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Minutes 02/19/08 PUBLIC HEARING February 19, 2008 Present: Peter Runyon Sara Fisher Am Menconi Bruce Baumgartner Bryan Treu Robert Morris Teak Simonton Kathy Scriver Chairman Commissioner Commissioner County Manager County Attorney Deputy County Attorney Clerk to the Board Deputy Clerk to the Board This being a scheduled Public Hearing, the following items were presented to the Board of County Commissioners for their consideration: Executive Session There was none. Special Recognition - Erika Donohue National Board Certification Am Menconi, Commissioner Edwards Elementary School Teacher, Erika Donahue, was congratulated by the commissioners for achieving National Board Certification. The certification is awarded to teachers who have met rigorous criteria through intensive study, expert evaluation, self-assessment, and peer review. Ms. Donohue stated that she chose to take on the National Board Certification process because it gave her an opportunity to reflect on her teaching, refine her instruction, and provide the children in her supervision with the best experience she could provide. Commissioner Menconi stated that it was an amazing achievement and wonderful benefit to her community. Commissioner Fisher thanked her for the effort, energy, and enthusiasm she brings to her work. Elected Officials Service Awards Commissioners The county commissioners recognized three elected officials for reaching 5 years of service to the county at their regular meeting on February 18. Coroner Kara Bettis and Surveyor Dan Corcoran were in attendance to receive the awards. Chairman Runyon thanked Mr. Corcoran for his service and stated that he was an asset to the community. He stated that Ms. Bettis brings an incredible sense of joy and pleasure of living to her job that normally people would not associate as county coroner. He thanked Ms. Simonton for her outstanding work and professionalism. Commissioner Fisher thanked the officials for their service and encouraged them to ask for support whenever needed. Commissioner Menconi thanked them for their participation in the organization. 1 02/19/2008 Consent Agenda Chairman Runyon stated the first item before the Board was the Consent Agenda as follows: A. Approval of bill paying for the week of February 18,2008 (subject to review by the Finance Director) Finance Department Representative B. Approval of payroll for February 28,2008 (subject to review by the Finance Director) Finance Department Representative C. Approval of the minutes of the Eagle County Board of Commissioners meeting for January 22,2008 Teak Simonton, Clerk & Recorder D. Sales and Professional Services Agreement between Tyler Technologies and Eagle County for software purchase, installation, maintenance and support. IT Department Representative E. Agreement between Menendez Architects and Eagle County for the design of the Eagle County Transit Leadville bus facility Facilities Management Department Representative F. Resolution 2008-015 in the Matter of Amending the Eagle County Land Use Regulations. General amendment affecting Chapter II, Article 4, adding Eco-Build Commercial!RMF. (Eagle County File No. LUR-0080) Adam Palmer, Community Development Chairman Runyon asked the Attorney's Office if there were any changes to the Consent Agenda. Bryan Treu, County Attorney stated that the agenda was appropriate for approval Commissioner Menconi moved to approve the Consent Agenda, Items A-F. Commissioner Fisher seconded the motion. The vote was declared unanimous. Citizen Input There was none Resolution adopting the First Supplementary Budget and Appropriation of Anticipated Revenues for Fiscal Year 2008 and authorizing the transfer of budgeted. and appropriated monies between various spending agencies Finance Department Representative Commissioner Fisher move to table the adoption of the First Supplementary Budget and Appropriation of Anticipated Revenues for Fiscal Year 2008 until February 26, 2008 at 11 :00 a.m. Commissioner Menconi seconded the motion. The vote was declared unanimous. Planning Files There was none 2 02/19/2008 Housing Guidelines Alex Potente, Housing Director Proposed Chane:es to Eae:le County Housine: Guidelines EC Old Housing Guidelines EC Proposed Housing Guidelines RESIDENTIAL INCLUSIONARY 20% oftotal residential units in PUD. 35% AH REQUIREMENT Applies to new residential development Applies to 4 residential units or more in a or of 4 units or more, excluding 35 acre zoning change. subdivisions. 30% AH and 10% RO 5 point credit on affordable units for 1.5% transfer assessment on market-rate units-no money to applicant AMI level of for-sales housing and 30-100% of AMI, average 80% AMI. An average of 100% for-sale or 80% AMI rental, rental housing with spectrum pricing. 10 AMI points for structured parking. Fees imposed at time of sale No broker; County facilitates sales. 