HomeMy WebLinkAbout4.2 Standard Pac Afford House Agmt Ament g STAFF REPORT CITY CLERK
% � File #600-30
s CITY COUNCIL
DATE: September 17, 2013
TO: Honorable Mayor and City Councilmembers
FROM: Joni Pattillo, City Manager&A—, 1-7-,01340
o�,
SUBJECT: Proposed First Amendment to Affordable Housing Agreement
with Standard Pacific Corp., Inc.
Prepared by Amy Cunningham, Assistant to the City Manager
EXECUTIVE SUMMARY:
Standard Pacific Corporation is seeking an amendment to their Affordable Housing Agreement
with the City of Dublin to satisfy the remaining affordable housing obligation for the Fallon
Crossings Project through the payment of in-lieu fees. The in-lieu fee payment would be
deposited into the City's Inclusionary Zoning In-Lieu Fee Fund and used for affordable housing
programs which further the goals of the City's Inclusionary Zoning Regulations.
FINANCIAL IMPACT:
The in-lieu fee payment of $856,000 would be deposited into the City's Inclusionary Zoning In-
Lieu Fee Fund and used for affordable housing programs.
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Approving First Amendment to
Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of
Fees In-Lieu of Constructing Certain Affordable Ownership Units.
Submitted B
y Reviewed By
Director of Community Development Assistant City Manager
DESCRIPTION
Fallon Crossings Project is a residential project that includes 106 residential units on 67.7 acres
of land generally located northeast of the Tassajara Road and Fallon Road intersection. On
January 10, 2012, the City of Dublin and Standard Pacific Corp., Inc. entered into an Affordable
Housing Agreement for the Construction of Inclusionary Units (Attachment 1). The agreement
provided that the Developer would satisfy its obligation to produce 13 affordable units (12.5%)
0 on the property by: (1) paying fees in-lieu of construction to satisfy the obligation for 5 units; and
Page 1 of 3 ITEM NO. 4.2
or
19 82
/ii � 111
DATE:
TO:
FROM:
STAFF REPORT
CITY COUNCIL
September 17, 2013
Honorable Mayor and City Councilmembers
Joni Pattillo City Manager""'
SUBJECT: Proposed First Amendment to Affordable Housing Agreement
with Standard Pacific Corp., Inc.
Prepared by Amy Cunningham, Assistant to the City Manager
EXECUTIVE SUMMARY:
CITY CLERK
File #600 -70
Standard Pacific Corporation is seeking an amendment to their Affordable Housing Agreement
with the City of Dublin to satisfy the remaining affordable housing obligation for the Fallon
Crossings Project through the payment of in -lieu fees. The in -lieu fee payment would be
deposited into the City's Inclusionary Zoning In -Lieu Fee Fund and used for affordable housing
programs which further the goals of the City's Inclusionary Zoning Regulations.
FINANCIAL IMPACT:
The in -lieu fee payment of $856,000 would be deposited into the City's Inclusionary Zoning In-
Lieu Fee Fund and used for affordable housing programs.
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Approving First Amendment to
Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of
Fees In -Lieu of Constructing Certain Affordable Ownership Units.
Submitted By Reviewed By
Director of Community Development Assistant City Manager
DESCRIPTION
Fallon Crossings Project is a residential project that includes 106 residential units on 67.7 acres
of land generally located northeast of the Tassajara Road and Fallon Road intersection. On
January 10, 2012, the City of Dublin and Standard Pacific Corp., Inc. entered into an Affordable
Housing Agreement for the Construction of Inclusionary Units (Attachment 1). The agreement
provided that the Developer would satisfy its obligation to produce 13 affordable units (12.5 %)
on the property by: (1) paying fees in -lieu of construction to satisfy the obligation for 5 units; and
Page 1 of 3 ITEM NO. 4.2
(2) constructing 8 inclusionary units made up of 2 very low- income units, 2 low- income units,
and 4 moderate income units, pursuant to provisions in Chapter 8.68 of the Dublin Zoning
Ordinance. The Developer satisfied the payment of in -lieu fees on January 11, 2012.
The Developer began construction of the first homes in January 2012 and opened for sale in
April 2012. In August 2012, construction of the required affordable housing units began.
Concurrently, the Developer opened the application period for purchase of the affordable units.
Since that time, the Developer has been unsuccessful in identifying qualified buyers interested
in the affordable, deed restricted, units.
The Developer, Standard Pacific Corp., Inc. has submitted a request to pay fees in -lieu of
constructing the eight Inclusionary Units at Fallon Crossings (Attachment 2). The Inclusionary
Zoning Regulations (Section 8.68.040.E, Waiver of Requirements) allow the City Council to
waive the requirements of the Inclusionary Zoning Regulations and approve an alternate
method of compliance if the Applicant can demonstrate, and the City Council finds, that the
alternate method of compliance meets the purposes of the Inclusionary Zoning Regulations.
Standard Pacific Corp., Inc. requests that the City Council approve an alternate method to
comply with the requirement to construct the remaining eight Inclusionary Units (2 very low -
income units, 2 low- income units, and 4 moderate income units). Standard Pacific Corp., Inc. is
proposing to pay in -lieu fees of $856,000 (or $107,000 per unit). In order to approve the
proposed alternate method, the City Council must find that the proposal "meets the purposes" of
the Inclusionary Zoning Regulations.
