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1997 02 25 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY MINUTES SPECIAL MEETING FEBRUARY 25, 1997 Special meeting of the La Quinta Redevelopment Agency was called to order at the hour of 1:00 p.m. by Chairman Sniff, followed by the Pledge of Allegiance. PRESENT: Board Members Adolph, Henderson, Holt, Perkins, Chairman Sniff ABSENT: None PUBLIC COMMENT None STUDY SESSION DISCUSSION RELATING TO CATTELUS RESIDENTIAL GROUP PROPOSED HOUSING PROJECT LOCATED AT THE NORTHWEST CORNER OF JEFFERSON STREET AND 48TH AVENUE. Frank Spevacek, consultant with Rosenow Spevacek Group, Inc., advised that staff is looking for direction regarding site plan alternatives for the development of property located on the northwest corner of Jefferson Street and Avenue 48. This 40-acre parcel along with another 40-acre parcel along Dune Palms Road, was purchased by the Redevelopment Agency in 1 990 as a possible location for the Desert Sands Unified School District Administrative Center. The Agency eventually sold the Dune Palms Road site to the School District which left this parcel available for an affordable housing development. He advised that Redevelopment Law was amended in 1 994, making it more difficult for redevelopment agencies to forego the production of affordable housing projects within redevelopment project areas. It also requires redevelopment agencies to achieve the imposition of affordability covenants for the purpose of keeping the units affordable for a minimum of 30 years. Criteria established by the law encumbers the Agency to produce affordable housing whenever it's directly involved with sponsoring housing development or if the private sector is doing it in one of the Agency's project areas. Therefore, as new developments take place in Project Area Nos. 1 and 2 by the private sector, the Agency is obligated to construct affordable housing with these covenants. Based on a 10-year projection prepared in 1 994, the Agency must try to develop 1,500 affordable housing units with affordability covenants by the year 2004. If this is not achieved or at least a good-faith effort made to do so within the 1 0-year period, the Agency will be penalized by annually having to identify ways in which it will attempt to achieve such production. BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 2 February 25, 1997 Furthermore, should the Agency be challenged after the 10-year period, the State could reduce the Agency*s non-housing tax-increment revenue from both project areas, leaving only sufficient revenue to service the Agency's bond debt service and administrative costs for the amount of the previous year. He advised that most of the Agency's fund is housing set-aside revenue due to tax-sharing agreements with the County and other taxing jurisdictions. Currently, the Agency generates $2.5 to $3 million annually in tax increment revenue with approximately $2 million being pledged to debt service on the $21 million housing bond sold in 1995. The purpose in selling the housing bond was to meet the Agency's obligation to produce affordable housing and to locate the projects in areas where off-site and on-site infrastructure improvements would benefit a wider area which would assist the City in producing capital improvements. He advised that after conducting an extensive interview process with seven different development proposals for this property, in September 1 996, the Agency approved an exclusive negotiation agreement with Catellus Residential. After negotiating with Catellus for site plan alternatives and after looking at the goals for the site and the related costs, four proposed alternatives were generated. He advised that if one or more of Catellus' alternatives are selected, detailed negotiations will begin and a Disposition and Development Agreement DDA) will be drafted for the purpose of facilitating the sale of this property and the development of these units. He advised that Catellus has been very cooperative in developing these proposals and have preliminarily agreed to: 1) limit their profit margin to 5%, 2) take ownership of the property in phases as it's developed, receiving Agency financial assistance in phases as well, and 3) share the cost savings generated from the project with the Agency by reducing the Agency's assistance. In response to Board Member Adolph, Mr. Spevacek advised that fill dirt must be brought in to raise the property to accommodate a 100-year flood In regard to having sellable homes without being very-low affordable housing, he advised that Catellus would conduct a market study to determine product type, price points, and how a project on this site would compare to other projects in the market area and the features and sale prices will be based on that study. Board Member Adolph felt that uniqueness is important in order to sell the homes. Stephen Kuptz, 5 Park Plaza, Suite 400, Irvine, Executive Vice President of Catellus Residential Group, advised that they are sensitive to the number of housing developments in the desert and wish to build a project that is unique and that will set the standard for affordable housing in the future. He BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 3 February 25, 1997 introduced their development team and advised that they would be looking for direction from the Agency upon the end of their presentation. Bradley Burke, 61 5 J Street, San Diego, of Studio E Architects, described the group's design goals as follows: 1) to establish a sense of community 2) to use a town square as open space and a focus within the community 3) to develop a pedestrian network in conjunction with the town square 4) to give preference to pedestrians over cars 5) to retain and enhance the natural topography as much as possible 6) to preserve and focus on the