[BoulderCouncilHotline] FW: 1422 55th Street

[Firnhaber, Kurt]

Dear Mark,



We have responded to your questions in blue below.





The proposed annexation of 1422 55th Street has come back to us in somewhat better form, but it continues to raise a couple of issues which I would like to see addressed. Those issues are as follows:



1) I am pleased that there is now a tie-in between this Annexation Agreement and the closing of 2691 30th Street. However, the language is not entirely clear. What happens if the seller refuses to close by August 19? Does the 55th Street project simply lie fallow until the developer does close? Do we have a right of specific performance to compel closure?  And what happens if, for any unforeseen reason, the City fails to close? What are the ramifications of that? Section 4.d is the cite of interest and says that no building permits for "any additional dwelling units" shall be approved for the Subject Property unless 2691 LLC has executed a special warranty deed conveying 2691 30th  and has conveyed the property to the city.  The restriction attaches to the property, so no additional dwelling units could be built by any developer, even if the applicant would sell it. There is not an exception for the City backing out of the deal.  There is not a specific performance mechanism but the city could use eminent domain to acquire some or all of 2691 30th street.  The applicant is aware of that possibility.



2) On page 6 of the staff memo it is stated that this issue may arise again with respect to small annexations. In moving forward with this transaction have we set a precedent that will be controlling in the future? By entering into this transaction have we effectively negated existing annexation provisions for these types of small properties in the future?  Mark, you are correct that this agreement could have an impact on other previous annexations, particularly for small developments.  In my opinion and from what we have observed, there are a number of previous, small annexations, that have never been developed because the community benefit and other requirements are simply too steep.  One would think that a one-acre parcel backing up to the golf course would have been developed over the past twenty years.  The one similar annexation of the same size and a couple parcels to the north, Toby's Lane, was attempted by developers over the years with no success.  It was only through Thistle and additional investment from the Affordable Housing Fund that actually completed this development, which had a similar annexation agreement.  I am aware of other small annexations which have not been able to be developed.



3) The units that would have been constructed at 80% or 100% of AMI under the original agreement would have been substantially cheaper than any recent new construction that I am aware of, such as the Park Mosaic or the Reve. I still do not understand why 2-BR units at $2,106/month for 80% of AMI renters or $2,632 for renters at 100% of AMI are not a superior benefit to Boulder than a very few 7-figure single family units and a very highly discounted cash-in-lieu payment based on 1999 standards. And if anyone believes that the market rate units will be remotely affordable to any purchasers other than high-end buyers, I suggest that you are in for disappointment.  Mark, I have addressed this question before, so I won't go into much detail.  The first is that one development with four or five affordable rental units is difficult to manage form an oversite standpoint (compliance) and second, for an owner of a small number of units to properly qualify the affordable residents.  Lastly, other affordable housing developments in the city have seen a real reluctance from residents in the 65-80% (AMI) desire to rent affordable units because they don't want to go through the qualification process to rent an apartment.



The only true benefit that Boulder receives from this transaction is the closing of the 30th Street parcel, and it is only on that basis that I am prepared to reluctantly support it. Staff attempts to suggest that there is a benefit to Boulder in adding to our stock of high-end housing, but this is simply not the case. Our housing problems have nothing to do with a shortage of luxury units; you can find them everywhere. And the discounted cash-in-lieu payments we have agreed to accept will provide much less affordable housing than if current levels of contribution were required. If this were a stand-alone transaction in which an applicant requested relief from every obligation of the previously agreed terms of an Annexation Agreement, but wanted to retain 23 year- old cash-in-lieu payment levels, I would have found the request to be preposterous. But in order to secure the closing of the 30th Street property, I will act accordingly.  If this development goes the route of eight additional homes, we will receive enough CIL to create three permanently affordable units that will serve households from 30-60% of the AMI in perpetuity. This would equate to the number of affordable units at 27% of the total.  I believe your statement that the only benefit to Boulder is the sale of 30th street, may not be genuine to this other outcome.  Holding this annexation agreement to higher standards would likely lead to either the development of one large home on this one-acre site or no further development, which has been the case for over twenty years.  With that said, I appreciate your frustration.  Other staff and I will be at the council meeting if you have further questions.



Thanks for your continued concern and questions,



Kurt


Kurt Firnhaber
Director of Housing and Human Services
[https://bouldercolorado.gov/links/fetch/41501]
O: # 303-441-4424
C: # 303-917-0914
FirnhaberK at bouldercolorado.gov<mailto:FirnhaberK at bouldercolorado.gov>
Department of Housing & Human Services
1300 Canyon Blvd  Boulder, CO 80302
Bouldercolorado.gov<https://www.bouldercolorado.gov/>

















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