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CITY COUNCIL AGENDA ITEM NO. 15

Meeting Date: January 11, 2004

Subject/Title: Approve a Resolution approving an Affordable Housing Agreement between the City of Brentwood and Lennar Homes (Brentwood Sand Creek Partners, LLC) for Subdivisions 8788, 8789, 8832 and 8833.

Prepared by: Kwame P. Reed, Housing Analyst

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a Resolution approving an Affordable Housing Agreement between the City of Brentwood and Lennar Homes (Brentwood Sand Creek Partners, LLC) for Subdivisions 8788, 8789, 8832 and 8833.

PREVIOUS ACTION
Ordinance 756 was adopted by the City Council on September 9, 2003 creating the City of Brentwood Affordable Housing Program. At its meeting of November 18, 2004, the Housing Subcommittee recommended approval of the Affordable Housing Agreement with Lennar Homes for Subdivisions 8788, 8789, 8832 and 8833.

BACKGROUND
Braddock and Logan was the original developer for Subdivisions 8788 and 8789, which were approved (Rezone, Tentative Map and Design Review) by the Planning Commission on March 2, 2004 for 311 single-family units. A portion of the project lies within the North Brentwood Redevelopment Project Area with 59 total parcels, the remaining 252 parcels are required to comply with the City’s Affordable Housing Ordinance. The average lot size for the project is 10,582 square feet with the 252 units having an average lot size of 9,495 square feet. The Housing Division staff had negotiated an agreement with the Lennar Homes, who acquired the project in the summer of 2004, to pay the associated in-lieu fees for both the very-low and low-income units. The negotiated agreement was based on the interim policy direction approved by the City Council’s May 25, 2004 action to allow developers of subdivisions with average lot sizes of over 8,500 square feet to “fee out” of both their very-low income unit obligation and their low-income unit obligation. The Housing Subcommittee reviewed the project originally at their October 21, 2004 meeting and requested staff work with the developer in obtaining one or more affordable units within the subdivision. After several discussions with the Developer, staff submitted the project for reconsideration at the November 18, 2004, Housing Subcommittee meeting that on a basis of consistency, recommended the Developer be allowed to “fee out”.

At the direction of the Housing Subcommittee, staff was instructed to provide the City Council with the same list of options that were presented at the November 18, 2004 Housing Subcommittee meeting. They were the following:

Obligation (subject to Housing Ordinance 756)
• 252 units X 10% X 50% = 12.6, say 13 units
• 13 units x 30% = 4 VL units
• 13units x 70% = 9 L units

Developer-proposed Compliance
The Developer has proposed three (3) options for compliance.
• Option 1 – Developer will purchase 13 apartment units at Town Centre Commons, making the units restricted for 55 years. The units will be designated 4 VL and 9 L.
• Option 2 – Developer will pay the in-lieu fee for all 13 units.
o 4VL X $106,044 = $424,176
o 9L X $75,179 = $676,611
o Total $1,100,787
• Option 3 – Developer will pay the associated in-lieu fee for the 4VL units and purchase 9L units at the Town Centre Commons.

The Housing Subcommittee is recommending the attached agreement to City Council for approval. With the average lot size over 9,000 square feet, the developer has agreed to Option 2, and will pay the required in-lieu fee of $1,100,787 within 5 days of the execution of this agreement. Staff concurs with the decision to accept the in-lieu fee for the units. Future projects that will be part of the Housing Division Expenditure Plan will be able to utilize these funds to provide additional housing units throughout the City.

FISCAL IMPACT
None at this time.

Attachments
Resolution
Affordable Housing Agreement
Implementation

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN AFFORDABLE HOUSING AGREEMENT BETWEEN THE CITY OF BRENTWOOD AND BRENTWOOD SAND CREEK PARTNERS (LENNAR HOMES) FOR SUBDIVISIONS 8788, 8789, 8832 AND 8833

WHEREAS, on September 9, 2003, the City Council adopted Ordinance 756, an Ordinance of the City Council of the City of Brentwood approving an amendment to the Municipal Code adding Chapter 17.725 that establishes an Affordable Housing Program; and

WHEREAS, Braddock and Logan had a Condition of Approval to their project to comply with the City of Brentwood Affordable Housing Program; and

WHEREAS, upon the transfer of the development rights to Lennar Homes, d.b.a. Brentwood Sand Creek Partners, all obligations are assumed by Brentwood Sand Creek Partners; and

