HomeMy WebLinkAboutAgenda Report - September 19, 2012 J-01AGENDA ITEM J-01
yOF�
O`A ,Oo OF LODI
r'
COUNCIL COMMUNICATION
36
Oq<%FOR��P
AGENDA TITLE: Ordinance No. 1861 Entitled, "An Ordinance of the City Council of the City of Lodi
Rescinding Development Agreement Pertainingto the Developmentof 257.76
Acres Located on the West Side of Lower Sacramento Road Between Highway
12-Kettleman Lane and Harney Lane (Southwest Gateway) (Development
Agreement GM -05-001)"
MEETING DATE:
PREPARED BY:
September 19,2012
City Clerk
RECOMMENDED ACTION: Motion waiving reading in full and (following reading by title)
adopting the attached Ordinance No. 1861.
BACKGROUND INFORMATION: Ordinance No. 1861 entitled, "An Ordinance of the City Council of
the City of Lodi Rescinding DevelopmentAgreement Pertaining to
the Development of 257.76 Acres Located on the West Side of
Lower Sacramento Road Between Highway 12-Kettleman Lane and Harney Lane (Southwest Gateway)
(Development Agreement GM -05-001)," was introduced at the regular City Council meeting of August 15,
2012.
ADOPTION: With the exception of urgency ordinances, no ordinance may be passed within five days of
its introduction. Two readings are therefore required — one to introduce and a second to adopt the
ordinance. Ordinances may only be passed at a regular meeting or at an adjourned regular meeting;
except for urgency ordinances, ordinances may not be passed at a special meeting. id. All ordinances
must be read in full either at the time of introduction or at the time of passage, unless a regular motion
waiving further reading is adopted by a majority of all council persons present. Cal. Gov't Code§ 36934.
Ordinancestake effect 30 days aftertheirfinal passage. Cal. Gov't Code§ 36937
This ordinance has been approved as to form by the City Attorney.
FISCAL IMPACT:
FUNDING AVAILABLE:
None.
None required.
A �-D-
Randi Johl
City Clerk
RJljmr
Attachment
APPROVED:
Bartlam, City Manager
N:\Administration\CLERK\Council\COUNCOM\Ordinancel.DOC
ORDINANCE NO. 1861
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI
RESCINDING DEVELOPMENT AGREEMENT PERTAINING TO THE
DEVELOPMENT OF 257.76 ACRES LOCATED ON THE WEST SIDE OF
LOWER SACRAMENTO ROAD BETWEEN HIGHWAY 12-KETTLEMAN LANE
AND HARNEY LANE (SOUTHWEST GATEWAY)
(DEVELOPMENT AGREEMENT GM -05-001
-------------------------------------------------------------------
-------------------------------------------------------------------
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LODI AS FOLLOWS:
SECTION 1. The Lodi City Council passed Ordinance No. 1788 approving a
Development Agreement covering the following property:
Southwest Gateway: 257.76 acres located on the west side of Lower
Sacramento Road between Highway 12-Kettleman Lane and Harney
Lane, Assessors Parcel Numbers: 058-030-09, 058-030-03, 058-030-04,
058-030-05, 058-030-06, 058-040-01, 058-040-02, 058-040-04, 058-040-
05, and 058-040-14.
SECTION 2. Frontier Community Builders ("Frontiers"), the sole party to the above
referenced Development Agreement, requested that the agreement be rescinded by
letter of May 16, 2012, a copy of which is attached hereto and incorporated by reference.
However, Frontiers, Citizens for Open Government and the City entered into a
settlement agreement dated November 15, 2006 ("Settlement Agreement"), the
obligations of which were incorporated into the Development Agreement and into the
CEQA approvals set forth in Resolution 2006-209. This ordinance shall not terminate
any of the obligations set forth in the Settlement Agreement. Moreover, CEQA
Resolution 2006-209 shall continue in full force and obligate Frontiers to comply with all
of the obligations set forth inthe Settlement Agreement.