Because of the specific aspects of this project and the reasons listed below, Staff believes that
the City Council can find that Standard Pacific Corp., Inc.'s proposed alternate method of
complying with the Inclusionary Zoning Regulations "meets the purposes" of the Regulations.
• Due to prevailing market conditions, potential buyers meeting the Inclusionary Zoning
Regulations requirements are able to purchase market rate homes that do not have Deed
Restrictions; and
• The location is not in close proximity to shopping, transportation, or other amenities that
are important components to the buyers of affordable units.
For the following reasons, Staff suggests that it would be appropriate to find that the project, as
a whole, will meet the purposes of the Regulations-
1 . If the Developer were to be required to produce the Inclusionary Units, it would
prove difficult because of currently prevailing market conditions for the developer
including (a) the ability to sell the deed restricted affordable units at prices that are
comparable to the current market price of similar market rate units within the
development, and (b) the difficulty in finding and qualifying lower income buyers in
the current lending market. As described above, the Developer has attempted to
find buyers for more than 12 months and has been unsuccessful. Such a
requirement would place an unfair burden on the Developer that is not consistent
with the purpose of the Regulations.
2. If the Developer were required to produce the Inclusionary Units, the future buyers
of those units would have difficulty reselling the units, for the foreseeable future,
because of the likely -to -be small difference between the affordable price and the
market price for similar units without deed restrictions. This would place a burden
on low -and moderate - income buyers and make it difficult for them to sell should a
Page 2 of 3
need arise. Such circumstances would be inconsistent with the purposes of the
Regulations.
3. Buyers who wish to re -sell their home are required to verify and assure the
prospective buyer meets inclusionary requirements, plus attend workshops and
cover all costs associated with qualification and sale. Again, because of the
minimal price distinction between market rate and affordable units, these
requirements would make it difficult for the Developer to find appropriate buyers
for the Inclusionary Units;
4. Furthermore, the location of the Project is not in close proximity to shopping,
transportation, and other amenities that are important factors for the buyers of
affordable units. Therefore, the units that would be produced with the in -lieu fees
are likely to be more suitable for potential buyers than would be affordable units
within the Project.
The proposed Resolution (Attachment 3) approving the amendment includes the required
findings.
If the City Council approves the amended Affordable Housing Agreement (Attachment 4), other
amendments to the Project Approvals may be required to maintain consistency between the
Planned Development Zoning, Site Development Review and the amended Agreement. The
Dublin Zoning Ordinance allows the Community Development Director to modify these
approvals by administrative action if the changes are consistent with the City's Ordinances and
the intent of the approved Planning Development Zoning and Site Development Review. The
proposed changes are minor and consistent with the intent of the approved Planned
Development Zoning and Site Development Review; therefore an Administrative Amendment to
the Planned Development Zoning and a Site Development Review Waiver would be
subsequently approved by the Community Development Director.
NOTICING REQUIREMENTS /PUBLIC OUTREACH:
The request for an amendment to an existing Affordable Housing Agreement is not subject to a
public hearing therefore a public hearing notice is not required. A copy of this Staff Report has
been provided to the Applicant and posted on the City's website.
ATTACHMENTS: 1. Affordable Housing Agreement January 2012 (no exhibits)
2. Request Letter from Standard Pacific
3. Resolution Approving Amended Affordable Housing Agreement
4. First Amendment to Affordable Housing Agreement
Page 3 of 3
RECORDING REQUESTED BY:
CITY OF DUBLIN
When Recorded Mail To:
City Clerk
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Fee Waived per GC 27383
Space above this line for Recorder's use
MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT FOR THE
CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN-
LIEU OF CONSTRUCTING INCLUSIONARY HOUSING UNITS
This Memorandum of Affordable Housing Agreement for the Construction of
Inclusionary Units and the Payment of Fees In-Lieu of Constructing Inclusionary Units (this
"Memorandum ") is entered into on this 10th day of January. 2012, by and between the City of
Dublin, a Municipal Corporation (hereafter "the City") and Standard Pacific Corp., a Delaware
corporation ("the Developer").
1. Pursuant to the Affordable Housing Agreement for the Construction of
Inclusionary Units dated as of fanuary 10, 2012 by and between City and Developer (the
"Agreement"), the Parties have set forth their respective obligations with respect to the
provision of affordable units on lands presently owned by Developer known generally as the
Fallon Crossing project and more specifically described in Exhibit A (the "Property"). These
obligations run with the land.
2. Developer and City have executed and recorded this instrument to give notice of the
Agreement, and the respective rights and obligations of Developer and City. The unrecorded
Affordable Housing Agreement for the Construction of Inclusionary Units is incorporated by
reference in its entirety in this Memorandum.
3. This Memorandum shall bind and inure to the benefit of the parties and their
respective heirs, successors and assigns, subject however to restrictions set forth in the
Agreement regarding assignment.
[EXECUTION PAGE FOLLOWS]
Fallon Crossings Affordable Housing Agreement
Affordable Housing Agreement
PA 04 -016 Fallon Crossing
cm` 0
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the date and year first above written.
CITY OF DUBLIN
Dated: ` /0//Z— By:
C ty Manager - Sbt,, PoZ \ V Z)
Attest:
City Clerk -Gct j,.tr s--t5 +%- J::e `
Dated:
ST.
a
.D PACIFIC ORP
rporatio
By: Stephen D, Melander
Its: Authorized Representative
XX Applicant's Signature shall be notarized prior to returning signed agreement to the City
of Dublin Community Development Department.
