HomeMy WebLinkAboutCC RES 90-130 RESOLUTION NO. 9�-130
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF PALM DESERT ESTABLISHING
A COMMERCIAL DEVELOPMENT LOW INCOME
HOUSING MITIGATION FEE FOR ALL
COMMERCIAL DEVELOPMENTS WITHIN THE
CITY OF PALM DESERT
WHEREAS, the City Council of the City of Palm Desert,
California held a duly noticed public hearing on 13th day of
September, 1990, to consider a low income housing mitigation fee
to be assessed against all commercial and industrial development
within the City; and
WHEREAS, that at said public hearing, upon hearing and
considering all testimony and arguments, if any, of all
interested persons desiring to be heard, and after considering
the Staff Report and its exhibits entitled "Commercial
Development Low Income Employee Housing Mitigation" dated
September 13, 1990, attached hereto as Exhibit "A" {hereinafter
"Report") the City Council found the following facts to justify
their actions as described below:
1. There exists a severe shortage of low and very low
income housing within the City of Palm Desert and surrounding
communities.
2 . Commercial development projected to occur within
the City over the next twenty (20) years will generate
substantial new demands for affordable low and very low income
employee housing.
3 . The City of Palm Desert, Palm Desert Redevelopment
Agency and the Riverside Housing Authority have initiated a
program to construct and subsidize low and very low income units
addressinq the employee housing demand of the projected
commercial growth.
4 . Major funding for the rent subsidized program will
come from the Palm Desert Redevelopment Agency's 20� housing
set-aside fund. The projected twenty-year cash flow for the
program is a reasonable cost estimate of the program and an
analysis of the cash flow indicates that additional revenue in
the fona of developer impact fees will be necessary to insure
program solvency.
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KLA1/06/mjm "
5. The proposed developer mitigation fee rate
schedule is reasonably related to the impact resultinq from the
type of development upon which the fee will be imposed and the
fees generated will not exceed the reasonable cost estimate of
the housinq program. The fee rate is projected to generate
approximately $3 .8 Million of the total $132 Million required to
provide necessary subsidy through the year 2010. While this
additional revenue should be able to maintain adequate positive
carry-over reserves, it will equal only 3� of the total program
mitigation costs. The fee structure assigns mitigation costs
according to the relative impact of various commercial and
industrial uses on low and very low income housing demand.
6. The development mitigation fees collected shall
only be used to finance the housing program as identified in the
Report.
WHEREAS, the City Council has concurred with the Director of
Community Development that the project will not have an adverse
impact on the environment and has approved a negative declaration
pursuant to the California Environmental Quality Act;
NOW, THEREFORE, in order to implement the goals and --
objectives of the housing element of the City of Palm Desert's
general plan, and to mitigate the low and very low income
employee housing impact caused by new commercial and industrial
development in the City of Palm Desert, the City Council of the
City of Palm Desert, California resolves as follows:
Section 1. Purpose.
In order to implement the goals and objectives of the
housing element of the City of Palm Desert's general plan, insure
the solvency of the City of Palm Desert's rent subsidized program
for low and very low income housing, and to mitigate the low and
very low income housing impacts caused by new commercial and
industrial development in the City of Palm Desert, the City
Council has determined that a commercial and industrial
development impact fee is needed. In establishing the fee
described in the following sections, the City Council has found
the fee to be consistent with its general plan and consistent
with those housing needs as established in the housing element of
the general plan.
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• KLA1/06/mjm
Section 2. Imposition of Fee .
All commercial developments shall be assessed the
following mitigation fees to be paid at the issuance of building
permits. The fee shall be based on the following schedule:
1 ) General Mixed Commercial. . . . . . . .$1 .00/square foot
2) Professional Office. . . . . . . . . . . . . $ . 50/square foot
3 ) Industrial. . . . . . . . . . . . . . . . . . .$ . 33/square foot
4) Resort Hotel (including major
amenities, golf course, multiple
restaurants, large convention
facilities , etc. ) . . . . . . . . . . . . .$1000/per room
5) Non Resort Hotel (limited
amenities) . . . . . . . . . . . . . . . . . . . .$ 620/per room
Section 3. Accounting and Disbursement of Fees.
Fees paid pursuant to this resolution shall be placed
in a special fund and shall be allocated and expended solely to
subsidize rents as part of the City' s program to provide
affordable housing for low and very low income Palm Desert
employee households .
PASSED, APPROVED and ADOPTED by the City Council of the City
of Palm Desert, California, at its regular meeting held on the
13th day of September, 1990 , by the following vote, to wit:
AYES: BENSO"1, KELLY, SNY'J�'R, �JILSO"1, CRIT�'S
NOES: `10�1�'
ABSENT: '.�10'VF
A3STAI�1: NONF �
BUFORD TES , Mayor
�-� City Palm Desert, California
� .
,
SHEILA R. GI IGAN, C Clerk
City of Palm esert, lifornia
AMENDED
BY RESOLUTION #..G.1.r:.°�r..
-3-
DATED: ._.3:v��`Uy---------------
GITY OF FALM DESE�T
DERARTMENT OF COMMUNITY DEVELOPMENT
TRANSMITTAL LETTER
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T�ANSMITTAL LETTER
SEPTEMRER 1�, 14�0
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II . SUMMARY ANL1 FINDINGS:
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c:
TRANSMITTAL LETTER
SEFTEMRER 1�, 1�av
III. RECOMMENDATION:
r7G:�pri=iv�:. �Fin��irir�s and adapt R�<�;�l�.�tion P�lo. 90-13.0 , ��t��.bli�h:i.i-�c� _�.
C;_-�mn�er cia7. LiPv�lc,Fim�=.n� Hn�_��ing h1itic7�tion F�e.
IV. ATTACHMENTS=
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�
RESPONSE TO COMMENTS
� ON THE
DRAFT ENVIRONMENTAL IMPACT REPORT
� FOR THE
� 1988 GENERAL PLAN AND ZONING OROINANCE UPDATE
STATE CLEARINGHOUSE N0. 88041802
�
Prepared For:
� CITY OF INDIAN WELLS
44-950 ELDORADO DRIVE
� INDIAN WELLS, CALIFORNIA 92210
� Prepared By:
� ULTRASYSTEMS, INC.
ENVIRONMENTAL SERVICES DIVISION
16845 VON KARMAN AVENUE
� IRVINE, CALIFORNIA 92714
�
�
4359/371 NOVEMBER 1988
.
• . � least no more than can find affordable housing in
Indian Wells.
To then conclude "it is expected that in-migration to
the area to fi 11 � these �.emp�.oyme.�t,�pp�.p,j�ti es
;;(7,347. 3obs) would be �mir�ima.l°K�:is astourid-�g. Where _
will they come from?
Response 124: Assuming that Indian Wells attracts only that propor- �
tion of job opportunities expected to occur in the �
City (7,357) to new employment opportunities pro-
jected to occur in the Coachella Valley between 1984 �
and 2010 as projected by the CVAT Study (52,925) , the �
City could reasonably expect to capture 13.90� of the
unemployed labor force (currently estimated at 4,711
individuals) , representing 654 employees. It can,
however, be more reasonably expected that unemployed
individuals will respond to job opportunities in
relationship to the rate of production of those new
jobs, such that if 20% (or some othPr percentage) of
the total number of new jobs produced throughout the �
Valley during any given year became available within
the City, then a comparable percentage of the avail- �
able labor force could expect to accrue to the City.
Comment 125: The EIR or General Plan does not identify any exist-
ing aff ordable housing in the City. Through 1994,
the fiousing Element program commits to only 109 low
incame and 15 moderate income units for a total of
124. At build-out up to 528 unit sites are possible. -
This is hardly adequate mitigation for a pro�ected
9,910 employees or even -'the 7,057 � new employees
identified in Table 37.
Response 125: Provided below is a projection of very low-, low- and
moderate-income housing needs that may result from
additional development authorized under the proposed
Project. Methodology and baseline data used to
extrapolate such housing needs are from Gruen Gruen &
Associates, the certified public accounting firm of
Pannell , Kerr and Forster, 1980 Census data, and -
Census data from SCAG concerning household formation
patterns of Riverside County employees. The only
particular development for which housing impacts and
related mitigation have been identified is the
Sunterra project, a resort-commercial (hotel ) use
projected to employ 5,200 persons. _
Very Low- and Low-Income Housing Needs
Of the 7,357 employees projected as a result of
Project implementation, 2,083 employees are antici-
pated to have household incomes at or below "low-in-
come" standards, as defined by the U.S. Department of .
�
108 •
i �
� .
. ?
� ' �
• Housing and Urban Development (HUD) . Of these lower
income employees 1,11I are projected to have an
� income less than �14,400, and 973 will have an income
between �I4,400 and �23,000. Based on househoid
formation patterns of "very low" and 'low-income"
� individuals in Riverside County (as determined by
1980 Census data) it is estimated that the Project
will induce a need for 1,418 dwelling units by
I employee households whose incomes are likely to be
less than low-income HUD standards.
The occupational mix of the Project was developed for
( the estimated 7,357 additional employees projected as
a result of Project development from Table 9 (Esti-
mated Project-Reiated Employment by a�T�o Occupa-
I tional Category) presented in this Response to
Comments.
I Based upon this projection, the potential distribu-
tion of the 7,357 employees is estimated to be: 464
executive, administrators and managers, 529 informa-
tion clerks, 4,053 food preparation and service
t employees, 1,619 cleaning and maintenance employees,
449 persona] service employees, and 449 uncategor-
ized.
ITable 15 (Estimated Percentage Distribution of
itiona Project Empioyees by Earnings and Occupa-
tion) presents the estimated percentage distribution
Iof Project empToyees by earnings and occupation.
Table 16 (Estimated Number of Additional Empioyees by
I arning and Occupation) represents the occupational
mix (from Table 9) as applied to percentage distribu-
tion (Table 15 , to obtain the estimated distribution
of Pro�e tc�employees by earnings and occupation.
This table shows that approximate7y 4,771 employees
will have annual earnings below $15,000 reflect 1987
dollars). Household formation patterns i.e. employ-
ees who will share dwelling units) and total house-
hold incomes are not considered in these tables.
The relationship between employee earnings and
household income for hotel and lodging employees in
the Riverside-San Bernardino SMSA was extracted from
1980 Census data and applied to the household income
distribution of additional Project empToyees by
overlaying the current earnings distribution (Table
16) onto the earnings and household income cross-
tabulation (Table 17 (Estimated Percentage Distribu-
tion of Additio� naT`�mployees by Occupation, Earnings
and Household Income)) .
.
� •
�
.
7ABLE 15
ESTIMATED PERCENTAGE DISTRIBUTION OF ADDITIONAL PROJECT EMPLOYEES
BY EARNINGS AND OCCUPATION
(1987 DOLLARS)
Less Than Greater Than
�10,000 �10,000-�14,999 $15,000-�19,999 �20,000-�24,999 �25,000 Total
Occupation (%) (�) (%) (�) (�� ,�_
Executive, Administrator, Manager 0 50 1 36 13 100
,� Information Clerk 0 96 4 0 0 100
�
0
Food Preparation and Service 19 34 16 22 9 100
Cleaning and Maintenance 71 17 0 12 0 100
Personal Services 0 48 26 26 0 100
dther 0 100 0 0 0 �00
Sources: Pannell , Kerr and Forster; Gruen Gruen & Associates
� � � � � � � � � � � � � � .�. .�.. --
�--
, :� �. �. � ;�. � � � a � � � � � � s
.
.
� . .
TABLE 16
ESTIMATED NUMBER OF ADDITIONAL PROJECT EMPLOYEES
BY EARNINGS AND OCCUPATION
(1987 DOLLARS)
Less Than Greater Than
Occupation $10,000 E10,000-E14,999 �15,000-$19,999 �20,000-�24,999 �25,000 T 1*
Executive, Administrator� Manager 0 232 5 167 60 464
Information Clerk 0 508 21 0 0 529
Food Preparation �nd Service 770 1378 648 892 365 4,053
Cleaning and Maintenance 1150 275 0 194 0 1,619
r
� Personal Services 0 215 117 117 0 449
Other 0 243 0 0 0 243
TOTAL 1,920 2,851 791 1*370 425 7 "�7
*From Table 9 (Estimated Project-Related Employment By Major Occupational Category)
Source: Gruen Gruen b Associates; Ultrasystems, Inc.
