HomeMy WebLinkAboutAgenda Bill 3.C 05/16/2011Z g'5.8
DATE:
May 16, 2011
TO: Honorable Mayor and Members of the City Council :through City Manager
FROM: Scott Duiven,. Senior'Planner
SUBJECT: Resolution Establishing the Amount of the Commercial Linkage Fee for
Nonresidential Development Pursuant to Petalu, ma Municipal Code Section
17.35.040
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution establishing the amount of
the Commercial Linkage Fee for Nonresidential Development pursuant Petaluma Municipal
Code Section 17.35.040..
BACKGROUND
In December 2003 the City Council adopted the Commercial Linkage Fee to increase funding for
workforce housing through, a fee linked to the creation of jobs. On May 2, 2011 the City Council
adopted Ordinance No. 2403`N.C.S, amending the Commercial Linkage Fee ordinance and
limiting its applicability to,' new- square footage as the sole basis for the fee calculation. The
ordinance also removes the'set amount of the fee previously adopted and provides that the fee
will be set from time to time�by resolution of the City Council so that future changes will not
require amendment to the.Municipal Code by ordinance.'
DISCUSSION
The attached resolution re- establishes the fee at the level previously set by Petaluma Municipal
Code Section 17.35.040:C:
Commercial'' Fee
Industrial Fee
Retail Fee
$2.08 /square,f6ot
$2.15 1square- foot
$3'.591square foot
FINANCfAE IMPACTS
The current balance in the Commercial Linkage Fee accounti is .approximately $334,000. Future
revenues will depend on the;timing of new nonresidential of new nonresidential development projects. For example,
the East Washington,Placeproj'ect :will generate approximately $670,000 in Commercial Linkage
Agenda Review:
City Attorney Finance Director City Manager
Fee revenue..Per the ordinance these revenues will be used. to- leverage funding for future
workforce housing projects.
ATTACHMENTS
1. Draft Resolution
2. Ordinance No: 2403 N.C.S.
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ATTACHMENT 1
RESOLUTION ESTABLISHING THE AMOUNT OF,THE COMMERCIAL LINKAGE
FEE FOR NONRESIDENTIAL DEVELOPMENT PURSUANT TO PETALUMA
MUNICIPAL CODE SECTION 17.35.040.
WHEREAS, on December 15, 2003, the City Council adopted Ordinance No. 2171 N.C.S.
implementing a Commercial Linkage Fee for Nonresidential Development in the City of
Petaluma; and
WHEREAS, on May 2, 201' 1 the City Council adopted Ordinance. No. 2403 N.C.S., an
Ordinance Amending the Commercial Linkage Fee for Nonresidential Development in the City
of Petaluma; and
WHEREAS, Ordinance No. 2403 N.C.S. provides at Section 37 that the Commercial Linkage Fee
shall be established from time to time by resolution of the City Council.
NOW THEREFORE, BE IT RESOLVED that based on the findings contained in Ordinance
No. 2171 N.C.S., effective January 15, 2004, and Ordinance No. 2403 N.C.S., adopted May 2,
2011, and effective June 1 2011, the Commercial Linkage Fee for Nonresidential Development
in the City of Petaluma shall be:
Commercial Fee
Industrial Fee
Retail Fee
$2.08 1square foot
$2:.15 /square foot
$3.59 1square foot
BE IT FURTHER RESOLVED THAT this resolution shall take effect upon the effective date
of Ordinance No. 2403 N.C.S.
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EFFEC'T'IVE DATE
OF ORDINANCE
June 1, 2011
ORDINANCE.NO. 2403 N.C.S
1 Introduced by Seconded by
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5 Teresa Barrett 'Mike Healy
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9 ORDINANCE OF THE: CITY COUNCIL OF THE CITY OF PETALUMA AMENDING
10 CHAPTER 17:35, SSE CTIONS 17.35.030 AND 17:35:040 OF THE CITY OF
11 PETALUMA MUNICIPAL CODE,REGARDING THE COMMERCIAL LINKAGE FEE
12 FOR NONRESIDENTIAL DEVELOPMENT
WHEREAS, on December 'l5', 2003, the City Council adopted Ordinance No. 2171 N.C.S.
