HomeMy WebLinkAbout2020-10-26 City Council Agendas (5)
City of Palo Alto (ID # 11599)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 10/26/2020
City of Palo Alto Page 1
Summary Title: 567 Maybell: Housing In-Lieu Fee and Development Impact
Fee Payment Modification
Title: QUASI-JUDICIAL. 567 Maybell Avenue [15PLN-00248]: Adoption of a
Resolution Authorizing the City Manager to Amend an Existing Agreement
Securing a Lien for the Deferral of Affordable Housing In-lieu Fees and
Development Impact Fees for a Project That Includes the Development of 16
Single-family Homes. The Applicant Proposes Payment of Fees in
Installments, Prior to Final Occupancy. Environmental Assessment: Not a
Project. Zoning Districts R-2 and RM-15
From: City Manager
Lead Department: Planning and Development Services
Recommendation
Staff recommends that Council adopt the Resolution in Attachment A authorizing the City
Manager or his designee to execute Amendment No. 2 to the Agreement between the City of
Palo Alto and Golden Gate Homes, LLC, securing a lien for the deferral of Development Impact
Fees and/or Housing In-Lieu fees. The proposed Amendment No. 2 (Attachment B) amends the
timing of the deferred affordable housing in-lieu fee and development impact fee payments for
the subject property.
Summary
The PTC, ARB, and City Council previously reviewed the approved project, which includes
construction of sixteen single-family homes. The project requires payment of development
impact fees and affordable housing in-lieu fees in accordance with Chapters 16.58, 16.59,
16.60, 16.64 and 16.65. As part of the project approval, Council authorized the payment of
affordable housing in-lieu fees instead of requiring on-site affordable housing units;1 the
1 The City’s current BMR ordinance, which went into effect in 2017 after the subject project was approved,
expresses a strong preference for the construction of affordable units. PAMC Section 16.65.080 sets forth
alternative means for compliance
City of Palo Alto Page 2
current housing in-lieu fee estimate is $4,934,239. In addition, the current development impact
fees estimate is $1,196,126.
In August 2018, the City Manager approved the developer’s request to defer payment of
development impact fees, requiring payment prior to issuance of final occupancy of the first
home. Consistent with PAMC Section 16.64.030, this approval required recordation of an
agreement placing a lien on the property, which is included in Attachment D.
PAMC Section 16.65.060 states that affordable housing in-lieu fees must be paid prior to
issuance of a building permit unless Council specifies an alternative timing by ordinance or
resolution. In October 2018, Council adopted Resolution 9794 (Attachment E) authorizing the
City Manager to amend the Agreement, allowing 90 percent (90%) of the housing in-lieu fees to
also be deferred to final occupancy of the first residence. The amended Agreement
(Amendment No. 1) is provided in Attachment C.
The applicant now requests Council approval of a Resolution authorizing a second amendment
to the agreement. The applicant’s request is included in Attachment F. The amendment would
modify the timing of payment for development impact fees and the remaining housing-in-lieu
fees. The applicant requests approval to pay these fees in installments, based on final
occupancy for the first, fifth, and tenth residence in this 16-unit development. Consistent with
the adopted resolution and previously executed agreements, the required fees would be
calculated based on the rates in effect at the time of payment and the amount due would
increase by four percent (4%) compounded annually from the date the building permit was
issued.
Discussion
Development impact fees, generally, are in place to defray the costs of direct impacts a new
development has on the City’s infrastructure or services. The fees are set forth in the City’s
Municipal Fee Schedule and updated annually based on the construction cost index for the San
Francisco Bay Area. Fees are assessed based on net new square footage, net new units, and net
new vehicular peak hour trips. They are typically due at the time of building permit issuance.
The City also requires developers of ownership housing to construct on-site below market rate
units or provide some alternative means of compliance, including payment of fees in-lieu of
BMR construction. Council authorized the payment of affordable housing in-lieu fees for this
development instead of requiring on-site affordable housing units.
At the time of Council approval, the housing in-lieu fees were estimated to be $4,771,350. In
accordance with Council’s Resolution in Attachment E, the applicant was required to pay ten
percent (10%) of the housing in-lieu fees prior to issuance of the building permit. The applicant
City of Palo Alto Page 3
paid this 10% fee ($477,135) in November 2018 (FY 2019) prior to issuance of the building
permit. The remaining balance of deferred housing in-lieu fees (90%) was $4,294,215.
