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@ 6#
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RDCAEAD^Hq_[Z\ZHJUFOnnOMZ\ZHJUKLMYZLKLqZKj^H[aZqHJ^KjHJicHL\JEQBBDgSV DURRE RDCAERDx[KaHjicHL\JEQEEDRSB RUABg
RDCAEgD ^KjHJfH`[HJHL\K\ZaHJOI^H[aZqHJUstqH`\iMaH[\ZJZLcUeLJ_[KLqHUYZLKLqZKj^H[aDZQqAHWJgUDKSV LMx[KaHBjUBgV RDCREDD ^KjHJfH`[HJHL\K\ZaHJUdGOjHJKjHKLMuKL_IKq\_[ZLcUxHqGLZqKjKLM^qZHL\ZIZqbE[QODMV_XqE\SD J ETURBB RDCREDX ^KjHJfH`[HJHL\K\ZaHJUdGOjHJKjHKLMuKL_IKq\_[ZLcUstqH`\xHqGLZqKjKLM^qEZHQLB\AZIXZqBSg b[OM_q\JRUDBA RDCgEDDmHnOLJ\[K\O[JKLMb[OM_q\b[OnO\H[JEQERgDSR WUgXD RDCgEXXfHKjsJ\K\H^KjHJicHL\JEQAAWESg BURRW
RDCgEAD^KjHJsLcZLHH[JEQETDWSD RTUDXB
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RDCgEgD mOO[C\OCmOO[^KjHJdO[PH[JUlHoJKLM^\[HH\wHLMO[JUKLMfHjK\HMdO[PH[J EQEDDRSA gURED RDCgEgg^KjHJKLMfHjK\HMdO[PH[JUijjh\GH[EQEgAWST DUAEX RACDEDDYZ[J\C]ZLH^_`H[aZJO[JOIhIIZqHKLMiMnZLZJ\[K\ZaH^_``O[\dO[PH[JDQRVADST RUTRR RACXEDD^oZ\qGyOK[Mh`H[K\O[JUeLqj_MZLciLJoH[ZLc^H[aZqHEQERAgSR VUgWX Agenda Item #11.2.
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@ 6#
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AUCDEAF rOPZHORPMZkLOQHORV[`OY\]IQ]OPIaOLZ]\QRESEDEATB UVFAf AUCDEfF[`OY\]IQ]OPIn{]YJeHMQNJHOPQLORESEEDDTA WVfcE AUCDEfDgPOeqLObHORPMZiPoLOHORV^OLJVv]ORHOdVPMZrOHHMKL]RHESEBWUTA FVEfE AUCDEfBgPOeqLObHORVgPOeVmPM\KVPMZ[{]P\]IQ]OPI[MYePIRESEE_DTA AVFWf AUCDEff[`OY\]IQ]OPIyLObHORV[IINQKHOESEEF_TA _VWWc AUCAEFFgLOHRQPMZ^LMRHOlPQYLMyLObHORESEEEATB AVUBf AUCAEDFgPIIHORESEEDATf FVFEc
AUCAEDDiL``YM`n{]YJeHMQNJHOPQLORESEFFETc FVBUE AUCAEDBiL`rOPZHORPMZk\PIHORESEEcDTU BVFcW
AUCAEDfiL``YM`yLObHORV[IINQKHOESEEEDTU FVBBf
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AWCDEDFXOY\bePRLMRPMZXIL\bePRLMRESFEAATW EVBF_ AWCDEDDkQLMHePRLMRESEFWETc DV_cf
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AWCDEADgILLOiPdHORVnu\HJQ^POJHQVyLLZVPMZsPOZGYIHRESEDfBTc EVfBW Agenda Item #11.2.
!"#$%&'())*+ ,-./0-1 /234#5 6#78.59/2*7,5- ":5.,.,;+#<./,-/*#2 =(<
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@ 6#
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ABCZETYuOHkOJPCCly\JL`\QIMbIJcOJPESEEATUZ ZWBFE ABCZEXXly\JL`\QIMbIJcOJPWwHHn\ROJESEEYDUZ ZWYAY AXCYEYYGQJP\CeQMOKdkOJhQPIJPIj_O`RLMQ`PWrMP\LHHOJPWLMNtOkLQJOJPESFVXXUX TWABA AXCDEYY]I^kd\OJWwd\I^L\ON[OHHOJWLMNnjjQ`O_L`RQMOtOkLQJOJPESEDTXUZ AWFVB AXCDEDYtLNQIW]OHHdHLJWLMN[IqOJlmdQk^OM\rMP\LHHOJPLMNtOkLQJOJPESEYFVUB EWVFT AXCDEDD [OHO`I^^dMQ`L\QIMPlmdQk^OM\rMP\LHHOJPLMNtOkLQJOJPWly`Ok\eQMOrMP\LHHOJPESFYDZUT ZWAEV AXCDEXYwhQIMQ`P[O`RMQ`QLMPESEEADUX FWTVD
AXCDEXDlHO`\JQ`_I\IJWgIqOJ[IIHWLMNtOHL\ONtOkLQJOJPESEEDDUZ BWXAD AXCDEXF lHO`\JQ`LHLMNlHO`\JIMQ`PrMP\LHHOJPLMNtOkLQJOJPW[JLMPkIJ\L\QIMlmdQk^OM\ ESEEETUT EWDAZ AXCDEXA lHO`\JQ`LHLMNlHO`\JIMQ`PtOkLQJOJPW]I^^OJ`QLHLMNrMNdP\JQLHlmdQk^OM\ ESEFDYUB BWZEX AXCDEXZlHO`\JQ`LHLMNlHO`\JIMQ`PtOkLQJOJPWgIqOJRIdPOWKdfP\L\QIMWLMNtOHLpESEEADUY ETWFBY AXCDEXBwdNQIhQPdLHlmdQk^OM\rMP\LHHOJPLMNtOkLQJOJPESEYTDUV EWZFF AXCDEXTKO`dJQ\pLMNGQJOwHLJ^KpP\O^PrMP\LHHOJPESYAYZUV ZWDEB AXCFEYYwQJ`JLj\_O`RLMQ`PLMNKOJhQ`O[O`RMQ`QLMPESEYAVUB XWTXD AXCFEDYwd\I^I\QhOvINpLMNtOHL\ONtOkLQJOJPESEEYAUV AWVAT AXCFEDDwd\I^I\QhOsHLPPrMP\LHHOJPLMNtOkLQJOJPESEEYDUA XWTVX AXCFEDFwd\I^I\QhOKOJhQ`O[O`RMQ`QLMPLMN_O`RLMQ`PESEDVZUV DWYAE AXCFEFYvdPLMN[Jd`c_O`RLMQ`PLMNoQOPOHlMiQMOKkO`QLHQP\PESEVVEUB DWVVX AXCFEAYGLJ^lmdQk^OM\_O`RLMQ`PLMNKOJhQ`O[O`RMQ`QLMPESEEFDUV EWYFX Agenda Item #11.2.
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abCDEBDwHHdnHHtJV]GNXYJVLiTLcNWHcZNVdfLVdLcZE^EDBa_A E[bFF abCDEBBwHHdjcHXLZZJV]sHctLcZ[qKKiWYLcE^Eahb_D `[BAD abCAEFb Q\WcSdJV]NVdocNkJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNEZ^WEJXFBa_A D[FFh abCAEFFwHc]JV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJXE^EbaA_a `[hha abCAEFDlHKKJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJXE^EbhA_a b[DFa abCAEDb nSWWJV][jSVXYJV][NVdjcLZZGNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNEV^dFajbKFN_A ZWJXa[BBB abCAEDF ocJKKJV]NVdxHcJV]GNXYJVLfHHKeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNEZ^WEJXEB`_a b[EAD abCAEDD vcJVdJV][uNTTJV][jHKJZYJV][NVdxSrrJV]GNXYJVLfHHKeLWWLcZ[iTLcNWHcZ[NVdfEL^EVhdBLgcZ_A [GLWNKNAV[Ahg abCAEDA uNWYLNVdfScVJV]GNXYJVLfHHKeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNEZ^WEJXFBB_a A[ghg abCAEDa GJKKJV]NVdjKNVJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJXE^EbA`_a `[BFb abCAEAb GNXYJVJZWZE^AgaF_a g[bab
abCAEab GLWNKClLrJVJV]wScVNXLiTLcNWHcZNVdfLVdLcZE^EEDg_A g[gFA abCAEaFjHScLcZNVdnNZWLcZ[GLWNKE^EEbF_A E[FAh
abCAE`b GHdLKGNtLcZ[GLWNKNVdjKNZWJXE^EEaA_h `[g`h abCAE`FjNWWLcVUNtLcZ[GLWNKNVdjKNZWJXE^EEbF_` g[aab abCAEhbwHSVdcPGHKdNVdnHcLUNtLcZE^EEaE_A b[AEA abCAEhF GHKdJV][nHcLUNtJV][NVdnNZWJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLE^WbNEKaNhV_A djKNZWJXA[`aa abCAEgb GSKWJTKLGNXYJVLfHHKeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJXE^bhaF_A A[`Bh abCAbbbfHHKNVdoJLGNtLcZE^EBD`_h b[aaF
abCAbFb sLKdLcZ[nSWWLcZ[eHKdLcLcZ[NVdxcNyLcZE^aAgh_a B[F`` abCAbFF sLKdJV][eHKdLcJV][NVdxcNyJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ E^EAAh_a F[BBF abCAbBb MLNWfcLNWJV]QRSJTULVWeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJX E^EbEg_a E[ADB abCAbBFuNPHSWsHctLcZ[GLWNKNVdjKNZWJXE^EEFg_` E[gaE abCAbBDjKNWJV]GNXYJVLeLWWLcZ[iTLcNWHcZ[NVdfLVdLcZ[GLWNKNVdjKNZWJXE^Ebg`_A `[EgD abCAbBAfHHKvcJVdLcZ[wJKLcZ[NVdeYNcTLVLcZE^EE`g_A g[bD` abCAbBB GLWNKsHctLcZNVdjKNZWJXsHctLcZ[qKKiWYLcE^EFDb_A a[FhE abCabbbjcLTcLZZfLXYVJXJNVZNVdsHctLcZE^EEag_a E[ggh Agenda Item #11.2.