Implementing a Commercial :Linkage Fee for Nonresidential Development in the City of
Petaluma; and,
WHEREAS, in September, 201:0, the Sonoma County Economic Development Board
published a report entitled "2010j,] l City of;Petaluma: Local Economic Report" ( "Report ") and,
WHEREAS, the Report identifies total employment in Petaluma at 28,200 jobs as of March,
2010, the lowest level in ten years, and down 9.74% from its peak in October, 2007; and,
WHEREAS, the Report finds that in the past' decade, the percentage of households
making less than $50,000 in Petaluma was reduced from 38% to 25% of local earners; and,
WHEREAS, the Report concludes 'that the percentage of expected household income in
all categories lower than $75,000 peer year will remain lower than 2000 levels through 2014; and,
WHEREAS, according to the Report, the median home price in Petaluma as of 2009 had
declined by 26% since 2005; and,
WHEREAS, the current HUD income guidelines for Petaluma for the categories defined as
low and moderate income in the fee ordinance range from $45,00 - $56,300 for a single person
household to $74,600= $83,970 for a family of six; and,
WHEREAS, the Report determined that office, industrial, and commercial vacancies in the
City of Petaluma as of the first quarter of 2010 were 39.6 %, 18.7% and 12.8 %, respectively; and,
WHEREAS, based on future nonresidential development provided for in the General Plan
2025, the Commercial Linkage Fee could generate close to $18,000,000 over the buildout
horizon of the General Plan, more than the $10,920,000 envisioned at the time of adoption of the
Commercial Linkage Fee in 2003; and,
Ordinance No. 2403 N.C.S. Page 1
1 WHEREAS, the City's current affordable housing stock includes 1,924 units of which 614
2 are designed as workforce housing; and,
3
4 WHEREAS, the City of 'Petaluma Housing Division historically leverages housing funds at a
5 ratio of $10 -12 outside dollars for every local dollar and has a record of successful leveraged
6 ;projects; and,
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8 WHEREAS, affordable projects currently approved or in the pipeline include Logan Place,
9 66 units of workforce housing, construction anticipated Fall 201 1; Vintage Chateau II, 67 senior'
10 apartments, construction. anticipated Summer 2011; and Kellg"en Apartments, senior housing,
11 construction anticipated in 2013; and,
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13 WHEREAS, the City's 2009 -2014 Housing Element was updated in 2009 and continues to
14 identify adequate land within the City for affordable housing 'development and programs and
15 policies designed to encourage affordable housing; and,
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17 WHEREAS, on November 15, 2010, the City Council accepted the Petaluma Economic
18 Development Strategy; and,
19 WHEREAS, the Economic Development Strategy calls for filling existing nonresidential
20 vacancies as one of its highest priorities; and,
21 WHEREAS, the current Commercial Linkage Fee may serve as a disincentive to filling
22 certain existing nonresidential vacancies; and,
23' WHEREAS, the Commercial Linkage Fee program as herein amended will continue to
24 make an adequate financial contribution from nonresidential development and expanded
25 nonresidential development to the City's affordable housing programs; and,
26 WHEREAS, the City Council considered the modification limiting the types of
27 nonresidential development projects subject to the Commercial Linkage Fee adopted hereby
28 at a noticed public meeting on. April 18, 2011.
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30 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS
31 FOLLOWS:
32
33 Section 1 . The City Council adopts the above recitals as true and correct and further finds
34 that this ordinance is consistent with the City of Petaluma General Plan 2025 and that the City
35 has duly considered the effects of this ordinance with respect to the housing needs of the city
36 and the region in which the city is situated.
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38 Section 2. Chapter. 17'.35,, Section 17.35.030 of the Petaluma Municipal Code entitled
39 "Definitions" is hereby amended to read in full as follows:
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41 17.35.030 DEFINITIONS.
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43 As used in this Chapter:
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45 A. Addition shall mean adding gross square feet to an existing development project or
46 building subject to this ordinance.
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Ordinance No. 2403 N.C.S. Page 2 S
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B. Affordable housing shall mean the total cost of monthly housing payments does not
exceed thirty (30) percent of gross household income_
C. City Manager shall mean the City Manager of the City of Petaluma or his /her designee.
D. Director of Community Development shall mean the Director of Community
Development for the City of Petaluma, his or her designee, or such person as the City
Manager may designate.
E.. Expanded Nonresidential `Development or Expanded Nonresidential Development
Project shall mean construction that results in a net increase in, the gross square footage
of an existing nonresidential space or any conversion of residential space to
nonresidential space.
