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CITY COUNCIL AGENDA ITEM NO. 10

Meeting Date: September 23, 2003

Subject/Title: Request for Time Extension for the Northwest Quadrant Exemption Area for the Residential Growth Management Plan (RGMP)

Submitted by: B. Grewal/M. Leana/B.Bornstein/T.Nielsen

Approved by: John Stevenson, City Manager

RECOMMENDATION
Approve a Resolution extending the time period for which projects in the Northwest Quadrant area are exempt from the Residential Growth Management Plan (RGMP) to July 6, 2004.

PREVIOUS ACTION
On July 6, 2001, by Resolution No. 2326, The City Council approved and adopted a RGMP to provide for the review and evaluation of residential growth in the City of Brentwood.

On November 26, 2002, by Resolution No. 2752, the City Council amended resolution 2363, by approving an extension of time for the exemption to the RGMP in the Northwest Quadrant area of the City until July 6, 2003, except the Pulte Homes’ Rose Garden Project, subject to approval of a tentative map by January 6, 2004.

On May 27, 2003, by resolution 2883, the City Council amended resolution 2752 clarifying that projects within the Northwest Quadrant Area that have an approved tentative map by October 6, 2003 shall be exempt from RGMP.

BACKGROUND
The RGMP was adopted in order to moderate the effects of rapid growth, and attempt to synchronize residential growth with infrastructure and municipal and public safety services. At the same time the City Council recognized that, due to its proximity to the Highway 4 Bypass, the Northwest Quadrant of the City was the key to job creation, increased retail sales taxes, and improved economic benefits. Consequently, the Northwest Quadrant area was given an exemption from the RGMP in order to allow enough time for property owners/developers to process their entitlements through the planning process and enable their properties to be included into the City’s Capital Improvement Financing Program (CIFP). These properties are then included into the assessment district under the 1913 and 1915 Improvement Act so that bonds could be issued against the properties for the financing and construction of the needed infrastructure prior to occupancy and in advance of the demands placed on the infrastructure by those residential units.

With the exemption time set to expire on October 6th, the Mayor felt it was important to analyze the sunsetting of the exemption compared to the remaining critical infrastructure in this Northwest Quadrant. A workshop has been scheduled for the City Council to review staff analysis of infrastructure and RGMP in the Northwest Quadrant, and determine if it desires to extend the exemption time period for this area of the City, or simply let it expire.

By examining the latest figures, the City Council's intent in adopting the RGMP is working; since its adoption in July, 2001, thirteen projects in the Northwest Quadrant exemption area, totaling 1445 units, have received discretionary approval. Another six projects also in the Northwest Quadrant exemption area, totaling 1018 units, are currently being processed. The remainder of the residentially zoned land in the Northwest Quadrant exemption area could generate another 501 units at mid-range build-out. Thus, the exemption provided to this area is working; it has stimulated the processing of nearly 2463 units in order to facilitate and pay for the needed infrastructure ahead of the residential development, to spur commercial development for the City.

But in the remainder of the City, only six projects, totaling 1212 units have received allocations since the adoption of the RGMP. As of the writing of this report, only four of those projects, totaling 325 units, have received discretionary approval of their tentative maps.

The RGMP appears to be slowing the overall rate of growth within the City, but the exemption for the Northwest Quadrant area is providing the intended financing for infrastructure in that area which the City Council desired.

The exemption has provided $16,738,500 in financing over the past two years (2002 and 2003) from the assessment district bond sales against these properties. The critical improvements being constructed include:

1) Lone Tree Way Widening - Segment 1 & 2 - Jeffery Way to Fairview Avenue
2) Lone Tree Way Widening - Subdivision No. 8546 Meritage Homes Frontage
3) Fairview Avenue Realignment
4) Empire Avenue - Grant Street to Shady Willow Lane

Further, there is critical infrastructure in the Northwest Quadrant that is under construction that will require additional funding of $1,936,360. The projects are as follows:

1) Lone Tree Way Widening - Segment 1 & 2 - Jeffery Way to Fairview Avenue: $500,000 funding shortfall
2) Shady Willow Lane Bridge over Sand Creek Road – reimbursement agreement with Meritage Homes for $1,180,030 to construct the bridge
3) Amber Lane – Shady Willow Lane to Empire Avenue – improvements in excess of Brentwood Union School District obligation ($256,330)

