HomeMy WebLinkAboutAgenda Packet - CC - 2018.02.20Gity of Burlingame
Meeting Agenda - Final
City Council
BURLINGAME CIry HALL
501 PRIMROSE ROAD
BURLINGAME, CA 94010
Tuesday, February 20, 2018 6:00 PM Council Chambers
STUDY SESSION - 6:00 p.m. - Council Chambers
a. Discussion of Residential lmoact Fees
Attachments: Staff Reoort
Residential Projects Overview
Residential lmoact Fee Nexus Study
San Carlos Affordable Housino lmoact Fee Table
Note: Public comment is permitted on all action iterns as noted on the agenda below and in the
non-agenda public comment provided for in item 7.
Speakers are asked to fill out a 'reguest to speak' card located on the table by the door and
hand itto staff, although the provision of a name, address or other identtfying information is
optional. Speakers are limited to three minutes each; the Mayor may adjustthe time limit in
light of the number of anticipated spealrers.
All votes are unanimous unless separately noted for the record.
1. CALL TO ORDER - 7:00 p.m. - CouncitChambers
2. PLEDGE OF ALLEGIANCE TO THE FLAG
3. ROLLCALL
4. REPORT OUT FROM CLOSED SESSION
5. UPCOMING EVENTS
6. PRESENTATIONS
a. Presentation of the Parks & Recreation Foundation and Lions Club Donation
b. Carolan Avenue Complete Streets Proiect Update
Attachments: Carolan Avenue Uodate
City of Burlingame Page 1 Printed on 2/1an018
City Council Meeting Agenda - Final February 20,2018
7. PUBLIC COMMENTS, NON-AGENDA
Members of the public may speak about any item not on the agenda. Members of the public wishing to
suggest an item for a future Council agenda may do so duing this public comment period. The Ralph M.
Brown Act (the State local agency open meeting law) prohibib the City Council from acting on any matter
that is not on the agenda.
8. APPROVAL OF CONSENT CALENDAR
Consent calendar items are usually approved in a single motion, unless pu ed for separate discussion.
Any member of the public wishing to comment on an item listed here may do so by submifting a speaker
slip for that item in advance of the Council's consideration of the consent calendar.
Adootion of Citv Council Meet ino Minutes Februarv 5. 2018
Afiachments: Meetino Minutes
Adoption of a Resolution Aoorovino the Recommended Measure I Expenditure Plan
Allachmeo,s: StaffReoort
Resolution
MacDonald for the Enoineerino Desion Services Related to the aston Addition Sewer
Rehabilitation Proiect and Citvwide Neiohborhood Sewer Reh litalion lmDrovements.
Ph.cp Arn.l 6 Cih,P No. 84193 and Authorizi Ci -h-^6. f^ trv6^' 'la ih6
Aoreement
Allachmen,5:Staff Report
Resolution
Professional Services Aoreement
Proiect Location Mao
d
9. PUBLIC HEARINGS (Public Comment)
a.
10. STAFF REPORTS AND COMMUNICATIONS (Public Comment)
Pnnbcl on 2/16/2018
a.
b.
c. Adoption of a Resolution Aoorovinq a Professional Services Aoreement with l\ilott
Aooroval of the Waiver of Citv Park Rental Fees for the Burlinqame Lions Club's
Cars-in-the-Park 2018
Afrachments: StaffReDort
Burlinqame Lions Club Reouest Letter
Public Hearino to lntroduce an Ordinance Amendinq Title 12 of the Burlinoame Municipal
Code to Update Chaoter '12. 12 "Sidewalk and Parkwav Maintenance"
Allachmenl.s: StaffReoort
Proposed Ordinance
December 4. 2017 Staff Reoort & Attachments - Citv Council Direction Reoardir
Page 2
City Council Meeting Agenda - Final February 20, 20r8
b.
a. Presentation and Discussion of Traffic S afetv and Parkino Commission Priorities
aftachfients: Staff ReDort
Memo from the Chair ofthe TSPC
Consideration of Aooointments to the Measure I Citizens Oversiqht Committee
attachmenls: StaffReDort
11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS
Councilmembers report on commiftees and activities and make announcements.
a.Mavor Brownrioo's Commitlee Reoort
afrachments: Committee Report
AT&T Briefi no Memorandum
b. Vice Mavor Colson'Committee Reoort
Allachmen's: Committee Reoort
,I2. FUTURE AGENDA ITEMS
13. ACKNOWLEDGMENTS
The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Safety & Parking
Commission, Beautification Commission, Pafus & Recreation Commission and Library Board of Trustees
are available online at www.burlingame.org.
14. ADJOURNMENT
Notice: Any attendees wishing accommodations for disabilities please contact the City Clerk at
(650)558-7203 at least 24 hours before the meeling. A copy of the Agenda Packet is available for
public review at the CW Clerk's ottice, City Ha , 501 Pimrose Road, trom 8:00 a.m. to 5:00 p.m.
before the meeting and at the meeting. Visit the City's website at www.budingame.org. Agendas and
minutes are available at this site.
NEXT CITY COUNCIL MEETING - Next regular City Council Meeting - Monday, March
5, 2018
vlEw REGULAR COUNCIL MEETING ONLINE AT www.burlingame.org/video
Any witings or documents provided to a majoity ot the CW Council regarding any item on this agenda
will be made available tor public inspection at the Water Office counter at City Ha at 501 Primrose
Road duing notmal Dusr,hess hours.
City ol Bu.lingane Prin ecl on 2/1U2O1a
STAFF REPORT AGENDA NO: Study Session
MEETING DATE: February 20,2018
To:Honorable Mayor and City Counci!
Date: February 20,2018
From:William Meeker, Community Development Director - (650) 558-7255
Kevin Gardiner, Planning Manager - (650) 558-7253
Subject: Discussion of Residentia! lmpact Fees
RECOMMENDATION
Staff recommends that the City Council provide direction on whether the City should pursue
adoption of an ordinance imposing residential housing impact fees.
BACKGROUND
Affordable housing impact fees are used to support and build new homes for lower-income
residents. The fees can be charged to developers of new residential projects, and used for land
purchase, construction costs, or site rehabilitation related to providing workforce housing.
Jurisdictions may tailor the fees so they meet local needs. The fees can be adjusted for a wide
variety of reasons, as long as they are not arbitrary or capricious and the fees for all projects
remain below the legal maximum permitted by a nexus study.
As part of the San Mateo County "21 Elements" multi-jurisdictional effort, a Residential lmpact
Fee Nexus Study was prepared for the City of Burlingame, together with a Commercial Linkage
Fee Nexus Study. These studies describe and quantify how the development of homes, offices,
and commercial space creates a need for housing, particularly for very low-, low- and moderate-
income residents. The maximum impact fees that can be legally charged were calculated by
estimating the number of new worker households associated with new development. A final
analysis was then completed that considered factors like local conditions and the fees of
neighboring jurisdictions to determine a potential range of impact fees. These studies enable the
City Council to consider the adoption of commercial linkage and/or residential impact fees that
would be used to provide affordable housing.
On June 19, 2017, the City Council adopted an ordinance establishing a Commercial Linkage
Fee for new commercial development in Burlingame. The adopted fees are $7.00 per square foot
for new retail development, $12.00 per square foot for new hotel development, $18.00 per square
foot for office projects of 50,000 square feet or less, and $25.00 per square foot for office greater
than 50,000 square feet. For developers who utilize prevailing wages or area standard wages, the
fees are $5.00 per square foot for new retail development, $10.00 per square foot for new hotel
development, $15.00 per square foot for office of 50,000 square feet or less, and $20.00 per
I
Housing Goals Discussron February 20, 2018
square foot for office greater than 50,000 square feet. Over time, these fees will provide a
dedicated source of funding for programs supporting workforce housing in Burlingame.
The item under consideration by the City Council on February 20th is whether or not to establish
residential impact fees that would apply to new residential development in Burlingame.
DISCUSSION
Housing Need: For years, housing development in Burlingame and San Mateo County has not
kept up with the thousands of new jobs added, and the problem has gotten worse in recent years.
Between 2010 and 2016, San Mateo Countyadded 79,000 new jobs, butonly4,941 new homes
of all types. The resulting jobs-housing gap ratio was 1 to 16. ln other words, only one new
housing unit was built for every 16 new jobs created. This jobs-housing gap drives up the cost of
housing for homebuyers and renters alike, produces congestion and long commutes for workers,
and forces friends and family members to move away because they can no longer afford to live in
Burlingame or San Mateo County.
A significant number of new jobs pay wages that are not sufficient to cover local housing costs.
This includes jobs generated by new development. The region's driving economic sectors are
increasingly split between high-wage jobs in industries such as professional and technical
services, and low-wage jobs in hospitality, childcare, retail, and others. Those in the low-wage
workforce increasingly commute into the area from long distances, which results in increased
traffic in the region and ultimately limits the pool of employees for local businesses. For a worker
earning minimum wage, the cost of gas and bridge tolls together with the long commute times
make it difficult (if not infeasible) to justify employment in a low-wage local job. Local service
businesses have reported difficulty hiring and retaining employees, even when offering wages
well above minimum wage.
The City of Burlingame has been proactive in addressing the supply aspect of the housing
situation through the encouragement and approval of significant numbers of new housing units.
The Burlingame Downtown Specific Plan, together with the most recent Housing Element update,
have emphasized the construction of new housing units to address the increased demand for
housing units near employment in Burlingame and San Mateo County. Per the City's most recent
Residential Projects Overview document (attached), 472 units have been approved, and an
additional 334 units are currently under review by the Planning Commission, for a total of 806
units. Of these, 178 would be priced below market rate for households in the Moderate, Median,
Low, or Very Low income categories.l
Lesal and Policv Context: lmpact fees are charges imposed by jurisdictions that can be used to
support and build new development. Since the 1970s, California cities have used impact fees to
reduce costs paid by the public for items like roads, parks, schools, water, and sewer. The money
By government definition, "Moderate-lncome" means a household with an income that is 120o/o of the
"Area Median lncome" (AMl); "Low-income" means a household with an income that is 80% of AMI;
"Very-Low lncome" means a household with an income that is 50% of AMI; and "Extremely-Low lncome"
means a household with an income al30o/o of AMl.
2
Housi ng Goals Discussion February 20, 2018
generated by housing impact fees is placed into a fund to help pay for new affordable housing.
Fees can be set per square foot, per unit, or by some other measure, and can only be applied to
new development projects. Before being adopted, jurisdictions must show that there is a
connection, or nexus, between the impacts of development and the fees charged.
A nexus study assesses the connection between new development and the need for new
affordable housing. This is accomplished by calculating the number, type, and salaries of jobs
that will result from a new development. The study then establishes the maximum impact fee that
can legally be charged to a developer for each type of development being studied. Residential
developments include single-family homes, townhomes, condominiums, and apartments.
The logic behind impact fee nexus studies is that residents of new housing spend money on
goods and services like landscaping, childcare, and restaurants. Many of the workers providing
these services and working at these new businesses earn lower wages, and cannot afford to buy
or rent a home at market-rate. Nexus studies calculate the maximum fees that would be
necessary to bridge the difference between what these new worker households can afford to pay,
and the cost of developing housing units to accommodate them.
While a nexus study will inform a jurisdiction about the maximum amount it can legally charge as
an impact fee, the maximum fee level may not be appropriate given local housing market
conditions, existing fee levels in the region, or the jurisdiction's current fee structure. A feasibility
study considers these conditions and recommends a more appropriate range of fees that does
not unduly burden or lessen the profitability of new development.
Housins lmpact Fees in Other Jurisdictions.'The following table is a summary of Housing
lmpact Fees that have been adopted by other San Mateo County jurisdictions. This information
can inform the Council's discussion regarding the appropriate fee amount for the City of
Burlingame:
TABLE 1:
SUMMARY OF HOUSING IMPACT FEES IN SAN MATEO COUNry JURISDICTIONS
September 2016$15.00 $15.00$15.00Colma
$25.00 2014$18.00 $22.00Daly City
NonelFoster City
2014$23.00 $33.71$23.00East Palo Alto2
NonelMenlo Park
$20.00 2015$25.00 $20.00Redwood City
November 2016$25.00 $25.00$25.00San Bruno
$21.00 2010$20.59 $20.59San Carlos3
NonelSan Mateo City
June 2016$12.50 $10.00$12.50San Mateo Countt'
I No Housing lmpact Fee adopted, but lncl usionary Housing requires Below Market Rate units in new developments
Some municipalities allow on-site Below Market Rate units to be satisfied with in-lieu fees.
3
'.Date-F,€e
,Adoot6.d,.P6t.SF
,bpaffienls
,,..:.,",,,1.11P€f ,sF,;,.,'
TowhhomeS
7'.t2.Pdi..SF,,,,7
:JuriSdi'cti6n
$12.50 $10.00$12.50
,$19-73 $21.39$19.87AVERAGE
$21.00s20.59 $20.59l/IEDIAN
$25.00 $25.00$25,00HIGHEST
Housing Goals Discussion February 20, 2018
3 Fees vary based on number of units, up to $42.00/sf for largest projects. AIso assesses fee on single family
additions.
a $5.00/sf for first 2,500 sf, $12.50 per each square foot over 2,500 sf. Only applies to projects with 4 or fewer units;
Fee increases to for projects with structured parking.
Ordinancetowith 5 units or more are
ln prior discussions, Councilmembers have suggested a tiered system where fees increased with
the size of the development and number of units. Referencing other municipalities, some exempt
smaller projects, such as residential pro1ects with fewer than five units. Other jurisdictions have a
slightly higher fee for higher-density projects, where the threshold is units per acre (for example,
greater than 35 units per acre). San Carlos is unique in having a full sliding scale for residential
projects, with a detailed schedule providing an incremental adjustment for each additional unit,
from 1 up to 280 units (attached).
One reference the City Council may wish to consider is the current tiered system in place for
condominium planning application fees. Currently, the application fees are tiered into the
following categories:
10 units or fewer
11-25 units
26-50 units
51-100 units
101 or more units
Potential Revenues: Estimating potential fees anticipated to be collected depends on a number
of variables, including the residential densities, sizes of units (since the fees are typically based
on square feet, not number of units), and the fees themselves. Some jurisdictions also provide
discounts for projects paying prevailing construction wages, similar to the model the City Council
adopted for commercial linkage fees. Furthermore, if an in-lieu option is offered, the impact fees
collected would be lower depending on how many units are built with projects.
Should housing impact fees be adopted in the coming months, they would apply to new
residential projects that have not had applications deemed complete as of the effective date of
the ordinance implementing the fee. Per the City's most recent Residential Projects Overview
document (attached), approximately 500 additional units have been presented to the public in
conceptual form, but either have not been formally submitted for review, or are part of master
plans with development projects to be submitted at later dates. Beyond that figure, there could be
potentially 350 to 400 additional units that have been discussed in conjunction with the update of
the General Plan, based on property owner input, and factoring the residential densities proposed
in the Draft General Plan.
Table 4 below provides a rough estimate of the range of potential fees that could be collected,
working with the assumption that applications for 850 to 900 new units may be contemplated in
the near term (approximately five years). For purposes of the estimate, the assumption is an
average unit size of 850 square feet. The estimate provides a range of potential fees based on
the lowest, average, and highest fees currently found in San Mateo County.
4
-ffi Townh6iitres
P6aSEl::;.,.-
'l.fjiifrdoininiums
7.L::;.<27.;8.6y.5V,;1,:.2.,
jABdE$ierts
'7:','?:€f,.,.8F,t€-bE'm
Housi ng Goals Discussion February 20,2018
722,500 $7,225,000 $14,450,000 $18,062,500850
$19,125,000900765,000 $7,650,000 $15,300,000
ESTTMATE oF porENnAr JAihtrih* ,orstNc tMpAcr FEES
Other Applicable Fees.' New housing development is subject to a number of impact and service
fees, so housing impact fees should be considered within the context of the full array of
applicable fees, and the potential impact on the viability of a project.
The costs involved with development in Burlingame include planning and building plan check and
permit fees, utility service fees, school fees, and a recycling fee. Unlike many other cities, the City
does not have park dedication fees or a bedroom tax. The City also has no exactions on
residential developers to provide public art or sound walls.
Plannino Fees; Burlingame's Planning Department is only partially funded by fees, with the
remaining costs covered by the City's General Fund. However fees have been increased in the
past few years to more fully recover the costs to process the applications.
With the exception of condominium permits, which are tiered based on project size, Planning fees
are fixed on a per-project basis.
Buildino Fees; Building permit fees are charged on a sliding scale that is based upon the
valuation of the project, plus plan check fees. The estimated valuation of a project is checked
against a minimum valuation per square foot for residential development. The basic plan check
fee is 650/o of the building permit fee. The energy plan check fee (when applicable) is an
additional 25o/o of the building permit fee. The basic fee for electrical, plumbing, and mechanical
permits is $25 dollars, with additionalfees charged on a line-item basis.
Public Facilities lmpact Fees. ln 2008, the Burlingame City Council adopted Ordinance No. 1830
in order offset the impacts of new development projects on City facilities. ln establishing the fees,
the City had a study conducted that provided information on the nexus between development
projects and impacts on City facilities and set out a formula of fees that would serve to offset
some of those impacts. Public lmpact Fees applicable to new residential development are shown
on Table 3 below.
Ihis Space lntentionally Blank
5
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.ZE)66i,.Are{7;;
''1AF{ifAitiii,,:99:a
:;:':l1'..::61fi nitl":12
Tru74-r-:%
4AW T,iffi*
"-'-r-Hoyging.litpact
7*4s9-ZAv,Fr{iie
',..;;;;;I$2:O:6Abf \:r-./z
Hou;ins4fi664
:,,F€6{.,=4i6{f,8*:,
,:?($25i$0blY.Zz
H ousi ng Goals Discussion February 20, 2018
$1,636General Facilities and Equipment
$1,415Libraries
$25ePolice
Parks and Recreation $350
Streets and Traffic $1 ,1 05
$381Fire
$391Storm Drainage
. TABLE 3:
BURLINGAME PUBLIC FACILITIES IMPACT FEES
lf a project proposes to include open space/recreatonal amenities on site, the project applicant
can request a waiver of the Public Facilities lmpact fee related to Parks and Recreation. The
Municipal Code Chapter related to Public Facilities lmpact fees allows a developer of a project to
apply to the Community Development Director for a reduction or waiver of any one of the fees.
The fee waiver request will be considered by the Planning Commission at the time that the
development application is considered. The findings for such a waiver would be based on the
provision of open space/recreational amenities to be available for the use of the residents;
therefore, the project would not create an impact to the existing parks in the community.
Public Works: Public Works fees associated with housing development typically include sewer
connection fees, which are $195 per unit for multi-family structures. Water meter and service
connection fees can range from $4,100 to $5,420 depending on the size of the service and meter
required. Sidewalk and special encroachment fees range from $315 to $570 for properties in
residential zoning districts.
Schoo/ Fees; School fees are collected to offset costs of rehabilitation and maintenance of school
buildings, with 60% of the fees collected going to the elementary school district, and 40o/o to the
high school district. Fees are collected on all new construction projects and residential remodels
in Burlingame that add 500 square feet or more. Residential school development fees are $3.17
per square foot.
For reference, Table 4 below provides an overview of applicable fees for a typical 1O-unit
residential condominium project. Fees for entitlements, construction fees, public facilities impact
fees, and school fees would total $41,906 per unit.
Ihrs Space lntentionally Blank
6
ffi Zz,:-.zrr, jltqltif gipi1l!:y=
T:€6.::f 6€4:ii.6lifi s,tJtltt
H o u s i n g Goals Discussion February 20, 2018
Desiqn Review 1,165
Condominium Permit, 10 units or
fewer 3,236
Enqineerinq Plan Review 1,770
Arborist Review 234
445Noticing
145,000Environmental Review2
Environmental Postinq Fee 600
County EIR Fish & Game Fee 2,216
6,413Condominium Map
161,079
Entitlement
Fees
Subtotal
1O-unit bldgPer Unit
14,583 145,830Building Permit
719 7,910Fire Sprinkler Permit
Utility Connection 275 2,750
Construction
Fees
Subtotal 15,577 156,490
1,636 16,360General Facilities and Equipment
1,415 14,150Libraries
Police 259 2,590
Parks and Recreation 350 3,500
1,105 11,050Streets and Traffic
381 3,810Fire
Storm Drainaqe 391 3,910
Subtotal 5,537 55,370
lmpact Fees
4,612 46,123School Fees Elementary & High School
TABLE 4:
ESTIMATE OF POTENTIAL FEES FOR A lO.UNIT RESIDENTIAL PROJECT
1 Multiple family development is assumed to be a 10-unit condominium development, 14,550 square foot construction,
requiring a tentative map. Costs shown are per unit, other than entitlement costs, which would remain the same
regardless of project size.2 Environmental review assumed to be an lnitial Study/Mitigated Negative Declaration, or an lnfill Exemption
document.
ln-Lieu Option'Adoption of a residential impact fee could also include an "in-lieu" option, where
the developer could choose to provide an affordable unit or units on site in lieu of submitting the
impact fee. Whether a developer would choose an on-site option would depend on a number of
factors such as the amount of the impact fee, the size of the development, the comparable cost of
underwriting the affordable units for a designated time period and affordability level, and whether
the ownership of the development is expected to be retained or sold at completion of
construction. For example, a developer building apartments that they intend to own and manage
for an extended time frame may have a different perspective and make a different choice than a
developer building condominiums to be sold with completion of construction.
Should the City Council have an interest in pursuing an in-lieu option, staff can arrange further
research on potential terms for the on-site in-lieu option, such as designated time periods and
affordability levels as they compare to the proposed impact fee. The Council may also choose to
7
Fe-6slCosts ',$nt|,jrrtr€.ffiffitf.
"b6r ,9...;, 419,0.62
Housing Goals Discussion February 20,2018
consider an in-lieu option for projects subject to commercial linkage fees, where a commercial
developer could choose to provide units on site (subject to zoning) or in an off-site development
in lieu of the applicable linkage fee.
FISCAL IMPACT
Residential impact fees ranging from $7,225,000 to $19,125,000 within the next five years are
estimated based on the current development applications under review.
Exhibits:
Residential Projects Overview
Residential lmpact Fee Nexus Study, November 2015
City of San Carlos Affordable Housing lmpact Fee Table, Rental Residential
Developments
I
I
I
I
Resldential Appl lcations Overview
February 2018
Approved Projects
The following projects have received approval and are in various stages of construction
L241600 Trousdale Drive -
Assisted Living
Demo
pemit
lncludes 29 Moderate lncome units (1200lo
AMI) for 25 years
1008-1028 Carolan Avenue
(SummerHill)290 29
t49t-93 Oak Grove Avenue 10
10 !lncludes l Moderate lncome units (120%
AMI) for 10 years1433 Floribunda Avenue
77 t lncludes l Moderate lncome units (120%
AMI) for 10 years1509 El Camino Real
lncludes 2 Moderate lncome units (11070
AMI)for 25 yearstt2a-32 Douglas Avenue 27
33TOTAL472
Status
Address Units Bt'/R
Units
pranning B-urlding B-uilding under
ADoroval ^.-. '. - - -- ConsLrucl.ion'' Suomrned Approveo
Not6
2
Proposed Projects
The following projects have applications that have been submitted for review, but have not yet been acted on by the Planning Commission:
Key to Applbatfon StatB:
Pht|s Under Revlow - Application has been submitted and plans are being reviewed by staff. Planning Commission study session will be scheduled once plan check
comments have been addressed.
