REPORT TO THE CITY COUNCIL
June 16, 2016
TO City Council
FROM CLAUDIA RUIZ, Economic Development Coordinator
Mayor & City Manager’s Office
THROUGH RENENA SMITH, Assistant City Manager
Mayor & City Manager’s Office
SUBJECT
Title
Actions pertaining to the Cesar Chavez Foundation Project located at the 5100 block of E. Kings Canyon Road
1. ***RESOLUTION - Authorizing Application for the Affordable Housing and Sustainable Communities Program and Authorizing Execution of Program Documents - Cesar Chavez Project (District 5)
2. Approve Amended Disposition and Development Agreement between Cesar Chavez Foundation and the City of Fresno
3. Approve a Waiver of Development Impact Fees in the amount of $648,133.42.
Body
RECOMMENDATION
Developer requests that City Council approve the Amended Disposition and Development Agreement (“Amended DDA”) between Cesar Chavez Foundation (“Developer”) and the City of Fresno; approve the Resolution authorizing the application for the Affordable Housing and Sustainable Communities (“AHSC”) Program and execution of program documents; and approve a waiver of development impact fees in the amount of $648,133.42.
EXECUTIVE SUMMARY
The Developer has a $31.7 million project that consists of a 135-unit affordable multi-family development (89 family & 46 senior units) and Sustainable Transportation Infrastructure (STI) components such as improved walk paths, dedicated bike paths and crosswalks, connecting residents to, major retail, social services, education, employment opportunities, and future Bus Rapid Transit services. They have been successful in passing the first round of the AHSC application process. The next step in this process is Council approval of a resolution authorizing execution of program documents, amending the DDA to make the City of Fresno the fiscal agent of the grant should it be awarded and approving a waiver of development impact fees in the amount of $648,144.42.
BACKGROUND
The Affordable Housing and Sustainable Communities Program (AHSC) was created by Senate Bill 862 (2014) to reduce greenhouse gas emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices to support infill and compact development. The AHSC Program is funded by the Greenhouse Gas Reduction Fund (GGRF), otherwise known as the auction proceeds derived from California’s cap-and-trade program, or, California Climate Investments. The AHSC Program Goals include funding projects that: 1) result in the reduction of greenhouse gas emissions and vehicle miles travelled (VMT); and, 2) increase accessibility of housing, employment centers, and key destinations through low-carbon transportation options such as walking, biking, and transit. The AHSC Program explicitly funds projects through affordable housing loans, and capital grants for housing-related infrastructure, sustainable transportation infrastructure, transit related amenities, and other related programs.
This $31.7 million project consists of a 135-unit affordable multi-family development (89 family & 46 senior units) and Sustainable Transportation Infrastructure (STI) components such as improved walk paths, dedicated bike paths and crosswalks, connecting residents to, major retail, social services, education, employment opportunities, and future Bus Rapid Transit services. This project also contains Transportation Related Amenities (TRA), Housing Related Infrastructure (HRI) components, and a workforce training/employment strategies program which will offer construction apprenticeships and a career training/placement program targeting renewable energy industry opportunities. Site control has been secured and the project is fully entitled. The project has passed the concept phase of the AHSC program and has been invited to submit a full application for funding.
The project addresses poor quality housing and limited affordable housing in the area by including high-quality energy efficient designed 135 unit affordable housing development. This project will target families and seniors at 40% and 60% Average Median Income (AMI). By reinvesting in the community with high-quality affordable housing and improved infrastructure energy efficiency savings will be realized. Things such as driving costs will be reduced as residents will need less gas when more housing and transportation options become available. Additionally other residents living in the community will see their property values rise as a result of the community improvements.
As the community suffers from low rates of unemployment, the project will benefit the community by providing workforce training, construction apprenticeships and jobs, as well as jobs through the ongoing property management. By providing greater connectivity to transportation, residents will have greater access to employment and education opportunities. Investment in infrastructure such as improved lighting and new bike and walk paths will make this a better transit area, thereby increasing community safety and opportunity.
AHSC funds land-use, housing, transportation, and land preservation projects to support infill and compact development that reduces greenhouse gas emissions. Many projects are submitted but few are funded due to their lack of competitiveness which can be increased in various ways such as securing enforceable funding commitments. Strong applications for the AHSC Program include both affordable housing components tied to transportation infrastructure improvements that improve access to transit as well as safety for pedestrians and bicyclists in the vicinity of the housing. Because of the strong emphasis on greenhouse gas emission reductions, significant consideration is given to higher-density housing projects located in regional employment centers and near high-capacity transit, including future high-speed rail stations. The AHSC Program also favors joint applications between public agencies and developers in the scoring criteria.
