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HomeMy WebLinkAboutRDA Packet 2003/07/08 Notice is hereby given that the Chairman of the Housing Authority has called and will convene a special joint meeting of the Housing Authority/City Council/Redevelopment Agency, Tuesday, July 8, 2003, at 6:00 p.m., immediately following the City Council meeting in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California to consider, deliberate and act upon the following: TUESDAY, JULY 8, 2003 (~HUL,&. V~',~[ COUNCIL CHAMBERS 6:00 P.M. PUBLIC SERVICES BUILDING (immediately following the City Council meeting) JOINT SPECIAL MEETING OF THE CITY COUNCIL/REDEVELOPMENT AGENCY/AND HOUSING AUTHORITY CALL TO ORDER ROLL CALL Agency/Council/Authority Members Davis, McCann, Rindone, Salas; Chair/Mayor Padilla CONSENT CALENDAR The staff recommendations regarding the following item(s) listed under the Consent CaJendar will be enacted by the Agency/Council by one motion without discussion unless an Agency/Council member, a member of the public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and submit it to the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed after Action items. Items pulled by the public will be the first items of business. 1. APPROVAL OF MINUTES: June 10, 2003; June 17, 2003 ORAL COMMUNICATIONS This is an opportunity for the general public to address the Public Financing Authority on any subject matter within the Authority's jurisdiction that is no~t an item on this agenda. (State law, however, generally prohibits the Public Financing Authority from taking action on any issues not included on the posted agenda.) If you wish to address the Agency/Authority on such a subject, please complete the "Request to Speak Under Oral Communications Form" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. PUBLIC HEARING The following item(s) have been advertised and/or posted as public hearings as required by law. If you wish to speak to any item, please fill out the "Request to Speak Form" available in the lobby and submit it to the Redevelopment Agency or the City Clerk prior to the meeting. 2. PUBLIC HEARING TO ACKNOWLEDGE RECEIPT OF TWO DEVELOPMENT PROPOSALS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF THIRD AVENUE AND NAPLES STREET AND DIRECTING STAFF TO FURTHER EXPLORE THE PROPOSAL SUBMITTED BY 3"D AND NAPLES, LLC FOR THE DEVELOPMENT OF A WALGREENS STORE WITHIN THE SOUTHWEST REDEVELOPMENT AREA - The Agency received an unsolicited proposal from the 3rd and Naples, LLC (Developer) proposing to acquire and develop seven parcels located at the southeast corner of Third Avenue and Naples Street with a 14,000-square foot commercial building to be occupied by a Walgreens store. The Developer currently has contracts to purchase four of the seven parcels, and has made efforts to negotiate with the two owners of the remaining three parcels but has not been able to come to terms. Owner Participation Rights were extended to the owners of the three remaining properties. The purpose of this action is to acknowledge the proposals and direct staff to work with one or more of the applicants. [Community Development Director] RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ACKNOWLEDGING RECEIPT OF TWO DEVELOPMENT PROPOSALS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF THIRD AVENUE AND NAPLES STREET AND DIRECTING STAFF TO FURTHER EXPLORE THE PROPOSAL SUBMITTED BY 3"D AND NAPLES LLC FOR THE DEVELOPMENT OF A WALGREENS STORE WITHIN THE SOUTHWEST REDEVELOPMENT AREA STAFF RECOMMENDATION: Agency adopt the resolution. 3. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) ACCEPTING A REPORT OF AN ALTERNATIVES TO MEET THE EASTLAKE COMPANY'S AFFORDABLE HOUSING OBLIGATION FOR EASTLAKE II/111; (2) APPROVING DEVELOPER REQUEST TO WITHDRAW AN APPLICATION FOR MULTIFAMILY REVENUE BONDS FROM THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE (CDLAC), PRIOR TO JULY 8, 2003; (3) DIRECTING STAFF TO WORK WITH DEVELOPER AND THE EASTLAKE COMMUNITY, AND RETURN TO COUNCIL NO LATER THAN DECEMBER 31, 2003 WITH A FINAL RECOMMENDATION; AND (4) DIRECTING CITY ATTORNEY TO RETURN TO COUNCIL ON JULY 15 WITH AN AGREEMENT TO ADDRESS EASTLAKE'S AFFORDABLE HOUSING OBLIGATION WITH RESPECT TO THIS ALTERNATIVE - On April 8, 2003, the City of Chula Vista City Council, Redevelopment Agency, and Housing Authority approved financing for a 150 unit affordable rental housing complex, known as "Rancho Vista Apartments at EastLake" (Project) in satisfaction of The EastLake Company's obligation to provide affordable housing for the EastLake II/111 master planned community. The development is located on a vacant 8.25 acre (gross) site located on the east side of future EastLake Parkway, approximately 3,000 feet south of Clubhouse Drive in the City of Chula Vista. Subsequent to receiving the project approvals, in response to community concerns, the Developer has proposed an alternative project approach: the development of a first time buyer (for sale) affordable housing program on the same site. At the direction of the City Council, various meetings with the EastLake community were held to provide information regarding affordable housing, EastLake's options for providing such housing within the community, and the issues and impacts related Redevelopment Agency, July 8, 2003 Page 2 to affordable rental and for-sale developments, Staff will provide a report of EastLake's affordable housing options and the community's comments on these options. [Community Development Director] STAFF RECOMMENDATION: Adopt the resolution, ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Agency, staff, or members of the general public. The items will be considered individually by the Agency and staff recommendation may in certain cases be presented in the alternative. Those who wish to speak, please fill out a Request to Speak form available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to the meeting. 4. DIRECTOR'S REPORT(S) 5. CHAIR/MAYOR REPORT(S) 6. AGENCY/COUNCIL COMMENTS ADJOURNMENT The meeting will adjourn to a closed session and thence to an adjourned meeting of the Redevelopment Agency on July 22, 2003, at 6:00 p.m., immediately following the City Council meeting in the City Council Chambers. CLOSED SESSION Unless Agency Counsel, the Executive Director, or the Redevelopment Agency/City Council states otherwise at this time, the Agency/Council will discuss and deliberate on the following item(s) of business which are permitted by law to be the subject of a closed session discussion, and which the Agency/Council is advised should be discussed in closed session to best protect the interests of the City. The Agency/Council is required by law to return to open session, issue any reports of final action taken in closed session, and the votes taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated at this point in order to save costs so that the Agency/Council's return from closed session, reports of final action taken, and adjournment will not be videotaped. Nevertheless, announcements of actions taken in Closed Session shall be made by Noon on Wednesday following the meeting at the City Clerk's office in accordance with the Ralph Brown Act (Govt. Code ~; 54957.7) 7. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - Pursuant to Government Code Section 54956.8 a. Property: Assessor Parcel Nos. 619-121-01, 02, 29 (approx. 0.29 acres) located at Third and Naples Negotiating Parties: Laurie Madigan, Lyle Haynes, Elizabeth Wagner Hull, Linda Bartz, (Agency/City) and Mr. Amin Kakayi, Mrs. Elisa Flores, and Mrs. Raquel Ruelas Under Negotiations: Instructions to negotiators b. Property: Assessor Parcel Nos. 563-350-13-00; 56-131-01-11 (Agency/City) and Assessor Parcel Nos. 563-350-12- 00; 566-132-55-00 (George A. Mross and Mayfair Lining Trust) Redevelopment Agency, July 8, 2003 Page 3 Negotiating Parties: Andy Campbell, Lyle Haynes (Agency/City) and George A. Mross and Mayfair Living Trust Under Negotiations: Instructions to negotiators 8. CONFERENCE WITH LEGAL COUNSEL REGARDING INITIATION OF LITIGATION-- Pursuant to Government Code Section 54956.9(c) Two cases AMERICANS WITH DISABILITIES ACT The City of Chula Vista, in complying with the Americans with Disabilities Act (ADA), request individuals who require special accommodates to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at least 48 hours in advance for meetings and five days for scheduled services and activities. Please contact the Secretary to the Redevelopment Agency for specific information at (619) 691-5047 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5647. California Relay Service is also available for the hearing impaired. Redevelopment Agency, July 8, 2003 Page 4 MINUTES OF ADJOURNED REGULAR MEETINGS OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA June 10, 2003 6:00 p.m. Adjourned Regular Meetings of the City Council and the Redevelopment Agency of the City of Chula Vista were called to order at 9:16 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Agency/Councilmembers: Davis, McCarm, Rindone, Salas, and Chair/Mayor Padilla ABSENT: Agency/Councilmembers: None ALSO PRESENT: Executive Director/City Manager Rowlands, Agency/City Attorney Moore, and City Clerk Bigelow CONSENT CALENDAR 1. APPROVAL OF MINUTES OF May 20, May 27 and June 3, 2003 Staff recommendation: Council/Agency approve the minutes. ACTION: Chair/Mayor Padilla moved to approve staff's recommendation and offered the Consent Calendar, heading read, text waived. Agency/Councilmember Davis seconded the motion, and it carried 5-0. PUBLIC HEARINGS 2. CONSIDERATION OF ESTABLISHiNG DEVELOPMENT STANDARDS FOR PRECISE PLAN PCM-03-15 KNOWN AS BROADWAY URBAN VILLAGE CONSISTING OF 40 LANE HOMES AND NINE LOFT APARTMENTS ABOVE 9,000 SQUARE FEET OF COMMERCIAL SPACE; AND (2) TO CONSDER, PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTIONS 33431 AND 33433, A DISPOSITION AND DEVELOPMENT AGREEMENT WITH CARTER REESE AND ASSOCIATES/BITTERLIN DEVELOPMENT CORPORATION FOR THE SALE, WITHOUT BIDDING PROCESS, OF THE REDEVELOPMENT AGENCY PROPERTY LOCATED AT 760 BROADWAY WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA The development is a mixed-use project in the central commemial zoning district. The mitigated negative declaration and mitigation monitoring and reporting program have been prepared in accordance with requirements of the California Environmental Quality Act and the City's environmental review procedures. The project was evaluated in accordance with the goals and objectives of the Southwest