PC Surdy S6slon - Planning Commission study session to review proposed design and identiry environmental issues to be studied. No action (approval) in this
meeting.
CEQA - Environmental review in compliance with California Environmental Quality Act (CEQA).
PCActlon - Planning Commission public hearing to consider action (approval) of the application.
Cw Councll - City Council hearingif application includes a General PlanlzoningAmendment, if the PlanningCommission decision is appealed, or if the application is
called up by a councilmember.
RESIDENTIAL APPLICATIONS OVERVIEW - FEBRUARY 2018 I 2
tl25/t6
2/24/14 7/24/17556 El Camino Real 2L
619-625 California Drive
Live,/Work 26 LVt3/17
6/t2/t7
lncludes 13 Moderate lncome units (120%
AlVl) for 30 years920 Bayswater Avenue 728 13 tt/t3/17
7/tolr7
3/27/t7 2/12/$a437El Camino Real b
2/26/ L8
Workforce units: 8 units at 5070 AMl, 63 at
607o AMl, 6 units at 11070 AMl, 1 unit at
72OVo AMl.
Senior units: 6 units at 5070 AMl, 43 units at
6070 AMl, 5 units at market rent
The Village at Burlingame
(Lot F Affordable Housing)732 732
t0/tt/fi21 Park Road 7
1214 Donnelly Avenue t4
334 L45TOTAL
Address Unlts BMR
Units
PIans
Under
Review
PC Study
Session
Status
Pc CitY NotesutrvA Adron councrr
Preliminaty Ptojects
The foltowing projects have been variously presented to the public in conceptual form, but either have not been formally submitted for review,
or in the instance of the Peninsula Wellness Community is a master plan with development projectsto be submitted at later dates. Estimated
unit counts should be considered very tentative and subject to change if and when a development application is submited.
RESIDENTIALAPPLICATIONS OVERVIEW _ FEBRUARY 2018 I 3
up to 400 Environmental review underway. Draft EIR anticipated Fall
2017.
Peninsula Wellness Community
Master Plan
Negotiations ongoing with City to consider including
municipal Parking Lot E in development.22O Park Road (former post office)700- t2a
TOTAL 500 - 528
Address ffi
DRAFT REPORT
Residential Impact Fee
Nexus Study
November 2015
prepared for:
City of Burlingame
fffiffi ffi
STRATEGICECONOMICS
VWA
Vernazza Wolfe Associates, lnc.
I. EXECUTIVE SUMMARY
lntroduction
8ackground.........................
Report Organization............
lmpact Fee lmplementation options
Nexus Analysis Results
il.
Policy Considerations......................................
INTRODUCTION AND METHODOLOGY ...... 15
.......16
.......16
Background
The Nexus Concept.....
Methodology
Recent Housing Development Trends
Residential Prototypes........................
Household lncomes of Buyers and Renters ...........
ECONOMTC IMPACT ANALYSTS (tMPLAN3)
5
5
5
o
o
0
...18
...18
...22
IV 26
26
27
27
28
28
The lI/PLAN3 Model..
Household lncome lmpacts
Employment and Wage lmpacts
Estimating Worker-Households
Estimating Demand for Affordable Housin9...............
V.AFFORDABILITY GAP ANALYSIS
Methodology.........
Estimating Affordable Rents and Sales Prices
Estimating Housing Development Costs.........
Calculating the Housing Affordability Gap......
VI, NEXUSFEESANDREQUIREMENTS............,.,..
Maximum Fee Calculation ...
Summary of Conservative Assumptions
vll. FEAsrBrL|TYANDPOLlCYCONSrDERATrONS......................
Financial Feasibility Analysis ........
Additional eoticy ConsiOerations.....
VIII. GLOSSARY OF TERMS AND ACRONYMS.....
Glossary of terms...............
Deflnition of Acronyms.......
33
..41
..46
49
49
52
54
54
66
73
76
-2
Table of Contents
List of Figures
Figure I
Figure I
Figure I
Figure I
Figure I
Figure I
-1. Recommended Housing lmpact Fees by Residential Prototype..............
-2. Sales Prices and Rental Rates of Residential Prototypes
-4. Estimated Annual Household lncomes of Buyers of Condominium Units
-5. Estimated Annual Household lncomes of Renters ofApartment Units....
-0. New Worker Households by lncome Group for Prototypes
-8. Total Affordability Gap for Condominiums
Figure l-g.Total Affordability Gap for Aparlments...................
Figure l-10. Maximum Housing lmpact Fee by Prototype......
Figure l-1 1. Housing lmpact Fees in Neighboring Cities
Figure l-12: Housing lmpact Fee Scenarios as Percent ofTotal Development Costs
6
7
I
8
9
9
Figure l-13: Total City Fees and Permits per Square Foot-................................
Figure lll-2. Sales of Recently Built Condominium Units in Budingame' ...........
Figure lll-3. Asking Rents of Recently Built Apartment Units in San Mateo City
Figure lll-6. Estimated Annual Household lncomes of Buyers of Condominiums...
Figure lll-7. Estimated Annual Household lncomes of Renters of Apartment Units
Figure lV-4. Estimated Job and Wage lmpacts of Prototypes by Occupation...
Figure lV-S. lnduced Employment lmpacts, Burlingame
Figure lV-6. New Worker Households by lncome Group for Single-Family
Apartment Prototypes ....
Figure ll14. Burlingame Prototypes..............
Figure V-3. Calculation of Affordable Sales Prices in San Mateo
Figure V-4. Calculation of Affordable Sales Prices in San Mateo
Figure V-5. Affordable Housing Project Pro Forma Data.............
Figure Vl-2. Maximum Per-Unit Fee for Condominium Prototype...
Figure Vl-3. Maximum Per-Unit Fee for Apartmenl Prototype...
Figure Vl-5. lvlaximum Fee per SF for Condominium Prototype
Figure Vl-6. Maximum Fee per SF for Apartment Prototype
Figure Vll-1. Residential Prototypes ............
Figure Vll-2. Fee Levels per Unit for Prototypes..................
Figure Vll-3. Fee Levels per Square Foot for Prototypes....
Figure Vll-4. Prototype Sales Prices and Rents..................
Figure Vll-5. Apartment Revenue Calculations....................
4
Figure lV-1. Estimated lncomes by lncome Categories for Buyers of Single-Family Attached Units ........29
Figure lV-2. Estimated lncomes by lncome Categories for Buyers of Condominiums Units and Renters of
Apartment Units 29
30
31
nd
Figure lV-3. Estimated Job and Wage lmpacts of Prototypes by lndustry
Attached, Condominium a
Figure V-1 . Calculation of Affordable Rents in San Mateo County by Household Size,2014
Figure V-2. Calculation of Affordable Rents in San lvateo County by Unit Type, 2014 .........ea
County by H
County by U
ousehold Size, 2014.........39
nit Type, 2014...................40
............42
Figure V-6. Sales of Vacant Lands in San Mateo County, 2014 ..................... .............43
Figure V-7. Condominium Sales: Average Unit Characteristics and Prices for Selected Cities in San
Mateo County (2008-2012\ .........44
Figure V-8. Estimate of Development Costs of Hypothetical Condominium Project.-.........'..,,.,..44
......,.,.........45Figure V-9. Rental Housing Unit Sizes and Development Costs
Figure V-10. For-Sale Housing Unit Sizes and Development Costs ......-................... .
Figure V-1 1. Housing Affordability Gap Calculation for Rental Housing ......................
Figure V-12. Housing Affordability Gap Calculation for For-Sale Condominium Housi
Figure V-13. Average Housing Affordability Gap by lncome Group.
........45
........47
........48
........48
n9.............
.................... 50
.................... 50
.................... 51
.................... 5'r
Figure Vll-6. Development Cost Factors.................
Figure Vll-7. Single-Family Vacant Land Sales Transactions in Central
.......54
.......55
....... 55
.._....56
.......58
.......60
4....61
.......64
,.,.... 65
San [.4ateo County
Figure VlF8. Multi-Family Vacant Land Sales Transactions in Central San Mateo County, 2o09-2o1
Figure Vll-9. Pro Forma Model Results for the Single-Family Attached Prototype
Figure Vll-10. Pro Forma Model Results for Condominium and Apartment Prototypes...... ........... .,
Draft Burlingame Residential lmpact Fee Nexus Study 1
List of Figures (continued)
Figure Vll-1 1. Burlingame Total Residential Fees Under Selected Fee Scenarios
Figure Vll-'12. Comparison with Fees in Neighboring Jurisdictions......
Figure Vll-13. Existing Housing lmpact Fees in Bay Area Cities....................
67
69
70
Draft Burlingame Residential lmpact Fee Nexus Study -4-
EXEGUTIVE SUMMARY
INTRODUCTION
This report is part of the 2l Elements multi-city nexus study, a collaborative effort to mitigate the
impacts of new development on the demand for affordable housing in San Mateo County. In February
2014, the local jurisdictions in San Mateo County partnered to hire Strategic Economics and
Yernazza Wolfe Associates, Inc. to develop nexus studies for commercial linkage fees and residential
impact fees.r The project was initiated by 2l Elements, a countywide collaboration among all the
cities in San Mateo County on housing issues. The preparation of these fee studies may result in the
adoption of new impact fees on either residential, commercial or both types of developments. This
draft report describes the methodology, data sources, and analytical steps required for the nexus
analysis.
BAGKGROUND
Burlingame is potentially interested in adopting an affordable housing impact fee on new residential
development. The purpose of this fee would be to mitigate the impact of an increase in affordable
housing demand from new worker households associated with new market-rate residential units.
When a city or counfy adopts a development impact fee, it must establish a reasonable relationship or
connection between the development project and the fee that is charged. Studies undertaken to
demonstrate this connection are called nexus studies. This nexus study quantifies the connection
between the development of market rate housing and the demand for affordable housing units.
This residential nexus study measures the income and spending generated by the new market rate
households renting or buying new units in Burlingame. This new consumption is then translated into
new induced job growth. These induced jobs will be at various wage rates; many will be at lower
wages, for example in the retail and personal services sectors. Since low-wage households cannot
reasonably afford to pay for market rate rental and for-sale housing in Burlingame, a housing impact
fee can be justified to bridge the difference between what these new households can afford to pay and
the cost of developing modest housing units to accommodate them.
REPORT ORGANIZATION
This executive summary provides an overview of the housing nexus analysis methodology and
results. The subsequent chapters of the report contain more detailed information regarding the
methodology, data sources, and the steps of the analysis. The report is organized into seven sections
and a glossary of terms. Following this executive summary, Section II provides an introduction to the
purpose of the study, and an overview of the methodology. Section III presents the residential
prototypes used in the analysis. Section IV describes the methodology and results of the IMPLAN
economic impact analysis. Section V covers the housing affordability gap analysis. Section VI
presents the maximum fee calculation based on the nexus analysis and affordability gap results. The
final section, Section VII, discusses financial feasibility and other policy considerations that
jurisdictions typically weigh before implementing a nexus fee.
Draft Burlingame Residential lmpact Fee Nexus Study -5-
1 Participating jurisdictions include: Atherton, Belmont, Brisbane, Burlingame, Colma, Daly City, East Palo Alto,
Foster City, Half Moon Bay, Hillsborough, Menlo Park, Millbrae, Pacifica, Portola Valley, Redwood City, San
Bruno, San Carlos, San Mateo City, San Mateo County, South San Francisco, and Woodside.
IMPAGT FEE IMPLEMENTATION OPTIONS
The maximum single-family attached fee per unit is $98,541 ($52 per square foot), the maximum
condominium impact fee per unit is $91,598 ($56 per square foot), and the maximum apartment fee
per unit is $85,253 ($85 per square foot). If Burlingame elects to adopt a housing impact fee, the
recommended fee ranges are as follows: between $40 and $50 per square foot for single-family
attached homes, and between $25 and $50 per square foot for condominiums and apartments. These
recommendations are based on the findings of the financial feasibility analysis, a comparison of fees
in neighboring jurisdictions, and other factors as explained in the Policy Considerations section,
below. The maximum and recommended fee levels are shown in Figure I-1.
Figure l-1. Recommended Housing lmpact Fees by Residential Prototype
Prototype
Maximum Justified
Fee per Unit
Maximum
Justified
Fee per SF
Recommended Fee
Per Unit
Recommended
Fee per SF
Single-Family Attached
Condominium
Apartments
$98,541
$91,s98
$85,253
$52
$56
$85
$76,000 - $95,000
$41,250 - $82,500
$25,000 - $50,000
$40 - $50
$25 - $50
$25 - $50
Sources: Vemazza Wolfe Associates, lnc. & Strategic Economics, 2015
NEXUS ANALYSIS RESULTS
This section describes the steps taken to calculate the nexus-based fee amount per housing unit. More
detail on each step can be found in other sections ofthis report.
Prototypes
The first step in the nexus analysis is developing residential housing prototypes. The prototypes
establish the types of market rate housing development that are occurring or are expected to occur in
the city that could potentially be subject to the affordable housing impact fee. The fees calculated in
this nexus study are only applicable to the housing prototypes defined in this analysis.
Based on historical development trends, market data, broker interviews, and input from city staff, the
Consultant Team constructed three housing protofypes that represent the type of development that is
likely to occur in Burlingame: for-sale single-family attached units, for-sale condominiums and rental
apartments. These development prototypes are not intended to represent specific development
projects; rather, they are designed to illustrate the type of projects that are likely to be built in
Burlingame in the near future. A single-family detached prototype was considered, but not included
in this nexus study, as it less likely to be developed in Burlingame. Figure I-2 provides information
on the unit type and size, as well as estimated sales prices and average monthly rents for each
prototype.
Draft Burlingame Residential lmpact Fee Nexus Study -6-
Figure /-2. Sa/es Prices and RentalRates of Residential Prototypes
Prototype Unit Type
Number of
Units
Net Area
(SF)
Unit Sales
Price/
Monthly
Rent
Price or
Rent per
SF
Single-Family Attached (For-Sale)
Type V wood frame
12 units per acre
Tuck-under podium parking
Net Residential Area
Condominiums (For-Sale)
Type V wood frame
38 units per acre
Subterranean parking
Net ResidentialArea (Net SF)
Average Net SF per Unit
Apartments (Rental)
Type V wood frame
40 units per acre
Podium parking
Net Residential Area (Net SF)
Averaoe Net SF per Unit
3 BD/3 BA
2BDI?BA
3 BD/2 BA
1 BD/1 BA
2BOI2BA
20 1 ,900 $1 ,132,000 $596
38,000
10
10
100
100
1,500
1,800
33,000
1,650
800
1,200
200,000
1,000
$942,000
$1,080,000
$3,600
$4,300
$628
$600
$4.50
$3.58
Sources: Strategic Economics &Vemazza Wolfe Associates, lnc., 2014.
Household lncome
The next step is to calculate the annual household incomes of the buyers and the renters occupying
new units by using the sales prices and rents shown in Figure I-2. Threshold incomes needed to
purchase or rent units are based on standards used in the housing industry.2 Figures I-3,1-4 and I-5
show the estimated household income of buyers of buyers of single-family attached units, buyers of
condominium units, and renters of apartment units, respectively. Household incomes are a key input
to the IMPLAN3 economic impact analysis described in Section IV of this report.
'These standards are presented in Section lll of this report.
7Draft Burlingame Residential lmpact Fee Nexus Study
Figure l-3. Estimated Annual Household lncomes of Buyers of Single-Family Attached Units
Single-Family Attached Unit Type
3 BR/3 BA
Number of Households
Sales Price
20
$1,132,000
Household lncome $213,344
a Wolfe Associates, lnc. 2015.
Figure l-4. Estimated Annual Household lncomes of Buyers of Condominium Units
Condominium Unit Type
?BDI2BA 3 BD/2 BA
Number of Households
Sales Price
10
$942,000
10
$1,080,000
Household 10 794
Source: Applied Development Economics &Yemazza Wolfe Associates, lnc. 2015.
Figure l-5. Estimated Annual Household lncomes of Renters of Apartment Units
Apartment Unit Type
1BD/l BA 2BDI2BA
Number of Households
Monthly Rent
Household lncome
100
$3,600
$144,000
100
$4,300
$172,000
Source: Applied Development Economics, lnc., 2015; Strategic Emnomics &Vernazza Wolfe Associates, lnc. 2015.
Economic Impact Analysis (IMPLAN)
The next step is to determine employment and wage impacts of each prototype based on the incomes
of the occupants of new housing units. The buyers and renters of the new market-rate single-family
attached, condominiums, and apartments create new spending in the local economy. These new
expenditures can be linked to new jobs, many of which pay low wages. The job and wage impacts
related to new market-rate housing units are measured using IMPLAN3, an economic impact analysis
tool. An economics consulting firm, Applied Development Economics (ADE) undertook the
IMPLAN3 analysis.
The results of the IMPLAN analysis indicate that many of the induced jobs generated within San
Mateo County are in low-wage sectors like retail and food services (restaurants). However, a
significant proportion of induced jobs are also in higher-paying resident-serving categories such as
health care and govemment.
Demand for Affordable Housing
Recognizing that many households have more than one wage-earner, the next step is to calculate the
number of worker households by dividing the total number of new workers by the average number of
wage-earners per household in Burlingame. However, not all of the worker households require
affordable housing. To estimate the affordable housing demand, the average annual household
income of worker households is sorted into income categories that are consistent with area median
income (AMI) levels defined for San Mateo County and is specific to the average household size in
the jurisdiction. Figure I-6 indicates that of the 10.7 new worker households associated with a single-
Draft Burlingame Residential lmpact Fee Nexus Study -8-
family attached development, there are 8.6 households that need affordable housing. The comparable
figures for condominium and apartment developments are 8 and73.9 households.
Figure l-6. New Worker Households by lncome Group for Single-Family Attached, Condominium and
Apartment Prototypes
Worker Households by lncome Category
Single-Family
Attached Condominium Apartment
Households Requiring Affordable Housing
Very Low lncome (<=50% AMI) 2.7 2.5
Low lncome (51-80% AMI) 2.7 2.6
Moderate lncome (81-120% AMI) 3.1 2.9
Subtotal Very Low, Low, Moderate lncome 8.6 8.0
Above Moderate lncome Households 2.1 2.O
Total All Worker Households 10.7 10.0
24.1
23.6
26.2
73.9
18.3
92.2
Source: Applied Development Economics, lnc., 2015; Strategic Economics &Yemazza Wolfe Associates, lnc. 2015
Affordability Gap
The next step is to quantify the total gap between what very low, low, and moderate income
households can afford to pay and the cost of building new, modest rental and for-sale housing units.
This housing "affordability gap" number is then multiplied by the number of income-qualified
households in each income category for single-family attached, condominium and apartment
developments separately in order to estimate the total housing affordability gap for each prototype.
Figures I-7 through I-9 present these totals for single-family attached, condominiums and apartments.
Figure l-7. Total Affordability Gap for Single-Family Attached
lncome Level
Households Requiring
Affordable Housing
Average Affordability
Gap per Household
Affordability Gap for
Al! Households
Very Low-lncome (<50% AMI)
Low-lncome (50-80% AM l)
Moderate-lncome (80-1 20% AM l)
Total
2.7
2.7
3.1
8.6
$280,783
$240,477
$175,558
$764,947
$660,706
$545,1 61
$1 ,970,813
Sources: Yemazza Wolfe Associates, lnc.; Strategic Economics, 2014.
Figure l-8. Total Affordability Gap for Condominiums
lncome Level
Very Low-lncome (<50% AMI)
Low-lncome (50-80% AM l)
Moderate-lncome (80-1 20% AMI)
Total
2.5
2.6
2.9
8.0
$280,783
$240,477
$175,558
$711,053
$614,156
$506,751
$1,831,960
Sources: Vemazza Wolfe Associates, lnc.; Strategic Economics, 2014.
Draft Burlingame Residential lmpact Fee Nexus Study -9-
Households Requiring Average Affordability Affordability Gap for
Affordable Housing Gap per Household All Households
Figure l-9.Total Affordability Gap for Apartments
lncome Level
Households Requiring
Affordable Housinq
Average Affordability
Gap per Household
Affordability Gap for
All Households
Very Low-lncome (<50% AMI)
Low-lncome (50-80% AM l)
Moderate-lncome (80-1 20% AM l)
Total
24.11
23.63
26.19
73.93
$280,783
$240,477
$175,5s8
$6,769,850
$5,682,340
$4,598,346
$17.050.536
Sources: Yernazza Wolfe Associates, lnc.; Strategic Economics, 2014.
Maximum Nexus-Based Fee
The final step in calculating the maximum housing impact fee by prototype is to divide the total gap
at each income level by the number of units in each prototype (Figure I-10). This maximum fee
amount represents the ceiling on the fee that could be charged to mitigate affordable housing impacts
from new residential development.
The maximum single-family attached fee per unit is $98,541, the maximum condominium fee
per unit is $91,598, and the maximum apartment fee per unit is $851253. The fees are also
calculated on a per-square-foot basis by dividing the unit fee by the average size of the unit. On a
per-square-foot basis, the maximum impact fee is $52 for single-family attached, $56 for
condominiums and $85 for apartments.
Figure l-10. Maximum Housing lmpact Fee by Prototype
Prototype Single-Family Attached Condominiums Apartments
Total Number of Units
Average Unit Size
Total Affordability Gap
Maximum Fee per Unit
Maximum Fee per SF
20
1,900
$1 ,970,813
$98,541
$52
20
1,650
$1,831,960
$91,598
$56
200
1,000
$17,050,536
$85,253
$85
Sources: Yernazza Wolfe Associates, lnc. & Strategic Economics, 2015.
POLIGY GONSIDERATIONS
There are a number of policy considerations that can be taken into account when jurisdictions
consider adopting an affordable housing impact fee on new market-rate development. These may
include factors such as: the likely financial impact of the proposed housing impact fees on
development; the additional cost of the new fees on the existing city fee structure; a comparison of the
fee scenarios to existing housing impact fees in nearby cities; the role of the fee in the City's overall
strategy for affordable housing implementation; and the potential overlap with a commercial linkage
fee. This section provides a discussion of each of these policy questions for Burlingame.
Comparison to Neighboring Jurisdictions - A comparison of the nexus fee scenarios to current
housing impact fees charged in nearby cities is an important element of the policy analysis. This
comparison is challenging, because most cities in San Mateo County are participating in this multi-
city nexus study, and may decide to adopt new fees or update existing fees. In San Mateo and Santa
Clara Counties, the impact fee for attached single-family homes is generally between $17 and $23 per
square foot (Figure I-11). The recommended fees for single-family attached homes in Burlingame
(from $40 to $50 per square foot) would be higher than the housing impact fees in nearby cities,
except for San Carlos. For condominiums, the recommended fee range of $25 to $50 per square foot
Draft Burlingame Residential lmpact Fee Nexus Study -10-
would be similar to the fee levels in East Palo Alto and San Carlos. For apartments, the recommended
fee levels are between $25 and $50; the lower end of the range is comparable to the existing housing
impact fees in Cupertino, Daly City, East Palo Alto and San Carlos.