� ' .
TABLE 17 .
ESTIMATED PERCENTAGE DISTRIBUTION OF ADDI7IONAL PROJECT EMPLOYEES BY OCCUPATION, . .� •
EARNINGS, AND HOUSEHOLD INCOME
Executives, Administrators, and Managers
Household Income Cate ories
ess an reater an
Employee �11,000 �11,000-�14,000 �14,00�-�21,000 �21,000-�23,Od0 �23,000 " Total
Earnings (%) (%) (�) (X) (�) �
Less Than �10,000 13 10 30 5 43 100
�10,000-�14,999 0 18 0 18 64 100
�15,000-$19,999 0 0 21 0 73 100
�20,000-b24,999 0 0 0 0 100 100
Greater Than �25,.000 0 0 0 0 100 1Q0
�
�-. ,
^' Information Clerks
Nousehold Income Cate ories
ess an reater an
Employee �11,000 �11,000-�14,000 �14,000-�21,000 �21,000-�23,000 �23,000 Total
Earnings (%} (�} (�j {%) (�) ���
Less Than �10,000 18 0 27 0 55 100
�10,000-�14,999 0 17 33 0 50 100
�15,000-�19,999 0 0 33 0 67 1Q0
�20,000-�24,999 0 0 7 7 87 100
Greater Than �25,000 0 0 0 0 100 100
Source: ruen rue� b Associates
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� .
� � � Table 18 (Esti�ated Number of Additional Project
Emp�oyees by �cc�ation, Earnings and Household
� Income) provida. the estimated household income of
employees by ocaupational category. This household
income distrib�it,ion ioplies that household inco�es,
in a majority s� iastances are greater than indivi-
� dual earnings in tbat households are fon�d with
other workers. Eor example, of those 232 executives,
administrators iad �anagers earning between $10,000 -
� $15,000, 190 (�'ZX) have household incomes greater
than $21,000. t close examination of the distribu-
tion patterns rtveal that for those workers earning
� less than $15,�0, approximately 65 to 80 percent
(depending upon occupational category) have a house-
hold income gr�ter than individual earnings.
� Table 19 (Esti�ated 1987 Household Income Distribu-
tion of Additional Project Employees by Occupation)
shows that apptvximately 424 employees will have a
� household inco� of less than $11,000; 687 employees
will have a hausehold income between $11,000 and
$14,400; 1,010 rmployees will have a household income
� between $14,400 and �21,000; 523 employees will have
a household inomme between $21,000 and $23,000; and
4,713 employees will have a household income greater
than $23,000.
� Table 20 (Es'�imated Distribution of Additional
Project Employ�es by Household Size and Household
� Income Categoraes) is a percentage distribution of
Riverside Coun� employees by household size for two
household incone categories and the number of Project
employees that fall into each size category. In the
� less than $14„400 category, the 1,111 projected
employees estisated to earn at or less than that
income (from Table 19) are distributed by household
� size. Table 2i shows that 333 employees are likely
to be one-perswi households; 289 will be two-person
households; 167 will be three-person households; and
� 322 will be fo�ing households consisting of four or
more individuaDs. A similar methodology is applied
to household i�omes of between $14,400 and $23,000.
� The United St3tes Department of Housing and Urban
Development (ItlD) has established definitions for
low- and very low-income households. "Lower-income
� households" me�s persons and families whose gross
incomes do ndt exceed the qualifying limits for
lower-income fanilies pursuant to Section 8 of the
� United States �ousing Act of 1937. These limits are
equivalent to 80 percent of the area median income
adjusted for family size and other adjustment
factors. The lanits for a "very low-income" household
� are defined as less than 50 percent of the area
� 115
TABLE 18 � '
.
ESTIMATED NUMBERS OF ADDITIONAL PROJECT EMPLOYEES BY OCCUPATION, EARNINGS, AND HOUSENOLD INCOME •
(1987 QOLLARS) ,� '
Executives, Administrators and Managers
Household Income Cate ories
Employee ess an reater an
Earnings �11,000 �11,000-$14,000 $14,000-$21,000 $21,000-�23,000 �23,000 Total
Less Than �10,000 0 0 0 0 0 0
�10,000-$14,999 0 42 0 42 148 '
�15,000-$19,999 0 0 1 0 4 5
�20,000-�24,999 0 0 0 0 167 167
Greater Than �25�000 0 0 0 0 60 60
TOTAL 0 42 1 42 379 464
�
�
�' Information Clerks
Househald Income Cate ories
Employee ess Than reater an
Earnings $11,000 �11,000-$14,000 �14,000-�21,000 a21,000-�23,000 �23,000 T�+�1
Less Than �10,000 0 0 0 0 0 0
�10,000-�14,999 0 86 163 0 250 508
�15,000-�19,999 0 0 7 0 14 21
�20,000-�24,999 0 0 0 0 0 0
Greater Than �25,000 0 0 0 0 0 0
TOTAL 0 86 175 0 268 529
ource: ruen ruen & Associates; Ultrasystems, Inc,
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_ I
TABLE 20
�
ESTIMATED DISTRIBUTION OF ADDITIONAL PROJECT EMPLOYEES
BY HOUSEHOLD SIZE AND HOUSEHOLD INCOME CATEGORIES
(1987 DOLLARS) �
Household Income Cate ories �
Household Size Less an 1 , 0 I ,400 - , 00
% # # �
One Person 30 333 I3 I99
Two Persons 26 289 31 475 '
Three Persons 15 167 21 322 �
Four Persons or More 29 322 35 537
TOTAL 100 1,111 100 I,533 �
Sources: ruen ruen & Associates; Ultrasystems, Inc. '
- '
'
�
'
'
,
,
�
120 ,
� . •
� �
� • .
median income. These limits (as of 1987) are
included in Table 21 (HUD Very Low- and Low-Incame
� Requirements o�r i�iverside County Residents) .
In order to estimate the number of employees that
� meet the above HUD income requirements, Project
employees have been distributed by household size and
income (Table 22 (Estimated Distribution of
Additional ro�ect Employees by Household Si2e and
� Household Income)). For purposes of analysis and to
facilitate comparison with HUD standards, the income
category $14,400 - 523,000 has been further
� subdivided into three categories: $14,400-$16,150;
$I6,150-$18,450; and $18,450-$21,000. It has been
assumed that employees are evenly distributed
� throughout the three income groups.
Households whose incomes exceed HUD income standards
have been identified (Table 22) and represent 560
households. Based upon t�iis Tnformation, Table 23
(Estimated Number of Additional Project mp�es
With a Household Income Within HUD's Low-Income
� Requirement) identifies 2,084 low-income employees
will be added to the City's work force as a result of
the Project.
� The actual housing need likely to be induced by the
very-low and low-income Project employees is less
than that number identified in Table 23. The Census
� presents five different househoTd- status groups that
are divided by two major categories. The first
category is the head of household. As the head of
� household, one can either be single, part of a
family, or part of a group of unrelated individuals.
The second category is the other household member.
As the other household member, one can either be a
� part of a family or part of a group of unrelated
individuals.
� According to the Census definition, each household
has one head. Tn other words, for every "other
household member" there is also a head of household.
� Therefore, as presented in the bottom half of Table
24 (Estimated Distribution of Additional ProT
Employees by Household Status and Household Income
Categories) , we have deducted 308 employees from the
� less than $14,400 group and 357 employees from the
$I4,400 to $23,000 group.
� Based upon this analysis, _the .total -low-income and
very low-income housing � need w resulting s-�from the
Project is 1,418 units. -�.This figure is not, however, --
� intended to represent the total number of new very
low- and low-income households which may be required
� '
121
. eires
TABLE 21
HUD VERY LOW - AND LOW-INCOME REQUIREMENTS
FOR RIVERSIDE COUNTY RESIDENTS
(1987 DOLLARS)
Maximum Maximum
Income Income
for Very for
Low-Income Low-income
Household Size Status * Status **
One Person 10,150 16,150
Two Person 11,600 18,450
Three Person 13,050 20,750
Four Person or More 14,400 23,000
* Defined as less than 50 percent of the area median income
adjusted for family size and other adjustment factors by the
United States Department of Housing and Urban Development.
** Defined as between 50 and 80 percent of the area median income
adjusted for family size and other adjustment factors by the
United States Department of Housing and Urban Oevelopment.
ources: nite ates Department of Housing and Urban Development; �
Gruen Gruen & Associates.
!
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�
7aBLE 24
� ESTIMATED DISTRIBIlTION OF ADDITIONAL PRCJECT EMPLOYEES
BY HOUSEHOLD STATUS AND HOUSEHOLD INCOME CATEGORIES
� (1987 DOLLARS)
� � Household Income Cate ories
Less an , 0 1 ,400 - , 00
Status (%) (No.) (%) (No.)
� Head of Household:
Single 27.6 307* n/a** n/a***
� Family 41.8 464* 58 545*
Non-family 2.8 31* 4 38*
� Other Household Member:
Family 23.2 257 33 310
Non-family 4.5 51 5 47
� TOTAL 100.0 1,110 100 940
� * Represent new Very Low- and Low-Income households (1,418
households) .
** Not Applicable
� *** There are an estimated 33 single households within the HUD
low-income requirements.
� Source: Gruen ruen Associates; Ultrasystems, Inc.
�
�
!
i.
r
�
A
� �
1� ^ �
•���.i-' • � •�
under the proposed Project. Many of the employees
rrho will Mork within the City currently are ade-
quately housed within the Coachella Valley. The �
number of additional housing units which will be
required, therefore, is significantly less than the
above projection.
Moderate Income Housing Needs �
Utilizing a similar methodology, housing needs for �
moderate income households can be estimated. The
results of this analysis are summarized in Table 25
(Estimate of Housing Need Induced by Moderate Income �
Employees}. The need for housing generated by the
2,084 employees with household incomes in the very
la+- and low-income range is 1,418 units. The need
generated by employees with hausehold incomes that �
qualify them as moderate-income households total
1,055 units. For the employees in low- and very low-
income housholds, the employees per household average �
is estimated to be 1.86, while the employees per
household ratio for workers living in moderate-income
hausing is estimated to be 2.8. These estimates are �
far hotel workers and include younger workers living
with families.
Availability �
The settlement agreement entered into by the City,
the developer of Sunterra and plaintiffs represented �
by the Western Center for Law and Poverty and Cali-
fornia Rurai Legal Assistance was based on analysis
that defined the commuting area fior Sunterra employ- �
ees as an eight-mile or thirty-minute commute radius
frca the nearest boundary of the City (see response
to Comment 459). Table 26 (Canparison Between the
Growth of Population and Nousing: 1980 to 1988) �
lists the jurisdictions that fall within this area,
their papulation in 1980 and 1988, their housing
stack in these two periods and their housing vacancy �
rates in 1988.
While housing prices in Indian Wells, Palm Oesert, �
Rancbo Mi�age and La Quinta have been relatively high
becau�se much of the housing stocic consists of single-
fasily haies and vacation homes, the stock of units
in I�dio and Coachella includes a majority of units
priced to neet the needs of low- and moderate-income �
households. The Planning Depar�ent in Indio indi-
cates that 38 percent, or approximately 4,800 units,
have bee� developed under subsidy programs, renting
or se�ling for prices that are affordable by moder-
ate-i*come households (Source: Indio Planning
Department).
126
-"'�'�
.
�Q�T
�✓J.
TABLE 25
ESTIMATE OF HOUSING NEED INDUCED BY
MODERATE INCQME EMPLOYEES
Employee Categories Housing Need
Employees who are primary 706
householders and have a
household income between
$23,000 and $34,500
Employees who are primary 346
householders and have a
household income below
$23,000, but qualify as
moderate income due to
their household size
TOTAL 1,055
* Moderate income is defined as between 80 and 120 percent of the
area median income adjusted for family size and other adjustment
factors by the United States Department of Housing and Urban
Development.
Source: Gruen Gruen & Associates; U7trasystems, Inc.
127
.�� eins
''�i_" .