unique views 7) to incorporate design strategies within the buildings that respond to the desert environment 8) to utilize the valley's historical patterns mountains surrounding the grid structure of the valley) 9) to incorporate native, cultivated, and oasis-type environments in the landscaping 1 0) to provide on-site amenities Conrad Sick, 5 Park Plaza, Suite 400, Irvine, Vice President of Catellus Residential Group, advised that they held two community workshops with members of both this community and surrounding communities in attendance as well as City representatives from both La Quinta and lndio. The goals and planning context of the project were discussed and seemingly supported by the attendees. Rancho La Quinta representatives are very concerned about the compatibility image of the project since Avenue 48 and Jefferson Street will be a market window for their project once Avenue 48 is completed. He advised that in their overall assessment of the site, they looked at both the current and possible future land uses of the surrounding properties. In reviewing some of the costs that will impact the development, he advised of the necessity to bring in fill dirt which will raise the property level above the high-water mark. As required by the City of lndio, the water line along Jeffers*n Street will be tied in with the proposed water line on Avenue 48. They will also be responsible for street improvements along the west side of Jefferson Street. The costs for improvements to Avenue 48 will be approximately $1 million, the assessment for the Jefferson Street/Avenue 48 traffic signal will be $50,000, and the 100% processing fee increase is estimated at $13,715. In regard to their market research on residential properties, he advised that sales are averaging at 2Y2-3 homes a month in local residential projects with BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 4 February 25, 1 997 the average cost per square foot being $75-$79 and buyers ranging from young families to retirees. The rental-market shows a high occupancy rate with the average square footage being 800 sq. ft. and the average rent being $500 per month. The lower rent projects are more family-oriented and located toward lndio and the more up-scale projects are toward Palm Desert. As to the commercial market, he advised that a 10,000-50,000 sq. ft., non-anchored, commercial center could stand alone on Jefferson Street and Avenue 48, but it would be difficult to fill due to the number of power centers in the valley and the current level of buildout of the surrounding area. Eric Naslund, 61 5 J Street, San Diego, of Studio E Architects, advised that a street design with pedestrian emphasis would be accomplished through the type of houses and a street-tree program. The property's unique site features will be retained and any commercial development will be placed toward Jefferson Street. For the purpose of compatibility, he advised that the larger homes would be on Avenue 48 across from the Rancho La Quinta development. Palm trees will mark the township lines along Avenue 48 and Jefferson Street and an attempt will be made to preserve and enhance the hummock at that corner of Jefferson Street and Avenue 48 as both a site and community gateway feature. They have proposed a straight boulevard as opposed to a curved one in order to see the mountains instead of driveways when entering the development. He then reviewed the elevation plans and alternative site plans, advising that Alternative A would have 110 homes, a commercial town center, a common area with a recreation building, and a landscaped median in the main boulevard. Alternative C, which is not a recommended alternative, would maximize use of the land with 141 typical homes in a more traditional tract, but with less open space, no street-tree program, nor. a main boulevard. Alternative B would be a compromise between A and C, having 1 23 homes with a commons area and extensive open space area at the end of the site. It would also have a landscaped boulevard and street trees, but he advised that it would be difficult to retain the community gateway feature with the hummock and open space area at Avenue 48 and Jefferson Street. There would be no median, but there would be a double row of trees on each side of the main boulevard for pedestrians to walk through. Alternative D would have 86 homes, 144 multi-family units, and many of the same features found in Alternatives A and B. He advised that Alternative A is the recommended alternative. Mr. Kuptz advised that Alternative A is responsive to everything in the RFP, but it requires a per-unit subsidy of $75,982 approximately $9 million total) whereas in Alternative B it's reduced to $56,098 per unit approximately $6.9 BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 5 February 25, 1 997 million total). The per-unit subsidy for Alternative C is $45,922 approximately $6.5 million total) and Alternative D is $31,047 approximately $7.2 million total). Alternative D would be higher density, but primarily single-story units and it would be funded as a tax-credit project. He advised that the cost estimates were compiled from their 20 years of experience in building approximately 10,000 homes. Mr. Spevacek advised that under Alternative D, the multi-family units would be senior housing which Catellus is comfortable that such rental units would be easily absorbed. The value of the land is not included in the cost. He advised that upon the Agency reaching a consensus on the alternatives, negotiations would begin and a DDA would be brought back for consideration. In response to Board Member Henderson, Mr. Sick advised that the financing would be enhanced by approximately $1 3 million if the commercial is eliminated and 10 homes are added to Alternative A. In response to Board Member Holt, Mr. Sick