Figure l-11. Housing lmpact Fees in Neighboring Cities
City
Single-Family
Attached Condominiums Apartments
Cupertino
Daly City
East Palo Alto
Mountain View
San Carlos
San Jose
Sunnyvale
Sources: Baird + Driskell;Yemazza Wolfe Associates, lnc. & Strategic Economics, 2015.
Financial Feasibility - Financial feasibility is just one of several factors to consider in making a
decision regarding a potential nexus fee. In order to provide Burlingame with guidance on how
proposed fees could impact development decisions, the Consultant Team conducted a pro forma
analysis that tested the financial impact of the maximum and reduced fee scenarios for each
prototype.
Single-Family Attached - The maximum fee and reduced fee levels for the single-family
attached prototype are financially feasible to implement.
Condominium - The maximum fee and reduced fee levels for the condominium prototype are
financially feasible.
Apartment - While the maximum nexus fee is not supportable for the apartment prototype,
the reduced fee level of $50 per square foot, as well as lower fee scenarios, are financially
feasible.
Total Development Costs - Currently, the total development costs (including building and onsite
improvements, parking, indirect costs, financing costs, and developer profit) are $221 per net square
foot for the single-family attached prototype, $360 per net square foot for the condominium prototype
and $354 per net square foot for the apartment prototype. When land costs are added to the project's
development costs, costs increase to between $246 and $271per net square foot for the single-family
attached prototype (depending on the land price of the site), between $535 and $585 per net square
foot for the condominium prototype, and between $529 and $579 per net square foot for the
apartment prototype. The maximum housing impact fees represent 15.6 percent, l3.l percent and
15.9 percent of total development cost of the single-family attached, condominium and apartment
prototypes, respectively (Figure I-12). A fee of$50 per square foot represents 14.4 percent oftotal
development costs for single-family attached units, 5.7 percent for condominiums, and 5.2 percent for
apartments.
Comparison to Existing City Fees -Burlingame has existing city permits and fees on new
development that would increase with the adoption of a new housing impact fee. The City may wish
to consider the amount that total city fees would increase with the addition of a new housing impact
fee. Based on the current schedule of fees in Burlingame, existing fees (excluding the nexus fees) for
the residential prototypes are estimated to be Sl7 per square foot for single-family attached units
$16.50 $20 $25
$18 $22 $25
$23 $23-$44 $23N/A N/A $15
$21-$42 $21-$42 $24-$44N/A N/A $17
N/A N/A $17
a
a
a
Draft Burlingame Residential lmpact Fee Nexus Study -1 1-
($32,072 per unit), $20 per square foot for condominiums ($32,604 per unit) and $17 per square foot
for rental apartments (S16,595 per unit).3 The maximum residential impact fee would increase total
fees by four to six times for these prototypes, as shown in Figure I-13. A residential impact fee of $50
per square foot increases the total city permits and fees to $67 per square foot for single-family
attached units, $70 per square foot for condominiums, and $67 per square foot for apartments.
t The fee estimates presented above represent the best approximations available from Burlingame.
Draft Burlingame Residential lmpact Fee Nexus Study -12-
Single-Family Attached
Fee as Yo of
Fee Arnount TDC
Condominiums
Fee as % of
Fee Arnount TDC
$0
$85
$50
$2s
s15
$0
$52
$so
$40
$25
0.00%
15.58%
14.40Yo
12.83Yo
11.2OYo
$0
$56
$50
$25
$15
0.00%
13.07%
5.69%
2.35%
1.19%
Figure l-12: Housing lmpact Fee Scenarios as Percent of Total Development Costs
Residential lmpact Fee
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Economics, 201 5.
Figure l-13: Total City Fees and Permits per Square Foot
Existing Permits and Fees
Scenario 1 (Maximum Fee)
Scenario 2
Scenario 3
4
Sources: Vemaza Wolfe Associates, lnc. & Strategic Economics, 2015.
Draft Burlingama Residential lmpect Fee Nexus Sludy
Apartments
Fee as Yo of
0.00%
15.89%
5.19%
2.670k
Apartments
Residential TotalPermits
and Fees
-13-
Condominiums
Residential TotalPermits
lmoact Fee and Fees
Single-Family Attached
Residential TotalPermits
lmpact Fee and Fees
$0
$s2
$50
$40
$25
$17
$69
$67
$57
s42
$0
$56
$50
$25
s15
$20
$75
$70
$4s
$35
$0
$85
$50
$25
$1s
$17
$1 02
$67
$42
s32
Role of Fee in Burlingame's Overall Housing Strategy - Burlingame does not currently have a
residential impact fee program or commercial linkage fee program. In January 2015, Burlingame has
adopted a Density Bonus Ordinance, which replaced its inclusionary zoning ordinance. The Density
Bonus ordinance provides a density bonus of 20 percent for residential projects of over five units
under the following circumstances: l0 percent of units are affordable to lower income households;
five percent of units built are affordable to very low income households; the project is a senior citizen
housing development; the project is a qualiffing mobile home park. For projects that provide ten
percent of units affordable to moderate income households, a density bonus of five percent is granted.
In addition to the density bonus policy, the City also supports affordable housing development by
providing funding to project sponsors. Typically, affordable housing projects in Burlingame are
funded through a variety of other financing sources, including San Mateo County, as well as the
federal government, e.g., the CDBG and HOME Programs. In addition, equity is also provided
directly by developers and indirectly raised through the allocation and sale of Low Income Housing
Tax Credits. Finally, a portion of permanent financing comes from conventional loans obtained from
private lending institutions. Residential impact fee revenues (and commercial linkage fee revenues, if
adopted) would augment the City's existing affordable housing funds. It should be noted that
revenues from a residential impact fee need to be spent on housing that benefits the workforce since
the funds stem from affordable housing impacts related to new employment.
Overlap with Commercial Linkage Fee - In addition to the residential impact fee described in this
report, Budingame is also considering implementing linkage fees on commercial development. There
may be a small share of jobs counted in the residential nexus analysis that are also included in this
residential impact fee analysis. Thus, the two programs may have some overlap in mitigating the
affordable housing demand from the same worker households. In order to reduce the potential for
overlap between the two programs, it is advisable to set both the commercial linkage fees and housing
impact fees at below 100 percent of the nexus-based maximum. In this way, when combined, the
programs would mitigate less than 100 percent of the impact even if there were overlap in the jobs
counted in the two nexus analyses.
Draft Burlingame Residential lmpact Fee Nexus Study -14-
II. INTRODUGTION AND METHODOLOGY
Burlingame is considering a housing impact fee on new residential development. The purpose of this
fee would be to mitigate the impact of an increase in demand for affordable housing due to
employment growth associated with potential new residential development. When a city or county
adopts a development impact fee, it must establish a reasonable relationship or connection between
the development project and the impacts for which the fee is charged. Studies undertaken to
demonstrate this connection are called nexus studies. Nexus studies for school impact fees, traffic
mitigation fees, and park fees are common. For housing impact fees, a methodology exists that
establishes a connection between the development of market rate housing and the need to expand the
supply of affordable housing. This study is based on this methodology.
The approach for this nexus study is to estimate the number of new workers that will be required to
provide goods and services to the market rate households that are occupying new units in Burlingame.
Although growth in employment will provide jobs at various wage rates, many of the new jobs will
be at low-wage rates in retail trade and services, consistent with job patterns in the County. Since
low-wage households cannot reasonably afford to pay for market rate rental and for-sale housing in
Burlingame, a housing impact fee can bridge the difference between what these new households can
afford to pay and the costs of developing new housing units for them.
New market rate housing units in Burlingame create a need for low-wage employees to provide goods
and services to residents of the new units. If new market rate housing were not built, there would not
be an increase in employment nor the accompanying demand for affordable housing from these new
workers. Because housing impact fees are directed related to employment growth, the revenues
collected from these fees needs to be spent on workforce housing and not on housing for households
that do not participate in the labor force, such as retired seniors, unemployed homeless, and full-time
student populations.
BAGKGROUND
Cities and counties in California have operated inclusionary zoning programs to increase the supply
of affordable housing since the 1970s. An inclusionary program requires that builders of new
residential projects provide a specified percentage of units, either on-site or off-site, at affordable
prices. Some programs have also allowed developers the option of paying fees "in lieu" of providing
inclusionary units.
Inclusionary zoning policies have usually been established based on the police power of cities and
counties to enact legislation benefitting public health, safety, and welfare. In its recent decision on
California Building Industry Ass'n v. City of San Jose, the Califomia Supreme Court upheld this
power of cities, finding that the objective of increasing affordable housing supply in economically
diverse developments was "unquestionably" permitted by the U.S. Constitution.
However, in 2009, in Pslmer/Sixth Street Properties, L.P. v. City of Los Angeles, the Court of Appeal
held that inclusionary rental reqtirements violate the Costa Hawkins Rental Housing Act, which
allows landlords to determine the rents of all new units. Affordable rental housing may still be
required ifa developer agrees by contract to do so, in exchange for financial assistance or regulatory
incentives. However, in the absence of these incentives, restricted rents cannot be required of a
developer. Consequently, communities have completed nexus studies and imposed rental housing
impact fees to mitigate the impact of market-rate rental housing on the need for affordable housing.
Although a nexus analysis is not required to adopt inclusionary ordinances and inlieu fees on for-sale
housing, conducting a nexus study provides additional support for these requirements.
Draft Burlingame Residential lmpact Fee Nexus Study -1 5-
The nexus analyses presented in this study are designed to define an upper limit for a housing impact
fee to be charged on new rental and for-sale housing to mitigate impacts on affordable housing needs.
The maximum fee is not necessarily the recommended fee. Subsequent sections of this report address
additional policy considerations to consider when adopting housing impact fees.
THE NEXUS GONCEPT
In a balanced housing market, the development of new market rate housing results in population
growth. Residents purchasing and renting these new units now spend money in the city. For example,
they go out to eat in local restaurants, shop for food and clothing in local stores, and paffonize other
local businesses, such as hair salons, dry cleaners, and dental offices. This local spending results in
the need to hire new workers to respond to the increased demand for goods and services. A nexus
study establishes the connection between the households that purchase new housing units (or rent
newly constructed rental units) and the number of new workers that will be hired by local businesses
to serve the needs ofnew residents.
Growth in employment will provide jobs at various wage rates. While some jobs will pay salaries that
will allow new workers to rent or purchase market rate housing, many new jobs will also be at lower
wages. Since low-wage households cannot reasonably afford to pay for market rate rental and for-sale
housing in Burlingame, a housing impact fee addresses the demand for affordable housing.
METHODOLOGY
The first step of the nexus analysis is to estimate the market prices or rents of new housing units.
Based on these prices or rents, gross household incomes of buyers and renters are calculated. The
gross household incomes of buyers and renters are then translated into direct economic impacts (new
spending on retail goods and personal services), and induced impacts (new jobs and wage income)
using the IMPLAN3 model. The IMPLAN3 analysis provides information on likely incomes of new
workers. These incomes can then be used to estimate the demand for affordable housing from new
worker households, and the costs of providing these affordable units.
Each step of the nexus analysis is described in greater detail below.
Step 1. Define the residential prototypes that represent new market rate housing development.
Based on a review of recent development trends, pipeline projects, and market data for the city and
county, the residential prototypes are defined. The prototypes represent typical new market-rate
development projects likely to occur in the city. The prototype definitions include information on the
building characteristics, net residential area, unit mix and sizes, and sales prices or rents.
Step 2. Estimate household income of buyers and renters of new market rate units.
The average gross household income required to purchase or rent new market rate units is estimated
based on the market value or rents of new units. For ownership units, the calculation assumes typical
mortgage terms and assumes that buyers spend 35 percent of their gross incomes on housing costs.
For rental units, is assumed that renter households spend 30 percent of their gross incomes on
housing.
Step 3. Estimate economic impacts of new buyers and renters using IMPLAN3.
The IMPLAN3 model uses Bureau of Labor Statistics Consumer Expenditure Survey data to model
the spending patterns of different income groups. The model estimates the increase in expenditures
from new households, the number of new (induced) workers related to new households, and the
occupations and wages of these new workers.
Draft Burlingame Residential lmpact Fee Nexus Study -16-
Step 4. Estimate the number of new worker households and annual household incomes.
The number of new induced workers from the IMPLAN3 analysis is divided by the average number
of workers per household in the city (defined by the U.S. Census Bureau) to calculate the total
number of worker households associated with each housing prototype. The average worker's wage
calculated in the IMPLAN3 analysis is multiplied by the number of workers per household in the city
to derive gross household income. This step assumes that the all wage-earners in a household have
the same income.
Step 5. Estimate the demand for affordable housing from new worker households.
Based on the calculation of new worker household income, the worker households are categorized by
target income group (very low income, low income, moderate income, and above moderate income).
Worker households with above-moderate incomes are removed from the nexus analysis, because they
would not require affordable housing.
Step 6. Estimate the affordability gap of new households requiring affordable housing.
The affordability gap represents the difference between what households can afford to pay for
housing and the development cost of a modest housing unit. For very low and low income
households, a rental housing gap is used. For moderate income households, the housing affordability
gap is calculated separately for renter and owner households, and then the two gaps are combined to
derive an average affordability gap for moderate income households.
Step 7. Estimate nexus-based fees for each prototype.
The number of new households requiring affordable housing is multiplied by the average affordability
gap per household to estimate the total affordability gap for each prototype. The maximum per-unit
and per-square foot fees are then calculated by dividing the aggregate affordability gap by the number
ofunits or net residential area in each prototype.
Draft Burlingame Residential lmpact Fee Nexus Study -17-
III. RESIDENTIAL PROTOTYPES
The first step in the nexus analysis is developing residential housing prototypes. The residential
prototypes establish the types ofresidential development that are occurring or are expected to occur in
the city and could potentially be subject to the affordable housing impact fee. The housing protoq/pes
are not intended to represent specific development projects; rather, they are designed to illustrate the
type of projects that are likely to be built in Burlingame in the near future. The fees calculated in this
nexus study are only applicable to the housing prototypes defined in this analysis.
Based on estimated sales prices and rents of new market-rate units, the household incomes of buyers
and renters of new units are estimated. This section of the report describes the methodology for
establishing the prototypes and calculating the household incomes of buyers and renters of new
market-rate units in Burlingame. The estimated household incomes are then used as inputs to the
IMPLAN3 analysis to estimate the employment impacts of the market-rate households, which is
described in more detail in Section IV of this report.
RECENT HOUSING DEVELOPMENT TRENDS
In order to ensure that the prototypes accurately reflect current market conditions, the Consultant
Team analyzed recently built market rate housing development projects in Burlingame and in
comparable neighboring cities. Burlingame has recently attracted condominium development, and the
City is anticipating future single-family attached and apartment development projects. A single-
family detached prototype was considered but not included in this study, as recent single-family
detached development has mainly consisted of replacement of existing units, rather than net new
units.
Figure III-I presents a recently built single-family attached project in the neighboring city of San
Mateo. These three-bedroom units have, on average, a size of 1,900 square feet, and a price of
approximately $1,100,000. Recently built and sold condominiums in Burlingame are presented in
Figure III-3: units had an average size of 1,200 square feet and an average price of $1,300,000.
Market data on San Mateo City's apartment market is presented in Figure III-4. As shown, average
asking monthly rents are approximately $3,000 for studios, $3,600 for one bedroom units, and $4,300
for two-bedroom units.
RESIDENTIAL PROTOTYPES
Based on historical development trends, market data, broker interviews, and input from city staff, the
Consultant Team constructed three housing prototypes that represent the type of development that is
likely to occur in Burlingame. These development prototypes are not intended to represent specific
development projects; rather, they are designed to illustrate the type of projects that are likely to be
built in Burlingame in the near future, using market data from the City of Burlingame and, when
necessary, from the City of San Mateo. The prototypes, as shown in Figure III-4, provide information
on the building type, number of units, average size by unit type, and average monthly rents or sales
prices by unit type.
For-Sale Single-Family Attached Units
The for-sale single-family attached prototype is a Type V wood-frame building with a tuck-under
podium parking and a net residential area of 38,000 square feet. The estimated density is 12 units per
acre. This type of building is representative of potential future single-family attached development in
Burlingame. These are three bedroom units with an average size of 1,900 square feet and a price of
$1,132,000. The prototype size and number of units are based on projects planned in Burlingarne,
Draft Burlingame Residential lmpact Fee Nexus Study -18-
while the price per square foot is based on recently built single-family attached units in San Mateo
City.
For-Sale Condominiums
The for-sale condominium prototype is a Type V wood-frame building with an underground parking
garage and net residential area of 33,000 square feet. The estimated average density is 38 units per
acre. This building type is representative of recently built condominium projects in Burlingame. Units
have two or three bedrooms and an average size of 1,500 or 1,800 square feet. The average estimated
price of newly built condominiums is $942,000 for two bedroom units and $1,080,000 for three
bedroom units. The unit prices per square foot were based on sales of newly built condominium units
in Burlingame. However, the average sizes of the prototypical units are slightly smaller than these
recently built projects, which were upscale luxury products. The resulting average unit sales price for
the prototype is slightly lower than the sales prices of recently built condominiums.
Rental Apartments
The rental apartment prototype is a Type V wood-frame building with podium parking and net
residential area of 200,000 square feet. The estimated density is 40 units per acre. This is
representative of potential future development in Burlingame. The apartment unit mix consists of
one- and two-bedroom units. Estimated monthly rents are $3,600 for two-bedrooms and $4,300 for
three-bedrooms, based on the rental rates achieved in a new development in the neighboring city of
San Mateo.
Draft Burlingame Residential lmpact Fee Nexus Study -19-
Figure tlt-1. Recently Built Single-Family Attached Proiect in San Mateo City
Number of
Units
Average Size Price per
ComDlex Bedrooms Bathrooms (Souare Feet) Sale Amount S.F.Address
Mateo Citv Landsdowne 57 3 3-3.5 1,852 $1,104.114 $596428 E 28th Ave
Sources: Shea website, 20'14; Strategic Economics & Vemaza Wolfe Associates, lnc., 2014.
Figure lll-2. Sales of Recently Built Condominium Units in Burlingame*
tStZlbrinunOaAveAptlo2 Burlingame 2 2.5 1,213 2008 2008 $1,025,000 $845.01
15't2 Ftoribunda Ave Apt 20'l Burlingame 3 2.5 2783 2008 2008 $2'350'000 $844'41
1512 Ftoribunda Ave Apt 102 Burlingame 2 2.5 1,213 2008 2009 $1,000'000 $824 40
1 51 2 Ftoribunda Ave Apt 401 Burlingame 2 2.5 1,960 2008 2011 $1 ,500,000 $765.31
1512 Ftoribunda Ave Apt 301 Burlingame 3 2.5 2,783 2008 2011 $1 ,870,000 $67'l .94
1512 Ftoribunda Ave Apt 202 Burlingame g 2.5 2,663 2008 2012 $1,732,500 $650 58
1512 FtoribundaAveApt3Ol Burlingame 3 2.5 2,783 2008 2012 $1'750'000 $628.82
1512 FtoribundaAveApt302 Burlingame 3 2.5 2,663 2008 2012 $1,750'000 $657.15
1 51 2 Ftoribunda Ave Apt 402 Burlingame 2 2.5 1,941 2008 2013 $1 ,635,000 $842.35
508 Peninsuta Ave # 3 Burlingame 2 2.5 1,350 2009 2009 $575,000 $425.93
508 Peninsuta Ave # 2 Burlingame 2 2.5 1,370 2009 2010 $300,000 $218.98
SO8 Peninsula Ave #'l Burlingame 2 2.5 1,350 2009 2013 $740,000 $548.15
'1226 Et Camino Real Apt 201 Burlingame 2 2 I,640 2010 2010 $825,000 $503.05
1226 Et Camino Real Apt403 Burlingame 2 2 1,580 2O1O 2011 $880'000 $556.96
Average by Unit TyPe
2-bedroom 2 2.4 1,513 $942,222 $622'75
3-bedroom 3 2.s 2,735 $1 .890.500 $691.22
'lncludes transactions that occurred through Mid-2013, of condominiums built in or after 2008
Sources: DataQuick, April 2014; Strategic Economics & Vernaza Wolfe Associates, lnc., 2014
Draft Burlingame Residential lmpact Fee Nexus Sludy -20-
Figure lll-3. Askrng Rents of Recently Built Apartment Units in San Mateo City
Proiect City Unit Type Averaqe Size (SF)Averaoe Rent
888 Apartments, 155 Units San Mateo City Studio
One-Bedroom
Two-Bedroom
634
812
1.127
$2,970
$3,581
s4.3312
Sources: June 2014 Leasing websit€; Stralegic Economics & Vernau Wolfe Associates, lnc., 2014.
Drafr Bulingame Residential lmpact Fee Nexus Study -21-
Figure lll-4. Burlingame Prototypes
Prototype Unit Type
Number of
Units
Net Area
(SF)
Unit Sales
Price/
Monthly
Rent
Price or
Rent per
SF
Single-Family Attached (For-Sale)
Type V wood frame
12 units per acre
Tuck-under podium parking
Net Residential Area
Condominiums (For-Sale)
Type V wood frame
38 units per acre
Subterranean parking
Apartments (Rental)
Type V wood frame
40 units per acre
Podium parking
Net ResidentialArea (Net SF)
Average Net SF per Unit
3 BD/3 BA
2BDI2BA
3 BD/2 BA
1 BD/1 BA
2BDI2BA
20 1,900 $1 ,132,000 $596
38,000
10
'10
100
100
1,500
1,800
33,000
1,650
800
1,200
200,000
1,000
$942,000
$1,080,000
$3,600
$4,300
$628
$600
$4.50
$3.58
Sources: Strategic Economics &Vemaza Wolfe Associates, lnc., 2014.
HOUSEHOLD INCOMES OF BUYERS AND RENTERS
Using the sales prices and rents shown in Figure III-4, the next step is to calculate the annual
household incomes of the buyers of new for-sale single-family attached units and condominiums, and
the renters occupying new apartment units. The household income is a key input to the IMPLAN3
economic impact analysis described in Section IV of this report.
lncome of Single-Family Attached Units Buyers
To calculate the household income of buyers of new single-family attached units, the analysis used
typical mortgage terms for San Mateo County: 20 percent down payment, 30 year fixed rate
mortgage, and 4.35 percent interest rate. Burlingame's property tax rate was estimated from recent
budget documents. Homeowner association (HOA) fees were based on a review of HOA fees at
similar new single-family attached developments in San Mateo County. Households are expected to
spend 35 percent of available monthly income on total housing costs, including monthly payments for
mortgage pa)rments, property taxes, insurance and HOA fees. Figure III-5 shows the result of the
Draft Burlingame Residential lmpact Fee Nexus Study -22-
Net Residential Area (Net SF)
Average Net SF per Unit
income estimates for households buying new single-family attached units. As shown in the
calculations, for single-family attached units, household incomes are estimated to be over $150,000.
lncomes of Buyers of Condominiums with Underground Parking
To calculate the household income of buyers of new condominium units, the analysis applied
mortgage terms typical for San Mateo County: 20 percent down payment, 30 year fixed rate
mortgage, and 4.35 percent interest rate. Property tax rates were estimated from recent budget
documents, and homeowner association (HOA) fees were based on a review of HOA fees at similar
new condominium developments in San Mateo County. Total housing costs, including monthly
payments for mortgage payments, property taxes, insurance, and HOA fees, are assumed to be 35
percent of available monthly income. The result of the income estimates for households buying new
condominium units is shown in Figure III-6. As shown in the calculations, for condominium units,
household incomes are estimated to be over $150,000.
lncomes of Apartment Renters
For renter households, maximum annual housing costs are assumed to be 30 percent of gross
household income, a standard established in California's Health and Safety Code Sections 50052.5
and 50053. The estimated household income of renters varies by unit type, as indicated in Figure III-
7. One-bedroom renter households have an estimated annual income of $144,000, while two-bedroom
renter households have an estimated annual income of S I 72,000.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -23-
Figure lll-5. Estimated Annual Household lncomes of Buyers of Single-Family Attached Units
Single-Family Attached Units
3 BR/3 BA
Number of Households
Sales Price
Down Payment (a)
Loan Amount
Monthly Debt Service (b)
Annual Debt Service
Annual Property Taxes (c)
Annual HOA Fees (d)
Fire and Hazard lnsurance (e)
Annual Housing Costs (f)
Household lncome
20
$1 ,132,000
$226,400
$905,600
$4,s08
$54,098
$13,610
$3,000
$3,962
$74,670
$213,344
Notes:
(a) Down payment is estimated at 20% of sales price, based on Freddie Mac data for San Mateo County.