Redevelopment Project Area and the General Plan relative to mixed-use development along Broadway. The Precise Plan would allow the project to be consistent with goals and objectives of the General Plan and the Chula Vista Municipal Code. (Community Development Director/Planning and Building Director) PUBLIC HEAR1NGS (Continued) Notice of the hearing was given in accordance with legal requirements, and the hearing was held on the date and at the time specified in the notice. Community Development Principal Tapia presented the project proposal for 760 Broadway, including the project description, development profile, proposed site plan, and home and loft features. Environmental Project Manager Hellman presented the environmental determination, and Associate Planner Walker presented the public outreach and comment process and precise plan requirements. Senior Assistant City Attorney Googins discussed the terms of the disposition and development agreement and joint escrow instructions for the sale of the property. He also asked that the proposed resolution be modified in paragraph three to state as follows: "The sale of the property is for not less than fair market value or the fair reuse value of the site. The property is being sold for $1,350,000, which has been determined to constitute the fair market price for the site, as that term is referenced under Section 1720B of the California Labor Code. The fair reuse value of the site has been determined to be $1,000,000." Agency/Councilmember Salas asked if prevailing wage rates would be triggered if the property were not sold at fair market price. Senior Assistant City Attorney Googins responded that the City, as a charter city, and is not subject to the prevailing wage laws. Chair/Mayor Padilla requested confirmation that the City possessed a reasonable mechanism and an independent external source to anive at a reuse value, and thus the fair market value, for the use being anticipated under the precise plan. Senior Assistant City Attorney Googins responded that a private consultant engaged specifically for that purpose conducted the fair reuse analysis. Agency/Councilmember Rindone asked if the driveway .to the north would be the entrance, the driveway to the south the exit, and right tums only would be permitted onto Broadway. Associate Planner Walker responded that staff would discuss the matter with the developer. Deputy Mayor Rindone requested assurance from staff that any contaminated soil would be removed from the proposed project site. Community Development Principal Tapia responded affirmatively. Agency/Councilmember Davis believed that right-tm only lanes were not necessary since there is a middle turn lane in that section of Broadway to allow tums in and out. Deputy Director of Engineering A1-Agha commented that one-way access to the project would restrict or discourage potential shoppers from entering the project. Chris Bitteflin, representing Bitterlin Development, believed that the project was an excellent balance and large enough to transform the face of Broadway and encourage home ownership in the community. Reese Jan:et, representing Carter Reese Associates, felt that the proposed project would work well in the western sector of the City, and he emphasized the importance of home-ownership in the community. Page 2 CounciVRDA Minutes /-- ~ 06/10/03 PUBLIC HEARINGS (Continued) Agency/Councilmember Rindone commended the developers on the creation of a project that would enhance the neighborhood by contributing to home-ownership and commercial opportunities, as well as by enhancing the ambiance in the Broadway corridor. Agency/Councilmember Salas asked if there would be an opportunity for someone to purchase both retail and residential property in the development. Mr. Jarret responded that pumhase opportunities are feasible but are not currently in the plans. With no further members of the public wishing to speak, Chair/Mayor Padilla closed the public hearing. Agency/Councilmember Davis commended the developers on the proposed project and commented on the positive aspect of home ownership. Agency/Councilmember McCann congratulated staff and the applicant on a job well done. He added that the proposed project will assist in revitalizing the area, and he welcomed the developer to look for further opportunities within the City. Agency/Councilmember Salas stated that the proposed project reflects the growing interest in private investment in the City. ACTION: Agency/Councilmember Rindone offered Ordinance No. 2920 for first reading and Council Resolution No. 2003-261 and Agency Resolution No. 1826 for adoption, headings read, texts waived: ORDINANCE NO. 2920, ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE MITIGATED NEGATIVE DECLARATION IS-03-016 AND PRECISE PLAN PCM-03-15 FOR THE MIXED-USE PROJECT KNOWN AS BROADWAY URBAN VILLAGE CONSISTING OF 40 LANE HOMES AND NINE LOFT APARTMENTS ABOVE 9,000 SQUARE FEET OF COMMERCIAL SPACE COUNCIL RESOLUTION NO. 2003-261 AND AGENCY RESOLUTION NO. 1826, RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA MAKING THE REQUIRED REDEVELOPMENT ACT FIND1NGS AND APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT AND JOINT ESCROW INSTRUCTIONS WITH CARTER REESE AND ASSOCIATES/BITTERL1N DEVELOPMENT CORPORATION FOR THE SALE, WITHOUT BIDDING PROCESS, AND DEVELOPMENT OF THE REDEVELOPMENT AGENCY PROPERTY AT 760 BROADWAY WITHIN THE SOUTHWEST REDEVELOPMENT PROJECT AREA The motion carried 5-0. Page 3 CounciVRDA Minutes t/~ .~ 06/10/03 PUBLIC HEAR1NGS (Continued) 3. CONSIDERATION OF (A) A PARCEL REZONE FROM THE THOROUGHFARE COMMERCIAL PRECISE PLAN ZONE TO THE CENTRAL COMMERCIAL PRECISE PLAN ZONE AND A (B) PRECISE PLAN (PCM-03-21) TO ALLOW FOR A MIXED-USE PROJECT THAT INCLUDES: (1) 41 APARTMENTS AFFORDABLE TO LOW-INCOME SENIOR CITIZENS WITH ASSOCIATED SUPPORT SERVICES; (2) ONE MANAGER'S APARTMENT; (3) 2,219 SQUARE FEET OF RETAIL SPACE; AND (4) REDUCTIONS 1N SETBACKS, PARK1NG AND OPEN SPACE LOCATED AT 825 BROADWAY TO BE DEVELOPED BY THE METROPOLITAN AREA ADVISORY COMMITTEE PROJECT The Metropolitan Area Advisory Committee (MAAC) Project is a not-for-profit, social service agency that specializes in the development of housing for low-income individuals and families. MAAC Project is proposing a mixed-use project on a one-acre site located at 825-841 Broadway. (Community Development Director; Planning and Building Director) Continued from the meeting of June 3, 2003 Chair/Mayor Padilla opened the public heating. Senior Community Development Specialist Do presented the MAAC Project's "Seniors on Broadway" development, stating that the proposed project would consist of 41 units of affordable senior housing, 2,200 square feet of retail and commercial space, 6,100 square feet of community space, and that the entrance to the parking lot would be from the access road directly offBroadway. Associate Planner Walker discussed the various planning aspects of the project. Sid Morris, a resident on Cedar Avenue, asked staff to elaborate on the results of the police traffic surveys conducted in the area of the proposed project. Senior Community Development Specialist Do replied that there were two separate occasions when three police officers were stationed at different locations; one officer on Sierra Way monitoring the school gate, one officer at the access road off Broadway, and one officer on K Street. The reports indicated significant activity on Sierra Way; little use of the access road; and normal circulation on K Street through the parking lot. She stated that the police officers went out again on the afternoon of June 10, 2003, and, over a half-hour time period, reported a 15-minute block of time when there were approximately 15 vehicles backed up from the access road onto Broadway until the school gates were opened. She added that staff would be meeting with the school district to discuss traffic issues. Bobbie Monis challenged the environmental impact report on the proposed project and expressed concern with parking and traffic problems in the area, particularly in the alley. She believed that the school district and neighborhood needed more parking for parents and teachers and a better circulation plan for the drop-off and pick-up of students. She asked the Council to look closely at the proposed project, since she believed that the residents would have to live with any mistakes made. Page 4 Council/RDA Minutes / ~ ¢ 06/10/03 PUBLIC HEARINGS (Continued) Chair/Mayor Padilla requested that staff respond to the letter from Bobbie Morris, dated June 10, 2003, requesting justification for changing the zoning map, reducing on-site parking requirements, reducing open space, building encroachments into required setbacks, and the plan for parking on a no-parking side street. Associate Planner Walker responded that: 1) the commercial thoroughfare does not allow for mixed-use development, and the proposed site has been vacant for some time; 2) the correct parking space reduction is 8 rather than 5, as stated in the letter, and the ratio corresponds to that in other jurisdictions; 3) because the site is adjacent to the charter school playground area, the City has required, and received a letter of agreement between the MAAC Project and the Chula Vista Unified School District, the use of the playground area after hours for the public and residents; 4) the encroachment for the project is consistent with other commercial uses for the area; and 5) there are a couple of parking spaces on the south side of Sierra Way, two-hour parking on Broadway, and parking on K and J Streets. Staff's analysis of the maximum 45 on-site parking spaces for the proposed site indicates that the 29 deficient spaces out of the 74 required would be adequately met, since there is adequate parking on Broadway and other surface streets. Mitch Thompson, representing the MAAC Project, stated that there is a dire need for additional housing in the community. The proposed project has no orientation toward Sierra Way; the commercial space requirement has been met and there will not be a parking problem associated with the proposed project; and, with reference to the open space sufficiency, residents want more indoor community space. Agency/Councilmember Salas asked if a survey of residents in the Town Manor or a similar facility had been conducted to see what percentage own cars. She also suggested the possibility of parking the MAAC bus off-site, possibly on the school district property, on nights and weekends. Deputy Director of Engineering A1-Agha reported