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November 28, 2023
ITEM TITLE
Waiver of Development Impact Fees: Waiving Parkland Acquisition Fees, Parkland Development Fees, and Residential Construction Tax for the Proposed 55-Unit Congregational Suites Senior Affordable Housing Project
Report Number: 23-0296
Location: 305 E Street, Northwest corner of E Street and Third Avenue Department: Development Services
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines . T herefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution waiving Parkland Acquisition Fees, Park land Development Fees and Residential Construction Tax, totaling $617,873, for a proposed 55-unit, 100% affordable senior housing project named Congregational Suites.
SUMMARY
Congregational Suites is a 55-unit 100% affordable senior housing project being developed at the northwest corner of E Street and Third Avenue (“Project”) by 3rd Street RHF and CCDC Partners, L.P. (“Developer”).
Pursuant to the Chula Vista Municipal Code (“CVMC”) Section 17.10.070(B), the Developer has requested a waiver of the Parkland Acquisition Fee and the Parkland Development Fee . Pursuant to CVMC Section
3.32.050, the City Council may waive the Residential Construction Tax due for the Project. The recommended waivers totaling $617,873 enhance the Project’s feasibility to construct the 100% affordable senior housing project.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with CEQA and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
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BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The Developer plans to construct a seven-story, building totaling 55,814 square feet , consisting of 55 apartments which will be age restricted for rent to persons 55 and over, an unrestricted Manager’s Unit, community room, outdoor amenity spaces and parking. Space on the ground floor is planned to be leased to San Ysidro Health for use as a clinic for seniors which will be open to the public. The residential units in the Project will be 100% affordable within the following income categories:
19 units restricted to very low-income households or persons (30% to 50% of area median income (“AMI”))
19 units restricted to low-income households or persons (50% to 80% of AMI) 17 units restricted to moderate-income households or persons (80% to 120% of AMI) Under a separate action, the Developer is entering into an Affordable Housing Density Bonus Agreement with the City and is agreeing to restrict the 55 units for a term of 55 years. Conditional Use Permit (CUP22-0050) and Design Review Permit (DR22-0032) were approved on August 2, 2023. The building permit is currently in process and is anticipated to be issued by the end of 2023.
Parkland Acquisition and Development In-Lieu Fees
The City requires all residential development projects over 50 units dedicate parkland and construct parks or pay park in-lieu fees. The City assesses two park in -lieu fees: the Parkland Acquisition Fee and the Parkland Development fee. The amount of each of these fees for this Project would be $207,592 and $396,256 respectively, for a total of $603,848. CVMC Section 17.10.070(B) provides for the waiver of all or any portion of such parks improvements or in-lieu parks fee requirements in the interest of stimulating the construction of housing for low- and moderate-income families, by resolution of the City Council.
Residential Construction Tax
The City assesses a Residential Construction Tax (“RCT”) on all new residential units in order to generate revenue to defray the cost of capital items required to serve the City’s increasing population. Pursuant to CVMC Section 3.32.050, the City Council may waive this tax for housing projects that serve low- or moderate- income families. The RCT rate for apartments is $250, plus $25 for every bedroom over one. The total RCT fee for the Senior Congregational Suites Project would be $14,025.
Staff recommends that the Parkland Acquisition and Development In-Lieu Fees and Residential Construction Tax for the Project in the total amount of $617,873 be waived to facilitate the construction of much needed 100% affordable senior housing units in downtown Chula Vista.
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DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property -related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Parkland Acquisition and Development In-Lieu Fees are used to acquire parkland and construct parks in Chula Vista. Approval of the waiver of Parkland In-Lieu Fees for this Project would result in a one-time loss of revenue of $ 603,848 in the Western Park Acquisition and Development Fee Fund . The Residential Construction Tax is charged on all new development to offset impact to parks and other capital facilities due to the increase in population created by new development. Approval of the waiver of this tax for the Project would result in one-time loss in revenue to the Residential Construction Tax Capital Project Fund of $14,025.
The total loss in revenues for all funds is $617,873 but allows for much needed affordable housing for seniors in downtown Chula Vista.
ONGOING FISCAL IMPACT
There are no on-going fiscal impacts as a result of this action.
ATTACHMENTS
None.
Staff Contact: Kimberly Elliott, Facilities Financing Manager Laura C. Black, AICP, Development Services Director