I
TABLE 26 �
COMPARISON BETWEEN THE GROWTH OF
POPULATION AND NOUSING: 1980 TO 1988
Population Housing Units 1988 �
Vacancy
Total Total Rate �
Jurisdiction I980 1988 1980 1988 %
Indian Wells 1,394 2,443 2,041 3,061 65.50 �
Indio 21,6I1 33,068 7,984 I2,792 18.97
Coachella 9,129 14,I15 2,298 3,226 2.98 �
Paln Desert 11,801 18,088 10,142 15,320 48.81 �
Rancfio Mirage 6,281 8,525 6,919 9,014 56.79
La Qulnta* 4,552 9,274 2,790 4,486 30.85 �
Total Market Area 54,768 85,513 32,174 47,899 N/A
Riverside County 663,199 946,074 295 ,069 410,170 18.16 �
* La Quinta was not incorporated until I981. �
Figures under the 1980 column are for 1981.
ource: tate o a i orn�a, Department of Finance; Gruen Gruen & Associates �
�
�
�
�
�
�
� NEXUS STUDY
. APPENDIX 1
k►.,�serMarstonAssociateslnC.
Timo[hy C.Kelly Golden Gateway Commom
A.Jerry Keyser 55 Pacific Aveaue Mall
ICace Earle Fuak Saa�ancisco.Gli[ornia 94111
Robert 1.Wetmote 415/398-3050
Michae!Conlon
Denise E.Coaley
LOS AI�GELFS 2I7/621-E093
Richard L.Boai
Calvin E.Hollis,II
SAN DIEGO 6l9/9�2•0350
HeinzA.s�twl�n� November 25 , 1987
!IEliORANDQI!
T0: Sacramento Housing nnd Aedevelopment Agency
Attn: Lester Smith
FROM: Reyser Marston Associates, Inc.
SUBJECT: COMMERCZAL AND INDVSTRIAL DEVELOP!lENT AND
� VERY LOW INCOME SOUSING NE7CZJS ANALYSIS
�
i �
� The following memorandum report summarizes 1Ceyser Marston Associates ,
Inc' s. (1cMA's) preliminary analysis o� the linkage between the
' development of various types of commercial and industrial buildinqs
� and very lor+ income housinq needs. The purpose is to illustrate the
� liakages between new employment in these buildings and the number of
households meeting the very 1eN income critaria that� are directly
associated with the buildings.
� This aaalysis, which was contracted by the Aqency, was intended to
provide input to the Bousinq Task Porce for uae in its investigation
� of possible fee structures as one of the alternative means of raising
funds for increasing the supply o� Iow income housing. The recent
Nollan decision by tbe Supreme Court emphaaized the need to establish
the "nexus" or ralationship b�tween the qovernment restriction or fee
� and the impact ezpected froa� the development or action.
This memorandum report is divided into two parts. The first sum-
� marizes th• analysis and provides a discussion of the strengths and
weakness ot the analysis , data availability, and other points of ;
special consideration. It also provides preliminary conclusions on
� the nwnber of very lovr income households for each land use type and
possible fee structure alternatives. The second part fs an in-depth
explanation of the steps of the analysis and a documentation of the
data sources utilized.
� Coaclusioas
� The first conclusion of the analysfs is that a very clear nexus can
be established between the employees of various commercial and
� Real Es�ace Predeveiovnxnc&EvaluatioRScci�
175
Memo To: Lester Smith November 25 , 1987
Subject: Commeccial and Industrial Development and Page 2 I
Very Low Income Housinq Nexus Analysis . �
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industrial buildings or land use typea and the number of very low
income employee households that are directly associated with the `
buildinga. Even though some of the steps lack complete data l
substantiation of the precise num.bers, the linkage clearly exists .
The .second conclusion is that while a nexus clearly exists , the [
analysis and numerical results raise some major questions and issues
about accounting for the qrowth of very low income households in a
growing economy. �
� The numerical results of the analysis are that for every 100 ,000
square feet of buildinq area, there are the following number of very
low income employee households that live ia Sacramento County. The �
percentage of very low income employee houaeholda to all employees is
indicated by the column on the riqht. �
Number ot Very LoM Percent all
Buildinq Type Income Employee Households Emplovees • �
_ O�tice 18.4 _ � 4.3�
Research � Devel. 13 .4 5. 1�
Manufacturinq 10.7 8. 2= �
Warehousinq 3.3 � 10. 0�
Retail 33.7 10.1�
Hotel 15.2 11. 4� �
The l�iaalysis Approach and lrase�vork ' , �
The analysis npproach is to esasine the esployment associated with
the developaent o� 100,000 square feet of each ot six buildinq types. �
The siz buildiag types are: •
O�fice �
. Research and Development (R�D)
Manuf actur inq .
warehousinq
Aetail �
Hotel
The analysis is conducted for Sacramento County as a unit.
'Table 1 presents the, numbers for each step and buildinq type. !
Followinq is a brief deacriptioa ot each step. A more detailed
description is contained in the Appendix, Methodoloqy and Documenta- �
tion.
176 �
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, Memo To: Lester Smith November 25 , 1987
Subject: Commercial and Industrial Development and Page 3
Very Low Income Housing Nexus Analysis
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The Aaalysis Steps
Step 1. Estimate o� Total New Employees
The first step identifies the total nwaber of direct employees who
� will work at or in the buildfnq type being analyzed. Employment
densities are based on local industry averaqea in some cases such as
office, retail and hotel. For the three industrial categories the
'� densities are based on local Sacramento analysea of employment
densities per acre converted to buildinqs with FAR adjustments.
In starting with a number of employees in the building there is an
implicit aasumption that all employees are neW employees to the
County. It the employees in thia buildinq hnve relocated from other
buildinga, they will have vacated spaces somewhere else and somewhere
in the chain new employeea will have co�e to Sacramento County to
work. ' �
� Step 2. Estimate of Employees Living in Sacramento County
This step factors out the employees who work in Sacramento County but
live outside the county. The factor is qenerated by 1980 U.S. Census
information which tells us that of the total number of people who
work in Sacramento County, 89� also live there. This percentaqe
� varies sliqhtly by occupation, but for ease ot analysis the 89�
factor was uaed for all six cateqor3es. On a preliminary judgmental
basis , no updating was deeaed necessary qiven the subatantial
� percentaqe ot both residential and non-residential development that
is occurrinq in Sacraaento County vs. the other counties in the
� metropolitan area. �
� Step 3 . Adjustm�nt o� Increases in Labor Force Participation
This step eliminates new employees who were previously living in
� Sacramento County but not working. � One local analysis found that 18�
of a the eaploysent qrowth in Sacramento County during the 1970
decade resulted trom increases in labor force parti�ipation but this
� rate was expected to decrease in the late 1980 ' s. For analysis
purposes a 15� factor was used and applied to all six categories .
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177
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Memo To: Lester Smith November 25 , 1987
Subject: Commercial and Industrial Developmeat and Page 4 �
Vety Low Income Housinq Nexus Analysis
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Step 4 . Estimate of the Number of Households
This• step recognizes that there are f=equently more than one employee �
per household and reducea the number of employees to the number of
households. The SSRA is usinq thS figure of 1. 35 employees per non- �
elderly household, a figure derived from Census information. The
1. 35 reduction factor is applied to all six categories.
Step 5 . Breakdown of Employees by Occupation �
This step divides the employees representing new households into
occupational groupinqs uainq industry by occupetion matrices prepared �
by the State Employment Development and the U.S. Department of Labor .
Occupational cat�gories include Prof essional/Technical/Managerial,
Clerical, Craft/�Cindred, Operator , Laborer. ( 'Industry" cateqories
cloaely approsimate our building type or laad use atarting point)� �
Step 6. Estimate ot Employees Meeting ,Very LoM Income Definition
Zn Step 6 occupation is tsanalated to income diatribution {without �
consideration for household size) rrith tocus on the very low income
•end o� the acal�. l�or this step rre could not locate a percentage �
' distributioa for any o� the categories except o�tice. For the other
buildinq type/land use cateqories and their related occupational
spread, we had to rely on Sacramento vraqe survey material prepared by
state and local sources. Thia survey material qave typical wage �
rates for sample jobs that could be related to occupationa. 1CMA had
to make judqmeats about th� likely percentaqe that fell into the
income levels that could quality as very low inceae, or below 517 ,05� �
per year usinq SHR� numbers. This step is a weak link in the chnin
as far as documentation of the allocation by incoae is concerned.
More research would likely �nable a refinement o� the numbers because �
aurely better iatormation eYists at least at the nntional level.
Step• 7. Estiaate of 8ousehold Size Disttibution
In this step, a household aize distribution was souqht in order to �
qet from incoa� distribution to the • income and household size
combinations that meet the de�initiona of very low income established �
by StTD and uaed by SHRA. gousehold size data is not readily
available for the number ot waqe earners pes household but the 1980
Cenaus does provide a percentaqe breakdowri of household size for
houaeholds with incomes less than $15 ,000 and under 65 years of age. �
Since the 515 ,000 fiqure ia 1979 dollars it was deemed a close enough
approximation for $I7,050 in the late 1980 's.
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178 �
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Memo To: Lester Smith November 25 , 1987
� Subject: Commercial and Industrial Development and Page 5
very Low Income Housinq Nexus Analysis
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Followinq is a percentage breakdown ot households under 517, 050 by
� siae:
Household Size Percent
� 1 36�
2 2aa
3 18�
4 • I1� �
� 5 or more 7�
Th3s dfstributlon was used for all bnflding type/land use cateqories .
� Ste 8. Estimate of Ver Low Iacome Households That Meet Size and
P Y
� Income Criteria
In this step we had to build a matrix of houaehold size and income to
establish probability tactors for th* tro criteria in combination.
� For eacb occupational grouping a probability �actor was calculated
for each of HUD'a income and household size levels. This step is
.performed far each occupational cateqory.
� To eatimate th� number of very low income households these
probability �actors calculated for each occupation are multiplied
by the number of households by occupation in Step 5 and thea totaled
� to arrive at the number of very loM income househo2ds. This step is
performed for each land use.
� See in depth dascriptioA aad attached appendix table.
Step 9. Adjustment ta Eliminate Most Multiple Earner Househo2ds
� This last step makes an adju�tment to eliminate most ot the house-
holds that have two os more earn�rs such that the incomea in combina-
tion make th� household no longer qualify as very loM income. The
� U.S. Census t�lls us that overall 40� ot the householda have one wage
earner but ia the under 515,000 houaeholds, 70= have only one wage
earner . A 70i adjustment would make the asaumpticn that aIl two or
� more income households do not qualify as very low income. Recogniz-
inq that there is likely a aignificant share of multiple wage earner
households that still do qualify (partfcularZy among minority
households where families may be larqe and skill levels low) , we made
� the judgment to use a 75� factor .
This final adjustment produces the number of very low income house-
� holds directly associated with Z00 ,000 sq. ft. of building area by
type.
� . 179
Me�o To: Lester Smith November 25 , 1987
Subject: Commercial and Industrial Development and Page 6
Very Low Income Housinq Nexus Analysis
Zssues Aaised by tbe Analysis
1. Responsibility for Growth
The nexus analysis illustrates how the typical cross section of
employees in a commercial or industrial building will likely include
a certain number of employees from very low income households .. The
aexus analysis does not ma�e the case that building construction is
tesponsible for qrowth. Clearly many factors come into play in
determining what makes a region grow. At best, it can be said that
the production of buildings to accammodate growth is but one of many
factors that enable ot contribute to its occurrence.
2. Direct vs. Indirect Empleyment
The analysis addresses direct employment enly, or that which is
employed within the building. In the case ot otfice space, direct
� employment covers the various managerial, protessional and clerical
workers that work in the buildinq; it does not include the janitorial
workers , the windoM washers, the security guards, the delivery
services, the landscape maintenance workers, and many others that are
associated with the narmal functioning o� office buildings. These
indirect empleyees tend to be the many aervice workers at the lower
end of the pay scale. No data source could be located which deals
with these indirect types of o�fice employees. Confining the
nnalysis to direct employment does not address all the low income �
wotkers assoc3ated with each land use and seriously understates the
impacts.
