REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Affordable Housing Agreement with LS-Santa Clara, LLC for the Project Located at 1433-1493 El Camino Real
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
On December 3, 2019, City Council approved the Affordable Housing Agreement with LS-Santa Clara, LLC for Project located at 1433-1493 El Camino Real. The Parties entered into the Original Agreement for the purpose of having Developer provide four (4) Below Market Purchase (BMP) units designated as Units 6, 10, 24, and 28. The Developer now wishes to amend the Original Agreement to replace unit #6 with unit #3; however, the Plan identification and Affordable Sales Price will remain the same.
The project consists of for-sale condominium units with attached two-car garage distributed among five three-story buildings; a private street and eight visitor parking spaces with access from Civic Center Drive; and common landscaped open space and a 3,048 square foot on-site private recreation area. The project also includes future private maintenance provisions with the establishment of a Homeowners Association and Covenants, Conditions and Restrictions.
As a condition of the land use entitlements, and per the City’s inclusionary housing policy governing at the time of the entitlement, the Developer was required to enter into an Affordable Housing Agreement (AHA) with the City to designate 10 percent of the total units (i.e., 3.9 dwelling units) as Below Market Purchase (BMP) units to be sold to qualified first-time homebuyers at an affordable price based upon Area Median Income (AMI).
DISCUSSION
The BMP Policies and Procedures Guidelines adopted by the City Council (“BMP Program”) provide that in the case of a fractional obligation of 3.9 units, a developer can either elect to provide four (4) BMP units or three (3) BMP units and pay a BMP in-lieu fee for the fractional units. In this case the Developer is proposing to provide four BMP units. The BMP units will be sold to households whose incomes are at or below 110 percent of 2019 AMI with an average affordability level of 100% AMI. The resulting sales prices for the BMP units will be as follows:
• 3 bedroom/ and 3 Bath, Plan 1 $388,000 (90% AMI)
• 3 bedroom/ and 3 Bath, Plan 1 $445,000 (100% AMI)
• 3 bedroom/ and 3 Bath, Plan 2 $445,000 (100% AMI)
• 3 bedroom/ and 3.5 Bath, Plan 3 $472,000 (110% AMI)
At the time of approval, the Developer designated Units 6, 10, 24 and 26 as affordable.
The sales staff mistakenly sold unit 6 as a market-rate home during early December and were unable to cancel the sale. As per Amendment No. 1, Unit 6 will now be replaced with Unit 3 which has the same plan layout, square footage, and Affordable Sales Price.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
In accordance with the policies of the BMP Program, the City will realize a recapture of the inclusionary subsidy value of the BMP units when resold in the future if the unit is sold within twenty (20) years of the date of the AHA. The principal amount of the BMP subsidy value is due in full at the end of the 20-year term.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> .
RECOMMENDATION
Recommendation
1. Approve and authorize the City Manager to execute Amendment No. 1 to the Affordable Housing Agreement with LS-Santa Clara, LLC, to execute amendments thereto, and to take any other action necessary to implement the requirement for the provision of four (4) Below Market Purchase homes within a 39-unit townhome project at 1433-1493 El Camino Real; and
2. Authorize the recordation thereof.
Staff
Reviewed by: Andrew Crabtree, Director, Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Amendment No. 1
2. Affordable Housing Agreement with LS-Santa Clara, LLC