F. Gross square feet or gross square footage shall mean the area included within the
surrounding walls of a nonresidential development. This area does not include enclosed
parking for vehicles.
G. Low- and moderate - income shall mean a household with total annual income between
80 percent and 100 percent of the area median income, adjusted for family size, and in
accordance with the Area Median Income Schedule as published annually by the U.S.
Department of Housing and Urban Development for the San{a Rosa MSA.
H. Nexus Study shall mean the Sonoma County Workforce Housing Linkage Fee Study
published by Economic and Planning Systems, Inc. in December 2001 as may be
amended from time to time.
I. Nonresidential Development or development project for purposes of this Chapter shall
mean any project resulting in new or expanded nonresidential gross square footage.
Section 3. Chapter 17.35, Section 1 of the Petaluma Municipal Code entitled
"Application of Fee" is hereby amended to read in full as follows:
17.35.040 APPLICATION AND CALCULATION OF FEE.
A. Payment of Fees Required. Every person constructing or causing to be constructed within
the city nonresidential development projects and /or expanded nonresidential
development projects as defined in this Chapter shall' pay to the city a fee computed as
set out in this chapter.
B. Determination of Land Uses. For the purposes of this chapter, nonresidential land uses shall
be divided into three (3) classifications: commercial; retail, and industrial. When
necessary,, the Director of Community Development or such other person as may be
designated by the City Manager shall determine the land use classification that most
accurately describes the nonresidential development, or in the case of Mixed Use
developments, the portion thereof, for the purposes of determining the fee to be
imposed.
C. Computation of Fees. The fee charged for residential and nonresidential development
shall be established from time to time by resolution of the city council and adjusted
consistent with the provisions of such resolution and this chapter.
Ordinance No. 2403 N.C.S.
Page 3 6
D. Adjustment of Fee. The fees specified herein shall increase or decrease annually by the
same percentage as the latest "Engineering News Record Construction Cost Index - 20
City Average" ( "Index ") annually increases or decreases. The adjustment shall be based
on a comparison of the most recent Index to the Index in the month of the adoption of
the fee, or 'the Index used for the prior adjustment of the fee. The Finance Director shall
compute the increase or decrease in such fee. The first adjustment shall take place on
July 1, 2012 and each following July 'l st.
Time of Collection. Such fees shall be due and payable prior to issuance of a building
permit, or if no permit is to be issued by the city, at the time a new business license is
issued.
Application of Fee in Redevelopment Project Areas. Any nonresidential development or
expanded nonresidential development located within the adopted boundaries of a City
of Petaluma Community Development Commission redevelopment project area shall
pay a fee equal to one -half the amount established pursuant to Section 17.35.040.C.
20 Section 4. Except as amended pursuant to this ordinance, Chapter 17.35 of the Petaluma
21 Municipal Code remains unchanged and in full force and effect.
22
23 Section 5 . If any section, subsection, sentence, clause or phrase or word of this ordinance is
24 for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent
25 jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance.
26 The City Council of the City of Petaluma hereby declares that it would have passed and
27 adopted this ordinance and each and every provision thereof regardless of the fact that any
28 one or more of said provisions be declared unconstitutional, unlawful or otherwise invalid.
29
30 Section 6. The City Council finds that this ordinance is not subject to the California
31 Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c) (2) (the activity will not result in
32 a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c) (3)
33 (the activity is not a project as defined in Section 15378) of the CEQA Guidelines because it has
34 no potential for resulting in physical change to the environment, directly or indirectly.
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36 Section 7. The City Clerk is hereby directed to post and /or publish this ordinance or a
37 synopsis of this ordinance for the period and in the manner required by the City Charter.
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39 INTRODUCED and ordered posted /published this 18th day of April, 2011.
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41 ADOPTED this 2nd day of May, 2011 by the following vote:
43 Ayes: Albertson, Barrett, Mayor Glass, Harris, Vice Mayor Healy, Kearney, Renee
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45 Noes: None
46
47 Abstain: None
Ordinance No. 2403 N.C.S. Page 4 F
Absent:
ATTEST:
None
Claire Cooper, City Clerk
C D'avicl Glass, ayor
APPROVED AS /Of FORM:
Eric W. Danly'City Attorney
Ordinance No. 2403 N.C.S. Page 5
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