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Home My WebLink AboutRes 2017-16- ARC Village Affrdable Housing RESOLUTION NO. 2017-16 CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT STAFF REPORT REQUEST: CONSIDERATION OF A RESOLUTION ADOPTING A WAIVER OF DEVELOPMENT IMPACT FEES FOR THE ARC VILLAGE AFFORDABLE HOUSING DEVELOPMENT LOCATED AT 73-255 COUNTRY CLUB DRIVE SUBMITTED BY: Eric Ceja, Principal Planner APPLICANT: Allied Real Estate Partners 409 Santa Monica Blvd, Ste. E Santa Monica, CA 90401 CASE NO: PP/CUP 16-102 DATE: February 23, 2017 ATTACHMENTS: 1. City Council Resolution 2017- 16 2. State Tax Credit Allocation Commission —Attachment 18(A) Recommendation Waive further reading and adopt City Council Resolution No. 2017- 16 waiving a maximum of $50,675.85 in developer impact fees for the ARC Village housing development. Executive Summary The applicant is requesting that the City Council provide a waiver of certain development impact fees for their affordable housing development — ARC Village. Financing of the development is contingent upon receiving a 9% Housing Tax Credit from the State of California. The applicant applied for the credit in the previous cycle, and although they received a perfect score, they were not awarded the tax credit. To provide a "tie-breaker" the applicant requests the City show further support of the project by providing a waiver of certain development impact fees up to a maximum of $50,675.85. Project Description Desert ARC has partnered with Allied Real Estate to develop 36 residential units for special needs housing at the Desert ACR 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 G.P'anning`.Erc Ce,a•.Case Files•PP.PP 16-101 Desert ARC Village\Fees`•.Fee Waiver-CC SR doc 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 its initial application. Due to changes in the application process and to provide a "tie-breaker" for the project, the applicant is requesting that the City Council waive its development impact fees. Waiver of these fees would show favorably for project support and could be the difference for obtaining State tax credits to finance the project. Analysis Development Impact Fees (DIF) 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 the purposes of the State Tax Credit Allocation Committee 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 never waived development impact fees for new development projects, and there is concern about setting precedent in waiving development impact fees for new development. However, this 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. In addition, 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 with a "tie-breaker" score with the State Tax Credit Allocation Committee. Staff does not recommend opening fee waivers for other development types at this time. Low Income Housing Tax Credit The State's Low-Income Housing Tax Credit is a highly competitive tax credit offered by the State Treasury Office for "low-income" housing developments. Interested developers may apply to this program for either a 9% or a 4% tax credit for developing affordable housing. The period to apply for these credits is opened bi-annually, in March and July. Annually, the State's "Tax Credit Allocation Committee" reviews a few hundred applications. In 2015, the Committee awarded $111 million of 9%tax credits to 89 projects for 4,900 new housing units and nearly $13 million of 4% tax credits to 8 projects for 589 new housing units. The applicant applied for the tax credit in the last cycle of funding. They applicant received a perfect score by the Tax Credit Allocation Committee; however, it did not receive enough "tie- G.•Plann•ig.Enc Cep`.Case Files•.PP PP 16-101 Desert ARC V'age:Fees•Fee Waver-CC SR doc breaker" scores to be awarded the tax credit. The Committee considers City financial support of the project as a tie-breaker. By providing the applicant a waiver of$50,675.85 in fees, the City has essentially provided the equivalent amount in financial support to the applicant. This monetary amount could be enough to provide a sufficient tie-breaker to finance the project. Fiscal Impact 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. Submitted By: - r � Eric Ceja, Princip I Planner Department Head: Ryan Stendell, Director of Community Development City Manager: auri Aylaian, City Manager G'Planning'.Enc Ceja•.Case Files PR PP 16-101 Desert ARC Vdlage Fees Fee Waiver-CC SR.doc CITY COUNCIL RESOLUTION NO. 2017- 16 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 to 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, by providing a waiver of development impact fees the City is providing a "tie-breaker" by showing financial support of the project in an amount of $50,675.85, which increases the chances that the project receives the necessary 9% Low Income Housing Tax Credit; 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. 2017- 16 PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on this 23rd day of February 2017, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN HARNIK, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK 2 State of California Tax Credit Allocation Committee ATTACHMENT 18(A) Local Development Impact Fees Project Name: Arc Village Itemize all local impact fees to be paid. The total must correspond with the total local impact fees line item shown in the development budget of the application. Pursuant to Regulation Section 10302(x), Local development impact fees are defined as: The amount of impact fees, mitigation fees, or capital facilities fees imposed by municipalities, county agencies, or other jurisdictions such as public utility districts, school districts, water agencies, resource conservation districts, etc. NOTE: Permit processing fees, building permit fees, and plan check fees are NOT considered local development impact fees. TYPE OF FEES TO BE PAID AMOUNT OF FEE Community Development Fees I $3,500.00 Drainage Facilities $7,360.00 Facilities Assessment $ Fire Facilities $ General Facilities I $ Governmental/Environmental Law Enforcement Facilities $ Library Facilities _ f _ $ Parks & Recreation Public Facilities $ Schools _ _ $78,472.02 Streets & Signals $1,200.00 Traffic Fees $ Waste Water Collection $ _ Waste Water Treatment $ Water Facilities $ Other(specify): CVMSHCP Fee $14,413.00 Other(specify): TUMF (transportation) Other(specify): Public Art Fee $28,750.00 Other(specify): SMIP Fee (Seismic) _ $1,550.00 Other(specify): Childcare Impact Fee $9,865.85 Total Local Development Impact Fees $145,110.87 City of Palm Desert (760) 346-0611 PRINT AGENCY/JURISDICTION NAME PHONE Eric Ceja eceja(a�cityofpalmdesert.orcL PRINT NAME EMAIL Principal Planner _ 6/16/16 PRINT TITLE SIGNATURE DATE