that staff studied the number of trips that would generated from the proposed project, and, as a result of the small project and the number of anticipated trips, it was determined that a full traffic impact analysis was not warranted. He also stated that peak-hour traffic occurs at different times for the school and residents, and therefore, staff did not believe there was a cumulative impact. City Manager Rowlands stated that the traffic problems are a school issue, and the school is not following its own environmental impact report (EIR) for the school site. He stated that a meeting would be scheduled between the Police Department, City staff, and environmental staff of the school to ensure the enforcement of the EIR, which he believed would eliminate the stacking up of traffic on Sierra Way. Agency/Cotmcilmember Davis asked whether there were any plans to widen Sierra Way. Deputy Director of Engineering A1-Agha replied that there are no current widening plans. Agency/Councilmember Rindone expressed the need to safeguard the quality of life for existing residents in the area. Page 5 Council/RDA Minutes / _ ~ 06/10/03 PUBLIC HEARINGS (Continued) Barbara Oliveira expressed concern about the traffic, stating that the peak hours for seniors are the same as those of the school. She suggested police enforcement in the area to regulate traffic and parking violations. Sid Morris stated that the vast majority of residents were not aware of the proposed project, since they were not within 500 feet of the proposed project and were, therefore, not notified. He believed that the proposed plot was too small for the project. Environmental Project Manager Hellman clarified that the environmental document prepared for the charter school in 2001 was not prepared for or adopted by the City, but by the elementary school district. The document did not contemplate any access, vehicular or pedestrian, on Sierra Way, only access off Broadway and K Street. Agency/Councilmember Davis expressed concern about the encroachment of the balconies within the six-foot front setback. Agency/Councilmember Salas commented that if the project is delayed, it might, in fact, not occur, since there is a funding deadline. She believed that it would be a greater social good to approve the project and that the associated problems could be mitigated. Executive Director/City Manager Rowlands requested that a meeting be conducted between the City, school district, and Police Department, prior to the project's funding deadline, to resolve the issues. Mayor Padilla commented on the essential need to bring projects forward sooner in the future to allow the Council time to discuss and mitigate issues. ACTION: Agency/Councilmember Rindone moved to table the proposed project. Chair/Mayor Padilla seconded the motion, and it carded 5-0. ORAL COMMUNICATIONS There were none. OTHER BUS1NESS 4. DIRECTOR'S REPORTS There were none. 5. CHAIR/MAYOR REPORTS There were none. 6. AGENCY/COUNCIL COMMENTS There were none. Page 6 Council/RDA Minutes / ~ (o 06/10/03 ADJOURNMENT At 11:13 p.m., Chair/Mayor Padilla adjourned the meeting to the Regular Meeting of the Redevelopment Agency on June 17, 2003, at 6:00 p.m., immediately following the City Council meeting. Susan Bigelow, CMC, Cit~y Clerk Page 7 Council/RDA Minutes / ~ "~ 06/10/03 M1NUTES OF AN ADJOURNED REGULAR MEET1NG OF THE CITY COUNCIL, A REGULAR MEETING OF THE REDEVELOPMENT AGENCY, AND A SPECIAL MEETING OF THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA June 17, 2003 6:00 p.m. An Adjourned Regular Meeting of the City Council, a Regular Meeting of the Redevelopment Agency, and a Special Meeting of the Housing Authority of the City of Chula Vista were called to order at 8:26 p.m. in the Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California. ROLL CALL: PRESENT: Agency/Authority/Councilmembers: Davis, McCann, Rindone, Salas, and Chair/Mayor Padilla ABSENT: Agency/Authority/Councilmembers: None ALSO PRESENT: Executive Director/City Manager Rowlands, Senior Assistant City Attorney Googins, and City Clerk Bigelow CONSENT CALENDAR 1. ORDiNANCE NO. 2920, ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE MITIGATED NEGATIVE DECLARA;I'ION IS- 03-016 AND PRECISE PLAN PCM-03-15 FOR THE MIXED-USE PROJECT KNOWN AS BROADWAY URBAN VILLAGE CONSISTING OF 40 LANE HOMES AND NINE LOFT APARTMENTS ABOVE 9,000 SQUARE FEET OF COMMERCIAL SPACE The development is a mixed-use project in the central commemial zoning district. The mitigated negative declaration and mitigation monitoring and reporting program have been prepared in accordance with requirements of the California Environmental Quality Act and the City's environmental review procedures. The project has been evaluated in accordance with the goals and objectives of the Southwest Redevelopment Project Area and the General Plan relative to mixed-use development along Broadway. The Precise Plan will allow the project to be consistent with goals and objectives of the General Plan and Chula Vista Municipal Code. (Community Development Director/Planning and Building Director) Staff recommendation: Council place the ordinance on second reading for adoption. 2. RESOLUTION NO. 2003-276, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ESTABLISHING THE APPROPRIATIONS LIMIT FOR THE CITY OF CHULA VISTA FOR FISCAL YEAR 2003-2004 Article XIIIB of the California Constitution, approved by the voters in 1979 and commonly refen'ed to as the Gann Initiative, requires each local government to establish an appropriations limit by resolution each year at a regularly scheduled meeting or noticed special meeting. The purpose of the limit is to restrict spending of certain types of revenues to a level predicated on a base year amount increased annually by an inflation factor. (Finance Director/Treasurer Kachadoorian) CONSENT CALENDAR (Continued) 3. COUNCIL RESOLUTION NO. 2003-277, AND AGENCY RESOLUTION NO. 1827, RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA GRANTiNG REIMBURSEMENT 1N THE AMOUNT OF $18,797 TO THE METROPOLITAN AREA ADVISORY COMMITTEE TO COVER THE COST OF ON-STREET IMPROVEMENTS INSTALLED AS PART OF THE REHABILITATION AND REUSE OF THE BUILDING AT 1351-1395 THIRD AVENUE WITH1N THE SOUTHWEST REDEVELOPMENT PROJECT AREA, AND APPROPRIATiNG $18,797 FROM THE UN-APPROPRIATED BALANCE OF THE MERGED PROJECT FUND FOR THIS In October 2001, the Metropolitan Area Advisory Committee (MAAC) entered into an owner participation agreement with the Agency for the rehabilitation and re-use of the commemial building located at 1351-1395 Third Avenue. MAAC has completed the improvements and is requesting financial assistance from the Agency for a portion of the cost of the improvements. (Community Development Director) Staff recommendation: Council/Agency adopt the resolution. ACTION: Chair/Mayor Padilla moved to approve staff's recommendations and offered the Consent Calendar, headings read, texts waived. The motion carded 5-0. Chair/Mayor Padilla left the dais at 8:30 p.m. PUBLIC HEARiNGS 4. CONSIDERATION AND ADOPTION OF THE OPERATiNG AND CAPITAL IMPROVEMENT BUDGETS FOR THE CITY, AND THE OPERATiNG BUDGETS FOR THE REDEVELOPMENT AGENCY AND THE HOUSING AUTHORITY FOR THE FISCAL YEAR ENDiNG JUNE 30, 2004 AND 2005 The Council has received and considered the City Manager's proposed operating and capital improvement budgets for the City and the operating budgets for the Redevelopment Agency and Housing Authority for the fiscal year ending June 30, 2004 and 2005. Three work sessions were held to consider and deliberate on the recommendations contained in those initial documents, as well as additions and deletions identified after the proposed budget document was printed. The budgets submitted for adoption represent the City Manager's initial spending plan as amended in accordance with tentative Council direction received during the budget work sessions. (Assistant City Manager Fruchter; Director of Finance Kachadoorian) Notice of the heating was given in accordance with legal requirements, and the hearing was held on the date and at the time specified in the notice. Agency/Authority/Councilmember Rindone opened the public hearing and asked if anyone from the audience wished to speak. There was no response, and he then closed the heating. Page 2 Council/RDA Minutes / ~ ~ 06/17/03 PUBLIC HEARiNGS (Continued) Agency/Authority/Councilmember Rind0ne asked staff to update the public regarding code enforcement and graffiti abatement in the City. Assistant Planning & Building Director/Building Official Remp responded that additional code enforcement staff is being placed in the field and will give particular attention to the Interstate 5 corridor and trolley station locations. He added that the additional staff would enable the City to address a larger variety of complaints and also increase interaction with the community. Agency/Authority/Councilmember Rindone requested that staff provide a memorandum to the Council on the City's graffiti abatement program. ACTION: Agency/Authority/Councilmember Davis offered Council Resolution No. 2003- 278, Agency Resolution No. 1828, and Housing Authority Resolution No. HA-23, headings read, texts waived: A. RESOLUTION NO. 2003-278, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTiNG THE OPERATiNG AND CAPITAL IMPROVEMENT BUDGETS FOR THE CITY OF CHULA VISTA FOR FISCAL YEAR 2004 AND APPROPRIATING FUNDS THEREFOR, AND APPROVING IN CONCEPT THE PROPOSED BUDGETS FOR FISCAL YEAR 2005 B. AGENCY RESOLUTION NO. 1828 AND HOUSING AUTHORITY NO. HA- 23, RESOLUTION OF THE REDEVELOPMENT AGENCY AND THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA ADOPTING THE OPERATING BUDGETS FOR THE REDEVELOPMENT AGENCY AND HOUSING AUTHORITY FOR FISCAL YEAR 2004 AND APPROPRIATING FUNDS THEREFOR, AND APPROVING IN CONCEPT THE PROPOSED BUDGETS FOR FISCAL YEAR 2005 The motion carried 4-0, with Chair/Mayor Padilla absent. 5. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (l) ACCEPTING A PRELIMINARY REPORT ON ALTERNATIVES TO MEET THE EASTLAKE COMPANY'S AFFORDABLE HOUSING OBLIGATION FOR EASTLAKE II/III; (2) APPROVING DEVELOPER REQUEST TO WITHDRAW APPLICATION FOR MULTIFAMILY REVENUE BONDS FROM THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE (CDLAC), PRIOR TO JUNE 25, 2003; (3) DIRECTING STAFF TO WORK WITH DEVELOPER AND EASTLAKE COMMUNITY, AND RETURN TO COUNCIL WITHIN 120 DAYS WITH A F1NAL RECOMMENDATION; AND (4) DIRECTING THE CITY ATTORNEY TO RETURN TO COUNCIL ON JULY 15 WITH AN AGREEMENT TO ADDRESS EASTLAKE'S AFFORDABLE HOUSING OBLIGATION WITH RESPECT TO THIS ALTERNATIVE Page 3 Council/RDA Minutes / -- / (~) 06/17/03 PUBLIC HEARINGS (Continued) On April 8, 2003, a joint meeting of the City Council, Redevelopment Agency, and Housing Authority was convened to consider a 150-unit affordable housing complex known as "Rancho Vista Apartments at Eastlake," within the Eastlake master planned community. The project was proposed to meet the Eastlake Comp0ny's 183-unit affordable housing obligation for the Trails, Woods, Vistas and "Land Swap" parcels (Il/III). It is located on a vacant 8.25-acre (gross) site on the east side of future Eastlake Parkway, approximately 3,000 feet south of Clubhouse Drive. This project would be developed, owned and operated by CIC Eastlake, L.P., a partnership between Pacific Southwest Community Development Corporation and Chelsea Investment Corporation. (Community Development Director) Notice of the heating was given in accordance with legal requirements, and the heating was held on the date and at the time specified in the notice. Community Development Director Madigan reported on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II and III. Agency/Authofity/Councilmember Salas expressed concern regarding the possible consequences of postponing the proposed project in light of new legislation that would require the City to pay prevailing wage for affordable housing subsidized by the City. Community Development Director Madigan responded that if the application were to go into the next funding cycle, it would necessitate paying prevailing wage at an approximate cost of $1,100,000 to the City for the project. Agency/Authofity/Councilmember Salas asked if there were any assurances for funding for this type of project in the next fiscal year. Community Director Madigan replied that the City would have to compete again for CDLAC funding, and there is no guarantee that the City would receive the points needed. Agency/Authofity/Councilmember Salas asked if the City has a timeframe for a community workshop and the ability to meet the CDLAC deadlines and funding for this year. City Manager Rowlands responded that the state funding deadline has been amended from June 25 to July 9, 2003, and, consequently, the City will be conducting community meetings over the next three weeks between the Eastlake community, developer, and City staff to discuss the proposed project. Staff will then return to the Council with a recommendation at the July 8, 2003 Council meeting. Wally Dikeman, representing Chelsea Investment Corporation, responded regarding the security of funding sources, stating that the investment tax credits and the low income tax-exempt housing bonds used to finance the project are allocated to the state by the federal government. Agency/Authofity/Councilmember Salas requested that staff or the developer provide a report that profiles the concerns of residents regarding low-income housing projects and incidents of crime and noise. She suggested asking the opinions of neighbors surrounding similar low- income projects in the City. Agency/Authority/Councilmember Rindone opened the public hearing. Debra Wheeler, an Eastlake resident, stated that she was given insufficient notice of the proposed project and was, therefore, unable to obtain statistics and information as to the effects of such projects on property values and schools. Ms. Wheeler stated that she would rather have a senior housing project in the area, and she did not feel that affordable housing should be concentrated in Eastlake. Page 4 Council/RDA Minutes / -- / / 06/17/03 PUBLIC HEAR1NGS (Continued) Judd Wheeler, an Eastlake resident, stated that he received short notice about the proposed project and that the notice should be provided to all residents who will potentially be affected. He also believed that the community should be better informed regarding the City's perception of low-income housing. Mitch Thompson stated that the inclusionary policy should be considered in the decision-making process, since it is intended to create balanced communities, and he believed that if the proposed project is converted to home ownership, it will result in almost no rental housing on the east side. Evan Becker, representing the Red Capital Group, San Diego, stated that the company is working with the developer as the providers of debt and equity financing for the proposed project, and he offered assistance to the City, developers, and the Eastlake community in providing information regarding affordable housing. Valerie McFarlin, president of the Antigua Homeowners Association, believed that affordable rentals would do nothing to alleviate poverty. She stated that there was no provision offered for Antigua homeowners for any kind of equity split with the City, which has resulted in the ability of current homeowners to sell their homes at a profit in excess of $150,000. She felt that any future for-sale affordable housing should include a provision for shared equity with the City to expand opportunities for home ownership to the community. Arthur Smith, a resident of Antigua, concurred with the comments made by Mr. and Mrs. Wheeler and Ms. McFarlin. He added that the community is looking forward to receiving information regarding the proposed affordable housing project. Agency/Authority/Councilmember McCann expressed the need for the City to engage the community in future projects and to ensure that they receive proper notification and an explanation of proposed low-income housing. Agency/Authority/Councilmember Davis expressed concern that if the project were delayed, it would result in a loss of CDLAC funding and in additional costs to the City by having to pay prevailing wage. Agency/Authority/Councilmember Salas asked whether participants in the City's first-time homebuyer program could rent out their properties. Senior Community Development Specialist Hines responded that the owners must maintain their property as their principal residence. Agency/Authority/Councilmember Salas believed that it was important to have a balance of for- sale and rental housing. ACTION: Agency/Authority/Councilmember Davis moved to continue the heating to July 8, 2003. Agency/Authority/Councilmember Salas seconded the motion, and it carried 4-0 with Chair/Mayor Padilla absent. Page 5 Council/RDA Minutes / -- / ~ 06/17/03 ORAL COMMUNICATIONS There were none. OTHER BUSINESS 6. DIRECTOR'S REPORTS There were none. 7. CHAIR/MAYOR REPORTS There were none. 8. AGENCY/AUTHORITY/COUNCIL COMMENTS Agency/Authority/Councilmember McCann commented that he had recently attended a public meeting regarding affordable housing, and people wanted more information on what was going on in the community as a whole. He asked that consideration be given to holding another open house in the Eastlake and Otay Ranch communities for a general community update. Executive Director/City Manager Rowlands replied that a community meeting has been scheduled for October 15, 2003, at the Heritage Community Center. CLOSED SESSION Closed Session was cancelled and the following item was not discussed: 9. CONFERENCE WITH LEGAL COUNSEL REGARDING INITIATION OF LITIGATION - Pursuant to Government Code Section 54956.9(e) One Case. ADJOURNMENT At 9:25 p.m., Agency/Authority/Councilmember Rindone adjourned the meeting, with the Redevelopment Agency adjourned to an Adjourned Regular Meeting on July 8, 2003, at 6:00 p.m., immediately following the City Council Meeting in the Council Chambers. Susan Bigelow, CMC, City Clerk Page 6 Council/RDA Minutes / -- //'~ 06/17/03 PAGE 1, ITEM NO.: ~ MEETING DATE: 07/08/03 REDEVELOPMENT AGENCY AGENDA STATEMENT ITEM TITLE: PUBLIC HEARING TO ACKNOWLEDGE RECEIPT OF TWO DEVELOPMENT PROPOSALS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF THIRD AVENUE AND NAPLES STREET AND DIRECTING STAFF TO FURTHER EXPLORE THE PROPOSAL SUBMITTED BY 3Rz' AND NAPLES, LLC FOR THE DEVELOPMENT OF A WALGREENS STORE WITHIN THE SOUTHWEST REDEVELOPMENT AREA RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ACKNOWLEDGING RECEIPT OF TWO DEVELOPMENT PROPOSALS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF THIRD AVENUE AND NAPLES STREET AND DIRECTING STAFF TO FURTHER EXPLORE THE PROPOSAL SUBMITTED BY 3RD AND NAPLES, LLC FOR THE DEVELOPMENT OF A WALGREENS STORE WITHIN THE SOUTHWEST REDEVELOPMENT AREA SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR REVIEWED BY: EXECUTIVE DIRECTOR 4/5THS VOTE: YES BACKGROUND The Agency received an unsolicited proposal from the 3rd and Naples, LLC (Developer) proposing a 14,000 square foot commercial building to be occupied by a Walgreens Store at the southeast corner of Third Avenue and Naples Street. The proposal requires the assembly of seven parcels. The Developer currently has controds to purchase four of the seven properties, and has made efforts to negotiate with the two owners of the remaining three properties but has not been able to come to terms with the owners. After receipt of the proposal, Owner Participation Rights were extended to the owners of the three properties. One of the owners (Mrs. Elisa de Flores) did not respond and thus waived the rights to participate; the other owner (Mr. Amin Kakayi) responded with a proposal. Consistent with the Rules Governing Participation and Re-Entry Preferences for Property Owners, Operators or Businesses, and Tenants in the Southwest Redevelopment Area ("Rules"), staff is presenting the proposals from the Developer and Mr. Kakayi for consideration. The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Ad (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary; however, environmental review will be necessary prior to subsequent discretionary actions related to the redevelopment of the subject properties. 