SECTION 3. The City Council hereby finds that termination of the Development
Agreement is in the best interest of the City to ensure that any construction is subject to
the new impact mitigation fee program, and to eliminate conditions in the Development
Agreement that could present barriers to housing construction in the current economy.
SECTION 4. The City Council hereby finds that the termination of the Development
Agreement is consistent with the General Plan land use designation and the zoning for
the proposed Development.
SECTION 5. The City Council hereby adopts Ordinance No. 1861 rescinding the
Development Agreement by and between the City of Lodi and Frontier Community
Builders. However, the Settlement Agreement and CEQA Resolution 2006-209 shall
continue in full force and obligate Frontiers to comply with all of the obligations set forth
in the Settlement Agreement.
SECTION 6. No Mandatory Duty of Care. This ordinance is not intended to and shall not
be construed or given effect in a manner which imposes upon the City, or any of icerfor
employee thereof, a mandatory duty of care towards persons or property within the City
or outside of the City so as to provide a basis of civil liability for damages, except as
otherwise imposed by law.
SECTION 7. Severability. If any provision of this ordinance or the application thereof to
any person or circumstances is held invalid, such invalidity shall not affect other
provisions or applications of the ordinance which can be given effect without the invalid
provision or application. To this end, the provisions of this ordinance are severable. The
City Council hereby declares that it would have adopted this ordinance irrespective of
the invalidity of any particular portion thereof.
SECTION 8. This ordinance shall be published onetime in the "Lodi News-Sentinel,"a
daily newspaperof general circulation printed and published in the City of Lodi, and shall
take effect 30 days from and after its passage and approval.
Approved this 19th of September, 2012
(JOANNEMOUNCE
ZJOY
, jMayor
City Clerk
-------------------------------------------------------------------
...................................................................
State of California
County of San Joaquin, ss.
I, Randi Johl, City Clerk of the City of Lodi, do hereby certify that Ordinance
No. 1861 was introduced at a regular meeting of the City Council of the City of Lodi held
August 15, 2012, and was thereafter passed, adopted, and ordered to print at a regular
meeting of said Council held September 19, 2012, by the following vote:
AYES: COUNCIL MEMBERS—Johnson, Katzakian, Nakanishi, and
Mayor Mounce
NOES; COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Hansen
ABSTAIN: COUNCIL MEMBERS— None
further certify that Ordinance No. 1861 was approved and signed by the Mayor
on the date of its passage and the same has beenPUO ed pursuant to law.
NDI L
A roved as to F City Clerk
D. STE HENS A AUER
City Attorney
2
May 16,2012
Mr. Rad Bardem
City Manager
City of Lodi
221 West Pine Street
Lodi, CA 95240
Re: Westside and Southwest Gateway Development Agreements —
Request for Tennhiation
Dear Rad,
Last April, 2011, I sent you a letter formally requesting termination of the
Westside and Southwest Gateway Development Agreements (see attached). The letter
followed nearly ten months of regular meetings with City Staff and their consultants
worldng on Lodi's Impact Mitigation Fee Program aNEP) update. We were convinced
then that the Westside and Southwest Gateway properties should be included in the IMFP
and the DevelopmentAgreements terminated. Now, over a year later, the IMFP update is
nearly complete, and the Westside and Southwest Gateway properties are an integral part
o f the updated BUR Clearly, then, it is time to move forwardto cancel the old Westside
and Southwest Gateway Development Agreements and establish an economic framework
for residential developmentto proceed within the current City limits.
At your request, I will outline below the main reasons we feel the Development
Agreements should be cancelled.
1. The Development Agreements did not address the actual impacts resulting from new
residential dev_elo-ornent.