!"#$%&'())*+ ,-./0-1 /234#5 6#78.59/2*7,5- ":5.,.,;+#<./,-/*#2 =(<
<.2# ())*+ ,-./> ?# :#5)#/,.8 ., "
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@ 6#
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ABCSQVDm[PKkOo[GHKMNKFOIPFLOHYfKHYKFLQRQQQDTV WUS_S ABCSQABmKnKFLUpOHYQRQQBQTW AUVVW
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ABC_QBDEPnKFcGLIFGtaIPFLOHYcGLNOIo[KFLQRQQDDTB B^UASW ABC_QBWEPnKFEeOHIMNKFOIPFLQRQQBDTB QlUSlD
ABC_QDBmIOIGPHOFbsHJGHKKFLOHYXPGeKFMNKFOIPFLQRQBDDTl _USW^ ABC_QWB \OIKFOHY\OLIKnOIKFfFKOIiKHIEeOHIOHYmbLIKiMNKFOIPFLQRQW_ATl _USV^ ABC_Q^Bd[KiGoOeEeOHIOHYmbLIKiMNKFOIPFLQRQQlDT^ WUASD ABC_Q^D hOLEeOHIMNKFOIPFLQRQQQSTB Q_U^_S
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ABC^QWDdaIIGHJOHYmeGoGHJkOo[GHKmKIIKFLUMNKFOIPFLUOHYfKHYKFLQRQAllTV lUQDB ABC^QVB sgIFaYGHJUZPFiGHJUEFKLLGHJUOHYdPiNOoIGHJkOo[GHKmKIIKFLUMNKFOIPFLUOHYQRfQKVHlYlKTV FLSUASD ABC^QABZaFHOoKUqGeHUMrKHUcFGKFUOHYqKIIeKMNKFOIPFLOHYfKHYKFLQRQB^QTV AU^S_ ABC^QSByHLNKoIPFLUfKLIKFLUmPFIKFLUmOiNeKFLUOHY\KGJ[KFLQRSS_QTA BUS_^ ABC^QlBzKnKeKFLOHYEFKoGPaLmIPHKOHYkKIOe\PF]KFLQRQBDSTA QU^lQ ABC^Q_BcKHIOe`OtPFOIPFbfKo[HGoGOHLQRQSl_TS QU^SV ABC^Q_D kKYGoOeuNNeGOHoKfKo[HGoGOHLQRQDQQTV _UWlA ABC^Q_W MN[I[OeiGo`OtPFOIPFbfKo[HGoGOHLQRQDlWTA BUBV_ ABC^BBBEOo]OJGHJOHYZGeeGHJkOo[GHKMNKFOIPFLOHYfKHYKFLQRAV_lTV _UlWQ ABC^BDWEOGHIGHJUdPOIGHJUOHYcKoPFOIGHJ\PF]KFLQRQBWQTA DUAQD ABC^BDV dPOIGHJUEOGHIGHJUOHYmNFObGHJkOo[GHKmKIIKFLUMNKFOIPFLUOHYfKHYKFL QRBB^WTA _UAWS ABC^BVBmKiGoPHYaoIPFEFPoKLLGHJfKo[HGoGOHLQRQVSlTA WU_DS ABC^BABE[PIPJFON[GoEFPoKLL\PF]KFLOHYEFPoKLLGHJkOo[GHKMNKFOIPFLQRQQADTV lUWWW ABC^BSBdPiNaIKF{aiKFGoOeebdPHIFPeeKYfPPeMNKFOIPFLQRDVBSTA DUBBl ABC^BSDdPiNaIKF{aiKFGoOeebdPHIFPeeKYfPPeEFPJFOiiKFLQRQW_lTl ^USD^ ABC^B^BuY[KLGrKXPHYGHJkOo[GHKMNKFOIPFLOHYfKHYKFLQRQQS_TV lUSDA ABC^B^D deKOHGHJU\OL[GHJUOHYkKIOeEGo]eGHJsxaGNiKHIMNKFOIPFLOHYfKHYKFL QRQBS_TV SU^Dl ABC^B^WdPPeGHJOHYZFKK|GHJsxaGNiKHIMNKFOIPFLOHYfKHYKFLQRQBDDTV SUlD^ ABC^B^VsIo[KFLOHYsHJFOrKFLQRQQVSTV WU^QA
ABC^B^A kPeYKFLUm[ONKFLUOHYdOLIKFLUsgoKNIkKIOeOHYEeOLIGoQRQSDBTV ^UQWD ABC^B^SEONKFhPPYLkOo[GHKmKIIKFLUMNKFOIPFLUOHYfKHYKFLQRQQ__TV ^UQ_V ABC^B^lfGFKXaGeYKFLQRQQQ_TV SUlD^
ABC^B^_pKeNKFLCCEFPYaoIGPH\PF]KFLQRDSAQTV SU^_^ ABC^B^^EFPYaoIGPH\PF]KFLUueeMI[KFQRDlQQTV ^UAVW AWCDQBBuGFeGHKEGePILUdPNGePILUOHYZeGJ[IsHJGHKKFLQRQQQSTD SDUWVW AWCDQBDdPiiKFoGOeEGePILQRQBQVTB V_UBD_
AWCWQBB uitaeOHoKcFGrKFLOHYuIIKHYOHILUsgoKNIsiKFJKHobkKYGoOefKo[HGoGOHL QRQQQ_TW ^UWSS AWCWQWBcFGrKF}mOeKL\PF]KFLQRQA^ATV SU^DQ
AWCWQWDpKOrbOHYfFOoIPFCfFOGeKFfFao]cFGrKFLQRS_SDTS QUQlW AWCWQWW`GJ[IfFao]cFGrKFLQRB_lDTV _UW^_
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Agenda Item #11.2.
!"#$%&'())*+ ,-./0-1 /234#5 6#78.59/2*7,5- ":5.,.,;+#<./,-/*#2 =(<
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34#5 6#
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@ 6#
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ABCAD[[\PK^dJHPQSePJKQMfK^MJHDWDDEEYZ aNZ[D
ABCADE[_PgRPKQHNePRMHNPQShK^dRHd`iPRMJjMHHM^HDWDDEXY[ [BNDEk ABCADEE edRdJldPRfgMJPRdJHDWDD[DYZ ANcEa
ABCADB[\]KgmQnKQMMJHDWDDDaY[ ZaNXZ[
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ABCZDA[OJPQHgdJRPRKdQTQHgMURdJHDWDDBEYc ANZA[
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ABCcDB[IJMSnMfgMJPRdJHDWDD[XYc [NccD
ABCcDa[tdKHRPQSiKQU]fgMJPRdJHDWDDDZYA [NaZX
ABCcDA[TQSGHRJKP^OJGUpPQSOJPURdJfgMJPRdJHDWaEDZYA DNAcB ABCcDZ[_^MPQMJHd`jM]KU^MHPQSmuGKgrMQRDWDXkZYa DNDka ABCcDZEoPldJMJHPQSvJMKn]RN\RdUpNPQSePRMJKP^edLMJHNtPQS[Wk[kXYa BNXDk ABCcDZB ePU]KQMvMMSMJHPQSf``lMPJMJHDWDAakYa AN[ZE ABCcDZahPUpMJHPQShPUpPnMJHNtPQSDWacBBYB ZNkXB ABCcDZA\RdUpMJHPQSfJSMJvK^^MJHDWBAcAYa ENE[c
ABCcDcEhGrgfgMJPRdJHNmbUMgRiM^^]MPShGrgMJHDWDDaZYA XNaDX ABCcDX[wM`GHMPQSwMUVU^Pl^MePRMJKP^_d^^MURdJHDW[EckYZ aNaZA ABCc[E[OPQp_PJNOJGUpNPQS\]KgodPSMJHDWDD[aYA XNDaa ABCc[kk ePRMJKP^edLKQnidJpMJHNq^^fR]MJDWDDXDYa kNcZ[ \dGJUMHx_qmIINfUUGgPRKdQP^mrg^dVrMQRyePVEDEEz{iPnMyEDEBC[HR|GPJRMJzIPRPW
Agenda Item #11.2.
!"#$%&'())*+ ,-./0-1 /234#5 6#78.59.,#":5.,.,;+# <(==.2# ())*+ ,-./> ?# :#5)#/,.8 ., "
34#5 6#
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AABiCAUf_hF[FOM\]MFNGkG\NFKGOc][]dG\OCPCVRCQATAAeWQCS AABiCAin]KF^FMFGOc][]dG\OCPiUARAVTACVWVQR
AABiCUADbhaLMG\][_o[Hb\h]MFb[kpOMGhOc][]dG\OCPCQACRSTAeeWQiQ AABiCiAnF[][KF]^c][]dG\OCPiUVeSeTASVWQRC
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AABRCeA Z]hl^F[dc][]dG\OCPCSASQQTAACWViV
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AABRAQAg\baG\MpWmG]^IOM]MGW][_DbhhL[FMpfOObKF]MFb[c][]dG\OCPCVUARUTe CWAXS AABRAXAkbKF]^][_DbhhL[FMpkG\NFKGc][]dG\OCPCCSVQRTV RWXVQ AABRAeRgG\Ob[]^kG\NFKGc][]dG\OWf^^`MEG\CPCUCXQVTe XWAAU AABRARR c][]dG\OWf^^`MEG\CPAeVCVUTAXUWQXV
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Agenda Item #11.2.
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Agenda Item #11.2.
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Agenda Item #11.2.
APPENDIX
CITY OF ST HELENA
AFFORDABLE HOUSING
DEVELOPMENT IMPACT FEE
FINANCIAL FEASIBILITY ANALYSIS
OCTOBER 1, 2024
Oakland Office Corporate Office Other Regional Offices
66 Franklin Street 27368 Via Industria Aurora, CO
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Oakland, CA 94607 Temecula, CA 92590 Phoenix, AZ
Tel: (510) 832-0899 Tel: (800) 755-6864 Plano, TX
Fax: (888) 326-6864 Seattle, WA
Washington, DC
Agenda Item #11.2.
www.willdan.com
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Agenda Item #11.2.
i
TABLE OF CONTENTS
EXECUTIVE SUMMARY............................................................................2 Methodology Overview 3
1. INTRODUCTION .............................................................................6 Purpose 6
Assumptions 6
2. FEASIBILITY ANALYSIS...................................................................7 Feasibility Analysis Methods 7
Land Residual Analysis 7
Structure and Inputs 8
3. IMPACT ON LAND VALUE..............................................................10 Factors Affecting Feasibility 10
Feasibility Results 11
4. APPENDIX ..................................................................................12 Appendix A: Proposed Affordable Housing Impact Fees 12
Appendix B: Development Prototype Pro Formas 13
Agenda Item #11.2.
2 Executive Summary
The primary purpose of this report is to estimate the impact on development financial feasibility of the imposition of an affordable housing fee by the City of St. Helena. The analysis examines the economics of six prototypes:
In a nexus study, dated May 22, 2024, Willdan has calculated the maximum justified for each development type and included them in the pro forma analysis contained in this report. These fees are detailed in the tables below. The table includes both the maximum justified fees as well as two alternatives of reduced fees presented earlier to accommodate project feasibility.
Table 1
Development Prototypes
St. Helena Feasibility Analysis
SF
Residential
MF
Residential Office Retail
Industrial/
Warehouse Hotel
Density (FAR) 0.29 0.76 0.28 0.33 0.17 0.13
Density (Units/Acre) 33
Form Factor single 3-5 stories 1 story 1 story 1 story Multi Residential Units/Rooms 1 33 65
Unit/Room Size 3,780 1,000 500
Residential SF 3,780 33,000 32,500
Commercial SF 3,597 2,847 1,500 21,097
parcel size (acres) 0.3 1 0.30 0.2 0.2 9.72
Willdan Financial Services, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Financial Feasibility Analysis 3 Methodology Overview
The financial feasibility analysis uses a pro forma approach to calculate the projected return that the six development prototypes are likely to generate. Each protype’s pro forma estimates the residual land value, a method of estimating the value of land for a project that calculates the total revenue generated by a project (either in the form of sales price or the present value of projected lease income) and subtracts the costs of developer and operations (as applicable) to arrive at a net amount that is attributable to the land under the project. The analysis assumes that all development protypes are rental or lease property, except for the single-family prototype.
The analysis assumes that if a residual land value is negative, the project is not feasible.
A low land value means a project is challenging to develop and may not be feasible.
Willdan and staff have reviewed transactions in St. Helena in the past ten years and estimate that a value below $25 per square foot (psf), or $1.1 million per acre, indicates a low feasibility and low probability of completion for the prototype development in question. This number can vary by land entitlement, with generally higher valuations for single family land and downtown parcels, and lower values for industrial and other less intensive uses.
Table 2
Proposed Fees (per square foot, except where noted)
St. Helena Feasibility Analysis
Maximum
Justified
Max Estimated
Feasibility (1) 15% of Max 10% of Max
Residential
Rental Unit $135 NA $20 $14
For Sale Unit $196 $168 $29 $20
Non-Residential
Hotel (per room) $41,797 $41,797 $6,270 $4,180
Commercial $141 $20 $21 $14
Office $176 NA $26 $18
Industrial $67 NA $10 $7
(1) Max Estimated Fee at $1.1 million per acre residual value.