(b) lnterest rate is estimated at 4.35o/o for a 30-year term, based on Freddie Mac data,
http ://www.fredd iemac. com/pmms/pmms30.htm.
(c) Property tax rate is 1 .2023o/o based on Burlingame CAFR.
(d) Homeownership association (HOA) fees are estimated at $250 per month, based on fees charged at a sample of
recently built projects in San Mateo County.
(e) lndustry standard
(f) Homeownership housing burden is estimated at 35%, based on Califomia Health & Safety Code Sections 50052.5 and
50053.
Sources: Strategic Economics &Vemaza Wolfe Associates, lnc.,20'14.
Figure lll-6. Estimated Annual Household lncomes of Buyers of Condominiums
Condominium Units
2BDI2BA 3 BD/2 BA
Number of Households
Sales Price
Down Payment (a)
Loan Amount
Monthly Debt Service (b)
Annual Debt Service
Annual Property Taxes (c)
Annual HOA Fees (d)
Fire and Hazard lnsurance (e)
Annual Housing Costs (f)
Household lncome
10
$942,000
$188,400
$753,600
$3,752
$45,018
$11,326
$5,400
$3,297
$65,041
$18s,831
10
$1,080,000
$216,000
$864,000
$4,301
$51 ,613
$12,985
$s,400
$3,780
$73,778
$210,794
Notes:
(a) Down payment is estimated at 20% of sales price, based on Freddie Mac data for San Mateo County.
(b) lnterest rate is estimated at 4.35o/o for a 30-year term, based on Freddie Mac data,
http://www.freddiemac.com/pmms/pmms30. htm.
(c) Property tax rale is 1.2023o/obased on Burlingame CAFR.
(d) Homeownership association (HOA) fees are estimated at $450 per month, based on review of new condominiums in
San Mateo County.
(e) lndustry standard
(f) Homeownership housing burden is estimated at 35%, based on California Health & Safety Code Sections 50052.5 and
50053.
Sources: Strategic Economics &Vemaza Wolfe Associates, lnc., 2014.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -24-
Figure lll-7. Estimated Annual Household lncomes of Renters of Apartment Units
Apartment Unit Type
1 BD/1 BA 2 BOI2 BA
Number of Households
Monthly Rent
Annual Housing Costs
Housing Costs as % of lncome (a)
Household lncome
'100
$3,600
$43,200
30%
$144,000
100
$4,300
$51,600
30%
$172,000
Notes:
(a) Renter housing burden is estimated at 30%, based on California Health & Safety Code Sections 50052.5 and 50053.
Sources: Strategic Economics & Vernazza Wolfe Associates, lnc., 20'14.
Draft Burlingame Residential lmpact Fee Nexus Sfudy
rv. EGoNoMIG IMPAGT ANALYSIS (IMPLAN3)
The buyers and renters of the new market-mte single-family attached units, condominiums and
apartments create new spending in the local economy. These new expenditures can be linked to new
jobs, many of which pay low wages. The job and wage impacts related to new market-rate housing
units are measured using IMPLAN3, an economic impact analysis tool. An economics consulting
firm, Applied Development Economics (ADE) undertook the IMPLAN3 analysis with the
information on residential prototypes and associated buyers' and renters incomes provided by
Strategic Economics and Yernazza Wolfe Associates Inc. In this section of the report, the
methodology and results of the IMPLAN3 analysis are described in detail.
THE IMPLAN3 MODEL
The IMPLAN model is an economic dataset that has been used for over 35 years to measure the
economic impacts of new investments and spending using the industrial relationships defined through
an Input-Output Model. The IMPLAN model can estimate economic impacts resulting from changes
in industry output, employment, income, and other measures. The latest version of this model is
referred to as IMPLAN3.
For this analysis, the input-output model used data specific to San Mateo County in order to estimate
the multiplier effects resulting from the households that could potentially rent or buy new housing
units in Burlingame. In this case, all of the multiplier effects derive from new demand for goods
and local services (including government) that new households would generate within San Mateo
County. It does not account for economic impacts generated during the construction period, or
any economic impacts that would occur outside of the county.
The economic impacts estimated by the model generally fall into one of three categories - direct,
indirect, or induced. For this analysis, the direct impacts represent the household income brought
into the community by new residents. Indirect impacts would normally result from demand for
commodities and services provided by suppliers for business operations. (Because the direct impacts
come only from household spending, and not from business activity, the indirect effects were not
calculated.) Induced impacts represent the potential effects resulting from household spending at local
establishments by the new workers hired as a result of increased household expenditures. These
impacts affect all sectors of the economy, but primarily affect retail businesses, health services,
personal services providers, and govemment services. The employment estimates provided by the
IMPLAN3 model cover all types ofjobs, including full and part time jobs.
The first analysis undertaken by the IMPLAN3 model estimated the household demand for retail
goods and personal services. It is assumed that buyers and renters of new housing units in
Burlingame increase demand for goods and services within San Mateo County. This demand is
based on the projected incomes of renters and owners for each prototype. The IMPLAN3 model's
calculations are based on changes in household income, which adjusts the gross income to account
for the payment of income taxes and savings.a
The second analysis estimated the induced impacts, or multiplier effects of new household spending
in terms of jobs and wage income. The jobs and income calculations are focused on the induced
jobs that would be created through local spending by the new households. The input-output model
a According to IMPLAN Group LLC, when the economic impact is modeled based on household income change,
IMPLAN3 will adjust the input for income taxes and savings.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -26-
estimates the job impacts by detailed industry sector. The analysis took the detailed industry impact
estimates and distributed them by occupational category. The occupational anployment data used
in the analysis came from the California Employment Development Department (EDD) Labor
Market Information Division, and aggregates together data for all of California. After converting the
industry level data into occupational employment, the income distribution was calculated using the
occupational wage data for the San Francisco-San Mateo-Redwood City Metropolitan Division
(MD) that combines San Francisco, Marin, and San Mateo counties.5 The average wage by
occupation was used to make this calculation. The 2014 (first quarter) occupational wage data used
in the analysis comes from California's EDD.
It should be noted that the figures used in the IMPLAN3 analysis reflect the demand for retail goods
and services by net, new San Mateo County households. The multiplier impacts assume that all of this
spending will remain in San Mateo County.6
HOUSEHOLD INGOME IMPAGTS
Since the IMPLAN3 Model bases its household income impacts on Consumer Expenditure Survey
data, income categories are used in the model instead of continuous income information. Because of
this feature, the analysis sorted the renters and buyers of new market rate units into income groups,
and then calculated the economic impacts based on the total income calculated for each income
group.
EMPLOYMENT AND WAGE IMPACTS
Based on the incomes of the new buyers and renters, the next step is to determine employment and
wage impacts from each prototype. Estimated employment and wages are shown in Figure IV-3 for
each IMPLAN3 industry sector, indicating the number of induced jobs, the industry's share of total
employment growth by prototype, and the average wage by industry. Figure IV-4 provides the same
IMPLAN3 output data, organized by occupation rather than industry, for each prototlpe. As shown in
both figures, many of the induced jobs generated within San Mateo County are in low-wage sectors
and occupations related to retail and food services (restaurants). However, a significant proportion of
induced jobs are in higher-paying resident-serving categories such as health care, engineering and
high tech and management.
s The San Francisco - San Mateo - Redwood City Metropolitan Division, which includes Marin, San Francisco
and San Mateo Counties, was used because it is the smallest geography including San Mateo County for which
certain occupational wage data was available.
6 Estimating the retail leakage would require a detailed analysis of retail sales totals for existing businesses in
San Mateo County and is beyond the scope of this study.
Draft Burlingame Residential lmpact Fee Nexus Study -zt-
Figure IV-1 below summarizes the household income data for single-family attached households.
All 20 single-family attached buyer households have an average household income situated in the
income category of $ 150,000 or higher, and an aggregate household income of $4.27 million. Figure
IV-2 demonstrates the same calculation for condominium buyer households and renter households.
The 20 households of the condominium prototype have an average household income over
$150,000, and a combined income of $3.97 million. The rental prototype has 100 households in the
S100,000-$150,000 income category, and 100 households in the over $150,000 income category.
The combined total household income for renter households is $31.6 million. These total income
figures, adjusted to account for taxes and savings, were used as inputs for the IMPLAN3 analysis.
ESTI MATI NG WORKER-HOUSEHOLDS
Recognizing that many households have more than one wage-earner, the next step is to calculate the
number of worker-households by dividing the total number of new workers by the average number of
wage-earners per household in Burlingame. According to the U. S. Census Bureau 2008-2012
American Community Survey 3-Year Estimate, Burlingame has an average of l.4l workers per
household. The number of induced jobs is divided by l.4l to calculate the total number of worker
households. Figure IV-5 illustrates this calculation.
ESTIMATING DEMAND FOR AFFORDABLE HOUSING
To estimate the demand for affordable housing, it is first necessary to determine the incomes of the
new households. Once the average annual household income of worker households is calculated, the
next step is to categorize households into area median income (AMD levels based on the thresholds
set by California Department of Housing and Community Development for San Mateo County. The
average household size in Burlingame is 2.0, according to the US Census American Community
Survey 5-Year Estimates 2008-2012. The income threshold for a two-person household in San Mateo
County was therefore used to determine the AMI categories of each new worker household.T Figure
IV-6 indicates that of the 10.7 new worker households associated with a single-family attached
development, there will be 8.6 households that need affordable housing. The comparable figures for
condominium and apartment developments are 8 and 73.9 households.
'The average Burlingame household size is 2.0, according to the US Census, American Community Survey 5
Year Esti mates, 2008-201 2.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -28-
Figure lV-1. Estimated lncomes by lncome Categories for Buyers of Single-Family Attached Units
Single-Family Attached PrototypeAggregate Average
New Household Household
lncome Category Households lncomes lncome
Less than $10,000 0 $0 nla
$10,000-$15,000
$1s,000-$25,000
$25,000-$35,000
$35,000-$50,000
$s0,000-$75,000
s75.000-$'t00,000
$100,000-$1 50,000
Over $1 50,000
0
0
0
0
0
0
0
20
20
$o
$o
$o
s0
$o
$0
$0
$4,266,871
$4.266.871
ola
nla
nla
nla
nla
nla
nla
$213,344
$213.344Total
Sources: Applied Development Economics, lnc.,2015:Vemaza Wolf€ Associates, lnc. and Strategic Economics, 2015.
Figure lV-2. Estimated lncomes by lncome Categories for Buyers of Condominiums Units and Renters of Apartment Units
Condominium Prototype Apartment Prototype
Aggregate Average Aggregate Average
Household Household Household Household
lncome Cateoorv New Households lncornes lncome New Households lncomes lncome
Less than $10,000 0 $0 n/a 0 0 nla
510.000-515,0000$0n/a00nla
$15,OOO-$25,000 0 $0 n/a 0 $0 n/a
$25,000-$35,000 0 $0 n/a 0 $0 nla
$35,000-$50,000 0 S0 n/a 0 $0 n/a
$50,000-$75,000 0 $0 n/a 0 $0 n/a
$75,000-$100,000 0 $0 n/a 0 $0 n/a
$100,000-$150,000 0 $0 nla 100 $14,400,000 $144,000
Over$1sO,OOO 20 $3,966,250 $198,312 100 $17,200,000 $172,000
Total 20 $3.966.250 $198.312 200 s31 600 000 s158 000
Sources: Applied Oevelopment Economics, lnc., 2015; Vemaza Wolfe Associates, lnc. and Stratsgic Economi6, 2015.
Drafl Burlingame Residential lmpact Fee Nexus Sludy -29-
Figure lV-3. Estimated Job and Wage lmpacts of Prototypes by lndustry
lndustrv (NAICS code)
Average
Waqe
Single-Family
Attached Prototype
Jobs % Of Jobs
Condominium
Prototype
Jobs % OfJobs
Apartment Prototype
Jobs o/o Of Jobs
1 1 Forestry, fishing, hunting, and agriculture
21 Mining
22 Utilities
23 Construction
3'l Manufacturing
42 Wholesale trade
44 Retail trade
48 Transportation & warehousing
5l lnformation
52 Finance & insurance
53 Real estate & rental & leasing
54 Professional, scientific & technical seNices
55 Management of companies & enterprises
56 Admin, support, waste mgt, remediation services
61 Educational services
62 Health care and social assistance
71 Arts, entertainment & recreation
72 Accommodation & food services
81 Other services (except public administration)
91 Govemment
$38,309
$70,505
$74,144
$68,376
$66,946
$62,797
$54,808
$49,308
$77,312
$71,830
$66,316
$91,389
$88,955
$54,197
$62,584
$68,778
$49,614
$31,s20
$53,217
$70,961
0.01
0.01
0.03
0.33
0.04
0.19
2.33
0.34
0.20
0.75
0.71
0.46
0.02
0.63
0.68
2.69
0.52
2.14
1.53
1.53
15.12
0o/o
0%
OYo
2o/o
0%
'lo/o
15%
2o/o
104
5o/o
SYo
3Yo
0%
4Yo
4o/o
18Yo
3o/o
14o/o
10o/o
10o/o
'100o/o
0.01
0.01
0.02
0.31
0.04
0.17
2.17
0.32
0.18
0.70
0.66
0.43
0.02
0.58
0.63
2.50
0.48
1.99
1.42
1.42
14.05
OYo
0o/o
0%
2Yo
0o/o
1o/o
1SYo
2Yo
1%
SYo
5o/o
3Yo
0o/o
4Yo
41o
18%
3Yo
'l 40/o
10%
10o/o
lOOo/o
0.08
0.05
0.23
2.66
0.35
1.62
20.31
2.81
1.76
6.50
6.43
3.85
0.17
5.43
5.10
24.56
4.40
19.22
13.37
11.21
1 30.1 't
iYo
OYo
0o/o
2Yo
OYo
1Yo
160/o
2o/o
1Yo
5o/o
5Yo
3Yo
OYo
4%
4o/o
19%
3o/o
1SYo
10o/o
9%
100%Total
Note: Av€rage wage is calculated based on the mean occupational wages, and the average statewide distribution of occupations for €ach industry.
Sources: Applied Oevelopment Economics, lnc, 2015: Vernaza Wolfe Associates, lnc. and Strategic Economi6, 2015.
Draft Burlingame Residential lmpact Fee Nexus Study -30-
Figure lV-4. Estimated Job and Wage lmpacts of Prototypes by Occupation
soc
Code Occupational Title
Average
Annual
Waqe
Single-Family
Attached Jobs
Condominium
Jobs
Apartment
Jobs
1 1 -0000
13-0000
15-0000
1 7-0000
19-0000
2'l-0000
23-0000
2s-0000
27-0000
29-0000
31-0000
33-0000
35-0000
37{000
39-0000
41 -0000
43-0000
45-0000
47-0000
49-0000
51 -0000
53-0000
Management Occupations
Business and Financial Operations Occupations
Computer and Mathematical Occupations
Architecture and Engineering Occupations
Life, Physical, and Social Science Occupations
Community and Social Services Occupations
Legal Occupations
Education, Training, and Library Occupations
Arts, Design, Entertainment, Sports, Media Occupations
Healthcare Practitloners and Technical Occupations
Healthcare Support Occupations
Protective Service Occupations
Food Preparation and Serving-Related Occupations
Building and Grounds Cleaning and Maintenance
Personal Care and Service Occupations
Sales and Related Occupations
Office and Administrative Support Occupations
Farming, Fishing, and Forestry Occupations
Construction and Extraction Occupations
lnstallation, Maintenance, and Repair Occupations
Production Occupations
Transportation and Material Moving Occupations
Total all occupations
$146,537 0.70 0.65 6.00
$95,505 0.73 0.68 6.11
$104,996 0.26 0.24 2.14
$100,605 0.14 0.13 1.07
$96,012 0.13 0j2 1.03
$s4,663 0.34 0.32 2.91
$140,841 0.10 0.09 0.77
$59,459 0.58 0.54 4.59
$70,952 0.23 0.21 1.96
$11 1,876 0.97 0.90 8.68
$41,374 0.45 0.42 4.12
$61,618 0.39 0.37 3.06
$27,076 2.26 2.10 20.23
$33,575 0.48 0.45 4.11
$33,716 1.08 1.01 9.54
$54,767 2.00 1.86 17 .44
$46,720 2.33 2.17 19.93
$34,770 0.02 0.01 0.13
$63,327 0.29 0.27 2.32
$58,564 0.54 0.51 4.67
$41,105 0.29 0.27 2.48
$42,255 0.80 0.74 6.81
15.12 14.05 130.11
Sources; Applied Development Economics, 201 5; IMPLAN3 input-output model, 201 5; California Labor Market lnformation Division, 201 5.
Draft Burlingame Residential lmpact Fee Nexus Sludy -31-
Figure lV-1. lnduced Employment lmpacts, Burlingame
Single-Family
Proiect Prototype Condominium Apartment
Number of Units
lnduced Employment (Workers)
Average Number of Workers per Household
New Worker Households
20
15
1.41
20
14
1.41
9.96
200
130
1.41
92.220.72
Source: Applied Development Economics,2015; Strategic Economics & Vemaza wolfe Associates, lnc. 2015-
Figure lV-6. New Worker Households by lncome Group for Single-Family Aftached, Condominium and Apaftment Prototypes
lncomeThresholds Single-Family
Worker Households bv lncome Cateqorv Household) Attached Condominium Apartment
Households Requiring Affordable Housing
Very Low lncome (<=50% AMI)
Low lncome (51-80% AMI)
Moderate lncome (81-'120% AMI)
Subtotal Very Low, Low, Moderate lncome
Above Moderate lncome Households (>120% AMI)
Total All Worker Households
$45,250
$72,400
$98,900
>$98,900
2.7
2.7
3.1
8.6
2.1
10.7
24.1
23.6
26.2
73.9
18.3
2.s
2.6
2.9
8.0
2.0
10.0
Source: Applied Development Economics, lnc., 2015; Strategic Economics & Vemaza Wolfe Associates, lnc. 20'15.
Draft Burlingame Residential lmpact Fee Nexus Study -JZ-
V. AFFORDABILITY GAP ANALYSIS
Estimating the housing affordability gap is necessary to calculate the maximum potential housing
impact fee. This affordability gap analysis was conducted at the county-wide level so that it can be
applied to al1 the jurisdictions in San Mateo County participating in the multi-city nexus study.8 This
section summarizes the approach to calculating the housing affordability gap and the results of the
analysis.
METHODOLOGY
The housing affordability gap is defined as the difference between what very low, low, and moderate
income households can afford to pay for housing and the development cost of new, modest housing
units. Calculating the housing affordability gap involves the following three steps:
l. Estimating affordable rents and housing prices for households in target income groups.
2. Estimating development costs of building new, modest housing units, based on current cost
and market data.
3. Calculating the different between what renters and owners can afford to pay for housing and
the cost of development of rental and ownership units.
The housing affordability gap is estimated at a countywide level, and assumed to be the same for all
the jurisdictions participating in the multi-city nexus studies, for the following reasons:
o Both the Califomia Department of Housing and Community Development Department
(HCD) and U.S. Housing and Urban Development Department (HUD) define the ability to
pay for housing at the county (rather than the city) level. Existing affordable housing studies
and policies in most jurisdictions rely on these countywide area median income (AMI)
estimates published by HCD or by HUD. This analysis uses 2014 income limits published by
California Department of Housing and Community Development (HCD).
Construction costs for housing and commercial development do not vary dramatically
between different jurisdictions in San Mateo County, because the cost of labor and materials
is regional in nature.
a
Although land costs vary widely in San Mateo County, the study estimated a single land value for the
county based on data provided by developers ofrecently built projects. These costs are at the low end
of recent land sales, as described below. Additionally, because the land costs used in the analysis are
from2012 and2073, and land values have escalated rapidly since then, the resulting affordability gap
will be slightly lower than if the analysis incorporated 2014 land costs, providing a conservative
estimate of the affordability gap.
I Although there is a single housing affordability gap estimate for all jurisdictions in the county, the subsequent
steps in the fee calculation considers market and household characteristics for Burlingame, generating a unique
maximum fee for each jurisdiction in the county, as described in Section V.
Draft Burlingame Residential lmpact Fee Nexus Study -33-
ESTIMATING AFFORDABLE RENTS AND SALES PRICES
The first step in calculating the housing affordability gap is to determine the maximum amount that
households at the targeted income levels can afford to pay for housing. For eligibility purposes, most
affordable housing programs define very low income households as those earning approximately 50
percent or less of area median income (AMD, low income households as those earning between 5l
and 80 percent of AMI, and moderate income households as those earning between 8l and 120
percent of AMI. In order to ensure that the affordability of housing does not use the top incomes in
each category, the analysis uses a point within the income ranges for the low and moderate income
groups.'
Figure V-l and Figure V-2 show the calculations for rental housing. The maximum affordable
monthly rent is calculated as 30 percent of gross monthly household income, minus a deduction for
utilities. For example, a very low income, three-person household could afford to spend $1,273 on
total monthly housing costs. After deducting for utilities, 51,220 a month is available to pay for rent.