Once the door is opened� to fndirect employees , there is the question
of how far to take the analysis. !or decades noM, huge econometric
models have qrappled with the question of multipliers and produced a
broad ranq� o� conclusions. We are not aware of any that have
specifically addreased lower income jobs or households.
Another approach to thinkinq about low income job qeneration is to
think through where in the economy the low income jobs are to be '
found. without uridertakinq such an analysis, we believe they would �
be largeZy repreaented in agricultural werkers, a whole host of
service workers (many of which are not associated with particular �
buildings, like qardeners, transportation workers, hospital workers ,
construction laborers, etc. ) In other words, any analysis that ties
low income housing to particular types of buildings will continue to I
be incomplete.
I
180 `
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IMemo To: Lester Smith November 25 , 19.
Subject: Coaimercial and Industrial Development and Page 7
very Low Income Housing Nexus Analysis
3 . Growth Inducing vs. Population Serving
The high proportion of low income employees in retail buildings
raises the question as to whether retail should be treated the same
as the�other categoriea. The other categories are generally
considered the primary qrowth inducer6, whereaa retail might be
regarded as more population serving. Classical economic base theory
divides all employment in a qiven geographical area between those
engaged in activities which brinq in dollars from the outside work
(or "basic" employees) and thoae which serve the local economy. Every
industrial category has son�e of both, but some industries such as
manufacturinq tend to have a far hiqher percentage of basic employees
than local.
An economic base analysis would be a very different analysis than the
nexus analysis presented here. It would produce one way of treating
the land uses ditterently and would likely result in retail carrying
less of a burden than, say, R�D. It should be recognized, however ,
than any econemfe base ana2ysfs is apt to be controversfal sfnce
there are several schools ot thought about qrowth generation and
reqional economies.
Qualifiers to tbe Aaalpsis
The qoal of this "first cut" throuqh the analyais was to determine if
the nexus could be found and to illustrate how it works. As such
there were steps in the analysis where the data was insufficient to
qenerate fully documented liakag� numbers aad thus judgments had to
� be made in order to complete the analysi�. The agreement with SHRA
was to use readily available data aAd leave further research until a
later time if it was deemed necessary. 1►s an example, we had qood
� information on the occupatioaal distribution o! employees in man-
ufacturing but could not locate data on the spread of , say, machine
operators by income level. (Nor, o� course, did we have the income
distributioa of manutncturinq employeea in qeneral. ) Instead we had
� to rely on sample waqe scales for machine operators in Sacramento and
eatimate the percentages that likely tell into the various incoze
categories. Surely data providing a spread by income exists at least
� on the national level which could perhaps be augmented by local union
intormation.
In other cases metropolitan area wide averages were used when a more
� indepth analysis might distinquish differences by land use or
'occupation. For ezample labor force participation increases may be
hiqher amonq office workers than industrial workers.
�
181
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Memo To: Lester Smith November 25 , 1987
Subject: Commercial and Industrial Development and Paqe e �
Very Low income Housinq Nexus Analysis
�
Finally, it should be emphasized that any analysis of this nature , no
matter how in-depth, contains a great many numbers and numerous �
judgments relatinq to them. It will always be possible to take issue
with a specific number. We do not believe, however , that chanqing
�most ot the individual num.bers would fundamentally alter the
conclusions of the analysis. �
Nezus Coaclusiens and iaplications on l�ee Structures �
Tables 2 through 5 present analyses that relate the conclusions of
the aexus analysis to fee amounts and the revenue goals of the
eousinq Task Force. �
It is important to emphasize that the conclusions on fees related to
nexus amount establish the upper limit oi feea that may be imposed �
while meeting the leqal nexus test. The Task l�orce is at liberty to
set feea in any amount below the nexus conc'lusions without further
documentation.
Table 2 starta with the conclusions ot the neaus analysis in terms of �
number of houaeholds and translates the fiqures into housinq cost.
The first set ot numbers addresses the total cost of each unit at �
536,000 per very low income housing unit and the second set address
the subsidy or gap portion at S1Z,000 per unit. (per SeRA costs ) . The
total coat burdea would result in f ees per square foot of buildinq �
area ranqinq from 51.18 �or warehouses to 512.13 for retail build-
inqs. The subsidy or qap portion reaults in fees a third of these
amounts, still makinq retail over Sd per square foot. �
Table 3 provides a calculation ot the revenue raised at the two fee �
levels based total housinq coats nnd based on the subsidy or gap �
portion. The volum• of conatructioa is the 1984-86 averaqe as �
calculated by S8R7► staff. (See appendix table) . The conclusien is
that at th� tull te* amount over $33 million would be raised, aad at
the. subsidy portion �e� over S11 million. �
Table 4 examin�s the impact on const�ruction costs of the fee amount.
Sine: it is evid�nt that the total housing amount produces clearly
exceasive fees and revenues, only the subsidy or gap portion is �
evaluated. Impacts on constructioa costs ranqe from a low of 1.5� on
average tor warehouse structurea to over 10� for retafl buildings .
Fee impact is also presented on a range basis to reflect the �
constructien cvst range for each land use. For example, oftice
buildinqs may be one story structures costinq under S40 per square
foot or hiqhrise structures costinq twice that amount.
�
. 182 �
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Memo To: Lester Smith November 25 , 198
Subject: Commercial and Industrial Development and Paqe 9 '
very Low Income Housinq Nexus Analysis
Table 5 presents some alternative suggestions for approaches to
settinq fee amounts. The first alternative is an across the board
50� cut of the "pure nexus" amount for the subaidy or qap poction. Zn
this case, retail still comes out with a fee in excess of SZ per
� square foot or a 3� to 6� levy on construction costs. This -approach
' adheres to the nexus relationships without reqard to impacts on
construction costs. Total revenue raised based on the 1984 86
� • construction activity wvuld averaqe over 55.5 million per year .
;"� The secend alternative approach is to produce a blend or hybrid of
the nexus amount and acceptable impact on construction costs. For
� purposes of illustration, a three percent ceilinq on construction
cost impact was applied. Nexus amount numbers were reduced in
varying degrees to meet the impact criteria. Since this alternative
is sensitive to impact considerations, it would be appropriate to
� have fee variations for different construction costa. The variation
on t'�e second alternative bypasaes the varyinq construction cost
. isaue by statinq the fee in terms of a dollnr amount on buildinq
� permit valuation instead ot building aize.
' The second alternative in either form vrould have raised revenues in
;�, the amount of over $3 .5 million on the 1984•86 averaqe annual
� ccnstruction actfvity.
Other Fee Consideratioa�
�■! ' .
The Task Force may wish to consid�r fee exemption to buildinqs below
a c�rtain �ize or dollar valuation. The rationale behind an exemp-
� tion for small buildinqs is to miaimize the impacts on developers of
� small projects and to minimize the impact on rents. Ot the buildinq
types analyzed, retail projects Would likely be the bigqest bene-
factors, followed by neiqhborhood servinq of�ice structures. A
� possible cut off size for consideration miqht be 10 , 000 square feet.
The revenue impact o! a small buildinq exemption has not been
analyzed but is somethinq could be done if desirable.
� The Task Force should also consider fees on additions and improve-
ments to existinq structures. Aqain, an exemption for minimum size
buildings is probably warranted.
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� 183
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TABLE A-1
;,0':.:':141 pKD 1Air�ST�1�: .D�GTk'.�TIGK FEkf.IT �:11�'111'
S4;RAt1:K10 C1TC aK4 COuyTY
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:DKSTR'�,ia► ����t ' �.«,s� esiac
9{ -bi Cost per Esti.�lri
IT 6�It5 Ir CS/B� .•cr�9e ��. it. �c.lt.
li�� Con:trn:tio+i
};aie�s, •olels �0,011,�C3 1�71S,L� ::�61l,Sli a0 �41,4:5
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. Inlesiritl, •�rtAousin� 1!�!!!,SS2 11�O11,3�0 ]0,5GG,96L �0 :�:SO�:�Z
Serricr si:tions 1,5!:,t1� 3,411,011 2,317,i�1 �2 S!,4�o
011iccs, b+nts Bi,IOT�Bi4 6C,I7L,17S 72�15;�!!S 60 1�20:,:37
f�rt�il ' S2��1L,2:5 • 64,6�fTOp SE��2,lIT Id 1,�E1,b61
OtAct noo-residrnli�� :�61C�17T ��120,(11 S�1Tt,�01 10 42,1E5
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Snbte:il �{,607,EZ7 2I7,JeS,tI7 Z'�,846,T:2 :,7�,4�
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� 70: =, 645, 162
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�
� S�CR�iENTO SODSZNG
� NE7CIIS ANALYSZS '
IiETSODOLOGY AND DOCUliLNTATZON
I
� STEP 1: ESTIISATE O! TOTAL NEW EI�IPLOYESS
; The estimate of the nwnber of employees is derived based on an
employment density factor for each land use. As shown below, the
qross building area is divided by the employment density factor to
calculate employment.
Gross Buildinq - Employment � Employment
Area Density Factor
The employment density factor is different for each land use and can
widely vary within each land use dependinq on land use types .
Densities in manufacturinq, for example, vary within a huge ranqe.
Other land uses are more constant. Employment denaity factors in
this analysis are based on �CMA' s experience in working in the
Saczamento market and on local published data.
The office employment density factor is estimated at 236 square feet
per employee. This estimate asaumes a 5� office vacancy factor . The
employment density tactor for retail is 300 square teet per employee
and for hotel 1.25 rooms per employee. Theae density factors are
based on typical tenant types in the Sacramento market.
For industrial employment density factors , 1cMA has in part relied on
information published by the Sacramento County Planning Department.
The County provides data on the number of jobs per acre. Research
and development, manufacturinq, and warehousinq and distribution jobs
per acre are eatimated in the Sacramento reqion at 40 , 20 and 7. 5 ,
respectively. 1CIrlA has estimated employment density factors for the
these three industrial land uses usinq these data alonq with averaqe
building area per acre ratioa or F.A.R. 's. The buildinq area per
acre ratios, which based on typical industry standards, are .35 for
both research and development and manufacturinq and .50 for warehous-
inq and distribution.
The employment density factors used in this analysis are the
followinq:
Of�ice 236/SF
Reaearch and Development 380/SF
Manufacturinq 765/SF
warehousinq and Distribution 3000/SF
Aetail 300/SF
Hotel 1.25/Rm
.Data Source: "The Sacramento Reqion in 1990 , Economic Growth and the
; Demand for Industrial Land" , Sacramento County
� Planninq and Community Development Department, 1982 .
� 191
STEP Z: ESTIISATE OP F�iPLOYEES LIVING IN SACR�IENTO COUNTY
This step estimates the number of employees residing in 5acramento
County.
Employment x Percentaqe of � Employees
Workers Residing in Residing in
Sacramento County Sacramento Co .
The petcentaqe ob Sacramento workers residing in Sacramento County is
estimated based on 1980 Census data. The census reports there are
318,100 workers over sixtetn years of age working in Sacramento
County of which 283 , 100 also live in the County. This indicates 89$
of the people who work in the County also resides in the County.
This estimate is an average across all occupational qroups and land
uses. Examininq selected occupation�s indicates that this average can
range plus or minus 5� . For purposes of our analysis, this ranqe is
viewed as statistically insiqnificant.
Data Source: "1980 Census of Population, Journey to work:
Charactezistics of Workers in Metropolitan Areas" ,
U.S. Department ot Commerce, Section 3 , pqs. 301- 302.
STL�P 3: EST2IS!►TE O! I1�CAalhSED I.�►HOR 1�ORCL P�TICIPATZON
This step eliminatea employees that enter the labor force as a result
of increased participation by existing Sacramento residents. Women,
who were net �ormerly in the labor force, qoinq to work accounts for
the vast majority of increased participation. Hased on Economic
Development Department (EDD) and Sacramento County Planninq Depart-
ment data�, �cMA estimates 18� ot all new joba between 1970 and 1980 in
the Sacramento Metropolitan area were tilled due to increased labor
force participation by Sacramento residants. This percentage is
calculated based on County data that indicated approximately 2y, 000
joba between 1970 and 1980 in the Sacram�nto region were filled due
to increased labor �orce participation while durinq the same period
employment qrew by 150 ,000 jobs. �
Zn our judgement, this percentage should decline over the �next decade
as fewer second wage earners in households enter the labor force.