2% 1.5% fee if remain in EC or own longer than 5 year; Transfer commission paid by the seller 4% if moving away and less than 5 years. for county's role as broker. Off-Site Mitigation Rate 25% of total residential units in PUD. AH and RO treated as on-site if certain criteria are met; rental ok for either obligation. In-Lieu Mitigation Rate 30% @ 80% AMI, based on square 35% @ 100% AMI plus 15% admin.fee; land in lieu footage ($132,000/950 sq. ft.). will be considered as alternative; off-site may be treated as on-site if objective criteria are met. RESIDENTIAL LINKAGE 20% of housing needs generated by Abolished. development's employees@ 80% AMI On-site on site; 25% off-site; 30% in-lieu. In-lieu 30% (13.1 % effective) @ 60% AMI N/A. CQMMERICAL LINKAGE Must meet commercial linkage or inclusionary requirement; whichever is higher. On-site 20% @ 60% AMI. 100% for job generation at less than 140% AMI (55% effective) @ 100% AMI sales price (or affordable rental at 80% AMI), with spectrum pricing. Off-site 25% @ 60% AMI. Treated as on-site if certain criteria are met (e.g., location inappropriate for employee housing); otherwise in-lieu must be paid. In-lieu 30% @ 60% AMI 100% at 100% AMI plus 15% administrative fee. This amount is $163 per square foot for 2008 Deed Restriction Terms Locals only; appreciation capped at Same, except no minimax for wage appreciation wages, but only 3%-6% compound (percentage caps removed), simple interest. interest; no income cap Mr. Potente stated that this is the latest in a series of public meetings held involving solutions to the challenges that Eagle County faces concerning affordable housing. These are requirements that new developers who are seeking an up zone, special use permit or subdivision must comply with when filing applications for development in Eagle County. The guidelines represent one of the solutions to the affordable housing problem. The county continues to take additional steps by partnering with developers, purchasing land, and providing 3 02/19/2008 incentives to developers to build affordable housing. The guidelines are not designed to address any of the "catch up requirements" that represent the 3400 units that are currently deficient according to the most recent needs assessment. His goal was to walk through the modifications and allow the public to make comment. After this hearing and after public comment, the draft will be put into final draft and released for public comment. The document has been broken up into two documents to make it more readable. The first document will contain what will be reviewed today and the second document is administrative in nature. The commissioners would approve both within three weeks time and both would be released with enough time for further review and public comment. Some of the changes to the guidelines included a residential inclusionary requirement that would require 35% of the total square footage in the development to be affordable. Alternatively, developers could choose to build 30% of the total square footage in their development as affordable and 10% as resident occupied. The developer could receive a 5-point credit off the 35% if they impose a 1.5% transfer assessment on market-rate units. This money would go directly to a non-profit. Chairman Runyon asked if there would be a distance requirement for on off-site building. Mr. Potente stated that in the regulations the county would be divided up into 3 quadrants. If your development is in one of these quadrants, you could not go outside of it. Building would be subject to review based on a mix of subjective and objective standards. He continued with his presentation and the commercial linkage must meet commercial linkage or inclusionary requirement; whichever is higher. The county gives a big break to mix use development and encourages it. He provided some examples of the proposals used for large scale residential, small scale residential, small scale residential-only lots, commercial development, commercial development-no new jobs, mixed use development, and hotel. Chairman Runyon opened public comment. Diane Mauriello, Vail Resorts Development Company spoke. She presented a packet to the board, which included a letter from Tom Ragonetti and a follow up letter with some pro-formas prepared by Vail Resorts staff illustrating what they believe the financial impact of the guidelines would be. Vail Resorts requested that the board revisit the nexus study and the number of employees generated by new development, especially since the 2008 study did not account for the impact of residential development. They'd also like the board to consider guidelines based on number of units versus square footage. They suggested that the language be clarified and include language that exempts existing PUD's from the guidelines. In addition, they requested a revision in the language related to rentals. Keith Fernandez, Vail Resorts Development Company spoke. He understands the requirements but it his observation that private developers will not be able to provide housing. He suggested that the board take a hard look at the guidelines because he believes the guidelines will deter development more than encourage employee or affordable housing. Gregg Jouflas spoke. He believes the guidelines would be counter productive under the current approach. He asked for careful consideration when imposing these guidelines. As a landowner, he believes it will be difficult to attract developers to an area such as Wolcott. Bethany Boston-Johnson, realtor spoke. She read a letter presented by the Vail Board of Realtors. She stated that their goals are to ensure the sustainability in their communities, which include assurance of affordable housing for essential employees and middle-income families. They do not believe inclusionary zoning and commercial linkage ordinances are the answers to creating affordable housing. By creating these ordinances, the unintended consequence may be that the two industries that drive the local economy, real estate and construction, will falter. They believe public-private partnerships are the ultimate goal in achieving affordable housing within the county. They look forward