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 4 As shown in Table 3 below, considering the $1.1 million benchmark described above, the analysis finds that single family residential, hotel and retail development appear feasible in current market conditions, and multifamily and office development are near the threshold of feasibility. Industrial uses appear infeasible, although industrial may in fact be feasible given that it typically has lower land valuations to meet. It is important to note that this feasibility analysis reflects current market conditions, and especially the historic increases in construction costs during and after the COVID epidemic. Willdan expects that market factors will return to a more historic balance in the future and that other development types will become feasible. It is also important to note that this analysis reflects a very generalized example, and that individual projects have their own economics and may in fact be feasible even in current market conditions.
Table 3 also shows the per acre cost of the 10%, 15% and 100% affordable housing fee alternatives to evaluate their effect on feasibility. It appears that the affordable housing fee would make little difference to feasibility for single family development but could pose a significant burden to the feasibility of retail. Office, MF residential and Industrial would be rendered even more infeasible, although the relative burden on industrial is small enough that it might make little material difference. For each development category the analysis has also calculated the maximum fee per acre, given the threshold value of $1.1 million.
The residual land values are affected by each of the inputs and assumptions contained in the pro formas and are particularly sensitive to capitalization rates, parking requirements, construction costs, and lease rates. The analysis identified reasonable ranges for these factors, given current market conditions, and tested the sensitivity to the factors to financial feasibility for each of the prototypes.
Table 3
Residual Value Summary
St. Helena Feasibility Analysis
Item
SF
Residential
MF
Residential Office Retail
Industrial/
Warehouse Hotel
Residual Land Value Per Acre 3,213,756 928,200 893,627 1,386,326 568,714 1,713,457 Residual Land Value Per land SF $74 $21 $21 $32 $13 $39 Porential Fees
10% Fee Per Acre $246,960 $646,800 $211,024 $200,714 $50,250 $27,951 15% Fee Per Acre $370,440 $970,200 $316,536 $301,070 $75,375 $41,926 100% Fee Per Acre $2,469,600 $6,468,000 $2,110,240 $2,007,135 $502,500 $279,507 Max Fee at Threshold $2,113,756 NA NA $286,326 NA $613,457 Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 5 Willdan believes it is important to consider that the impact fees are a cost recovery mechanism, not an assessment or tax. The impact fees are a calculation of the costs incurred by the City to provide affordable housing in connection with development. At the full calculated fee, the City “breaks even” on the revenue received and the costs of new facilities needed to serve development. Any reduction of the fees results in the need to outside revenues to make up the difference or a reduction in the provision of affordable housing. This analysis examines the proposed fees in comparison to estimated project feasibility, but that does not mean that the fees are responsible for the feasibility of projects, or that they should be set at a level that assists project feasibility.
This is a policy judgement to be made by elected officials, with the input of members of the community and other stakeholders.
Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 6 1. Introduction
Purpose
The primary purpose of this report is to analyze the effect on financial feasibility of the proposed updated impact fees on six residential and commercial prototypes. These prototypes are summarized in Table 1, below:
• Residential: For-Sale Townhomes/Single-Family Detached • Multifamily: Multifamily Residential/3-5 Story Building • Office/single story building
• Retail / single story building
• Industrial (warehouse)/Single Story Building
• Hotel (65-room resort hotel)
The Nexus Study calculates the maximum justified fee that will be considered by the City Council. The nexus study documents the necessary data and calculations to establish nexus and proportionality.
Assumptions
The financial feasibility analysis assumes all development prototypes are rentals or leases, except for single-family residential. The analysis includes other assumptions about the development prototypes which are documented in Table 4 and individual pro formas in the Appendices.
.
Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 7 2. Feasibility Analysis
The feasibility analysis of St. Helena’s proposed development impact fees uses a pro forma approach to calculate the projected financial return that six development prototypes are likely to generate for developers. The analysis assumes a standard set of assumptions and then estimate potential revenues, costs and a net financial return for the real estate developer.
.
Feasibility Analysis Methods
In classical real estate economics, development value is created when existing land or buildings can be improved by the investment of financial capital. Two main types of financial calculations are used by developers and policy makers to understand the financial feasibility of a particular development concept or project. The first and simplest type of financial feasibility analysis can be expressed by this basic equation:
Development Value – (Development Costs + Land) = Profit In this case profit can be expressed as total dollars or more typically as a percent return on money invested or costs. Assuming a positive return, this percent return is then compared to typical returns in the marketplace to assess the viability of a particular development versus other potential investment and development opportunities.
The second type of financial feasibility analysis is called a “land residual method” and can be expressed by the following simple equation:
Development Value – (Development Costs + Profit) = Land Residual This type of analysis is often preferred by urban economists as a means of clarifying the value generate by a proposed project under different planning and development scenarios and with validated cost and revenue assumptions. Assuming that the land residual is positive, the land value created by a development is compared to recent land sales for comparable parcels of land to further evaluate the relative feasibility of the development concept compared to other opportunities in the marketplace. Effectively, the land residual is the amount the developer can afford to pay for the land. If this amount is above prevailing land costs, the project is generally feasible.
This analysis uses the land residual method for determining financial feasibility. .
Land Residual Analysis
As a policy tool for helping to understand the potential for value capture related to new zoning and/or planning permissions in each area, a land residual methodology is often a Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 8 preferable approach for illustration the potential increase in underling land values associated with different policy interventions. This report uses a land residual analysis to estimate the value of land for each of the six development prototypes that relies on the net operating income and value of improvements.
Structure and Inputs
Table 4 details the key assumptions used as inputs into the pro forma model, as well as a summary of calculated residual land values.
Agenda Item #11.2.
City of St. Helena Development Impact Fee Nexus Study Update 9 Table 4
Feasibility Model Assumptions
St. Helena Feasibility Analysis
SF Residential MF Residential Office Retail Industrial Hotel Development/Construction Costs ($/sf)
Residential Construction Costs 240 310
Commercial Construction Costs 250 250 125 650
Commercial Tenant Improvements (PSF) Landlord Allowance 50 75 0 0 Soft Costs
Soft Costs (% of hard costs) 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% Developer Profit 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Vacancy Rate
Residential Vacancy NA 5.00%
Commercial Vacancy 5.00% 2.50% 5.00% 20.00%
Operating Expenses (% of revenue)
Residential Operating Expenses NA 25.00%
Commercial Operating Expenses 20.00% 20.00% 15.00% 25.00% Financing
% of Construction Cost 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Revenue
Residential Lease Rate (psf) $2.60
Commercial Lease Rate (psf) $3.30 $3.40 $2.00
For Sale Market Rate Residential Price Per Unit $2,457,000 Commercial Cap Rate 7.00% 7.00% 7.00% 8.00%
Residential Cap Rate 5.50%
Hotel ADR $1,000
hotel occupancy 80%
hotel revpar $800
Results: Residual Land Values (per acre)
Residual Land Values $3,213,756 $928,200 $893,627 $1,386,326 $568,714 $1,713,457 Willdan, 2024
Agenda Item #11.2.
-10
3. Impact on Land Value
The residual land values are affected by each of the inputs and assumptions contained in the pro formas, and are particularly sensitive to capitalization rates, parking requirements, construction costs, and lease rates. However, in all cases the impact fees charged by the City do not have a major effect on feasibility, and in no case do they transform a prototype project from feasible to infeasible.
Factors Affecting Feasibility
If a residual land value is negative, the project is not feasible. Alternatively, low land values indicate a low feasibility for a project. Willdan estimates that generally land values below $25 per square foot indicate a low feasibility and low probability of completion for the prototype developments.
A developer’s selection of real estate product type and location depends on various factors. The past, current, and projected future demand for a certain prototype in the area are weighed against the existing and projected future supply of these development types in the local and surrounding areas.
Potential factors affecting financial feasibility include the following:
• Capitalization rate – lower capitalization rates increase financial feasibility. Based on current and anticipated market conditions and assessment of relative market risk associated with St. Helena, this analysis assumes capitalization rates of 7.0 percent for non-residential development and 5.5 percent for multifamily residential development. • Construction costs – lower construction costs increase financial feasibility. Based on current market conditions, this analysis assumes base construction costs of $250 per square foot for retail and office development, $240 per square foot for residential development, $310 per square foot for multifamily development, and $125 per square foot for industrial developments.
• Operating expenses – operating costs include utilities, common area maintenance, security, and property taxes. The financial feasibility analysis uses 25% of revenue for multifamily residential and 15 to 20% for commercial prototypes. • Lease rates – higher lease rates and dependent on building features and market conditions but increase financial feasibility. Based on current and expected market conditions, this analysis assumes a lease rate of between $2.60 per square foot for residential development, $3.30 per square foot for office development, $3.40 per square foot for retail development, and $2.00 per square foot for industrial development. • Tenant improvement costs – passing improvement costs to tenants or amortizing costs increase financial feasibility. This analysis assumes a commercial tenant improvement landlord allowance of $50 psf for office and $75 psf for retail developments. • Profit margin – lower profit margins return less to developers but increase apparent financial feasibility of a project. This analysis assumes a developer profit of 12 percent (of costs) on each development project.
• Density – the floor area ratio (FAR) of a development project affords financial feasibility because it allows for a higher number of square feet of development on a given parcel.
There is a tradeoff, however, in that a higher FAR can result in a change in construction type which can lead to higher costs per square foot. The analysis assumes varying FARs to explore this dynamic.
Refer to Table 4 for a master list of pro forma inputs and assumptions.
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 11 Feasibility Results
The residual land values are affected by each of the inputs and assumptions contained in the pro forma and are particularly sensitive to capitalization rates, parking requirements, construction costs, and lease rates. The analysis identified reasonable ranges for these factors, given current and likely market conditions, and tested the sensitivity of the factors of financial feasibility for each of the six development prototypes.
As shown in Table 3, above, initial results indicate that some of the development types are feasible under current market conditions, and that single family development, retail development and hotel development appear able to bear the burden of an affordable housing impact fee to varying degrees.
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 12 4. Appendix
The appendix provides detailed and supporting tables for the summary analysis described above.
Appendix A: Proposed Affordable Housing Impact
Fees
The following tables detail the maximum justified fees for the City calculated in the recent Nexus Study, dated May 22, 2024.
.
Table A.1
Proposed Fees (per square foot, except where noted)
St. Helena Feasibility Analysis
Maximum
Justified
Max Estimated
Feasibility (1) 15% of Max 10% of Max
Residential
Rental Unit $135 NA $20 $14
For Sale Unit $196 $168 $29 $20
Non-Residential
Hotel (per room) $41,797 $41,797 $6,270 $4,180
Commercial $141 $20 $21 $14
Office $176 NA $26 $18
Industrial $67 NA $10 $7
(1) Max Estimated Fee at $1.1 million per acre residual value.