For purposes ot this analysis, we eatimate 15� of all new jcbs will
be filled by residents in existinq Sacramento households. Converse-
ly, 85� of the new jobs will be filled by residents that represent
new household formations.
. Employees x � of jobs filled � Employees
Reaiding in by new house• Zn
Sacramento Co. holds New Households
� 192
�
�
Data Source: "The Sacramento Region in 1990 , Economic Growth and
the Demand for Industrial Land, " Sacra�aento County
Planninq and Community Development Degartment ,
Appendix 3 .
State of California,Economic Development Department ,
Employment figures for the Sacramento SMSA for 1970
and 1980 .
STEP 4: ESTIl"U�TB 0� THE NQABEIt O1� HOQSEHOLDS
This step eatimates the number of households represented by a given
number of employees. The number of househclds needs to be estimated
since housinq assistance ia based on household income and household
size . The Sacramento Houaing and Redevelopment Agency estimates
thece are 1.35 wage earners per non-elderly household. Using this
. factor the number of houschalds can be calculated.
Employees Zn - Avezaqe Nua►ber of � New
New Households Workers per Households
Household
Datn Source: Sacramento Bousinq and Aedevelopment Aqency
STLP 5: HA,EI�I1CD01il� O! HOIISESOLDS H7 OCCQPI�►TION
This step divides households by occupational groupings for each land
use. �or purpoaes ot this analysis, we have relied on the occupa-
tional groupings defined by the State of California Employment
Development Department. Occupational qroupings include Professional-
/Technical/I�lanaqerial, Clerical, Craft/Rindred, Sales, Service,
� Operative and Laborer. For each land use category, such as office,
the total number ot households identified ia Step a are disaqgregated
iato occupation cateqories. Ia this step, wr have relied on data for
the Sacrnmento region whenever possible, but for some land uses we
have turned to natioaal census data to complement local data.
Our primary aource for offics and industrial land uses was the
� industry and occupation matrix prepared by EDD. For retail and hotel
� � we relied oa the occupatien industrial survey in the 1980 U.S.
Census.
E New Households x Percentage ot �� New Households
Souseholda in each in each Occupation
Occupation Cateqory Category
Data Source: "�980 -1985 Projections of Employment by Industry
and Occupation" , State of California Employment
Development Department, Table 3 . 3 .
"1980 Census of Population; Occupation by Industry
Survey" , U.S. Department of Commerce , volume 2.
193
STEP 6: ESTII�ATE OF EliPLOYEE5 liEETSNG VERY LOW ZNCOKE DEfINITION
The number of households in each occupation category that meet the
very low income criteria are estimated in Step 6 . To accomplish this
stcp, RMA first reviewed available waqe survey data collected by the
U.S. Department of Labor and the State of California Employment
Development Department.
Overall , these sources did not provide enough compreheasive and
detailed data for our needs; fn the majority of cases data was
available for only a select number of job typea. As a result, we had
to make judqements based on extrapolation of available data to i
eatimate the perc�ntage of households that have a wage earner making
less than 517,050 . This income level is set by SUD as the upper
limit to qualify a household's incams as very low income. This does �
not necessarily mean the household qualifies for assistance since the
household must also meet household siae criteria.
The most comprehens�ve waqe data was tound tor office workers, �
particularly for clerical and profesaional/technical occupations.
This survey data was accumulated by the U.S. Department of Labor
which conducts periodic surveys of occupational earninqs for selected �
occupations in the Sacramenta metropolitan area.
�CMA's analysis of this survay data indicated that 56� of clerical '
o�tice workers and 6� of profeasional/technical office workers earn
less than 517, 050. The employees in the pro�easional/technical
occupationa earning lesa than $I7,000 are in computer data entry �
jobs. Available waqe data for other land uses and related occu-
pational qroups was less complete and provided data for only select
job typta, such aa weldet and cashiet. 1tM�► had to therefore make
' estimates of income distribution by occupation. �
,
Ta estimate. the percentage of heuseho-lds- ea=afng Yess than �I7,058� in • -
the craft/kindred, service, operative and laborer occupatians , we �
• have used the clerical wage data as a benchmark and have made
adjustments relying on available wage data for selected job types in
each of the occupetional categories. This methodology introduces a �
potential source of error since the eatimate of households earning
less than 517,050 for each of these occupations is not based on a
representative range of job types but rather on specific jobs types
which may not adequately reflect the ranqe of salaries in an �
occupatian cateqory. Additional research should be undertaken to see
if more comprehensive wage data is available.
The percent of households earning less than 517 ,Q50 for each �
occupation are shown in the table on the following paqe. These
percentaqes were applied to all six land uses.
�
�
194
. �
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i $ Employee Households
� Earninq Less Than SI7 , 050
� Professional/Technical/Managerial 6$
Clerical 56$
Crafts/Rindred 35$
Operative 75�
Laborers 90�
Service 9p�
The next step estimates the number of very low income households in
each of the five very low income subgroups defined by HUD. For this
step, we have again relied on clerical wage data. As previously
discussed, this data is the most comprehensive and thus is utilized
to estimate the number of very low income households in each of IiUD's
income subgroups. This is done for the cratts/kindred, operativ�,
service and laborer occupational categories and applies to all land
use categories. Table A-1 presents the distribution of households
that fall in to these five income subgroupa.
By using the clerical income distribution to estimate the number of
households in each ot HUD's five income subqroups, our estimates for
the four occupational cateqories will �either over or underestimate
the number ot householda in each aubgroup. 1�►dditional research is
needed to obtain more comprehensive and detailed waqe data for each
occupation category.
Data Source: "Area wage Survey, Sacramento, California
Metropolitan Area" , L1.S. Department ot Labor , December
1986.
"Sacramento Reqion Business Profile, Greater
Sacramento Area" , The Sacramento Aren Commerce and
Trade Organization, 1986.
"Annual Planninq Information; Sacramento" , State of
- California Employment Development Department,
May, 1987.
� SZ'EP 7: BS?ZlUTE O! SOIISEHOLD SIZE DZSTRIBDTION •
� HUD�s criteria for aaaistance is dependant on a household meeting a
combination of incame and household size requirements. Step 7
� estimates the number o� households in each household size category
ranginq from one person per household to five persons or more per
household.
� Household size varies by income and age, so we utilized U.S. Census
on data for non-elderly households with an income less than 515 , 000
in 1979 dollars. This income level is close enough to approximate
� HUD�s 517,050 income level in I987.
� � 195
�
�
The following chart is a percentage breakdown of households under
517 , 050 by size: �
Low Income
Household Size Percent
1 36�
2 28�
3 18�
4 11�
5 or more 7�
Date Source: "1980 Census of Population, Detailed Population
Characteristics, California" , v.s. Depaztment of
Commerce, Section 3 , Page 6-2394.
STEP 8: ESTZISPiTE Or VERY LOi�I INCONB HOQSEHOLDS TH!►T lIEET
IIdCOliE A�iD SZZ$ CRITERIA
This step calculates the number of householda that meet HUD' s very
law income assistance criteria. Usinq the matrix shown on Table A-2 ,
a probability factor is calculated foc each of the five HUD income
subgroups, such as for example householda enrninq less than 512, 650
with a household siae of two: To determine the probability factor
for each occupation cateqory the five probability factors calculated
for each HUD level are totalled. This number represents the prob-
ability that new households in a qiven occupation cateqory will meet
both income and household size criteria established by BUD. The �
probability factors for each occupation are presented below:
� of Households that I
heet HUD Criteria
Pzafeasion/Techaical/ 1.5� �
Managers -
Cleri.cal 21.3��
Cra�t/Rindred 13.0� �
Operative 29.0�
Laborer 38.0�
Service 35.Oi
. �
To determine the number o! households that qualify for assistance the
probability factors shown above are multiplied by the number of '
households by occupation estimated in Step 5 . This is done for each
land use category.
. '
�
196 �
�
�
STEP 9: �►DJIISTXENT TO BLIKINATE MOST liIILTIPLE BARNEA HOOSESOLDS
This last step makes an adjustment to eliminate most of the house-
holds that have two or more earners such that the incomes in combina-
tion make the househelds no longer qualify as very low income. The
U.S. Census tells us t�at overall 4Q� of the households have one wage
earner but in the under 515 , 000 households , 70� have only one wage
earner . Recoqnizing that there likely a significant share of
multiple �aqe earner houaeholds that still do qualify (particularly
amonq minority households where families may be larqe and ski1Z
levels low) , we made the judgement to use a 75� factor .
This final adjustment produces the number of very low income house-
holds directly asaociated with the construction of 100 , 000 sq. ft. of
buildinq area by type.
Number of x � Adjustment to - Adjusted Number
Households Requiring Eliminate Multiple of Households
Assistance Earner Households Requiring Assistance
Data Source: "1980 Census of Population, Detailed Population
Characteristics, California" , U.S. Department of
Commerce.
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73-510 FRED WARING DRIVE, PALM DESERT,CALIFORNIA 92260
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TELEPHONE(619)346-0611
P�arSi�.�nt tn i ii- lP 14. Uivitiir�n t;, Arti� le 7, tiNrtion t`iUrt3, ��f Tna (�,�i iF��rnf,�
Admini;trati�:E� lnre.
NEGATIVE DECLARATION
APPI ICANT/PROJECT SPONSOR: i;i t.� nf N;�I fi) D?,��rt
PROJECT DESCRIPTION/LOCATION: �:��mmerc i � i Deve i opmPnt i�_�w i nr_om� em:� �o�w�e�
housina mit ;aarion r"ee
Th� fj i ra�,t��r Or fhe i�FU..�t'trila�it +�t (,nmmUn i tv [�Pv����Pm�nt. �i tv Ot P,�I m l.�a;arL,
(d i i forn i d, i��a=. rn�ind th�t the CieSCr i Cieri prp jEct wi 1 I nOt t'�dve a ti i an i r i cant
et fe�.r on th� rnv i t-�nmenr. A rc�py �if th� [n i t i�1 St�_irjy h�s D�er �t t 3rhe�� tn
C1C�CUme!"iT tr�e reasans in su�,F,nrt pf thi5 find�ng. Mitig,�-tion mea�,ure=,. if any.
i nr I�_idYd i n tP�P prn ir���t Tn av��i d (�r]t'F_'C11: I:1! I� �;i r�n i t i r,ant r'trPf:T�_, m�y ,�i�o t�P
foun�i �ttachNr±.