advised that the commercial area would be more of a neighborhood-serving center with such uses as day care and learning centers, small dry cleaners, or professional offices. Board Member Henderson felt that a retail complex might be a far-reaching part of the project and didn't know how much of it the Redevelopment Agency would subsidize. In response to Board Member Henderson, Mr. Kuptz advised that their only sense of discomfort with Alternative D is the competitiveness of the tax credits for the senior housing. He personally likes the integrated community and large range of affordability that Alternative D provides. Board Member Henderson pointed out that that portion of the project could be in the final phase and if the balance of the project is successful, then one of the other alternatives could be considered. In response to Board Member Holt, Mr. Sick advised that the more compatible, larger homes would be adjacent to the Rancho La Quinta development in Alternatives A and D. He also felt that locating the multi-family units adjacent to the commercial center would be a good transition. Mr. Spevacek advised that in Alternative D, if the senior housing component is achieved, there would be 234 units with covenants, which with the current covenants in place, would bring the Agency more than a third of the way toward its 1,500 needed by 2004. He advised that from a production BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 6 February 25, 1 997 standpoint with covenants, Alternative D provides for the opportunity to get more units for a lower price as well as more affordability covenants. Board Member Perkins felt that this was one of the best presentations that he's seen. He asked if the *75,982 per unit subsidy in Alternative A would be a sellable factor to which Mr. Spevacek advised that it's double the subsidy of the Williams Development which is approximately $34,000 per unit. Board Member Perkins felt that the layout provides an opportunity to make this development a showplace and questioned if the 234 units in Alternative D would detract from the sense of openness and desirability that would otherwise exist in Alternative A which he really liked. Mr. Naslund felt that the cluster home area could be very nice even though it would have less open space and he pointed out that if the number of multi- family units is reduced, it would allow more open space. Board Member Holt advised that she would tend to support Alternative D if the number of multi-family units could be reduced. If Alternative A is selected, she felt that the commercial aspect should be eliminated. She also had some safety concerns with the alleys proposed in the alternatives. Mr. Naslund advised that alleys have come back real strong in the last 5-10 years and felt that a presentation showing how they're working in other areas might be beneficial. The alleys, which they characterize more as lanes, would be 40 feet wide with varying setbacks and would only span the length of 10 homes. Board Member Perkins suggested that a good lighting system might alleviate some of the concerns. Board Member Adolph had a problem with the alleys because with the layout of the homes, the patios would face the alley and make the homes less sellable. He would rather see well-landscaped, cul-de-sacs that would not allow speeding vehicles. He questioned the reality of the topography as presented and the need for 100,000 yards of fill dirt to which Mr. Sick advised that they have additional information to substantiate the presentation. Board Member Adolph felt that the design is unique to the area and didn't have a problem with the multi-family units because he felt that it would make it more marketable and unique. He liked the layout except for the lots next to Jefferson Street and felt that the traffic noise would make those lots less sellable. He felt that some type of light-manufacturing and service-type BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02 Redevelopment Agency Minutes 7 February 25, 1 997 commercial along Jefferson Street would do well and help buffer the traffic noise for the residential area. Chairman Sniff felt' that it was a skillful presentation and advised that he preferred a slightly-modified, Alternative D that would somewhat reduce the number of senior housing units to provide adequate open space. He felt that the commercial center should be limited and professional-oriented in nature. Board Member Henderson noted that the density in the south section of the parcel is the same for both Alternatives A and D and, although, it increases in the north section under Alternative D, it would be extremely flexible to changes. She supported Alternative D with possible modification, but didn't envision including the retail aspect. Board Member Perkins asked how wide the lots would be adjacent to the alley to which Mr. Kuptz responded 50 feet. Board Member Perkins felt that with only six lots on each side, the alleys wouldn't be very long. He agreed with looking at a buffer zone along Jefferson Street, but felt that the market would dict8te the use, noting the current number of vacancies in the commercial buildings along Dr. Carreon in lndio. He supported Alternative D with slight modification. Board Member Holt advised that she would*also support a modified version of Alternative D, with safe alleys. Board Member Adolph also supported a modified Alternative D and felt that the streetscape would make the project sellable. Chairman Sniff noted that the consensus of the Agency was for a slightly- modified Alternative D. There being no further business, it was moved by Board Members Adolph/Holt to adjourn. Motion carried unanimously. R ectfully submitted, AUNDRA L. JUHOLA, Secretary La Quinta Redevelopment Agency BIB] 07-30-1997-U01 01:27:37PM-U01 ADMIN-U01 RDAMIN-U02 02-U02 25-U02 1997-U02