Council’s resolution stipulates that any deferred housing in-lieu fees be calculated at the rates
in effect at the time of payment and that the amount due also be increased by four percent
(4%), compounded annually, for each year that the fees are deferred. Based on this calculation,
the deferred housing in-lieu fees that would have been due in 2018 ($4,294,215)2 increased to
$4,503,3823 in fiscal year 2020 and are now currently estimated at $4,934,2394.
Development impact fees (as distinguished from housing in-lieu fees) were also deferred to
final occupancy of the first residence. These fees are required to be paid at the rates in effect
at the time of payment but are not currently subject to any additional interest. The applicant’s
current proposal includes interest on development impact fees and staff recommends that 4%
interest on these fees be compounded annually from the date the building permit was issued in
2018. Table 1 shows the development impact fee estimate at the time of building permit
issuance (FY 2019) and calculates how that fee increased over the last two years based on the
rates in effect for each fiscal year and the addition of 4% compounded interest. The
development impact fees were calculated based on a net total of 12 units because the 16-unit
development replaces four existing units. The column for fiscal year 2021 reflects the current
fees due.
2 The adopted Fiscal Year 2019 Municipal Fee Schedule can be found here:
https://www.cityofpaloalto.org/civicax/filebank/documents/66147
3 Fiscal Year 2020 Municipal Fee Schedule can be found here:
https://www.cityofpaloalto.org/civicax/filebank/documents/73099
4 The adopted Fiscal Year 2021 Municipal Fee Schedule can be found here:
https://www.cityofpaloalto.org/civicax/filebank/documents/78473
City of Palo Alto Page 4
Table 1: Development Impact Fee Summary
FY 2019 FY 2020 FY 2021
Community Center Fee $38,352 $41,446 $45,414
Libraries Fee $13,404 $14,052 $15,406
Public Safety Fee $12,864 $13,491 $14,783
General Government Fee $16,212 $16,998 $18,625
Charleston/Arastradero
Corridor Fee $16,212 $16,998 $18,625
Citywide Transportation Fee $44,400 $98,417 $107,844
Parkland Dedication Fee $751,004 $757,587 $862,942
Public Art Fee $104,000 $108,160 $112,486
Total Fees Due $996,448 $1,097,149 $1,196,126
Summary of Key Issues
Deferring the in-lieu housing payment impacts the City in two principal ways. First, the money is
not readily available to the City should it elect to support a below market rate housing
development within the deferral timeframe. Second, the City loses out on any interest earned
within the deferral timeframe (though this is partially offset by annual increases in the fee
rates).
To bridge any shortcoming that could result from further deferral of development impact fees
and housing in-lieu fees, the applicant proposes the following:
• Pay $2,640,000 of the remaining housing in-lieu fees and one-third of the
development impact fees prior to final occupancy of the first home
• Divide the remaining balance of housing in-lieu fees and development impact fees
into two additional payments payable prior to final occupancy of the fifth home and
prior to final occupancy of the tenth home
• All deferred fees shall be paid based on the rate in effect at the time of payment
increased by an interest rate of four percent (4%), compounded annually, for each
year that the fees have been deferred
• All fees shall be paid no later than December 31, 2021
On January 13, 2020, Council reallocated $2,638,993 from the housing in-lieu and impact fee
funds for an affordable housing project at 3705 El Camino Real (Wilton Court Apartments) (CMR
10928). These funds were previously reserved for a potential teacher housing project on Grant
Avenue and were intended to be replenished with the first home sold at the subject property.
The pandemic delayed construction, subsequent real estate transactions and therefore the
City of Palo Alto Page 5
restoration of these funds. The proposed payment schedule provides an initial payment enough
to cover the City’s $3 million pledge toward the future County project.
The remaining fees would be paid prior to final occupancy of the fifth and tenth residence
within the development. All remaining housing in-lieu fees and development impact fees would
be evenly split between those two payments. Consistent with Council’s previous stipulations
regarding housing in-lieu fees, this Resolution and Amendment to the Agreement would require
that any deferred fees be paid based on the fees in effect at the time of payment and subject to
an annual 4% compounded interest.
With the proposed provisions included in the lien agreement and associated amendments
(Attachments A, B and C), staff supports this payment deferral request.
Policy Implications
The City continues to promote and advance policy initiatives to encourage housing
development, consistent with the Comprehensive Plan. The applicant has indicated that the
pandemic has resulted in unexpected burdens with respect to construction costs, delays and
the sale of the homes, as discussed further in the applicant’s request letter in Attachment F.
Council’s approval of this request supports the applicant’s effort for a timely completion of all
sixteen units, which are currently under construction. Without this approval, the property
owner has expressed the potential need to pause construction on some of the homes until
revenue is available from the sale of completed units.
Resource Impact
At the time of building permit issuance (FY 2019) housing in-lieu fees totaled $4,294,215. Due
to rate increases and compounded interest, the current housing in-lieu fees total $4,934,239.
With approval of the proposed amendment, the developer would pay $2.64 million into the
residential housing in-lieu fund prior to final occupancy of the first residence. The property
owner anticipates that this will occur within the 60 days. The remaining housing in-lieu fees,
totaling $2,294,239 would be paid in two installments as described further below.
At the time of building permit issuance, the development impact fees totaled approximately
$980,081. Due to annual rate increases and compounded interest, the current development
impact fee estimate is $1,196,126.
Timeline
The following table summarizes the timing of payment of each fee. Note that the fee estimates
provided below are based on the current fees in effect (FY 2021) and compounded interest to
date. Should fees be deferred to FY 2022, any deferred payments would increase accordingly
City of Palo Alto Page 6
based on the rate in effect at the time of payment and another 4% compounded interest on any
remaining fees. Because Council has not yet adopted the Municipal Fee Schedule for FY 2022,
the total amount due if one or more payments are deferred to FY 2022 cannot be assessed at
this time. All fees shall be paid no later than December 31, 2021.
Table 2: Summary of Payment Timing for Deferred Housing In-Lieu and Development
Impact Fees
Timing Housing In-Lieu fee Estimate Due Development Impact
fee Estimate Due
Final occupancy of the first
unit (anticipated November
2020)
$2,640,000 $398,709
Final occupancy of the fifth
unit (anticipated April 2021)
$1,147,119 $398,709
Final occupancy of the tenth
unit or December 31, 2021
(whichever is sooner)
$1,147,119 $398,709
Environmental Review
In accordance with the California Environmental Quality Act (CEQA) 15061(b)(3), the activity is
covered by the general rule that CEQA applies only to projects, which have the potential for
causing a significant effect on the environment. Where it can be seen with certainty that there
is no possibility that the activity in question may have a significant effect on the environment,
the activity is not subject to CEQA. The project involves the execution of an agreement between
the City and the applicant and this action would no direct or in-direct effect on the
environment.
Attachments:
Attachment A: Resolution Modifying Timing of Impact Fee Payment
Attachment B: Draft Amendment No.2 to Existing Agreement Creating a Lien for Deferral of
Impact Fees
Attachment C: Amendment No. 1 to Existing Agreement Creating a Lien For Deferral of
Impact Fees
Attachment D: Existing Agreement Creating a Lien for Deferral of Impact Fees
Attachment E: Existing Resolution for Deferral of Impact Fee Payment (Reso 9794)
Attachment F: Applicant's Request for Modification to Timing of Payment
1
** NOT YET ADOPTED **
DRAFT
Resolution No. ___
Resolution of the Council of the City of Palo Alto Authorizing the City
Manager or Designee to Execute Amendment No.2 to a Lien to Secure
Deferred Payment of Development Impact Fees And/or In-Lieu Fees
for 567 Maybell
RECITALS
A. Golden Gate Homes, LLC, (“Developer”) is the owner of that certain tract of land
situated in the City of Palo Alto, County of Santa Clara, State of California, generally known and
described as 567 Maybell, Palo Alto, California (the "Property"); and
B. On or about June 28, 2017 and August 24, 2017, City approved Developer’s
application(s) for Tentative Map and Architectural Review, respectively, subject to conditions of
approval including the payment of development impact fees and/or in-lieu fees under Chapter
16.64 of the Palo Alto Municipal Code (“PAMC”).
C. On or about August 15, 2018, City Manager approved Developer’s request to
defer payment of development impact fees and the Parties executed the AGREEMENT.
D. On or about October 15, 2018, Council adopted Resolution 9794 approving the
Developer’s request to defer payment of below market housing in-lieu fees pursuant to Section
16.65.060 and amending the AGREEMENT, subject to conditions.
D. Pursuant to PAMC Section 16.65.060, below market rate housing in-lieu fees
must be paid prior to issuance of any building permit for a development project, unless
otherwise specified by City Council ordinance or resolution.
E. Developer has requested that the time of payment for below market rate
housing in-lieu fees and development impact fees be deferred and paid in installments prior to
the date a final occupancy permit is issued for the first, fifth and tenth unit in this sixteen unit
development.
SECTION 1. The City Manager is hereby authorized to execute an agreement
deferring below market rate housing in-lieu fees for Architectural Review Approval No. 15PLN-
00248 and Tentative Map Approval No. 15PLN-00270 to allow payment in installments prior to
the date a final occupancy permit is issued for the first, fifth and tenth unit in this sixteen unit
development, subject to 4% interest compounded annually for each year of deferral. In no
event shall fees be deferred beyond December 31, 2021.
SECTION 2. The Council finds that this is not a project under the California
Environmental Quality Act and, therefore, no environmental impact assessment is necessary.
2
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development Services
______________________________
Director of Administrative Services
This document is recorded for the
benefit of the City of Palo Alto
and is entitled to be recorded
free of charge in accordance with
Section 6103 of the Government Code
After Recordation, mail to:
OFFICE OF THE CITY ATTORNEY
250 Hamilton Avenue
Palo Alto, CA 94301
AMENDMENT NO. 2 TO AGREEMENT CREATING A LIEN
TO SECURE PAYMENT OF DEFERRED PAYMENT OF
DEVELOPMENT IMPACT FEES AND/OR IN-LIEU FEES
ADDRESS: 567 Maybell Avenue, PALO ALTO, CA
A.P.N. Nos. 137-25-108 & 137-25-109
This Amendment No. 2 (“AMENDMENT”) to the above-referenced Agreement, recorded in the Official
Records of Santa Clara County as Instrument No. 24049742, (“AGREEMENT”), as amended by
Instrument No. 24058571, is entered into on ___________ by and between the CITY OF PALO ALTO, a
California charter municipal corporation ("City"), and GOLDEN GATE HOMES, LLC, a California
Limited Liability Company ("Developer") to secure the payment of deferred development impact fees and
or in-lieu fees.
RECITALS
A. Developer is the owner of that certain tract of land situated in the City of Palo Alto, County of
Santa Clara, State of California, generally known and described as 567 Maybell, Palo Alto,
California (the "Property"); and
B. On or about June 28, 2017 and August 24, 2017, City approved Developer’s application(s) for
Tentative Map and Architectural Review, respectively, subject to conditions of approval
including the payment of development impact fees and/or in-lieu fees under Chapter 16.64 of the
Palo Alto Municipal Code (“PAMC”).
C. On or about August 15, 2018, City’s Director of Planning and Community Environment approved
Developer’s request to defer payment of development impact fees and the Parties executed the
AGREEMENT.
D. On or about October 15, 2018 the Palo Alto City Council adopted Resolution No. 9794,
approving Developer’s request to defer payment of below market housing in-lieu fees pursuant to
PAMC Section 16.65.060 and executed Amendment No. 1 to the AGREEMENT.
E. In November 2018, Developer paid $477,135, representing 10% of the housing in-lieu fees due at
that time, pursuant to the AGREEMENT, as amended by Amendment No. 1.