2-/ PAGE 2, ITEM NO.: MEETING DATE: 07/08/03 RECOMMENDATION That the Redevelopment Agency acknowledge receipt of the two proposals, rejects the Kakayi proposal, and direct staff to further explore the development proposal submitted by 3rd and Naples, LLC for a Walgreen's Store. BOARDS/COMMISSIONS RECOMMENDATION This action does not require review by other boards or commissions. DISCUSSION Site Description The 1.34-acre site for the proposed development includes seven parcels with four properly owners. Four parcels front on Third Avenue, one is at the corner, and ~wo parcels front on Naples Street (see Exhibit A attached). These parcels are relatively small, ranging from 3,049 square feet to 18,731 square feet in area. Six of these parcels ore currently occupied by old, non-descript buildings, and are used by a variety of businesses, including a family-owned market, a small retail store, a repair shop, a medical office, a bar, and a single-family residence. One parcel is currently vacant, and most of them can be considered underutilized. The building structures appear to be in poor to fair condition. The Site is bounded by commercial uses to the north (across Naples Street), west (across Third Avenue), and south, with single-family residential uses to the east of the site. The subject Sites comprise approximately one-half of the block facing Third Avenue between Naples Street and Emerson Street. Developer's Project Description The Developer proposes to build a 14,285-square foot building to locate a Wolgreens store. The building would be positioned at the southeast corner of Third and Naples, with the parking lot (74 spaces) toward the southeast of the site (see Exhibit B). A 9-foot wide landscape buffer would be provided along Third Avenue and Naples Street. Access driveways would be located on Third Avenue, .as well as Naples Street for be~ter traffic access. Potentially, an additional 2,000-square foot building could be located at the south end of the site fronting on Third Avenue. The location of the main building structure close to the properly line along the two streets is intended to maintain the building line close to the street in order to give the area a more urban appearance. Originally, the Developer presented a more traditional suburban project with the building set toward the southeast corner of the site and the parking lot fronting the streets. The original proposal did not include Mr. Kakayi's properly on Naples Street, but it did include the two parcels owned by Mrs. de Flores. City staff analyzed that proposal and determined that it had three major deficiencies. First, the original proposal did not include Mr. Kakayi's properly, which has an outdated and non-conforming building, lacks the necessary street improvements, and does not meet the minimum parking and landscaping standards. Not including the Kakayi property in a redevelopment proposal would leave a significant blighting influence intact, thus minimizing the positive redevelopment effects. Second, without Mr. Kakayi's property, the original proposal PAGE 3, ITEM NO.: MEETING DATE: 07/08/03 would face potential parking, traffic and access problems. Mr. Kakayi's property configuration (the western part of the property encroaches on the southwest properties) restricts access to and from Nap[es Street. The inclusion of his property into the project would provide additional space for parking, landscaping, and access to and from Naples Street. Third, in the analysis of the originally proposed traditional suburban project, staff felt that the site and the area could better be served by a more urban project dose to the corner of Third Avenue and Naples Street, which would keep the building line close to the property lines, the building structure away from the residential area, and parking behind the building. Leaving the Kakayi's building would prevent the positioning of the Walgreens building at the corner. Therefore, inclusion of Mr. Kakayi's property is desirable for the effective removal of blighting influences and to facilitate the construction of a beneficial project that meets code. The Developer responded to staff comments and submitted the proposal being presented on a preliminary basis to the Agency Board. This proposal was presented to the Design Review Committee on an informational basis to obtain their opinion on this concept. The Committee responded positively. Kakayi's Project Description Mr. Kakayi's property is at 287 Naples Street, west of Third Avenue, and has an approximate area of 6,641 square feet (see Exhibit C). It contains a 2,000-squre foot non-conforming structure from which he operates a produce and meat market. Most of the area around the structure is not paved and serves as a parking area for customer vehicles. The site lacks appropriate street improvements, such as curbs, gutters, sidewalks, driveways, and the required handicap access. The properly abuts residential properties on the south and east sides. As part of his response to the Agency's extension of owner participation rights, Mr. Kakayi submitted a proposal to redevelop the site with his own project. An original proposal called for the demolition of the existing non-conforming building and the construction of a 2,500~square foot building along with thirteen parking spaces, minimum landscaped areas, and a trash enclosure. Subsequently, a more formal and modified site plan was submitted, which calls for the construction of a 2,920-square foot structure, a parking lot with six parking spaces, two driveways, landscaping, and a trash enclosure (see Exhibit D). Projects Analysis The P~edevelopment Plan and the Rules provide that the Agency may, in its discretion decline any offer of owner participation or resolve conflicting proposals based upon the following: 1. Conformity of proposals with the intent and objectives of the Redevelopment Plan; 2. Whether the proposal will be in the public interest; 3. Amount of sales tax revenue, tax increment revenue, and other economic benefit accruing to the City and Agency from the proposal; 4. Employment retention and generation and other economic benefit which can be expected to result to the community if the proposal is accepted; 5. Size and configuration of the parcel proposed for owner participation; 6. Ability of persons desiring to redevelop the properly to implement the proposed project, taking into consideration the developer's financial capability, prior experience PAGE 4, ITEM NO.: MEETING DATE: 07/08/03 with similar development, ability to obtain financing, and ability to abide by Agency design standards and development controls; 7. Time schedule for completion of the proposed projects; and 8. Estimated cost of public and Agency services required if the proposal is accepted. The Developer's proposal to consolidate and redevelop the seven parcels with a Walgreens store meets the criteria listed above in the following ways: It is consistent with the Southwest Redevelopment Plan in the sense that it will consolidate one-half the block fronting on Third Avenue between Naples Street and Emerson Street and set the stage for completing redevelopment of the entire block; it will remove significant existing blighting influences; will bring a significant amount of investment (approximately $4.5 million) that will result in the creation of additional temporary and permanent jobs and new improvements for the communi~/; it will contribute to the generation of sales tax revenues for the City's General Fund, tax increment revenues for the City's housing fund, redevelopment fund, and funds for other taxing entities in the approximate annual amount of $45,000. The implementation of this redevelopment project will be in the public's best interest because it could serve as a catalyst and lead to the redevelopment of other adjacent propedies. For all these reasons, the proiect is clearly seen as a major positive contribution to the revitalization of the area and of great benefit to the community. While Mr. Kakayi's project could represent a good effort at redeveloping the small site, there are two major weaknesses that make it uncompetitive with the Developer's project. First, Mr. Kakayi's site is very small (6,641 sq. ft.) and the extent of the project is not sufficient to redevelop the area and remove existing blighting influences, since the proposal does not include any of the other parcels included in the Developer's proposal. Additional[y, his project does not meet all the City's development standards. For example, the modified plan shows only six parking spaces; the parking requirement based on the proposed building area (2,920 sq. ft.) is fifteen parking spaces; internal circulation is very limited and could potentially lead to traffic problems at the site and on the street; site configuration is irregular and one-half of the site encroaches on the parcels to the southwest. If the existing building remains or a new building is constructed, it will encroach on the proposed Walgreens building and block access to and from Naples Street. This situation would not allow the two buildings to co-exist and comply with City regulations. Conclusion Based on the analysis of each of the proposed projects, staff believes that the Developer's project is the best option for the full redevelopment of the seven properties at the corner of Third and Naples and the revitalization of the area. Since the Developer's project is still in the City's review process and is still subject to compliance with City codes and regulations, and that tonight's Agency action does not constitute approval of the Developer's proposed plans, staff recommends that the Agency acknowledge receipt of both proposals and direct staff to work with the Developer to further explore and pursue the project proposed by the 3rd and Naples, LLC. The Agency retains its full and sole discretion as to any and all actions that may be necessary to process a project at this location. Tonight's action constitutes consideration of the two project concepts and acceptance of the Developer's concept and rejection of Mr. Kakayi's concept for the redevelopment of his site alone. PAGE 5, ITEM NO.: MEETING DATE: 07/08/03 FISCAL IMPACT The action to be taken by the Agency has no fiscal impact. Developer will be submitting a deposit to cover all costs associated with the review and analysis of the proposal. ATTACHMENTS Exhibit A: Map showing the seven-parcel site Exhibit B: Proposed development concept plans for Walgreens Exhibit C: Map showing Mr. Kakayi's properly Exhibit D: Development Proposals from Mr. Kakayi J:\COMMDEV~STAFF REPS\07-08-03\TH[RD & NAPLES FIRST REPORT.doc[06/24/2003 11:39 AM] AGENCY RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA ACKNOWLEDGING RECEIPT OF TWO DEVELOPMENT PROPOSALS FOR PROPERTY LOCATED AT THE SOUTHEAST CORNER OF THIRD AVENUE AND NAPLES STREET AND DIRECTING STAFF TO FURTHER EXPLORE THE PROPOSAL SUBMITTED BY 3"0 AND NAPLES, LLC FOR THE DEVELOPMENT OF A WALGREENS STORE WITHIN THE SOUTHWEST REDEVELOPMENT AREA WHEREAS, 3r~ and Naples, LLC (Developer) submitted an unsolicited proposal to the Redevelopment Agency for development of seven properties owned by third parties and located at the southeast corner of Third Avenue and Naples Street, as shown in Exhibit A, attached hereto and incorporated by this reference; and WHEREAS, the Developer has entered into purchase contract with