There is additional critical infrastructure that is needed in the Northwest Quadrant for better traffic circulation, public safety, enhance economic development in the City, as well as to assure that the roadways to schools and fire stations are built in the necessary timeframe prior to their occupancy. The following projects are presently in the design phase and need to be financed and are estimated to cost $21,600,000:

1) Lone Tree Undercrossing of the Union Pacific Railroad
2) Lone Tree Way Widening from the Railroad to O’hara Avenue
3) Shady Willow Lane Improvements from Lone Tree Way to Grant Street
4) Sand Creek Road from the State Highway 4 Bypass to San Jose Avenue Extension

Therefore the total infrastructure cost is projected to be $23,536,000. This includes both projects in construction and projects in design.

The inclusion of the 1018 additional units within the Northwest Quadrant as part of the assessment district/bond sales for the prepayment of facility fees, and the developer roadway fee obligation is critical to obtain the majority of the necessary financing to construct the critical master planned roadway infrastructure in the Northwest Quadrant area. The total amount of money generated from the sale of bonds is projected to be approximately $19,342,000. This figure is determined utilizing the figures for bonding capacity from the 2003 CIFP, plus inflation. This figure is $19,000, per single family dwelling multiplied by the number of units assumed to be included into the next assessment district from the Northwest Quadrant (1018 units, assuming City Council agrees with staff recommendation). The nine month extension will allow sufficient time for these lots to get entitlements through the approval process and be incorporated into the assessment district / sale of bonds in 2004. If the projects, projected to be incorporated into CIFP 2004, do not participate in the time frame required, assessment funding from other developments outside the Northwest Quadrant area, or facility fees, will be required to make up this shortfall in funding. The assessment district/sale of bonds will help finance the critical roadway infrastructure stated above.

Since the bonding capacity for the necessary improvements is less than the cost to construct ultimate improvements, the improvements can be scaled back to include the critical elements of each project. For instance, by removing the landscaping and irrigation along the parkways of the projects, but installing the landscaping in the median islands the cost of infrastructure can be reduced by $2,463,000. With this reduction the total cost of necessary infrastructure in the Northwest Quadrant is $21,073,000. Also, presently the Arbor Ridge Apartments on Shady Willow Lane is proceeding with their project and is not participating in a CIFP but will prepay roadway fees estimated in the amount of $801,000. Therefore, the shortfall of funding for the critical infrastructure through the sale of assessment district bonds is $930,000. This financial shortfall can be borrowed from the water or sewer facility fee funds to complete these improvements. We are very close to creating enough financing through 2004 CIFP to pay for the critical infrastructure in the Northwest Quadrant area and deferring the construction of the parkway landscaping to complete these improvements. This deferral will also reduce the costs for the lighting and landscape district maintenance for the landscaping areas.

If the exemption in the Northwest Quadrant is not extended then the development would be required to follow the guidelines of the RGMP program, extending the approval of the project tentative map beyond the timeline for the next Capital Improvement Financing Program in 2004.
The City would not obtain funding from the inclusion of the additional units within the Northwest Quadrant area as part of the assessment district/bond sales.

The benefits of extending the date of the exemption in the Northwest Quadrant to July 2004 are as follows: It is staffs conservative projection that this nine month time extension will allow all the projects currently in process in the Northwest Quadrant area to obtain tentative map approval. The projects must obtain tentative map approval by July 2004 in order to meet the deadline to participate in the next CIFP 2004. It is critical to meet this deadline to sell bonds in August to make the tax roll in September, and avoid capitalized interest costs against the total bond amount.

Staff feels that the additional 1018 units within the Northwest Quadrant exemption area that are currently being processed need to be included as part of the assessment district/bond sales for CIFP 2004 to provide the critical master planned roadway improvements in the Northwest Quadrant area. The money generated through the participation in the 2004 CIFP can finance the infrastructure detailed above, assuming parkway landscaping will be constructed as future development occurs. It is therefore staffs recommendation that the exemption for the Northwest Quadrant area be extended for an additional nine months, until July 6, 2004, to enable these projects to obtain the necessary discretionary planning approvals.

