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ADOPT A RESOLUTION APPROVING A THIRD AMENDMENT TO THE MOSS GARDEN EAST - TRACT NO. 3632 SUBDIVISION AGREEMENT
recommended action
RECOMMENDATION
Staff recommends that the City Council adopt a resolution:
1. Approving a Third Amendment to the Moss Garden East- Tract No. 3632 Subdivision Agreement to revise conditions.
2. Authorizing the City Manager to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
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Summary
On March 20, 2007, City Council approved a Subdivision Agreement (Agreement) with K. Hovnanian Forecast Homes, Inc. (Subdivider) and Final Map for the Moss Garden East - Tract No. 3632 located south of Charter Way/State Highway Route (SR) 4 and east of Fresno Avenue. The residential subdivision consists of 34.30 acres divided into 243 lots for single-family residential units. The Agreement contained approved conditions of development, including requirements to perform off-site street improvements on Charter Way/SR 4 and Fresno Avenue.
Initially, the Subdivider struggled with the extent of off-site street improvements needing to be constructed prior to obtaining residential building permits. As a solution, the Subdivider prepared supplemental traffic analysis, to the satisfaction of the State and City, that identified residential unit count triggers for constructing certain street improvements. On October 23, 2007, City Council approved, at the request of the Subdivider, a first amendment to the Agreement that split up the off-site improvements into three phases and specified a maximum 81 residential unit construction allowance for each phase (for a total of 243 units). In 2008, the Subdivider constructed the Project 1 street improvements and built 53 residential units before halting construction due to the economic slowdown.
In 2016, the Subdivider approached the City to restart residential development in the Moss Garden East subdivision. During the period the Subdivider was inactive, the 200-Year flood regulation (commonly referred to as Senate Bill 5) became effective on July 2, 2016, and required the residential units at the Project site to be elevated 5-6 feet higher above the existing ground. To make development feasible, the Subdivider requested an allowance for 120 residential units to be constructed within the Project 1 improvements already constructed. On June 21, 2016, the City Council approved a second amendment to the Agreement to revise the phase 1 development allowance to 120 residential units. Phase 2 development allowance remained at 81 units and Phase 3 was changed to 42 units. Though the amendment was approved, the Subdivider opted not to proceed with residential construction due to housing market concerns.
At present, the Subdivider is interested in restarting residential development and has prepared residential building plans that provide for elevated construction to comply with the 200-year flood regulation. The Subdivider is requesting a third amendment to the Subdivision Agreement to allow for an additional 16 residential units to be constructed within its Phase 1 development allowance. The current development allowance provides for 120 residential units to be constructed and the request will provide for 136 units.
The Subdivider indicates that the additional 16 units will finish out a small lot (3,200 square feet) residential product type within the Project subdivision. The Project 2 off-site improvements would be constructed with the 137th residential unit. Staff is supportive of this request because the Port of Stockton constructed improvements to SR4 and Fresno Avenue in the last few years, that were coincidently obligations of the Subdivider in their second and third development phases. Additionally, the SR4 freeway extension was recently constructed to Navy Drive, which reduced traffic volumes on the SR4 segment adjacent to the Project site and lessens the urgency for constructing the Project 2 and 3 improvements.
It is recommended that Council adopt the proposed third amendment to the Moss Garden East - Tract No. 3632 Subdivision Agreement to revise conditions.
DISCUSSION
Background
The Moss Garden East Subdivision - Tract No. 3632 is located south of State Highway Route 4 (Charter Way), east of Fresno Avenue and West of Interstate 5 (Attachment A - Vicinity Map). On March 20, 2007, by Resolution 07-0098, Council approved a Subdivision Agreement between the City and K. Hovnanian Forecast Homes, Inc. (Original Developer) for Moss Garden East to subdivide 34.30 acres into 243 lots for residential use. The subdivision agreement contained obligations to comply with all of the tentative map conditions of approval and deposit bond securities to assure the performance and timely development of the subdivision project. Notable tentative map conditions on the project included the project’s obligation to construct off-site street frontage improvements along State Highway Route 4 (Charter Way) and Fresno Avenue and traffic signal and intersection modifications at Fresno Avenue and State Highway Route 4, which are under the purview of the California Department of Transportation (Caltrans). A maximum of 49 production homes were allowed to be issued prior to the completion of the off-site roadway improvements.
On October 23, 2007, by Resolution 07-0445, Council approved a first amendment to the subdivision agreement to change the timing obligations stipulated for constructing the off-site improvements and specified the maximum number of residential units to be constructed with defined project phases for the off-site. The amendment divided the project into three development phases and assigned 81 residential units allowance for each phase with defined off-site improvements referred to as Project 1, 2, & 3, which were required to be completed before moving onto a subsequent development phase. The off-site improvements are described in detail in Exhibit B of the Subdivision Agreement.
On June 21, 2016, by Resolution 2016-06-21-1206, Council approved a second amendment to the subdivision agreement to allow 39 additional residential units (combined total of 120 residential units) to be constructed within its Phase 1 allowance and ratified the assignments and assumptions of the subdivision agreement from the Original Developer to K. Hovnanian at Charter Way, LLC (Subdivider). The timing obligation for constructing the off-site improvements remained the same.
Project 1 off-site improvements were constructed as the 53 residential homes within the first phase of the development were built. Also, an external Port of Stockton Project resulted in constructing a significant portion of the off-site improvements in Project 2 & 3, such as pavement widening, traffic signal modification, and intersection improvements at Fresno Avenue and State Highway Route 4.
Present Situation
The Subdivider indicated that the number of home sales within the Moss Garden East development has been increasing and is requesting to amend the Subdivision Agreement to revise the conditions to allow for additional 16 residential units to be built within the Phase 1 allowance of the development. The development has two types of lots, 40’x80’ and 60’x60’. The Subdivider stated that the 16 additional residential units would be 40’x80’ lot type, which would complete the construction of that product type, thereby keeping the sales price affordable for the community.
The 16 additional residential units would be transferred from the Phase 2 allowance. The Phase 3 allowance would remain as approved. Below table presents existing approved and requested residential units allowance along with the status of the off-site improvements:
|
Development |
Current Allowance of Residential Unit |
Proposed 3rd Amendment Allowance of Residential Unit |
Status of Required Off-site Improvements |
|
Phase 1 |
120 |
136 |
Completed |
|
Phase 2 |
81 |
65 |
Partially Completed |
|
Phase 3 |
42 |
42 |
Partially Completed |
Staff is supportive of the request and recommends approval based on the fact that all of Project 1 off-site improvements and a significant portion of Project 2 and 3 off-site improvements have been constructed, which would support the additional 16 residential units. Also, the request provides affordable housing to low-income families, which supports the City’s priority in providing affordable housing.
The remaining off-site improvements for Project 2 and 3 will address the conveyance of storm run-off and pavement widening on State Highway Route 4 to provide additional capacity on the State Highway, which will be required as the project moves onto its subsequent development phase. The Subdivider has hired an engineering firm to update the improvement plans for the construction of the remaining off-site improvement for Caltrans approval.
It is recommended that Council adopt the proposed third amendment to the Moss Garden East - Tract No. 3632 Subdivision Agreement to revise conditions to allow for additional 16 residential units to be built within the Phase 1 allowance of the development.
FINANCIAL SUMMARY
There is no anticipated financial impact associated with the approval of this third amendment to the Moss Garden Subdivision Agreement, since the Subdivider remains obligated to fulfill all requirements under the Subdivision Agreement as amended.
Attachment A - Vicinity Map