Loading...
HomeMy WebLinkAboutED Housing Development; Lennar ENRA; ExtensionAgenda Item No: 3_b Meeting Date: November 16, 2015 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Economic Development Prepared by: Stephanie Lovette, Manager City Manager Approval: - TOPIC: Use of the City garage property on Third and Lootens to allow the construction of a mixed use housing development. SUBJECT: A RESOLUTION OF THE SAN RAFAEL CITY COUNCIL TO PROVIDE A SEVENTY FIVE DAY EXTENSION OF AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT WITH LENNAR MULTIFAMILY COMMUNITIES, LLC TO DEVELOP HOUSING AND PARKING FOR THE CITY GARAGE LOCATED AT THIRD STREET AND LOOTENS PLACE RECOMMENDATION: Adopt Resolution approving the extension to the Exclusive Negotiating Rights Agreement. SUMMARY: Lennar Multifamily Communities ("Developer") has been working on preliminary plans to redevelop the properties located at 1001 Fourth (current tenant is Body Kinetics Gym), 926 Third Street (current tenant is San Rafael Laundry and Cleaners) and the City's garage at Third and Lootens into a mixed-use housing development. On August 17, 2015 the City Council authorized staff to enter into a sixty day Exclusive Negotiating Rights Agreement (ENRA) for this project. If successful, this ENRA would lead to an Owner Participation and Disposition and Development Agreement ("OPDDA") for the sale of the garage parcel. The developer has requested and staff supports a seventy five day extension to the ENRA period. BACKGROUND: The City adopted "Our Vision of Downtown" in 1993. The Vision was for a Downtown that is vibrant throughout the work week, is the cultural activity hub of Marin County, and is "Alive after Five" in the evening and on weekends. The Rafael Theatre, the San Rafael Corporate Center (Bio Marin) and Artworks Downtown are examples of projects that manifest the Downtown Vision. Another goal of the Downtown Vision was to create more housing to support the retail businesses and to create twenty-four hour activity in the downtown area. General Plan policies and the technical support of staff resulted in housing at One H Street, Centertown, Lone Palm, Boyd Court, Artworks Downtown and Rafael Town Center. FOR CITY CLERK ONLY File No.: 12-21 Council Meeting: 11/16/2015 Disposition: Resolution 14033 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 Other City policies to encourage housing developments which support Fourth Street include the City's Housing Element, the Downtown Station Area Plan, the City's Climate Change Action Plan and the City Council's Neighborhood and Economic Vitality and Quality of Life goals. ANALYSIS: The Developer approached the City with a proposal to build a mixed-use development on 1001 Fourth Street, 926 Third Street and the City garage parcels located across from the existing Rafael Town Center. The City Council authorized staff to enter into a sixty day `Exclusive Negotiating Rights Agreement' ("ENRA") to allow the City garage to be included as part of this mixed-use development. If the ENRA is concluded successfully, staff would request City Council approval to enter into an Owner Participation and Disposition and Development Agreement ("OPDDA") that would grant air rights on the City garage for the Development, subject to all CEQA and other City discretionary approvals. The Developer and the owner of 1001 Fourth were not able to conclude their negotiations. The Developer is requesting an extension to the ENRA to redesign the project on the Third Street parcels. The additional seventy-five days will allow the City and Developer to assess the feasibility of such development. If the extension is granted, the City would be precluded from soliciting other development proposals for the garage site until the conclusion of the ENRA period. Staff has engaged Seifel Consulting and Goldfarb and Lipman, counsel to the former Redevelopment Agency. Both firms have extensive experience in public-private real estate transactions. Goldfarb assisted the Redevelopment Agency with the ENRA and OPDDA on the Corporate Center and the sale of the Agency property and ultimate development of the Rafael Theatre, the Rafael Town Center and Lone Palm. COMMUNITY OUTREACH: Staff presented the garage reuse and housing concept to the Citizens Advisory Committee on Economic Development and Affordable Housing ("CAC"). The developer presented the conceptual plan to the Economic Vitality Committee of the San Rafael Chamber of Commerce ("EVC"). Both groups were supportive of additional market rate housing in the Downtown and requested City staff to negotiate for additional affordable units. Both groups felt that the project met numerous City goals and therefore, affordable housing should not be the main driver on this particular development. FISCAL IMPACT: The City is not committing any additional resources to this project other than staff and consultant time. There are sufficient funds in the Department's current contractual services budget to support the initial consultant work. The Developer has requested the City provide an appraisal to establish the market value of the garage property. Staff feels it is premature to