Figure V-3 and Figure V-4 demonstrate housing affordability for homeowners. Homeowners are
assumed to pay a maximum of 35 percent of gross monthly income on total housing costs, depending
on income level. The maximum affordable price for for-sale housing is then calculated based on the
total monthly mortgage payment that a homeowner could afford, using standard loan terms used by
CaIHFA programs and many private lenders for first-time homebuyers, including a five percent down
payment (Figure V-3). For example, a moderate income, three-person household could afford to
spend $2,974 a month on total housing costs, allowing for the purchase of a 5348,526 home. Key
assumptions used to calculate the maximum affordable rents and housing prices are discussed below.
o Unit types: For rental housing, the analysis included studios, one-, two-, and three-bedroom
units. For for-sale housing, one-, two-, and three-bedroom units were included. These unit
types represent the affordable and modest market-rate apartment and condominium units
available in San Mateo County. Condominiums were used to represent modest for-sale
housing because single-family homes in San Mateo County tend to be significantly more
expensive than condominiums.
o Occupancy and household size assumptions. Because income levels for affordable housing
programs vary by household size, calculating affordable unit prices requires defining
household sizes for each unit type. Consistent with Califomia Health and Safety Code
Section 50052.5(h), unit occupancy was generally estimated as the number of bedrooms plus
one. For example, a studio unit is assumed to be occupied by one person, a one bedroom unit
is assumed to be occupied by two people, and so on. Several adjustments to this general
assumption were made in order to capture the full range of household sizes. In particular, it is
assumed that one-bedroom condominiums could be occupied by one- or two-person
households, and three-bedroom apartments and condominiums could be occupied by four- or
fi ve-person households. lo
e For rental housing, 70 percent of AMI is used to represent low income households and 90 percent of AMI is
used to represent moderate income households. For ownership housing, it is assumed that moderate income
homebuyers may earn slightly less than the maximum for that income category (110 percent of AMI). Higher
income limits are used for ownership than for rental housing because ownership housing is more expensive to
purchase and maintain.
10 For these unit types, the maximum affordable home price (or rent) is calculated as the average price (or rent)
that the relevant household sizes can afford to pay. For example, the maximum affordable home price for a one-
bedroom condominium is calculated as the average of the maximum affordable home price for one- and two-
person households.
Draft Burlingame Residential lmpact Fee Nexus Study -34-
a
a
a
a
Targeted income levels for rental housing: For rental housing, affordable rents were
calculated for very low income, low income, and moderate income households (see Figure V-
I and Figure V-2). For eligibility pu{poses, most affordable housing programs define very
low income households as those earning 50 percent or less of area median income (AMI),
low income households as those earning between 5l and 80 percent of AMI, and moderate
income households as those eaming between 8l and 120 percent of AMI. However, defining
affordable housing expenses based at the top of each income range would result in prices that
are not affordable to most of the households in each category. Thus, this analysis does not use
the maximum income level for all of the income categories. Instead, for rental housing, 70
percent of AMI is used to represent low income households and 90 percent of AMI is used to
represent moderate income households.
Targeted income levels for ownership housing For ownership housing, affordable home
prices were calculated only for moderate income households (see Figure V-3 and Figure V-
4). Higher income limits are used for ownership than for rental housing because ownership
housing is more expensive to purchase and maintain. It is assumed that moderate income
homebuyers may eam slightly less than the maximum for that income category (l l0 percent
of AMI).
Maximum monthly housing costs.lr For all renters, maximum monthly housing costs are
assumed to be 30 percent of gross household income. For homebuyers, 35 percent of gross
income is assumed to be available for monthly housing costs, reflecting the higher incomes of
this group.r2 These standards are based on California's Health & Safety Code Sections
50052.5 and 50053.
Utilities. The monthly utility cost assumptions are based on utility allowances calculated by
the U.S. Department of Housing and Urban Development for San Mateo Counfy.r3 Both
renters and owners are assumed to pay for heating, cooking, other electric, and water heating.
In addition, owners are assumed to pay for water and trash collection.ra
Mortgage terms and costs included for ownership housing. The mortgage calculations are
based on the terms typically offered to first-time homebuyers (such as the terms offered by
the Califomia Housing Finance Authority), which is a 30-year mortgage with a five percent
down payment. A five percent down payment standard is also used by many private lenders
for first-time homebuyers. Based on recent interest rates to first-time buyers, the analysis
assumes a 5.375 percent annual interest rate.rs In addition to mortgage payments and utilities,
11 The calculation of homeowner affordability is conservative in that the model accounts for additional costs for
buyers (such as utility costs) that might not be considered by all lenders.
t2 The assumption that homebuyers spend 35 percent of gross household income on housing results in a lower
affordability gap than if 30 percent of gross household income were used instead.
t' U.S. Department of Housing and Urban Development, "Allowances for Tenant-Furnished Utilities and Other
Services: Housing Authority of San Mateo County," November 201 3.
'o Units are assumed to have natural gas heating, cooking, and water heating systems, as natural gas is the
most common fuel for units located in San Mateo County. Sources: U.S. Census Bureau, 2012 American
Community Survey, "Table 8251 17: Tenure by House Heating Fuel," San Mateo County; U.S. Census Bureau,
201 1 American Housing Survey, "Table C-03-AH-M, San Francisco-San Mateo-Redwood City: Heating, Air
Conditioning, and Appliances - All Housing Units."
's Sources: CaIHFA Mortgage Calculator, accessed March 2014; Zillow.com, "Current Mortgage Rates and
Home Loans," accessed March 2014; interviews with California Housing Finance Agency (CalHFA) Preferred
Loan Officers, March 2014.
Draft Burlingame Residential lmpact Fee Nexus Study -35-
monthly ownership housing costs include homeowner association (HOA) dues,r6 property
taxes, t7 private mortgage insurance, 18 and hazardand casualty insurance. te
tu HOA fees are estimated at $300 per unit per month, based on common HOA fees in San Mateo County as
reported in: Polaris Pacific, "Silicon Valley Condominium Market," February 2014.
17 The annual property tax rate is estimated at 1.18 percent of the sales price, based on the average total tax rate
for San Mateo County (calculated from County of San Mateo, 2008-09 Property Tax Highlights
http://www.co.sanmateo.ca.us/Attachments/controller/Files/PTH/PTH_2009.pdf) and discussions with Preferred
Loan Officers.
t8 The annual private mortgage insurance premium rate is estimated at 0.89 percent of the total mortgage
amount, consistent with standard requirements for conventional loans with a five percent down payment.
Sources: Genworth, February 2014; MGIC, December 201 3; Radian, April 2014.
te The annualhazard and casualty insurance rate is assumed to be 0.35 percent of the sales price, consistent
with standard industry practice.
Draft Burlingame Residential lmpact Fee Nexus Study -36-
Figure V-1. Calculation of Affordable Rents in San Mateo County by Household Size, 2014
1 2 3 4
Very Low lncorne (50% AMI)
Maximum Household lncome at 50% AMI
Maximum Monthly Housing Cost (a)
Utility Deduction
Maximum Available for Rent (HH Size) (b)
Low lncome (70% AMI)
Maximum Household lncome at 70% AMI
Maximum Monthly Housing Cost (a)
Utility Deduction
Maximum Available for Rent (HH Size) (b)
Moderate lncome (90o/o AMI)
Maximum Household lncome at 90% AMI
Maximum Monthly Housing Cost (a)
Utility Deduction
Maximum Available for Rent (HH Size) (b)
$39,600
$990
$29
$961
$50,470
$1,262
$29
$1,233
$64,890
$1,622
$2e
$1,593
$4s,2s0
$1,131
$40
$1,091
$57,680
$1,442
$40
$1,402
$74,160
$1,854
$40
$1,814
$s0,900
$1,273
$53
$1,220
$64,890
$1,622
$s3
$1,569
$83,430
$2,086
$53
$2,033
ss6,5s0
$1 ,414
$68
$1,346
$72,100
$1,803
$68
$1,735
$92,700
$2,318
$68
$2,250
$61,050
$1,526
$68
$1,4s8
$77,875
$1,947
s68
$1,879
$1 00,1 25
$2,s03
$68
$2,435
Notes:
(a) 30 percent of maximum monlhly household income.
(b) Maximum monthly housing cost minus utility deduclion.
Acrcnfns:
AMI: Area median income
HH: Household
Sources: Califomia Department of Housing and Community D€velopment, 20'14; U.S. Department of Housing and Urban Dswlopment,
20'l3iVamazaWolfo Associates, lnc. & Strategic Economics, 2014.
Draft Burlingame Residential lmpact Fee Nexus Study -37-
PaEdh. her lldusch6l.l ,llHl 5
Figure V-2. Calculation of Affordable Rents rn San Mateo County by Unit Type, 2014
Affordable Rents bv Unit la)
2 Bedroom 3 Bedroom
(4 and 5 mrsonsl(3
Very Low lncome (50% AMI) $961 $1,091 $1,220 $1'402
Low lncome (70% AMI) $1,233 $1,402 $1,569 $1,807
Moderate lncome (90% AMI) $1,593 $1,814 $2,033 $2,342
Notes:
(a) Affordable rents are calculated as follows: Studios are calculated as one-person households; One-bedroom units are calculated as
two-person households; Two-bedroom units are calculated as three-pereon households; Three-bedroom units are calculated as an
average of four and five pe6on households. See Figure V-1 .
Sources: California Department of Housing and Community Development, 2014; U.S. Department of Housing and Urban Development,
2O13; Vemaza Wolfe Associates, lnc. & Strategic Economics, 2014.
Draft Burlingame Residential lmpact Fee Nexus Sfudy
Studio
(1 Derson)
1 Bedroom
(2 oersons)
-38-
Figure V-3. Calculation of Affordable Sa/es Pnces rn San Mateo County by Household Size, 2014
PersonsperHousehold(HH) I 2 3 4 5
Moderate lncome (110% AMI)
Maximum Household lncome at 110% AMI (a) $79,310 $90,640 $101,970 $113,300 $122,375
Maximum Monthly Housing Cost (b) $2,313 $2,644 $2,974 $3,305 $3,56S
Monthly Deductions
Utilities $106 $106 $130 $156 $156
HOA Dues $300 $300 $300 $300 $300
PropertyTaxes and lnsurance (c) $517 $607 $690 $773 $844
Monthly lncome Available for Mortgage Payment (d) Sl ,390 $1 ,631 $1,854 $2,076 $2,269
Maximum Mortgage Amount (e) $248,195 $291,274 $331,100 $370,795 $405,155
Maximum Affordable Sales Price - HH Size (0 $26 1.258 $306,604 $348,s26 $390,311 $426,479
Notes:
(a) Calculated as 1 10 percent of the median household income reported by HCO for each household size.
(b) Maximum housing cost is estimated at 35 percent of household incom6 for homebuyers.
(c) Assumes annual property lax rate of '1.1 8 p€rcent of salss price; annual private mortgago insurancs premium rals of 0.89 percsnt of
mortgage amount; annual haard and casualty insurance rat€ of 0.35 percent of sales price.
(d) Maximum monthly housing cost minus dsductions
(e) Assumos 5.375 psrcsnl intgrsst rato and 30 year loan tom
(f) Assumes 5 p€rcent dom payment (75 perc€nt loan-to-valu€ ratio)
Acronyms:
AMI: Ar6a median income
HH: Household
HOA: Homs omeB association
Sources: California Department of Housing and Community Dev€lopment, 2014; U.S. Oepartment of Housing and Urban Oevelopment, 2013;
Vemaza Wolfe Associates, lnc. & Strategic Economics, 2014.
Draft Burlingame Residential lmpact Fe€ Nexus Srudy -39-
Affordable Sales Price by Unit Type (a) (1 and 2 persons) (3 persons) (4 and 5 persons)
Figure V-4. Calculation of Affordable Sa/es Pnbes in San Mateo County by Unit Type, 2014
Moderate lncome (110% AMI)$283,931 $348,526 $408,395
Not€s:
(a) Affordablo sales pric€s are calculated as follows: One-bedroom units are calculaled as an average of one- and two-
peEon households; Two{edrcom units are calculated as thBe-person households; Throg-bedroom units are calculated as
an average offour and five person households. See Figure V-3.
Sources: California Housing and 2014; U.S. Oepartmsnt of Housing and Urban
Development, 201 3;2014.
Draft Burlingame Residential lmpact Fee Nexus Study -40-
ESTIMATING HOUSING DEVELOPMENT COSTS
The second step in calculating the housing affordability gap is to estimate the cost of developing new,
modest housing units. Modest housing is defined slightly differently for rental and ownership
housing. For rental housing, the costs and characteristics of modest housing are similar to recent
projects developed in San Mateo County by the affordable rental housing sector. Modest for-sale
housing is assumed to be non-luxury multifamily (condominium) development because single-family
homes in San Mateo County tend to be significantly more expensive than condominiums; many of the
new single-family homes in the county are custom-built luxury units that are too costly to meet the
standard for modest housing.
The calculation of housing development costs used in the housing affordability gap requires several
steps. Because the gap covers both rental housing and for-sale housing, it is necessary to estimate
costs for each. The following describes the data sources used to calculate rental and for-sale housing
development costs.
Rental Housing
Rental housing development costs were based on pro forma data obtained from three recent
affordable housing projects in San Mateo County. Figure V-5 shows the location and description of
these projects and summarizes the information that was used to generate a per-square-foot cost of
$410 used in the cost analysis. These costs include site acquisition costs, hard costs (on- and off-site
improvements), soft costs (such as design, city permits and fees, construction interest, and
contingencies), and developer fees. The costs from the rental housing pro formas were also cross-
referenced against proprietary pro formas available to the consultant team from other private
development projects in order to ensure accuracy.
Since these projects assumed state and federal funding, the labor costs included in the original pro
formas reflect the prevailing wage requiranent imposed by state and local governments. The costs
shown in Figure V-5 have been adjusted to subtract out the prevailing wage requirement because the
development cost model used in the housing affordability gap analysis does not assume receipt of
government subsidies. A rule of thumb used by local economists who assist affordable housing
developers in obtaining public financing, is to estimate that, under the prevailing wage requirement,
labor costs are 25 percent higher than would otherwise be the case. Therefore, on-site and off-site
improvement costs obtained from the original pro formas are reduced by 25 percent to reflect actual
labor costs that would apply to construction projects that do not have these requirements.20 Finally, on
average, land acquisition costs accounted for 20 percent or less ofthese total adjusted costs.
'0 These prevailing wage requirements refer only to labor cost requirements on construction projects that receive
funding from the state or federal government. These are not the same as minimum wage requirements that
individual cities may adopt.
Draft Burlingame Residential lmpact Fee Nexus Study -41-
Figure V-5. Affordable Housing Project Pro Forma Data
Project Description Project 1 Proiect 2 Proiect 3
Location
Year Built
Land Area (acres)
Gross Building Area (SF)
Net Building Area (SF)
Number of Units
Parking Type
Parking Spaces/ Unit
Land Acquisitlon Costs
Prolect Costs per SF of Net Building Area
Land Cost (a)
Hard Costs (b)
Soft Costs (c)
Developer Fees
Total Project Costs (d)
San Mateo
2013
1.05
106,498
56,075
60
Podium
1.82
$3,157,000
($69 per SF of land)
San Mateo
2010
1.0
127,718
67,850
68
Underground
1.55
$5,s43,600
($127 per SF of land)
San Bruno
2011
0.63
42,688
33,297
42
Structure
1.0
$2,096,500
($76 per SF of land)
$56
$228
$e3
$25
$402
$82
$21 6
$ee
$21
$41 7
$63
$187
$1 14
$39
$403
Notes:
(a) Calculated per square foot of net building area.
(b) Excludes prevailing wage requirements for on-site and off-site hard costs.
(c) lncludes design, engineering, city permits and fees, construction interest, contingencies, legal, etc.
(d) Total costs include developer fees.
Acronyms:
SF: Square feet
Source: Confidential Pro Forma Oala;Vemazza Wolfe Associates, lnc; Strategic Economics, 2014.
To ensure that the land value assumptions used in the rental development cost estimates (ranging
from $69 to $127 per square foot ofland) were reasonable, the consultant team analyzed recent sales
of vacant properties in San Mateo County using DataQuick, a commercial vendor that tracks real
estate transactions. Cities with fewer than three vacant land transactions were excluded from the
analysis. As shown below in Figure V-6, land values in San Mateo County are highly variable from
city to city, ranging from $45 to $300 per square foot; the average sales price for the selected sites in
the County was $189 per square foot. The analysis demonstrates the land cost assumptions used to
calculate rental housing costs (in Figure V-5) represent the lower range of current land values.
Draft Burlingame Residential lmpact Fee Nexus Study -42-
Figure V-6. Sa/es of Vacant Lands rn San Mateo County, 2014
Jurisdiction
Number
Transactions
Average
Sales Price
Average Site
Size (SF)
Average
Sales Price/
SF Land
Belmont
Menlo Park
Pacifica
San Bruno
San Mateo
Unincorporated San Mateo County
Average of Records
4 $920,000 6,383 $165
6 $1,239,s00 5,802 $220
4 $487,000 7,221 $111
13 $933,769 3,259 $295
8 $1,314,188 5,424 $300
4 $224,2s0 5,194 $45
$8s3,118 5,547 $189
Notes: lncludes data from cities with 3 or more transactions of vacant land in San Mateo County from January through May
2014. Records with missing sales or land area information were eliminated.
Acronyms:
SF: Square feet
Sources: DataQuick, January-May 2014iYemazza Wolfe Associates, lnc; Strategic Economics, 2014.
For-Sale Housing
Since affordable housing developers do not typically build for-sale housing in San Mateo County, the
cost of developing new, modest for-sale housing was estimated using two data methods: the first
method used price data for recently built condominium units as a proxy for development costs; the
second approach estimated development costs based on published market and cost data for similar
projects in San Mateo Counfy. Each of these cost estimate approaches is described in more detail
below.
Review of condominium sales data - In this approach, average sales prices from condominium units
built in San Mateo County between 2008 and 2012 are used as a proxy for development costs. " This
approach assumes that construction costs, land costs, soft costs, and developer profit are all included
in the unit sales price. Using data provided by DataQuick, the consultant team analyzed sales prices
of condominium units of various sizes in the seven cities that experienced condominium development
that exceeded 10 units in the aggregate between 2008 and 2012. These seven cities included Brisbane,
East Palo Alto, Millbrae, Redwood City, San Carlos, San Mateo City, and South San Francisco. The
other jurisdictions in San Mateo County experienced little or no condominium development during
this time period. Figure V-7 summarizes the information that was used to generate a per-square-foot
cost for condominium development of $420.
Cost estimate of hypothetical condominium project - The second approach relied on published
industry data sources and recent financial feasibiliry studies to estimate the development costs of a
hypothetical condominium project, as described in Figure V-8." Land costs were estimated based on
recent DataQuick land transactions shown in Figure V-6. RS Means cost data, adjusted for the Bay
Area's construction costs, was used to calculate hard costs. Based on a review of recent financial
21 ldeally, cost estimates would be based only on projects built in the last year or two. However, the decline in
new construction after 2007 necessitated that the analysis use several years' worth of data in order to estimate
for-sale housing costs. Since costs are not adjusted for inflation, they may be slightly lower than actual costs
required for a new project to be built in2014 or 2015. This approach is more conservative - and likely more
accurate - than applying across-the-board inflation factors to historic costs. Furthermore, the increasing cost of
residentially zoned, high density parcels is the main source of development cost increase. Adjusting land costs
for inflation is not easily done.
22 The hypothetical condominium building type is a Type V building with underground parking and floor-area ratio
of 1.7. The building characteristics are described in Figure lV-8.
Draft Burlingame Residential lmpact Fee Nexus Study -43-
feasibility analyses in the Bay Area, soft costs were estimated at 30 percent of hard costs, and
developer fees and profits were estimated at 12 percent of hard and soft costs. Using this second
method, the development costs are estimated at $495 per net square foot of building area. In order to
ensure that the results of the affordability gap analysis are conservative, the lower development cost
estimate of $420 per net square foot was selected for ownership units.
Figure V-7. Condominium Sales: Average lJnit Characferlsflcs and Prices for Selected Crlies rn San
Mateo County (2008-201 2)
Jurisdiction
Average
Number of
Bathrooms
Average
Number of
Bedrooms
Average
Square Feet
Average Price
per Square
Foot
Average Unit
Price
Brisbane
East Palo Alto
Millbrae
Redwood City
San Carlos
San Mateo City
South San Francisco
1.2
1.8
1.9
2.7
1.8
2.3
1.7
1.9
1.5
1.3
2
2.9
1.8
2.2
1.8
1.9
892
1,029
1,290
1,933
1,066
1,545
981
$41 3
$340
$429
$402
$508
$439
$427
$368,625
$349,991
$553,893
$776,655
$541,932
$677,430
$418,740
Wolfe Associates, lnc.2014.
Figure V-8. Estimate of Developmenf Cosfs of Hypothetical Condominium Proiect
Building Characteristics
Land Area (SF)
Gross Building Area (SF)
Net Building Area (SF)
Number of Units
Parking Type
Floor-area ratio (FAR)
Density (units per acre)
Average Unit Size
Land Acquisition Costs per Square Foot (a)
110,727
188,235
160,000
100
Underground
1.7
39
1,600
$1 89
Development Cost
Land Cost (b)
Hard Costs
Soft Costs (c)
Developer Fees (d)
Total Development Costs
Cost per Net SF
$1 31
$250
$75
$3e
$495
Notes:
(a) Land value is calculated based on DataQuick records of vacant land transactions
in the county. See Figure lV6.
(b) Calculated based on RS Means cost estimates per square foot of net building
area.
(c) Estimated at 30 percent of hard costs. lncludes design, engineering, city permits
and fees, construction interest, contingencies, legal, etc.
(d) Estimated at '12 percent of hard costs and soft costs.
Acronyms:
SF: square feet
Sources: RS Means, 2014; DataQuick 2014; Recent financial feasibility studies;
Vernazza Wolfe Associates, lnc. & Shategic Economics, 2014.
Draft Burlingame Residential lmpact Fee Nexus Study -44-
Cost Estimates by Unit Size
The data sources described above also provided information on estimated unit sizes. Unit size
information is needed to translate costs/sales prices per square foot to unit costs. Unit sizes are
estimated separately for rental and for-sale units. For the rental units, the recent inventory ofprojects
developed by MidPen Housing was analyzed. For ownership units, the average sizes of recently built
condominium units (Figure V-7) were analyzed.
Figure V-9 provides the unit sizes and development cost estimates for rental units. Per-unit
development costs were calculated by multiplying average unit sizes by the per-square foot
development costs of $410. Rental unit costs range from $205,000 for studio units to $479,700 for
three-bedroom units.
Figure V-10 summarizes the costs of condominium units. The per-unit costs were derived by
multiplying the average unit size by the development cost per square foot of $420. Condominium
development costs range from $357,000 for one-bedroom units to $672,000 for three-bedroom units.
Figure V-9. Rental Housing Unit Sizes and Developmenf Cosfs
Unit Type
Estimated Cost
per Net SF
Unit Size
(net SF)
Development
Costs
Studio
One bedroom
Two bedroom
Three bedroom
$41 0
$41 0
$41 0
$41 0
500
700
970
1,170
$205,000
$287,000
$397,700
$479,700
Acronyms:
SF: Square feet
Sources: Confidential Pro Forma Dala;Vemazza Wolfe Associates, lnc. & Shategic Economics, 2014.
Figure V-l0. For-Sale Housing Unit Sizes and Developmenf Gosfs
Unit Type
Estimated Gost
per Net SF
Unit Size
(net SF)
Development
Gosts
One bedroom
Two bedroom
Three bedroom
$420
$420
$420
850
1,200
1,600
$357,000
$504,000
$672,000
Acronyms:
SF: Square feet
Sources: DataQuick, 2014;Yemazza Wolfe Associates, lnc. & Strategic Economics, 2014.
Draft Burlingame Residential lmpact Fee Nexus Study -45-
CALCULATING THE HOUSING AFFORDABILITY GAP
The final step in the analysis is to calculate the housing affordability gap, or the difference between
what renters and owners can afford to pay and the total cost ofdeveloping new units. The purpose of
the housing affordability gap calculation is to help determine the fee amount that would be necessary
to cover the cost of developing housing for very low, low, and moderate income households. The
calculation does not assume the availability of any other source of housing subsidy because not all
"modest" housing is built with public subsidies, and tax credits and tax-exempt bond financing are
highly competitive programs that will not always be available to developers of modest housing units.
Figure V-l1 shows the housing affordability gap calculation for rental units. For each rental housing
unit type and income level, the gap is defined as the difference between the per-unit cost of
development and the supportable debt per unit. The supportable debt is calculated based on the net
operating income generated by an affordable monthly rent, incorporating assumptions about operating
expenses (including property taxes, insurance, etc.), reserves, vacancy and collection loss, and
mortgage terms based on discussions with local affordable housing developers. Because household
sizes are not uniform and the types of units each household may occupy is variable, the average
housing affordability gap is calculated by averaging the housing affordability gaps for the various unit
sizes.
Figure V-12 shows the housing affordability gap calculation for ownership units. For each unit type,
the gap is calculated as the difference between the per-unit cost of development and the affordable
sales price for each income level. As with rental housing, the average housing affordability gap for
each income level is calculated by averaging the housing affordability gaps across unit sizes in order
to reflect that households in each income group vary in size, and may occupy any of these unit types.
Finally, the tenure-neutral estimates of the housing affordability gap were estimated for very low,
low, and moderate income households (Figure V-l3). Because very low and low income households
that are looking for housing in today's market are much more likely to be renters, an ownership gap
was not calculated for these income groups. The rental gap represents the overall affordability gap for
these two income groups. On the other hand, moderate income households could be either renters or
owners. Therefore, the rental and ownership gaps are averaged for this income group to calculate the
overall affordability gap for moderate income households. The calculated average affordability gap
per unit is $280,783 for very low income households; $240,4'77 for low income households, and
$175,558 for moderate income households. The housing affordability gap is highest for very low
income households because those households with higher incomes can afford to pay more for
housing.
Draft Burlingame Residential lmpact Fee Nexus Study -46-
Figure V-11 . Housing Affordability Gap Calculation for Rental Housing
t nit
(SF)
Size
Maximum
Monthly
Rent (a)
Annual
lncome
Net
Operating
lncome
(b)
Available
for Debt
Service
(c)
Supportable
Debt (d)
Development Affordability
Costs (e) Gaplncome Level and Unit Type
Very Low lncome (50% AMI)
Studio
1 Bedroom
2 Bedroom
3 Bedroom
Average Affordability Gap
Low lncome (70% AMI)
Studio
1 Bedroom
2 Bedroom
3 Bedroom
Average Affordability Gap
Moderate lncome (90% AMI)
Studio
'l Bedroom
2 Bedroom
3 Bedroom
Average Affordability Gap
500
700
970
1,170
500
700
970
1,170
500
700
970
1,170
$1,s93
$1,814
$2,033
$2,342
$19,1 19
$21,768
$24,393
$28,108
$961
$1,091
$1,220
$1,402
$1,233
$1,402
$1,s69
$1,807
$1 1,s32
s13,09s
$14,634
$16,824
$14,793
$16,824
$18,831
$21,680
$3,4s5
$4,940
$6,402
$8,483
$6,553
$8,483
$10,389
$13,096
$10,663
$13,1 80
$15,673
$19,202
$2,764
$3,952
$5,122
$6,786
$s,243
$6,786
$8,312
$10,477
$8,530
s10,544
$1 2,53S
$1 5,362
$36,5s2
$52,259
$67,725
$89,733
$69,323
$89,733
$10s,902
$1 38,s35
$1 12,796
$139,417
$165,796
$203,127
$205,000
$287,000
$397,700
$479,700
$205,000
$287,000
$397,700
$479,700
$205,000
$287,000
$397,700
$479,700
$168,448
$234,741
$329,975
$389,967
1280,783
$135,677
$197,267
$287,798
$341,1 65
$240,477
$92,204
$147,583
$231,904
$276,573
$187,066
Notes:
(a) Affordable rents are based on State of Califomia Housing and Community Development FY 2014 lncome Limits for San Mateo County. See Figure V-2.
(b) Amount available for debt- Assumes syo vacancy and collection loss and $7,500 per unit per year for operating expenses and res€rves based on r€cently buill (2012-2014) and
proposed affordabl6 housing poects in the San Francisco Bay Area.
(c) Assumes 1.25 Oebt Coverage Ratio.
(d) Assumes 6.38%, 30 y€ar loan. Calculations based on annual payments.
(e) Assumes $410/SF for development costs based on comparable pOect pro fomas.
(0 Calculated as the difference between development costs and supportable d6bt.
Acronyms:
SF: Square feet
AMI: fuea median income
Sources: Housing and Community Development, 20'14; Selected San Matso Rental Housing Pro Fomas; Vernaza Wolfs Associates, lnc. & Strategic Economics, 2015,
Draft Burlingame Rosidential lmpact Fee Nexus Study -47-
Figure V-12. Housing Affordability Gap Calculation for For-Sale Condominium Housing
lncome Level
and Unit Type Unit Size (SF)
Affordable
Sales Price
(a)
Development
Costs (b)
Affordability Gap
(c)
Moderate lncome (110% of AMI)
1 Bedroom
2 Bedroom
3 Bedroom
Averaqe Affordability Gap
850
1,200
1 ,600
$283,931
$348,526
$408,395
$357,000
$504,000
$672,000
$73,069
$155,474
$263,605
$164,049
Notes:
(a) See calculation in Figure V-3.
(b) Assumes $420lSF for development costs, based on recent condominium sales data.
(c) Calculated as the difference between development cost and affordable sales pdce.
Acronyms:
SF: Square feet
AMI: Area median income
Sources: DataQuick Sales Data, 200&20'12; Vemazza wolfe Associatos, lnc. & Strategic Economics, 2015
Figure V-13. Average Housing Affordability Gap by lncome Group
lncome Level Rental Gao
Average
Ownership Gap Affordabilitv Gap
Very Low lncome (50% AMI)
Low lncome (70% - 80% AMI) (a)
Moderate lncome (90% - 1 10% AMI) (b)
$280,783
s240,477
$187,066
NiA
N/A
$1 ,049
$280,783
$240,477
$175,558
Notes:
(a) Low incom€ households are defined at 70 percent ofAMl for renters and 80 porcsnt ofAMltor owners.
(b)Moderate income households are defned at 90 percent of Al\,'ll for renters and 110 percent Ai,4l forowners.
Acronyms:
Al\,,t1: Area median income.
Source: Vema2za Wolfe Associates, lnc. and Stratogic Ec.nomics, 2015.
Draft Burlingame Residential lmpacl Fee Nexus Study -48-
VI. NEXUS FEES AND REQUIREMENTS
This section builds on the findings of the previous analytical steps to calculate maximum justified
housing impact fees for each prototype.
MAXIMUM FEE CALCULATION
To derive the maximum nexus-based fee, the housing affordability gap is applied to the number of
lower-income worker households linked to the prototypes. This is the basis for developing an estimate
ofthe total affordability gap for each prototype. The total gap for each prototype is then divided by
the number of units in the development prototype to calculate a single maximum fee per unit.
Figure VI-l presents the results of the nexus fee calculation for the single-family attached prototype.
The per unit housing affordability gap number is multiplied by the number of income-qualified
worker households linked to the prototype to estimate the total gap. The total affordability gap is then
divided by the number of units in the prototype to derive the maximum fee per unit, estimated at
$98,541 per unit. The same steps are taken for the condominium and apartment prototypes to estimate
the maximum fee per unit, as shown in Figures VI-2 and VI-3. The calculated maximum fees are
$91,598 per condominium unit and $85,253 per apartment unit.
\
The fees can also be calculated on per-square-foot basis by dividing the total gap by the net
residential area for each prototype. The maximum fee per square foot is $52 for the single-family
attached protot)?e (Figure VI-4), $56 per square foot for the condominium prototype (Figure VI-5),
and $85 for the apartment prototype (Figure VI-6).
The per-unit and per-square-foot fees shown in the tables below express the total nexus-based fees for
new market-rate single-family attached, condominium and rental apartment development in
Burlingame. They represent the maximum justified fees based on the nexus analysis that could be
imposed on new development. The city may adopt fees or require mitigations at a lower level than
thesejustified fees, depending on financial feasibility and otherpolicy considerations.
Draft Burlingame Residential lmpact Fee Nexus Study -49-
Figure Vl-1. Maximum Per-Unit Fee for Single-Family Aftached Prototype
lncome Cateoorv
Average Affordability
Gap (Der Household)
Number Worker
Hous6holds
Maximum Fee
Revenues for
Prototype
Number Units
in Prototype
Total Fee Per
Unit
Very Low lncome (<=50% AMI)
Low lncome (51-80% AMI)
Moderate lncome (81-120% AMI)
$280,783
$240,477
$1 75,558
2.7
2.7
3.1
$764,947
$660,706
$545,161
Total $1,970,813 20 $98,541
20'14; IMPLAN 3 via Applied Developm€nt Economics,2015; Vemaz Wolfe Associates, lnc. & Strategic Economics,2015.
Figure Vl-2. Maximum Per-Unit Fee for Condominium Prototype
lncome Category
Average Affordability
Gap (per Household)
Number Worter
Households
Maximum Fee
Revenues for
Prototype
Number Units
l! Eo!9!vE
Total Fee Per
Unit
Very Low lncome (<=50% AMI)
Low lncome (51-80% AMI)
Moderate lncome (81-120% AMI)
$280,783
$240,477
$ 1 75,558
2.5
z.o
2.9
$711,053
$614,156
$s06,7s1
Total $'1,831,960 20 $91,598
2014: IMPLAN 3 via Applied Development Economics, 2015:VemaruWolfe Associates, lnc. & Strategic Economics,2015.
Figure Vl-3. Maximum Per-Unit Fee for Apartment Prototype
lncome Category
Average Affordability
Gap (per Household)
Number Worker
Households
Maximum Fee
Revenues for
Prototype
Number l.lnits
in Prototype
Total Fee Per
Unit
Very Low lncome (<=50% AMI)
Low lncome (51-80% AMI)
Moderate lncome (81-120% AMI)
Total
$280,783
$240,477
$'17s,558
24.1
23.6
26.2
$6,769,850
$5,682,340
$4,598,346
$17,050,536 $8s,2s3
Sources: California Housing and Community Development; Individual lenders; Affordable and market-rate prcject pro formas; DataOuick, 2014; RS Means,
2014; IMPLAN 3 via Applied Development Economics, 2O15;VernazaWolfe Associates, lnc. & Strategic Economics, 2015.
Figure Vl-4. Maximum Fee per SF for Single-Family Attached Prototype
Draft Burlingame Residential lmpact Fee Nexus Sludy
200
-50-
Average Affordability
Gap (Der Household)
Number Worker
Maximum Fee
Revenues for
Prototvoe
Net Residential
Area (SF)
Total Fee Per
SFlncome Cateqorv
Very Low lncome (<=50% AMI) $280,783 2.7 $764,947
Low lncome (51-80% AMI) $240,477 2.7 $660,706
Moderate lncome (81-120% AMI) $175,558 3.1 $545,161
Total $1,970,813 38,000 $52
2014; IMPLAN 3 via Applied Development Economics, 20'15; Vemazza Wolfe Associates, lnc. & Strategic Economics, 2015.
Figure Vl-5. Maximum Fee per SF for Condominium Prototype
Affordability Gap NumberWorker Revenues for Net Residential Total Fee Per
lncome Category (per Household) Households Prototype Area (SF) SF
Very Low lncome (<=50o/o AMI)
Low lncome (51-80% AMI)
Moderate lncome (81-'120% AMI)
$280,783
$240,477
$1 75,558
2.5
2.6
2.9
$71 1,053
$614,156
$506,751
Total $1,831,960 33,000 $56
2014: IMPLAN 3 via Applied Oevglopment Economics,20'15; Vemau Wolfe Associates, lnc. & Strategic Economics, 2015.
Figure Vl-6. Maximum Fee per SF for Apaftment Prototype
Average Affordability
Gap (Der Household)
Number Worker
Maximum Fee
Revenues for
Prototvo€
Net Residential
Area (SFl
Total Fee Per
SFlncome Cateoorv
Very Low lncome (<=50% AMI) S280,783 24.1 $6,769,850
Low lncome (51-80% AMI) 9240,477 23.6 $5,682,340
Moderate lncome (81-120% AMI) $175,558 26.2 $4,598,346
Total $17,050,536 200,000 $85
2014; IMPLAN 3 via Applied Development Economics, 20lSiVamazzaWdfe Associat€s, lnc. & Strategic Economics, 2015.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -51-
SUMMARY OF CONSERVATIVE ASSUMPTIONS
The housing impact fee nexus analysis methodology utilizes conservative assumptions that result in a
lower estimate of the nexus-supported maximum fee. Some of the conservative assumptions
undertaken in the analysis include the following:
Prices and rental rates for new development. Because there has been little new housing
development completed in the aggregate in San Mateo County the sale prices and rental rates
for new market-rate housing are based on older market data. The rental rates and sale prices
for projects that are coming on the market today are significantly higher. The use of lower
prices and rents results reduces the total nexus fee calculation.
Economic impact analysis model. The IMPLAN3 model only measures the impacts of new
market-rate housing development in San Mateo County. It does not measure any of the
impacts that could be occurring in other Bay Area counties. The economic impact analysis is
modeled on a household income change approach, which adjusts for income taxes and
savings when calculating the employment impacts of new households.
Cost estimates for affordability gap analysis. The affordability gap analysis measures the
difference between what households can afford to pay for housing and the cost of new
housing units. To ensure that the gap is conservative, the development cost estimates are
based on the lower range of land and construction costs in San Mateo County. In many sub-
areas of the county, including priority-development areas and downtown locations, land costs
for housing sites may be higher, particularly under today's market conditions.
a
a
Extremely low income households and very low income households are combined in the
affordability gap analysis. The affordability gap analysis combines these two income
groups, thereby reducing the total fee calculation.
Affordability gap for owner households. The calculation of the affordability gap for
ownership households only considers moderate-income households. Low and very low
income households are not considered in the calculation. This also results in a lower estimate
of the maximum fee.
Feasibility analysis. The analysis takes into account the financial feasibility of adding the
maximum impact fee and reduced fee levels to the total cost of new development. The
financial feasibility component of the analysis incorporates market-supportable assumptions
about revenues, costs, land costs, and developer retum expectations based on research on
recent development trends. The results of financial analysis informed the final
recommendations on the housing impact fee.
Comparison to other cities. The Consultant Team researched existing impact fees and BMR
policies in other nearby cities to determine the competitiveness of the maximum fee and
reduced fee levels. The fee recommendations in this report incorporate the findings from the
comparative analysis.
Overlap analysis. The City is undertaking two impact fee nexus studies at the same time: the
commercial linkage fee nexus study and the housing impact fee nexus study. To minimize the
potential that some jobs could be double-counted by including the same worker households in
both studies, the Consultant Team ensured that the recommended fees for the two programs
a
a
a
a
a
a
Draft Burlingame Residential lmpact Fee Nexus Study -52-
(commercial linkage and housing fees) would - when combined -mitigate less than 100
percent of the total impact.
Draft Burlingame Residential lmpact Fee Nexus Study -53-
VII. FEASIBILITY AND POLIGY CONSIDERATIONS
There are a number of policy considerations that can be taken into account when jurisdictions
consider adopting an affordable housing impact fee on new market-rate development. These may
include factors such as the likely impact of the proposed fee levels on local housing development, the
competitiveness of the city in attracting development relative to neighboring jurisdictions, the impact
of the proposed fee on existing city fee level, and the role of the proposed fee in meeting the city's
overall affordable housing objectives. This section provides a discussion of some of the key financial
and policy questions for Burlingame.
FINANCIAL FEASI BILITY ANALYSIS
Summary of Residential Prototypes
As discussed in more detail in Section III of this report, this nexus analysis is based on three
residential prototypes: single-family attached units, ownership condominiums and rental apartments.
Figure VII-1 summarizes the characteristics of the three development prototypes that were tested for
financial feasibility. These prototypes are representative of the types of market rate housing
development projects that can reasonably be expected in Burlingame. The single-family attached
units are Type V wood frame buildings with a tuck-under parking, a density of 12 units per acre, and
an average net area per unit of 1,900 square feet. The condominiums are Type V wood frame
buildings with underground parking and a density of 38 units per acre. The average net residential
area is 1,650 square feet per unit. Half of the condominium units are two-bedroom units, and the other
half are three-bedroom units. The apartment prototype building is Type V wood frame construction,
with podium parking and a density of 40 units per acre. The average net area per unit is 1,000 square
feet. Half of the apartment units are one-bedroom units, and the other half are two-bedroom units.
Fig u re V I l - 1 . Resid e nti al Prototype s
Building Characteristics
Single-Family
Attached Condominiums Apartments
Building Type
Total Residential Units (a)
Avg. Size Unit in Square Feet
(SF)
Net Square Footage (NSF)
Parking Type
Efficiency Factor (b)
Gross Square Footage (GSF)
Floor Area Ratio (FAR) (c)
Land Area (SF)
Land Area (Acres)
Units per Acre
Type V
20
Type V
20
Type V
200
1,000
200,000
Podium
65Yo
307,692
1.4
219,780
5.05
40
1,900
38,000
Tuck-Under
85Yo
44,706
0.6
74,510
1.71
12
1,650
33,000
Underground
85%
38,824
1.7
22,837
0.52
38
Notes:
(a) Unit characteristics are described in more detail in Section lll.
(b) Ratio of leasable square footage to gross square footage.
(c) Floor area ratio (FAR) measures density by dividing gross building area by total site area.
Source: Vernazza Wolfe Associates, lnc. and Skategic Economics, 2015.
Draft Burlingame Residential lmpact Fee Nexus Study -54-
Fee Levels
In order to provide Burlingame with guidance on how proposed fees could impact development
decisions, the Consultant Team conducted a financial feasibility analysis that tested the impact of
different fee scenarios on developer profit. In addition to the maximum nexus-based level, three
additional fee scenarios were evaluated for each prototype. These calculations provide Burlingame
with an understanding of the impact of different fee scenarios on the financial feasibility of residential
development projects.
Figure VII-2 demonstrates the calculated fees per unit for each prototype for all four scenarios. The
fees can also be calculated on per square foot basis. The per-square-foot fees at different fee levels are
shown in Figure VII-3.
Figure Vll-2. Fee Levels per Unit for Prototypes
Net Scenario 1
Residential (Maximum Scenario 2 Scenario 3 Scenario 4
Prototype SF per Unit Fee)
Single-Family Attached 1,900 $98,541 $95,000 $76,000 $47,500
Condominium 1,650 $91,598 $82,500 $41,250 $24,750
Apartments 1 ,000 $85,253 $50,000 $25,000 $15,000
Sources: Vemazza Wolfe Associates, lnc.; Strategic Economics, 2015.
Figure Vll-3. Fee Levels per Square Foot for Prototypes
Prototype
Single-Family Attached 1,900 $52 $50 $40 $25
Condominium 1 ,650 $56 $50 $25 $15
Apartments 1,000 $85 $50 $25 $15
Sources: Vemazza Wolfe Associates, lnc.; Strategic Economics, 2015.
Methodology
Financial feasibility of the fee options was tested using a pro forma model that measures the residual
land value of a given development project. Many pro forma models are structured to solve for the
financial retum for the developer or investors (internal rate of return). In contrast, the residual land
value method of analysis solves for the value of the land. This method recognizes that the value of
land is inextricably linked to what can be built on it, and that development potential is heavily
influenced by zoning, lot sizelconfiguration, neighborhood context, and other factors. The pro forma
model tallies all development costs (minus land) including direct construction costs, indirect costs
(including financing), and developer fees. Revenues from unit sales or rental leases are then summed.
The total project costs are then subtracted from the total project revenues. The balance is the residual
value, representing the price a developer would pay for the land if pursuing that project. The fee
levels were then added as an additional development cost to measure the effect on the residual land
value.
Revenues
To estimate income from residential development, the analysis uses the sales prices and monthly rents
presented in Section III of this report and summarized in Figure VII-4. These revenue assumptions
were based on a review of local and regional market data, including information on the type of
Net
Residential
SF per Unit
Scenario 1
(Maximum
Fee)
Scenario 2 Scenario 3 Scenario 4
Draft Burlingame Residential lmpact Fee Nexus Study -55-
development that has been recently constructed or is planned or proposed in Burlingame; and current
sales prices and rental rates of recently built (or sold) residential development in Burlingame and
neighboring cities. For single-family attached and condominium projects, the revenues are calculated
by multiplying the unit count by the sales price. Single-family attached units are estimated at
$1,132,000 and condominium units at S942,000 or $1,080,000, depending on size. For rental projects,
the revenues were estimated using an income capitalization approach. This valuation approach first
estimates the annual net operating income (NOI) of the apartment prototype, which is the difference
between total project income (annual rents) and project expenses, including operating costs23 and
vacancies. The NOI is then divided by the capitalization rate (cap rate) to derive total project value.
Figure VII-5 summarizes the calculations and data source used for estimating the value of the
apartment prototype.
Figure Vll-4. Prototype Sa/es Prices and Rents
Prototype Unit Type
Unit Sales
Price/
Monthly
Rent
Number of
Units
Net Area
(Sr1
Price or
Rent per
SF
Single-Family Attached (For-Sale)
Type V wood frame
12 units per acre
Tuck-under podium parking
Net Residential Area
Condominiums (For-Sale)
Type V wood frame
38 units per acre
Subterranean parking
Net ResidentialArea (Net SF)
Average Net SF per Unit
Apartments (Rental)
Type V wood frame
40 units per acre
Podium parking
3 BD/3 BA
2BDI2BA
3 BD/2 BA
,I BD/1 BA
2BDI2BA
20 1,900 $1,132,000 $596
38,000
1,500
1,800
33,000
1,650
800
1,200
200,000
1,000
$942,000
$1,080,000
$3,600
$4,300
$628
$600
$4.50
$3.58
100
100
Net Residential Area (Net SF)
Averaqe Net SF per Unit
Sources: Strategic Economics &Yernazza Wolfe Associates, lnc., 2014.
23 Operating costs were calculated based on the lnstitute of Real Estate Management Survey of Apartment
Buildings in the San Francisco Metropolitan Statistical Area (MSA).
Draft Burlingame Residential lmpact Fee Nexus Study -56-
10
10
Figure Vll-5. Apartment Revenue Calculations
Apartment Revenues Calculation Total
Gross Annual Rental lncome (a)
Operating Expenses (b)
Vacancy (c)
Annual Net Operating lncome (c)
Capitalization Rate (d)
Capitalized Value
Gross annual rents
30 percent of income
5 percent of income
lncome less expenses
and vacancy
5 percent
Project value
$9,480,000
($2,844,000)
($474,000)
$6,162,000
5.00%
$123,240,000
Notes:
(a) Average monthly rents multiplied by l2 months multiplied by unit count for each unit type.