Fallon Crossings Affordable Housing Agreement
Affordable Housing Agreement
PA 04 -0I6 Fallon Crossing
CALIFORNIA ALL - PURPOSE
ACKNOWLEDGMENT
State of California
County of Alameda
On January 10, 2012, before me, Gaylene Burkett, a Notary Public; personally appeared Joni
Pattilio who proved to me on the basis of satisfactory evidence to be the person(s) whose name(}
is /afe subscribed to the within instrument and acknowledged to me that he/she/" executed the
same in his/her /th& authorized capacity0es), and that by #islher /theif signature{} on the instrument
the person; or the entity upon behalf of which the person{} acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
fie GAYLEME RUNUP
Commission * 1827334
Notify Publlo • California
Alimada County ..
My Comm, EK Ires Jin 15 13
Signature _. ,,
CALIFORNIA ALL-PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
State of California
[f�
per
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to
the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized
capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERMY under the laws of the State of California that the foregoing paragraph
is true and correct.
SYDNEY MURRAY METZ
WITNESS my ha d and official seal. Commission 7e 1837702
Notary public - California n
Alameda County a
Sittnatt of No ry ubiic
(Notary seal) M Comm. Expires Feb 21, 2013
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AFFORDABLE HOUSING AGREEMENT
FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT
OF FEES IN-LIEU OF CONSTRUCTING INCLUSIONARY HOUSING UNITS
PA 04 -016, Standard Pacific Corp., a Delaware corporation.
Fallon Crossing Project
THIS AGREEMENT is hereby entered into this LO: day of JGh0or 2012 by and
between the City of Dublin (the "City ") and Standard Pacific Corp., a Delaware orporation, (the
"Developer").
Recitals
A. Chapter 8.68 of the Dublin Municipal Code contains Inclusionary Zoning
Regulations (the "Regulations "). The Regulations were adopted pursuant to Strategy I.B. of the
City's General Plan Housing Element, the purpose of which is to create affordable housing
opportunities in the City of Dublin for low - and moderate - income households.
B. The City of Dublin adopted the Regulations recognizing that the cost of new
housing is so high that persons with low- and moderate- incomes are increasingly unable to locate
affordable housing in the City. The purpose of the Regulations is to achieve a balanced
community with housing available at all income levels.
C. Accordingly, the Regulations require that residential projects with 20 or more for
sale units /lots contain at least 12.5% low and moderate - income units /lots. The Regulations
require that the for sale units be constructed in the following proportions: 40% low - income, and
60% moderate income_ In lieu of constructing 40% of the Inclusionary Units that the
Regulations would otherwise require, the Regulations authorize developers to pay a fee,
currently set by the City through June 30, 2012 at $103,888 per unit required but not built. If
developers opt to pay the maximum allowable fees in lieu of construction, they are still required
to construct 60% of the obligation.
D. Developer is the owner of 673 acres of real property in the City of Dublin
generally located northeast of the Tassajara Road and Fallon Road intersection and more
specifically described in Exhibit 1 (the "Property").
E. Developer desires to construct a residential project on the parcel that consists of
106 for -sale units (collectively "the Project") and that are subject to the Regulations.
F. Developer applied for and the Planning Commission (PC) approved (November
13, 2007) a Site Development Review and vesting tentative map (PC Resolution. No. 07 -59) for
the Project to construct a total of 106 residential units (98 single family and 8 duets). On
November 8, 2011, the Planning Commission approved PC Resolution No. 11 -31, relating to the
design of the 98 single- family detached units. (The two Site Development Review approvals
and the vesting tentative map approval are hereinafter collectively referred to as "the
Approvals ".) Based on 106 units, the Approvals for the project establish the Developer's
obligation under the Regulations to construct 13 Inclusionary Units. (12.5% of 106 r 13.)
G. Developer has, consistent with the Regulations, elected to pay fees to meet its
obligation with respect to 5 of the 13 Inclusionary Units. (40% of 13 = 5.)
H. The remaining 8 units {"the Inclusionary Units ") will be allocated, consistent with
Section 8.68.0303 of the Regulations, in the following manner: (a) 3 low - income units; and (b)
5 moderate - income units.
L The purpose of this Agreement is to set forth the manner by which Developer
satisfies any and all inclusionary housing obligations applicable to the Project under the
Regulations.
NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin
Municipal Code, condition 8 of PC Resolution No. 07 -59, condition 23 of PC Resolution No.
11 -31 and in consideration of the City's approval of the Project, Developer and City for
themselves and their respective successors and assigns hereby agree as follows:
1. Definitions and Interpretations. Terms used in this Agreement shall be defined as
set forth in Chapter 8.68 of the Dublin Municipal Code.
2. Developer's Compliance with Affordable Housing Obligation. Developer intends
to and shall satisfy its obligations under the Regulations by paying fees in lieu of constructing 5
Inclusionary Units and by constructing 8 Inclusionary Units (in the types and locations specified
in section 4). Section 8.68.030 of the Regulations requires that all affordable units in a project be
constructed concurrently with a project or construction phase of a project. Accordingly, all
Inclusionary Units shall be constructed concurrently with the market -rate units surrounding -the
Inclusionary Units within the same construction phase. If the City Building Official or City
Community Development Director determines that the Inclusionary Units have not been or are
not being constructed concurrently with the market -rate units as required by this Section 2, the
Building Official shall withhold further issuance of building permits in the Project until
construction of the Inclusionary Units has been completed to the satisfaction of the Community
Development Director.
