HomeMy WebLinkAboutMINUTES - 04142007 - C.84 Contra
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County
TO: BOARD OF SUPERVISORS >'
_
FROM: Dennis M. Barry, AICP, Director of Community Development C . $�
DATE: August 14, 2007
SUBJECT: Dougherty Valley Affordable Housing Program Compliance
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
Y DETERMINE that Shapell-lndustries of Northern California and Lennar Homes (on behalf of the
Windemere group of developers) are in compliance with the Dougherty Valley Affordable Housing
Program.
APPROVE AND AUTHORIZE the Director of Community Development or his designee to execute
an Amendment of Regulatory Agreement and Declaration of Restrictive Covenants for the Canyon
Oaks and Mill Creek Moderate Income Projects in the Dougherty Valley to allow for use of the City of
San Ramon median-income on a permanent basis in exchange for a 99-year term to the Regulatory
Agreement.
FISCAL IMPACT
None. No General Funds are involved.
BACKGROUND/REASONS FOR RECOMMENDATIONS
See attached.
CONTINUED ON ATTACHMENT: X SIGNATURE:
t RECOMMENDATION OF COUNTY ADMINISTRATOR ECOMME DATION OF B ARD
COMMITTEE /APPROVE OTHER
SIGNATURE(S):
tyJ %`I
ACTION OF RD ON AULGU5r fit-, 2tP7 APP VED AS RECOMMENDED v/VOTE OF SUPE ISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT `hOtt-f ) 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.
Source: Jim Kennedy
335-7225 ATTESTED G� GGST l'4�� Zrr07
orig: Community Development
JOHN CULLEN, CLERK OF THE
cc: County Administrator's Office BOARD OF SUPERVISORS AND
County Counsel COUNTY ADMINISTRATOR
Community Development
via: Redevelopment BY DEPUTY
• Shapell
• Lennar
• Fairfield Residential
• United Dominion Realty Trust
• Essex Property Trust
• City of San Ramon
GAGDBG-REDEV\redev\Alicia(formally LNoble)\Personal\Board Orders and Greenies\BOARD.08.14.07.DVAHP.doc
DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM COMPLIANCE
Approved by the Board of Supervisors on March 22, 1994, and amended on October 16, 2001, the
Dougherty Valley Affordable Housing Program (DVAHP) sets forth the requirements to be met by the
Dougherty Valley developers (Shape[[ and Windemere group). The DVAHP requires the submittal of an
annual compliance report by the respective development entities. The following discussion and Table 1
summarizes the compliance status of Shapell Industries of Northern California, and the Windemere
group led by Lennar. A map depicting the location of DVAHP Projects is also attached as Figure 1.
A. Shapell Affordable Housing Compliance
The Shapell portion of the Dougherty Valley includes 5830 residential units. These units are being built in
four phases as follows:
Phase For-Sale Units Rental Total
Gale Ranch 1 960 256 1216
Gale Ranch II 1682 266 1948
Gale Ranch III 1041 165 1207
Gale Ranch IV 588 871 1459
Total 4271 1558 5830
(73%) (27%)
The DVAHP requires that at least 25% of the residential units be affordable to Very Low, Low, and
Moderate Income Households. The Shapell portion of the DVAHP Affordable Housing obligation is as
follows:
Affordability Requirement
Percent Number
Very Low Income 10% 146
Low Income 25% 365
Moderate Income 65% 947
100% 1458
To date the Shapell-Gale Ranch Affordable Housing Program has built 658 units, or 45%of its obligation
(Table 1 Section I-A). The remaining 799 affordable units are to be delivered in future phases of the
Gale Ranch development (Table 1, section 1-13). The Shapell program complies with the
requirements of the DVAHP.
The remainder of Shapell's Affordable Housing obligation will be delivered in Gale Ranch Phase III and
IV (Table 1, Section I-B). Two mixed income rental projects would be built, one each in Phase III and
Phase IV. The phasing program reflects the recent modification to the development program resulting
from the relocation of the Dougherty Valley Middle School.
B. Windemere Affordable Housing Compliance
The DVAHP requires that at least.25% of the 5170 residential units to be affordable to Very Low, Low,
and Moderate Income Households. The Windemere portion of the DVAHP Affordable Housing obligation
is as follows:
Affordability Requirement
Percent Number
Very Low Income 10% 129
Low Income 25% 323
Moderate Income 65% 841
100% 1293
The Windemere Affordable Housing Program already completed1,000 of its affordable housing units in
phase 1, or 77% of its obligation (Table 1, Section II-A).
GACDBG-REDEV\redev\Alicia(formally LNoble)\Personal\Board Orders and Greenies\BOARD.08.14.07.DVAHP.doc
The remaining 293 units of the Windemere Affordable Housing obligation will be delivered in the third '
phase mixed income project (Figure 1 and Tablel, Section II-B). The Windemere program complies
with the requirements of the DVAHP.
II IMPLEMENTATION DISCUSSION
A) Shapell-Gale Ranch
On November 14, 2006, the Board of Supervisors approved amendments to the Dougherty Valley
Specific Plan and an associated General Plan Amendment and Final Development Plan
Amendment, related to the relocation of the Gale Ranch Middle School, and re-planning
residential areas within Gale Ranch. With respect to the DVAHP, this action had the effect of
modifying Phase III and IV of Shapell's affordable housing program as follows:
• The size of the Phase III apartment project was reduced from 394 units to 165 units. The
displaced units were moved to Phase IV. As a result of the reduction in size the phase III
apartment project will contain Low Income and Very Low Income Units only;
• The Phase IV Apartment Project was increased from 406 units to 634 units. The project will
continue to include Moderate Income Units, Low Income Units, and Very Low Income
Units.
According to Shapell's officials, the Phase III project could proceed to construction in the 2009-
2010 time frame. The Phase IV units could proceed to construction in the 2011-2013 time frame in
order to comply with the DVAHP.
B) Windemere Ranch
1. Project Ownership changes- Since the last DVAHP Compliance Report one of three
Windemere Apartment project has changed ownership. The Canyon Oaks and Mill Creek
Projects were sold by Fairfield Residential to an affiliate of United Domain Realty Trust
(UDR) UDR has subsequently sold the Canyon Oaks property to Essex Property Trust,
Inc., a Palo Alto board real estate investment trust. The Moderate Income Regulartory
Agreement is in place, and the project complies with all requirements. Staff has also been
advised that UDR and Essex Property Trust are in escrow for the sale of the Mill Creek
Project.
2. Moderate Income Amendment—when the Board considered the last DVAHP Compliance
Report (3/06) it also authorized amendments to the Moderate Income Household income
definition under specified conditions. The approved amendments permitted the interim use
of up to 5 years, a maximum income of 100% of the City of San Ramon Median Income,
rather than 120% of the Oakland PMSA Median Income. In exchange for the up to 5-year
City of San Ramon. Median Income, the owner had to agree to extending the term of the
Regulatory Agreement for up to 10 years (2 years of extension for each year of San
Ramon Median Income use). A First Amendment to the Moderate Income Regulatory
Agreement has been executed and recorded, however the owners have not yet
affirmatively certified their request to activate the provision. As a result, the provisions of
the original Regulatory Agreement still govern for Canyon Oaks & Mill Creek.
Essex Property trust, the new owner of Canyon Oaks, is also negotiating the purchase of
Mill Creek. They have proposed an alternative to the interim use of the City of San Ramon
Median Income as the maximum for Moderate Income Households. They have proposed a
permanent charge to the Moderate Income Definition incorporating the City of San Ramon
Median Income as the limit in exchange for a 99-year term on the Regulatory Agreement
(currently 30-years). In addition, the owner would reserve up to 5% of the units for Low
Income Public Service Employees at Low Income rents for a period of two years. The
definition of affordable rents does not change as part of these proposed changes. The table
below reflects the effect of the change:
GACDBG-REDEV\redev\Nlicia(formally LNoble)\Personal\Board Orders and Greenies\BOARD.08.14.07.DVAHP.doc
Current Proposed Windemere
DVAHP Amendment
Moderate Income` $90, 504 n/a
San Ramon Median Income • n/a $118,850
Maximum Rent# $2000 $2000
(2 bedroom unit)
Family of 3 using $120% of Oakland PSMA Median
• Median Income Family of 3 using Clarities methodology
# Maximum rent is lesser of market rent or the calculated rent. Market rents are currently
$200-300/month lower than the maximum calculated rents, so the market rent
determination governs.
Staff has analyzed and discussed these changes with City of San Ramon staff, who are
recommending the County approve the proposed change (see Exhibit A). County staff
concurs and is recommending the proposed change.
3. Condominium Conversion- While endorsed as part of the Board's March, 2006 DVAHP
Compliance Report approval, the owner of Canyon Oaks- Essex Property Trust- does not
appear to have an interest in pursuing a condominium conversion of the property. The prior
owner- United Dominion Realty Trust- did submit a subdivision application to the City, and
the subdivision application was approved. No final map was ever processed, nor does the
current owner intend to pursue, therefore, this provision appears to be moot.
GACDBG-REDEV\redev\Alicia(formally LNoble)\Personal\Board Orders and Greenies\BOARD.08.14.07.DVAHP.doc
FIGURE 1
Dougherty Valley Affordable Housing Projects
II
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Numerical Summary of DVAHP Performance
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EXHIBIT A
City of San Ramon Letter of August 2, 2007
4
NTIAPOW
San Ramon
CL I I U Y N i n
" 1001 JUL 3 3 P 15 U
CITY OF SAN RAMON ti' i ' _ ;';i!'; ELCI 2222 CAMINO RAMON
SAN RAMON,CALIFORNIA 94583
PHONE: (925)973-2500
WEB SrrE: www.sanramon.ca.gov
August 2, 2007
Jim Kennedy, Redevelopment Director
Contra Costa County Community Development Department
2530 Arnold Drive, Suite :190
Martinez, CA 94553
Re: Mill Creek and Canyon Oaks Moderate Income Affordable Housing Agreements
Dear Mr. Kennedy:
The City of San Ramon supports the Essex Property Trust acquisition of Canyon Oaks
and Mill Creek as they have a local presence in the ownership and management of
multifamily housing in San Ramon as well as the East Bay.
City staff has reviewed Essex's request to the County to be able to use the City of San
Ramon Median Income calculation for k1l Creek and Canyon Oaks (as compiled by
Claritas, based upon San Ramon demographic and financial data) .rather than the County
income calculation in determining maximum eligible household applicant income for the
properties. In exchange for being able to use San Ramon's Median Income, Essex is
agreeable to an extension of the exi.sting 20 year affordability terms to 99 year
affordability terms. In addition we have reviewed Essex's concession to temporarily
provide rental for a two year period of 5% of the units at Mill Creek and Canyon Oaks at
rents affordable to 80% of median income to lower income teachers and public service
employees.
San Ramon supports Essex's proposal to use the City of San Ramon Median Income as it
will provide for a broadened tenant selection-base, which more accurately reflects the
workforce employment base in San Ramon as well as the Tri-Valley region. Further, it
will help Essex expedite the rental of these 650 affordable housing units. We further
support their agreement to keep the rents at the existing affordable levels mandated under
the current County regulatory agreements.
An extension of the Mill Creek and Canyon Oak's affordable agreements from the
current 20 year regulatory term to 99 years will help alleviate the pressure of the City and
CIT}'COUNC.II.:973-2530 CITYCI.ERK.973-2539 PARKS&COMMUNITYSERVICES:973-3200 PLANNING DEPARTMENT:973-2560
CITY MANAGER.97-3 2530 HUMAN RESOURCE'S:973-2503 POLICE SERVICES:973-2700 PUBLIC SERVICES:973-2800
Cnv A rrORNI:Y.973-2549 FINANCE DEPARTMENT:973-2609 ECONOMIC DL'vE1.OPMI:NT:973-2554 ENGINEERING SERVICES:973-2670
County to replace 650 units of affordable housing in 19 years. As you are very aware the
development of affordable housing is a difficult, expensive, and time consuming process.
Essex has also agreed to rent 5% of the units temporarily to low income teachers and
public service employees for a two year period. Next month two new schools—
Dougherty Valley High School and Live Oak Elementary School — will celebrate their
grand openings in Dougherty Valley which are in close proximity to Mill Creel and
Canyon Oaks. Having 33 units of housing affordable at a teachers level of income will
help support the recruitment of teachers to sustain the operation of these new schools
while keeping the teachers within close proximity to where they work.
Overall we are pleased with the Essex proposal and recommend County approval.
Should you have any questions please do not hesitate to contact Marc Fontes, Economic
Development Director at (925) 973-2578 or Brooke Littman at (925) 973-2573. Thank
you for your continued support of affordable housing for the County and the City of San
Ramon.
Sincerely,
Her b��Mo/�iz
City Manager
Cc: Marc Fontes, Economic Development Director
Brooke Littman, Housing Programs Manager