SUBJECT: Consent Agenda
Title
A Resolution of the Town Council of the Town of Erie Approving a Development Agreement and Accepting Dedications as Shown on the Final Plat for the Cheesman Street Residences Subdivision
Body
DEPARTMENT: Planning and Development
PRESENTER: Aly Burkhalter, Senior Planner
FISCAL IMPACT:
Cost as Recommended: $3,200,000
Balance Available: $3,200,000
Budget Line-Item Number: 100-30-430-576000-130430
205-30-430-605000-130430
205-30-110-604000-212121
New Appropriation Required: No
POLICY ISSUES:
The proposed resolution supports a specific affordable housing development that implements the Council's policy direction to encourage development of a variety of housing types and levels of affordability throughout the Town.
STAFF RECOMMENDATION:
Recommendation
Approve the Development Agreement and accept the dedications shown on the Final Plat for Cheesman Street Residences Subdivision.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
The Cheesman Street Residences Development is a public/private partnership that tackles Erie’s need for affordable/attainable housing as documented in the Housing Needs Assessment the Town of Erie completed in 2023. Erie committed to strive for 12% of our housing to be affordable by 2035 (currently at 1.3%) and to collaborate with the Boulder County Regional Housing Partnership to work regionally on this issue.
In 2020, the Town of Erie committed to expand affordable and attainable housing throughout the community and in 2021 signed onto the Regional Housing Partnership commitment to work towards the collective regional goal of 12% of the region’s housing inventory to be affordable by 2035. In 2023, the Town also committed to Proposition 123, which calls for a 3% annual increase in affordable housing units. The commitment to Prop 123 calls for the Town to create an additional 15 units of affordable housing by November 2026.
In November 2022, the Board of Trustees (now, Town Council) voted to acquire the property at 765-785 Cheesman Street to support the development of affordable homeownership units. In February 2023, the Town closed on the property and issued an RFQ for a developer to tackle the challenge. The Town received two responses which staff reviewed and recommended that Vertikal Development be selected as the developer. On April 11, 2023, the Board of Trustees accepted the committee’s recommendation to designate Vertikal as the developer and to start negotiations toward a development agreement.
On June 22, 2023, staff presented the framework for the pubic-private partnership that included:
• 35 for-sale homes
• 50% of the homes priced to be affordable to households earning less than 90% HUD AMI (household of 4: $119,520)
• 50% of the homes priced to be affordable to households earning less than 110% of the AMI; (household of 4: $146,080)
• Design to fit with fabric of Old Town; meet 2021 International Building Code (IBCC); and be net zero ready and all-electric;
• 20-year renewable deed restriction to maintain long term affordability, with restricted rental options;
• Developer return on investment not to exceed 10%; and
• Town contribution of land and up to $1,950,000 in rebates toward development and impact fees, and use taxes, and up to $100,000 in public site improvements along East County Line Road.
In October 2023, the Town and Vertikal entered into a Letter of Intent (LOI) as the concept design progressed. On Nov. 22, 2023, Erie received Vertikal’s first submittal for Site Plan and Minor Subdivision. In concert with development review, Town staff negotiated a Pre-Development Agreement with Vertikal’s construction entity, HousePad Erie, LLC. The Pre-Development Agreement included the terms presented in the LOI and was approved by the Town Council on March 12, 2024.
During development review, Vertikal held a neighborhood meeting and focused meetings with surrounding property owners. The first meeting was held on Dec. 14, 2023, which was attended by over 20 residents. Key concerns identified by residents included density and resulting traffic, parking, school capacity, process, and occupancy limits. These concerns were integrated into the Town’s development review considerations and further discussed during one-on-one meetings with adjacent neighbors. Additionally, Town staff increased transparency and communication on this development with a dedicated website to provide ongoing updates to the community on the project and its progress.
In May 2024, the Town demolished the existing structures on the site as was stipulated in the Pre-Development Agreement to occur prior to conveyance of the land. Staff anticipates a Summer 2024 construction start. Staff will start outreach and marketing of the homeownership units in early summer, with applications due in December for homebuyer selection in January 2025. Homes are expected to be ready for occupancy starting in late summer 2025.
Cheesman Street Residences and Development Agreement
The Cheesman Street Residences Development is the Town’s first affordable housing public-private partnership. The development brings high quality design and construction at an affordable price to the Town of Erie. The 35 new single family detached and attached homes will offer opportunities for families who want to set down roots in Erie to become homeowners in a market where for households in the target income ranges homeownership has been elusive for several years.
Cheesman Street Residences Minor Subdivision Plat
Development Information:
• Plat Size: 2.028 acres
• Number of Lots: 35 residential dwelling units
• Number of Tracts: 2 tracts
The Cheesman Street Residences subdivision is generally located northwest of East County Line Road and Cheesman Street. The plat includes 35 residential lots, private open space and common areas tracts, right-of-way dedication to widen the public alley, and a new private alley internal to the property. The development is accessed primarily from the new proposed alley access off Evans Street and the existing public alley access from Cheesman Street to Evans Street.
Development Agreement
The Cheesman Street Residences Development Agreement (DA) reflects provisions negotiated by Town staff with the Town Attorney’s counsel and the developer, HousePAD Erie, LLC (also referred to as Vertikal Development). The DA incorporates the terms of the previously-approved Pre-Development Agreement, typical Town language for public improvements, provisions addressing affordable housing requirements, fees and public improvements, and specifically:
• Affordability provisions related to home sales and deed restriction;
• Conveyance of the land from the Town to the Developer;
• Fees related to schools, parks, open space, and tree mitigation;
• Reimbursements to the Town for public improvements; and
• Town’s contribution to estimated development costs.
Action Items
The Town Council is the approval body for both the DA and the acceptance of dedications as shown on the Final Plat.
Fiscal Impact
To accomplish the level of affordability outlined, the Town is contributing the land (acquired for $1.15M) and rebating up to $1,950,000 in permit, taxes, and fees, and $100,000 for public improvements along East County Line Road for a total of $3.2m. ARPA funds, general funds, and a DOLA grant of $1,000,000 will cover the Town’s contribution. The estimated public contribution of $91,500 per affordable home is well within the range of public contributions needed to create affordable units in the western front range communities, which currently ranges from $50,000-$150,000 per unit. No development fees will be waived or reduced. All required reimbursements and fees will be covered by the Town’s contribution from the funding sources listed above and the Developer’s obligations. It will generate property and sales taxes to the Town, County, School, and Fire Districts. The resulting revenue will be used to provide municipal services to support the new development.
COUNCIL PRIORITY(S) ADRESSED:
ü Engaged and Diverse Community
ü Prosperous Economy
ü Small Town Feel
ü Safe and Healthy Community
ü Effective Governance
ü Environmentally Sustainable
ü Fiscally Responsible
ATTACHMENTS:
1. Resolution No. 24-090
2. Development Agreement
3. Cheesman Street Residences Plat