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TELEPHONE(6 t9) 346-0611
IMT711L S'IUOY � I'1\L C�IDCI4�IST
I. Backgnxuxi
1. Date �;l �l � v
2. case rso. ��c.�,S c v�6 w�,lT'tG �r�o v� F E�'
3. Applicant G l r`t d� ��L�"'t �L� �'2l
� II. �vironmental Impe�cts
(E�cplanations of all "yes" and "�.ybe" anewers are required on attached
sheets.)
yes Maybe No
1. Barth. Will the proposal result in:
a. Unstable eartt� conditions or in changes in
geologic substructures? "'
b. Disruptions, displacements, canpaction or
overcovering of the soil? �
, c. Change in topography or ground surface
relief features? �
d. The destruction� covering or modification
ot any unique gec�logic or F�liysicat feat�ires? ✓ •
e. Any increase in wiad or wa.ter erosion o!
soils� either on or off the site? !� .
f. Changes in deposition or erosion of beach
sands� or ct�anges in siltatioci, deposition or
erosion which may rUo�dify the channel of a
river or strea.rn or the bed of the ocean or ✓
any bay� inlet or lake? —
g. Exposure of people or property to geologic
hazards such as �rtt�q�iakes� landslides,
mudslides� grouncl fllliire, or slmtlar hnzacas? �./
, . Yes �laybe No
2. Air. Will the propo�al result in:
a. Subetantial air emissions or deterioration
ot ambient air quality? �
b. The creation ot ob�ectionable odors? �
c. Alteration oP air mc�vement, rn�isture, or
temperature� or a.ny change in climate�
either loca.11p or regionally�t �
3. �ater. Will the proposal result in: �
a. CUanges in currents, or the caurse o2 di-
rection of water movanents, in either marine
or f resh a►aters? ,/
b. Q�anges in absorption rates, drainage pat-
terns� or the rate and amount of surface
runoff? ✓
c. Alterations to the course or low oi Ylood
waters? �/
d. Change in the amount of surface water in
any water bodyt ✓
e. � Discharge into surface ava.ters, or in any
alteration ot surface water quality, in-
cluding but not limited to tenpera.ture,
dissolved oxygen or turbidit�t ✓
Y. Alteration o4 the direction or rate of flow
oY ground �ra.ters? ✓
g. Change in the quantity of ground waters,
either through direct additions or with-
drawals, or through interception of an
aquifer by cuts or excavations? �/
h. Substantial reduction in the amount of
water otherWise available for public
water supplies? ✓
i. Eaposure of people or property to water re-
lated hazards such as flooding or tidal waves? ✓
4. Plant L11e. Will the proposal result in: ✓
a. Ct�ange in the diversity oY species, or num-
ber oP any species oi pla,nts (inclu�ding trees,
' shrubs, �rass� crops� and aquatic plants)? ✓
. Yes Maybe No
b. ReductioQ of the n�anbers of any unique, rare
or endangered species ot pla.nts? �,/
c. Introduction of new species of plants into an
area, or in a barrier to the normal replenish-
ment of eaisting species? �,/
, d. Reduction in acreage oP a.ny agricultural crop? ,/
5. Animal Life. Will the proposal result in;
a. Change in the diversity oP species, or n�-
bers of a.ny species oP anirnals (birds� land
animals including reptiles, fish and shell-
fish, benthic orga.nisms or insects)? ✓
b. Reduction of the ntmmbers of any unique,
rare or enda.ngered species oi animals? �/
c. Introduction of new species of anirmis into
an area, or result in a ba.rrier to the migra-
tion or movement of animals? ✓
d. Deterioration to eaisting fish or wildlife
ha.bitat? �
6. Noise. 7ii11 the proposal result in:
a. Increa.ses in eaisting noise leveie? ✓
b. Eaposure ot people to severe noise levels? �/
?. Light and Glare. �Pill the proposal produce new
light or glare? � ,/
8. Land Ose. Will the proposal result in a sub-
sta.ntial alteration of the present or pZanned
land use o� a.n area? .�
9. Natural Reeotlrcee. Will the proposal result in:
a. Increase in the rate of use of a.ny natural
reeources? ✓ •
10. Risk oi Opset. Will the proposa.l involve:
a. A risk o! an eaplosion or the release of
hazardous substances (incluciing, but not
liinited to� oil, pesticides� chemica.ls or
radiation) in the event of an accident or
upset conditions? �
Yes 6�aybe No
b. Foseible interference with an emergency
response plan or an gnergencq evacuation
plan? ✓
11. Population. Will the proposal alter the loca.tion,
distribution� density, or growth rate of the h�an
population of an area? ,/
12. Houeing. Will the proposal affect existing hous-
ing, or create a deroand for additiona.l housing? ✓
13. Traasportation/Circulation. Will the propo.4a.1 .
result in:
a. Generation of substantial additional
vehicular movement? ,/
b. Effects on eaisting p�s.r�dng facilities� or
demand for new parking? ,/
c. Substantial impact upon eaisting transpor-
tation systeas? ✓
d. Altera.tions to present patterns of circula.-
tion or m�venent oP people and/or goods? ✓
e. Alterations to ava,terborae, rail or air traffic? ✓
f. Increase in traffic ha.�ards to motor vehicles,
bicyclists or pedestrians? �
14. Public Servicee. Will the proposal have an eifect
• upon, or result in a need for new or altered gov-
ernmental services in anp of the following areas:
a. Fire protection? ✓
b. Police protection? �/
c. Schools? ✓
d. Parks or other recreational tacilities? �
e. Maintenance o! public facilities� including
roads? .�
f. Other governmental services? �
15. Saergp. Will the proposal result in: .
a. Use oi substantial amounts of fuel or energ�t .�
�
Yes I�.ybe No
b. Substantial increase in de�a.nd upon existing
�ources or energy� or require the developnent
oi neW sources of energy? i/
16. Dtilitiee. Will the proposal result in a need Por
new systea�, or substantial alterations to the
following utilities: ✓
17. H�n Health. Will the proposal result in:
a. Creation of any health h.aza.rd or potential
health hazard (eacluding mental health)? ✓
b. E�posure of people to potential health
hazards? ✓
18. Aesthetics. Will the proposal result in the
obstruction of any scenic vista or view open to
the public� or will the proposal result in the
creation oP an aesthetically offeasive site open
to public viea/7 ✓
19. Recreation. Will the proposal result in an
impact upon the quality or qua.ntity of existing
recreational opportunities? ✓
20. G�ltural Reso�urces.
a. Will the proposal result in the alteration
of or the destruction oP a prehistoric or
historic archaeological site? ✓
b. Will the proposal result in a.dverse physical
or aesthetic effects to a prehistoric or
historic building, structure, or ob�ect? ✓
c. Does the proposal have the potential to
cause a physical change which arould affect
unique ethnic cultura.l values? �/
d. Rill the proposal restrict eaisting religious
� or sacred uses within the potential impact
area? �/
21. �faadatory Findings oi Signiiica.nce. .
a. Does the pro�ect have the potential to degrade
the quality of the environment, substantiallp
.reduce the habitat oi a fish or wi1d11Pe
species, ca.use a fish or a►ildlife population �
to drop below sel� sustaining levels, threaten
to eliminate a plant or animal cartmunity� re-
duce the nucnber or restrict the range o! a rare
or endangered plant or a.nimal or eliminate
� Yee Maybe No
important examples oP the ma,jor periode of
California history or prehistor�? ✓
b. Does the pro�ect ha.ve the potential to achieve
short-terno, to the disadvantage of long-tenn�
environmental goals? (A short-term impact on
the environment is one which occurs in a rela-
tively brief, definitive period of time while
long-tenn imp�.cts will endure well into the �
future.) ,/
c. ibes the pro�ect have imp�.cts which are �
individually limited, but cumulatively con-
siderable? (A pro�ect may impa.ct on two or
- more separate resources where the iinp�,ct on
each resource is relatively small� but where
the effect of the total of those impacts on �
the environment is signiYicant.) ,/
d. Does the pro�ect have environmental effects
which will ca.use substantial adverse efPects
on human beings, either directly or indirectl�t �/
III. Dete�1II�L10�
On the b�sis o! this initial evaluation:
I find that the pmposed pro,�ect OCJUI.� NOT have a significant effect
on the environment, and a NDGATIVE DflCL�ARATION will be prepared. [�
I find that although the proposed pro�ect could ha.ve a significant
effect on the envirocunent, there will not be a significant ePfect in
this case because the mitigation measures described on an attached
sheet have been added to the pro�ect. A NDGATIVE DDCL�AftATION WILL BE
PREPARF,D. �
I find the proposed pro,ject MAY have a significa.nt efPect on the
environment, a.nd a.n II1VI�TAL IMPACT REPORT is required. []
� � �.__ -�, \a��---►-�
� ly -
Date Signature
For
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� NIIN[TPFS
PAllK DFSF�tT PLANNING OQ�MISSION
�� 19, 1990 r
B. C�se No. PMW 90-9 - GUY AI�II) NDILIA �111NS, �alicant
Request for approval of a parcel map waiver to
merge lots 17 and 18 into one parcel and lots 19
and 20 into one parcel of tract 13236, located at
Beacon Hill and Mayfair Drive.
Action•
Moved by Commissioner Er�rood, seconded by Ca�nissioner Richards,
approving the consent calendar by minute motion. Carried 3-0-1
(Camussioner Jonathan abstained).
VII. PUBLIC HEl1RII�S
A. Continued Case Regarding Conunercial Develo��ent Iaw Ir�ornie
F}�tploy+ee F1aus.u�g Mitigation Fee - CITY OF P11LM DF�ER`I', 1lpplicant
Request for plaruzing caTnnission reca�enendation of
approval to city council the establistunent of a
conunercial development low income housing
mitigation fee.
Mr. Drell outlined the salient points of the report and indicated
that the econanic develognent camnittee had recommended against
establist�nent of the fee.
Comnissioner Jonathan asked if the IDC discussed any alternatives.
Cannissioner Richards noted that he was a member of the canmittee, of
which many different facits of the cona�nuiity were represented, and
stated that all were against it. IIe indicated t.�lat one of the
reasons rr�ntioned was the unfairness to the "new guy".
Chairperson Wh.itlock opened the public testimony and asked if anyone
present wished to speak in FAVOR or OPP06ITION to the proposal.
MR. fiANK FIOWENSTEIN, 65-940 Cahuilla in Desert Hot Springs,
representi.ng F3uilding Industry Association. FIe explained that
BIA of the desert was very supportive of the need for
low/il�erate income housing, but was concerned with the method
of assessing the fee and was concerned about the last developers
t�ing made to pay for the cost. He indicated that AB 1600,
effecLive January 1, 1989, resulted in government code sectiori
66000 dealing taith several issues of ne�s. He felt that the
canparison for fees charged in Palm Desert had no relationship
to tt�e fees �t�at migtit be charged in other cities. He felt the
2
. NIIIV[TI'E�
PALM DESQtT PI�1M�Iii� �NMISSION •
JUt� 19, 1990 °
issue needed to be addressed on the basis of what the cost was
of providing the service for Palm Desext. He inclicated that the
next nexus issue was being site specific--have the specific
sites for the hcxnes been selected, and if so, what was the cost
to develop them. He also felt there were several other issues
in the goverrvnent code that needed further addressing before
adoption, i.e. what would the city do with the 20 year program
when they were collecting fees that have to be used within five
years and if they're not used, they must be returned as per
goverrunent code section 66000. He indicated that the fees had
been upheld by the courts at the trial court level, but was too
new for decision by the appellate courts and abave. He stated
that if the city was selective and he only shopped in Ahmanson
stores, he was supportive of low income housing in the
con�n�unity, but if he shopped at the To�m Center he was not
supportive--he felt that inequity needed to be addressed. He
felt the way in which the funds were dealt with needed to be
handled; site specificity, and comm�uzity support needed to be
looked into and funds in tenns of isolation in a specific
account for the specified purpose only and refunded to the
individual if action was not taken. In tern�s of low incane
housing, he invited the carQ�tission to attend the BIA meeting on
July 11 at Palm Valley Countzy Club, where they were goirig to
devote an entire everLi.ng to low incane housing issues.
Chairperson Whitlock closed the public testimony.
Commission discussed the proposed fee and detennined that it was
unacceptable because existing fees were already excessive and it
would be unfair for new develop�lient to bear the burden of addressing
law incane housing needs.
Action•
Nbved by Caiuitissioizer Richards, seconded by Conenissioner Jonathan,
approving the findings. Carried 5-0.
Nbved by CaiIInissioner Richards, seconded by Ca�unissioner Jonathai�,
adopting Planr�ing Cai�nission Resolution No. 1445, recomnending denial
to city council the establishn�ent of a cainnercial development low
incane housing mitigation fee. Carried 5-0.
B. Cbritinued Case No. GUP 90-10 - BInX:E Q�11RK, Applicant
R�quest for approval of a senior housing unit to
3
MINUTES
ECONOMIC DEVELOPMENT ADVISORY COMMITTEE
MAY 17, 1990
that the area had improved dramatically. He fe.It the plan
encouraged development of good projects in the area .
Mr. Ceriale asked what the condition of the existing homes
in that area was. Mr. Tschopp felt the construction of
this project would be a big improvement to the area .
Mr. Dre11 noted that Charlie Miller owns property next to
this site and he may be willing to tie-in to this project.
Mr. berkey indicated this project could take away high end
retail from EI Paseo and that might caus2 some concerns.
He felt the location was good for an extension of the
commercial area.
Mr. Dre11 indicated this project would be going before
Ci ty Council in one week.
Councilman Snyder felt this was basically the same project
that was submitted two years ago. Mr. Dre11 indicated
that it was except that they have applied to the more
stringent restrictions.
Mr. Tschopp indicated that he was familiar with the
applicant, Dr. Lyons, and the Zocation is near his place
of employment. They are wilZing to have further
restrictions and have complied with a11 requests for
changes.
rir. Ceriale felt there was no real argument because a
restaurant or lube shop vse would need a conditional use
permit to Zocate on that site anyway. He agreed that
office and retail uses don ' t work we11 together.
MOTION was made by Mr. Tschopp, seconded by Mr. Ceriale to
recommend to City Council that they adopt the
recommendation of staff to permit the commercial use of
the property. Motion carried .3-0-1 (Mr. Goodman
abstaining) .
Commercial Development Low Income Employee Housing
Mi tiga tion Fee
Mr. Dre11 zxplained that this item had gone before
Planning Commission and they asked for input from the
Economic Development Advisory Committee. He reviewed the
3
MINUTES
ECONOMIC DEVELOPMENT ADVISOR Y COMMITTEE
MAY 17, 1990
staff report and indicated that hotels would be assessed
$1, 000 per room. He noted that they tried to project
housing costs to the year 2010 and came up with a Zack of
funds for 1ow income housing between RDA and the housing
program. Ninety five percent of the program would be
funded by the RDA and only a sma11 portion would be from
fees collected.
Mr. Diaz indicated the committee should Iook at this and
decide what type of impact it would have on economic
development in the ci ty.
Mr. A1 tman explained that CVAG has been dealing wi th this
issue and looking for a valley-wide solution. He felt the
proposed mitigation fee was reasonable and that a less
reasonable solution may be proposed valley-wide by CVAG.
Councilman Snyder explained that CV.�G formed a committee
to exclusively Iook at this matter. He noted that
sometimes these committees can focus on one problem and
not Zook at the overall program. The CVAG committee wi11
go back to the cities and see how their proposed program
wi11 affect each budget. He felt the program proposed by
staff was at least reasonable and would a11ow the option
for the city to make changes. If CVAG imposes a fee there
wiZl be no control by the ci ty.
Mr. Ceriale asked how much money does RDA set aside for
housing and how much is accumulated because they don ' t
know where to spend it. Mr. Altman noted that 20� is set
aside for housing and that by and Iarge that money is used
for housing.
Mr. Diaz noted that both Pa1m Desert and PaZm Springs use
their housing funds.
Mr. Ceriale was concerned about the money not being used
because communities don ' t want affordable housing in their
neighborhoods.
Mr. Richards was. concerned about the administration of
these funds when someone no longer qualifies to Iive
there.
Mr. Ceriale felt that if you are a part of the RDA area
that 20� should be sufficient for Zow income housing.
4
MINUTES
ECONOMIC DEVELOPMENT ADVISOR Y COMMITTEE
MAY 17, 1990
Mr. Altman felt there needed to be a reasonable approach
by everyone that is kept in the confines of our control .
He noted the city 's participation in the rehabilitation of
the Town Center Apartments as one of its RDA projects.
Shopping centers and hotels create the largest housing
demands.
Mr. Berkey indicated that he has been attending the CVAG
housing task force meetings. He agreed with Mr. Ceriale
that the 20� set aside fund represent an adequate amount
by the deve3oper. He was opposed to any new fees being
applied. He rather see the city approach this with an
overall general fund philosophy.
Mr. Goodman noted that from the standpoint of a developer
he would not like to see any new fees imposed. He felt it
was a city-wide problem and suggested that a11 property
owners in the city be taxed.
Mr. Richards was opposed to the fee and recommended they
provide zoning that would create some competition. He
felt that even if the city were to provide 1ow income
housing hispanics would stiZ1 choosz to Zzve in areas
where they felt comfortable.
Mr. Ceriale indicated that the Marriott created a need for
housing when they opened but that the demand no Ionger
exists. He felt that the city has not built any Zow
income housing at this point.
Mr. Dre11 noted that there has been a Zot of complaints
about three and four families Iiving in one house. There
is also a growing hispanic community in Pa1m Desert . He
did not feel that sharzd housing was the correct way for a
city to address the probZem.
Mr. Tschopp felt that this was not a hispanic problem but
a overall community need. He was concerned that the whole
program was based on development continuing.
Mr. Dre11 explained that if development does stop then the
housing needs would scale back. This proposal is intended
to address the needs brought on by new development.
Councilman Snyder noted that he was not in favor of a Iot
of new fees but felt there was a real problem that exists
and should be addressed.
5
MINUTES
ECONOMIC DEYELOPMENT ADVISORY COMMITTEE
MAY 17, 1990
Mr. Ceriale felt a reasonable approach was needed and
suggested that one of the other fees be deleted. He was
not con vinced that a city approach, rather than a regional
approach, was better.
Mr. Tschopp felt that if this was a preemptive strategy to
keep our money here instead of it going to the county, he
would not be opposed to it. He suggested we compare our
fees to other cities. He explained there are programs
offered by banks for these type of projects.
Mr. 9erkey felt that if the city didn ' t want to get
involved in housing they should set up a deal with
bonding. A private, non-profit corporation would manage
the housing projects and the public enti ty would feed
money into the program from the retiring bonds. That way
the money would be coming from the general fund and
everyone is paying rather than just the developers.
Mr. Richards was more concerned about what would be done
wi th the money raised. He fe1 t there should be specific
projects earmarked for this money and results shouZd be
seen.
Mr. Dre11 indicated that the Riverside County Housing
Authority has stated they can do what the city is asking.
Mr. Richards asked if there were any successful examples
that they could see.
Mr. DreI1 indicated that staff was just as concerned about
the quality of housing provided. He noted that it would
be an urban design.
Councilman Snyder explained that the city has pUrchased
some property and are working on a master pZan which will
include affordable housing.
A MOTION was made by Mr. Berkey, seconded by Mr. Ceriale
to state the Economic Development Advisory Committee 's
opposition to the proposed Commercial Development Low
Income Employee Housing Mitigation Fee. Motion carried 5-
1 (Ms. Cox voting no) .
Mr. Tschopp felt that another fee or hidden tax was not
the way to address the housing problem.
6
MINUTES
ECONOMIC DEVELOPMENT ADVISORY COMMITTEE
MAY 17, 1990
Ms. Cox asked if Ahmanson was being required to pay these
fees. Councilman Snyder explained that they were included
in the developmen t agreemen t be tween the Ci ty and Ahm.anson
Development.
IV. MISCELLANEOUS COMMENTS
Non e
V. ORAL COMMUNICATIONS
Non e
VI. ADJOURNMENT
The meeting was adjourned at 4:.35 p.m.
/dl g
�
' NiLNITPFS
PAIM DFSF�T PLAN[JiI� �T�IISSI�1 .
N�Y l, 1990 '
Chairperson Whitlock asked if anyone present wished to speak in FAVOR
or OPP06ITIOiN to the proposal.
Nfft. JOE BR11t�IDT rwted that other business in the center (i.e.
Danino's and Bigelaws) were delivery only businesses. He did
not feel there would be any parking problem.
Ccaynissioner Dawr�,s indicated that those businesses each have several
drivers that take up parking space.
NiR. BRANDT indicated that they would canply with the conditions
as stated.
C7iairperson Whitlock closed the public testimony.
Action:
Moved by Commissioner powns, seconded by Commissioner Er��od,
approving the findings as presented by staff. Carried 5-0.
Moved by Commissioner powns, seconded by Commissioner Er�,x�od,
adr�ptirig Plaruzing C,armission Resolution No. 1440, approving CUP 90-
9, subject to conditions. Carried 5-0.
G. �e�Cial I)eve.ic�n�t I,ow Ino�o�[�e EYnnlayee Ho�irx3 Mitigation
Fee - QTY OF PAIM DESF�tT, Applicant
Request for planning camtission recarmendation of
approval to city council the establishmP.nt of a
commercial development low income housing
mitigation fee.
Mr. Drell outlined the salient points of the staff report.
Ccamission infonned staff that more ti►r� was needed to st�.idy the
proposal and requested, if possible, that fees be studied in other
areas ( i.e. Phoenix Arizona, Austin Texas, or Ft. Lauderdale
Florida). It was rioted that there were fees for lizards, TU[�',
school, art, drainage and signalization. Ccamissioner Richards felt
the city sYiould keep in mi.nd the total costs inv�lved to insure a
viable ecoi�Lic future for the city, noting the serious changes in
California's econanic grawth in sorne areas. After further discussion
Mr. Diaz indicated that he could get cam�ents fran the economic
development camtittee. Staff indicated that they would tzy to obtain
approxi.mate figures that shr�w the cost of building in Palm Desert
with the fees that are presently levied.
11
. , NaIV[��
PAI1�I DESF�T PI�IIVING aCt�T�IISSI�I
MAY l, 1990 '
Chairperson Whitlock opened the public testimr�ny and asked if anyone
present wished to speak in FAVOR or OPP06ITICt�1. There was no one.
Cannission indicated that the item should be referred to the ecorxxnic
developnent cannittee for review and continued to June 19, 1990.
Action:
Moved by Commissioner powns, seconded by Carmissioner Richards,
continuu�g this matter to June 19, 1990. Carried 5-0.
VIII. NiISC�LIAN�O[7S
None.
IX. ORAL �1NICATI�IS
None.
X. C�1I5
Mr. Diaz noted that the next joint meeting of the planning
calmission/city council/architectural review camussion w�uld be on
May 17, 1990 from 11:00 a.m. to 2:00 p.m. at a place to be
detennined. Cannissioner Ez�n�od inforn�d I�. Diaz that he would not
be able to attend that day.
XI.
Moved by Commissioner powns, seconded by Carmissioner Richards,
adjourning the meeting. Carried 5-0. The meeting adjourned at 9:45
p.m.
R1�MON A. DIAZ, Secretary
ATTEST:
CAROL WHITLOC!{, Chairperson
/�
12
i
F'LATII�LII� Q1M�SSI�T RFSOLLTPIUN I�U. 1445
A RESOLUTION OF TF� PLANNZNG CJOM�IISSION OF THE
CITY OF PALM DFSERT, CALIFORNIA RECOTM'IENDING
DENIAL TO CITY OOUNCIL THE ESTABLIS��fP OF A
COI�M'lERCIAL DEVELOPMENT LOW INCOME HOUSING
MITIGATION F'EE.
WHERE'.AS, the Planning Caimission of the City of Palm Desert, California
did on the lst day of May, 1990, hold a duly naticed public hearing to consider
a low inccxr�e housing mitigation fee to be assessed against all co�mercial and
industrial develo�zt within the city; and
WHEREAS, at said public hearing, upon hearing and considering all
testi►rony and argtnnents, if any, of all interested persons desiring to be
heard, said plann.ing ccmni.ssion did find the follawing facts to justify their
actions, as described belaw:
1. Existi.ng fees are already excessive.
2. New development should not bear the burden of addressing law inccme
housing needs.
NOW, Tf�REFnRE, BE IT RESOLVID by the P1anrLing Caimission of the City of
Palm Desert, California, as follows:
1. That the above recitations are true and correct and constitute the
findings of the caimission in this case.
2. That the proposed Commercial Development Low Income Housing
Mitigation Fee F�hibit "A" is hereby reccmnended for denial.
PASSED, APPROVID and ADOPTID at a regular meeting of the Palm Desert
Planning Camnission, held on this 19th day of June, 1990, by the following
vote, to wit:
AYES: DOWNS, ERVJOOD, JONATHAN, RIC��ARDS, AND WHITLOC�C
N013S: NONE
�ss�r: r�orrE
ABSTAIN: NC`NE
CAROL WHITL,OC�C, C�aizperson
ATTEST:
•
RAMO A. DIAZ, Sec t
PD/tm
F'I,AIVIVII� CC[+T�IISSIC�t RF�OLUrI�T NO. 1445
EXI-LIBIT "A"
All oamiercial developnents shall be assessed the follawing mitigation
fees ta be paid at the issuance of building permits. Said fees shall be used
exclusively to subsidize rents as part of the City of Palm Desert's program to
provide affordable housing for law and very law incane Palm Desert employee
h�useholds.
