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Staff Report PREPARED BY: ROBERT SHULTZ Town Attorney Reviewed by: Town Manager, Town Attorney, Finance Director, and Community Development Director 110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov TOWN OF LOS GATOS TOWN COUNCIL REPORT MEETING DATE: 10/16/2018 ITEM NO: 8 DATE: OCTOBER 11, 2018 TO: MAYOR AND TOWN COUNCIL FROM: ROBERT SCHULTZ, TOWN ATTORNEY SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE. RECOMMENDATION: Staff recommends that the Town Council authorize the Town Manager to sign an Exclusive Negotiating Agreement (ENA) with Sarah Chaffin for the siting and development of affordable teacher housing at 20 Dittos Lane. BACKGROUND: On September 19, 2017, the Town Council provided guidance regarding the disposition of 20 Dittos Lane. The Town Council confirmed that the property should be utilized for BMP housing in keeping with the original intent of the property acquisition. In addition, the Council opined that the preferred goals for the property would entail a maximum of four units, target low and moderate affordability income ranges, and attempt to preserve the historic and environmental nature of the site. Per the Council’s direction, interested parties were encouraged to submit proposals reflective of the aforementioned goals by October 22, 2017. On February 6, 2018, the Town Council reviewed the elements of the five proposals and discussed the unique nature of the property and the challenges associated with each proposal. At the conclusion of Council’s deliberations, it selected proposals by Habitat for Humanity and Support Teacher Housing to continue in the evaluation process. The Habitat for Humanity proposal was based on accessing the property from College Avenue and constructing a minimum of 12 units within two, two story structures. The Support Teacher Housing proposal PAGE 2 OF 3 SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE. OCTOBER 11, 2018 S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\08 ENA for Dittos\Staff Report.docx 10/11/2018 5:16 PM BACKGROUND (Continued): envisioned two homes and two accessory dwelling units with access from the current Dittos Lane. Council directed staff to engage with both parties to understand how each would address the challenges and concerns that the Council identified during delibera tions. On May 1, 2018, the Town Council reviewed supplemental information from Support Teacher Housing and Habitat for Humanity for Below Market Price (BMP) housing at 20 Dittos Lane and directed Staff to move forward with an ENA with Support Teacher Housing. DISCUSSION: The Town may legally enter into an Exclusive Negotiating Agreement with Sarah Chaffin for the sale or lease of property. In fact, the California Municipal Law Handbook states: “A city may sell property essentially in any way it chooses, if sale is for the common benefit of the City’s citizens”. Staff recommends that the Town Council authorize the Town Manager to sign the ENA (Attachment 1). The purpose of the ENA is to set the parameters between the Town and Sarah Chaffin (Developer) that will guide the negotiations of a Development Agreement (DA). The DA will set the contractual relationship between the Town and Sarah Chaffin, and define the project to be developed, the financial relationships, and the performance milestones for both parties. The Developer has informed Town staff that she is comfortable with the terms of the ENA. The ENA does not remove the Developer from the Town’s normal planning and development application requirements and process, and all financial parameters and obligations of the Town and Developer will be fully discussed with the Town Council. Upon entering into exclusive negotiations, the parties will begin to meet regularly to discuss the various issues described above, as well as new issues not yet identified. CONCLUSION: Based on the Council’s previous action, Council should authorize the Town Manager to sign an Exclusive Negotiating Agreement (ENA) with Sarah Chaffin for the siting and development of affordable teacher housing at 20 Dittos Lane. COORDINATION: This report was coordinated with the Town Manager’s Office and Director of Community Development. PAGE 3 OF 3 SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE. OCTOBER 11, 2018 S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\08 ENA for Dittos\Staff Report.docx 10/11/2018 5:16 PM FISCAL IMPACT: No fiscal impact at this time but there will be additional staff time required. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachment: 1. Exclusive Negotiating Agreement