Last week we reported that city staff was bringing Verona, a project on the corner of Fifth and Alhambra that was approved in July of 2008 back to amend the development agreement. To date, like most other project that have been approved by council in the last two years, there has been no building permits pulled nor construction that has begun.
On May 12, there was an emergency hearing of the Planning Commission where suddenly the Verona project was brought back with major changes. Because of the nature of the Planning Commission meeting, there were two members absent, in addition, there were already two vacancies, which means that the final vote to move this to council occurred with just four commissioners by a 3-1 vote.
They would eliminate the requirement that 17 of the units be designated for middle income, this makes sense given that the city has suspended that requirement (although I disagree with the council’s policy here). They would also amend the number of required low and moderate income units from 21 to 17 with a density bonus. So what you have now done is reduce the number of “affordable” units from 38 to 17. That is certainly a huge issue right there that ought to be discussed in the Social Services Commission per the policy the city just passed last month on commissions and developments.
They would amend the timing of payment of sewer and water connection fees from final map to Certificate of Occupancy. This was a change that the council approved a few weeks ago citywide. While their effort was to attempt to help developers trying to secure loans, I think this policy transfers additional risk and burden on the city. If the houses were built but did not sell, the city might be left with the bill.
Because the project is coming back anew essentially, it would fall under current Greenhouse Gas Emission Reduction, which is better than what it had, but as we have discussed many times, the city’s current policy falls well shy of what it should be.
The two biggest issues are the recommendation by the Recreation and Park Commission to eliminate essentially an acre of parkland dedication. If passed they would “direct the applicant to submit a new tentative map and other necessary entitlements to designate the parcel from parkland to residential and/or commercial use.” They would then require the developer to pay fees in-liue of parkland dedication, $607,000 under the current fees and also pay $110,000 currently designated for parkland development for use toward improvements in Mace Ranch Community Park.
As explained last week, this is a staff initiated change.
“The developer is not requesting this change as part of the revised project proposal. The parkland was required as a buffer between the new development and the adjacent Mace Ranch Park burrowing owl habitat. Since the project approvals, numerous surveys conducted by staff have shown that the owls have relocated and no longer occupy the natural area. Therefore, staff believes that the buffer is no longer necessary.”
The problem of course is that this does not take into account any agreements between the residents and the city on what should or should not go there.
The issue of fees is crucial here. When Verona passed it was $12,000 per market rate unit and $6000 per middle income unit, if they simply modified the middle income requirement, the impact fees would be nearly $800,000 rather than the $640,000 the staff is claiming. Before people decry that additional payment, remember that they are getting 21 additional units to sell at market rate, which will more than make up for that loss.
Originally staff and the Planning Commission called for $1000-$3000 per unit in fees. Perhaps staff received some blow back from our last article and have now modified that to $5000 which would produce $330,000. That would be a net loss of $500,000 for the city at a time when they are in budget crisis and asking the voters to extend a sales tax.
Staff justifies this as follows:
At their May 12, 2010 meeting, the Planning Commission recommended that the project fees be revised so that there is equity among all recently approved developments, relative to the supplemental fees, but did not provide a specific figure for the Verona project. Under the Commission’s recommendation, based on the project fees shown above, the suggested supplemental residential fee for Verona would be closer to $3,000 than the current $6,000 to $12,000 per market rate unit. This would generate $198,000 based on 66 market rate units (assuming elimination of the middle income units), which would be commensurate with other recent projects.
Due to the current economic climate and difficulty in securing project financing, most of the recently entitled residential projects are not proceeding to Final Map or construction. An exception to this is the first phase of Willowbank Park. Relief from a portion of the Verona supplemental fees could facilitate financing for the project if the city desires the project to be built in the near term. While consideration of a reduced supplemental fee may be appropriate, the city anticipated utilizing a significant portion of the Verona supplemental fees to fund the Sports Complex EIR when it initiated the study. Too great a reduction in the development agreement supplemental fees would require the city to use other discretionary funds to backfill this effort. However, staff believes that with the rejection of the parkland, it would be possible to restructure the Verona project fees to enable project financing and construction to move forward, while generating more fees overall for the city than the approved project. Under staff’s proposal shown below, with park in-lieu fees, the recommended revisions would result in an increase of $404,907 to the city above current project fees.
