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The Danville Town Council is set Tuesday to discuss budgetary concerns raised by the developer of the affordable housing project set for construction on a portion of the town’s historic Borel property after voters approved an update last year to the town’s lighting and landscaping assessment district.
With multifamily rental units seeing an increase in LLAD fees under the new structure, developers for the 44-unit affordable housing project slated for a portion of the Borel property on Fostoria Lane that was sold by East Bay Regional Park District to fund an agricultural park on the remaining portion are asking for an exemption from the town.
“Without exemption, the cumulative impact over the next five years would total approximately $53,040,” wrote Sarah Ford, attorney for the project developers, The Armony Company, in a March 12 letter to Danville city attorney Robert Ewing.
“The exempted amount could cover utilities for approximately 20-25 units annually (based on average utility costs of $400-$500 per unit) or fund preventive repairs, enhancing long-term property sustainability and resident quality of life,” Ford continued.
Under the previous LLAD structure, multifamily rentals had been assessed based on acreage rather than per unit, a major change under the new structure.
“This resulted in very low assessment rates and created an inequity compared to multi-family for sale units such as condominiums,” Ewing wrote in a staff report prepared for an upcoming town council study session on the topic.
The change to a per-unit assessment formula means that the project is now set to be assessed at $8,152 for the first year, a nearly 980% increase from the $758 fee that would have been assessed under the previous acreage model according to Ewing’s staff report.
“Understanding the impact this increase can have on low-income housing, Town staff
agreed to look into options,” Ewing wrote.
While Ford had requested that the town change its assessment rate for affordable rental projects, Ewing said that town staff had decided against recommending that.
“In discussions with our District Engineer, we do not believe it is possible to justify a lower assessment because the property receives the same benefits as any other multi-family apartment building,” Ewing wrote.
Instead, Ewing is recommending that the town council consider using $200,000 of Danville’s $2.1 million affordable housing fund to offset costs for both the Borel project and the BRIDGES project on Laurel Drive, the only two 100% affordable housing projects on the immediate horizon.
“This dollar amount would still leave sufficient funds to assist in funding for the future low-income project at 510 La Gonda Way,” Ewing wrote.
Any remaining funds from that $200,000 should be used to offset the same increased costs at the 510 La Gonda Way project when it is developed, according to Ewing’s recommendations.
Under the proposal, owners of the two qualifying projects would be eligible for reimbursement of up to half of the LLAD assessment fees after providing proof of payment.
At its upcoming study session at 8:30 a.m. Tuesday (April 14), the Danville Town Council is set to discuss the item and consider directions for staff on whether or not to bring a resolution forward for a vote at a regular meeting. The agenda is available here.
In other business, the council is also set to talk about recommended updates to its guidelines and rules of procedure proposed by Town Manager Tai Williams.