commit to the cost of an appraisal. Staff will provide additional information on the appraisal cost to the City Council at a later date. OPTIONS: 1) Adopt the Resolution 2) Suggest changes to the proposed contract 3) Refuse to adopt the Resolution ACTION REQUIRED: Adopt Resolution. ATTACHMENTS: Resolution RESOLUTION NO. 14033 A RESOLUTION OF THE SAN RAFAEL CITY COUNCIL TO PROVIDE A SEVENTY-FIVE DAY EXTENSION OF AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT WITH LENNAR MULTIFAMILY COMMUNITIES, LLC TO DEVELOP HOUSING AND PARKING FOR THE CITY GARAGE LOCATED AT THIRD STREET AND LOOTENS PLACE WHEREAS, the City of San Rafael ("City") owns the real property and parking garage known as the Third-Lootens Parking Garage ("Parking Garage"); and WHEREAS, the City adopted a goal to "provide a vibrant Downtown" in "our Vision of Downtown" in 1993, which was later incorporated into the goals of the General Plan as Goal 6. General Plan Goal 6 includes the following implementation policies: NH 16 to substantially expand Downtown's economic success and increase opportunities for retail, office and residential development; NH 22 to create a popular and attractive residential environment that contributes to the activity and sense of community in Downtown; and NH 34 to encourage activities that will promote the Fourth Street Retail Core as being "Alive after Five"; and WHEREAS, one of the City Council goals is to provide neighborhood and economic vitality by supporting the development of key Downtown sites, and the City Council's Economic Development Committee has adopted "support development of key sites such as 1001-1009 Fourth Street" as one of its eight priorities; and WHEREAS, Lennar Multifamily Communities ("Developer") has proposed redeveloping the City Parking Garage at Third and Lootens and adjoining privately - owned properties on which Developer holds an option to purchase, including the property located at 1001 Fourth Street and 926 Third Street, into a mixed-use development, including new multi -family housing and related amenities, private parking and replacement public parking ("Project"); and WHEREAS, staff engaged Seifel Consulting to evaluate the preliminary economic feasibility of the proposed Project and the preliminary analysis indicates that the current proposal provides adequate financial consideration for the City to consider further negotiations regarding the potential Project; and WHEREAS, funds have been appropriated in the Economic Development Department budget for the current Seifel Consulting contract; and WHEREAS, the City Council approved an Exclusive Negotiating Rights Agreement ("ENRA") between the City and the Developer on August 17, 2015; and WHEREAS, staff and Developer have diligently conducted negotiations pursuant to the ENRA. The Developer no longer has an option to purchase the property located at 1001 Fourth Street and has requested a seventy-five day extension to the ENRA to redesign the project without that parcel; and WHEREAS, the staff report accompanying this Resolution provides additional information about the potential project. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of San Rafael as follows: 1. The City Council hereby finds and determines that the above recitals are true, correct and incorporated herein. 2. The City Council hereby approves a seventy-five day extension to the ENRA and authorizes the City Manager to execute on behalf of the City the ENRA extension in a from to be approved by the City Attorney provided, however, that nothing in this Resolution, the preparation of the ENRA or the conduct of the negotiations pursuant to the ENRA or the ENRA extension commits the City to approve any land use approvals for the Project or approve any agreement with the Developer. 3. The City Council authorizes and directs the City Manager and his/her designees to take such steps as are reasonable and necessary to performance of the City's obligations under the ENRA and to carry out the terms and conditions of the ENRA. 4. This Resolution shall take immediate effect upon adoption. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, herby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael held on the sixteenth day of November, 2015, by the following vote: AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin & Vice -Mayor McCullough NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Mayor Phillips `.1 ,c'.,-� ESTHER C. BEIRNE, City Clerk 2 ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval by the City Council. Save staff report (including this cover sheet) along with all related attachments in the Team Drive (T:) 4 CITY COUNCIL AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT - AGENDA TOPIC] From: Stephanie Agenda Item # 3.t) Date of Meeting: 11/16/2015 Department: ED Date: Click here to enter a date Topic: 75 day extension to ENRA Subject: Type: M Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Other: APPROVALS ® Finance Director Remarks: MM -Approved 11/9/15 ® City Attorney Remarks: LG- Approved 11/7/15 with minor changes. ® Author, review and accept City Attorney / Finance changes Remarks: ® City Manager Remarks: