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17 Staff Report - Development Agreements with attachment Reviewed by: Town Manager, Assistant Town Manager, Community Development Director, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 4/16/2024 DATE: April 4, 2024 TO: Mayor and Town Council FROM: Gabrielle Whelan, Town Attorney SUBJECT: Discuss Future Adoption Development Agreement Procedures and Provide Direction to Staff RECOMMENDATION: Discuss future adoption of development agreement procedures and provide direction to staff. BACKGROUND: Government Code Section 65954 provides that, upon request of an applicant for a planning entitlement that a local jurisdiction adopt development agreement procedures, a public agency shall adopt procedures for the processing of development agreements. DISCUSSION: A development agreement is a voluntary contract between a local jurisdiction and a person who owns or controls property within the jurisdiction, detailing the obligations of both parties and specifying the standards and conditions that will govern development of the property. Development agreements will often provide for payments or dedications of land in exchange for vesting to current development standards. Jurisdictions are never obligated to enter into development agreements; it is a voluntary agreement that must be of benefit to the jurisdiction. Government Code Sections 65864 and following address development agreement requirements. Section 65865 requires that the Town develop and adopt development agreement procedures upon request of an applicant for a planning entitlement. The Town has received a verbal request that the Town adopt development agreement procedures from counsel for an applicant for a planning entitlement. As a result, Government Code Section 65865 requires that the Town adopt procedures for the consideration and processing of development agreements. PAGE 2 OF 2 SUBJECT: Discuss Potential Adoption of Development Agreement Procedures and Provide Direction to Staff DATE: April 4, 2024 DISCUSSION (continued): Development agreement procedures typically include the following: • A statement of purpose/findings concerning the public benefits of development agreements • Application requirements • Notice and hearing procedures • Planning Commission and Governing Body Review • Recordation Requirements • Procedures for Amendment or Termination • Procedures for Periodic Review A sample of development agreement procedures is included as Attachment 1. Such procedures may be adopted by ordinance or resolution. State law allows local agencies to recover the direct costs of developing development agreement procedures. The Town Council’s direction is sought on the following topics: 1) Should development agreements be considered for all types of land uses? Or just residential? 2) Should the consideration of development agreements be limited to projects of a certain size (e.g., minimum acreage, minimum square footage, minimum number of units)? 3) Should the consideration of development agreements be limited to projects in which the applicant will be expending a minimum dollar amount on public infrastructure? CONCLUSION: Staff recommends that the Town Council authorize staff to draft proposed development agreement procedures for the Town Council’s consideration at a future meeting. FISCAL IMPACT: The potential adoption of development agreement procedures could result in payments to the Town in exchange for vesting of development standards applicable to development projects. ENVIRONMENTAL ASSESSMENT: Discussion of potential development agreement procedures is not a project subject to CEQA and no environmental assessment is required. Attachment: 1. Sample Development Agreement Procedures I ' RESOLUTION NO. 120 (1990) ESTABLISHING PROCEDURES AND REQUIREMENTS FOR THE CONSIDERATION OF DEVELOPMENT AGREEMENTS RESOLVED by the Council of the City of San Mateo, California. /3a__ WHEREAS, the State Legislature has found and declared that: "(a) The lack of certainty in the approval of developmental projects can result in a waste of resources, escalate the cost of housing and other development to the consumer, and discourage investment in and commitment to comprehensive planning which would make maximum efficient utilization of resources at the least economic cost to the public. (b)Assurance to the applicant for a developmentproject that upon approval of the project, the applicant may proceed with the project in accordance with existing policies, rules and regulations, and subject to conditions of approval, will strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic costs of development. (c)The lack of public facilities, including, but notlimited to, streets, sewerage, transportation, drinking water, school and utility facilities, is a serious impediment to the development of new housing. Whenever possible, applicants and local governments may include provisions in agreements whereby applicants are reimbursed over time for financing public facilities." (Government Code Section 65864); and WHEREAS, the Legislature therefore adopted Government Code sections 65864 through 65869.5 authorizing cities to enter into development agreements; and WHEREAS, Government Code Section 65865(c) requires that cities shall, if requested by an applicant, establish procedures and requirements for consideration of development agreements; and WHEREAS, the City of San Mateo has received a request to establish such procedures and requirements. NOW THEREFORE, IT IS DETERMINED and ORDERED as follows: Section 1. Authorization for adoption. These procedures are adopted under the authority of Government Code sections 65864 -65869.5. 4269G/13 1 OR\G\NAL ATTACHMENT 1 Section 2. Authorization. (a)The City may enter into a development agreementwith a person having a legal or equitable interest in real property within the City for the development of the property as provided in this resolution. (b)The City may enter into a development agreementwith a person having a legal or equitable interest in real property in unincorporated territory within the City's sphere of influence for the development of the property as provided in this resolution. However, the agreement shall not become operative unless annexation proceedings annexing the property to the City are completed within the period of time specified by the agreement. If the annexation is not completed within the time specified in the agreement or any extension of the agreement, the agreement is null and void. Section 3. Application. Application for a development agreement shall be made to the Department of Community Development. An application for a development agreement may not be filed prior to an application for a development project on the same property. The application shall be accompanied by the fee prescribed by the City fee schedule, established pursuant to the San Mateo Municipal Code, and shall be accompanied by the form of development agreement proposed by the applicant. When the application is determined to be complete, the Director of Community Development or designee shall, at the applicant's expense, review the application and transmit it, together with staff recommendations, to the Planning Commission. Section 4. Contents. A development agreement shall specify the land subject to the agreement, the duration of the agreement, the permitted uses of the property, the density or intensity of use, the maximum height and size of proposed buildings, and provisions for reservation or dedication of land for public purposes. The development agreement may include conditions, terms, restrictions, and requirements for subsequent discretionary actions, provided that such conditions, terms, restrictions, and requirements for subsequent discretionary actions shall not prevent development of the land for the uses and to the density or intensity of development set forth in the agreement. The agreement may provide that construction shall be commenced within a specified time and that the project or any phase thereof be completed within a specified time. The agreement may also include terms and conditions relating to applicant financing of necessary public facilities in conjunction with the phasing of the development project. 4269G/13 2 Section 5. Rules, regulations and official policies. Unless otherwise provided by the development agreement, rules, regulations, and official policies governing permitted uses of the land, governing density, and governing design, improvement, and construction standards and specifications, applicable to development of the property subject to a development agreement, shall be those rules, regulations, and official policies in force at the time of execution of the agreement. A development agreement shall not prevent the City, in subsequent actions applicable to the property, from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth in the development agreement, nor shall a development agreement prevent the City from denying or conditionally approving any subsequent development project application on the basis of such existing or new rules, regulations, and policies. Section 6. Public hearing and notice of intention to consider adoption. A public hearing on an application for a development agreement shall be held by the Planning Commission and by the City Council. Notice of intention to consider adoption of a development agreement shall be given as provided in California Government Code sections 65090 and 65091, and San Mateo Municipal Code section 27.06.050, in addition to any other notice required by law for other actions to be considered concurrently with the development agreement. Section 7. Legislative act, A development agreement is a legislative act which shall be approved by ordinance and is subject to referendum. This resolution only establishes procedures for consideration of development agreements; the City Council retains discretion to approve or disapprove any proposed development agreement. A development agreement shall not be approved unless the City Council finds that the provisions of the agreement: (a)are consistent with the City's General Plan andany applicable specific plan, (b)are compatible with the requirements of the ZoningOrdinance, and (c)provide substantial public benefits to personsresiding or owning property outside the boundariesof the development project, beyond the exactionsfor public benefits required in the normaldevelopment review process under federal, state.orlocal law. Section 8. Amendment or termination. (a)Periodic review. The Planning Commission shallreview the development agreement at least every 12 months, at which time the applicant or successor in interest t�ereto, 4269G/13 3 Section 10. Execution and Recordation. (a)No development shall be executed by the Mayoruntil it has been executed by the applicant. Ifthe applicant has not executed the agreement, asapproved by the City Council, within thirty daysof the City Council approval, the application fordevelopment agreement shall be deemed withdrawn,and a Mayor shall not execute the agreement. (b)No later than 10 days after the City enters into adevelopment agreement, the City shall record withthe County Recorder a copy of the agreement, whichshall describe the land subject thereto. From andafter the time of such recordation, the agreementshall impart such notice thereof to all persons asis afforded by the recording laws of this state.The burdens of the agreement shall be bindingupon, and the benefits of the agreement shallinure to, all successors in interest to theparties to the agreement. Section 11. Environmental Finding. The Council finds that the adoption of this resolution is not a project for the purposes of the California Environmental Quality Act, and therefore, no environmental impact assessment is necessary. Section 12. Effective Date. This resolution shall become effective sixty days after its adoption, together with its companion resolution adopting a fee for the processing of development agreements. Dated: October 15, 1990 ATTEST: -�---·(V�City Clerk 4269G/13 5 Mayo � * * * Resolution adopted by the City Council of the City of San Mateo, California, at a regular meeting held on October 15, 1990, by the following vote of the Council members: AYES: Council Members POWELL, MACK, RHOADS, BAKER and GUMBINGER NOES: NONE ABSENT: NONE