We have a different view from staff and I think this gets to the heart of the matter.
First of all, they are going to use the funding that was go to go to a park in Verona to fund Mace Ranch Park and Community enhancements. I still want to know what the neighbors asked for and what was agreed to. But from our standpoint, we should probably not be spending money on either the Sports Complex or the Park unless there are actual safety issues involved. If this is general fund money, then the money should go directly into the city’s reserve.
Second, even if the park is determined not be needed, the city is still forgoing $500,000 in supplemental impact fees. They cover up for that by mixing the park in-lieu fees into the equation, but as I understand the developer is paying those fees either in the form of a park or the form of in-lieu fees that go to an existing park. So the trade off is between Mace Ranch Park and a new park in Verona.
Third, what is becoming clear is that the city not only is approving developments during a time when they will not be built, but they are doing so at greatly reduced impact fees. So we are forgoing in the course of the three most recently approved projects millions of dollars for developers to get approval for projects that will not be built in the near future. That is money that should be going into reserves and perhaps to augment things like crumbling road infrastructure. It is one-time money but at least it could buy us two to three years.
Instead it appears we are set to use money for new projects like a Sports Complex EIR. Perhaps we should accept the fact that we cannot build a sports complex right now in this economic time. Granted this is one time money, but frankly we need one-time money now to do basic city services.
I wonder how much more money we are forgoing that could be used for these purposes. It seems irresponsible of the city to ask its employees to sacrifice, the residents to sacrifice in city services and to continue to pay higher tax rates, while at the same time, council priorities have not changed and they are subsidizing developers to build project that are not going to get built anyway in the near future.
The city that so desperately needs additional sales tax dollars is giving away millions to developers.
The City simply cannot afford to make short term concessions which will have long run costs. Once the economy improves, the developer will be able to pay the fees, sell the houses, and make a profit, and there is no need to postpone and eliminate fees now to get building now.
Furthermore it would be advantageous to get this building after 2013 to count in the next SACOG cycle and not this one.
—David M. Greenwald reporting
Are we are seeing a potential conflict of interest here? Emlen and Planning and Development staff sacrificing city revenues in the hope that they can get some residential development going(although there is no guarantee that the developer will not still wait for the market to improve with his new agreement now in hand) that will create real work for them, as the city’s budget issues continue to be of the highest priority.
I do not see need to take PC or CC time on this until it is going to be built. I also am in favor if a time limit to begin building from spproval time. I understand this might nit be a good time to build but then don’t push through approvals now either. Things can change in the interim.
Sports Complex?? I seem to remember a Walnut Pool too…..
DMG: “Instead it appears we are set to use money for new projects like a Sports Complex EIR. Perhaps we should accept the fact that we cannot build a sports complex right now in this economic time. Granted this is one time money, but frankly we need one-time money now to do basic city services.”
Is the reason the city is pushing through development like Verona and Willowbank now, in a time of economic turmoil when houses are not selling – to start the process for building a new Sports Complex come hell or high water? Just wondering…
And Davisites want to pass Measure Q, so the city can keep wasting taxpayer dollars like this on things we don’t need?
What is really going on here is the city is playing a clever game – cutting basics to keep frills – so that a tax cut will hurt citizens so much, they will go ahead and put up with extending or increasing taxes rather than suffer cuts in basic services that the city has cleverly engineered. But make no mistake, if Measure Q passes, it will be same old, same old – basic services will be cut and frills will still abound. At what point do voters say enough is enough is the real question?
“At what point do voters say enough is enough is the real question?”
In the final analysis, our city Council hires or fires Emlen and has the power/authority to set the city’s agenda. It all depends on whether the Davis voter is willing to remain politically engaged and hold their Council representatives accountable by voting them out of office and just as importantly for those with obvious political ambitions, working hard to deny them the ability to climb the political “ladder”.