FISCAL IMPACT
If the Northwest Quadrant exemption is not extended, fewer lots will be included in the assessment district for 2004. The amount of infrastructure improvements would need to be scaled back significantly, delaying the necessary improvements for traffic circulation, public safety and economic development in this area of the City, or additional funding from other City sources estimated at $19,342,000 be injected into the system.

Attachments
Resolution
Map of residential projects in the Northwest Quadrant RGMP exemption area
Northwest Quadrant Infrastructure Map

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN EXTENSION OF TIME FOR THE EXEMPTION TO THE RESIDENTIAL GROWTH MANAGEMENT PROGRAM (RGMP) FOR PROPERTIES IN THE NORTHWEST QUADRANT AREA OF THE CITY AS PREVIOUSLY DEFINED UNTIL JULY 6, 2004.

WHEREAS, On July 6, 2001, by Resolution No. 2326, The City Council approved and adopted a RGMP to provide for the review and evaluation of residential growth in the City of Brentwood; and

WHEREAS, On November 26, 2002, by Resolution No. 2752, the City Council amended resolution 2363, by approving an extension of time for the exemption to the RGMP for properties in the Northwest Quadrant area of the City until July 6, 2003; and

WHEREAS, On May 27, 2003, by resolution 2883, the City Council amended resolution 2752 clarifying that project within the Northwest Quadrant Area that have an approved tentative map by October 6, 2003, shall be exempt from RGMP except the Pulte Rose Garden Project which is subject to approval of a tentative map by January 6, 2004; and

WHEREAS, in recognizing the importance of the Northwest Quadrant area as the key to major job creation, retail sales tax benefits, and major infrastructure improvements that would benefit the entire community, this area was given an 18 month and a nine month exemption from the RGMP; and

WHEREAS, during this exemption period the City has processed and approved thirteen projects, totaling 1445 dwelling units, in the Northwest Quadrant area; and

WHEREAS, the city is currently processing an additional six projects, totaling 1018 dwelling units, in the Northwest Quadrant area which will not have completed the planning process prior to the expiration of the 27-month exemption period on October 6, 2003; and

WHEREAS, infrastructure improvements in the Northwest Quadrant area have begun and additional dwelling units are needed to be included in assessment districts currently being drawn up so that bonds are sold to insure the completion of the needed infrastructure in the Northwest Quadrant area; and

WHEREAS, without the continuation of the exemption in the Northwest Quadrant area the application of the RGMP would conflict with and hinder the provision of the necessary infrastructure in this area.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Brentwood, hereby finds and determines as follows:

Section 1. The foregoing recitals and staff report statements are found and determined to be true and correct.

Section 2. The City council adopts the Revised RGMP Exemptions as indicated below: (revisions are reflected by strike-out and italics)

Exemptions:

The following are exempt from the Allocation Process, and will not be subtracted from the total dwelling unit allocation available, unless otherwise indicated:

1. Affordable housing units.
2. Projects that have an approved Tentative or Final Map, Building Permit or other City entitlement, development agreement, are in the Garin Ranch Specific Plan area south of Chestnut Street, or have an application which has been deemed complete by the City, prior to the date of adoption of the RGMP.
3. Replacement housing on a one for one basis (i.e., one unit replaced for each legally existing unit destroyed or demolished) or modifications to existing properties that do not increase the number of dwelling units. These units will NOT be deducted from the annual Allocation Schedule because no new units are being created.
4. Residential care facilities with units that are non-self-sufficient units; that is, they do not include kitchen facilities (if a project includes both self-sufficient and non-self-sufficient units, only the latter are exempt. Non-self-sufficient residential care units will NOT be deducted from the Annual Allocation Schedule because they are similar to a convalescent home and are not considered to be a dwelling unit).
5. If a residential development receives an Annual Allocation and all other City entitlements to develop, and that development, pursuant to California Government Code Section 65915 is subject to the State mandate that the City provide the developer a density bonus, the bonus units over and above the permitted mid-range density will NOT be deducted from the Annual Allocation Schedule.
6. Projects in the Northwest Quadrant area, as shown in the map attached to this RGMP, and subject to approval of a tentative map within 18 months of adoption of this RGMP by July 6, 2004.
PASSED AND ACCEPTED by the City Council of the City of Brentwood at its regular meeting of September 23, 2003 by the following vote:

 

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