Thread by @shayshinecastle

OK, so our next one is a little weird. On its face, not that big a deal: It's an old annexation agreement of a v small piece of land — 1 acre.

But the owner and city wants to rejigger the affordable housing requirements, so it has become A Thing.

It's 1422 55th Street, which was annexed (added into city limits) Sept. 7, 1999. documents.bouldercolorado.gov/WebLink/DocVie…

Annexations have dif requirements for affordable housing. They have to provide more, via either building or cash-in-lieu, than already-in-the-city projects.

The thinking is: You're getting the benefit of city services, so give us the benefit of affordable housing.

The 1999 annexation agreement required construction of on-site affordable housing when property is redeveloped; either for-sale or rental

Owner/applicant Don Altman wanted to build 14 townhomes in two buildings - 60% would have to be affordable

Per staff: “​​The requirements of the annexation agreement are no longer financially feasible to implement if constructed as for-sale units and, for rental outcomes, are not desirable from a community benefit perspective.”

That's bc affordable rental rents at the AMI levels in the agreement would be “at or above market rents” (80-100% AMI, or $2,106-$2,632 per month)

That's "no longer desirable from a community benefit perspective," staff says.

They recommended an amendment to the annexation agreement, which requires for-sale units and/or cash-in-lieu; $25K per unit for 5 years - after 5 years, the standard CIL fee.

Per notes to council: “Staff recommended a size limitation for the new for-sale housing units but were unable to come to an agreement with the applicant on an acceptable square footage limitation.”

Staff still thinks amended agreement “provides an equivalent amount of community benefit as intended in the 1999 agreement” and gets us middle-income, for-sale housing — which we get hardly any of.

Wallach starts off discussion with a heavy sigh. Last time we (briefly) looked at this, he said: "We're dealing with a difficult developer." He also wrote a lengthy Hotline post about it.

As Kurt Firnhaber explains, the units would not be deed restricted. But they would be of a smaller size, which is part of the city's middle-income housing strategy: Market-rate, attached homes that are still affordable to middle-income earners.

Plus the applicant would pay cash-in-lieu, which funds affordable housing.

I mean, they *could* do on-site, deed-restricted units. But it seems unlikely given the size of the lot and the homes.

Wallach: "I would ask the applicant, what are his intentions?"

We'll get back to that later.

More council qs for now.

Yates: At our middle-income levels, a family could afford roughly a $600-$800K mortgage, right?
Firnhaber: It depends, but generally.

Yates: What size would you suggest at that price point?
Firnhaber: Townhomes of 2-3 bedrooms on the smaller side are 1,200 sq ft. On the larger side, 1,600-1,700 sq ft.

I totally forgot to say that maximum allowed density — which the city would require to be developed here — is 14-16 homes.

Yates: The first 5 years, the cash-in-lieu amount is capped, then it goes to normal. What would that normal fee be? That $25K/yr for the first 5 years is "artificially low, isn't it?"
Firnhaber: "It is."

Firnhaber: For for-sale projects like this, you pay 1.5X the cash-in-lieu amount. We did that to encourage on-site, for-sale homes.

Boulder has gotten not very many of them.

It's typically $65-$75K per unit, Firnhaber says, for units similar to this one.

Yates: Where did the suggested $25K amount come from? Is that to reflect the time period of the annexation? (1999)
Firnhaber: That came from negotiations.

"We had to do a bit of research to find out what the cash-in-lieu amounts were in 2000, the year" those requirements "came in to place," Firnhaber said. We came to about $35K per lot.

Folkerts: If we were to look at this as an annexation today, don't we charge more for those?
Firnhaber: We typically charge 1.5X more.

Applicant Altman is here. Wallach asks his q.

"Our intention is to build as many homes as possible," Altman says. "We don't know attached or single-family, yet. We haven't gone that far."

Altman: We have the 3,000 sq ft of open space per unit requirement
Wallach: An acre is 45,000, so that should give you plenty of units.
Altman: Our most dense plan is 14 units
Wallach: What size?
Altman: We don't know. It's in the flood plain; we can't do basements.

Wallach: You don't know size?
Altman: We spent a year and $100K designing the 14 units, but it didn't pencil, which is when we stopped and started working on the annexation agreement.

Wallach: What are you asking us?
Altman: For us to pay cash-in-lieu, then we could sell those units at market rate.
Wallach: What do you see that market rate?
Altman: I don't know. We would want to sell them for as much as ppl are willing to pay for.

Folkerts: It looks like you previously applied for 20,000 sq ft of residential area. Do you think you'd still be able to build that 20K sq ft, with the flood plain?

Altman: All it means is we can't do a basement.
Folkerts: It looked like you were proposing two stories above parking, so it didn't look like the flood plain would change that. Am I misunderstanding?

Speer is *I think* asking if Altman wanted to build these on 30th Street (he also owned that site) but sold it to the city for the fire station (to do a shared street) and affordable housing.

It's a dif kind of community benefit, Speer says, but it seems like a benefit.

I say "sold" but it's still under contract.

Altman: They're actually both great sites to develop, but I've been asked to accommodate what the city wants to do there, which is a dif plan than we originally made, also with the city. The fire station project came in after we purchased 30th St.

