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HomeMy WebLinkAboutSPJT Minutes 1998-04-06SRCC/SRRA MINUTES (Spec. Jt.) 4/6/98 Page 1 IN THE COUNCIL CHAMBER, CITY OF SAN RAFAEL, MONDAY, APRIL 6, 1998, AT 8:10 PM Special Joint Public Hearing: Present: Albert J. Boro, Mayor/Chairman San Rafael City Council/ Paul M. Cohen, Councilmember/Member San Rafael Redevelopment Agency Gary O. Phillips, Councilmember/Member Absent: Cyr Miller, Councilmember/Member Barbara Heller, Councilmember/Member Others Present: Rod Gould, City Manager/Executive Director Lee Rosenthal, Redevelopment Agency Attorney Gary Ragghianti, City Attorney Jeanne M. Leoncini, City Clerk/Agency Secretary SPECIAL JOINT PUBLIC HEARING - TO CONSIDER A DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) FOR THE FORMER MACY'S SITE AT 998 FOURTH STREET, LOCATED AT THE NORTHEAST CORNER OF FOURTH AND COURT STREETS (APN 11-222-01 AND 04) TO RAFAEL TOWN CENTER, LLC (RA) - File R-380 x (SRCC) 140 Mayor/Chairman Boro declared the public hearing opened, and asked for the staff report. Senior Planner Katie Korzun reported the Redevelopment Agency selected Samuelson/Schafer as the Developer for this site in March, 1997, noting the Agency has been operating under an Exclusive Right to Negotiate which expires this evening. She stated a Disposition and Development Agreement (DDA) has been negotiated, and if approved, would take the Agency out of the Right to Negotiate phase, and into a more active construction phase. Ms. Korzun stated the Agency purchased this site with the intent of developing a project that would further the Vision of Downtown San Rafael, and significantly improve the Downtown's vitality. She reported the project would consist of 113 residential units, 38,000 square feet of Office space, and 24,000 square feet of Retail space. She stated the project design, which is attached to the Disposition and Development Agreement, consists of plans that were recommended for approval by the Design Review Board last October, with the addition of the Plaza. She noted the Plaza concept plan, which is the closure of Court Street and its transition into a Plaza, was approved in concept by the Agency, and has been incorporated into this project. Ms. Korzun stated the proposal with this DDA was for the Developer to construct the first phase, or a basic level of improvement, not the full $500,000 Plaza, but $150,000 toward those improvements. She noted the idea was that while they are under construction, an economy of scale would be achieved, and we would be able to get more Plaza for the $150,000. She stated what we would get for that amount of money has not yet been determined, noting that would be worked out with the Developer, and brought back before the Agency for approval. Referring to the timing on this project, Ms. Korzun reported that within 180 days following approval of the Use Permit, which is scheduled for May 12th, the Developer will submit the construction plans, and apply for the Demolition Permit and Building Permit, and at the same time, he must submit a financing plan. She noted that once a Building Permit has been issued, construction must begin within 30 days, and must proceed to completion within 24 months of the start of construction. Ms. Korzun stated one of the major issues discussed at the time the Developer was chosen was who would be selected as the major retail tenant, and noted there is a provision in the DDA that will require the Developer to bring a list of the retail tenants before the Agency for approval prior to the signing of a final lease. She reported the purchase price has been set at $2,140,000, noting that is over the $2 million the Agency paid for the site. She stated staff considered the price to be at least equal to the Fair Market Value for the Highest and Best Use, as stated in the Redevelopment Plan. Ms. Korzun reported the Developer has proposed that 38 units, which is over the allowable density bonus units, would be affordable to low and moderate income households, noting half the units would be 80% of median income, and the other half would be 90% of median. Ms. Korzun stated the Agency's Implementation Plan is consistent, noting the Macy's Project Re -use was specifically included as an implementation in the Plan. Regarding Environmental Review, she reported the Agency had just approved the Negative Declaration, and no further Environmental Review is required on this project, explaining the mitigation measures identified in the Negative Declaration would be approved here. Addressing the issue of fiscal impact, Ms. Korzun stated the DDA provides for a SRCC/SRRA MINUTES (Spec, Jt.) 4/6/98 Page 1 SRCC/SRRA MINUTES (Spec. Jt.) 4/6/98 Page 2 sale price that is higher than the Agency's purchase price, so there will be a net increase received by the City. In addition, the Developer is contributing $150,000 toward the Court Street Plaza. Councilmember/Member Cohen noted the staff report and the language of the headers were not entirely consistent with each other, or with his understanding of how this is to be approached. He noted that in the Recommendation section of the staff report, the City Council is being asked to approve a Resolution approving and executing a Disposition and Development Agreement between the Redevelopment Agency and Rafael Downtown Center, LLC, and then the Redevelopment Agency is asked to approve and authorize execution of the Disposition and Development Agreement. He stated the second recommendation was consistent with his understanding that it is the Redevelopment Agency that is executing the DDA, while the language stating the City Council is approving and executing the DDA seems incorrect. Agency Attorney Lee Rosenthal stated there had been a typographical error, and the City Council Resolution was just approving the Disposition and Development Agreement, noting the City does not execute the Agreement, and the words "and execution" should be removed from the title. Mr. Cohen asked if it should correctly read, "A Resolution of the San Rafael City Council Approving the Disposition and Development Agreement Between the Redevelopment Agency and Rafael Town Center, LLC?" Mr. Rosenthal stated that was correct. Mr. Cohen noted the staff report would also change accordingly. Councilmember/Member Cohen referred to the Housing issue, noting it was stated that the 38 units were consistent with the Density Bonus. He asked if that meant that in order to get these 38 units, all 38 would have to be affordable? Ms. Korzun stated that was the proposal being made. She reported State law states if someone applies for a Density Bonus, the City would have to grant at least a 25% increase in density, and the affordability is left open. She noted the City has generally requested that all density bonus units be low and moderate, but that is just a negotiation point in the Disposition and Development Agreement. Mr. Cohen asked whether or not there might be some room to move at least a couple of those units down to the 70% range? Economic Development Director Jake Ours stated that could be done, and the Density Bonuses could still be granted, noting 15% was looked upon as the "magical" number for affordability of the project. Mr. Cohen noted that on Page 7 of the DDA there was a section regarding affordability which specifies 38 units at the rates stated in the staff report. Councilmember/Member Cohen wondered, if the DDA were approved at this time, would there be an opportunity to come to a mutually agreeable arrangement on modifying the numbers, and could they come back and amend this specific paragraph and adjust the numbers accordingly? Mr. Ours stated that could be done, noting the Council or Agency could give staff the authority to do this now, or it could be brought back at a later date. Mr. Ours noted staff had looked at some changes in those numbers, reporting that when it gets down to 70%, the number of total affordable units is reduced. He stated they had considered changing 9 of the units to 70%, and leaving 9 at 90%, which were the numbers that worked at that time; however, that would lower the total number of affordable units from 38 to 18. Mr. Cohen stated he would like to take a closer look at some of the trade-offs, noting if there is an opportunity to get a little bit more affordability out of some of these units he would like to consider that. He suggested perhaps we could revisit the issue of finding someone to help buy -down the cost of some of these units. Mayor/Chairman Boro agreed with Mr. Cohen; however, he pointed out we were looking at 38 units that will be Below Market Rate, and felt it was important that we have a high number out of this project. He stated it would be interesting to see how the equation came out, noting 9 (at 70%) and 9 (at 90%) did not get him too excited, and he would not want to lose 18 or 20 units to have 9 at 70%. Mr. Cohen stated this was the kind of thing he would like to have more information on, and he would like to know what Market Rate is for these types of units, noting they were looking at figures based on affordability, which in turn is based on median income. He believed that as long as they could still have this discussion at a later date, they could keep the project moving forward. Councilmember/Member Miller stated he preferred to look at this in a more "global" way, and see the entire package. He believed we should also look at the rates at Lone Palm and Centertown, so we see the entire package throughout Downtown, noting we might find that we have a number of units at 50% or 70%, and decide this project might be a nice fit as proposed. He believed that in looking at the entire package we might find we are coming in with a much more diversified program. Mr. Ours stated staff could present that at the next meeting. Councilmember/Member Phillips believed there might be other approaches in addressing the low to moderate income housing, to get a greater number of units at perhaps even a lower monthly rate. He felt that instead of just shifting SRCC/SRRA MINUTES (Spec, Jt.) 4/6/98 Page 2 SRCC/SRRA MINUTES (Spec. Jt.) 4/6/98 Page 3 units back and forth to equal what we have now, perhaps we should consider other alternatives. Mayor/Chairman Boro invited public comment. Mayor/Chairman Boro explained for those in the audience who did not have a copy of the staff report that the Councilmembers/Members were referring to a chart that addresses potential rental rates. As an example, one person in a studio unit would pay $960 per month at 80% of Median; $1,080 at 90%; and $1,200 at 100%. He stated the Council/Agency was trying to determine if there were ways in which more housing could be made available below $960 per month, and still maintain a large number of workforce housing on this site. Elissa Giambastiani, President of the San Rafael Chamber of Commerce, stated the Chamber had spoken briefly with