to working with the county on this important issue. Don Cohen, Executive Director of the Economic Council of Eagle County spoke. He stated that four years ago he spoke against the adoption of housing guidelines and felt that the proposed guidelines would strike at the heart of small business. For the past 2 years, workforce housing has been the prime focus of the Economic Council's work. Demand for land and property has created a type of community schizophrenia. Businesses start up or expand to meet growing market demands waiting for someone else to solve their worker shortage by underwriting more affordable housing. He believes the county has learned from past mistakes as it has aggressively sought out and engaged key developers, planners and community leaders in developing these guidelines. To the county's credit, he has watched this document significantly evolve over several draft cycles. The underlying motivator for developing these guidelines is the increasing inability of our free market to deliver good affordable workforce housing. The downside is the uncomfortable pressure of government regulation in the private market. 4 02/19/2008 Four years ago, no one could foresee that a historically chronic problem in housing would become a direct threat to our long-term economic health. Looking ahead it's tough for even the most well informed to predict where we'll be four years into the future. He believes the proposed housing guidelines are in the best interest of the county. While developers have exit strategies, communities do not. We have to live with the consequences. Rosie Shearwood, Brush Creek resident spoke. She wondered if the proposed guidelines would apply to the Adam's Rib project that had been indefinitely tabled. Mr. Potente stated that it would. Dominick Mauriello spoke. He asked if pre-existing PUD's that have PUD guides and employee housing requirements would be exempt. Mr. Potente stated that an existing PUD would not be affected by the housing guidelines. Mr. Mauriello stated that the focus on square footage is uncommon and takes a reasonable percentage and magnifies it to a point where it is no longer reasonable. Chairman Runyon closed public comment. Commissioner Fisher stated that she understands the affordable housing problem and if the county doesn't find a way to meet the housing shortfalls there will not be enough employees to provide the services needed in our world class resort community. She believes the county has made every effort to be as open minded as possible to the concerns of the development community. She is disappointed that some of the major employers in the community have not stepped up to the plate to provide affordable workforce housing or get employees into homes that they can own. She doesn't believe developers will leave our valley but even if they do she wonders whether we'll be any worse off.. She thanked Vail Resorts for providing their information and input. She thanked Gregg J ouflas for his input and concerns for the Wolcott area but she doesn't believe there is reason for him to be concerned that the development he envisions will be affected. Commissioner Menconi asked Mr. Potente to comment on some of the concerns brought up during public comment. Mr. Potente stated that most ofthe concerns are not new. On the square footage versus units, square footage does create a larger requirement. Mr. Mauriello's comment that it has a magnifying affect is probably true. He believes the job generation is only one part of the nexus or impact of the development. If we want to see our community have a mix of locals and non-locals who own these units that will be built over the next 5-10 years this square footage measure and the inclusionary requirement measure will help to achieve this goal. People will have to adjust their expectations being landowners or developers. The county has employed outside council from two different law firms. Commissioner Menconi asked Mr. Cohen about his recent housing assessment presentation and the information provided by employers about the future of the housing need. Mr. Cohen stated that when they asked employers about the local economy they found that 58% of the large employers expected a difficulty in 2008 recruiting new employees. He believes these numbers are troubling. Commissioner Menconi wondered about the present economy and how the county would be affected by a drop in development. Mr. Cohen stated that we are in a real estate development oriented economy. He believes if we stop or dramatically slow grown no one really knows what that consequence will be. He understands the Vail Board of Realtors concerns but he believes the free market will work it out. There is an erosion of full time owner occupied units in the county. He believes that there is an unrealistic expectation that this will radically altar the development landscape in the resale and real estate landscape. Commissioner Menconi stated that there is only a small group of people that believe that this will adversely affect them. However, he believes the number one issue is housing and the free market is not going to solve this problem. In many instances, market rate builders unfamiliar with all financing sources will team up with non-profit developers to produce and manage inclusionary housing units within their project. He requested that Mr. Montag, Ms. Mauriello and Mr. Ragonetti come down to the table to discuss the concerns addressed in Mr. Ragonetti's letter. Commissioner Menconi reviewed a letter provided by Vail Resorts. Mr. Potente stated that the letter referred to residential employment generation mitigation. The county has eliminated the residential linkage from the guidelines primarily because it does not attempt to address housing needs generated by the people building the houses but an imbalance in the market. Commissioner Menconi asked why the 2005 nexus study is a concern. 