The fee shall be based on the follawing schedule:
1) General Mixed Catanercial. . . . . . . . . . . . . . . . . . . . .$1.00/square foot
2) Professional Office. . . . . . . . . . . . . . . . . . . . . . . . . .$ .50/square foot
3) Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 .33/square foot
4) Resort Hotel (includes major amerLities,
golf course, multiple restaurants,
large convention facilities, etc. ). . . . . .51000/per roan
5) Non Resort Hotel (limited amenities). . . . . . . . .$ 620/per roan
PD/tm
2
City of Palm Desert
Department of Goanx�n i ty Deve 1 opnent
Staff Report
T0: Planning Commission
FROM: Philip Drell , Senior Planner
DATE: June 19, l990
SUBJECT: Housing Impact �ees and Totai Commerciai Development Fee Survey
I. BACKGROUND:
At the last hearing the commission requested some data relative to Palm
Desert commercial develapment fees in comparison to elsewhere in the
valley and sitnilar resort communities. Aithough the computation of fees
for major commercial projects is quite complex and subject to many
variables, I have been able to calculate comparable costs per square foot
for a typicai 10 acre 100,000 square foot shopping center. I was able to
get a detailed breakdown for Palm Oesert, Palm Springs (a comparable
valley measure) and Carlsbad, a rapidly growing coastal resort community.
Totat f ees for Palm Springs and Palm Desert are neariy identical at.
approx i mate 1 y $8.00 per square foot, of wh i ch $1 .30 - $1 .77 ( 177. - 227.)
are "permit processing fees". The remainder goes to specific public
infrastructure improvements: drainage, traffic, schools, water and sewer.
Prior to proposition 13, these costs were spread throughout a community
via the property tax. Communities which have experienced rapid growth
since 1978 have had to rely on development fees to finance needed
expansio� of infrastructure. The City of Carlsbad's "permit fees" are
neariy twice that of Coachella Valley cities at $3.00. Their public
infrastructure fees, specifically traffic, are quite substantiai equaling
$7.91/square foot atane in some areas. The bridges and thoroughfares fee
is being phased out. leaving a $4.20/square foot traffic mitigation fee.
twice our TUMF. Carlsbad fees currently total $14.39/square foot. The
housing fee was discussed by the economic development committee on May 17.
The cortxnittee recommended that the fee not be implemented.
.. ,�pl ��,�..�
_ _,
Phiiip Orell , Senior Planner
/tm
PAIM DFSIItT
�AL DEVII�r�FNP F�
�6T PIIt S¢ARE FOO�P OF BUILDII� AFtEA
1. Planning
a. Application Fees $ .05
2. Building and Safety
a. Permit/Plan Check .55
b. Construction Tax .27
c. Art in Public Places .26
1.08
3. � Public Works
a. Gradis�g .17
b. Signalization .50
c. Drainage .22
.89
4. Non-City Fees
a. Schools .26
b. T[)MF 2.19
c. Lizard (north of Whitewater) .40
d. Water and Sewer 3.00
$5.85
TOTAL 57.87 square foot
PAi�I SPRII�S
�AL F�
�6T PIIt SQ[]ARE FCX7P OF &TILDIl� ARFA
1. Plar�ning
a. Application Fees $ .10
2. Building and Safety
a. PernLit/Plan Check .55
b. Constxuction Tax .40
c. Art in Public Places .52
1.47
3. Public Works
a. Graclirig .17
b. Drainage .31
.48
4. Non-City Fees
a. Schools .26
b. TUNIF' 2.19
c. Lizard (rx�rth of Whitewater) .40
d. Water and Sewer 3.00
$5.85
TO'I'AL 57.90 square foot
QTY OF (�RLSBAD
QM�QAL �
Q�6T PF�2 SQ[JARE FOO'P OF BITILDII� AREA
1. Plannuzg
a. Application Fees $ .55
2. Building and Safety
a. Permit/Plan Check .16
b. Public Facilities Fee 1.35
1.56
3. Public Works
a. Gradux,� .90
b. Traffic Mitigation Fee 4.20
c. Bridges and Thoroughfares 3.71 (to be phased out in future)
d. Drainage .22
9.03
4. Non-City Fees
a. Schools .25
b. Water and Sewer 3.00
S 3.25
TO'PAL $14.39 square foot
QTY OF PAIM DFSIIZT
D�AR�3�fP OF �T�IAVI'PY DEVII�OPN�TP
STAFF �
TO: P1anrLiszg Catmission
F'RCM: Phil Drell, Senior Planner
DATE: May 1, 1990
SUBJDLT: Carrnercial Develognent Law Incane F]nployee Housing Mitigation
Fee
I. BA�II�ID
Over the past twr� years, the city has bee.n wr�rkuzg with the Riverside
County Housing Authority on developing a housing pz�ogram to address the
low inc;attie emplayee hr.w.sing needs genexated by the city's eoorx�nic
grawth. CamLitmPrnts to pursue a rent subsidized law inoome housing
program are contained within the city's newly adopted Gerieral Plan
Housing Element and in a settlement agreement with the Western Center
on Law and Poverty and The California Rural Legal Assistance.
Phase I of the program to be canpleted by 1995 will include the
constxuction of 1100 units equally divided among very law, lawer and
moderate incane. Construction or acquisition will be financed by tax-
exempt bond funds. The very law and lawer incane rents will be
achieved through direct subsidies fran the Redevelognent Agency's 20 0
tax increment Iwusing fund.
Phase II of the program, tentatively scheduled for 1995-97, will
include 100 very law incane and 60 law incane units. The ti mi r,c� of
future phases will depend upon the pace of cortrnercial developnent, new
employment, available revenues, and housing demand.
During the hearings on the Ahmanson Cannercial Developnent Plan and
EIR, discussion became focused an the law im�ie characteristics of
retail calmercial employment and r.annercial developers potential role
in mitigating the housing impact generated by their projects. The
Ahman_son Developnent agreement contained provision for payment of a
housirx� mitigation fee.
According to SCAG's Regional Housing Needs AssesscnPa�t, 1,144 law and
very laa incane Palm Desert households are currently overpaying for
housirx�. Through 1995, additional demand for 670 law and vezy low
incane units is expected. A survey of the 180 city rent controlled law
income units has indicated a zero percent vacancy rate. It is,
therefore, clear that there are rio vacant law incane units available to
meet the demands of households attracted to Palm Desert by new
c;ar►nercial development.
STAFF REPOF�P
�;IAL DEVIIAPN�fP I�C�1 IlV�N1E
II�I�OY� I�XT.SIl� NIITIGATI�i F�
N�Y 1, 1990
In a study by GYuen, GYuen and Associates and Ultra Systems, Inc.
aonducted as part of the Indian Wells General Plan EIR, a direct
relationship was documented between employment, new low income
households, and the detnand for law inc;ane hou.sing. That study, based
on the 1980 Cex�,sus incane, e�layment and hou,sehold characteristics,
concluded that 7,357 new resort/retail/sexvice �obs will result in at
least 1418 new lav/very law inr,ome households.
In a study by Keyser Marsten Associates, Inc., relationships were
established between new carmercial develognent of various categories
and very low inaane emplayee Yx�usetwlds in the Sacramento area.
Havirig established a nexus between n,ew ca�nercial develogne,nt and law
incane Yxx�,sing dc�nand, the next task was to assess the long term
financial requirc�nents of a rent subsidy program and magnitude for
developer participation in a mitigation program. The City Finance
Department has completed a cost/revenue analysis of the proposed
housing pr�ogram projecting rent subsidy aosts and RDA Hou,sing revenues
(without developer mitigation) through the year 2010 (Table I). It
ass�unes canpletion of Phase I, 1100 units; Phase II, 160 units; and
Phase III, 900 units to meet d�nand through 2010.
The analysis indicates that for Phase I there would be an operating
surplus and accumulating carryr�ver balance. With Phase II (1996)
subsidy costs begin to exr,eed RDA housing revenues and reduce the
carryc�ver suzplus. As gzYxaing employee hou.5ing needs continue to be
addressed in Phase III, the carryr�ver svrplus becomes exhausted in the
year 2002. The accumulated deficit w�uld gzrw to reach $5,125,539 in
2006. By 2007, Y�using revenues catch up and pass program expenses and
the canyover deficit will begin to shri.nk.
The results of Table I lead to the conclusion that additional revenues
will be required if the proposed housi.ng pi�ram is to remain solvent
through Phase II and beyond.
In a second analysis (Table II), the effects of a developnent fee
program were examined. The goal of the fee program wr�uld be to build
up the annual positive carryaver during the initial surplus years
(1990-96), then slow its decline during the deficit years (1996-2006)
so that sufficient reserves could be maintained until RDA revenues
caught up in 2007.
2
STAFF R�P
Q7NN�ZQAL D�,VE[�O�PN�TTP LCJW INI�NIE
EMPIAY� �Il� NIITIGATICN FF� "
N�Y l, 1990
The analysis was based on the following commercial development
assumptions:
1) General Mixed Cannercial. . . . . . . . . . . . . . . . . . . . .2,OQ0,Q00 sq. ft.
2) Professioa�al Office. . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 sq. ft.
3) Indu,strial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 sq. ft.
4) Hotels/Resorts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1200 roans
5) Hotels/Non Resort. . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 roar�s
Based on the Gruen Associates Indian Wells study, the Keyser Marsten
Sacramento Study and additional data frtxn major Palm Desert emplayees
(Palm Desert Tawn Center, Ahmansan, Marriott), various �atn►ercial land
use typ�s were rar�ked according to their relative impact an law irx;une
Yx�using and assigned a fee.
1) General Mixed Camiercial. . . . . . . . . . . . . . . . . . . . . 51.00/square foot
2) Protessional Office. . . . . . . . . . . . . . . . . . . . . . . . . . .50/square foat
3) Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33/square foot
4) Resort Hotel (includes major amexiities,
golf c:ourse, multiple restaurants, large
convention facilities, etc. ). . . . . . . . . . . . . . $1000/per roan
5) I�1on Resort Hotel (limited ameazities). . . . . . . . . $ 620/per roan
This fee structure would generate $3,799,000 based upon the 10-15 year
develognent assumptions. The fees effect on the subsidy program cash
flaw is sYxxm in Table II. It indicates a carryaver balance grr7wing to
a maxim�un $11.3 million in 1998, then shrinking to a miniirnun of $1.7
million in 2006. In 2007 the carryvver would begin increasing again.
The total projected housing mitigation subsidy costs through the year
2010 will be nearly $100,000,000.
II. Si�TR1RY ATID FITIDINC�
1. There exists a severe shortage of law and very law incane housing
within the City of Palm Desert and sunnunding �nities.
2. Ccamercial develognent projected to occur within the city aver the
next 20 years will general substantial new demands for affordable
law and very law incane emplayee housing.
3. The City of Palm Desert, Redevelopment Agency and Riverside
Housing Authority have initiated a program to construct and
subsidize law and very laa incane units addressing the c�riplayee
housing demand of the projected ca�mercial grawth.
3
STAFF RE�P
�AL DENEGOPN��TP I�(7W Il�TQ,N1E
II�'I,OYF� I�TSIl� MLTIGATI�1 FFE
N�1Y 1, 1990
4. Major funding for the rent subsidized program will c��e from the
Palm Desert Redevelopttent Agency's 20� housing set aside fund. An
analysis of the projected 20 year cash flaw for the program
;n�;cates that additional revenue in the form of developer impact
fees will be necessary to in.�ure program solvenc,y.
5. The proposed developer mitigation fee rate schedule is projected
to generate approximately $3.8 million of the total $100 million
required to provide the necessary subsidy thmugh the year 2010.
While this additional revenue should be able to maintain adequate
positive carzyaver resexves, it will equal onl.y 4$ of the total
program mitigation oost. The fee structlare attgnpts to assign
mitigation costs according to the relative inq�act of various
c�mercial uses on law and very law incane housirig demand.
III. RD�'�TI�T
Approve findings and adopt Resolution No. establishing a
Cannercial Developnent Housing Mitigation Fee.
IV. ATTAQi�NIS•
1. Subsidy cost cash flaw tables I, II
2. �cezpt fran Indian Wells General Plan EIR
3. Sacramento Nexus Study
�,.
Prepared by: � `
Reviewed and Appro�ved by:
PD/db
4