(b) lnstitute of Real Estate Management, San Francisco MSA Apartment Properties, 201 1.
(c) Assumes a vacancy rate of 5 percent in a stabilized rental market.
(d) According to DTZ's San Francisco Real Estate Forecast 2015, the cap rate for
apartments is approximately 5 percent.
Sources: IREM, DTZ, Strategic Economics, 2015.
Development Costs
Cost estimates for the residential prototypes include direct construction costs (site work, building
costs, and parking), indirect costs, financing costs, and developer overhead and profit. Development
cost estimates for the pro forma analysis are distinct from the cost estimates provided in the
countywide affordability gap analysis. Direct building construction cost estimates are based on RS
Means and project pro formas for recent projects in San Mateo County.2a Soft costs and developer
overhead/profit were calculated based on a review of similar project pro formas in the Bay Area. City
fee calculations were provided by City staff. Each of the cost factors used in the analysis is
summarized in Figure VII-6.
2a The development cost estimates used in the pro forma analysis are slightly different from those used in the
affordability gap analysis because they include more recent real estate data, and are more tailored for
Burlingame and Central San Mateo County, rather than an overall estimate for the entire county. Furthermore,
the market-rate units are generally larger and costlier to build than the "modest" units described in the
affordability gap analysis.
Draft Burlingame Residential lmpact Fee Nexus Study -57.
Figure Vll-6. Development Cost Factors
Development Costs
Direct Costs (a)
Single-Family Attached
Condominiums
Apartments
lndirect Costs (b)
A&E & Consulting
Permits & Fees (Excl. Housing) (c)
Taxes, lnsurance, Legal & Accounting
Other (d)
Contingency
Total lndirecl Costs
Financing Costs (b)
Loan to Cost Ratio (LTC)
Loan lnterest Rate
Compounding Period
Construction/Absorption Period (e)
Utilization Rate
Loan Fees
Developer Overhead & Profit
aoyo
6%
12
12 to 24
55./o
2o/o
of total costs
annual rate
months
months
of loan
of loan
$150
$225
$210
Per NSF
Per NSF
Per NSF
6.00%
3.00%
3.00%
5.00%
12% of total costs (excl. land)
Notes:
(a) Direct costs include site wolk, bujlding construclion, and parking costs of$3O,0OO per space
for underg.ound parking and $25,000 p€r space for podjum parking. Costs estimates are based
on review of Bay Area pro formas for similar projects and data from RS Moans.
(b) Based on review of similar project pro formas in the Bay Area and interviews with developers.
(c) Permits & fees are a generalized estimate of costs based on prototypes, calculated by City
staff. Permits and fees for actual p.ojects varydepending on many facto6.
(d) Other sofr costs include marketing, personal property, environmontal studies, etc.
(e) Absorption periods are estimated at 24 months for apartments, condominiums and singte-
family attached units; and 18 months for single-family subdivisjons.
Sources: RS i,leans, 2014; Similar pro formas; Burlingame, 2015; Strategic Economics, 2015.
Draft Burlingame Residential lmpact Fee Noxus Study -58-
Metric
of direct costs
estimated by City
of direct costs
of direct costs
of indirect costs
Land Value
In order to understand what the different fee levels indicate regarding financial feasibility, the residual
land values for each fee scenario can be compared with the market value of residential land in
Burlingame. If the residual value is higher than the market value, the project is feasible. If the residual
value is lower than the market price, then the project is infeasible.
To determine the land value of sites zoned for lower density uses (single-family attached units) and
higher density multi-family residential uses (condominiums and rental apartments), the Consultant
Team analyzed recelt sales transactions in Central San Mateo County, and reviewed third-parfy
property appraisals. 2s Figure VII-7 illustrates the results of the land value analysis for lower density
single-family attached residential uses, while Figure VII-8 shows the value of properties zoned for
higher density multi-family residential uses. For lower density residential uses, values range
considerably depending on location and size, from $28 per square foot for the lower quartile, to $44
per square foot for the upper quartile. For higher-density multi-family housing, the average value is
$201 per square foot. For this analysis, the estimated land value is $25 to $50 for lower density sites,
and between $175 and $225 per square foot for higher density multi-family development, including
condominiums and apartments. For all prototypes, the market value of land is presented as a range
because the land value of properties is likely to vary depending on location, size, and other
conditions.
2s The land value assumptions utilized in the pro forma analysis are different from the affordability gap analysis in
two ways: 1) they include more recent transactional data than the affordability gap analysis, which was
completed in July 2014; and 2) they are tailored to Burlingame and Central San Mateo County, unlike the
affordability gap estimate, which is a countywide estimate.
Draft Burlingame Residential lmpact Fee Nexus Study -59-
Figure Vll-7. Single-Family Vacant Land Sa/es lransactions in Central San Mateo County
Address City Sale Price Lot Area Price/ SF Land
Naughton Ave
Cipriani
2200 Ralston Ave
Marsten Ave
Naughton
Naughton
Belmont Ave 1
Belmont Ave 1
Belmont Ave 1
Belmont Ave 1
1724ferace Dt
17'17 Notre Dame Ave
383 Siena Dr
1085 Parrott Dr
30 Cinnamon Ct
275 Robin Rd
101 Tiptoe Ln
77 New Place Rd
138 New Place Rd
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Belmont
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
Hillsborough
$1 50,000
$1 s0,000
$225,000
$200,000
$256,000
$256,000
$920,000
$920,000
$920,000
$920,000
$315,000
$299,000
$1 1,800,000
$'1,450,000
$2,200,000
$999,000
$1,280,000
$1,780,000
$1,7s0,000
$3,500,000
$2,512,500
$4,750,000
5,000
6,750
3,950
8,712
8,250
10,350
4,280
7,827
4,000
9,425
11,81?
7,250
124,582
29,250
34,717
22,651
zc,zo)
42,400
71,874
1 48,958
68,475
1't4,998
$30.00
$22.22
$56.96
$22.96
$31.03
$24.73
$36.03
$36.03
$36.03
$36.03
$26.67
$41.24
$94.72
$49.57
$63.37
$44.10
$50.66
$41.98
$24.3s
$23.s0
$36.69
$41.31
Summary Statistics
Lower Quartile (25%)
Median Value
LJoDer Ouartile (75%)
$27.50
$36.03
$43_57
Source: CoreLogic, 2015; Strategic Economics, 2015.
Drafl Bulingame Residential lmpact Fee Nexus Sludy -60-
Figure Vll-8. MultiFamily Vacant Land Sales Transactions in Central San Mateo County, 2009-2014
Site Address Location Price Lot Area
Price/ SF
Land
1950 Elkhom Court
E. Side of Tilton Ave/N. El Camino Real
1 840 Ogden Dr.
2790 S. El Camino Real
10 Barneson
Shea Homes of Northem CA
TRI Pointe Homes, LLC
Summary Statistics
Average Value per SF
San Mateo
San Mateo
Burlingame
San Mateo
San Mateo
San Mateo
San Mateo
$16,745,000
$4,505,000
$7,180,000
$6,1 00,000
$2,530,000
$13,480,000
$22,5't0,000
88,862
33,572
38,768
14,331
15,341
79,279
132,422
$188
$134
$18s
$426
$131
$1 70
$1 70
$201
s1 80weiohted Averaoe Value oer SF
Source: Proporty appraisals; DataQuick, 2015; Loopnet,2015; Strategic Economics, 2015
Drafr Burlingame Residential lmpact Fo€ Nexus Sludy -61-
Financia! Feasibility Results
Figures VII-9 and VII-10 provide the pro forma for the single-family attached, condominium and
apartment prototypes. Below is a discussion of the findings.
Single-Family Attached
According to the feasibility analysis, with no added nexus fees, the single-family attached prototype
would have total development costs of $8.4 million and a sale value of $22.6 million. The residual
land value, without nexus fees, is estimated at $191 per square foot. This residual land value is higher
than the current value of land in Burlingame for single-family attached units, estimated at between
$25 and $50 per square foot.
The analysis shows that under current market conditions, the single-family attached prototype can
also support a maximum impact fee of $52 per square foot. The maximum housing impact fee level
brings development costs from $8.4 million to $10.4 million. This cost increase results in a residual
land value of $165 per square foot, which is higher than the current market value of land in
Burlingame. Lower fee levels result in higher residual land values, and are even more economically
viable from the perspective ofa developer.
Condominiums
The feasibility analysis estimates that under current sales prices, the condominium prototype would
have revenues of 520.2 million, and a total development cost of $11.9 million. The difference
between the revenues and costs is the residual land value, which is estimated at $365 per square foot.
This residual land value is higher than the current market value of multi-family land in Burlingame,
which is between $175 and 5225 per square foot.
The analysis shows that under current market conditions, the condominium prototype can also
support a maximum impact fee of $56 per square foot. The maximum housing impact fee level brings
development costs from $11.9 million to $13.7 million. This cost increase results in a residual land
value of 5284 per square foot, which is higher than the current market value of multi-family land in
Burlingame. As in the case of the single-family attached prototype, lower fee levels result in higher
residual land values, and are even more economically viable from the perspective of a developer.
Apartments
For apartments, the financial analysis shows that under current market conditions, without a nexus fee
on affordable housing, a prototypical apartment development costs approximately $70.9 million, with
a total project value of $123.2 million. The residual land value on this prototype, excluding a nexus
fee, is estimated at $262 per square feet. The current market value of multi-family land in Burlingame
is between $175 and 5225 per square foot.
Scenario l, the maximum nexus fee of $85 per square foot, results in a residual land value of $160 per
square foot, which is below the market value of higher density residential land in Burlingame, making
the project infeasible to develop under current conditions. The lower fee scenarios of $50, $25 and
$15 per square foot are all financially feasible under current rental rates, yielding a residual land value
of over $175 per square foot. The following summarizes the results for the apartment prototype:
. The maximum justified impact fee of $85 per square foot raises development costs to $87.9
million, and accounts for 15.9 percent of total project costs. The residual land value is $ 160
per square foot, below the threshold required for financial feasibility.
Draft Burlingame Residential lmpact Fee Nexus Study -62-
Scenario 2, a reduced impact fee set at $50 per square foot raises development costs to $80.9
million, making tp 5.2 percent of total development costs. This fee scenario is financially
feasible under today's market conditions, with a residual land value of $ 193 per square foot.
Scenario 3, a fee level of $25 per square foot results in development costs of $75.9 million.
This fee level would make up 2.7 percent of total development costs. The residual land value
is $215 per square foot.
Scenario 4,afee of $l5persquarefootresultsinatotaldevelopmentcostof $73.9million.
The fee is 1.4 percent of total development costs, and the residual land value is $224 per
square foot.
a
a
a
Draft Burlingame Residential lmpact Fee Nexus Study -63-
Figure Vll-9. Pro Forma ModelResulfs for the Single-Family Attached Prototype
rplrl€ht Land Nexus
Fee)
Direct Costs (a)
Building & On-Site lmprovements
Building & Onsite per NSF
Parking
Total Direct Costs
Total Direct Costs per NSF
lndirect Costs (a)
A&E & Consulting
Permits & Fees (Excl. Nexus fee) (b)
Taxes, lnsurance, Legal & Accounting
Other lndirect Costs
Contingency
Total lndirect Costs
Financing Costs (a)
Developer Overhead & Profit (a)
Total Development Costs
Total Development Costs (per NSF)
lncome
Gross lncome/Sales Proceeds
Less: Operating/Sales Expenses &
Vacancy
Net (Operating or Sales) lncome
Gapitalized Value/Sales Value (c)
Residual Land Value Analysis
Total Development Costs (TDC) Except
Land With Various Levels of Nexus Fee
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Scenario 4
Residual Land Value per Sq. Ft. at Various
Nexus Fee Levels
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Scenario 4
Nexus Fee as Percentage of Total
Development Costs
No Fee
Scenario 'l : Max Fee
Scenario 2
Scenario 3
Scenario 4
Current Land Values/ Threshold for
Feasibility
$17,100
$32,072
$8,550
$8,550
$3,314
$69,585
$19,715
$44,916
$419,21 6
per Unit
$285,000
lncl. above
$285,000
Total
$5,700,000
$1s0
lncl. above
$5,700,000
$1 50
$342,000
$641,432
$171,000
$171,000
$66,272
$1,391,703
$394,299
$898,320
$8,384,322
$221
$22,640,000
$22,640,000
$22,640,000
TDG incl. Nexus Fee
$8,384,322
$10,355,135
$10,284,322
$9,904,322
$9,334,322
Residual Land Value
per SF
$1 91
$1 65
$1 66
$1 71
$1 79
Fee as % of TDC
0.00%
15.58%
14.40%
't2.83%
11.20%
$25-$50
$1,132,000
$1 ,132,000
$1,132,000
Nexus Fee per NSF
$o
$52
$so
$40
$25
Nexus Fee per NSF
$o
$52
$50
$40
$25
Nexus Fee per NSF
$o
$sz
$s0
$40
$2s
Noles:
(a)
(b)
See Figure Vll-5.
This represents a generalized estimate of the fee and permit costs for each prototype, calculated by city staff. Actual fee and permit costs for
development proiects will vary depending on many factors.
(c) See Figure Vll-4.
(d) Feasibility threshold varies by density of prototype. For single-family attached, the threshold is $35 - $120 per square foot. For mutti-family
rental apartments and condominiums, the threshold is $1 70 to $250 per square foot
Acronyms:
SF: square feet
NSF: net square foot
TDC: total development costs
Source: Strategic Economics, 201 5.
Draft Burlingame Residential lmpact Fee Nexus Study -64-
Figure Vll-10. Pro Forma ModelResulfs for Condominium and Apartment Prototypes
Development Costs
Nexus Fee)
Direct Costs (a)
Land
Building & On-Site lmprovements
Building & Onsite per NSF
Parking
Total Direct Costs
Total Direct Costs per NSF
lndirect Costs (a)
A&E & Consulting
Permits & Fees (Excl. Nexus fee) (b)
Taxes, lnsurance, Legal & Accounting
Other lndirect Costs
Contingency
Total lndirect Costs
Financing Costs (a)
Developer Overhead & Profit (a)
Total Development Costs
Total Development Costs (per NSF)
lncome
Gross I ncome/Sales Proceeds
Less: Operating/Sales Expenses &
Vacancy
Net (Operating or Sales) lncome
Capitalized Value/Sales Value (c)
Residual Land Value Analysis
Total Development Costs (TDC) Except
Land With Various Levels of Nexus Fee
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Scenario 4
Residual Land Value per Sq. Ft. at
Various Nexus Fee Levels
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Scenario 4
Nexus Fee as Percentage of Total
Development Costs
No Fee
Scenario 1: Max Fee
Scenario 2
Scenario 3
Scenario 4
Current Land Values/ Threshold for
Feasibility
$1,011,000 $20,220,000 $47,400 $9,480,000
per Unit
$371,250
$45,000
$416,250
Total
$7,425,000
$225
$900,000
$8,325,000
$252
$499,500
$652,08s
$249,750
$249,7s0
$82,554
$1,733,639
$559,260
$1,274,148
$11,892,047
$360
$20,220,000
$20,220,000
per Unit
$210,000
$37,500
$247,s00
Total
$42,000,000
$21 0
$7,500,000
$49,500,000
$248
$24,975
$32,604
$12,488
$12,488
$4,1 28
$86,682
$27,963
$63,707
$s94,602
$14,8s0
$16,595
$7,425
$7,425
$2,31s
$48,610
$20,372
$37,978
$354,460
$2,970,000
$3,318,989
$1,485,000
$1,485,000
$462,949
$9,721,939
$4,074,469
$7,595,569
$70,891,977
$354
$1,01
$1,01
1,000
1,000
Nexus Fee per
NSF
$0
$56
$50
$25
$15
Nexus Fee per
NSF
$0
$56
$50
$25
$15
Nexus Fee per
NSF
$0
$56
$50
$25
$15
$16,590
$30,810
$616,200
$3,318,000
$6,162,000
$'123,240,000
TDC incl.
Nexus Fee
$11,892,047
$13,724,007
$13,s42,047
$12,717,047
$12,387,047
Residual Land
Value per SF
$36s
$284
$292
$329
$343
Fee as % of
TDC
0.00%
13.07o/o
5.69%
2.35%
1.19%
Nexus Fee per
NSF
$0
$85
$50
$25
$15
Nexus Fee per
NSF
$0
$85
$50
$25
$15
Nexus Fee per
NSF
$0
$85
$so
$25
$15
TDC incl.
Nexus Fee
$70,891,977
$87,942,513
$80,891,977
$75,891,977
$73,891,977
Residual Land
Value per SF
$262
$1 60
$1 93
$21 5
$224
Fee as % of
TDC
0.00%
15.89%
5.19%
2.67%
1.35o/o
$1 75-$225 $1 75-$225
Notes:
(a) See Figure Vll-s.
(b) This represents a generalized estimate of the fee and permit costs for each prototype, calculated by city staff. Actual fee and permit costs for
development projects will vary depending on many factors.
(c) See Figure Vll-4.
(d) Feasibility threshold varies by density of prototype. For single-family attached, the threshold is $35 - $120 per square foot. For multi-family
rental apartments and condominiums, the threshold is $170 to $250 per square foot
Acronyms:
SF: square feet
NSF: net square foot
TDC: total development costs
Source: Strategic Economics, 201 5.
Draft Burlingame Residential lmpact Fee Nexus Study -65-
ADDITIONAL POLICY CONSIDERATIONS
While the nexus study provides the necessary economic analysis for the residential impact fees, it is
up to policymakers to decide what percentage of the maximum fee to be charged on new
development. Financial feasibility is one important factor to examine. In addition, there are a number
ofother policy issues to consider, such as:
o How much residential fees would increase with a new residential impact fee;
o How a residential impact fee in Burlingame would compare with those in neighboring
jurisdictions; and
r How a residential impact fee fits into Burlingame's overall housing strategy.
A discussion of each of these topics is presented below.
Gomparison to Existing Fees on Residential Development
Figure VII-1l presents information on current city fees charged on the three residential prototypes
included in this nexus analysis. It also demonstrates the effect of the residential impact fee scenarios
on overall city permits and fees.
Currently, Burlingame's fees for the residential prototypes are estimated to range from $17 to $20 per
square foot for the three prototypes.26 Once the nexus-based residential impact fees at various levels
are added to existing fees, the total fees increase as presented in Figure VII-I1. The maximum fee
(Scenario l) increases total fees by over 400 percent for all prototypes.
'u The fee estimates presented above represent the best approximations available from Burlingame,
Draft Burlingame Residential lmpact Fee Nexus Study -66-
Figure Vll-l 1. Burlingame Total Residential Fees Under Selected Fee Scenarios
Fees)
Existing Fees and Permits per SF (Excl. Nexus Fees)
$32,072 $32,604
Fee Scenario'l: Maximum Fees
Nexus Fee per SF
Combined Fees per SF
Fee Scenario 2
Nexus Fee per SF
Combined Fees per SF
Fee Scenario 3
Nexus Fee per SF
Combined Fees per SF
Fee Scenario 4
Nexus Fee per SF $25 $15 $15
Combined Fees persF $42 $35 $32
Sources: City staff, 2015; Strategic Economics, lnc; Vemaza Wolf€ Associatos, lnc., 2015.
Draft Burlingame Residential lmpact Fee Nexus Srudy
$17
$52
$69
$50
$67
$40
$s7
$16,595
$17
$85
$102
$s0
$67
$25
$42
$20
$56
$7s
$50
$70
$25
$45
-67-
Comparison to Neighboring Jurisdictions
It is challenging to compare the potential residential impact fee in Burlingame to the adopted fees in
neighboring jurisdictions, because most cities in San Mateo County are participating in the multi-city
nexus studies, and the fee levels may change. However, Figure VII-14 provides the most up-to-date
information available to compare Burlingame's potential fee scenarios to existing residential impact
fees in jurisdictions in San Mateo and Santa Clara Counties.
For condominiums, the lower end of the recommended fee range ($25 to $50 per square foot) is
comparable to the housing impact fees in Cupertino, East Palo Alto, and Daly City. For apartments,
the recommended fee range of $25 to $50 per square foot is higher than the housing impact fees in
most neighboring cities, which tend to be between $15 and $25 per square foot. The exception is the
City of San Carlos, which has a housing impact fee of between $24 and $44 per square foot for
apartments.
Draft Burlingame Residential lmpact Fee Nexus Study -68-
If the maximum impact fees calculated for Burlingame were adopted for the three prototypes, they
would all exceed the fees charged in neighboring jurisdictions, as listed in Figure VII-12. The
recommended fee level of between $40 and $50 per square foot for the single-family attached
prototype is slightly higher than in most nearby cities, with the exception of San Carlos. The
recommended fee levels for the single-family attached prototypes are equivalent to between seven
and eight percent of the sales price, which is comparable with the inclusionary in lieu fee in
Sunnyvale, set at seven percent ofsales price.
Figure Vll-12. Comparison with Fees in Neighboring Jurisdictions
Single Family
Attached Condominiums Apartments
Date Fee Was
Adopted
Burlingame Fee Scenarios
Scenariol-MaximumFee
Per SF
Per Unit
Scenario 2
Per SF
Per Unit
Scenario 3
Per SF
Per Unit
Scenario 4
Per SF
Per Unit
lmpact Fees
Cupertino
Daly City
East Palo Alto
Mountain View
San Carlos (b)
N/A
N/A
N/A
N/A
$85
$s0$50
$40
$52
$98,541
$9s,000
$76,000
$25
$47,500
$22lSF
2015
2014
2014
2015
2010
2014
2015
$s6
$91,598
$50
$82,500
$2s
$41,250
$15
$24,750
$2olsF
$22lSF
$22-$aalSF (a)
N/A
$20.59-$42.20/SF
N/A
N/A
3% of Sales Price
lnclusionary @15% or
517/SF inJieu fee
7% of Sales Price
$85,253
$s0,000
$25
$25,000
$15
$15,000
$25lSF
$25lSF
$22lSF
$15/SF
$23.54-$43.54/SF
$17lSF (c)
$17lSF (d)
$15/SF
$1 4/SF
$23.54-$43.s4lSF
N/A
San Jose N/A
Sunnyvale N/A
lnclusionary Policies and ln-Lieu Fees
Mountain View 3% of Sales Price
lnclusionary @15% or
San Jose (e) $17lSF inlieu fee
Sunnwale 7olo of Sales Price
N/A
N/A
N/A
2015
2014
2015
Notes:
(a) Fee ranges from $22 per square foot for for-sale housing without structured parking to $,14 per square foot for housing with structured parking.
(b) Fees shown as ranges. Actual fees charged depend on project siz€.
(c) Fee goes into effect in 2016. Developments approved by July 2016 are exempt with a longer exemption for downtown development.
(d) Fees for projects that are between 4 and 7 units pay 50 percent of lhis fee.
(e) lnclusionary policy and in-lieu fee apply to for-sale developments of more than 20 units.
Sources: The Non-Profit Housing Association of Northem California; City of San Carlos Municipal Code; Vemaza Wolfo Associates, lnc; Strategic Economics, 2015.
Draft Burlingame Residential lmpact Fee Nexus Sfudy -69-
The potential fee scenarios can also be compared with existing residential impact fees in other Bay
Area cities outside of San Mateo County and Santa Clara Counry for regional context. This list is not
an exhaustive inventory of all Bay Area cities with residential impact fees, but it provides information
about many cities that have fees on housing. As shown in Figure VII-13, housing impact fees in other
Bay Area cities vary significantly from city to city.