WHEREAS, the Developer has agreed to pay in lieu fees in the amount of $1,100,787 within five (5) days of the execution of this Agreement by all parties.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve an Affordable Housing Agreement with Brentwood Sand Creek Partners (Lennar Homes) for Subdivisions 8788, 8789, 8832 and 8833 and the Mayor or the City Manager and City Clerk or any of their designees are authorized to execute the agreement and such other documents as may be needed to complete the transaction.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 11th day of January, 2005 by the following vote

AYES:
NOES:
ABSENT:
ABSTAIN :
_______________________ Brian Swisher
Mayor

ATTEST:
__________________________________
Karen Diaz, CMC
City Clerk/Director of Administrative Services

RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:

City of Brentwood
150 City Park Way
Brentwood, California 94513
Attn: City Clerk

Free Recording Requested Per Government Code Section 27383

AFFORDABLE HOUSING AGREEMENT
THIS AFFORDABLE HOUSING AGREEMENT (“Agreement”) is entered into as of the ____________day of_______________, 200__, by and between BRENTWOOD SAND CREEK PARTNERS, LLC, a Delaware limited liability company (“Developer”), and the CITY OF BRENTWOOD (“City”). The Developer and City (“Parties”) agree as follows, with reference to the following facts:
RECITALS
A. Developer owns that certain real property identified as Subdivisions 8788, 8789, 8832 and 8833 (APN 016-050-001, 016-060-001, 016-070-002, 016-070-001, 016-090-001 (the “Site”).
B. Developer proposed to construct on the Site a single-family residential development consisting of approximately 311 detached residential units (of which 252 units will be subject to this agreement) (the “Project”) (each lot, together with all improvements thereon and other rights appurtenant thereto, being referred to individually as a “Unit” and collectively as the “Units”) which Units shall be offered for sale.
C. All of the Units are located within City’s jurisdictional boundaries. However, 59 of the Units are also located within the boundaries of the Agency’s Merged Redevelopment Project Area (“Agency Units”). The Project’s remaining 252 Units are located outside of the Merged Redevelopment Project Area and are hereinafter referred to as the “City Units.”
D. City is acting to carry out its obligations under its Ordinance No. 756 (Brentwood Municipal Code Chapter 17.725) (the “Ordinance”), Section 65915 of the California Government Code, and the City’s General Plan (collectively, the “City Inclusionary Housing Requirements” or the “Affordable Housing Program”).
E. The Developer has elected to meet the requirements of the Affordable Housing Program (Brentwood Municipal Code Chapter 17.725) through an alternate equivalent proposal as provided in Brentwood Municipal Code Sections 17.725.004 and 17.725.006, by paying an in-lieu fee for its very-low and low obligations.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE 1
ALTERNATE EQUIVALENT PROPOSAL
• City Council approved a policy change to the Ordinance at their May 25, 2004 for subdivisions with an average lot size of 8,500 square feet or greater. The policy states :
Residential projects with lots that have an average size of 8500 square feet or more shall be eligible to pay in-lieu fees for very low and low-income units.
Because the average lot size associated with the Project is greater than 8,500 square feet, the Developer shall pay to the City an in-lieu affordable housing fee to comply with the requirements of the Ordinance for Restricted Units set aside for four (4) Very-Low Income Households and nine (9) Low Income Households. Developer shall pay an in-lieu fee in the amount set forth in Exhibit A, In Lieu of Constructing Affordable Housing Fee, attached hereto and incorporated herein by this reference. Such fee shall be due and payable to the City within five (5) business days after the execution of this Agreement by both parties.
• Developer’s execution of this Agreement and compliance with the terms and conditions herein, shall be deemed full and final satisfaction of all City Inclusionary Housing Requirements that may now exist, or that may hereafter be adopted by City, applicable to the Project.
ARTICLE 2
GENERAL PROVISIONS
2.1 Condition of Approval. Upon execution of this Agreement, City agrees that Developer has satisfied all general and specific subdivision map conditions applicable to the Project to the extent that such conditions relate to or obligate Developer to participate in the City’s Affordable Housing Program.
2.2 Notices. Notices required to be given to the City or to Developer shall be given by hand delivery, recognized overnight courier (such as UPS, DHL, or Fed Ex) or certified mail, return receipt requested, to the following addresses, or to such other address(es) as a party may designate from time to time by written notice to the other. All notices so given shall be deemed received (a) on the date delivered if hand delivered by receipted hand delivery or by overnight courier and (b) one day after postmark if sent postage prepaid by certified mail, return receipt requested.
2.3
To City:

Housing Manager
The City of Brentwood
City Hall
150 City Park Way
Brentwood, CA 94513

To Developer:

Brentwood Sand Creek Partners, LLC
c/o Lennar Homes
3130 Crow Canyon Pl., #310
San Ramon, CA 94583
Attn: Ms. Lynn Jochim

2.4 Amendment. This Agreement may be amended only in writing by City and the Developer.
2.5 No Third Party Beneficiaries. Notwithstanding anything in this Agreement to the contrary, there are not third party beneficiaries of this Agreement.
2.6 Effect of Agreement. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall have ay force or effect on any buyer of a single Unit of its right, title or interest in or to such Unit, except for the Restricted Units.
2.7 Default.
2.7.1 Any failure by Developer to perform any term or provision of this Agreement shall constitute an “Event of Default” (1) if Developer does not cure such failure within thirty (30) days following written notice of default from the City, or (2) if such failure is not of a nature which cannot reasonably be cured within such thirty (30) day period, Developer does not within such thirty (30) day period commence substantial efforts to cure such failure or thereafter does not within a reasonable time prosecute to completion with diligence and continuity the curing of such failure. The City shall not enforce any of its rights and remedies for breach by Developer except upon the occurrence of an Event of Default.
2.7.2 Any notice of default given hereunder shall specify in detail the nature of the failure in performance alleged by the City and the manner in which such failure of performance may be satisfactorily cured in accordance with the terms and conditions of this Agreement. During the time periods herein specified for cure of a failure to perform, the Developer shall not be considered to be in default of this Agreement for any purposes.
2.7.3 Any failure or delay by the City in asserting any of its rights or remedies as to any Event of Default shall not operate as a waiver of any Event of Default or of any such rights or remedies or deprive the City of its right to institute and maintain any actions or proceedings which it may seem necessary to protect, assert or enforce any such rights or remedies.
2.7.4 In the Event of Default under this Agreement, City shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other remedy proceedings to cure, correct or remedy such Event of Default.
2.7.5 In the Event of Default, failure by Developer to comply with the terms of this Agreement shall be grounds for the City to suspend issuance of building permits for the Project, or pursue any other remedy available to it pursuant to this Agreement or applicable law and/or demand an in lieu payment per City’s Affordable Housing Ordinance.
2.7.6. Upon any default or breach of this Agreement by City, Developer shall have the right to exercise any and all rights and remedies, and to maintain any actions at law or suits in equity or pursue any other remedy available to it pursuant to this Agreement or applicable law.
2.8. California Law. This Agreement shall be construed in accordance with and be government by the laws of the State of California.
2.9 Severability. Should any provision of this Agreement be found invalid or unenforceable by a court or other body of competent jurisdiction, said invalidity, unenforceability or ineffectiveness shall not affect the validity of the remaining provisions which shall remain in force to the maximum extent possible.
2.10 Entire Agreement. This Agreement contains the entire understanding between the parties relating to the transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. No provision of this Agreement may be amended, waived, or added except by an instrument in writing signed by the Parties hereto.
2.11 Incorporation of Exhibits. All exhibits referred in this Agreement are incorporated herein by reference.
2.12 Incorporation of Recitals. The Parties agree that Recitals A through E, above, are true and correct and are incorporated herein by this reference.
2.13 Counterparts. This Agreement may be executed in counterparts, which when taken together shall constitute a single signed original as though all parties had executed the same page.
2.14 Effective Date. The Effective Date if this Agreement shall be the date this Agreement is executed by both parties.
2.15 Attorney’s Fees. In the event any party to this Agreement commences litigation for specific performance or damages for the breach of this Agreement, the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys’ fees and court costs incurred.

IN WITNESS WHEREOF, City and Developer have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized.

Date: THE CITY OF BRENTWOOD and THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD
By:
City Manager and Executive Director

ATTEST:
By:
City Clerk

"CITY"
APPROVED AS TO FORM:

City Attorney
Date: BRENTWOOD SAND CREEK PARTNERS, LLC, a Delaware limited liability company
By: Lennar Homes of California, Inc., a California corporation,

Its: Managing Member

By:

Vice President

"DEVELOPER"
SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature
~~~~~~
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature

EXHIBIT “A”

In Lieu of Constructing Affordable Housing Fee
Number of Reserved Units
Subject to Fee Fee Amount Total Fee Due City
9 L 75,179 $676,611
4 VL 106,044 $424,176
$1,100,787

Payable within five (5) business days after execution of this Agreement by both parties.

RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
City of Brentwood
150 City Park Way
Brentwood, California 94513
Attn: City Clerk

Space Above Line for Recorder's Use Only
IMPLEMENTATION AGREEMENT
This Implementation Agreement (the "Agreement") is entered into this ____ day of _______________, 2004 by and between the City of Brentwood (the "City") and BRENTWOOD SAND CREEK PARTNERS, LLC, a Delaware limited liability company (the "Developer").
Recitals
A. The City Council of the City of Brentwood (the "City Council") adopted and approved the Affordable Housing Program for the City (the "Program") by Ordinance No. 756 on September 9, 2003. The Program requires that all developers of new residential subdivisions or development projects of four or more lots or residential dwelling units designed and intended for residential occupancy in the City's Planning Area produce a certain number of residential units that are set aside for low- and very-low income households. Alternatively, the Program permits the Developer to be in compliance with the Program by paying a fee in-lieu of constructing the required number of affordable units pursuant to the terms of the Program, provided that Developer and City enter into this Agreement.
B. The Developer has submitted a development application to the City in connection with certain real property located north of Old Sand Creek Road and west of Lone Oak Road, Brentwood, California, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property"). Developer proposes to construct a single-family residential subdivision on the Property of approximately 311 detached residential units (the “Project”). Two hundred fifty two (252) of the Project’s residential units are subject to the Program requirements.
C. The Program permits the Developer to be in compliance with the Program by satisfying one-half (1/2) of the production requirements otherwise set forth in the Program and/or paying a fee in lieu of constructing the required number of affordable units pursuant to the terms of the Program, provided that Developer and City enter into this Agreement.
D. Developer has requested of the City that it be permitted to pay a fee in lieu of constructing affordable units, and the City has approved such request.
E. The parties therefore desire to enter into this Agreement.
Agreements
NOW THEREFORE, based on the above recitals and in consideration of the matters set forth below, the Developer and City agree as follows:
Section 1. Developer Obligations. The Developer shall be deemed to have fulfilled its obligations under the Program by satisfying one-half (1/2) of the production requirements otherwise set forth pursuant to the Program. More specifically the Developer shall satisfy such obligation by paying an in-lieu fee in the amount of $1,100,787 to the City as set forth in more detail in the Affordable Housing Agreement between Developer and City dated ____________, and recorded against the Property (the “Affordable Housing Agreement”).
Section 2. Covenant Not to Sue. The Developer agrees that it will not raise any objections to or initiate or participate in, directly or indirectly, any litigation with regard to the Program, the Affordable Housing Agreement or this Agreement, or Developer's obligations hereunder or thereunder, provided, however that the foregoing covenant not to sue shall not apply to any litigation or any other proceeding brought by Developer to interpret or enforce its rights under this Agreement or the Affordable Housing Agreement.
Section 3. Successors and Assigns. The covenants contained in this Agreement shall be binding upon the parties and any successor in interest, heirs and assigns. Upon the transfer by Developer of all of its interest in the Property, all references in this Agreement to Developer thereafter shall mean and refer to such successor in interest of Developer as may then be the owner of the Property. Nothing contained herein shall amend, alter or modify any the terms of any other agreement limiting Developer’s right to transfer the Property, or part or interest therein.
Section 4. Remedies. In the event of any breach of any covenant contained herein, the non-defaulting party shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. Notwithstanding the foregoing, the event of a breach by Developer hereunder, the City's rights and remedies shall include, without limitation, the right to terminate this Agreement, in which case the Developer shall be obligated to comply with one hundred percent (100%) of the affordable unit production requirements set forth pursuant to the Program.
Section 5. California Law. This Agreement shall be construed in accordance with and be governed by the laws of the State of California.
Section 6. Severability. Should any provision of this Agreement be found invalid or unenforceable by a court or other body of competent jurisdiction, said invalidity, unenforceability or ineffectiveness shall not affect the validity of the remaining provisions which shall remain in force to the maximum extent possible.
[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the City and the Developer have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized.

Date:_______________________ CITY:
THE CITY OF BRENTWOOD
By:________________________________
City Manager
ATTEST:
By:________________________________
City Clerk

APPROVED AS TO FORM:
__________________________
City Attorney

Date:_______________________ DEVELOPER:
BRENTWOOD SAND CREEK PARTNERS, LLC, a Delaware limited liability company
By: Lennar Homes of California, Inc., a California corporation,
Its: Managing Member
By:_________________________________

Vice President

SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature
~~~~~~
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature

EXHIBIT A
Legal Description of the Property
 

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov