HomeMy WebLinkAboutOrdinances - No. 1861ORDINANCE 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
AND HARNEY LANE (SOUTHWEST GATEWAY)
LOWER SACRAMENTO ROAD BETWEEN HIGHWAY 12-KETTLEMAN LANE
(DEVELOPMENT AGREEMENT GM-05-001 ................................................................... ...................................................................
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LODl 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,
05, and 058-040-14.
058-030-05, 058-030-06, 058-040-01 , 058-040-02, 058-040-04, 058-040-
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referenced Development Agreement, requested that the agreement be rescinded by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, 201 2, 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 in the 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.
1
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 officer for
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 one time in the "Lodi News-Sentinel," a
daily newspaper of general circulation printed and published in the City of Lodi, and shall
take effect 30 days from and after its passage and approval.
ApRroved this 19" of September, 2012
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, 201 2, by the following vote:
................................................................... ...................................................................
AYES:
NOES; COUNCIL MEMBERS - None
ABSENT: COUNCIL MEMBERS - Hansen
ABSTAIN: COUNCIL MEMBERS - None
I further certify that Ordinance No. 1861 was approved and signed by the Mayor
COUNCIL MEMBERS - Johnson, Katzakian, Nakanishi, and
Mayor Mounce
on the date of its passage and the same has been pu ed pursuant to law. P
City Clerk
- City Attorney
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May 16,20 I2
Mr. IRad Bartlem
City Manager
City of Lodi
22 I West Pine Street
Lodi, CA 95240
Re: Westside and Southwest Gatewav Development Agreements -
Request for Termination
Dear Rad,
Last April, 201 1 , I sent you a letter formally requesting termination of the
Westside and Southwest Gateway Development Agreements (see attached). The letter
fobllowed nearly ten months of regular meetings with City StaEand their consultants
working on Lodi’s Impact Mitigation Fee Program (IMFP) update. We were convinced
then fhat the Westside and Southwest Gateway properties should be included in the WP
and the Development Agreements terminated. Now, over a year later, the IMFP update is
nearly compiete, and the Westside and Southwest Gateway properties are an integral part
of the updated IMFP. Clearly, then, it is time to move forward to cancel the old Westside
and Southwest Gateway Development Agreements and establish an economic fiamework
for residential development to proceed within the current City Iiits.
At your request, I will outline below the main reasons we feel the Development
Agreements should be cancelled.
1. The DeveloDment Agreements did not address the actual impacts resulting from new
residential develoDment.
When the Westside and Southwest Gateway projects were moving through the
entitlement process, the City’s existing impact fee program - originally adopted in
2991 - had riot been updated for 15 years. V&le the fies had been periodically
increased over time, 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. I Fa
lo100 fRlNlsV PARKWAY, SUITE 420 STOCKTON. CALIFORNIA 95219
209-957-8f 12 FAX 209-957-36 I8 WWW.FCBH0MES.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 StaE is
also approaching the end of a two year comprehensive study of growth impacts via
the IMFP’ which include the Westside and Southwest Gateway properties. Their
work, dong with the Council’s ultimate approval, wiIl result in an updated, tailored
IMFP. The new IMFP will be a far better and more accurate way to mitigate impacts
from both the Westside and Gateway projects in comparison to the mitigation sought
by the Agreements.
2. The Development Aseements have a fifteen year term. were never implemented and
cannot be completed before they exoire.
The national, state and local housing markets were at Iistoric levels when the
Development Agreements were approved in 2006. The fifteen year term of the
Agreements seemed reasonable at the tirue given the active market conditions.
However, the market has since plummeted to historic lows. Fdemore, City Staff,
consultants, and developers are not expecting new residential development to even
begin for another two to three years. By that time, tlie Development Agreements 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) WP. Having to renegotiate the Development Agreements,
regularly monitor compliance, and account for ali funds and programs separate from
the IMFP would be time consuming and an unnecessary financial burden for
everyone involved.
3. The Develoment Agreements reauired predetermined lump sum pavments for
certain fees that cannot be financed without a robust and consistent housing inarket.
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, pmticuiarly in a
cornunity like Lodi - where the long term residential grawth rate is relatively slow.
Development in Westside and Southwest Gateway will likely occur in phases by
multiple development interests. While this is consistent with how development in
Lodi has occurred for mmy years, it makes the p3yment of large, lump sums OR a
predetermined schedule virtually impossible to fmance.
Development Agreements with lump sum payments work best on large scale projects
expected to be completed in a predictable fashion. They can even work effectiveIy on
small projects when the completion can be reasonably forecasted. Rowever, in a
cornunity like Lodi, this structure WiIl not work effectively on larger scale areas of
development over longer (Iess economically predictable) periods of time.
While the issues outlined above are not exhaustive, they highlight several important
factors which underscore the need to terminate the Westside and Southwest
GatewayDevelopntent Agreements. Alternatively, these Development Agreements could
be renegotiated, but that should be weighed against the inclusion of these projects in the
updated WP program.
The Agreements were executed during an unprecedented “Huusing Bubble” heled 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 struggling to fmd its footing followkg one of the 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 City’s
planned growth plans for the nex3 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,
Thonias P. Doucette
Presideni
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