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cos Ga��. COUNCIL AGENDA REPORT
DATE: OCTOBER 18, 2012
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
MEETING DATE: 11/5/12
ITEM NO: e
SUBJECT: PLANNED DEVELOPMENT APPLICATION PD -12 -002. PROJECT
LOCATION: 626 W. PARR AVENUE (AKA 612 W. PARR AVENUE)
PROPERTY OWNER: VILLA VASONA LTD. APPLICANT: HIGHLAND
PROPERTY DEVELOPMENT. APN: 406 -.28 -034.
INTRODUCTION OF AN ORDINANCE MODIFYING AN EXISTING
PLANNED DEVELOPMENT ORDINANCE TO REMOVE EXISTING
COVENANTS THAT ARE NO LONGER VALID ON PROPERTY ZONED R-
1:8:PD.
RECOMMENDATION:
After opening and closing the public hearing, and asking the Clerk Administrator to read the title
of the proposed ordinance, it is recommended that the Town Council:
1. Waive the reading of the proposed ordinance;
2. Make the required finding that the proposed zone change is consistent with the General Plan
and its Elements. (Attachment 1); and
3. Introduce the ordinance of the Town of Los Gatos to effectuate the zone change modification
(Attachment 3).
BACKGROUND:
On September 28, 1983, the Town entered into an Agreement for Disposition of Property with
Villa Vasona Ltd. for the property at 612 (AKA 626) W. Parr Avenue,
On December 1, 1986, Ordinance 1698 was adopted by the Town Council. Ordinance 1698
allowed for the construction of 107 Section 8 senior apartments, including ten units for the
physically handicapped.
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PREPARED BY: Todd Capurso, Acting Director of Community Development
Reviewed by: Assistant Town Manager Town Attorney Finance
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PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: 612 (AKA 626) W. Parr Avenue /PD -12 -002
October 18, 2012
On September 5, 1989, the Town entered into the First Amendment to the September 28, 1983
Agreement for Disposition of Property with Villa Vasona Ltd. This amendment was necessary
because the property was transferred from Jack W. Sheehan to PMG.
On March 19, 2012, Town Council adopted a resolution finding that Highland Property
Development (Highland) is willing and able to fulfill the obligations of the developer under the
existing agreement or any amendments thereto as required by Ordinance 1698.
On June 18, 2012, Town Council adopted a resolution authorizing the Town Manager to:
• Rescind the Agreement for Disposition of Real Property between the Town of Los Gatos
and Villa Vasona Ltd., dated September 28, 1983, and rescind the First Amendment to
Agreement for Disposition of Real Property between the Town of Los Gatos and Villa
Vasona Ltd., dated September 5, 1989; and
• Negotiate and execute a new agreement between the Town of Los Gatos and HPD Villa
Vasona LP (an affiliate of Highland), for the disposition of real property at 626 (AKA
612) W. Parr Avenue,
DISCUSSION:
The new agreements with HPD Villa Vasona LP are nearing completion and a modification of
the existing Planned Development Ordinance (Attachment 2) is necessary. The proposed
Planned Development Ordinance (Attachment 3) reflects the removal of existing performance
standards that will no longer be appropriate following execution of the new agreements.
The revised agreements include the following general components: Town ownership of the
property; 55 year ground lease of the property to HPD Villa Vasona LP that would provide the
Town the property and the improvements at the end of the ground lease term; extending the
affordability term by 13 years from 2054 to 2067; making the units affordable at lower levels of
affordability; exterior building and site improvements; and interior renovations and upgrades of
the existing units. In additions no existing tenants will be displaced due to the change in
ownership.
PUBLIC COMMENTS:
The Town has not received any comments in regards to this application.
CONCLUSION:
Based on the positive components of the revised agreements outlined above and its consistency
with the General Plan, staff recommends that the Council make the required finding (Attachment
1) and introduce the draft Planed Development Ordinance (Attachment 3).
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: 612 (AKA 626) W. Parr Avenue /PD -12 -002
October 18, 2012
ENVIRONMENTAL ASSESSMENT:
The project could not possibly have a significant impact on the environment; therefore the
project is not subject to CEQA, pursuant to Section 15061 of the State Environmental Guidelines
as adopted by the Town.
FISCAL IMPACT:
The existing agreement calls for a distribution of limited residual one -time proceeds to the Town
from any transfer of the property. It is estimated that the net General Fund benefit would be over
$700,000. Additionally, the new Regulatory Agreement also requires the new owner to pay the
Town an annual regulatory oversight fee of $10,000 per year.
Attachments:
1. Required Finding
2. Existing Planned Development Ordinance 1698
3. Proposed Draft Planned Development Ordinance
4. Letter from the applicant
Distribution:
Cc: Hallway Partners LLC, 1777 Saratoga Avenue, Suite 209, San Jose, CA 95.129
TC:JP :ct
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REQUIRED FINDING FOR:
626 W. Parr Avenue (AKA 612 W. Parr Avenue)
Planned Development Application PD -12 -002
Introduction of an Ordinance modifying an existing Planned Development Ordinance to remove
existing covenants that are no longer valid on property zoned R- 1:8:PD. APN 406 -28 -034.
PROPERTY LOCATION: 626 W. Parr Avenue (AKA 612 W. Parr Avenue). PROPERTY
OWNER: Villa Vasona LTD. APPLICANT: Highland Property Development.
FINDING:
Required consistency with the Town General Plan:
That the Planned Development Ordinance amendment is internally consistent with the General
Plan and its Elements.
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ATTACHMENT 1
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ORDINANCE N0. 1698
AN ORDINANCE OF THE TOWN OF LOS GATOS
DICE 1572
WHICH AMENDED NTHEGZONINGNAORDINANCE EFFECTING
ZONE CHANGE NO. 52 FROM 0 AND RM:5 -12 TO R- 1:8,000 -PD
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ORDAINS:
SECTION I.
The Zoning Ordinance of the Town of Los Gatos is hereby amended to change
the. zoning of the propeapty at 612 West Parr Avenue shown on the map which is
attached hereto, marked Exhibit A and is a part of this ordinance, from RM :5 -12
(Multipl'e Family Residential, 5 -12 .dwelling units per net acre and 0 (Office)
to R- 1:8 -PD (Single Family Residential, 8,000 square foot minimum lot
size - Planned Development).
SECTION II.
The PD (Planned Development Overlay) zone established by this ordinance
authorizes the following construction and use of improvements:
1. Construction of One hundred and seven (107) apartments to be used by
senior citizens, including 10 units designed for the physically
handicapped.
2. Parking (including a minimum of four handicapped spaces), landscaping
and other imp- rovements shown and required on the Official Development
Plan.
3. Uses permitted are those specified in the R -1:8 (Single Family
Residential) zone by Sections 4.26.020 (Permitted Uses) and 4,26.030
(Conditional Uses) of the Zoning Ordinance, as those sections exist at
the time of the adoption of this ordinance, or as they may be amended
in the future. However, no use listed in Section 4.26.030 is allowed
unless specifically authorized by this ordinance, or by conditionai use
permit.
ATTACHMENT 2
SECTION III
COMPLIANCE WITH OTHER DEVELOPMENT STANDARDS
All general provisions in Article 3 of the Zoning Ordinance apply, and the
provisions of Chapter 4.10 of the.Zoning Ordinance apply except when the
Official Development Plan specifically shows otherwise.
SECTION IV
Architecture and. Site Approval is required before any grading or
construction work is performed, whether or not a permit is required for -the
work, and before any permit for grading or construction is issued. Grading or
construction permits shall only be used in. a manner complying with Section
4.82.120 of the Zoning Ordinance.
SECTION V
OFFICIAL DEVELOPMENT PLAN
In addition to Exhibit A (Zone Change Vicinity.Map), the attached Exhibit B
(Site Plan), Exhibit C, D E, F (Floor- Plans), Exhibit G- (E- levations), Exhibit
H (topographic survey), and Exhibit I (Tentative - Parcel Map) are part of the
Official- D.evel'opment plan. 'the following performance standards are part of the
Official D- evel°opmen`t Plan and must be complied with before issuance of an
grading or construction permits:
1. The applicant shall.file a parcel map to the satisfaction of the Town
Engineer showing the final- coh•iguratioh of the project site and the
remainder' of the County parcel.
2. The -applicant shall .submit grasdfng, drainage, on -site lighting, on -site
parking, and _storm and san.i�..ary sewer .plans to the °satisfaction of the Town
Engi•n.eer.
3. No grading shall occur within 6 feet beyond the driplines of mature trees,
and no paving shall be placed within a 6 foot radius of the base of these
trees.
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4. Hand trenching will be required if any utility lines are to be placed
within the root zones of any mature trees, to the satisfaction of the
Superintendent of Parks and Forestry.
5. Existing trees shown to remain shall be surrounded with protective fencing
along the driplines during grading and construction, to the satisfaction of
the Superintendent of Parks and Forestry.
6. If permitted by HUD financing, each unit shall be served with an active
solar hot water system from the start.
7. No gates or other obstructions shall be built across any portion of any
access road.
8. Residence in this project shall be restricted to persons wh-o are senior
citizens as defined by Zoning Ordinance Section 2.00.420, except that
handicapp -ed residents need not be senior citizens.
9. The handicapped parking measurements shall be updated to be accurate.
10. All units must be handicapped adaptable as defined by the State Housing and
Community Development Adaptability /Accessibility Regulations dated December
10, 1982 or the Housing Adaptability Guidelines by Peoples Housing Inc.
1980, except where the standards would create an unreasonable hardship.
11. Floor plans, including the recreation building, landscaping and other
amenities; shall be reviewed and may be modified by the Deciding Body at
the time of Architecture and Site approval.
12. Covenants
By appropriate documents at close of escrow, developer shall covenant, on
behalf of itself and its successors, to do the following:
A. Restrict the use of the site to housing for elderly persons eligible
for Section 8 subsidies during the period when Section 8 subsidies are
available to the project (or to persons eligible for subsidy available
to the project under any successor law to Section 8) and, thereafter,
restrict the use of the property to housing for elderly perso,ns of low
and moderate income as defined in HUD regulations.
B. Adhere, on initial and subsequent lettings, to the Occupancy Preference
System as supplemented by the Affirmative Fair Marketing Plan, both of
which have been established by the Town. At such .ti.me as the project
is no longer receiving any federal subsidy, the Town may modify its
occupancy preference in any manner that will not jeopardize the
developer's interests.
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C. Maintain the housing units to be constructed on the site in accordance
...with the. maintenance ,standards estab1 shed by the Town. Town pearsonnel
will make periodic inspections. The parties may revise such standards
by mutual consent if necessity requires f.t.
D. Adopt and maintain the Los Gatos management policies together with
other management policies which ensure. that tenants are not allowed to
violate any Town ordinances or in any manner cause ,a disturbance to
neighbors of the project. The parties may revise such standards by
mutual consent if necessity requires -it.
E. Not sell, assign or transfer in any manner any part or all of the site
or i.Mprovements, or bring in,a new,,general partner, :other than Jack W.
Sheehan, Inc. (or a co- general partner for syndication purposes) or
transfer control of Jack W. Sheehan, Inc., without an express prior
.fi,.ndi.n.g by the Town Council, after full , and. fair consi derat .on of all
the..,facts, and cir6umstance°.s, that the_ purchase (or: new general,: partner)
is willing and able to fulfill' a.11 the dbligations of the developer
under this Agreement or any amendments thereto. This covenant shall
have no effect if the Developer's HUD- insured loan is in default or the
mortgage is held or foreclosed by HUD.
F. Maintain the premises in private ownership, subject to ad valorem
taxation.
G. Place no new encumbrances on the site at any time after 45 years from
close of escrow, nor borrow against the p,roperzy on any existing
encumbrances after :said date, without the written approval of the Town.