"I hope to come to an agreement on both these properties," Altman says.

Benjamin to Altman: Would you agree to an amendment that gives the city a little more certainty on 30th St?

Yes, Altman says. "I'm very open to that."

Wallach: What are the specific issues that are preventing a closing?
Firnhaber doesn't really answer that other than to say it's been "on and off 2-3 times."
Wallach: Are we prepared to close?
Yes, Firnhaber says.
Wallach asks again: What's in the way?

Altman: The contract allows me to choose whether or not to close.
Wallach: Why wouldn't you? Is it a timing issue? Or can you just elect not to close ever?
Altman: I don't have to close. "I don't think the spirit of the last 2 years would be to close one and not the other."

Winer: Can you agree to a size cap on the units?
Altman: The only way we can do that is to get 20-25 units, and that requires an open space requirement. I would love that, but I don't want to go through the process to do that. "We're kind out of gas."

Altman: "To be fair, I'm being asked to give up an other property, shrink the homes, raise the cash-in-lieu fees, keep it middle-income... it doesn't work for any affordable housing in Boulder."

Folkerts: Your previous submittal was for 20K sq ft and 14 units, which is about 1,500 sq ft per unit. A cap feels like a non-issue, bc the underlying zoning won't allow more. Help me understand.

Altman: We don't know how many units we are able to fit. Once engineering gives us their feedback, once the fire dept says what they need for a truck turnaround. "It's a fear of the unknown."

"We're just being cautious," Altman says. "We want to build as many units as we can. That will by nature make them smaller and less expensive."

Speer: You just listed 5-6 dif things that we're asking you for here. Are there some of them you'd be willing to do? Which ones?

Altman: "I'm OK handing over 30th Street. I'm OK paying some cash-in-lieu. But that's probably the extent. And again, I want to do more units. If I didn't want to do more units, I would just build one big house there. I really think we want the same thing."

Yates: If we don't approve this amendment tonight, what would happen? Does it just kind of sit out there under the old 1999 terms and he either builds or doesn't?
Planner Sloane Walbert: They could build a single-family home. Or they could do rental.

Yates to Altman: You're not giving us the fire station. We're paying $4.7M. We want to get started on our fire station. Can we just get going on that? Do you need relief on the open space? We did that on Diagonal Plaza.

And quickly, Yates adds: They used a special ordinance.

A bit more detail on how open space requirements (and other stuff) stand in the way of doing middle-income housing. boulderbeat.news/2021/12/04/spr…

Wallach: "This is, in my 2.5 years on council, the most problematic project I've had to review. This is an individual who wants to pay 1999 cash-in-lieu and sell them for 2022 prices."

"I'm always interested in discussing a compromise," Wallach says. "I'm v concerned about his behavior on the fire station site and the implied leverage on that."

"This to me is a substantial overreach in any number of respects. There's not another developer in town who would have the expectation of $25,000 per unit in cash-in-lieu," Wallach says. Cannot support this as is.

Folkerts: I'm also not in favor of the low cash-in-lieu, though I appreciate the sunset. The fact that it could be developed, under our current rules, with a single-family home, make me think the city would not be getting the benefit we want.

Suggests $35K/per unit cash-in-lieu fee, but doing a fixed amount based on the assumed development potential. So if it can be 14 units, it's $35K x 14. And if more housing fits there, fine. The total fee stays the same.

Yates and Brockett also good with some leeway on the open space requirements, a la Diagonal Plaza.

Everyone (so far) wants to tether this to the fire station deal. Well, maybe Wallach didn't, but everyone else.

Friend: "I would be cautious about overplaying our hand. We could lose what we need and a massive single-family house gets put there." It would be great to get an extra $10K/per unit in cash-in-lieu, she says, but in the grand scheme of things... that's nothing.

Joseph: Let Altman and staff figure it out, instead of us doing it on the fly, making up amounts. I don't think this is the right time to do it.

Wallach disagrees with Joseph: "We've been talking to this developer for a couple years. I think it's important council lays out a couple parameters here."

He *is* in favor of tying the fire station property to this, so we are ensured that deal goes through.

Firnhaber asks city attorney Teresa Tate and the planning dept to weigh in on that.

It's cool, Tate says.

Brockett to Altman: Can you work with staff on this?
Altman: "I do want a little bit of credit" for selling the 30th Street property for no profit, and at 2017 prices — not 1999 ones. That wasn't originally the plan.

He would be OK with a higher cash-in-lieu fee of $35K / per unit and tying the two deals together but NOT a size cap on the units.

Brockett: What if we wiggled with the open space rules?
Altman: I could say yeah right now, and everybody would be happy, but I really don't want to delay the process. It's been 6 years. "We're just tired."

Council's support "would be tenuous" if there wasn't a cap on the unit size, Brockett says.

I feel like the requirement to develop to the maximum density IS a cap on the size.... If they require you to build as much as you can, that's essentially the same thing.

But maybe not. This planning stuff is hard.

Either way, we're gonna revisit this in a month after Altman and staff hash things out.

I will wait with breath that is bated.

@threadreaderapp please unroll. Thanks!