3. In Lieu Fees. Developer shall pay in -lieu fees to fulfill its obligation to construct
5 of the 13 inclusionary units at the time and as required by the Regulations and Council
Resolution No. 56 -02. As required by the Regulations, the entirety of the fee shall be paid at
time of issuance of the first building permit in the Project.
4. InclusionqU Unit DesigtL Location and Size.
(a) Exterior Materials and Exterior Architectural Desi . Section 8.68.030.E
of the Regulations provides that inclusionary units shall not be distinguished by exterior design,
construction, or materials. Although the 8 inclusionary units proposed by Developer are attached
duet units, the City hereby finds that, due to the architectural treatment and configuration of the
inclusionary units, as approved by the Planning Commission in the Site Development Review
approval, the units are not distinguished by exterior design, construction, or materials. The
exterior materials and exterior architectural design of the Inclusionary Units shall be consistent
with the Project's market -rate units as reviewed and approved through the Site Development
Review by the Planning Commission on November 13, 2007; provided, however, that minor
-2-
changes to unit size may be approved by the Community Development Director through a Site
Development Review waiver. There shall be no requirement that the interior of the Inclusionary
Units be consistent with the Project's market -rate units.
(b) Unit Location. Consistent with Section 8.68.030 of the Regulations, the
Inclusionary Units shall be dispersed throughout the individual phase in which they are
constructed. The Diagram and Location of Inclusionary Units C Location Diagram "), attached
hereto as Exhibit 2, shows the location of the Inclusionary Units as proposed by the Developer,
and the City hereby finds that the units as shown are reasonably dispersed through the Project as
required by Section 8.68.030.E of the Regulations. Developer may request that the Community
Development Director reasonably approve changes to said Location Diagram that alter the
location of the Inclusionary Units. Upon the Community Development Director's approval,
which shall be administrative, the revised Location Diagram shall be automatically incorporated
into this agreement as Exhibit 2, replacing the previous Exhibit 2. In approving any revised
Location Diagram, the Community Development Director shall find (a) that the Location
Diagram shows three low - income units and five moderate - income units; and (b) that the
Inclusionary Units as depicted in the Location Diagram are "reasonably dispersed" throughout
the Project as required by Section 8,58.030.E of the Regulations.
(c) Unit Bedrooms and Size. Section 8.68.030.E requires that the
inclusionary units reflect the range of numbers of bedrooms provided in the project as a whole.
The Developer proposes to provide:
3 — three- bedroom low- income units;
1— three - bedroom moderate - income unit; and
4 four- bedroom moderate - income units.
The City hereby finds this breakdown reflects the range of numbers of bedrooms
provided in the project as a whole, as required by Section 8.68.030.E of the Regulations.
The size of and number of bedrooms in the inclusionary units shall be consistent with the
Site Development Review approvals of the Planning Commission on November 13, 2007,
provided however, that minor changes to unit size may be approved by the Community
Development Director through a Site Development Review Waiver.
5. Ensuring Affordability.
(a) Sales Price and Marketing. Developer shall sell the Inclusionary Units at
sales prices that are affordable, as applicable to the individual buyer, to persons with low -, or
moderate- incomes as defined in the Regulations. The maximum sales price shall be adjusted for
household size and income. Additional detail on the manner of calculating sales prices for the
Inclusionary Units is set forth in the Layperson "s Guide to the Inclusionary Zoning Ordinance
Regulations, adopted by the City Council on June 1, 2004 and attached hereto as Exhibit 3. All
units shall be marketed and sold in a manner that is consistent with the Regulations.
(b) Marketing Plan. Developer shall prepare and receive City approval of a
Marketing Plan as required by Section 3.1 of the Layperson's Guide to the Inclusionary Zoning
Ordinance Regulations, adopted by the City Council on June 1, 2004 and attached hereto as
-3-
Exhibit 3, prior to issuance of the first building permit in the Project (excluding building permits
issued for model homes).
(c) ResaleAgreements . Developer shall prior to transferring ownership of the
Inclusionary Unit to the buyer ensure that the initial buyer and the City have executed a Resale
Restriction and Option to Purchase Agreement (the "Resale Agreement ") in substantially the
form attached hereto as Exhibit 4. The Resale Agreement shall serve as the agreement required
by Section 8.68.050.0 of the Regulations. Upon (i) the sale of an Inclusionary Unit as a
completed home in accordance with the terms of this Agreement and (ii) the recordation of the
Resale Agreement against such Inclusionary Unit, Developer shall have no further obligations or
liabilities with respect to such Inclusionary Unit, including but not limited to, monitoring the
compliance with this Agreement or the Resale Agreement of the buyer of an Inclusionary Unit or
any successor, and responsibility for compliance with the Resale Agreement as to that
Inclusionary Unit shall thereafter be the burden of the then owner. Developer shall remain
responsible for compliance with this Agreement as to all other Inclusionary Units not yet sold.
Sale of all Inclusionary Units in accordance with the terms and conditions herein, and payment
of the in-lieu fees required herein, shall be deemed full and final satisfaction of Developer's
obligations to provide affordable housing for the Project. The City and Developer agree that a
breach of the Resale Agreement by a purchaser of an Inclusionary Unit shall not constitute a
default or breach by Developer.