H. Reconvey the site to the Town, at the Town's option, to be exercised as
stated herein, sixty -five (65) years from the date of close of escrow
on the take -out loan for the .project, for the sum of One Dollar ($1.00)
pTus .all transfer costs. ,Said conveyance shall- .include any and .-all
improvements then existing on the site,,free of a,11 encumbrances, „but
subject to all obligations arising from operat+b n of the project except
thos,p personal i.njury and property damage obligations,;not covered by
i nsur-ance;.. e.
13. If at any, =time. within the first five, Years after .initial..occupancy,
additional parking is shown,to be necessary, it shall be provided by the
property owner subject to Architecture and Site.,approval.-
14. The parking spaces in the southernmost parking area shall be paved with
"turf block ".
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SECTION VI
This ordinance amends Ordinance No. 1572.
SECTION VII
This ordinance takes effect 30 days after the date it is adopted. Within
15 days after this ordinance is adopted the Town Clerk shall cause it to be
published once in a newspaper of general circulation published and circulated
in the Town.
This ordinance was introduced at a regular '
meeting of the Town Council of the Town of Los Gatos on November 3rd:. , 1986
and adopted by the following vote as an ordinance of the Town of Los Gatos at a
regular meeting of the Town Council on December 1st , 1986.
AYES: COUNCIL MEMBERS Joanne Benjamin, Eric D. Carlson, Thomas J.
Ferrito, Robert L. Hamilton, and Mayor Brent N. Ventura
NOES:
COUNCIL
MEMBERS
None
ABSTAIN:
COUNCIL
MEMBERS
None
ABSENT:
COUNCIL
MEMBERS
None
SIGNED: /s/ Brent N. Ventura
M
ATTEST:
/s/ Rose E. Aldag (seal)
CLERK
PLN01 :ORD: VILLA
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El
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EXHIBIT A
Of Attachment 2
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ORDINANCE
ORDINANCE OF THE TOWN OF LOS GATOS
MODIFYING ORDINANCE 1698 AND
AMENDING THE TOWN CODE EFFECTING A ZONE CHANGE
FROM R- 1:8 :PD TO R- 1:8:PD FOR PROPERTY AT
626 W. PARR AVENUE (AKA 612 W. PARR AVENUE) (APN 406 -28 -034)
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS
FOLLOWS:
SECTION I
The Town Code of the Town of Los Gatos is hereby amended to modify Ordinance 1698 and
to change the zoning on property at 626 W. Parr Avenue (AKA 612 W. Parr Avenue) (Santa Clara
County Assessor Parcel Numbers 406 -28 -034) as shown on the map attached hereto as Exhibit A,
and is part of this Ordinance, from R- 1:8:PD (Single Family Residential, Planned Development) to
R- 1:8:PD (Single Family Residential, Planned Development).
SECTION II
The PD (Planned Development Overlay) zone established by this Ordinance authorizes the
following:
1 One hundred and seven (107) apartments to be used by senior citizens, including ten (10)
units designed for the physically handicapped
2. Landscaping, parking, and other site improvements shown and required on the Official
Development Plan for Ordinance 1698.
3. Uses permitted are those specified in the underlying R -1 :8 (Single Family Residential) zone
by Sections 29.40.385 (Permitted Uses) and 29.20.185 (Conditional Uses) of the Zoning
Ordinance, as those sections exist at the time of the adoption of this Ordinance, or as they
may be amended in the future, subject to any restrictions or other requirements specified
elsewhere in this ordinance including, but not limited to, the Official Development Plan.
However, no use listed in Section 29.20.185 is allowed unless specifically authorized by this
Ordinance, or by Conditional Use Permit.
Page 1 of 4 ATTACHMENT NT 3
SECTION III
COMPLIANCE WITH OTHER DEVELOPMENT STANDARDS
All provisions of the Town Code apply, except when the Official Development Plan
specifically shows otherwise:
SECTION IV
Architecture and Site approval is required before construction and site improvement
construction work is performed, whether or not a permit is required for the work and before any
permit for construction is issued. Construction'perm'its shall only be in a manner complying with
Section 29.80.130 of the Town Code.
SECTION V
The attached Exhibit A (Map), and Exhibits B -I (Official Development Plans) of Ordinance
1698, are part of the Official Development Plan. The following conditions must be complied with
before issuance of any grading, or construction permits:
TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT:
Planning Division
1. APPROVAL: This application has been completed in accordance with all of the conditions of
approval listed below and in substantial compliance with the plans approved and noted as
Official Development Plans_ of Ordinance 1698. Any changes or modifications made to the
approved plans shall be approved by the Director of Community Development, Development
Review .CommitteeRlanning Commission or the Town Council, depending -on the scope of the
change(s).
2. TOWN INDEMNITY: Applicants are notified that Town Code Section 1.10.115 requires that
any applicant who receives a permit or entitlement from the Town shall defend, indemnify, and
hold.harmless the. Town and its officials in any action brought by a third party to overturn, set
aside., or void the permit or. entitlement. This requirement is a condition of approval of all such
permits and entitlements whether or not expressly set forth in the approval, and may be secured
to the satisfaction of the Town Attorney.
Page 2 of 4
3. AFFORDABILITY: The one hundred and seven (107) apartments are to be used by senior
citizens, including ten (10) units designed for the physically handicapped and shall be rented to
individuals who have income at or below sixty percent (60 %) of the median income for Santa
Clara County.
4. SUBORDINATE AGREEMENTS: The following Agreements are in place and contain
additional regulations and /or requirements:
• Regulatory Agreement and Declaration of Restrictive Covenants
• Property Disposition Agreement
• Ground Lease and Merriorandum of Ground Lease
• Termination of Agreement for Disposition of Property
These Agreements may be modified in the future by the Town Council.
Page 3 of 4
SECTION VI
This Ordinance was introduced at a regular meeting of the Town Council.of the Town of Los
Gatos on November 5, 2012, and adopted by the - following vote as an ordinance of the Town,of Los
Gatos at a meeting of the Town Council of the Town of Los Gatos on November 19, 2012, and
becomes effective on the later of ,(i) .the date of recordation of the Memorandum of Ground Lease
and the Regulatory Agreement or (ii) 30 days after it. is adopted.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
ATTEST:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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LUCOT WY
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Approved by Town Council Date: Ord:
Clerk Administrator Mayor
EXHIBIT A
Of Attachment 3
Hia (and
September 27, 2012
Mr. Joel Paulson
Town of Los Gatos
110 East Main Street
Los Gatos, California 95030
250 W. Colorado Blvd., Suite 210
Arcadia, CA 91007
Telephone, 626 294 -9230
Facsimile, 626 294 -9270
www.highlandcompanies.com
Subject: Request for Modification of the Town's Ordinance #1698 that amended Town
Ordinance #1572
Dear Mr. Paulson:
.Please find the enclosed Development Review Application submitted for the purpose of
requesting a Modification of Town Ordinance #1698 (that amended Town Ordinance #1572).
Such Ordinances concern a 107 -unit affordable housing complex called Villa Vasona
Apartments, which is restricted for occupancy to low- income senior households.
A closing of the pending sale of this property will require existing Town Ordinance #1698 to be
modified by the documents currently under review by the Town of Los Gatos, as follows:
Termination of Disposition Agreement
Property Disposition Agreement
Ground Lease Agreement
Regulatory Agreement
The only document above that will require action of the current owner is the Termination of
Disposition Agreement, in concert with a successful sa-le. The remaining documents described
above (Property Disposition Agreement, Ground Lease Agreement & Regulatory Agreement)
are being negotiated between the Applicant (Highland Property Development LLC) and the
Town of Los Gatos.
We request that the enclosed application be presented to Town Council for introduction and
adoption in November 2012.
Sincerely,
0 I � +
Paul Patierno
Vice President of Highland Property Development LLC
Encl.
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