County may reasonably request. The owner shall pay all fees and charges incurred in connection with any such recording. 7 . With this Agreement, Owner hereby agrees to include and require each' Low and Moderate Income Household acquiring an affordable units to execute a Buyer's Purchase Agreement for Affordable Units ( "Purchase Agreement") as part of the purchase process. 8. Owner shall cause said Purchase Agreement to be recorded in the real property records of Contra Costa County, California. IN WITNESS WHEREOF, the County and the Owner have executed this Developer Agreement by duly authorized representatives, all on the f date first above written. j By (OWNER/Name) (Title/Corporation) By C4c/1 - ICPoQ� v. ( le) O NTY OF CO TRA COST kh/k6/DA1 date first above written. Z By (OWNER/Name) ALL-PURPOSE ACKNOWLEDGMENT NO 209 State of CALIFORNIA CAPACITY CLAIMED BY SIGNER !" CONTRA COSTA [I INDIVIDUAL(S) County of ® CORPORATE On 04�29�93 before me Gail I . Watkins OFFICER(S) President TITLE(S) DATE NAME,TITLE OF OFFICER-E.G.,*JANE DOE,NOTARY PUBLIC' ❑ PARTNER(S) personally appeared Carl D. Dame 1 ❑ ATTORNEY-IN-FACT r; NAME(S)OF SIGNER(S) ❑ TRUSTEE(S) ® personally known to me-OR- ❑ proved to me on the basis of satisfactory evidence [I SUBSCRIBING WITNESS y to be the person(s) whose name(s) is/are subscribed to the within instrument and ac- ❑ GUARDIAN/coNSERVATOR knowledged to me that he/she/they executed ❑ OTHER: the same in his/her/their authorized r'- capacity(ies), and that by his/her/their L; signature(s)on the instrument the person(s), - orthe entity upon behalf of which the person(s) SIGNER IS REPRESENTING: NAME OF PERSON(S)OR ENTITY(IES) acted, executed the instrument. Dame Construction OFMIAL SEAL Witness m hand and official seal. GAIL 1.WATKINS y company, nc. -s ..OTARY PUBLIC-r']7 1 oR%A + CONTRA COSTA COUNTY My Comm.Ettpaes Apr.29.1494 SIGNATURE OF NOTARY i; ATTENTION NOTARY:Although the information requested below is OPTIONAL,it could prevent fraudulent attachment of this certificate to unauthorized document. Developer Agreement — Somerset THIS CERTIFICATE Title or Type of Document p g MUST BE ATTACHED TO THE DOCUMENT Number of Pages Three Date of Document 04/2R191 � DESCRIBED AT RIGHT: Signer(s) Other Than Named Above James Kennedy ®1991 NATIONAL NOTARY ASSOCIATION•8236 Remmet Ave.-P.O.Box 7184•Canoga Park,CA 91304-7184 (, NAMt(Jt ur 11niNrntat p TITLE(S) U c, t` personally known to me R-❑ proved to me on the basi f satisfactory evidence ❑ PARTNER(S) [D LIMITED �f; to be the personoo-whose name(Wis/tee- ❑ GENERAL !: subscribed to the within instrument and ac- ❑ATTORNEY-IN-FACT r. knowledged to me that he/sboA4ey-executed ❑TRUSTEE(S) the same in his/ha*t'heir authorized ❑GUARDIAN/CONSERVATOR (' ca acit Sj+' LINDA HOOVER P yE+eand that by his/#ef>�#Eif- ❑OTHER: Comm.*9880M z signaturejs}on the instrument the persoR(s); Notary Pub5c—California n or the entity upon behalf of which the CON RA COSTA COUNTY person( 'acted, executed the instrument. My Comm.Eypires VA 14, 1'x97 f' SIGNER IS REPRESENTING: WITNESS my hand and offi al seal. N+ OF PERSON(S)OR ENTITY(IES) 0�✓ CG�t� IP SIGNATURE OF NOTARY OPTIONAL SECT THIS CERTIFICATE MUST BE ATTACHED TO TITLE OR TYPE OF DOCUMENT THE DOCUMENT DESCRIBED AT RIGHT: p q (. NUMBER OF PAGES DATE OF DOCUMENT Though the data requested here is not required by law, }:. it could prevent fraudulent reattachment of this form. SIGNER(S)OTHER THAN NAMED ABOVE ©1993 NATIONAL NOTARY ASSOCIATION•8236 Remmet Ave.,P.O.Box 7184•Canoga Park,CA 91309-718• t,Cornmunity �. o ltm Harvey E. Bragdon (Development Director of Community Development epartment COSta County Administration Building County 651 Pine Street 4th Floor, North Wing ........c a Martinez, California 945530095 - L Phone: E 510-646-2026 TT'+ COUt+� December 1, 1993 RECEIVED 1993 Michael Rupprecht, Vice President Dame' Construction Co., Inc. CLERK BOARD OF SUPERVISORS 1975 San Ramon Valley Blvd. CONTRA COSTA CO. San Ramon CA 94583 Dear Mr. Rupprecht: RE: Somerset Project (2983-RZ, Sub 7763) This is to clarify that Condition 4(A) for the above referenced project means that a determination of eligibility of low and moderate income households is made by taking into account the income of the proposed homebuyer relative to the maximum allowable income for that household size; i.e., the maximum allowable income is adjusted for family size. Sincere , ey B d n, Director Communi evelopment Department HB:JK:ih cc: Dennis Barry Jim Kennedy Kathleen Hamm File C4.10(d)(3) sral l/dame.hr