Agenda Item No. 9B August 10, 2021 TO: Honorable Mayor and City Councilmembers Attention: Aaron M. Busch, City Manager FROM: Emily Cantu, Housing and Community Services Director

(Staff Contact: Emily Cantu, Director, (707) 449-5688)

SUBJECT: CONSIDER ALTERNATIVE SITES PRIOR TO THE NEXT STEP IN THE RESIDENTIAL OVERLAY (RO) ZONE CHANGE FOR THE OAK GROVE APARTMENTS PROJECT AT 475 WEST MONTE VISTA AVENUE (APNS 0126-150-050 AND 0126-160-150)

BACKGROUND:

On June 11, 2019, the City Council updated the Housing Disposition and Development Strategy (HDDS) (See Attachment 1) for City-owned former Redevelopment Agency housing properties. Additionally, to implement the updated Strategy, Council approved an Exclusive Negotiating Rights Agreement (ENRA) between the City of Vacaville and Eden Housing, Inc. to negotiate a Disposition, Development and Loan Agreement (DDLA) for affordable housing and associated community room on the City-owned housing property on Orchard Ave. (See Attachment 2, Map). On July 28, 2020, the City Council adopted a resolution to approve a DDLA between the City and Eden Oak Grove Investors, L.P. (Eden). The DDLA describes the agreed to terms for the development of rent-restricted housing on the Orchard Ave. site. The DDLA terms include a loan for acquisition of the City land (fair market value to be determined), construction ($1,070,000), and a $1,430,000 pre-development loan. The DDLA also provides that Eden is responsible for identifying and seeking all required City approvals to develop the site as described in the DDLA. Since DDLA approval, Eden purchased an adjacent privately-owned site (See Attachment 2) and conducted pre-development work to create all reports, materials, and documents required to submit the appropriate applications to the City, including a required zone change application. To date, $664,748.76 of the predevelopment loan has been expended. Additionally, three neighborhood meetings were held. One on October 13, 2020 (hosted by Eden), one on December 17, 2020 (hosted by the City), and one on May 20, 2021 (hosted by Eden). Eden also obtained a grant in the amount of $1,126,732 from CAP Solano, JPA for this development. At the May 25, 2021, City Council meeting, the City Council considered a request to initiate a residential overlay zone change for the Oak Grove Apartments project. The property is zoned Neighborhood Commercial and requires a rezoning to add a Residential Overlay district, which would allow multi-family development on the site, subject to the approval of a Planned Development permit. Eden made significant changes to the proposed project in response to feedback received during the community meetings and other meetings Eden held with community stakeholders. Eden proposes a 55-unit apartment complex for affordable and supportive housing on the site. The site plan identifies two (2) 3-story buildings with a community room, and a common open space area incorporated within an existing Oak Tree grove. The project includes other tenant amenities such as tenant resource and supportive services, space for the Vacaville Neighborhood Boys & Girls Club, children’s play equipment,

trellis covered BBQ area, etc. The project includes one-bedroom, two-bedroom, and three-bedroom units. At the conclusion of the May 25, 2021 meeting, City Council approved the initiation of the Residential Overlay and directed staff to bring back alternate locations for this project as well as possible expansion before the next step in the rezoning process. DISCUSSION: Prior to City Council approval actions for the Eden proposed development on the City-owned site on Orchard Ave., the following sites had previously been considered: City-owned housing property:

o Brown Street: Proposed project included a 10,000 square foot City office building and

72 apartments. It was determined this proposed project was not compatible with the Solano County Airport Land Use Compatibility Zone regulations. Currently, a grant application has been submitted for $6.2 million for the recreation components and a portion of this property is now under exclusive negotiation with the Vacaville Neighborhood Boys & Girls Club.

o East Monte Vista/Scoggins: 72 apartments proposed at the time could not fit on this site. This site is now under exclusive negotiation with Habitat for Humanity.

Privately-owned property:

o Eden explored acquisition of a privately held commercial site across the street from

Lincoln Corner Apartments on Markham Ave. The seller was seeking a commercial buyer and did not express interest in selling the property to Eden for affordable housing.

o Eden entered into a Letter of Interest to purchase the vacant lot on the North West corner of Orchard Ave. and W Monte Vista. A Purchase & Sales Agreement was not completed because Glenbrook Hills Swim Club on W Monte Vista was for sale for a community serving purpose and was superior because it is contiguous to the City-owned property on Orchard Ave., provided a more feasible housing development that could be built on the combined 2.11 acres of the two properties together, and was a significantly lower price for similar size parcel. Eden acquired this property in August 2021.

After receiving direction from the City Council at the May 25, 2021 meeting to bring back alternate sites and possible expansion, staff reviewed City-owned housing properties and other City-owned properties. Of the approximately 600 City-owned properties, the majority are improved or planned for improvements to be made by the City. Of the remaining properties, staff did not analyze parcels that were too small, irregularly shaped, inaccessible, and/or incompatible for the proposed project or any expansion. The remaining five parcels were analyzed as alternate sites and possible expansion are included in Attachment 3. This evening, staff is requesting that the City Council consider the analyses and select one of the following options:

Option 1: Determine there are no available City-owned properties appropriate as alternate locations. The project will proceed to the next step in the rezoning process for the Orchard Avenue location, or

Option 2: Determine there are available City-owned properties appropriate as

alternate locations. The project will not proceed to the next step in the rezoning process for the Orchard Avenue location, or

Option 3: Provide other direction to staff on desired next steps.

Should the City Council select Option 2 or otherwise not allow the project to proceed to the next step in the rezoning process for the Orchard Avenue location, the Disposition, Development and Loan Agreement (DDLA) between the City and Eden Oak Grove Investors, L.P. would be terminated. Because this would not be considered a default of the developer, upon termination of the DDLA, the $664,748.76 predevelopment funds would not be required to be repaid. In addition, Eden could lose the $1,126,732 grant from CAP Solano, JPA because it is highly unlikely the funds could be spent by the December 31, 2022 deadline attached to those grant funds. If an alternate site is selected, staff would begin new negotiations with Eden Housing. Eden Housing would conduct due diligence activities, including, but not limited to: (i) the physical and land title conditions of the site and remediation of any adverse conditions by the Developer; (ii) the type of entitlements necessary for the Project; (iii) the development schedule for the Project; (iv) financing for the Project (including any proposed City financial assistance for the acquisition of the Property and/or the development of the Project, if any); (v) the level of housing affordability. Eden Housing may request predevelopment funds for the above due diligence and other additional predevelopment work. This would likely delay construction of the proposed affordable housing units approximately 2-3 years.

FISCAL IMPACT: Amount Requested: There are no funds requested for this item. If Option 2 is selected, the City would not receive repayment of the $664,748.76 predevelopment funds. Funding Source: Not applicable. Budget Distribution: Not applicable STRATEGIC PLAN GOALS/INITIATIVE: Goal #3 – Protect Vacaville’s Quality of Life Initiative 3A: Promote Housing for All RECOMMENDATION:

By simple motion, that the City Council: Option 1: Determine there are no available City-owned properties appropriate as alternate

locations. The project will proceed to the next step in the rezoning process for the Orchard Avenue location, or

Option 2: Determine there are available City-owned properties appropriate as alternate locations. The project will not proceed to the next step in the rezoning process for the Orchard Avenue location, or

Option 3: Provide other direction to staff on desired next steps. ATTACHMENTS: Attachment 1: June 19, 2019, Housing Disposition and Development Strategy Attachment 2: Map Attachment 3: Analysis of City-Owned Properties

Attachment 1

Housing Successor Affordable Housing Disposition and Development Strategy

Property Location/ Acreage

6-11-2019 Disposition Plan 7-21-2021 Status

Orchard

Develop as Affordable Housing with Community Room for New Housing and Adjacent Affordable Housing Complex

SEE STAFF REPORT

Brown St

Develop as Housing Services Department/Social Service Agency Office/Meeting Space and Outdoor Recreation Component

IN PROGRESS

Eldridge, Suite 1-5

Retain as Housing Services Department Office Space Until Relocation Possible

IN PROGRESS

220 Aegean

Develop as Senior Affordable Housing

IN PROGRESS

East Monte Vista/Scoggins

Develop as Affordable Housing

IN PROGRESS

Mason/Wilson/Catherine/ E. Main/McClellan/Bush

Develop as Mixed Use, Residential, Commercial and Retail

IN PROGRESS

301 Hazel

Sell to Low Income First Time Homebuyer

COMPLETE

Callen/Bennett Hill

Develop Affordable Housing

COMPLETE

Lincoln Corner Land

Retain as Long-Term Lease with Vacaville Depot, Ltd (Lincoln Corner Apartments)