the owners of four of the seven properties; and WHEREAS, the Developer has made efforts to negotiate the purchase of the other three properties but has not been able to come to terms with those owners; and WHEREAS, Agency staff extended owner participation rights to the owners of the three properties not currently under contract with the Developer; and WHEREAS, the owner of two properties (Mrs. de Flores) did not respond within the time period provided, and has therefore waived the rights to participate in the redevelopment process; and WHEREAS, the owner of the third parcel (Mr. Kakayi) responded within the period of time provided and submitted a proposal to redevelop his property; and WHEREAS, the Rules Governing Participation and Re-Entry Preferences for Property Owners, Operators or Businesses, and Tenants in the Southwest Redevelopment Area ("Rules") requires that both proposals be presented for Agency consideration; and WHEREAS, the Redevelopment Plan and Rules provide that the Agency may, in its discretion, decline any offer of owner participation or resolve conflicting proposals based upon the following considerations: 1. Conformity of proposals with the intent and objectives of the Redevelopment Plan; 2. Whether the proposal will be in the public interest; 3. Amount of sales tax revenue, tax increment revenue, and other economic benefit accruing to the City and Agency from the proposal; 4. Employment retention and generation and other economic benefit which can be expected to result to the community if the proposal is accepted; 5. Size and configuration of the parcel proposed for owner participation; 6. Ability of persons desiring to redevelop the property to implement the proposed project, taking into consideration the developer's financial capability, prior experience with similar development, ability to obtain financing, and ability to abide by Agency design standards and development controls; 7. Time schedule for completion of the proposed projects; and 8. Estimated cost of public and Agency services required if the proposal is accepted. WHEREAS, for purposes of determining which development proposal should be considered further, Mr. Kakayi's proposal does not present the greatest benefit to the community or the Agency based upon the objectives of the Redevelopment Plan and the above listed criteria because it does not include other properties that would contribute to the redevelopment of a larger portion of the site, does not have the capacity to remove significant blighting influences, and does not comply with all the requirements of the City code and regulations; and WHEREAS, for purposes of determining which development proposal should be considered further, the development proposal from 3rd and Naples, LLC presents the greatest benefit to the community and the Agency based upon the objectives of the Redevelopment Plan and the above listed criteria because the proposal includes a significant land area which may set the stage for completing redevelopment of the entire block, has the capacity to remove significant blighting influences, will bring in a significant amount of investment (approximately $4.5 million) that will result in the creation of additional temporary and permanent jobs and new improvements for the community, will generate more sales tax revenues for the City's General Fund, tax increment revenues for the City's housing fund, redevelopment fund and funds for other taxing entities and contributes to redevelop and revitalize the area. WHEREAS, the Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary; however, environmental review will be necessary prior to subsequent discretionary actions related to the redevelopment of the subject properties. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City Chula Vista does hereby acknowledge receipt of two development proposals for the property located at the southeast corner of Third Avenue and Naples Street and does hereby direct staff to further explore the proposal submitted by the 3~d and Naples LLC for the development of a Walgreens store within the Southwest Redevelopment Area. BE IT FURTHER RESOLVED that the Redevelopment Agency of the City Of Chula Vista retains its full and sole discretion as to any and all actions that may be necessary to process a project at this location and that this action does not constitute approval of Developer's proposal, nor does it commit the Redevelopment Agency to any future action. Presented by App~;~..ed as to form by Director of Community Development C~t/~A1A~torney ,~ J:\COMMDEV\RESOS\THIRD & NAPLES RESO - ACCEPT PROPOSAL [06/24/2003 5:54 PM] Exhibit A Proposed Development Site 1123 Properties Included: 287 Naples Street (Parcel No. 619~121-29) 293 Naples Street (Parcel No. 619-121-02) 1101 Third Avenue (Parcel No. 619-121-01) 1105 Third Avenue (Parcel No. 619-121-31) 1109 Third Avenue (Parcel No. 619-121-06) 1121 Third Avenue (Parcel No. 619-121-07) 1123 Third Avenue (Parcel No. 619-121-09) EXHIBIT B EXHIBIT B EXHIBIT C properties Subject to Owner Participation Rights Properties Included: 287 Naples Street (Parcel No. 619-121-29) S EXHIBIT D-1  ?.L. 52.05' · 25' ~ 25' ?.L. 52.05' 4,. PAGE 1. ITEM NO.: .~ MEETING DATE: 07/08/03 JOINT REDEVELOPMENT AGENCY / CITY COUNCIL / HOUSING AUTHORITY AGENDA STATEMENT ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) ACCEPTING A REPORT OF AN ALTERNATIVES TO MEET THE EASTLAKE COMPANY'S AFFORDABLE HOUSING OBLIGATION FOR EASTLAKE II/111; (2) APPROVING DEVELOPER REQUEST TO WITHDRAW AN APPLICATION FOR MULTIFAIMILY REVENUE BONDS FROM THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE (CDLAC), PRIOR TO JULY 8, 2003; (3) DIRECTING STAFF TO WORK WITH DEVELOPER AND THE EASTLAKE COMMUNITY, AND RETURN TO COUNCIL NO LATER THAN DECEMBER 31, 2003 WITH A FINAL RECOMMENDATION; AND (4) DIRECTING CITY ATTORNEY TO RETURN TO COUNCIL ON JULY 15 WITH AN AGREEMENT TO ADDRESS EASTLAKE'S AFFORDABLE HOUSING OBLIGATION WITH RESPECT TO THIS ALTERNATIV/E, SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR REVIEWED BY: EXECUTIVE DIRECTOR O~''~ 4/5TH" VOTE: YES BACKGROUND On April 8, 2003, a joint meeting of the City of Chula Vista City Council, RedeveJopment Agency, and Housing Authority was convened to consider a 150 unit affordable housing complex, known as "Rancho Vista Apartments at EastLake" (Project} within the EastLake master planned community. The project was proposed to meet The EastLake Company's (Developer} 183-unit affordable housing obligation for the Trails, Woods, Vistas and "Land Swap" Parcels (11/111}. It is located on a vacant 8.25 acre (gross) site located on the east side of future EastLake Parkway, approximately 3,000 feet south of Clubhouse Drive in the City of Chula Vista. This project would be developed, owned and operated by CIC EastLake, L.P., a partnership between Pacific Southwest Community Development Corporation and Chelsea Investment Corporation (CIC). The City Council authorized the issuance of $12 million in private activity bonds by the Housing Authority from the California Debt Limit Allocation Commi~ee (CDLAC} to finance the project. The Housing Authority expressed its intent to issue such bonds. Additionally, the City and the Agency conditionally approved financial assistance of $500,000 from the City's HOME funds and $1,000,000 from the Redevelopment Low and Moderate Income Housing Fund to CIC EastLake, L.P. for the development of the project. Subsequent to receiving the proiect approvals, in response to community concerns, the Developer has proposed an alternative project approach: the development of a first time buyer (for sale) PAGE 2, ITEM NO.: MEETING DATE: 07/08/03 affordable housing program on the same site. At the diredion of the City Council, various meetings with the EastLake community were held to provide information regarding affordable housing, EastLake's options for providing such housing within the community, and the issues and impacts related to affordable rental and for-sale developments. BOARD/COMMISSION RECOMMENDATION On February 26, 2003, the Housing Advisory Commission voted to recommend the development of the proposed Rancho Vista Apartments and the use of tax-exempt bonds and Low and Moderate Income Housing Set-aside funds to finance the project. On April 14, 2002, the Design Review Committee (DRC) reviewed the proposed plans for 150- unit Rancho Vista Apartments and approved such plans. DRC held a preliminary hearing on the project on March 3, 2003. STAFF RECOMMENDATION Staff recommends that Council/Agency: 1) accept this report on alternatives to meet the EastLake Company's affordable housing obligation for EastLake II/111; (2) approve developer request to withdraw the application for Multifamily Revenue Bonds from the California Debt Limit Allocation Committee (CDLAC), prior to July 9, 2003; (3) direct staff to work with developer to develop an affordable first time homebuyer project. Directing staff to work with the Developer and the EastLake community, and return to Council no later than December 31, 2003 with a final recommendation; and (4) directing city afforney to return to council on July 15m with an agreement to address EastLake's affordable housing obligation with respect to this alternative. DISCUSSION Subsequent to the April 8th Council meeting, concerns relative fo the Rancho Vista apartments were raised by members of the EastLake community. In an effort to respond to community concerns, EastLake Development Company began to investigate the possibility of replacing the rental project with a "for sale" affordable project. On June 11th, staff organized a community meeting at EastLake High School to provide information on the Rancho Vista development and the potential alternative for sale project. In addition to City staff and community members, representatives from The EastLake Development Company and CIC were in aHendance. Discussion with the community focused around the ~wo programs available to accomplish the goal of providing an affordable housing project on the "land swap" site in order to meet the EastLake affordable housing requirement: an affordable rental or first-time buyer program. The advantages and disadvantages of each of the affordable programs were presented through discussion with staff and CIC. Community members, who communicated to staff that they believed there had not been adequate oppodunity for public input, expressed no single, clear preference. Although, they did express a desire for more information to be provided to them. PAGE 3, ITEM NO.: MEETING DATE: 07/08/03 On June 17th, staff presented to Council a preliminary report on alternatives to meet the EastLake Company's affordable housing obligation for EastLake II/111 and the developer's request to withdraw an application for multifamily revenue bonds and work with the community to provide a recommendation on the affordable housing options for EastLake. Council directed staff to continue to work with the Developer and the community to provide further information on the approved Rancho Vista Apartments, the alternative proposal for an affordable for-sale development, and to return to the City Council with a report and final recommendation for affordable housing within the EastLake community. It was suggested to return to Council no later than July 8~h in order for the Housing Authority and Developer to withdraw the application to CDLAC prior to the final bond commitment on July 9th. City staff organized community meetings at EastLake High School held on June 25th and July 2®. Additionally, on June 28th the City and Chelsea Investment Corporation sponsored a tour of affordable housing developments in the City of Chula Vista and northern San Diego. Individual notices were sent out to approximately 1,042 residences, generally within 1,500 feet of the project and 3,500 feet to the east. Notices were also sent to approximately 48 persons on the City's interest list. The Star News advertised the meetings within their calendar of community events. The EastLake Company posted a Notice of the meetings on their website and undertook their own efforts towards outreach. The purpose of the first meeting on June 25th was to provide information regarding affordable housing, options for the Developer to meet their housing obligation, and the issues and impacts related to rental and for sale developments. Approximately 30 persons were in affendance. Some in attendance indicated a clear preference for affordable for-sale housing based upon the ability of homeowners to build equity and their belief that homeowners have a greater stake in the community. At the meeting of July 2~d, CIC provided a video clip of showing affordable housing for those who were unable to attend the tour of such housing, presented the Rancho Vista Apartments, and the benefits related to rental housing. The Developer also presented the alternative for-sale proposal. City staff and representatives from the School Districts were available to answer questions and further engaged the community in a discussion of the possible affordable housing options for the site. Approximately 75 persons were in attendance. Attendees included residents of EastLake, representatives of Crossroads and South Bay Forum, and other community members. A significant number of EastLake residents clearly voiced their desire for homeownership · opportunities based upon the opportunity to help lower income households build equity and financial stability. Other attendees also expressed a desire for a rental community to give lower income households an opportunity to have decent and affordable housing within the newer communities of Chula Vista. One resident expressed an interest in senior housing, which would limit the impact on schools, crime, and traffic. Staff also provided attendees with an opportunity to provide their comments in writing. A summary of comments will be provided as a verbal report to Council. PAGE 4, ITEM NO.: MEETING DATE: 07/08/0:3 Housing Element Requirements The Ciys State-mandated Housing Element, which was adopted by Council in December 2000, requires the provision of housing for all economic groups and distribution of affordable housing developments throughout the City. The Cih~s strategy to implement this mandate, Policy 3.1 (Affordable Housing Program) of the Housing Element, is to require 10 percent of any new subdivision in excess of fifty (50) units to be made affordable for Iow and moderate-income families (5% Iow and 5% moderate) and to balance affordable housing development throughout the City. The primary objective of this policy is to increase affordable housing opportunities in the new planned communities of eastern Chula Vista so that residents have equal housing choices throughout the community. For the 1999-2004 planning period, the specific obiective is to provide the new construction of 590 units for lower income households: 130 un[ts will be for-sale units and 460 rental units. The following Table provides a summary of housing opportunities created through the City's Affordable Housing Program since program inception in 1981 and the current 1999-2004 planning period. e s R Famil l 1981-1998 Units Produced / 0[ 401 114 1999-2004 Units Produced Villa Serena 132 Teresina at Lomas Verdes 88 Rollinq Hills Garden 104 Eastlake Greens Antiqua 130 Herita,qe Town Center 91 180 Subtotal 327 268 130 1999-2004 Goals 460 130 Surplus/Deficit 135 TOTAL from 1981-2004 327 308 244 As shown in the above Table, affordable housing has been generally balanced be~veen rentals for seniors, rentals for families and for-sale condominiums. Developer Affordable Housing Obligation Under the City's Affordable Housing Program, the master developer of EastLake Trails, Woods, Vistas and "Land Swap~ Parcels (11/111) has an obligation to provide a total of one hundred eighty three (183) Iow-income units. The current condition of the Tentative Map for EastLake Landswap, Chula Vista Tract 03-04 requires that the Developer pursue development of an affordable rental project. The Developer is currently in compliance with this condition, having entered into an agreement with CIC, prepared and processed a project proposal, and submitted applications to CDLAC for Multifamily Revenue Bonds. On June 2, 2003, CDLAC published their preliminary evaluation of all projects. Rancho Vista has received an evaluation score well above the cut-off limit for bond financing and would leverage $18.8 million in private financing (bonds & tax credits) towards a total $20.1 million cost if the rental program moves forward. PAGE 5, ITEM NO.: MEETING DATE: 07/08/03 The EastLake Tentative Map condition provides flexibility that allows the Developer, "upon request of the City", to enter into an agreement delineating the use of an alternative method of compliance. Should the Council elect to accept the Developer's alternative proposal for a first time homebuyer program, a new agreement between the Developer and the City will be needed to insure that compliance with the affordable housing requirements is maintained. Rancho Vista and the Proposed Alternative Staff had originally recommended that the Developer pursue the development of rental housing to satisfy EastLake II/lll's Iow-income housing requirement consistent with the Housing Element's direction that affordable rental housing is the City's more pressing need for lower income families. The Developer submitted a rental development for review and has since received all necessary discretionary approvals. At this point in time, the Developer is authorized to build a 150-unit affordable rental development. Additionally, the City Council and Housing Authority expressed its intent to issue Multifamily Revenue Bonds (MRB) for project and the City and Agency approved financing for the development based upon specified conditions. The project as approved by the Design Review Committee (DP, C) is comprised of 150 total dwelling units, with 60 two bedroom, 80 three bedroom, and10 four bedroom units. On site amenities would include a community room with computer lab, tot lot, half basketball court, bbq/picnic areas and 345 parking spaces provided in surface parking and carports. At this time, the Developer is considering, as an alternative to the approved project, converting the project to an affordable for-sale condominium development in order to fulfill their entire affordable housing obligation. A condominium map and the site plans and elevations have already been approved for the development (Exhibit 2). At this point in time, the Developer has not yet determined whether to pursue the development of the for-sale product as it has been approved or to propose a redesign, which may reduce the number of units and would partially fulfill their obligation. Therefore, the Developer and staff request additional time to continue to work together and with the community to define a for-saFe housing development that is appropriate for the site and the needs of the community and the City. It is proposed that the alternative for-sale development would be presented to Council within 120 days. Alternatives for Council Consideration A~achment 3 illustrates the pros and cons of both the affordable for-sale and rental development options. Each addresses a different and important need within our community. Since the inception of the City's Affordable Housing Program, the City has been able to provide a balance of housing opportunities from senior rental, family rental end for-sale condominiums. Therefore, based upon an understanding of the EastLake affordable housing obligations and map condition, and input from the community meeting, staff believes that both alternatives are consistent with the City's Housing Element and the developer's obligation. Therefore, three alternative actions are available to the Council at this time: PAGE 6, ITEM NO.: MEETING DATE: 07/08/03 1. Reaffirm approval of the Rancho Vistas apartment project and accept the $12 million Multifamily Revenue Bond allocation anticipated to be made by the California Debt Limit Allocation Committee (CDLAC) on July 9, 2003; 2. Approve the Developer's request to withdraw the CDLAC application for Multifamily Revenue Bonds prior to CDLAC's final commitment of such financing on July 9, 2003, and dired staff to work with Developer to develop an affordable first time homebuyer project; or 3. Approve the Developer's request to withdraw the CDLAC application for Multifamily Revenue Bonds prior to CDLAC's final commitment of such financing on July 9, 2003, and direct staff to work with the Developer and the EastLake community to develop an affordable housing program that will meet EastLake's its requirements on the Land Swap site, returning to the Council by December 31, 2003, with a final staff recommendation. FISCAL IMPACT This item is for discussion only. No financial assistance is being requested at this time. ATTACHMENTS 1. Locator Map 2. Project Site Plan and Elevations 3. Summary of Issues and Impacts; Rental vs. For-Sale (HINES) J:\COMMDEV~STAFF.REP~07-08-03~,113 EastLake III All Homebuyer 7-8-03.doc [7/3/03 4:32 PM] ALTERNATIVE 1 COUNCIL RESOLUTION NO. 2003- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REAFFIRMING ITS APPROVAL OF THE RANCHO VISTAS APARTMENT PROJECT WHEREAS, on April 8, 2003, the City of Chula Vista City Council, its' Redevelopment Agency, and its' Housing Authority ("City/Agency/Authority") authorized the issuance of private activity bonds from the California Debt Limit Allocation Committee and approved $1.5 million in financial assistance from the Redevelopment Low and Moderate Income Housing Set-aside fund and HOME funds to finance the development of a 150 unit affordable rental housing project, known as Rancho Vista Apartments (the "Project") within the Eastlake master planned community to satisfy Eastlake I I/lll's 183-unit affordable housing obligation; WHEREAS, on April 14, 2003, the Design Review Commission approved the development plans for the Project; WHEREAS, subsequent to receiving the project approvals, The Eastlake Company has proposed an alternative project approach; to develop an affordable for sale development for first time homebuyers on the same site; WHEREAS, on June 17, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/111; and, WHEREAS, on July 8, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/Ill and the community's comments on such alternatives. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista reaffirms its approval of the Rancho Vistas apartment project and accept the $12 million Multifamily Revenue Bond allocation anticipated to be made by the California Debt Limit Allocation Committee (CDLAC) on July 9, 2003. Presented by Approved as to form by /'~An.,Q~Y. M 66re /~ ' Laurie A. Madigan Community Development Director ,G'fty Attorney ~' LHINES (J:\COMMDEV~RESOS\Reso Eastlake Alternative 1.doc) ALTERNATIVE 2 COUNCIL RESOLUTION NO. 2003- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) ACCEPTING A REPORT OF AN ALTERNATIVES TO MEET THE EASTLAKE COMPANY'S AFFORDABLE HOUSING OBLIGATION FOR EASTLAKE II/111; (2) APPROVING DEVELOPER REQUEST TO WITHDRAW APPLICATION FOR MULTIFLAMILY REVENUE BONDS FROM THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE (CDLAC), PRIOR TO JULY 9, 2003; (3) DIRECTING STAFF TO WORK WITH DEVELOPER TO DEVELOP AN AFFORDABLE FIRST TIME HOMEBUYER PROJECT. WHEREAS, on April 8, 2003, the City of Chula Vista City Council, its' Redevelopment Agency, and its' Housing Authority ("City/Agency/Authority") authorized the issuance of private activity bonds from the California Debt Limit Allocation Committee and approved $1.5 million in financial assistance from the Redevelopment Low and Moderate Income Housing Set-aside fund and HOME funds to finance the development of a 150 unit affordable rental housing project, known as Rancho Vista Apartments (the "Project") within the Eastlake master planned community to satisfy Eastlake I I/lll's 183-unit affordable housing obligation; and WHEREAS, on April 14, 2003, the Design Review Commission approved the development plans for the Project; and WHEREAS, subsequent to receiving the project approvals, The Eastlake Company has proposed an alternative project approach; to develop an affordable for sale development for first time homebuyers on the same site. WHEREAS, on June 17, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/111. WHEREAS, on July 8, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/111 and the community's comments on such alternatives. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista approves the Developer's request to withdraw the CDLAC application for Multifamily Revenue Bonds prior to CDLAC's final commitment of such financing on July 9, 2003, and direct staff to work with Developer to develop an affordable first time homebuyer project. Presented by Approved as to form by Laurie A. Madigan Community Development Director ~it'y Attorney LHINES (J:\COMMDEWRESOS\Reso EasUakeAIternative 2.doc) _~ f ~ ALTERNATIVE 3 COUNCIL RESOLUTION NO. 2003- RESOLUTION Of THE CitY COUNCIL Of THE CITY OF CHULA VISTA (1) ACCEPTING A REPORT OF AN ALTERNATIVES TO MEET THE EASTLAKE COMPANY'S AFFORDABLE HOUSING OBLIGATION FOR EASTLAKE II/111; (2) APPROVING DEVELOPER REQUEST TO WITHDRAW AN APPLICATION FOR MULTIFAIMILY REVENUE BONDS FROM THE CALIFORNIA DEBT LIMIT ALLOCATION COMMITTEE (CDLAC), PRIOR TO JULY 8, 2003; (3) DIRECTING STAFF TO WORK WITH DEVELOPER AND THE EASTLAKE COMMUNITY, AND RETURN TO COUNCIL NO LATER THAN DECEMBER 31, 2003 WITH A FINAL RECOMMENDATION; AND (4) DIRECTING CITY ATTORNEY TO RETURN TO COUNCIL ON JULY 15 WITH AN AGREEMENT TO ADDRESS EASTLAKE'S AFFORDABLE HOUSING OBLIGATION WITH RESPECT TO THIS ALTERNATIVE. WHEREAS, on April 8, 2003, the City of Chula Vista City Council, its' Redevelopment Agency, and its' Housing Authority ("City/Agency/Authority") authorized the issuance of private activity bonds from the California Debt Limit Allocation Committee and approved $1.5 million in financial assistance from the Redevelopment Low and Moderate Income Housing Set-aside fund and HOME funds to finance the development of a 150 unit affordable rental housing project, known as Rancho Vista Apartments (the "Project") within the Eastlake master planned community to satisfy Eastlake I I/lll's 183-unit affordable housing obligation; and WHEREAS, on April 14, 2003, the Design Review Commission approved the development plans for the Project; and WHEREAS, subsequent to receiving the project approvals, The Eastlake Company has proposed an alternative project approach; to develop an affordable for sale development for first time homebuyers on the same site; and WHEREAS, on June 17, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/111; and WHEREAS, on July 8, 2003, the City Council considered a report on alternatives to meet the Eastlake Company's affordable housing obligation for Eastlake II/111 and the community's comments on such alternatives. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista accepts the report on alternatives to meet The Eastlake Company's affordable housing obligation for Eastlake II/111. BE IT FURTHER RESOLVED that the City Council approves the Developer's request to withdraw the application for Multifamily Revenue Bonds from the California Debt Limit Allocation Committee (CDLAC) prior to July 9, 2003. BE IT FURTHER RESOLVED that the City Council directs staff to work with Developer and Eastlake community and return to Council no later than December 31, 2003 with a final staff recommendation. BE IT FURTHER RESOLVED that the City Attorney return to Council on July 15, 2003 with an agreement to address Eastlake's affordable housing obligation with respect to this alternative. Presented by Approved as to form by Laurie A. Madigan Ann Y(Moore Community Development Director City~ttorney ;/ LHINES (J:\COMMDEV~RESOS\Reso Eastlake Alternative 3.doc) ATTACHMENT I CNIIIA inSTil COligllfl7 PAIU[ EASIIJU~ NIGe $CllOOt CHULA VISTA PLANNING AND BUILDING DEPARTMENT LOCATOR ..o:E~ ..o~Ec~ oEsc~oN: C } ~u~: C.E,S~S~E.*CO,,O~nO~ BESlON REVIEW PRO,ECl' ADORF_SS: Soulhside of Eastlake Parkway Request: Proposing 150 multi-family units. SCALE: FILE NUMBER: NORTH No Scale DRG-03-54 j:\home\planning\cherrylc~locators\drcO354.cdr 02.14.03 ~ ~ / / ATTACHMENT 3 Low Income Housing Obligation ISSUES AND IMPACTS RELATED TO RENTAL AND FOR SALE HOUSING Eastlake (15o affordal~le units) RENTAL HOUSING FOR SALE HOUSING Housing Needs Lower income renters No Opportunities To Purchase · 58% are very Iow income · New communities and resale market · 42% are Iow income · Low-income households can afford to pay · Can assist very Iow income with rental $168,000 for a three-bedroom home housing but not with homeownership · Median sales price in March 2003 opportunities due to higher purchase prices. $362,000 for a single family home · Homeownership is not recommended due $243,000 for a condominium. to the limited income available to support the purchase of a home and for discretionary expenses Housing Cost Burden (pay more than 30% of Benefits · Stabilizes neighborhoods income towards housing) · Build equity & financial stability · 83% of extremely Iow · Greater community & civic participation · 87% of very Iow-income · 57% of Iow income renters Severe Housing Cost Burden (pay more than 50% of income towards housing) · 75% of very Iow-income renters Balanced Communities · Allows families of various economic levels equal housing choice and an opportunity to live near work Targeted Population · Maximum Monthly Income from $2,392 · Maximum Monthly Income from $3,829 to $3,700 to $4,933 · Monthly Rents ranging from $717 to · Maximum Allowable Sales Price $1,110 2 Bdrm $145,000 3 Bdrm $168,000 4 Bdrm $190,000 · Serves Iow income households at 80% AMI rather than the full range of very Iow and Iow income due to the sales price of homes. RENTAL HOUSING FOR SALE HOUSING Financing · Rancho Vista has received initial · No City/Agency assistance is required. approval for 94% of necessary financing (Bonds & Tax Credit) · City/Agency assistance @ $10,000 per unit Costs of Construction · Higher costs for construction with the · Greater costs for construction, including RENTAL HOUSING FOR SALE HOUSING implementation of prevailing wages insurance, quality assurance, labor, and beginning January 2004. Anticipated local permit fees and DIFs may increase increase for apartments would be $1.1 gap financing. million. Period of Affordability · Long term of affordability for $5 years or · Benefits of affordability go to the first life of the project, resident. No ongoin§ affordability. Initial homebuyer and the City share in the equity of the home over a 10-year period. Property Management & Maintenance · Property owner and City have control · No oversight of residency. over those who reside in the · HOA and CC&R's responsible for long- development, long-term property term property maintenance. management and maintenance. · No restrictions on occupancy. With a · $250 per unit set-aside annually for large number of 3 and 4 bedroom units, capital reserves, overcrowding may become an issue. · Property owner can be selective of · No ongoing monitoring of the project. residents and has authority to evict. · Restrictions limiting number of occupants. · Projects are monitored annually for compliance with each of the regulatory agreements. Incidents of Crime · Some rental housing communities have · In general, lower calls for service for similar levels of calls for service, homeownership versus rental housing. (Lhines) J:\COMMDEV\STAFF.REP\07-08-03\Eastlake III For Sale vs. Rental v.3 7-8-03.doc Reviseck 7/3/037.3.03