F. The Parties wish to amend the AGREEMENT.
NOW, THEREFORE, for and in consideration of the approval and covenants contained herein and other
good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Section 1 of the AGREEMENT, Deferral of Fees is hereby amended to read as follows:
1. Deferral of Fees. Pursuant to PAMC Section 16.64.030 and City
Council Resolution ______, payment of the development impact fees and in-
lieu fees identified in Exhibit B shall be deferred as follows:
a. Prior to the date of final occupancy approval for the first
completed unit, Developer shall pay $2,640,000 in housing in-
lieu fees. Prior to the date of final occupancy approval for the
fifth (5th) completed unit, Developer shall pay one-half of the
then-outstanding housing in-lieu fees. Prior to the date of final
occupancy approval for the tenth (10th) completed unit,
Developer shall pay all remaining housing in-lieu fees.
b. Developer shall pay development impact fees for the Project in
approximately equal one-third (1/3) installments prior to the
dates of final occupancy for the first, fifth and tenth completed
units.
c. In no event shall the payment of any fee be deferred beyond
December 31, 2021.
d. The amount of outstanding housing in-lieu fees and
development impact fees shall be calculated using the rates in
effect at the time of payment, with an additional four percent
(4%) increase, compounded annually from the date of building
permit issuance.
2. The following Exhibit(s) to the AGREEMENT is/are hereby amended to read as set forth in
the attachments to this Amendment, which are incorporated in full by this reference:
a. Exhibit “B” entitled “DEFERRED DEVELOPMENT IMPACT FEES AND/OR IN-
LIEU FEES”
3. Except as herein modified, all other provisions of the AGREEMENT, including any exhibits
and amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed in
duplicate the day and year first above written.
CITY OF PALO ALTO Developer
____________________________ ______________________________
Name: ______________________
City Manager Title: _______________________
APPROVED AS TO FORM:
____________________________
Albert S. Yang
Assistant City Attorney
APPROVED AS TO CONTENT:
___________________________
Jonathan Lait
Director of Planning and Development Services
EXHIBIT B
DEFERRED DEVELOPMENT IMPACT FEES AND/OR IN-LIEU FEES
Name of Fee Estimated Amount of Fee (As of October 2020)
Public Art In-Lieu $112,486.40
Community Centers $45,414.22
Libraries $15,406.31
Public Safety $14,783.31
General Government $18,625.15
Charleston/Arastadero Traffic $18,625.15
Citywide Traffic $107,844.71
Parkland Dedication $862,941.71
Sub-Total: $1,196,126.43
Affordable Housing (In-lieu) (90% deferred since
November 2018)
To be paid prior to issuance of final occupancy for
the first unit
To be paid prior to issuance of final occupancy for
the fifth unit (approximately)
To be paid prior to issuance of final occupancy for
the tenth unit (approximately)
$4,934,239
$2,640,000
$1,147,119.35
$1,147,119.35
Total Deferred: $6,130,365.43
Amounts provided are estimates based on the rates in effect as of October 2020. Fees are payable at
the rates in effect on the date of payment.
State of _____________________
County of ___________________
On the _______________________ before me, ______________________a Notary Public,
personally appeared _______________________________________________, who
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 he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature: ________________________
Name: ________________________
(Typed or Printed) (Seal)
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
DocuSign Envelope ID: 2289F86D-C384-4ACC-951C-7EDC7982379E
Resolution No. 9794
Resolution of the Council of the City of Palo Alto
Authorizing the City Manager or Designee to Execute an Agreement
Deferring Affordable Housing In-Lieu Fees for 567 Maybell
RECITALS
A. Golden Gate Homes, LLC, ("Developer'') is the owner of that certain tract of land
situated in the City of Palo Alto, County of Santa Clara, State of California, generally known and
described as 567 Maybell, Palo Alto, California (the "Property"); and
B. On or about June 28, 2017 and August 24, 2017, City approved Developer's
application(s) for Tentative Map and Architectural Review, respectively, subject to conditions of
approval including the payment of development impact fees and/or in-lieu fees under Chapter
16.64 of the Palo Alto Municipal Code ("PAMC"). . .
C. On or about October 15, 2018, City Manager approved Developer's request to
defer payment of development impact fees and the Parties executed the AGREEMENT.
D. Pursuant to PAMC Section 16.65.060, below market rate housing in-lieu fees
must be paid prior to issuance of any building permit for a development project, unless
otherwise specified by City Council ordinance or resolution.
E. Developer has requested that the time of payment for below market rate
housing in-lieu fees be deferred until the date a final occupancy permit is issued.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The City Manager is hereby authorized to execute an agreement
deferring below market rate housing in-lieu fees for Approval of Architectural Review
application 15PLN-00248 and the Tentative Map approved by Record of Land Use Action No.
