HomeMy WebLinkAboutRes 2019-75 - PP 16-102 - Waiver of DIF - ARC VillageSTAFF REPORT
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
MEETING DATE: September 12, 2019
PREPARED BY: Eric Ceja, Principal Planner
REQUEST: Consideration of a Resolution reaffirming a waiver of Development
Impact Fees (DIF) for the ARC Village affordable housing development
located at 73-255 Country Club Drive.
Recommendation
Waive further reading and adopt City Council Resolution No. 2019- 75
waiving a maximum of $50,675.85 in DIF for the ARC Village affordable
housing development.
Strategic Plan Obiective
The reaffirmation of a waiver of DIF for this project is supported by the following Strategic
Plan Objectives:
Land Use, Housing & Open Space
Priority 2: Facilitate development of high -quality housing for people of all income
levels.
Priority 4: Utilize progressive land use policies and standards to support ongoing and
future needs.
Executive Summary
The City Attorney has advised that the City Council should reaffirm its previous action to
provide a waiver of certain development impact fees for the ARC Village affordable
housing development. The developer of the project has expanded their efforts to obtain
financing for the development to include a more varied source of state, local, and non-
profit funding sources. The applicant has applied for multiple cycles of tax credit
financing with the State and has recently been awarded vouchers from the Riverside
County Housing Agency. As a means to clarify and reaffirm the City Council's support
of the waiver of fees for the project, the City Attorney has asked that a new resolution
be adopted. Consistent with Resolution 2017-16, the waiver of certain development
impact fees are not to exceed $50,675.85.
September 12, 2019 — Staff Report
ARC Village DIF Waiver
Page 2 of 3
Proiect Description
Desert ARC has partnered with Allied Real Estate to develop 36 residential units for special
needs housing at the Desert ARC Campus. In May 2016, the Planning Commission
approved the 36-unit development for high -functioning special needs adults. From the
onset, the applicant had made it clear that financing for the project was always contingent
on the applicant's ability to obtain State Tax Credits through the State Tax Credit Allocation
Committee. Applications for the tax credits are highly competitive, and the applicant failed to
obtain the State tax credits on multiple application cycles. As such, the applicant has
expanded their efforts to close the gap in financing the project and is pursuing new sources
of funding. Since the previous City Council Resolution was specific in supporting a waiver of
development impact fees when the applicant was pursuing State Tax Credits, the City
Attorney has advised that the City Council reaffirm its support of the fee waiver and
acknowledge that State Tax Credits are not the sole reason to support the relief. Waiver of
fees does show favorably for project support and does make a difference when the
applicant applies for funding sources.
Backaround Analvsis
Development Impact Fees are collected by the City to expand or improve existing public
facilities and infrastructure. Some impact fees collected by the City are passed on to other
agencies such as a school district, the Coachella Valley Association of Governments, or
State agencies. Other fees are imposed by the City to cover plan checks and inspections, to
expand the City's public art programs, or to expand park facilities (Quimby fees).
For estimating purposes the City has estimated fees for the project to be $145,110.87. City
imposed fees are estimated to be $50,675.85 of the total and includes fees for childcare
mitigation, public art, drainage facilities, and others. To the best of staff's knowledge, the
City has only waived development impact fees for one project — this one in 2017. At that
time, the City Council supported the fee waiver based on the project merits as the project
fulfills a great community need by providing affordable housing to special needs adults at a
project site that is very difficult to develop.
Affordable housing is increasingly hard to build, and the City should explore creative options
to ensure this type of housing is provided in the City. Additionally, because the project site is
landlocked, it is very difficult to put any development on the site. This particular proposal is
a great fit for the site, as the housing type generates far less traffic than traditional multi-
family housing, and employment recreation and support facilities are provided on -site. Staff
is recommending approval of the fee waiver only for this project to help close the financing
gap on the project and to show City support of the project. Showing City support of the
project helps the applicant apply for other funding sources. Staff does not recommend
opening fee waivers for other development types at this time.
GAPlanning\Eric Ceja\Case Files\PP\PP 16-101 Desert ARC Village\Fees\CC Staff Report (2019).doc
September 12, 2019 — Staff Report
ARC Village DIF Waiver
Page 3 of 3
Fiscal Analvsis
There is no direct monetary contribution made by the City to the applicant. However, the City
would forgo receiving $50,675.85 in development impact fees from the applicant.
LEGAL REVIEW
y6e
Hargreaves
City Attorney
DEPT. REVIEW
Ryan Stendell
Director of
Community
Development
FINANCIAL REVIEW
NIA
Janet Moore
Director of Finance
City Manager, Lauri Avlaian:
ATTACHMENTS: 1. Draft City Council Resolution 2019- 75
ASSISTANT CITY
MANAGER
i Firestine
3tant City Manager
G:\Planning\Eric Ceja\Case Files\PP\PP 16-101 Desert ARC Village\Fees\CC Staff Report (2019).doc
CITY COUNCIL RESOLUTION NO.2019- 75
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT
CALIFORNIA ADOPTING A WAIVER OF DEVELOPMENT IMPACT FEES FOR THE
ARC VILLAGE AFFORDABLE HOUSING DEVELOPMENT LOCATED AT 73-255
COUNTRY CLUB DRIVE
CASE NO: PP 16-102
WHEREAS, the Planning Commission of the City of Palm Desert, California, did on
the 17th day of May, 2016, hold a duly noticed public hearing and approved the request by
Allied Real Estate Partners, for a 36-unit residential project dedicated to housing high -
functioning special needs adults; and
WHEREAS, the applicant has applied for multiple cycles of funding with the State
Tax Credit Allocation Committee for a 9% "Low -Income Housing Tax Credit" and received a
perfect score by the Committee but did not receive the tax credit due to "tie -breakers" that
favored other projects; and
WHEREAS, the applicant has demonstrated a commitment to the project and has
made progress in obtaining other sources of funding, including obtaining vouchers from the
Riverside County Housing Authority, and that providing a waiver of development impact fees
the City showing financial support of the project in an amount of $50,675.85; and
WHEREAS, the project itself is unique in fulfilling a great need for affordable housing
units for special needs adults at a project site that is difficult for another type of development;
and
WHEREAS, the circumstances and financial mechanisms to build the project are
unique and a waiver of development impact fees is a means to ensure that the project is
built and that new affordable housing units are developed; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, AS FOLLOWS:
1. That the above recitations are true and correct and constitute the findings of the City
Council in this case.
2. That the City Council does hereby approve the applicant's request for a waiver of
development impact fees in the amount of $50,675.85 based on the circumstances
of the project.
CITY COUNCIL RESOLUTION NO.2019-
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm
Desert, California, at its regular meeting held on this 12th day of September 2019, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
SUSAN MARIE, MAYOR
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