5 02/19/2008 Mr. Potente stated that it's because residential linkage is not included in the new guidelines. Ms. Mauriello stated that she believes residential linkage is an important component left out of the 2008 study. Her organization believes it's a link that measures what the residential development is generating. Mr. Ragonetti stated that the fundamental problem is disproportionality. There needs to be a differentiation between moral ends and practical means. He believes that the government is asking for something prior to an approval and as a preliminary matter a county has limited power. Commissioner Menconi wondered what Mr. Ragonetti would say about the other counties like ours that have inclusionary requirements already in place. Mr. Ragonetti stated that these communities might be doing something they are not authorized to do. Commissioner Menconi wondered about Mr. Ragonetti's main point in bringing this up. Mr. Ragonetti stated that his main point is that the two different places where the county would find the power to take something for affordable housing both come with limitations. Those limitations were designed under the law to create fairness. Commissioner Menconi asked Mr. Potente to address the fairness of the guidelines. Mr. Potente stated that the fairness issue had been explored, debated, and adjusted. Mr. Fernandez asked if the subject had been debated with developers. When he runs the numbers, it's a challenging prospect to develop under these guidelines. Commissioner Menconi stated that Mr. Fernandez's example estimate high building costs. Mr. Fernandez stated that their numbers are based on the kind of product his organization would build. Commissioner Menconi asked what they believed to be proportionately fair. Mr. Ragonetti stated that the county should run a proper nexus study. The current study is out of sink. Mr. Potente stated that the numbers in the guidelines are relatively conservative. The inclusionary requirement is for an up zone and there is no entitlement to build on these properties. The board of county commissioners under the land use regulations in Colorado has dramatic and wide range discretion to deny up zones. The idea that you can only have a nexus based on jobs generated is over simplified. The inclusionary requirement addresses the affects of how primary/secondary homes change the character of the community. Mr. Ragonetti stated that this is a very cumbersome forum to talk about technicalities and wondered if it would make better sense to sit down to address the issues in detail. Commissioner Menconi stated that he is trying to educate the public in public forum as well as understand what items need clarification. Chairman Runyon wondered if they could get staff together to sit down to discuss these issues. Commissioner Menconi asked that there be more openness. He believes the numbers used in the pro formas provided by Mr. Fernandez are on the high side. He believes the multi faceted approach of buying and building land is taken into consideration. He thinks some of the comments from the board of realtors can be discussed and he would like to explain the process, principals, and the outcomes that the county is trying to achieve in order to make sure there is affordable housing. Mr. Potente stated that he would like to meet with Mr. Fernandez to talk about hard costs, etc. Mr. Fernandez stated that they are looking for affordable housing and a solution. Mr. Potente suggested meeting in 3-4 weeks in order to have the document final and ready for approval. Commissioner Fisher stated that she is interested in sitting in on any further discussion as the county looks at multiple solutions to try to meet the challenges countywide. She would like to look at ways to move things forward. The goal of the county is not to put the burden on the back of developers. She would like to work together to start addressing the concerns and not just for seasonal employees. The key is to get people into homes that they can afford and have a healthy community. Chairman Runyon stated that the problem here is the rate of growth. Skilled labor is in demand. There was a shift from a resort economy to a build economy and the reality is we could loose the community we value. He believes there needs to be a balance and if regulations like these have the unintended consequence of slowing things down, let it be. We need to look at this in a global sense if we are going to retain the quality of what many of us came here for. Mr. Potente stated that his goal in drafting the guidelines is not to shut down development but to make them as workable as possible in the framework of the commissioner's goals of generating as much affordable housing as is practicable. Ms. Mauriello wondered when the new proposed guidelines would be available. 6 02/19/2008 Mr. Potente stated that this has been a long drawn out process. There have been many drafts of the document circulating. He would like to incorporate everyone's comments before releasing what he hopes will be the final document. He estimated that the document would be available for review in 10-15 days. Clerk to the Board I?'-t: ~ I fJL,vv I '- 7 02/19/2008