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 13 Appendix B: Development Prototype Pro Formas
Single Family
DEVELOPMENT PROGRAM ASSUMPTIONS ASSUMPTION/FACTOR TOTAL Development Site (Square Feet) 0.3 Acres 13,068
Dwelling Units 3.3 DU/Acre 1
Gross Building Area (Square Feet) 3,780 GBA/DU 3,780
Net Habitable Square Feet 100% 3,780
BUILDING INCOME AND VALUE ASSUMPTION/FACTOR PER GBA TOTAL Net Operating Income (NOI) $0 $0
Project Market Value $2,457,000 per DU $650 $2,457,000
Project Sale Cost 7.0% Value 46 171,990
Net Project Value $605 $2,285,010
PROJECT DEVELOPMENT COSTS ASSUMPTION/FACTOR PER GBA TOTAL Construction Cost
Building Direct Cost (includes site development) $240 Cost/SF (GBA) $240 $907,200 Total Construction Cost $240 $907,200
Soft Costs
Financing 5% of Construction Costs $12 $45,360
Other Soft Costs 25% of Construction Costs $60 $226,800 Total Soft Costs $72 $272,160
Other Project Costs
Developer Return on Investment 12% of Construction & Soft Costs $141,523 Residual Land Value Model Output/Supportable Land Cost $964,127 Total Other Costs $1,105,650
Total Project Cost (including land) $2,285,010
Residual Land Value $964,127
Per Acre $3,213,756
10% Affordable Housing Fee $20 psf $74,088
per acre $246,960
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 14 Multifamily
DEVELOPMENT PROGRAM ASSUMPTIONS ASSUMPTION/FACTOR TOTAL Development Site (Square Feet) 1 Acres 43,560
Dwelling Units 33 DU/Acre 33
Gross Building Area (Square Feet) 1,000 GBA/DU 33,000
Net Rentable Square Feet 85% 28,050
BUILDING INCOME AND VALUE ASSUMPTION/FACTOR PER GBA TOTAL Gross Potential Rent $2.60 per SF/Month $27 875,160
Gross Potential Parking Income 0 per Space/Month
Losses to Vacancy 5% of Gross Income ($1) (43,758)
Gross Residential Revenue 831,402
Basic Operating Expenses 25% of Gross Potential Rent ($7) (218,790) Total Operating Expenses (218,790)
Net Operating Income (NOI) $19 $612,612
Project Market Value 5.50% Cap Rate $0 $11,138,400
Project Leasing Cost (included in operating costs) 0.0% Value $0 $0.0 Net Project Value $0 $11,138,400
PROJECT DEVELOPMENT COSTS ASSUMPTION/FACTOR PER GBA TOTAL Construction Cost
Building Direct Cost (includes site development) $250 Cost/SF (leaseable area) $213 $7,012,500 Total Construction Cost $213 $7,012,500
Soft Costs
Financing 5% of Construction Costs $11 $350,625
Other Soft Costs 25% of Construction Costs $53 $1,753,125 Total Soft Costs $64 $2,103,750
Other Project Costs
Developer Return on Investment 12% of Construction & Soft Costs $1,093,950 Residual Land Value Model Output/Supportable Land Cost $928,200 Total Other Costs $2,022,150
Total Project Cost (including land) $11,138,400
Residual Land Value $928,200
per acre $928,200
10% affordable housing fee $20 $646,800
per acre $646,800
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 15 Retail
DEVELOPMENT PROGRAM ASSUMPTIONS ASSUMPTION/FACTOR TOTAL Development Site (Square Feet) 0.20 Acres 8,712
FAR 0.33
Gross Building Area (Square Feet) 14,235 GBA/Acre 2,847 Net Leaseable Square Feet 100% 2,847
BUILDING INCOME AND VALUE ASSUMPTION/FACTOR PER GBA TOTAL NNN Potential Rent $3.40 per SF/Month $41 $116,158
Losses to Vacancy 3% of Gross Income ($1) ($2,904)
NNN Commercial Revenue $113,254
Basic Operating Expenses 0% of Gross Potential Rent $0 $0 Additional Operating Expenses (TDM) 0 Per Year 0 0
Total Operating Expenses $0
Net Operating Income (NOI) $40 $113,254
Project Market Value 7.00% Cap Rate $0 $1,617,909
Project Leasing Cost 6.0% Value $0.0 $97,075
Net Project Value $0 $1,520,835
PROJECT DEVELOPMENT COSTS ASSUMPTION/FACTOR PER GBA TOTAL Construction Cost
Building Direct Cost (includes site development) $250 Cost/SF (leaseable) $250 $711,750 Tenant Improvements $50 cost/sf (leaseable sf) $50 $142,350 Total Construction Cost $300 $854,100
Soft Costs
Financing 5% of Construction Costs $15 $42,705
Other Soft Costs 25% of Construction Costs $75 $213,525 Total Soft Costs $90 $256,230
Other Project Costs
Developer Return on Investment 12% of Construction & Soft Costs $133,240 Residual Land Value Model Output/Supportable Land Cost $277,265 Total Other Costs 410,505
Total Project Cost (including land) 1,520,835
Residual Land Value 277,265
per acre $1,386,326
10% affordable housing fee $14 $40,143
per acre $200,714
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 16 Industrial
DEVELOPMENT PROGRAM ASSUMPTIONS ASSUMPTION/FACTOR TOTAL Development Site (Square Feet) 0.2 Acres 8,712
FAR 0.17
Gross Building Area (Square Feet) 7,500 GBA/Acre 1,500
Net Leaseable Square Feet 100% 1,500
BUILDING INCOME AND VALUE ASSUMPTION/FACTOR PER GBA TOTAL Gross Potential Rent $2.00 per SF/Month $24 $36,000
Losses to Vacancy 5% of Gross Income ($1) ($1,800)
Gross Residential Revenue $34,200
Basic Operating Expenses 15% of Gross Potential Rent -$4 -$5,400 Total Operating Expenses -$5,400
Net Operating Income (NOI) $19 $28,800
Project Market Value 7.00% Cap Rate $0 $411,429
Project Sale Cost 6.0% Value $0.0 $24,685.7
Net Project Value $0 $386,743
PROJECT DEVELOPMENT COSTS ASSUMPTION/FACTOR PER GBA TOTAL Construction Cost
Building Direct Cost (includes site development) $125 Cost/SF (leaseable area) $125 $187,500 Tenant Improvements $0 cost/sf (leaseable sf) $0 $0
Total Construction Cost $125 $187,500
Soft Costs
Financing 5% of Construction Costs (incl. site) $6 $9,375 Other Soft Costs 25% of Construction Costs (excl. site) $31 $46,875 Total Soft Costs $38 $56,250
Other Project Costs
Developer Return on Investment 12% of Construction & Soft Costs $29,250 Residual Land Value Model Output/Supportable Land Cost $113,743 Total Other Costs $142,993
Total Project Cost (including land) $386,743
Residual Land Value $113,743
per acre $568,714
10% Affordable Housing Fee $7 $10,050
per acre $50,250
Willdan, 2024
Agenda Item #11.2.
City of St. Helena Development Impact Fee Feasibility Study 17 Hotel
DEVELOPMENT PROGRAM ASSUMPTIONS ASSUMPTION/FACTOR TOTAL Development Site (Square Feet) 9.72 Acres 423,403
FAR 0.13
Rooms 65.00
Gross Building Area (Square Feet) 5,514 GBA/Acre 53,597 Net Leaseable Square Feet 100% 53,597
BUILDING INCOME AND VALUE ASSUMPTION/FACTOR REFERENCE TOTAL ADR $1,000 /night
Occupancy 80%
Gross Potential Room Revenue $18,980,000 annually $18,980,000 $18,980,000 Ancillary Income 80.00% % of Room Revenue 15,184,000
Gross Revenue $34,164,000
Overall Exp. 62.0% of Gross Revenue $21,181,680
Room Operations 18.0% of Room Revenue $3,416,400
Other Op Exp 27.5% of Ancillary Revenue $4,175,600
Total Operating Expenses $28,773,680
Net Operating Income (NOI) $5,390,320
Project Market Value 8.00% Cap Rate $0 $67,379,000
Net Project Value $0 $67,379,000
PROJECT DEVELOPMENT COSTS ASSUMPTION/FACTOR REFERENCE PER GBA TOTAL Construction Cost
Building Direct Cost (includes site development and improvments) $650 Cost/SF $650 $34,838,050 Total Construction Cost $650 $34,838,050
Soft Costs
Financing 5% of Construction Costs (incl. site) $33 $1,741,903 Other Soft Costs 25% of Construction Costs (excl. site) $163 $8,709,513 Total Soft Costs $195 $10,451,415
Other Project Costs
Developer Return on Investment 12% of Construction & Soft Costs $5,434,736 Residual Land Value Model Output/Supportable Land Cost $16,654,799 Total Other Costs $22,089,535
Total Project Cost (including land) $67,379,000
Residual Land Value $16,654,799
per acre $1,713,457
100% Affordable Housing Fee $41,797 $2,716,805
per acre $279,507
Willdan, 2024
Agenda Item #11.2.
May 9, 2024
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Willdan Financial Services Responses to Comments on the Affordable Housing and Commercial Linkage Fee Nexus Study
Comments From Jennifer La Liberte
1. When is this item scheduled to go to City Council, and when will the staff report be published? This item is scheduled for the City Council meeting on May 14, 2024.
2. Can the City provide a prototype comparison of the proposed Affordable Housing Impact Fee, which is in dollars per square foot, with the current fee, which is a percentage of construction costs? It seems that would be helpful for the decision makers as well as the public.
Willdan has prepared a fee comparison comparing the City’s current fees to the maximum justified fee schedule and other Napa County cities. Table 1 below shows the residential housing fee comparison, and Table 2 displays the commercial linkage fee comparison.
ATTACHMENT 3
Agenda Item #11.2.
May 9, 2024
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Tabe 1: Residential Affordable Housing Fee Comparison
American
Canyon Napa Cloverdale Cotati Healdsburg
Rohnert
Park
Santa Rosa
(Inside
Downtown)
Santa Rosa
(Outside
Downtown) Sebastopol1
St. Helena
Current
St. Helena -
Maximum
Justified
Fee Schedules
Per Square Foot
Single Family, Townhouse 3.43 4.75 - - - - - 22.24 -
Stacked Flats, Apartment 3.98 4.05 - - - - - 22.24 -
0 to 909 square feet - - - - - 4.00 2.00 22.24 -
910 square feet or above - - - - - 8.00 3.00 22.24 -
Rental Unit - - - 2.15 4.02 - - 22.24 135
For Sale Unit - - - 16.70 - - - 22.24 196
-
Per Unit
Studio $ 24,000
1 Bed $ 27,400
2 Bed $ 30,900
3 Bed $ 34,300
4 Bed $ 37,000
5 Bed $ 39,800
For Sale Unit $ 15,520
Fees for Prototype Units
Single Family, 2,761 square feet,
3 bedrooms $ 9,470 $13,115 $ 34,300 $ 33,400 $ 46,109 $ 15,520 $ 22,088 $ 8,283 $ 61,405 $ 22,500 $ 541,156 Single Family, 3,780 square feet,
5 bedrooms 12,965 17,955 39,800 41,400 63,126 15,520 30,240 11,340 84,067 27,500 740,880 Based on
sales price of
unit, calculated
as follows:
$2,400 first
$125,000 of
sales price
+$200 for each
$5,000
increment
thereafter
The housing
in-lieu fee
shall be
charged on a
percentage
basis of the
projected
construction
costs of
market rate
dwelling
units.
1 No in-lieu fee is required for less than 4 dw elling units. For 5 or more dw elling units, on-site inclusionary housing is required: https://sebastopol.municipal.codes/SMC/17.250 If there is a decimal fraction unit requirement, an in-lieu fee shall be provided equal to the applicable decimal fraction times the established in-lieu fee for one inclusionary unit (based on the average size of the units being built), or, at the developer’s discretion, an inclusionary unit may be provided.
Agenda Item #11.2.
May 9, 2024
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Table 2: Commercial Linkage Fee Comparison
Land Use
Category
American
Canyon Calistoga1 Napa Yountville Cotati2 Petaluma3
Rohnert
Park3
Santa
Rosa Sebastopol3 Sonoma
St. Helena -
Current
St. Helena
Maximum
Justified
Office $ 0.87 $ 2.63 $3.55 $ 11.60 $ 2.39 $ 3.36 $ 0.69 $ 3.00 $ 2.08 $ 4.00 $ 4.11 $ 176.08 Hotel 0.87 1,756.35 6.00 11.60 2.39 3.36 0.69 3.00 2.08 15.00 3.80 74.64 Retail 0.87 3.81 3.55 11.60 4.12 5.81 1.19 3.00 3.59 4.00 5.21 141.29 Industrial 0.57 1.93 3.50 11.60 2.47 3.46 0.71 3.00 2.15 n/a 1.26 66.66 All fees charged per square foot, except for Calistoga hotel fee, w hich is charged per room. 1 Calistoga hotel fee charged per room.
2 Hotel and office assumed charged at "commercial" rate. New construction less than 2,000 sf, and the first 2,000 sf of any commercial project is exempt. 3 Hotel and office assumed charged at "commercial" rate.
Agenda Item #11.2.
May 9, 2024
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3. Can the City provide an example of how much one or more of the current proposed hotel developments would generate in housing impact fees with the current fee and the proposed fee at the 10% and 15% levels, and compare that to what it would cost the developer to construct the number of affordable housing units that particular development will necessitate? Table 3 displays the potential commercial linkage fee revenue for a proposed hotel project, under the maximum justified fee schedule, the 15% and 10% scenarios. The current proposed hotel project is expected to be 75 rooms and 52,313 square feet.
For reference, the last hotel entitled included 62 rooms, and the City negotiated $3.4 M in payment towards affordable housing back in 2020 when housing costs were lower. It is the City’s policy to require a Development Agreement for all hotels to produce more housing production or larger funding than impact fees provide.
4. For the fee calculation on Table 1.11, how is the “Units Demanded” factor calculated? Or what is it based on?
Units demanded are identified in Tables 1.8 and 1.9. They are the number of units needed to house the employment generation needed to meet induced demand from the household spending of market rate households.
5. Has the City or consultant determined a maximum threshold a private development project can tolerate for the housing impact or in-lieu fee? If not, how did the consultant arrive at the 10% to 15% maximum for the proposed fee.
City staff recommended the 10% and 15% scenarios. A maximum threshold a private project can tolerate has not been determined, as it is subject to a wide variety of factors that vary from project to project and change according to market conditions. The 10% and 15% scenarios would make the fees more in line with the other Sonoma County cities in the fee comparison compared to the maximum justified fees.
Comments:
Table 3: Potential Hotel Fee Revenue
Square Feet 52,313
Maximum Justified Fee per Square Foot $ 75
Maximum Justified Fee $ 3,923,475
15% of Maximum Justified Fee 588,521
10% of Maximum Justified Fee 392,348
Agenda Item #11.2.
May 9, 2024
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1. It is a difficult balancing act to ensure the City can achieve a reasonable fee requirement while not discouraging private development. The City should identify and adopt incentives to encourage developers to include affordable housing in their developments that would be more attractive than writing a check to ensure affordable units actually get built.
The higher the fee, the greater the incentive for developer to incorporate affordable housing. A drawback of this approach is that some projects are limited in scale or other factors that make providing affordable housing problematic.
2. Toward the City’s goal to encourage housing, the City should consider adopting a policy that exempts affordable housing projects from paying impact and other fees, rather than requiring each project proponent to request a waiver, project by project. The City of Sacramento’s Zero-Dollar Rate Program For Affordable Dwelling Units is a good example to follow.
This is a common approach. Units that meet certain criteria (below market rate in perpetuity for a certain number of years) are frequently assessed reduced or exempt from paying impact fees. This is a policy decision, however, and therefore outside the scope of this fee study.
3. It would be helpful in the staff report to include a 10-year history of the Housing Impact Fee fund, how much has been paid, and how the funds have been utilized.
Table 4 displays the revenue and expenditure history of the housing impact fee fund.
Agenda Item #11.2.
May 9, 2024
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Table 4: Historical Affordable Housing Impact Fee Revenue and Expenses FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 Totals Affordable Housing Impact Fees $884,027 $257,649 $427,649 $235,122 $ 80,340 $176,224 $317,631 $ 106,784 $ 2,226 $212,358 $2,700,009 Utilities - 684 McCorkle Ave $ 2,470 $ 2,314 $ 917 $ - $ - $ - $ - $ - $ (40) $ - $ 5,661 Maintenance - 684 McCorkle Avenue 2,488 750 - - - - - - - - 3,238 Property Taxes - 684 McCorkle Avenue 6,558 6,562 20 - - - - - - - 13,140 Title & Appraisal - 684 McCorkle Avenue - - 4,982 - - - - - - - 4,982 Napa Housing Authority - Housing Services 20,950 - - - - - - - - - 20,950 Affordable Housing Feasibility Study - 5,000 - - - - - - - - 5,000 Attorney Fees 4,424 5,388 21,848 91,550 19,754 20,472 - - (1,574) - 161,862 Brenkle Court Contributions - - 24,300 - 2,938 120,000 316,884 25,016 4,469 - 493,606 Turley Flats Contributions/Loan - - - 438 813,639 50,797 (50,336) 185,884 - 9,998 1,010,420 Our Town St. Helena | Non-Profit Grant - - - - - 10,000 25,000 - - - 35,000 Our Town St. Helena | 963 Pope Street - - - - - - 450,000 - 8,400 3,600 462,000 723 Hunt Avenue | CDBG Grant Reimbursement - - - - - - - 1,400,565 (1,400,565) - - Affordable Housing Fee Update - - - - - - - - 6,045 - 6,045 Housing Element Update - - - - - - - - 69,210 29,915 99,125 Total Expenses $ 36,890 $ 20,014 $ 52,066 $ 91,988 $836,331 $201,270 $741,548 $1,611,464 $ (1,314,054) $ 43,513 $2,321,029 Source: City of St. Helena.
Expenses
Revenues
Agenda Item #11.2.
May 9, 2024
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Comments from Mary Stephenson
1. What is the rationale for recommending 10% to 15% of maximum fees? This is a City staff recommendation. See response #5 above.
2. How many new housing starts (and renovation, if that is included in the fee structure) has the city had in the last 5-10 years? Projecting into the future with the recommended fee structure, what is the potential funding that new (and renovated if it applies) units could generate for the city? From 2015 to 2024 the City has added 29 net new residential dwelling units according to data from the California Department of Finance. Renovation is not included in the fee structure, unless the renovation is adding new square footage. Table 5 displays a projection of potential fee revenue, based on the growth projections from the City’s recently adopted development impact fee nexus study.
3. The current rents seem high to me. The rental rates include mostly single-family dwellings, which excludes a significant number of small multi-unit buildings that I think would illustrate a wider range of rentals.
The current rents were estimated based on all the available units that were advertised for rent at the time the study was completed. There were few multifamily units advertised for rent at that time. The only units that were excluded from the sample were luxury units with rents more than $10,000 per month. Further, many of the City’s existing multifamily units are rented at below market rate rents, so they do not accurately reflect current market rates.
4. Is the proposed fees for commercial development tied to past or projected development in each category? Is there an historical overview of commercial development by category that informs this? Table 5: Projected Affordable Housing and Commercial Linkage Fee Revenue Land Use
Projected
Increase (Sq.
Ft.)
Maximum
Justified Fee
per Square
Foot
Potential Fee
Revenue
(Maximum
Justified Fees)
Potential Fee
Revenue (15%
Fee Scenario)
Potential Fee
Revenue (10%
Fee Scenario)
Residential 685,152 $ 196 $ 134,289,792 $ 20,143,469 $ 13,428,979 Nonresidential
Commercial 325,943 $ 141 $ 45,958,019 $ 6,893,703 $ 4,595,802 Office 92,638 176 16,304,294 2,445,644 1,630,429
Industrial 640,517 67 42,914,655 6,437,198 4,291,466
Total 1,744,251 $ 239,466,761 $ 35,920,014 $ 23,946,676 Agenda Item #11.2.
May 9, 2024
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The nonresidential fees are calculated based on the affordable housing demands of a hypothetical project, informed by the likely type of workers and current salary data.
5. Is it possible to see an analysis of what the current Housing Impact Fee structure has generated over the last 10 years divided between residential and commercial fees and how that money has been used? See Table 4 above for historical fee revenue and expenditures.
6. Has any scenario been flushed out regarding how any of the existing proposals for new hotels could contribute funding under this proposed fee structure and how that compares to the cost of housing incremental employees at various salary levels as documented in the study? This analysis has not evaluated any existing proposals for hotels.
7. How does this new Housing Impact Fee Study relate to the City’s plan to create the VL and L housing units in our RHNA requirements?
Affordable housing fee and commercial linkage fee revenue can be used to help fund the development of very low and low income units in the City.
Comments from Joe McGrath
General Comments/Questions:
*The report seems to lack effective context. It is not clear from the report what the current baseline policy is and/or fee structure. The comparison to other Napa County cities is useful, but there is not a comparison to St. Helena status quo.
Willdan has prepared a fee comparison comparing the City’s current fees to the maximum justified fee schedule and other Napa County cities. See Tables 1 and 2 above. * It is also not clear if this Impact Fee is meant to be in lieu of Inclusionary policy requirements for residential development or in addition to inclusionary requirements. (I attempted to look thru current zoning code but this is very time consuming as new code is not yet hyperlinked :/) Please refer to 17.30.030 E in the new zoning code. Please note that the City will be amending the zoning text to reflect that the calculation is based on the square footage of the proposed unit (no longer percentage of construction cost). The Housing In-Lieu fee in the ordinance is the same as the impact fee, not in addition to the impact fee.
* It is not clear as to whether this fee applies to renovated S.F. or just new S.F.? Only applies to net new square footage. Per 17.30.030 A.3 “Upon the remodeling or rebuilding of a residential dwelling to add additional square footage, the housing impact fee shall be paid on the additional square footage (except for a one-time exclusion of 850 square feet per residence)” Agenda Item #11.2.
May 9, 2024
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* I believe the rental rates in the report are overstated and do not represent current market conditions.
The data biases itself by looking only at open listed units and appears to be mostly detached single family structures. I believe the construction cost per rental unit is also overstated and for some reason was based on a 5-unit complex whereas the work impact numbers were based on 100-units. Having said that, as both the rental rates are high and construction costs are high, the delta cost to deliver an affordable product to this sector is probably close.
The current rents were estimated based on all the available units that were up for rent at the time the study was completed. There were few multifamily units advertised for rent at that time. The only units that were excluded from the sample were luxury units with rents more than $10,000 per month. Were someone looking to rent a home, these would be the only available units to rent, so the data does reflect the current market.
The construction costs were based on data provided by the City. The City’s most recent experience came from 2020. Those costs were adjusted for inflation using the Engineering News Record’s Construction Cost index.
The hypothetical 100-unit market rate project is used to identify the affordable units demanded by income category. This is different from the cost to construct one affordable unit. The total affordability gap to meet the affordable housing demands of market rate units is then divided by 100 to identify the gap needed to meet the demands of a single unit, which drives the fee calculation. * It would be great to see a breakdown of Housing Impact Fee collections over the last ten years and a breakdown of where they were generated (ie Residential, Commercial, Industrial, Hospitality).
Please refer to Table 4 above. Unfortunately, the revenue data is not available by land use type paying the fee.
* It would also be great to see a Pareto/chart of where all of these funds collected have been allocated or spent.
Table 4 above also lists expenditures.
Inputs:
* For Residential Development. For projects >= 4 units the city should maintain an inclusionary policy (I believe it is 20%*,) and not create an in-lieu fee relief valve. It would fail logic to have both as you would be taxing the solution side of the ledger. Inclusionary Policies build affordable units, not just funds for future units. If you do create an in-lieu fee option it would seem that that fee should roughly represent a ~ 20 YR? Net Present Value of the delta income between market rents and affordable rents. [When I did this calculation in 2019 at 632 McCorkle, the 20YR NPV delta between market rents and affordable rents per inclusionary unit would have been approximately $200K/unit (I did not use a discount rate because I assumed both rents would rise proportionally). In comparing the $200K to 2019 costs per unit (~$550K) that represents about 36%. Against a 20% inclusionary policy that would represent 7.2% of ALL costs (20% * 36%). Instead I negotiated an "alternative equivalent" proposal which Agenda Item #11.2.
May 9, 2024
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deed-restricted existing units in my portfolio. The 20-YR NPV of that proposal was closer to $100k per unit which would be ~3.6% of all costs. That was palatable.] I believe the report is advocating between $14-20/SF. If we assume $500/SF construction costs, and $20/SF that would be 4% of CONSTRUCTION costs. An In-lieu fee at that rate would not be a great deal for the City and the developer would likely take the lower cost in-lieu fee (as much as I hate to say this as a developer). I believe the City would rather have the deed-restricted units than the funds so it should bias towards the built units. Having said that, there is of course a limit where the rates simply cause projects not to pencil.
* For Residential Projects <4 Units. It seems to me here there should be an option to either deed restrict an ADU for SF - Triplex developments or have an in-lieu option with a fee structure akin to what I recommend above.
* For Commercial, Industrial, Hospitality, Hotels. I will not comment greatly here. It seems that this fee structure should be "progressive" in nature. No Impact on renovation project (ie. no new SF). Negligible impact on small businesses/projects, and have rate progression based on the size of project. The comparison with other Napa County cities and Sonoma is very informative on Hotel rates and greatly suggests that impact fee on hotels is far too low in St. Helena.
The fees are calculated on net new square footage, so they wouldn’t apply to renovation projects, unless they are adding square footage.
Agenda Item #11.2.
WILLDAN
Financial Services
Agenda Item #11.2.
Affordable Housing and Commercial Linkage Fee Study
City of St. Helena
October 8, 2024
Agenda Item #11.2.
Overview
Affordable housing impact fees
• Charged to new residential development
• Funds share of affordable housing induced by the household spending associated with new market rate residential
development
Commercial linkage fees
• Charged to new nonresidential development
• Funds share of affordable housing needed for employees of businesses located in retail, commercial and industrial development projects
Agenda Item #11.2.
Affordable Housing Impact Fee Approach
New residential
development
generates population
growth
Residents who can
afford to purchase
or rent this new
housing then
spend their
disposable income
in the city
Demand from
increased spending
generates
employment growth
at various wage and
salary levels
Low wage workers
cannot afford
market rate
housing within the
City of St. Helena
Funding gap exists
between what low
wage workers can
afford to pay and the
cost of providing
housing
Affordable housing
impact fee
calculated to
bridge the housing
funding gap
Agenda Item #11.2.
Commercial Linkage Impact Fee Approach
Identify “prototype”
projects representing
the types of
nonresidential
development that
could occur in St.
Helena
Estimate the
industries and
occupations that
could be located
in prototypes
Identify wages
associated with the
occupations
associated with each
prototype
Low wage workers
cannot afford
market rate
housing within the
City of St. Helena
Funding gap exists
between what low
wage workers can
afford to pay and the
cost of providing
housing
Commercial linkage
fee calculated to
bridge the housing
funding gap
Agenda Item #11.2.
Income Limits
2023 Napa County Income Limits
Persons per HH: 1 2 3 4 5 6 7 8
Median Income 90,700 103,700 116,650 129,600 139,950 150,350 160,700 171,050 Extremely Low 28,050 32,050 36,050 40,050 43,300 46,500 49,700 52,900 Very Low Income 46,750 53,400 60,100 66,750 72,100 77,450 82,800 88,150 Low Income 74,700 85,400 96,050 106,700 115,250 123,800 132,350 140,850 Median Income 90,700 103,700 116,650 129,600 139,950 150,350 160,700 171,050 Moderate Income 108,850 124,400 139,950 155,500 167,950 180,400 192,800 205,250 Source: Department of Housing and Community Development, State Income Limits 2023. Agenda Item #11.2.
▪ The analysis estimates the number of
affordable units demanded for each
land use
▪ Different land uses provide jobs for
different amounts of workers by
income category
▪ The number of units are multiplied by
the adorability gap to determine the
total financing gap
▪ The total financing gap for each
prototype is divided by 100,000 to
determine the fee per square foot
▪ Hotel fee assumes 560 square feet per
room
Factors Driving Differences In Nonresidential Fee Schedule Very Low
Income (31-50%
AMI)
Low Income
(51-80% AMI)
Moderate
Income (81-
120% AMI)
Total (per
Prototype)
Total per
Square
Foot or
Room
Financing Gap per
Affordable Unit 834,062 738,005 620,705
Commercial Prototype
Units Demanded 13.273 3.509 0.754 17.536
Total Financing Gap 11,070,844 2,589,522 468,154 14,128,520 141.29 Office Prototype
Units Demanded 7.807 8.312 7.995 24.114
Total Financing Gap 6,511,699 6,134,268 4,962,295 17,608,262 176.08 Industrial Prototype
Units Demanded 2.772 3.710 2.604 9.085
Total Financing Gap 2,311,978 2,737,705 1,616,097 6,665,780 66.66 Hotel Prototype (Assumes 560 Sq. Ft. per Room)
Units Demanded 6.836 1.804 0.694 9.334
Total Financing Gap 5,701,231 1,331,724 430,855 7,463,811 41,797.34 Agenda Item #11.2.
Maximum Justified Fee Schedules
Maximum Justified
Fee
Residential Affordable Housing Impact Fee
New Rental Unit – per Square Foot 135
New For Sale Unit – per Square Foot 196
Commercial Linkage Fee
Commercial – per Square Foot 141
Office – per Square Foot 176
Industrial – per Square Foot 67
Hotel – per Room 41,797 Agenda Item #11.2.
Residential Affordable Housing Fee Comparison per Prototype Unit St. Helena
Current
Single Family, 2,761
square feet, 3
bedrooms
22,500
Single Family, 3,780
square feet, 5
bedrooms
27,500
American
Canyon Napa Cloverdale Cotati Healdsburg
Rohnert
Park
Santa Rosa
(Inside
Downtown)
Santa Rosa
(Outside
Downtown) Sebastopol1
9,470 13,115 34,300 33,400 46,109 15,520 22,088 8,283 61,405 12,965 17,955 39,800 41,400 63,126 15,520 30,240 11,340 84,067 St. Helena -
Maximum
Justified
541,156
740,880
Agenda Item #11.2.
Commercial Linkage Fee Comparison
Calistoga1 Napa Yountville Cotati2 Petaluma3
Rohnert
Park3 Santa Rosa Sebastopol3 Sonoma
2.63 3.55 11.60 2.39 3.36 0.69 3.00 2.08 4.00
1,756.35 6.00 11.60 2.39 3.36 0.69 3.00 2.08 15.00
3.81 3.55 11.60 4.12 5.81 1.19 3.00 3.59 4.00
1.93 3.50 11.60 2.47 3.46 0.71 3.00 2.15 n/a
All fees charged per square foot, except for Calistoga hotel fee and maximum justified St. Helena hotel fee, which are charge d per room. 1 Calistoga hotel fee charged per room.
2 Hotel and office assumed charged at "commercial" rate. New construction less than 2,000 sf, and the first 2,000 sf of any com mercial project is exempt. 3 Hotel and office assumed charged at "commercial" rate. 4 Maximum justified hotel fee shown per room.
Land Use
Category
St. Helena -
Current
Office 4.11
Hotel 3.80
Retail 5.21
Industrial 1.26
St. Helena
Maximum
Justified4
176.08
41,797.34
141.29
66.66 Agenda Item #11.2.
Feasibility Analysis- Project Prototypes
SF
Residential
MF
Residential Office Retail
Industrial/
Warehouse Hotel
Density (FAR) 0.29 0.76 0.28 0.33 0.17 0.13
Density (Units/Acre) 33
Form Factor Single 3-5 Stories 1 Story 1 Story 1 Story Multi Residential Units/Rooms 1 33 65
Unit/Room Size 3,780 1,000 500
Residential SF 3,780 33,000 32,500
Commercial SF 3,597 2,847 1,500 21,097
Parcel size (acres) 0.3 1 0.30 0.2 0.2 9.72 Agenda Item #11.2.
Feasibility Analysis- Pro Forma Summary
Item
SF
Residential
MF
Residential Office Retail
Industrial/
Warehouse Hotel
Residual Land Value Per Acre 3,213,756 928,200 893,627 1,386,326 568,714 1,713,457 Residual Land Value Per Land SF 74 21 21 32 13 39
Potential Fees
10% Fee Per Acre 246,960 646,800 211,024 200,714 50,250 27,951 15% Fee Per Acre 370,440 970,200 316,536 301,070 75,375 41,926 100% Fee Per Acre 2,469,600 6,468,000 2,110,240 2,007,135 502,500 279,507 Max Fee at Threshold 2,113,756 NA NA 286,326 NA 613,457 Agenda Item #11.2.
Potential Revenue Scenarios
Development Impact Fee Study Planning Horizon of 2040
Land Use
Projected
Increase (Sq.
Ft. or Hotel
Rooms)
Maximum
Justified Fee per
Square Foot or
Room
Potential Fee
Revenue
(Maximum
Justified Fees)
Potential Fee
Revenue (15%
Fee Scenario)
Potential Fee
Revenue (10%
Fee Scenario)
Residential 685,152 196 134,289,792 20,143,469 13,428,979 Nonresidential
Commercial 325,943 141 45,958,019 6,893,703 4,595,802
Office 92,638 176 16,304,294 2,445,644 1,630,429
Industrial 640,517 67 42,914,655 6,437,198 4,291,466
Hotel 116 41,797 4,848,452 727,268 484,845
Total 244,315,213 36,647,282 24,431,521 Agenda Item #11.2.
Staff Recommended Fee Schedule
Land Use
Staff
Recommended Fee Factor
Potential Fee
Revenue (1)
Residential
Rental Unit 14 per sq. ft. 10% Max Justified 13,428,979 For Sale Unit 20 per sq. ft. 10% Max Justified Non-Residential
Commercial 20 per sq. ft. Max Feasible 6,518,860
Office 18 per sq. ft. 10% Max Justified 1,630,429
Industrial 7 per sq. ft. 10% Max Justified 4,291,466
Hotel 41,797 per room Max Feasible 4,848,452
Total 30,718,186
(1)Based on Development Impact Fee Study planning horizon of 2040. Agenda Item #11.2.
Questions Agenda Item #11.2.
Prototypes listing all Fees Assoicated with Permit
Existing Fees
Fee Type SF Residential
MF Residential
(1) Commercial Industrial Hotel
Square Footage 3,780 3,904 2,847 1,500 53,597
Affordable Housing Fee 27,500 38,000 11,701 1,890 203,669 Planning/Building Fee 7,638 10,402 9,514 7,230 129,818
Civic Improvement Fee 6,048 6,246 4,555 1,305 90,579
Park Impact Fee 14,251 14,718 - - -
Public Safety Impact Fee 4,914 5,075 3,701 1,065 73,428 Sewer Impact Fee 5,935 6,129 5,324 2,475 294,784
State Fees 187 259 337 154 12,396
St. Helena School Fees 19,543 20,184 2,391 1,260 44,688 Storm Drain Impact Fee 2,306 2,381 5,409 2,850 141,496
Traffic Mitigation Impact Fee 3,062 3,162 14,520 3,645 292,640 Water Impact Fee 5,330 5,505 2,448 1,095 128,633
TOTAL 96,714 112,060 59,901 22,969 1,412,130
(1) Prototype is based on 4 units or less
Fee Type SF Residential
MF Residential
(1) Commercial Industrial Hotel
Square Footage 3,780 3,904 2,847 1,500 53,597
Proposed Affordable Housing Fee 75,600 78,080 39,858 10,500 2,716,805 Planning/Building Fee 7,638 10,402 9,514 7,230 129,818
Civic Improvement Fee 6,048 6,246 4,555 1,305 90,579
Park Impact Fee 14,251 14,718 - - -
Public Safety Impact Fee 4,914 5,075 3,701 1,065 73,428 Sewer Impact Fee 5,935 6,129 5,324 2,475 294,784
State Fees 187 259 337 154 12,396
St. Helena School Fees 19,543 20,184 2,391 1,260 44,688 Storm Drain Impact Fee 2,306 2,381 5,409 2,850 141,496
Traffic Mitigation Impact Fee 3,062 3,162 14,520 3,645 292,640 Water Impact Fee 5,330 5,505 2,448 1,095 128,633
TOTAL 144,814 152,140 88,058 31,579 3,925,267
(1) Prototype is based on 4 units or less
Fee Type SF Residential
MF Residential
(1) Commerical Industrial Hotel
Square Footage 3,780 3,904 2,847 1,500 53,597
Proposed Affordable Housing Fee 109,620 113,216 59,787 15,000 2,716,805 Planning/Building Fee 7,638 10,402 9,514 7,230 129,818
Civic Improvement Fee 6,048 6,246 4,555 1,305 90,579
Park Impact Fee 14,251 14,718 - - -
Public Safety Impact Fee 4,914 5,075 3,701 1,065 73,428 Sewer Impact Fee 5,935 6,129 5,324 2,475 294,784
State Fees 187 259 337 154 12,396
St. Helena School Fees 19,543 20,184 2,391 1,260 44,688 Storm Drain Impact Fee 2,306 2,381 5,409 2,850 141,496
Traffic Mitigation Impact Fee 3,062 3,162 14,520 3,645 292,640 Water Impact Fee 5,330 5,505 2,448 1,095 128,633
TOTAL 178,834 187,276 107,987 36,079 3,925,267
(1) Prototype is based on 4 units or less
Option A - All land uses with the exception of hotel be charged 10% of the Maximum Justified Fee per square foot Option B - All land uses with the exception of hotel be charged 15% of the Maximum Justified Fee per square foot ATTACHMENT B Agenda Item #11.2.
Summary of Comparative Building Permit Data
Agency SF Residential MF Residential Retail Industrial Hotel Square Footage 3,780 3,752 790 1,500 3,283
St. Helena 156,755 122,747 36,997 36,283 2,807,879
1 American Canyon 92,992 100,152 104,009 332,436 554,207 2 Santa Rosa 119,541 99,997 35,408 31,846 129,859
3 Napa 71,982 72,383 28,141 63,570 1,175,719
4 Healdsburg 112,572 109,773 47,023 79,124 486,663
5 Petaluma 89,491 124,008 63,010 160,962 844,060
6 Calistoga 117,467 129,010 31,640 35,477 2,388,869
Average 100,674 105,887 51,538 117,236 929,896
Percentage Difference 35.8% 13.7% -39.3% -223.1% 66.9%
Hotel valuation is estimated at $3,000,000
GPD calculation is based on average use per customer class in St. Helena Daily trip calculation is based on national average per land use As illustrated in the data summary above, the fees for the City are notably higher in certain categories compared to the surveyed cities. This is primarily because the proposed housing impact fees are driven by the City's significantly higher land costs. Given that land costs in our City exceed those of most cities in the survey, the expense of constructing affordable housing—an endeavor these fees are designed to support—is correspondingly higher. To adequately subsidize the development of affordable housing and address the unique financial challenges posed by our local market conditions, it is necessary to implement fees that are above the average of our peer cities. These higher fees are critical to ensuring that the City can meet its affordable housing goals while balancing the economic realities of our community.
Assumptions
Residential valuation is estimated at $1,000,000
Retail valuation is estimated at $500,000
Industrial valuation is estimated at $1,000,000
Agenda Item #11.2.
Agenda Report to the City Council
Agenda Section: NEW BUSINESS
Department: Administration
DATE: December 10, 2024
FROM: Cindy Tzafopoulos, City Clerk
SUBJECT: Consideration of Process for Appointment to Fill City Council Vacancy
RECOMMENDED
ACTION:
Fill the vacancy via an appointment (as opposed to an
election) to fill the vacancy left by Council Member
Chouteau's resignation. Utilize the proposed process and timeline for the appointment of a new City Council
Member.
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
PURPOSE:
The purpose of this action is to request for that Council establish a process to consider applications to fill the City Council vacancy.
FINANCIAL IMPACT: None
BACKGROUND:
Council Member Chouteau has announced that she is resigning from the City Council, effective December 15, 2024.
When a vacancy on the City Council occurs, the Council must, within 30 days of the commencement of the vacancy, either fill the vacancy by appointment, or call a special election. (Government Code §36512(b); St. Helena Municipal Code §2.04.020.[1]) However, if the City Council holds a special election to fill the vacancy, that election must be held at “the next regularly established election date” not less than 90 days from the call of the special election under the City Code, and not less than 114 days from the call of the special election under State law. (Id.)
The next regularly established election date in Napa County is the Statewide Primary Election on June 2, 2026.
DISCUSSION:
Filling the vacancy by an election will take several months and cost at least $35,000 dollars. So, staff recommends that the Council fill the vacancy by appointment of a Council Member to fill the vacancy.
The appointment must be made within 30 days of commencement of the vacancy, and therefore the appointment must be made by January 15, 2025. The appointed Council Agenda Item #13.4.
Member would serve for the remainder of Council Member Chouteau’s term, which expires in November 2026.
If the City Council directs staff to proceed with a recruitment and appointment process, the following is the proposed timeline:
Tentative Selection Timeline
Date Action
12/11/24 Mayor invites candidates to apply to fill the vacancy 01/03/25 End of application period
01/14/25 Candidate Interviews
01/14/25 Appointment and Seating of new Council Member
There is no specific process required for the appointment to fill the vacancy. Council may discuss and agree upon an appropriate process.
__________________________
[1] State law provides that the appointment or call of the election must occur within 60 days, but given that the Municipal Code requires a shorter timeframe, that is the deadline that the Council must meet.
GOAL:
Goal 4: Provide Effective Community Information & Opportunities for Engagement Miscellaneous/Other
DOCUMENTS ATTACHMENTS:
Attachment 1 - Press Release - Chouteau Resigns from the City Council and Joins Congressman Thompsons Team
Attachment 2 - Proposed City Council Application
Agenda Item #13.4.
TODAY’S DATE: December 2, 2024
RELEASE DATE: Immediate
TITLE: New Way To Serve Community – Chouteau Joins Congressman Thompson’s Team (PRESS RELEASE 2024-44)
CONTACT: Andrew Bradley, Program Manager
(707) 968-2635 direct, [email protected]
St. Helena, CA – On Monday, December 2, 2024, second term Council Member, Anna Chouteau, informed Mayor Paul Dohring that she has accepted a position with Congressman Mike Thompson’s office. In her resignation letter to Mayor Dohring, Council Member Chouteau said, “My time on the City Council has been a privilege. I cannot possibly say enough about my respect for my fellow council members, city staff, and all the citizen volunteers who contribute to our community. I have seen how hard they work, how much they care about our City, and how they continue to show up and engage no matter how big the challenge. I am optimistic about our future and am here to help, always.” “Anna has been a dedicated and skilled public servant for over 6 years, fully engaged in her work and fully committed to improving the lives of our residents,” said Mayor Paul Dohring. “She has worked tirelessly on gun-violence prevention and reduction of greenhouse gases, and she has built strong relationships throughout the county and the state. Locally, she has elevated the importance of housing, pedestrian and bike safety, especially for our youth, encouraged youth participation in policy making, and advocated for inclusivity both in our governance and in our community. I know she will bring the same commitment, enthusiasm and grace to Congressman Thompson’s office, and I look forward to working with her in her new role.”
Council Member Chouteau will start her new role as Field Representative on December 16. She will serve in her role as a City of St. Helena Council Member until December 15 and her last regular City Council meeting will be on December 10, 2024. Council Member Chouteau said, “I have had the honor of serving our City and all the incredible people who make St. Helena so special. I will be forever grateful for this opportunity.” ###
PRESS RELEASE
Agenda Item #13.4.
1088 College Ave. | St. Helena, CA 94574
(707) 967-2792 | cityofsthelena.org
NOTE: THIS COMPLETED AND SIGNED APPLICATION MUST BE FILED WITH THE ST. HELENA CITY CLERK BY XXXXX, XXXXX XX, 2024, AT 5:00 P.M.
*Please note that a League of California Cities Mayors and Council Members Academy registration (Jan. 22-24 in Sacramento) has been made for the individual chosen to replace Council Member Chouteau.
APPLICATION FOR APPOINTMENT TO THE ST. HELENA CITY COUNCIL This application is to fill a vacancy on the St. Helena City Council. The St. Helena City Council will publicly-review all submitted applications where the applicants meet the qualifications. The Council will hold a public interview process for each candidate on Tuesday, January 14, 2025, beginning at 4:00 p.m. The applicant interviews will take place at the wellness center (first floor across from the cafeteria) at Vintage Hall, 465 Main Street, St. Helena. The appointment to the City Council will be made at the regularly scheduled City Council meeting on Tuesday, January 14, 2025, beginning at 6 p.m. The term of office will be from January 14, 2025 through November 2026.
This application is a public document, although your personal information will be redacted. Your application will be compiled with other applications and considered by the St. Helena City Council as a part of a noticed public meeting.
Only St. Helena residents who are registered voters in St. Helena will be eligible for appointment.
Name:
Residence Address:
Mailing Address (if different):
E-mail:
Best Phone Number to Reach You:
Are you currently a registered voter and a resident of the City of St. Helena, or will be at the time of an appointment? (yes or no)
• Please include your resume and answer the following questions on a separate sheet(s) of paper. (continued on next page)
DATE AND TIME RECEIVED:
Agenda Item #13.4.
1088 College Ave. | St. Helena, CA 94574
(707) 967-2792 | cityofsthelena.org
Reasons for Applying
1. Why do you want to be appointed to the Council?
2. Service as a City Council Member easily could require 10 or more hours per week reviewing council agenda packets, responding to citizen communications, meeting with constituents, and attending various regional and local subcommittee meetings, and council meetings. How much time per week do you have to devote to City Council service?
3. If appointed, do you plan on running for election in November 2024? Experience, Qualifications, Education
4. What qualifications, life experiences, and educational background do you have that will enable you to make sound decisions in the best long-term interest of the community?
5. Please describe your community service and government participation in St. Helena or elsewhere.
Issues, Priorities, Concerns
6. What do you believe are the most important issues facing the City?
7. If you were appointed to the Council, what would be your top three priorities?
8. What strategies can be undertaken to address the City’s fiscal challenges, improve the City’s economic health, and maintain and enhance quality of life?
Values, Vision, Approach
9. What vision do you have for the future of St. Helena?
10. How would you resolve a situation where your personal philosophy may be considered at odds with the majority view regarding what is best for the City?
You may also provide any additional information or comments you feel would assist City Council in considering your application.
Please note: At the time you would be named to the St. Helena City Council, you must be:
• At least 18 years of age,
• A registered voter in St. Helena; and
• A resident residing within the City limits of St. Helena.
You must maintain St. Helena residency and registered voter status throughout your term of office. (continued on next page)
Agenda Item #13.4.
1088 College Ave. | St. Helena, CA 94574
(707) 967-2792 | cityofsthelena.org
Also, at the time of appointment (and annually as well as at the completion of your service), you will be required to complete and file a public Form 700 Statement with the California Fair Political Practices Commission. Form 700 filings allow the public to know of any potential conflicts of interest related to your public service. These conflicts can relate to employment, property ownership, loans and gifts, stock ownership, and more. You are also required to disclose certain financial interests of your spouse (if applicable).
During your term on the City Council, you will be required to identify any potential conflicts (often with the assistance of the City Attorney) and to recuse yourself from voting on or otherwise influencing any action that might cause a financial or other conflict.
Please sign and return this form with the questions answered via an email to Cindy Tzafopoulos, St. Helena City Clerk, at [email protected]. The City Clerk will confirm receiving your emailed application, if you do not receive confirmation, please call the City Clerk at (707) 312-1257. You may also drop off the form and questions at St. Helena City Hall, 1088 College Avenue, St. Helena, California. Please address the envelope to the City Clerk.
Please do not mail the form, as it may not get to the City by the deadline. If you have any questions about this application, please call Ms. Tzafopoulos at (707) 312-1257.
I (print name) swear/affirm that the foregoing
information is true and correct.
Applicant’s Signature: Date:
Agenda Item #13.4.
Agenda Report to the City Council
Agenda Section: NEW BUSINESS
Department: Administration
DATE: December 10, 2024
FROM: Cindy Tzafopoulos, City Clerk
SUBJECT: 1. Designate a regular member and alternate City Council Member to represent the City of St. Helena on the Upper Valley Waste Management Agency (UVWMA) and;
2. Designate a regular member to the Napa Valley
Transportation Authority (NVTA).
RECOMMENDED
ACTION:
Designate a regular member and alternate City Council Member to represent the City of St. Helena on the UVWMA. Designate a regular member to represent the City of St. Helena on the NVTA.
PREVIOUS COUNCIL
ACTION:
STATEMENT OF THE
PURPOSE:
Designate a regular member and alternate City Council Member to the Upper Valley Waste Management Agency and a regular member to the Napa Valley Transportation Authority
(NVTA).
FINANCIAL IMPACT: N/A
BACKGROUND:
Council Member Kenealy is designated the regular member and Council Member Chouteau is designated as the alternate. They will not be serving on the City Council for the next UVWMA meeting.
Council Member Chouteau is a regular member on the NVTA and will not be serving on the City Council at the next meeting.
DISCUSSION:
Designate a regular member and alternate City Council Member to represent the City of St.
Helena on the UVWMA. The meetings are held the third Monday of the month at 1:30 pm at the Yountville Town Council Chambers.
Designate a regular member to represent the City of St. Helena on the NVTA. The meetings are held third Wednesday of the month at 1:30 pm at the NVTA offices.
GOAL:
Miscellaneous/Other
Agenda Item #13.5.
DOCUMENTS ATTACHMENTS:
Attachment 1 - Intergovernmental CC Assignments 2-27-24 Agenda Item #13.5.
2024 St. HELENA INTERGOVERNMENTAL CITY COUNCIL ASSIGNMENTS MAYOR/COUNCIL COMMITTEE ASSIGNMENTS: Date/Time & Location Contact Primary Alternate 700 Form Filiers City/SHUSD/Chamber/NVC (Monrovia) (707) 967-2701
Erica Madrigal Council Member Summers Vacant
• Meet to discuss interests in common Staff:
• No Compensation City Manager
St. Helena Sewer District No. 1
• Meets only as needed
Association of Bay Area Governments (ABAG) - Executive Board 101 Eighth St. Oakland CA 94607 (415) 820-7913 Council Member Choteau Required [email protected]
Fred Castro
• Appointed by the City Selection Committee ABAG Clerk of the Board Bay Area Metro Center
375 Beale Street, Suite 800
• Agency membership dues based on population San Francisco, California 94105 • Compensation - $150.00 per Meeting
Association of Bay Area Governments (ABAG) - General Assembly 101 Eighth St. Oakland CA 94607 Mayor Dohring Council Member Choteau Not Required Meets: Annually (510) 464-7900
• St. Helena City Council appoints member and alternate, no term limit • Agency membership dues based on population
Napa Valley Tourism Corporation (Umbrella for Napa County) Amy Carabba, St. Helena Chamber CEO Vacant Not Required
LODGING REPRESENTATIVES:
Michael Lennon: City of Calistoga, Calistoga Spa Hot Springs Marcelle Adderley: City of St. Helena, Southbridge Napa Valley Max Compagnon: Town of Yountville, Napa Valley Lodge
Sara Brooks: City of Napa, Napa River Inn
Don Shindle: City of Napa, The Westin Verasa
Erik Burrow: City of American Canyon, Doubletree by Hilton Napa Valley George Goeggel: Unincorporated County of Napa, Auberge Resorts GOVERNMENT/BUSINESS REPRESENTATIVES:
Donald Williams: City of Calistoga, Mayor
Amy Carabba-Salazar: St. Helena, Chamber of Commerce
Brad Raulston: Town of Yountville, Manager
Steve Potter: City of Napa, Manager
Linsey Gallagher: Visit Napa Valley
David Oro: American Canyon, City Council
Meets: Qtrly Not Required
• 11-08-1964 Resolution 1964-597 Establishing Sewer District No. 1 and 1964-598 Description
Meets: 7:00 p.m., 3rd Thursday of every other
month
• To enhance the quality of life in the San Francisco Bay Area by leading the region in advocacy, collaboration, and excellence in planning, research and member services Term of office 7/1/22 -
6/30/24
All
• To enhance the quality of life in the San Francisco Bay Area by leading the region in advocacy, collaboration, and excellence in planning, research and member services Agenda Item #13.5.
2024 St. HELENA INTERGOVERNMENTAL CITY COUNCIL ASSIGNMENTS MAYOR/COUNCIL COMMITTEE ASSIGNMENTS: Date/Time & Location Contact Primary Alternate 700 Form Filiers Anne Cottrell: Napa County, Board of Supervisors
*4/27/2010 BOS approved a resolution to establish the Napa Valley Tourism Business Improvement District (TBID) for St. Helena *The TBID governance structure established the Napa Valley Tourism Corporation as the responsible agent to manage day-to-day decisions on the use of TBID funds
*Since the creation of the Napa Valley Tourism Corporation the St.
Helena Chamber CEO has represented the City of St. Helena *It would be appropriate to annually review the appointment of the primary member and alternate
St. Helena Tourism Improvement District (SHTID) Meets: Qtrly Catherine Heywood Vice Mayor Hall Anna Chouteau Not Required Southbridge 707-260-0112
Staff:
• Elected official appointed by the St. Helena City Council City Manager Kevin Dimond, Harvest Inn
Mark Hoffmeister, Wydown Hotel
Anil Comelo, City Manager
Chair - Marcelle Adderley, Inn at Southbridge - General Manager Chamber Rep - Executive Director
Pirrette Therene, El Bonita Hotel - GM
St. Helena City Council Representative
• No Compensation
League of California Cities – North Bay Division P.O. Box 458, Mill Valley, CA 94941 (415) 302-2032 All Not Required Meets: Quarterly Nancy Hall Bennett
• Agency membership dues required
* No Compensation
Napa County City Selection Committee 1195 Third Street, Suite 310, Napa 94558 (707) 253-4423 Mayor Dohring Council Member Summers Not Required Karita Whitney (Delegate)
• Representative must be Mayor (per above Gov’t. Code)
* No Compensation
Napa County Flood Control and Water Conservation District 1195 Third Street, Room 305, Napa 94558 (707) 259-8600 Mayor Dohring Vice Mayor Hall Required Krista Reif
[email protected]
Forward forms to:
*Flood Control is located at 804 1st Street, Napa
Napa County Flood
Control and Water
Conservation District
• Representative must be Mayor (707) 253-4423 804 First Street Meets: 1:00pm, 3rd Tuesday of the month,
Quarterly
Meets: 1:30 p.m., 1st and 3rd Tuesday of the
Month
• In counties where 2 or more cities are incorporated, this Committee appoints city representatives to certain boards, commissions and agencies as prescribed by law (Section 50270, CA Govt Code)
• 7 members from St. Helena (4-members of lodging, 1-Chamber of Commerce, 1-Elected Official and 1-City Manager) Membership includes:
• To maintain a central office of information and research for matters pertaining to City government and to influence legislation that affects cities (The City Manager has designated
the Asst. City Manager as the City
Reprersentative)
• Mission is the conservation and management of flood and storm waters to protect life and property; the maintenance of the County watershed using the highest level of environmentally sound practices; and to provide coordinated planning for water supply needs for the community.
Agenda Item #13.5.
2024 St. HELENA INTERGOVERNMENTAL CITY COUNCIL ASSIGNMENTS MAYOR/COUNCIL COMMITTEE ASSIGNMENTS: Date/Time & Location Contact Primary Alternate 700 Form Filiers • Bylaws Karita Whitney Napa, CA 94559-2623
* No Compensation
Youth Opportunities Commission Location Changes (707) 253-4211 Mayor Dohring Not Requried District Attorney's Office
* Prevention, intervention & suppression of gang violence * No Compensation
Napa County League of Governments (NCLOG) Location rotates 2023 St. Helena All Not Requried Cindy Tzafopoulos
* No Compensation 707-312-1257
• Bylaws
• Mayors of the City and County rotate the Chair position Napa County Local Agency Formation Commission (LAFCO) 1195 Third Street, Napa 94558 (707) 259-8645 Required • City Selection Committee makes appointment Meets: 4:00p.m., 1st Thursday of the month Kathy Mabry Mail to: Kathy Mabry • Four-Year Term Gov Code; Informal Policy Two-Year Rotation 1030 Seminary St,
Suite B
* $125 per meeting (St. Helena is scheduled to take over the LAFCO UpValley seat on May 5, 2025) *LAFCO is located at 1030 Seminary, Napa Napa CA 94558 Napa Valley Transportation Authority (NVTA) 625 Burnell Street, Napa 94559 Laura Sanderlin Mayor Dohring Vice Mayor Hall Requried (707) 259-8633 Council Member Chouteau Mail to: Board
Secretary
or 625 Burnell Street
Kate Miller Staff: Napa CA 94559
• Bylaws City Manager
Public Works Director
Napa County Watershed Information Center & Conservancy (WICC) (707) 259-5936 Council Member Kenealy Vice Mayor Hall Not Required Jeff Sharp, Liaison
• City Council makes appointment recommendation to the Board of Supervisors Meets: 4:00p.m., 4th Thursday of the month * No Compensation
• BOS Resolution 02-202
Upper Valley Waste Management Agency (707) 259-6716 Council Member Kenealy - Primary Council Member Chouteau -
Alternate
Form 700
Required to send
• City Council makes appointment recommendation to the Board of Supervisors Meets: 1:30p.m., 3rd Monday of the month Napa County Public Works
1195 Third Street, Suite 101
Napa, CA 94559
Napa County Regional Climate Action Committee Neha Hoskins Council Member Summers Vice Mayor Hall Not Required Administrative Manager/Clerk of
the Board Council Member Chouteau
• City Council makes two appointments to the Committee Meets: No schedule has been determined County of Napa, CA 1195 3rd St., 3rd Floor
Meets: 4:30 p.m., on 3rd Wednesdays, As needed/no
less than quarterly
Board of Supervisoers Chambers
Yountville Town Council Chambers
Alice Ramirez, Board Clerk
1125 Third Street, 2nd Floor Conference Room,
Napa 94558
Meets: 1:30p.m., 3rd Wednesday of the month
Meets: 6:00 p.m., 2nd Thursday of the month,
Quarterly
• 2 Members and 2 alternates(1-Mayor with City Council appointing the other City Council Member/Alternate
• City Council makes appointee recommendation to the Napa County Board of Supervisors
(Formerly Napa County Gang & Youth Violance Commission
Agenda Item #13.5.
2024 St. HELENA INTERGOVERNMENTAL CITY COUNCIL ASSIGNMENTS MAYOR/COUNCIL COMMITTEE ASSIGNMENTS: Date/Time & Location Contact Primary Alternate 700 Form Filiers Napa, CA 94559
707-253-4196
Agenda Item #13.5.