HomeMy WebLinkAboutOrdinances - No. 1862ORDINANCE NO. 1862
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODl
RESCINDING DEVELOPMENT AGREEMENT PERTAINING TO THE
DEVELOPMENT OF 151 ACRES LOCATED ON THE WEST SIDE OF
LOWER SACRAMENTO ROAD BETWEEN THE WOODBRIDGE
IRRIGATION DISTRICT CANAL AND VINE STREET (WESTSIDE
PROJECT) (D EVE LOPM E NT AGREEMENT GM-05-002) ................................................................... ...................................................................
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LODl AS FOLLOWS:
SECTION 1. The Lodi City Council passed Ordinance No. 1794 approving a
Development Agreement covering the following property:
Westside Project: 151 acres within the Westside Project area located on
the west side of Lower Sacramento Road between the Woodbridge
Irrigation District canal and Vine Street (Assessors Parcel Numbers
029-380-05, 027-040-01 , 027-040-020, and 027-040-030).
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referenced Development Agreement, requested that the agreement be rescinded by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 December 4, 2007 (“settlement Agreement“), the obligations of which
were incorporated into the Development Agreement. This ordinance shall not terminate
any of the obligations set forth in the Settlement Agreement. Moreover, the Settlement
Agreement 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. 1862 rescinding the
Development Agreement by and between the City of Lodi and Frontier Community
Builders. However, the Settlement Agreement 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 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.
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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.
Approved this lgth of September, 2012
JOANNE MOUNCE
State of California
County of San Joaquin, ss.
I, Randi Johl, City Clerk of the City of Lodi, do hereby certify that Ordinance
No. 1862 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
COUNCIL MEMBERS - Johnson, Katzakian, Nakanishi, and
Mayor Mounce
ABSTAIN: COUNCIL MEMBERS - None
I further certify that Ordinance No. 1862 was approved and signed by the Mayor
on the date of its passage and the same has b
City Clerk
Amroved as to Form:
City Attorney
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May 16,20 12
Ivfr. Rad Bartlem
City Manager
City of Lodi
22 I West Pine Street
Lodi, CA 95240
Re: Westside and Southwest Gatewav Development Ameernents -
Request for Termination
Dear Rad,
Last April, 20 1 I, I sent you a letter formally requesting temkation of the
Westside and Southwest Gateway Development Agreements (see attached). The letter
followed nearly ten months of regular meetings with City Staffand their consultants
working on Lodi's Impact Mitigation Fee Program OMFP) update. We were convinced
then that the Westside and Southwest Gateway properties should be included in the XLVIFP
and the Development Agreements terminated. Now, over a year later, the IMFP update is
nearly complete, and the Westside and Southwest Gateway properties are an integral part
of the updated TMFP. Clearly, then, it is time to move forward to cancel the old Westside
and Southwest Gateway Development Agreements and establish an economic framework
for residential development to proceed within the current City Emits.
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 development.
When the Westside and Southwest Gateway projects were moving through the
entitlement process, the City's existing impact fee program - originally adopted in
199 I - had not been updated for 15 years. Wile the fes had been periodicafIy
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 littie or no relationship to growth impacts from tlie Westside and Gateway
projects.
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10100 TRlNlTY PARKWAY. SUITE 420 STOCKTON. CALlPORNIA 952 19
209-957-81 12 FAX 209-957-36 I8 WWW.FCBWOMES.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 Staffis
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, will 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 Agreements have a fifteen year term. were never imdemented and
cannot be comuleted before they expire.
The national, state and local housing markets were at lGstoric levels when the
Development Agreements were approved in 2006. The fifteen year term of the
Agreements seemed reasonabIe at the time given the active market conditions.
However, the market has since plummeted to historic lows, Furthemore, City Staff,
consultants, and developers are not expecting new residential development to even
begin for another two to three years. By that time, the 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,
regularIy monitor compliance, and account for all funds and programs separate from
the IMFP would be time consuming and an unnecessary financial burden for
everyone involved.
3. The Development Agreements required uredetermined lump sum payments for
certain fees that cannot be financed without a robust and consistent housing market.
Historically, the City’s IMFP has been designed to be a “pay-as-you-go” system.
This allowed the pace of devdopment to mirror the acceleration or decline of the
housing market. The proposed updated MFP will likewise operate on a “pay-as-you-
go” basis. This is a more sustainable way to manage growth, particularly in a
coinmunity like Lodi - where the long term residentid growth 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
Lo& has occwred for mmy years, it makes the p3ymezl.t: of large, lump sums on a
predetermined schedule virtuaIIy impossible to finance.
Development Agreements with lump sum payments work best on large scale projects
expected to be completed in a predictabfe fashion. They can even work effectively on
small projects when the completion can be reasonably forecasted. However, in a
cornunity like Lodi, this structure will not work effectively on larger scale areas of
development over longer (less economically predictable) periods of time.
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While the issues outlined above are not exhaustive, they highlight several important
factors which underscore the need to terminate the Westside and Southwest
GatewayDeveIopment 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 during an unprecedented "Housing Bubble" fueled by fie
"Znational Exuberance" of a dysfunctional financial system. These dynamics no longer
exist and will not return in our lifetime. The housing market, as we11 as the overall
economy, is struggling to find its footing following one of the worst recessions in history.
Fortunately, the City has moved on and set a couke to plan for sustainable future growth
base on realistic assumptions.
The Westside and Soutt.rwest Gateway projects will be a major component of the City's
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