(d) City Administrative Fee. Prior to the City's execution of each Resale
Agreement, Developer shall pay the City a City Administrative Fee, in an amount to be
established from time to time by the City Council and which is currently set at $1,500 per
transaction.
6. Term. This Agreement shall be effective until all in -lieu fees have been paid, and
all Inclusionary Units are constructed, sold, and a Resale Agreement in substantially the form
attached hereto as Exhibit 4 has been recorded against each Inclusionary Unit. Upon satisfaction
of these requirements, Developer shall have no further obligations under this Agreement.
Notwithstanding any provisions of this Agreement to the contrary, the burdens of this Agreement
shall terminate as to any parcel that is individually (and not in "bulk") sold to the purchaser or
user thereof and thereupon and without the execution or recordation of any further document or
instrument such parcel shall be released from and no longer be subject to or burdened by the
provisions of this Agreement.
7. Memorandum of Agreement to be Recorded. Developer and City shall execute
and acknowledge a Memorandum of this Agreement ("Memorandum ") substantially in the form
attached hereto as Exhibit 5, and City shall cause the Memorandum to be recorded in the Official
Records of Alameda County upon its execution.
8. Agreement Runs with the Land. All of the provisions, rights, terms, covenants,
and obligations contained in this Agreement shall be binding upon the Parties and their
respective heirs, successors and assignees, representatives, lessees, and all other persons
acquiring the Property, or any portion thereof, or any interest therein, whether by operation of
law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable
as equitable servitude and shall constitute covenants running with the land pursuant to applicable
10
laws, including, but not limited to, Section 1468 of the Civil Code of the State of California.
Each covenant to do, or refrain from doing, some act on the Property hereunder (a) is for the
benefit of the Property and is a burden upon the Property, (b) runs with the Property, and (c) is
binding upon each Party and each successive owner during its ownership of the Property or any
portion thereof, and shall be a benefit to and a burden upon each Party and the Property
hereunder and each other person succeeding to an interest in the Property.
9. Assignments and Transfers.
(a) Right to Assign. Developer may wish to sell, transfer or assign all or
portions of its Property to other developers (each such other developer is referred to as a
"Transferee "). In connection with any such sale, transfer or assignment to a Transferee,
Developer may sell, transfer or assign to such Transferee any or all rights, interests and
obligations of Developer arising hereunder and that pertain to the portion of the Property being
sold or transferred, to such Transferee, provided, however, that no such transfer, sale or
assignment of Developer's rights, interests and obligations hereunder shall occur without prior
written notice to City and approval by the City Manager, which approval shall not be
unreasonably withheld or delayed.
(b) Approval and Notice of Sale. Transfer or Assignment. The City Manager
shall consider and decide on any transfer, sale or assignment within thirty (30) days after
Developer's notice thereof, provided all necessary documents, certifications and other
information are provided to the City Manager to enable the City Manager to determine whether
the proposed Transferee can perform the Developer's obligations hereunder. Nothing herein shall
be deemed to limit the right of Developer to freely alienate or transfer all or any portion of the
Property, provided however, Developer shall not be released from liability under this Agreement
unless and until the proposed Transferee shall have agreed in writing to be bound by and to
comply with the requirements of this Agreement and any recorded Resale Agreement and the
City Manager has approved of such Transferee in accordance with this Section 9(b). Notice of
any such approved sale, transfer or assignment (which includes a description of all rights,
interests and obligations that have been transferred and those which have been retained by
Developer) shall be recorded in the official records of Alameda County, in a form acceptable to
the City Manager, concurrently with such sale, transfer or assignment. In the event the City
Manager fails to make such determination within such thirty (30) day period, City shall be
deemed to have approved the assignment and assumption of this Agreement by the proposed
Transferee and Developer shall be released pursuant to Section 9(c) below.
(c) Effect of Sale Transfer or Assignment. Developer shall be released from
any obligations and liability hereunder sold, transferred or assigned to a Transferee pursuant to
Section 9.a of this Agreement, provided that: a) such sale, transfer or assignment has been
approved by the City Manager pursuant to Sections 9.a and 9.b; and b) such obligations are
expressly assumed by Transferee and provided that such Transferee shall be subject to all the
provisions hereof
10. Successors. Except as specifically provided in this Agreement, this Agreement
shall bind and inure to the benefit of all successors and assigns of the parties and any associates
in interest, and their respective directors, officers, agents, servants, and employees, and the
-5-
successors and assigns of each of them, separately and collectively. Developer shall provide
notice to the City of the names and mailing addresses of any such successors or assigns.
11. Hold Harmless. Developer shall hold City, its elective and appointive boards,
commission, officers, agents and employees harmless from and against any or all loss, liability,
expense, claim, costs, suits, damages of every kind, nature and description directly or indirectly
arising from the performance of the obligations or undertakings of Developer pursuant to this
Agreement. Developer shall defend City and its elective and appointive boards, commission,
officers, agents and employees from any suits or actions at law or in equity for damages caused
or alleged to have been caused, by reason of any of the obligations or undertakings of Developer
pursuant to this Agreement. It is further provided that this hold harmless agreement shall apply
to all damages and claims for damages for every kind suffered, or alleged to have been suffered,
by reason of any of the obligations or undertakings of Developer pursuant to this Agreement
provided however, that the foregoing indemnity shall not be construed to apply to any liability or
claims related to administering any provisions of the Resale Agreement for any Inclusionary
Unit following the sale of such Inclusionary Unit to an initial Qualified Purchaser.