When the Westside and Southwest Gateway projects were moving through the
entitlement process, the City's existing impact fee program - originally adopted in
1991- had riot been updated for 15 years. While the fees had been periodically
increased overtime, many of the underlying assumptions about program funding had
changed and it was those old fee programs that provided the basis for the
Agreements. Furthermore, other fees were included in the Agreements, some of
which bore little or no relationship to growth impacts from the Westside and Gateway
projects.
10100 TRINITY PARKWAY. SUITE 420 STOCKTON, CALIFORNIA 95219
209-957-81 12 FAX 209-957-3618 WWW.FCBHOMES.COM
Now, nearly six years later, the City has the cumulative benefit of precise plans for
the Westside and Southwest Gateway and a new General Plan. The City's Staff is
also approaching the end of a two year comprehensive study of growth impacts via
the IlVIFP`which include the Westside and SouthwestGatewayproperties. Their
work, along vAJh the Council's ultimate approval, will result in an updated, tailored
IMFP. The new IMFP will be a far better and more accurate way to mitigate impacts
fmm both the Westside and Gateway projects in comparison to the mitigation sought
by the Agreements.
2. TheDevelobment Agreements have afifteen year tempwere never implemented and
cannot be completed before they expire.
The national, state and local housing markets were at historic levels when the
Development Agreements were approved i n 2006. The fifteen year term of the
Agreements seemed reasonable at the tine given the active market conditions.
However, the nmzket has since plummeted to historic lows. Furthermore, City Staff,
consultants, and developers are not expecting new residential development to even
begin for anothertwo to three years. By that time, the DevelopmentAgreements will
only have approximately seven years remaining before they expire. This is less than
half the time that was deemed appropriate under the best of market conditions and
will simply not be sufficient time to complete these projects. At a minimum, the
Development Agreements need to be renegotiated to account for this fact alone.
However, as noted, it would be more accurate and efficient to put the entire City
under one (updated) IMPP. Having to renegotiate the Development Agreements,
regularly monitor compliance, and account for all funds and programs separate from
the EVUT would be time consuming and an unnecessary financial burden for
everyone involved.
3. The Develobment Ameements required predetermined lump sum payments for
certain fees that cannot be financed without a robust and consistenthousinm market.
Historically, the City's IMFP has been designed to be a "pay-as-you-go" system.
This allowed the pace of development to mirror the acceleration or decline of the
housing market. The proposed updated IMFP will likewise operate on a "pay-as-you-
go" basis. This is a more sustainable way to manage growth, particularly in a
community like Lodi - where the long term residential growth rate is relatively slow.
Development in Westside and Southwest Gateway will likaly occur in phases by
multiple development interests. While this is consistent with how development in
Lodi has occurred for many years, it males the payment of large, lurp suns on a
predetermined schedule virtually impossible to finance.
Development Agreements r, lump sin payments work best on large scale projects
expected to be completed in a predictable fashion. They can even work effectively on
small projects when the completion canbe reasonably forecasted. However, in a
community like Lodi, this structure will not work effectively on larger scale areas of
development over longer (less economically predictable) periods caf time.
Summary
While the issues outlined above are not exhaustive, they highlight several important
factors which underscore the need to terminate the Westside and Southwest
GatewayDevelopment Agreements. Alternatively, these Development Agreements could
be renegotiated, but that should be weighed against the inclusion of these projects in the
updated IMFP program.
The Agreements were executed dicing an unprecedented "Housing Bubble" fueled by the
"Irrational Exuberance" of a dysfunctional financial system. These dynamics no longer
exist and will not return in our lifetime. The housing market, as well as the overall
economy, is strugglingto find its footing following one ofthe worst recessions in history.
Fortunately, the City has moved on and set a course to plan for sustainable future growth
base on realistic assumptions.
The Westside and Southwest Gateway projects will be a major component of the Mys
planned growth plans for the next ten to fifteen years. With this in mind, it is our belief
that it will be more efficient, balanced and productive to utilize the updated IMFP for the
Westside and Southwest Gateway projects once it is adopted by the City Council.
Sincerely,
Thomas P. Doucette
President