COMPLETE

Rocky Hill

Develop as Affordable Housing

COMPLETE

Orange Tree

Develop as Retail/Commercial

COMPLETE

Rocky Hill at Holly

Develop as Community Garden

COMPLETE

20’ adjacent to railroad right-of-way

Develop as Portion of Rocky Hill Trail

COMPLETE

Markham at Rocky Hill

Develop/Retain as Portion of Rocky Hill Trail and Open/Vacant space

COMPLETE

Vanden

Develop as Affordable and Market-Rate Housing with a Military Component

ON HOLD/PENDING

Depot/Bush

Sell for Downtown Entry Development

ON HOLD/PENDING

 

 

 

Attachment 2

MAP

 

N

City Housing 

Site 

Eden‐Owned

Apartments 

Privately‐Owned 

Property 

 

 

Attachment 3

Analysis of City-Owned Properties City-owned housing property: Site 1

APN: 0136-080-040 Site Area: 8.40 acres GP Designation: Residential Medium Zoning: RM (Residential Medium Density) Jurisdiction: Incorporated Vacaville City Limits Site 1 is located on Vanden Road and is designated in the HDDS as affordable and market rate rental and homeownership housing with a military component. Under the current zoning designation, the subject site could accommodate approximately 201 units. However, newly identified liquefaction issues discovered during due diligence conducted by a different developer caused development of affordable housing to be infeasible without significant subsidy at this time.

 

 

 

Other City-owned property: Site 2

APN: 0124-160-150 Site Area: 20.04 acres GP Designation: Agriculture Zoning: None Jurisdiction: Unincorporated Solano County This property is located off of Pleasants Valley Rd. in the unincorporated area of the County of Solano and the City does not have jurisdiction over the General Plan, Zoning, or development of this location. Site 2 would require a General Plan Amendment, Zoning Map Amendment, and Annexation to accommodate any residential development.

 

 

 

Site 3

APNs: 0133-140-290 & 0133-150-220 Site Area: 1.49 acres GP Designation: Highway Commercial Zoning: General Commercial Jurisdiction: Incorporated Vacaville City Limits Site 3 consists of two properties located on Orange Drive with a total area of 1.49 acres, which is less than the 2.11 acres on the proposed site on Orchard Avenue. Site 3 is located in Area I of the Willow-Kilkenny Policy Plan, which currently does not allow residential development. Any proposal for residential development would require a Zoning Map Amendment, and Policy Plan Amendment to add a Residential Overlay district and allow multi-family as a permitted land use with a maximum of 24 units per acre. Any further increase in unit capacity would require a Density Bonus. This site is located in Nut Tree Airport Land Use Compatibility Plan Zone F with no restrictions for residential development. These parcels do not have adequate sewer capacity for the current proposed 55 apartment unit project.

 

 

 

Site 4

APNs: 0129-240-310, -320, and -560 Site Area: 13.47 acres GP Designation: Highway Commercial Zoning: General Commercial Jurisdiction: Incorporated Vacaville City Limits Site 4 consists of three (3) properties located at the end of Nut Tree Road near the Nut Tree Village and Nut Tree Airport and totaling 13.47 acres in size. Site 4 is located in Area A2 of the Nut Tree Ranch Policy Plan, which allows residential development at a maximum density of 18 units per acre (du/ac) for those areas within Zone E of the Nut Tree Airport Compatibility Plan (NTACP). However, the NTACP restricts residential density to no greater than 6 units per acre. Any further increase beyond 6 du/ac would require additional analysis and review by the Solano County Airport Land Use Commission. Horse Creek runs through a portion of the site, which would remain undeveloped. The two smaller parcels are oddly shaped and entirely or mostly land locked requiring site access through the larger parcel only. The City has been pursuing a hotel/conference center use for this site.

 

 

 

Site 5

APNs: 0129-240-600 Site Area: 3.21 acres GP Designation: Highway Commercial Zoning: General Commercial Jurisdiction: Incorporated Vacaville City Limits

Site 5 is comprised of the Harbison Event Center located behind Nut Tree Village. The site is located in Area A1 of the Nut Tree Ranch Policy Plan and is currently being used by the Parks and Recreation Department for recreation programming. Currently, Area A1 does not permit residential development. Therefore, a Policy Plan Amendment would be required to add a Residential Overlay and allow residential development within Area A1. The 3.21-acre site is large enough to accommodate the proposed development and expansion. Development on this site would present a number of constraints. For instance, the Harbison House is located on the site and there is a lease with Vacaville Museum who owns the Harbison House. The site also includes an encumbrance of providing an easement to Nut Tree Dunhill, LLC to allow the train to move from the train “garage” to the south of the property, through the property to the Nut Tree amusement area.