the Developer and Mr. Ours about the possibility of modifying the affordability. She stated the problem we had was the fact that Marin County's income is so high, noting that when referring to one person income of $38,000 as being low income, in reality that is hardly what we would consider in terms of the workforce. She stated she was most concerned about the studios, noting that with a 1 bedroom apartment, you assume there may be two people who, even if they are making in the low $20,000's, could afford that; however, the average salary paid to Marin workers is $32,000, and it was her guess there were a considerable number of employees right here at the City who make less than the $38,000 figure shown in the chart. Ms. Giambastiani stated the Chamber would like members of their Affordable Housing Committee to discuss this with the City, noting she and Mark Garwood, Chairman of the Affordable Housing Committee, were going to make an appointment to discuss the possibility of finding funds to buy -down some of those units, to increase the affordability. Phillip "Casey" Fields, resident of San Rafael, stated people assume the statistics for median income in Marin County is such that everyone can afford it; however, in reality, that is not the case, noting there are many college students and disabled persons who, for one reason or another, have very low, fixed incomes. Mr. Fields asked, since the City Council has the goodwill to make housing affordable, would it be possible for the City Council and the people involved in this project to be more specific, and make a percentage of this housing affordable for people on Section 8? Mayor/Chairman Boro stated that was not something that would be appropriate for this site. He noted Centertown, on Third and "C" Streets, was 100% affordable, with the units ranging all the way down to $350 per month. Mr. Ours stated the Centertown units were at the 30% to 35% level. Mayor/Chairman Boro stated the City had made a sustained effort to address that market, noting that had not been done through Section 8 housing, but through the Redevelopment Agency and a private Developer. City Manager/Executive Director Gould explained it would be the decision of the Marin Housing Authority whether or not to grant Section 8 certificates for this project, and not the City's decision. Mr. Fields noted there are disabled individuals who require 2 bedroom apartments, and urged the Council/Agency to seek other means of incorporating a percentage of units to meet those needs. Jim Schafer, Project Sponsor representing Samuelson/Schafer, reported it was their intention to dovetail the start of construction of the Macy's project with the need for fill at the Fair, Isaac site. He explained they would begin excavation in July, and export the fill to the Fair, Isaac site, allowing them to complete their cap by the end of August or early September. He noted this maneuver was a little tricky, because it requires a fast track of the permit process, in terms of the Excavation and Foundations Permits, and the issuance of the permits on a phased basis. However, this was a real opportunity for the City to get both projects going as fast as possible. There being no further public comment, Mayor/Chairman Boro closed the public hearing. Councilmember/Member Cohen stated this had been a long time in coming, and he believed everyone looked forward to seeing this project get started quickly, and seeing a quality construction project which, in itself, will provide good jobs for the City, and ultimately, will be a real boost to our Downtown and retail, and add to the overall mix of housing in the Downtown. SAN RAFAEL CITY COUNCIL - File 140 x (SRRA) R-380 Councilmember Cohen moved and Councilmember Miller seconded, to adopt the Resolution approving the Disposition and Development Agreement between the San Rafael Redevelopment Agency and Rafael Town Center, LLC for the Macy's site. SRCC/SRRA MINUTES (Spec, Jt.) 4/6/98 Page 3 SRCC/SRRA MINUTES (Spec. Jt.) 4/6/98 Page 4 RESOLUTION NO. 10035 - RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE SAN RAFAEL REDEVELOPMENT AGENCY AND RAFAEL TOWN CENTER, LLC. AYES: COUNCILMEMBERS:Cohen, Miller, Phillips & Mayor Boro NOES: COUNCILMEMBERS:None ABSENT: COUNCILMEMBERS:Heller SAN RAFAEL REDEVELOPMENT AGENCY - File R-380 x (SRCC) 140 Member Miller moved and Member Phillips seconded, to adopt the Resolution approving and authorizing Execution of a Disposition and Development Agreement between the San Rafael Redevelopment Agency and Rafael Town Center, LLC, for the Macy's site. RESOLUTION NO. 98-13 - RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY APPROVING AND AUTHORIZING EXECUTION OF DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE SAN RAFAEL REDEVELOPMENT AGENCY AND RAFAEL TOWN CENTER, LLC. AYES: MEMBERS: Cohen, Miller, Phillips & Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: Heller Mayor/Chairman Boro stated this was a great opportunity for our City to really turn that corner, which is a very significant corner in our Downtown. He believed this project, plus the Rafael Theater and Fair, Isaac have really turned the nature of the City toward the twenty-first century. There being no further business, the meeting was adjourned at 8:35. JEANNE M. LEONCINI, CITY CLERK/AGENCY SECRETARY APPROVED THIS 1998 DAY OF VICE -MAYOR OF THE CITY OF SAN RAFAEL/ REDEVELOPMENT AGENCY VICE CHAIRMAN SRCC/SRRA MINUTES (Spec, Jt.) 4/6/98 Page 4