To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Tara Vargish, Development Services Director
Matt Gohl, Special Projects Manager
Title
Resolution Approving a Fee Waiver for the Unity on Park Street Multi-Family Residential Housing Development [Wellspring Community, 884 Park Street]
Body
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Executive Summary
Town staff received a fee waiver request from the Douglas County Housing Partnership (DCHP) in a letter dated June 21, 2023 (Attachment A) associated with the planned Unity on Park Street project. Wellspring Community has partnered with the DCHP on this project and, the project developer - Unity at Park Street LLLP - is requesting a $661,365 waiver for the renovation of the old La Quinta Inn in Castle Rock. The renovation will result in a 42-unit apartment complex with half of the units set aside for households with disabilities, especially those with intellectual and developmental disabilities (I/DD), and the remaining units offered with attainable rents for residents earning between 30 - 80% of the Area Median Income (AMI).
Town code allows up to 100 percent of applicable fees to be waived for attainable housing projects. Fees that can be waived include application and permitting fees, development impact fees and system development fees. Total Town fees for this project, as shown in the request, are estimated to be $661,365. Unity on Park Street, LLLP is requesting that the Town waive 100 percent of these fees. Town Council has approved fee waivers in the past including for Auburn Ridge senior housing in 2013, senior housing at Oakwood Apartments in 2020 and Meadowmark attainable senior housing in 2023.
Unity on Park Street is located at 884 Park Street, Castle Rock, CO 80104 - situated within Councilmember LaFleur’s District. The vicinity map is provided here for reference.
This development has also received commitments from Douglas County for $3.5 million and the State of Colorado for $4 million. Other support for this project includes $200,000 from the contractor (Almquist Construction) and $10,000 from Canyon Title towards closing costs.
Staff recommends approval of the Resolution (Attachment B) waiving permit and impact fees associated with the Unity on Park Street project.
Discussion
Project Information
Unity on Park Street will renovate the old La Quinta Inn located at 884 Park Street in Castle Rock to create 42 attainable apartment units, of which half will be dedicated for households with disabilities, especially those with intellectual and developmental disabilities (I/DD). The 42 units will consist of 22 studio apartments and 20 one-bedroom units with monthly rents ranging from $615-$1,436. All units are dedicated for individuals earning between 30 - 80 percent AMI. Two Wellspring staff members will be on site 24 hours per day to provide living assistance for the I/DD residents. Additionally, the existing pool area will be converted to community space for hosting classes and events. Additional project details are included in Attachment A.
Total project costs for Unity on Park Street are estimated to be $11,392,069 including Town fees of $661,635. Funding sources for the project include a bank loan, County and State funding, developer fees and DC mill levy. Unity on Park Street, LLLP has requested waiver of all Town fees, totaling $661,365 into order to fully finance this project.
Unity on Park Street has submitted their site development plan (SDP) and building permit documents. While they have not yet submitted for site construction documents (CDs), staff is providing review comments and working through project planning with the developer at this time. The project requires a Use By Special Review on their Site Development Plan proposal which the Planning Commission unanimously approved for recommendation on October 26, 2023. The Town Council hearing is scheduled for November 7, 2023. Unity on Park Street is ready to move forward with demolition and renovations this year as soon as final Town Council and building permit approvals are ready.
Waiver Authority
Town code provides for development impact fee (§3.16.050) and system development fee (§13.12.080J) reductions of up to 100 percent for attainable housing projects. Per code, “A qualifying attainable housing project and unit shall be defined as a housing project or unit participating in an attainable or affordable housing program through the Douglas County Housing Partnership, Colorado Housing Finance Authority or other certified local, state or federal attainable housing program.” Waivers of this type require Town Council approval. Additionally, section 15.01.030 allows Town Council to waive, reduce or defer payment of building fees if it determines “in its sole and exclusive discretion, that there are unique and compelling circumstances that render the imposition of such fees in strict accordance with this Chapter inequitable with respect to a particular application, site or building.” Full text of applicable Town code sections is available in Attachment C.
For projects other than attainable housing, Town Council is authorized by Town code to approve waivers for various project costs including development impact fees (§3.16.070) and development services fees such as building permit and inspection fees (§15.01.030). Note that waiving use tax is not permitted but is not applicable to this request due to the applicant’s tax-exempt status.
Use of Fee Waivers
The Town has utilized the fee waiver programs for attainable housing and economic development projects in the past. In 2013, Town Council approved a development impact fee waiver of $200,000 related to the Auburn Ridge project that included construction of 80 affordable housing units. The Town utilized the General Fund to backfill impact fee funds that were affected by the waiver, but this is not required by Town code. The decision to offset fee waivers can be made at the time of each request, factoring in available funds and the best interest of the Town at the time. In 2020, Town Council approved a $200,000 fee waiver for the Oakwood Senior II project that added 45 attainable units. Earlier in 2023, Town Council approved a $500,000 fee waiver for 200 attainable senior housing units at Meadowmark Senior Apartments. Affected Town funds were not made whole for the waived fees under the Oakwood and Meadowmark agreements.
Budget Impact
Approval of the requested fee waiver would result in $661,365 less revenue for Town funds and affected funds will not be made whole for lost revenue. Note that there are no Castle Rock Water fees since this is a renovation of an existing facility and additional water services are not required. Waived fees would reduce permit and impact fees as shown in the following table:
*Based on 2023 Development Fee Schedule
Recommendation
Staff recommends approval of DCHP and Wellspring Community’s fee waiver request totaling $661,365. It is further recommended that this fee waiver be contingent on Unity on Park Street, LLLP being issued a building permit no later than December 31, 2023.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Alternate Motions
“I move to approve the Resolution, with the following conditions: (list conditions).”
“I move to continue this item to the Town Council meeting on ___date to allow additional time to (list information needed).”
Attachments
Attachment A: Unity on Park Street Fee Waiver Request
Attachment B: Resolution
Attachment C: Town Code - Fee Waivers
Attachment D: Fee Waiver Agreement