Thursday, September 20, 2007
In November 2006, homebuilding company KB Bakewell signed an exclusive negotiating agreement (ENA) with the city of Seaside to redevelop a 5-acre parcel at Monterey Road and Coe Avenue. The developers propose to replace the abandoned gas station and mini-mart that occupy the property with 61 town homes in 10 two-story buildings, plus about 3,500 feet of commercial space.
The proposal slates at least one-fifth of the town homes for sale to low- and moderate- income households, with the possibility of some workforce units. But when it comes to affordable housing, city history suggests that promises and delivery are two different things.
Developer Danny Bakewell Jr. currently lives in LA, but he isn’t new to Seaside. In the late 1990s, he teamed with housing mammoth KB Home to submit a proposal that became Seaside Highlands, a 380-unit development that sits opposite the proposed town home project on Monterey Road.
Rep. Sam Farr did legislative voodoo to convey the Seaside Highlands property directly from the Army to the City without going through the Fort Ord Reuse Authority, exempting the developers from paying construction workers prevailing wages. The City then sold the 110-acre parcel to KB Bakewell for $6.8 million, a pitiful price considering its later estimated value of $115 million. The City added some other sweeteners for the developers, including a one-third reduction in re-use fees.
In 1998, the developers assured the City that a portion of the Seaside Highlands homes would be “affordable,” starting at less than $200,000. But when the first home was offered for sale about five years later, it carried a $475,000 price tag.
Farr, who’d pulled strings to expedite the deal, blames city officials for allowing KB Bakewell to build Seaside Highlands without affordable units. “They violated the law, and they know that – I brought it to their attention,” he says.
Seaside Mayor Ralph Rubio, on the other hand, blames the congressman. “That project was enabled under special legislation by Sam Farr, and there was no requirement for affordable housing under that agreement,” he says. “Not only did we lose affordable housing, but we lost the ability to pay our residents proper wages on that project.”
Bakewell, for his part, says it was the City’s idea to forego moderately priced units in favor of more expensive homes. “Seaside Highlands was designed to do exactly what it did: give Seaside a higher level of housing. That was really the mandate,” he says.
The laws have changed since the City approved Seaside Highlands. Seaside’s General Plan now requires residential redevelopments to sell at least one-fifth of their units at prices affordable to low- and moderate-income households. The developers and city officials agree that the quota should apply to the town home proposal.
“Every project has to have 20 percent affordable housing,” Bakewell says. “We knew that going in, and we’re happy to do it.”
Rubio insists Bakewell’s proposal will get no sweeteners this time around. City officials, he says, will require prevailing wage for construction workers, adherence to all redevelopment policies and some affordable price tags. “We will look to the developers to be creative in accomplishing more than 20 percent,” he says.
Rubio notes that his was the lone dissenting vote when the Council considered granting KB Bakewell an ENA on the project last November. At the time, he was reluctant to enter into an agreement before the City had completed its redevelopment marketing study. “But the council felt otherwise,” he says. “I’m fully on board now.”
City Manager Ray Corpuz will negotiate with Bakewell in closed session on Sept. 20. The council will soon consider extending the ENA and select a consultant to do the environmental impact report, says Seaside Redevelopment Services Manager Sara Isgur.
Before breaking ground, the developers will also need to secure a Disposition and Development Agreement and a property appraisal, a process that Isgur estimates will take at least a year. She says affordable units will be required for project approval and written up as deed restrictions.
Corpuz confirms that the agreement to provide homes priced below market rate will be legally binding. “This’ll be enforceable,” he says. “It’s more than a handshake.”