March 21, 2023
Community Development
DATE: March 21, 2023
TO: Mayor Martinez and Members of the City Council
FROM:
Lina Velasco, Director of Community Development
Chris Castanchoa, Building Official
Subject:
Terraces at Nevin Fee Deferral Amendment
FINANCIAL IMPACT: There is no fiscal impact to the General Fund related to this amendment. The amendment corrects an error in the
original agreement so that the agreement correctly
reflects the fees paid and fees deferred.
PREVIOUS COUNCIL
ACTION:
December 19, 2017: Item I-1 - City Council authorization for the City Manager to negotiate deferral of impact fees.
STATEMENT OF THE
ISSUE:
The City and Richmond Nevin Associates, L.P. entered
into an Impact Fee Deferral Agreement for the Terraces
at Nevin project. Per the Agreement, all but $500,000 of the deferred impact fees would be paid at issuance of
Certificates of Occupancy and the City would provide a
Fee Deferral Loan for the remaining $500,000 due to be
paid through residual receipts. Prior to issuance of the Certificates of Occupancy, an error in the impact fee
amount due referenced in the Agreement was
discovered, resulting in the need to prepare the subject Amendment to ensure accurate records.
RECOMMENDED ACTION:
APPROVE an Amendment to the Terraces at Nevin fee
deferral agreement correcting the referenced amount of
total impact fees due to ensure proper documentation
and accurate records for said agreements recorded
against the subject properties – Community Development
(Lina Velasco/Chris Castanchoa 510-620-6764).
AGENDA
REPORT
March 21, 2023
DISCUSSION:
On December 19, 2017, the City Council authorized the City Manager to negotiate deferral of impact fees for the Terraces at Nevin project, a 271-unit affordable housing development.
On July 19, 2018, Richmond Nevin Associates, a California limited partnership entered into an Agreement with the City of Richmond to defer its payment of impact fees, attached herein as Attachment 1 (“Agreement”). Per Government Code Section 66007, developers of affordable housing projects can defer payment of certain impact fees until certificate of occupancy. Richmond Nevin Associates, L.P. is the developer of the project known as Terraces at Nevin, a 271-unit very low and low-income development for seniors and families.
When the developer and City entered into this Agreement, the total outstanding impact fees due to the City was $3,528.984.34, evidenced by the two invoices dated February 24, 2021 and February 25, 2021 in Attachments 3 and 4. City staff is also attaching a copy of the master fee schedule noting the impact fee in place at the time the permit fees were calculated and a summary of the calculation demonstrating that $3,528,984.34 was the correct fee amount due (see Attachment 5).
When the Agreement was drafted in December 2017, it stated in Section C of the Recitals, that “Owner is obligated to pay impact fees for the Project to the City in the amount of $4,028,984.34.” In section D of the Recitals, it stated ‘Owner has requested that the City issue building permits for the construction of the Project and has requested a deferment in the amount of $3,528,984.34 until the date the project is issued Certificates of Occupancy.’ These two amounts were inputted incorrectly by the drafter of the Agreement. These amounts do not reflect the invoices prepared by the City in Attachments 3 & 4. After working with the developer, City staff has reviewed all records and agrees that there was a drafting error in this document. The executed Agreement reflects $500,000 more than the actual impact fees due for the project. It appears that the writer of the agreement added $500,000 to the actual fee due instead of subtracting the $500,000 loan amount. The proposed amendment (see Attachment 6) would correct the total impact fee amount from $4,028,984.34 to $3,528,984.34.
To date, the developer has paid the City $3,028,984.34 to receive their occupancy permits in April 2021. Also, the City still has a $500,000 remaining note due secured by the Fee Deferral Loan Note dated December 20, 2017 and that certain Deed of Trust and Security Agreement recorded in the real property records of Contra Costa County, California as Document #2018-0127118-00 on August 9, 2018.
In order to correct the official Agreement that is recorded against the property, City staff has worked with the City Attorney’s office and developer’s counsel to draft a formal amendment to this Agreement which is attached herein in Attachment 6.
March 21, 2023
DOCUMENTS ATTACHED:
Attachment 1 – Recorded Fee Deferral Agreement
Attachment 2 – Recorded Deed of Trust Security Agreement Attachment 3 – Terraces at Nevin permit #B16-02228 Fees Invoice Attachment 4 – Terraces at Nevin permit #B16-02229 Fees Invoice Attachment 5 – Master Fee Schedule and Impact Fees Calculations Attachment 6 – Fee Deferral Agreement Amendment