[BoulderCouncilHotline] Re: Annexation of 302,334 Arapahoe

[Firnhaber, Kurt]

Dear Steve,

Thanks for you opinion on the 302 Arapahoe annexation.  I have attached the language below from the annexation agreement.  I am sure that you are aware that detailed site plans are often not complete at the time of annexation.  We also see with most all developments that the designs often change slightly when going through the entitlement process.  It may relate to requirements from Xcel, or a regulation around road requirements or emergency access or unexpected natural conditions.  When site designs are completed there can be impacts on unit design, size or even number of units.  With the clause below, it gives us a path forward to solve issues that arise.

While you may be uncomfortable with the word equivalent and how it plays out in this agreement, it clearly defines that the community will still receive on-site affordable housing.  I also trust our City Manager and trust that she will be able to properly use good judgement to ensure we receive an equivalent community benefit for minor adjustments.  It is also important to recognize that if the City Manager does not believe a change is equivalent, they can deny a change and require that an amendment to the annexation would go back through Planning Board and City Council.

Thanks for sharing your concerns,

Kurt


a)     Modification of Affordable Housing. The Applicant and the City Manager, or her delegate, may agree to modify the requirements set forth in this Paragraph18 provided that the City Manager finds the proposed development would provide an affordable housing benefit that provides a community benefit at least equivalent to the housing benefit provided by the Affordable Units required herein.  The City Manager may not accept cash-in-lieu to satisfy the requirement for any of the on-site Affordable Units required under this Agreement.


From: Stephen Pomerance <stevepomerance at me.com>
Sent: Tuesday, June 21, 2022 10:32 AM
To: Firnhaber, Kurt <FirnhaberK at bouldercolorado.gov>
Cc: Wallach, Mark <WallachM at bouldercolorado.gov>; HOTLINE <HOTLINE at bouldercolorado.gov>; Sugnet, Jay <SugnetJ at bouldercolorado.gov>; Council <council at bouldercolorado.gov>; Allen, Michelle <AllenM at bouldercolorado.gov>; boulderplanningboard <boulderplanningboard at bouldercolorado.gov>; Brockett, Aaron <brocketta at bouldercolorado.gov>; Friend, Rachel <friendr at bouldercolorado.gov>
Subject: Re: [BoulderCouncilHotline] Annexation of 302,334 Arapahoe

External Sender
Hi Kurt,

As a former council member, I would never have voted to approve an Annexation Agreement with such unnecessarily fuzzy language as "equivalent" in it.

Why not just negotiate with the property owner/developer what they will do that is what the City wants and then put that in the AA? For example, the size of the units, number of bedrooms, prices, etc., should all be in it.

You have all the time in the world to do this. You have no obligation to operate on the developer's time line.

Annexation is a legislative matter, and so the City can ask for what it wants/needs.

So take the time and get what you want, and have a bullet-proof agreement that guarantees you will get it.

This "equivalent" language is completely unnecessary. It allows too much flexibility, and so puts the CM in an impossible position. And it just creates more room for nonsense to happen.

Steve Pomerance




On Jun 21, 2022, at 6:36 AM, Firnhaber, Kurt <FirnhaberK at bouldercolorado.gov<mailto:FirnhaberK at bouldercolorado.gov>> wrote:

Dear Mark,

I am replying to your question on if the developer can, in the future, substitute on-site affordable units with cash-in-lieu (CIL)? As per the annexation agreement, the units must be provided on-site. The Planning Board (PB) discussed their concerned that the clause in the annexation agreement that allows the city manager to approve an alternative outcome as long as it provides equivalent community benefit, would allow the city manager to approve CIL. While CIL is not considered an equivalent, the PB made an amendment to the agreement language specifying that the city manager could modify the affordable housing benefit with the exception of allowing CIL.

I hope that this answers your concern,

Kurt


Kurt Firnhaber
Director of Housing and Human Services
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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
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From: Wallach, Mark <wallachm at bouldercolorado.gov<mailto:wallachm at bouldercolorado.gov>>
Sent: Sunday, June 19, 2022 12:49 PM
To: HOTLINE <HOTLINE at bouldercolorado.gov<mailto:HOTLINE at bouldercolorado.gov>>
Cc: Council <council at bouldercolorado.gov<mailto:council at bouldercolorado.gov>>
Subject: Annexation of 302,334 Arapahoe

In the staff memo (p.3), it is stated that the developer wishes to retain the option of requesting cash-in-lieu to fulfill his community benefit obligations, yet on p. 32 of the annexation agreement the developer acknowledges, without qualification, that cash-in-lieu is not an available option and that the 5 affordable units will be built to the specifications provided in that document. Please be prepared to explain the discrepancy, as the annexation agreement has already been executed, and the Planning Board unanimously  suggested that there be a clear obligation to provide the on-site, deed restricted housing.

BTW, what would be the cash-in-lieu payment required for these 5 units? I inquire, because it is likely that 5 additional market rate units of 3,300 square feet are likely to sell at anywhere from $2.5-3.5MM, for total additional revenue to the developer of $12.5MM-17.0MM. That is a lot of additional revenue and profit, and if the option exists, it is more than possible that the cash-in-lieu option will be exercised. It seems to me that the executed annexation agreement should control. What is the argument for giving the developer the cash-in-lieu option and not following the suggestion of the Planning Board?
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