2016-4. Ten percent (10%) of the below market rate housing in-lieu fees shall be paid prior to
issuance of a building permit; the remainder shall be deferred to the date of final occupancy
approval for the first completed unit of the project. The deferred fees shall be calculated at the
rates in effect at the time of payment; in addition, the amount due shall be increased by four
percent (4%), compounded annually, for each year that the fees are deferred.
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Envelope Summary Events Status Timestamps
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Payment Events Status Timestamps
Explore Real Estate
2625 Middlefield Rd, #101
Palo Alto, CA 94306
650.813.1077
October 1, 2020
Jonathan Lait, Director of Planning
Planning and Community Environment Department
250 Hamilton Avenue
Palo Alto, CA 94301
650.329.2679
jonathan.lait@cityofpaloalto.org
Subject: Maybell Development Impact Fee Payment Modification
Mr. Lait:
On behalf of Golden Gate Homes LLC, I have been authorized to submit this formal
request to modify the payment schedule of developer impact and below market
rate housing in-lieu fees (hereafter ‘fees’) for the project at 567 Maybell Avenue
consisting of 16 single family homes.
In 2018 the City Council of Palo Alto approved the deferral of the payment of fees
to later in the construction of the project. The deferral provided that the payment
of fees would be when the first of the 16 homes would be ready for final inspection,
rather than at the time of issuing Building Permits.
As the final quarter of 2020 begins, we can all agree it has been an unprecedented,
unpredictable, tumultuous, and contentious year for the economy, public health,
education, and day-to-day lives. As many businesses struggle through this
unpredictable year, this project has also been negatively impacted particularly in
the timing and realization of revenues from home sales. Please consider:
• The project’s first home was formally listed and made available for the public
to view 3 days prior to the statewide shelter-in-place order in March.
• At the outset of shelter-in-place, real estate was not classified as an
essential service and since has slowly come back but is significantly limited
to supporting appointment only showings made with Covid-19 & entry
disclosures required to enter a home without the support of open houses or
local brokerage community previews. The activity and volume of showings
has been a fraction of what a typical cycle would see particularly in the
spring season when the market is generally the most active.
• Construction activity was limited for the 2nd half of March and completely
shut down for the month of April. The month of May allowed for the
continuation of construction with much of the month slowly ramping as
contractors reassembled and reactivated on the project.
• Since March, the residential real estate marketplace has had varied
performance across different types of homes. While some areas and types
have outperformed, that has not been the case for the Palo Alto market or
for the homes that are in construction at the project. In general, the inventory
of for sale homes and days-on-market in Palo Alto have been more like the
2008-09 time following the financial crisis brought on by poor lending
practices.
• We do not believe the lack of sales activity is due to a significant decrease
in value or demand for the homes. We observe that buyers have been less
motivated to visit homes for safety reasons (including the recent air quality
issues), logistical hassles to see homes and travel restrictions for both
international and domestic potential buyers alike. Further, the homes under
construction are best suited for families with school aged children. With
many districts and schools operating with distance learning models, the
desire to be in place in a new home or school district that typically drives
the spring to summer market, this demand was not present. We also find
that buyers who might be considering a “move up” to a larger home are
more inclined to remain in a patient waiting pattern with a significant election
forthcoming and the arrival of a Covid-19 vaccine that would hopefully usher
confidence back to the marketplace and a return to a more normalized
market environment.
The primary goal of the modification would provide cash flow relief to the project
by more equitably spreading their payments across the sales cycle of the project.
There is no request for a discount or reduction in any fees. The framework of the
request is:
1. Developer will pay $2,640,000 of the remaining housing in-lieu fees and
one-third of the development impact fees prior to final occupancy of the first
home sale.
2. Divide the remaining balances of housing in-lieu fees and the remaining
two-thirds of the development impact fees into 2 additional payments,
payable prior to final occupancy of the 5th home and then, prior to final
occupancy of the 10th home.
3. All deferred fees shall be paid based on the rate in effect at the time of
payment increased by an interest rate of four percent (4%), compounded
annually, for each year that the fees are deferred, as is already in place.
Thank you in advance for your consideration and work on this request.
Best Regards
Ted O’Hanlon
Cc: Yurong Han, Golden Gate Homes LLC