12. Enforcement. If the Developer defaults in the performance or observance of any
covenant, condition, restriction or obligation of the Developer as set forth in this Agreement, and
such default remains uncured for a period of thirty (30) days after notice thereof is given by the
City (or such longer period as may be necessary to cure the default, provided that Developer
commence the cure within the thirty (30) day period and diligently prosecutes the cure to
completion), the City may take any one or more of the following steps:
(a) By specific performance or other action or proceeding at law or in equity,
require the Developer to perform its obligations under this Agreement or enjoin any acts or
things which may be unlawful or in violation of the rights of the City hereunder.
(b) Take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants, conditions and restrictions of the Developer
under this Agreement.
If Developer transfers any portion of the project in bulk and a Transferee defaults under
this Agreement, the City shall exercise the foregoing remedies only with respect to the defaulting
Transferee and its portion of the project; and so long as Developer has not otherwise defaulted
hereunder, the City shall not seek to exercise any rights and remedies against Developer.
13. Attorneys' Fm. If legal action is necessary to enforce any provisions of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and legal costs.
14. Amendments. This Agreement shall be amended only by a written instrument
executed by the parties hereto or their successors in interest and duly recorded in the Official
Retards of the County of Alameda, California.
In the event that Developer is unable to perform its obligations under Section 2 of this
Agreement due to significant changes in circumstances, such as unanticipated delays in
construction within the Project, the City shall confer with Developer in an effort to reach a
mutually acceptable resolution, consistent with the terms of the affordable housing conditions in
rol
the Approvals. If an agreement is reached, this Agreement shall be amended accordingly.
Developer shall pay the City its reasonable costs, including attorneys' fees, incurred in such
negotiations and in amending this Agreement, and Developer shall, if requested by the City,
provide the City with a reasonable deposit to cover the City's reasonable costs, upon Developer
initiating such negotiations.
15. Co orate Authority. If either party is a corporation, each individual signing this
Agreement on behalf of that corporation represents and warrants that each of them is duly
authorized to execute and deliver this Agreement on behalf of the corporation and that the
Agreement is binding on the corporation in accordance with its terms.
16. Notices, Demands and Communications Between the Parties. Any and all
notices, demands or communications submitted by any Party to another Party pursuant to or as
required by this Agreement shall be proper if in writing and dispatched by messenger for
immediate personal delivery, or by registered or certified United States mail, postage prepaid,
return receipt requested, to the address of City and Developer, as applicable, as set forth below.
Such written notices, demands and communications may be sent in the same manner to such
other addresses as either Party may from time to time designate as provided in this Section. Any
such notice, demand or communication shall be deemed to be received by the addressee,
regardless of whether or when any ;return receipt is received by the sender or the date set forth on
such return receipt, on the day that it is dispatched by messenger for immediate personal
delivery, or two (2) calendar days after it is placed in the United States mail as heretofore
provided.
If to Developer: Standard Pacific Corp.
3825 Hopyard Road, Suite 195
Pleasanton, CA. 91588
Attention: Project Manager- Fallon Crossing
Phone: (925) 847 -8700
Fax No.: (925) 730.5375
Xf to City: City Manager
City of Dublin
100 Civic Plaza
Dublin, CA 94568
17. Entire Agreement. This Agreement contains the entire understanding between the
parties relating to the transaction contemplated hereby, and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are merged herein
and shall be of no further force or effect. No provision of this Agreement may be amended,
waived, or added except by an instrument in writing signed by the Parties hereto.
18. Inco oration of Exhibits. All exhibits referred in this Agreement are
incorporated herein by reference.
-7-
19. Counterparts. This Agreement may be executed in counterparts, which when
taken together shall constitute a single signed original as though all parties had executed the
same page.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
Dated: jZ CITY OF DUBLIN
By: t
City Manager
Attest
,DOu City Clerk
Dated: t Z STAND PACIFIC C
corporate
BY: 14L) � M-11, �./
Stephen D. Melander
Its: Authorized Representative
-8-
July 11, 2013
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Attn: Luke Simms
MirzJhi.tig Ye)te ...Rigbr At 11r�1�zn`"
RE: gallon Crossing Affordable Housing Agreement (PA04 -016)
Dear Luke,
Thank you for meeting with us on July 9, 2013 to discuss the current Affordable Housing
Agreement (No PA04 -016) for our Fallon Crossing project (Tract# 7617). Standard Pacific
Homes is writing this letter to request a modification to the Affordable Housing Agreement. The
City Council has the authority under 8.68.040 (E) to approve alternate methods of compliance if
the applicant demonstrates, and the City Council finds, that such alternate methods meet the
purpose of chapter 8.68. The proposal will convert the requirement from delivery of 8
inclusionary units and payment of in -lieu fee on 5 units, to payment of in -lieu fee for 13 units.
Background:
In January 2012, we began construction of the first homes in our project and opened for sale in
April 2012. In August 2012, we began construction our first 4 affordable units (3 Moderate
Income Units and 1 Low Income Unit). At the same time, we worked with the City to initiate
the marketing plan for these units, and soon began taking applications fiom potential buyers for
these homes (which have been complete since February). It has been nearly a year since these
homes have been on the market. We have yet to find any buyers that both qualify for Dublin's
Inclusionary Housing Program and are willing to purchase a deed restricted property for the
prices currently prescribed by the inclusionary housing program.
Buyers who purchase deed restricted homes must sell back into the inclusionary program. The
investment in their home is subject to average income in the local area which may potentially
result in negative equity in the home. Furthermore, the City's program requires that to re -sell
their home, the owner must market, verify and assure the prospective buyer meets the
inclusionary requirements plus attend workshops, and cover all costs associated with the
qualification and sale including a $1,500 fee for City Application.
A4 c7 rerg Y x -[ Regbt At f-Irjtrz
In summary of the primary issues that we are running across seem to be the following:
1. Those candidates that meet the Inclusionary Income Requirement and are able to qualify for
financing are able to purchase market rate homes that do not have BMR Deed Restrictions;
and
2. The remote location of this Project (intersection of Camino Tassajara and Fallon Road) is
not in close proximity to shopping, transportation, or other amenities that are important
components to the buyers of affordable units.
Proposal:
For the reasons outlined above, we believe that continuing to build and market Below Market
Rate (deed restricted) homes at our project is not the best solution. A better approach for
providing affordable housing in the Dublin community can be achieved through publicly funded
projects targeted specifically to lower income households. For example the Crown Chevrolet site
in Downtown Dublin that is slated to be re- developed into a 76 unit apartment complex to serve
low income residents and military veterans.
We would like to propose that our Affordable Housing Agreement be amended to allow for the
full satisfaction of our remaining (8 Units) BMR/Inclusionary obligations through the payment of
$107,000 in -lieu fee per inclusionary Income unit, a total of $856,000.00. This amount is
reflective of a similar request recently approved by City Council for Shea Homes on their Tralce
project. We believe that these funds would be useful in defraying some of the City's costs of
current and upcoming affordable apartment sites that are closer to transportation and amenities as
mentioned above.
C011CIII'doli:
Thank you in advance for your consideration of this proposal. Please let us know if you have any
questions or comments. I can be reached at (925) 730 -1357. We look forward to your response
and to continuing to work with the City on this matter.
Regards,
Doug Moses - Batson
Project Planner
Standard Pacific Homes
RESOLUTION NO. XX - 13
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
* * * * * * * * * **
APPROVING FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT FOR THE
CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN -LIEU OF
CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS
WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the
City of Dublin Zoning Ordinance (the "Ordinance "), on January 10, 2012, the City of Dublin (the
"City ") and Standard Pacific Corp, Inc. ( "Standard Pacific "), entered into an Affordable Housing
Agreement for the Construction of Inclusionary Units (the "Agreement ") for the construction of
106 residential units known as the Fallon Crossing Project ( "Project "), including the construction
of thirteen (13) Inclusionary Units on certain property it owned; and
WHEREAS, under the Agreement, Standard Pacific's Inclusionary Zoning obligation was
to provide thirteen (13) Inclusionary Units, allocated as follows: construction of two (2) very low -
income units, two (2) low- income units, and four (4) moderate - income units; and pay fees in -lieu
of constructing the remaining five (5) Inclusionary Units; and
WHEREAS, Standard Pacific paid fees in -lieu of constructing five (5) Inclusionary Units
on January 11, 2012, in the amount of $519,440; and
WHEREAS, Standard Pacific has proposed to amend the Agreement to provide that it
will satisfy its obligations through payment of fees in -lieu of constructing the remaining eight (8)
Inclusionary Units; and
WHEREAS, Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council,
at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning
Regulations and approve an alternate method of compliance if the applicant demonstrates, and
the City Council finds, that such alternate methods meet the purposes of the Inclusionary Zoning
Chapter; and
WHEREAS, the purpose of the Inclusionary Zoning Regulations are to enhance the
public welfare and assure that further housing development contributes to the attainment of the
City's housing goals by increasing the production of residential units affordable by households of
very-low, low and moderate - income and assure that the limited remaining developable land in
the City's planning area is utilized in a manner consistent with the City's housing policies and
needs; and
WHEREAS, the City Council hereby finds that the proposal by Standard Pacific to pay
fees in -lieu of constructing the remaining eight (8) Inclusionary Units is an alternate method of
complying with, and is consistent with the purposes of, the Inclusionary Zoning Regulations for
the reasons that follow and hereby waives the requirement that 7.5% of the units in the project
be affordable:
1. If the Developer were to be required to produce the Inclusionary Units, it would
prove difficult because of currently prevailing market conditions for the developer
to sell the units at prices that approach the current maximum affordable price,
since the market prices for units with deed restrictions are less than the affordable
prices. Such a requirement would place an unfair burden on the Developer that is
not consistent with the purpose of the Regulations.
2. If the Developer were required to produce the Inclusionary Units, the future buyers
of those units would have difficulty reselling the units, for the foreseeable future,
because of the likely -to -be small difference between the affordable price and the
market price for similar units without deed restrictions. Such circumstances would
be inconsistent with the purposes of the Regulations.
3. Buyers who wish to re -sell their home to market are required to verify and assure
the prospective buyer meets inclusionary requirements, plus attend workshops
and cover all costs associated with qualification and sale. Again, because of the
minimal price distinction between market rate and affordable units, these
requirements would make it difficult for the Developer to find appropriate buyers
for the Inclusionary Units;
4. Furthermore, the location of the Project is not in close proximity to shopping,
transportation, and other amenities that are important factors for the buyers of
affordable units. Therefore, the units that would be produced with the in -lieu fees
are likely to be more suitable for potential buyers than would be affordable units
within the Project.
WHEREAS, the Project has been found to be Categorically Exempt from the California
Environmental Quality Act (CEQA); and
WHEREAS, a Staff Report setting forth in further detail the background and terms of the
proposed Amended and Restated Agreement has been submitted to the City Council for
consideration of this request.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby approve the First Amendment to the Affordable Housing Agreement for the Construction
of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable
Ownership Units Between the City of Dublin and Standard Pacific Corp, Inc., as described in
Exhibit A. ( "Amendment ")
BE IT FURTHER RESOLVED that the City Manager is authorized and directed to
execute the Amendment and such other documents, and to take such other and further action,
as necessary and appropriate to carry out the Intent of this Resolution.
BE IT FURTHER RESOLVED that the Community Development Director is authorized
and directed to modify the approved Planned Development Zoning and Site Development
Review by administrative action to maintain consistency between the Amendment approved
Planned Development Zoning and Site Development Review.
PASSED, APPROVED AND ADOPTED this 17th day of September 2013, by the
following vote-
AYES-
NOES-
ABSENT-
ABSTAIN-
ATTEST-
City Clerk
2115454.1
Mayor
RECORDING REQUESTED BY:
CITY OF DUBLIN
When Recorded Mail To:
City Clerk
City of Dublin
100 Civic Plaza
Dublin, CA 94568
Fee Waived per GC 27383
Space above this line for Recorder's use
FIRST AMENDMENT TO
AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF
INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN -LIEU OF
CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS
PA 04 -16, Standard Pacific Corp., a Delaware Corporation
(Fallon Crossing Project)
This First Amendment ( "Amendment ") to the Affordable Housing Agreement, dated
January 10, 2012, for the Fallon Crossing Project ( "Agreement ") is entered into this 17th
day of September, 2013 ( "Effective Date ") by and between the City of Dublin, a municipal
corporation (the "City "), and Standard Pacific Corp., a Delaware corporation (the
"Developer ").
Recitals
1. Developer is the owner of portions of real property, consisting of
approximately 67.7 acres of land, located in the City of Dublin, County of Alameda, State of
California, generally located northeast of the Tassajara Road and Fallon Road intersection,
and more particularly described in Exhibit 1 attached hereto and incorporated into this
Agreement by reference (the "Property ").
2. Chapter 8.68 of the Dublin Zoning Ordinance ( "Ordinance ") requires
developers of residential projects consisting of 20 units or more to set aside 12.5% of the
units in the project as Inclusionary Units and to execute and record an affordable housing
agreement against the project property prior to the issuance of building permits.
3. Developer had entered into the Agreement so as to document its means of
complying with the Ordinance. In particular, the Agreement provided that Developer would
satisfy its obligation to produce 13 affordable units on the property by:
—I— Amendment to Affordable Housing Agreement
Fallon Crossing
a. Paying fees in -lieu of construction to satisfy the obligations for 5 units.
b. Constructing 8 inclusionary units, 2 very low- income units, 2 low -
income units, and 4 moderate - income units.
4. On September 17, 2013, the City Council approved the Developer's proposed
alternate method of complying with the Ordinance.
5. The purpose of this Amendment is to set forth the manner by which Developer
will satisfy its inclusionary housing obligations for Inclusionary Units pursuant to the
Ordinance.
NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the
Dublin Municipal Code, and in consideration of the City's approval of the project, Developer
and City for themselves and their respective successors and assigns hereby amend the
Agreement as follows:
Section 1. Paragraph 2 of the Agreement is amended to read as follows
"3. Developer's Compliance with Affordable Housing Obligation.
Developer will satisfy its obligation by paying in -lieu fees for thirteen (13) units.
Section 2. Paragraph 3 of the Agreement is amended to read as follows:
"3. In -Lieu Fees. Developer will satisfy its obligation for eight (8)
Inclusionary Units by paying fees in -lieu of constructing said units. Accordingly,
Developer will pay $107,000 per unit, a total of $856,000 to fulfill the obligation to
construct Inclusionary Units required by the Ordinance. The entirety of the fees shall
have been paid prior to the issuance of any further city approvals for the project, such
as occupancy authorizations or building permits, and in no event later than October
18, 2013. Developer and City both acknowledge that as of the date of execution of
the First Amendment to the Agreement, the Developer had previously satisfied the
obligation to pay fees in -lieu of five (5) units on January 11, 2012 when the City
received payments totaling $519,440 (or $103,888 per unit)."
Section 3. Paragraphs 4 and 5 of the Agreement are deleted in their entirety.
Section 4. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original and all of which together shall constitute one
agreement.
Section S. Severability. If any provision of this Agreement is held invalid,
illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and
enforceability of the remaining provisions shall not be affected or impaired thereby.
—2— Amendment to Affordable Housing Agreement
Fallon Crossing
Section 6. Entire Agreement. The Agreement, together with Exhibits and this
Amendment contain the entire understanding between the parties relating to the transaction
contemplated hereby, and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are merged herein and shall be of no further
force or effect. No provision of this Agreement may be amended, waived, or added except
by an instrument in writing signed by the Parties hereto. The exhibits attached hereto are
incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
CITY OF DUBLIN
Attest:
City Clerk
City Manager
STANDARD PACIFIC CORP.,
a Delaware corporation
Name:
Its:
2115383.1
—3— Amendment to Affordable Housing Agreement
Fallon Crossing