Impact fee waivers are considered enforceable funding commitments that make the application more competitive. The City does not have a revolving trust to support housing projects as other municipalities do, therefore waiving impact fees for this project is the alternative. In an effort to increase competitiveness and assist projects that are beneficial to the residents of Fresno, staff recommends the approval of the proposed impact fee waiver of $648,133.42. The project has successfully passed the concept phase of the AHSC process and has been invited to submit a full application on June 20, 2016. The project does not qualify for impact fee waiver under the IDEFR Act, Commercial BUILD Act, Economically Disadvantaged Neighborhoods Act or the Economic Expansion Act. The aspects of the project that make it ineligible are as follows: the project is not located in the downtown area; it is not industrial in nature; not mixed-use nor is it a replacement of an existing structure.
If awarded the funds, the grant requires that all construction contracts awarded are subject to state prevailing wage law. Because the City and Developer are applying as joint applicants, there are some protections that need to be in place to protect the City from being liable for failed project delivery on behalf of the developer. According to the AHSC Program Guidelines, each grant and/or loan recipient is jointly and severally liable for the completion of the project. The Amended DDA stipulates an agreement between the Developer and the City that includes: indemnification of the City in the event that the Developer defaults on the project; Developer procurement of a 110% performance bond; and, Developer procurement of $5,000,000 in General Liability Insurance.
Per the updated Better Business Act the City is required it be the fiscal agent that will disburse funds on a performance basis. The City and the developer will agree on a fee prior to any work commencing as compensation to the City for administering the grant dollars. The Developer shall request that the City reimburse funds for eligible project and construction costs using the City’s Request for Reimbursement of Funds form. Developer certifies that the requested disbursement of funds will be used solely for reimbursements of eligible project and construction costs and supported by itemized obligations. Requests for reimbursements will be disbursed proportionately based upon progress and completion of project construction.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary assessment of this approval and has determined that the proposed modifications consist of minor technical changes and are consistent with Environmental Assessment No. C-14-044 which was prepared for Conditional Use Permit Application NO. C-14-044
1. No substantial changes are proposed in the project which will require major revisions of the previous Finding of Conformity due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case, the only change is to modify the project description to acknowledge the purchase option and proposed Disposition and Development Agreement.
2. No substantial changes occur with respect to the circumstances under which the project was undertaken which will require major revisions of the previous Finding of Conformity due to the City of Fresno Page 2 of 3 Printed on 6/8/2016 powered by Legistar™ File #: ID#15-155, Version: 1 undertaken which will require major revisions of the previous Finding of Conformity due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case, the nature and intensity of the project will remain the same as that previously assessed.
3. There is no new information, which was not known and could not have been known at the time of the previous Finding of Conformity that the project will have significant effect not discussed in the Finding of Conformity. Furthermore, since a Finding of Conformity was previously adopted for this project, the considerations set forth in CEQA Guidelines § 15162(a)(3)(C) and (D), related to the adequacy and feasibility of previously adopted mitigation measures, are not applicable.
LOCAL PREFERENCE
Local preference is not applicable because this is not a contract for goods, services, or public work of improvement.
FISCAL IMPACT
The AHSC application provides for a proposed impact fee waiver of $648,133.42 and donation of City property last appraised at $904,000.
The City and Developer are applying as joint AHSC applicants for $15,579,426. According to the AHSC Program Guidelines, each grant and/or loan recipient is jointly and severally liable for the completion of the project. To provide protection to the City of Fresno the Amended DDA stipulates an agreement between the Developer and the City that includes: indemnification of the City in the event that the Developer defaults on the project; Developer procurement of a 110% performance bond; and, Developer procurement of $5,000,000 in General Liability Insurance.
Additionally, the City is also requiring being the fiscal agent that will disburse funds on a performance basis. The City and the developer will agree on a fee prior to any work commencing as compensation to the City for administering the grant dollars. The Developer shall request that the City reimburse funds for eligible project and construction costs using the City’s Request for Reimbursement of Funds form. Developer certifies that the requested disbursement of funds will be used solely for reimbursements of eligible project and construction costs and supported by itemized obligations. Requests for reimbursements will be disbursed proportionately based upon progress and completion of project construction.
Attachments:
Resolution
Signed DDA