Figure Vll-l3. Existing Housing lmpact Fees in Bay Area Cities
City Project Type Amount
Berkeley
Emeryville
Fremont
Livermore
Napa
Rental Development
Rental Residential Projects
For-Sale and Rental Development
For-Sale and Rental Development
For Sale and Rental Development
$28,000 per unit
($8,000 discount for eligible projects)
$20,000 per dwelling unit
$19.50 per habitable SF
$22.50 per habitable SF for single family homes
on lots 6,000 SF or greater.
Based on type of dwelling produced
Single Family: $ 2.20 per SF
Condo: $2.20 per SF
Rental: $3.75 per sq.
Single Family (over 1,500 SF): $10,880 per unit
Single Family (1,500 SF or less) and Multi-family
(Apt. or Condo): $2,696 per unit
Adjusted annually based on CPI
$199,698 per studio unit
$270,411 per 1 bedroom unit
$367,71 1 per 2 bedroom unit
$419,621 per 3 bedroom unit
$522,545 per 4 bedroom unit
2.5o/o of sale price of for-sale units. Based on SF
for rentals
Pleasanton For-Sale and Rental Development
San Francisco Any housing project that consists
of five or more units
Santa Rosa For-Sale and Rental Development
Sources: The Non-Profit Association of Northern Califomia, Strategic Economics, and Vemazza Wolfe
Associates, |nc, 201 5.
Role of Fees in Overall Housing Strategy
Burlingame does not currently have a residential impact fee program or commercial linkage fee
program. In January 2015, Burlingame has adopted a Density Bonus Ordinance replacing its
inclusionary zoning ordinance. The Density Bonus ordinance states that for residential projects of five
or more units, developers are granted a density bonus of 20 percent for building any of the following:
10 percent of units as affordable to lower income households, five percent of units as affordable to
very low income households, a senior citizen housing development, or a qualifying mobile home
park. A density bonus of five percent is granted for developers building at least ten percent of
dwelling units affordable for moderate income households. The revenues to be collected from a
residential impact fee provide an important source of local funding; however, fee revenues do not
generally cover the entire funding gap encountered by sponsors of new affordable housing.
Additional funding is almost always required.
Currently, affordable housing in Burlingame is funded through the use of a variefy of sources,
including funding provided by Burlingame and San Mateo County, as well as the federal government,
e.g., the CDBG and HOME Program. In addition, equity is also provided directly by developers and
indirectly raised through the allocation and sale of Low Income Housing Tax Credits. Finally, a
Draft Burlingame Residential lmpact Fee Nexus Study 70-
portion of permanent financing comes from conventional loans obtained from private lending
institutions.
Residential impact fee revenues (and commercial linkage fee revenues, if adopted) would augment
existing affordable housing funds. The existence ofa local revenue source such as nexus fees can also
make certain projects more competitive for outside funding. It should be noted that revenues from a
residential impact fee need to be spent on housing that benefits the workforce since the funds stem
from affordable housing impacts related to new employment.
Potentialfor Overlap between Residential and Commercial Fees
The City is also undertaking a commercial linkage nexus study simultaneously, and may soon adopt a
commercial linkage fee in a parallel process to the residential impact fee considered in this report.
One issue that may arise if a city considers the adoption of both fees is whether there is any overlap
between the two impact fees, resulting in potential "double-counting" of impacts.
The commercial linkage fee study examined jobs located in new commercial buildings
including office/ R&D/ medical office buildings, retail/ restaurants/ services, and hotels.
The nexus analysis then calculated the average wages of the workers associated with each
commercial building to derive the annual income of the new worker households. The
analysis determines the area median income (AMI) level of the new worker households to
identify the number of worker households that would require affordable housing.
a
a The residential impact fee nexus analysis examines households buying or renting new
market rate units in the jurisdiction. The household expenditures by these new residents
have an economic impact in the county, which can be linked to new jobs. The nexus
analysis quantified the jobs linked to new household spending, and then calculated the
wages of new workers and the household income of new worker households. Each worker
household was then categorized by AMI to determine the number of households that require
affordable housing.
There may be a share ofjobs counted in the commercial linkage fee analysis that are also included
in the residential nexus analysis, particularly those in the service sector. Other types ofjobs counted
in the residential nexus analysis are unique to that analysis, and are not included in the commercial
linkage fee analysis (for example, public sector employees). The commercial linkage fee analysis
is limited to private sector office/ R&D/ medical office buildings, hotels, and retail/ restaurants/
services space.
There is potential that some jobs could be counted in both analyses, and that the two programs may
overlap in mitigating the affordable housing demand from the same worker households. Each of the
proposed fees is required to mitigate no more than 100 percent of the demand for affordable units by
new worker households. In order to reduce the potential for overlap between the two programs, it is
advisable to set both the commercial linkage fees and housing impact fees at below 100 percent of the
nexus-based maximum. In this way, when combined, the programs would mitigate less than 100
percent of the impact even if there were overlap in the jobs counted in the two nexus analyses.
Administrative lssues
When adopting a residential impact fee, there are several administrative issues to consider. First, does
the City want to encourage smaller units? By charging lower fees for smaller units, it is possible that
it could encourage development of smaller units.
Draft Burlingame Residential lmpact Fee Nexus Study 71
Secondly, similar to any impact fee, it will be necessary to adjust the residential impact fees on an
annual basis. Adjustments are also needed due to possible changes in the affordability gap. However,
the connection between new residential construction and growth in employment derived from the
IMPLAN3 Model is unlikely to change in the short run.
It is advisable that the City adjusts its residential impact fee annually by using an annual adjustment
mechanism. An adjustment mechanism updates the fees to compensate for inflation in development
costs. To simplify annual adjustments, it is recommended that the City select a cost index that is
routinely published. While there is no index that tracks changes in Burlingame's development costs,
including land, specifically, there are a few options to consider'
The first option is the Consumer Price Index (CPI) Shelter component. The shelter
component of the CPI covers costs for rent of primary residence, lodging away from home,
owner's equivalent rent of primary residence, and household insurance. Of the total shelter
index, costs associated with the owner's equivalent rent of primary residence constitute 70
percent oftotal costs entered into the index.
o A second option to adjust the fee for annual inflation is the construction cost index published
in the Engineering News Record (ENR). This index is routinely used to update other types of
impact fees. Cost index information for the San Francisco region, the smallest geographical
area available for this purpose, is available on an annual basis. The ENR cost index measures
inflation in construction costs, but it does not incorporate changes in land costs or public fees
charged on new development.
Because these indices are readily available, reliable, and relatively simple to use, it is recommended
that Burlingame use these indices for annual adjustments. However, because both understate the
magnitude of inflation, it is recommended that the City base its annual adjustment mechanism on the
higher of the two indices (CPI or ENR), using a five-year moving average as the inflation factor.
In addition to revising the fee annually for inflation, the City is encouraged to update the residential
impact study every five years, or at the very least, update the housing affordability gap used in the
basic model. The purpose of these updates is to ensure that the fee is still based on a cost-revenue
structure that remains applicable in the Burlingame housing market. In this way, the fee will more
accurately reflect any potential structural changes in the relationships between affordable prices and
rents, market-rate prices and rents, and development costs.
a
Draft Burlingame Residential lmpact Fee Nexus Study 72-
VIII. GLOSSARY OF TERMS AND AGRONYMS
GLOSSARY OF TERMS
Affordable Housing: Under state and federal statutes, housing is defined as affordable if housing
costs do not exceed 30 to 35 percent ofgross household income.
Annual Adjustment Mechanism: Due to inflation in housing construction costs, it is frequently
necessary to adjust impact fees. An index, such as the Consumer Price Index (CP! or a published
construction cost index (for example, from the Engineering News Record) is used to revise housing
fees to reflect inflation in housing construction costs.
Assisted Housing: Housing that has received public subsidies (such as low interest loans, density
bonuses, direct financial assistance, etc.) from federal, state, or local housing programs in exchange
for restrictions requiring a certain number of housing units to be affordable to very low-, low-, and
moderate-income households.
Consumer price index (CPI): Index that measures changes in the price level of a market basket of
consumer goods and services purchased by households.
Employment Densities: The amount of square feet per employee is calculated for each property use
that is subject to a commercial development housing linkage fee. Employment densities are used to
estimate the number of employees that will work in a new commercial development.
Household: The US Census Bureau defines a household as all persons living in a housing unit
whether or not they are related. A single person living in an apartment as well as a family living in a
house is considered a household. Households do not include individuals living in dormitories,
prisons, convalescent homes, or other group quarters.
Household Income: The total income of all the persons living in a household. Household income is
commonly grouped into income categories based upon household size and income, relative to the
regional median family income.
Housing Affordability Gap: The affordability gap is defined as the difference between what a
household can afford to spend on housing and the market rate cost of housing. Affordable rents and
sales prices are defined as a percentage ofgross household income, generally between 30 percent and
35 percent of income.
]@, rental costs are assumed to include the contract rent as well as the cost of utilities,
excluding cable and telephone service. The difference between these gross rents and
affordable rents is the housing affordability gap for renters. This calculation assumes that
30% of income is paid for gross rent.
Draft Burlingame Residential lmpact Fee Nexus Study 73-
For owners, costs include mortgage payments, mortgage insurance, property taxes, property
insurance, and homeowner association dues. 27 The difference between these housing
expenses and affordable ownership costs is the housing affordability gap for owners. This
calculation assumes that 35o/o of income is paid for housing costs.
Housing Subsidy: Housing subsidies refer to government assistance aimed at reducing housing sales
prices or rents to more affordable levels.
Housing Unit: A housing unit can be a room or group of rooms used by one or more individuals
living separately from others in the structure, with direct access to the outside or to a public hall and
containing separate toilet and kitchen facilities.
IMPLAN3: A software model that is used to provide a quantitative assessment of the
interdependencies between different branches of a regional (or national) economy. The latest model,
IMPLAN3, was used in the nexus studies. The major input is household income, and the major
output is direct and induced employment reported by industries
Inclusionary Zoning: Inclusionary zoning, also known as inclusionary housing, refers to a planning
ordinance that requires that a given percentage of new construction be affordable to households with
very low, low, moderate, or workforce incomes.
In-Lieu Fee: A literal definition for an in-lieu fee for inclusionary units would be a fee adopted "in
place of' providing affordable units. For the purposes of operating an inclusionary housing program,
a public jurisdiction may adopt a fee option for developers that prefer paying fees over providing
housing units on- or off-site. A fee study is frequently undertaken to establish the maximum fee that
can be charged as an in-lieu fee. This fee study must show that there is a reasonable relationship
between the fee and the cost of providing affordable housing.
Market-Rate Housing: Housing which is available on the open market without any public subsidy.
The price for housing is determined by the market forces of supply and demand and varies by
location.
Nexus Study: In order to adopt a residential housing impact fee or a commercial linkage fee, a nexus
study is required. A nexus requires local agencies proposing a fee on a development project to
identify the purpose of the fee, the use of the fee, and to determine that there is "a reasonable
relationship between the fee's use and the type of development project on which the fee is imposed."
A nexus study establishes and quantifies a causal link or "nexus" between new residential and
commercial development and the need for additional housing affordable to new employees.
2' Mortgage terms for first-time homebuyers typically allow down payment of five percent; these terms require private
mortgage insurance.
Draft Burlingame Residential lmpact Fee Nexus Study -74-
Linkage Fee: A fee or charge imposed on commercial developers to pay for a development's impact
on the need for affordable housing. The fee is based on projected household incomes of new
employees that will work in newly created space. The fee varies according to the type of property
use.
Prototypes: Prototypes are used for residential and commercial developments in order to define
housing impact fees. The prototypes generally represent new development projects built in a
community and are used to estimate affordable housing impacts associated with new market rate
commercial and residential developments. While the protoffies should be 'otypical" of what is built,
for ease of mathematical computation, they are often expressed as larger developments in order to
avoid awkward fractions.
Residential or Housing Impact Fee: A fee imposed on residential development to pay for a
development's impact on the need for affordable housing. The fee is based on projected incomes of
new employees associated with the expansion of market rate developments. Two steps are needed to
define the fees. The first step is the completion of a nexus study, and the second step entails selection
of the actual fee amount, which can be below the amount justified by the fee study, but not above that
amount.
RS Means: Data source of information for construction cost data.
Draft Burlingame Residential lmpact Fee Nexus Sfudy 75-
DEFINITION OF ACRONYMS
AMI:
CBIA:
EDD:
FAR:
F'F&E:
GBA:
HCD:
NAICS:
NSF:
QCEW:
R&D:
SF:
TDC:
Area Median Income
California Building Industry Association
State of California Employment Development Department
Floor-area-ratio
Furniture, Fixtures, and Equipment
Gross Building Area
Department of Housing and Community Development (State of Califomia)
North American Industry Classification System
Net Square Feet
Quarterly Census of Employment and Wages
Research and development
Square Feet
Total Development Costs
Draft Burlingame Residential lmpact Fee Nexus Study -76-
Atfordable llousing lmpact Fee
Table Bental Besidential Deuelopments
and Single tamily Homes and Additions
Per BMR Ordinance Section 18.200.040, any Residential Rental Development or developmet
ownership unit or an addition of '1,000 square feet or more, an impact tee shall be paid based on thr
table. As an alternative to payment of the impact fee, a Builder may propose to provide BIVIR ut
specified levels, to mitigate the impact of the development on the need for affordable housing. The
approve the proposal only if the Builder enters into an agreement with the City consistent with
Hawkins Act per BMR Ordinance Section 18.200.040 (C).
For Total Project lmpact Fee:
Step '1: Find line for Total Units in project under Column A
Step 2: Go to Column C for Total Fee Obligation per square foot
Step 3: Multiply figure in Column C by the average square feet per unit in project
A B c
Total Units
lncremental !mpact
tee Per Avg. Sq. Ft.
Gumulatiue Project lmpact
Fee Per Aug. Sq. Ft.
4
5
6
7
8
I
10
11
12
13
14
15
't6
17
18
19
20
21
22
23
24
25
26
27
28
29
30
33.36
43.54
45.24
35.18
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
72.38
115.92
161.16
196.34
219.88
243.42
266.96
290.5
314.04
337.58
364.28
392.55
420.83
449.1
477.37
505.65
533.92
562.19
590.47
618.74
647.01
675.29
703.56
730.26
753.8
777.34
800.88
: Affordable Housing lmpact tee:, Table Bental Residential Deuelopments
. and Single Family Homes and Additions
A B c
Total Units !ncremental lmpact
tee Per Aug. Sq. tt.
Cumulative Project lmpact
Fee Per Aug. Sq. Ft.
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
824.42
847.96
871.5
898.2
926.47
954.75
983.02
1,011.29
1,039.57
1,067.84
1,096.11
1,124.39
1,152.66
1,180.93
1,209.21
1,237.48
1,264.18
1,287.72
1,311.26
1,334.80
1,358.34
1,381.88
1,405.42
1,432.12
1,460.39
1,488.67
1,516.94
1,545.21
1,573.49
1,601.76
1,630.03
1,658.31
1,686.58
1,714.85
1,743.13
1,771.40
1,798.10
1,821.64
1,845.18
1,868.72
1,892.26
1,915.80
1,939.34
Aflordable Housing lmpact tee
fable Bental Besidential Ileuelopments
and Single Family Homes and Additions
A B c
Tolal llnits lncremental lmpact
tee Per Aug. Sq. tt.
Gumulatiue Proiect lmpact
tee Per Avg. Sq. tt.
741
zsl
zol
,rl
781
79t
aol
81t
82
83
a4
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
'100
101
102
103
104
105
106
107
108
109
110
1',11
112
113
114
115
'I 16
26.7
2A 27
24.27
24.27
2A 27
28.27
28.27
28.27
29 )7
28.27
28.27
28.27
28.27
26.7
23.54
23.54
l5.J+
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
za.zt
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
ti.a.+
23.54
26.7
28.27
28.27
1,966.04
1,994.31
2,022.59
2,050.86
2,079.13
2,107 .41
2,135.68
2,163.95
2,192.23
2,220.50
2,248.77
2,277 .05
2,305.32
2,332.02
2,355.56
2,379.10
2,402.64
2,426_18
2,449.72
2,473.26
2,499.96
2,528.23
2,556.51
2,584.78
2,613.05
2,641 .33
2,669.60
2,697 .87
2,124.15
2,754.42
2,782.69
2,810.97
2,839.24
2,865.94
2,889.48
2,913.02
2,936.56
2,960.10
2,983.64
3,007.18
3,033.88
3,062.'15
3,090.43
Affordable Housing lmpac-t Fee
fable Bental Besidential 0evelopments
and Single tamily Homes and Additions
A B c
lneremental Impact
tee Per Aug. Sq. tt.
Cumulatiue Prolect lmpact
fes Per Aug. Sq. tt.
't17
118
119
120
121
122
1
1
1
1
I
I
1
1
1
1
1
1
I
1
1
1
1
1
I
2
24
zo
27
28
29
30
32
J
3
39
40
41
142
143
144
't45
146
147
4
151
152
153
154
155
156
't57
158
159
28.271
zaz)
za.ztl
28.271
24.271
2a.27
28.27
28.27
2A.27
2A.27
26.7
23.54
23.54
23.U
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
3,118.70
3,146.97
3,17 5.25
3,203.52
3,231.79
3,260.07
3,288.34
3,316.61
3,344.89
3,373.16
3,399.86
3,423.40
3,446.94
3,470.48
3,494.02
3,517.
3,54'l .10
3,567.80
3,596.07
3,624.35
3,652.62
3.680.89
3.709.17
3.737.44
3,765.71
3,793.99
3,822.26
3,850.53
3,878.81
3,907.08
3,933.78
3,957.32
3,980.86
4,O04.40
4,027.94
4,051.48
4,075.02
4,101.72
4,129.99
4,158.27
4,'186.54
4,214.8',1
4,243.09
Total Units
Affordable Housing lmPact Fee
Table Bental Besidential Eleuelopments
and Single Family Homes and Additions
A B c
Total Units
lncremental lmpact
tee Per Aug. Sq. tt.
Gumulative Project lmpact
Fee Per Aug. Sq. Ft.
rool
rorl
rczl
roal
ro+l
rosl
rool
rozl
rosl
rogl
17olnl
1721
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
za.ztl
za.zzl
za.ztl
za.ztl
za.zz1
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
+,ztt.zal
4,299.631
+,szt.stl
4,356.181
q,saq.+sl
+,+tz.tzl
4,44',1.001
+,+aznl
4,491.24l|
q,il+tal
+,sgg.szl
+,sor.aol
+,ses.+ol
+,ooa.s+l
4,635.64t
+,oog.gt I
+,ogz.tsl
+,tzo.+al
+l+a.tzl
4,777.011
4,805.281
+,ass.ssl
4,861.831
4,890.101
4,918.37
4,946.65
4,974.92
5,001.62
5,025.16
5,048.70
5,072.24
5,095.78
5,119.32
5,142.86
5,169.56
5,197.83
5,2.26.11
5,254.38
5,282.65
5,310.93
5,339.20
5,367.47
5,395.75
. Aflordaile Housing lmpact tee
'Table Bental Besidential 0evelopments
and Single tamily Homes and Additions
B c
Total lJnits lncremental lmpact
tee Per Avg. Sq. tl.
Cumulatius Proisct lmpact
Ier Per Aug. Sq. tt.
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
215
220
221
222
22a
224
22E
22f
227
228
2.29
230
231
232
233
234
236
237
238
239
240
242
243
244
245
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
24.27
28.27
28.27
28.27
2A.27
28.27
26.7
23.54
23.54
23.54
23.54
z5.c+
23.54
28.27
28.27
29.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
5,424.02
5,452.29
5,480.57
5,s08.84
5,535.54
5,559.08
5,582.62
5,606.16
5,629.70
5,653.24
5,676.78
5,703.48
5,731.75
5,760.03
5,788.30
5,816.57
5,844.85
5,813.12
5,901.39
5,929.67
5,957.94
5,986.21
6,014.49
6,042.76
6,069.46
6,093.00
6,116.54
6,140.08
6,163.62
6,187.'t6
6,210.70
6.237.40)
6,265.67i
I
6,293.951
6,322.221
6,350.4e1
6.378.771
I
6,407.041
6,435.31t
o.+os.ssl
o.+sr.aol
o,szo. r el
o,s+a.+ r I
A
Aflordable Housing lmpact Fee
Table,Rental Hesidential Deuelo;lments
and Single Family Homes aild Additions
A B c
Total Units
!ncremental lmpact
Fee Per Aug. Sq. tt.
Gumulatiue Project lmpact
Fee Per Aug. Sq. tt.
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
2.74
275
276
277
278
279
280
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
28.27
26.7
23.54
23.54
23.54
23.54
23.54
23.54
26.7
28.27
28.27
28.27
28.27
28.27
28.27
6,576.68
6,603.38
6,626.92
6,650.46
6,674.00
6,697.54
6,721.08
6,744.62
6,771.32
6,799.59
6,827.87
6,856.14
6,884.41
6,912.69
6,940.96
6,969.23
6,997.51
7,025.78
7,054.05
7,082.33
7,110.60
7,137.30
7,160.84
7,184.38
7,207.92
7,2.31.46
7,255.00
7,278.54
7,305.24
7,333.51
7,361.79
7,390.06
7,418.33
7,446.61
7,474.88
2lts/2078
CAROLAN AVENUE COMPLETE
STREETS PROJECT
City Council
lnformational Update
IMPROVEIVENTS & BENEFITS
Reduced from 4-lanes to 2-lanes
Added a single Left-Turn lane
New asphalt concrete
New Class ll and lane striping
Broadway to Oak Grove Avenue
Both directions
s-ft. & 7-ft, lanes plus a 3-ft buffer
lncreases bicyclist confidence & usage
New Class ll Bike LanesComplete street reconfigured
4
L
,-
Feb 20,2018
217s/2018
IMPROVEIVIENTS & BENEFITS
Pedestrian Safety
. Bulb-out curbs - reduces pedestrian exposure to
traffic. Traffic Calming Elemenb. UpdatedADAaccess ramps. Crosswalk improvements to Caltrain pedestrian
crossing (Carolan & Monell)
Sustainable "Green" Landscaping
(currently in progress)
. NPDES best-practice features
. Rain-garden landscape
. lmproved storm water run-off
. Before
. After
2
*
.;
Agenda Item 8a
Meeting Date: 2/2O/LB
BURLINGAME CITY COUNCIL
Unapproved Minutes
Regular Meeting on February 5,2018
1. CALL TO ORDER
A duly noticed regular meeting of the Burlingame City Council was held on the above date in the City Hall
Council Chambers.
2. PLEDGE OF ALLEGIANCE TO THE FLAG
The pledge of allegiance was led by Supervisor Dave Pine.
3. ROLL CALL
MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz
MEMBERS ABSENT: NONE
4. STUDY SESSION
a. THE VILLAGE AT BURLINGAME AFFORDABLE HOUSING DEVELOPMENT
(PARKING F _ 150 PARK ROAD) AND C PARKING STRU (PARKING
LOT N _ 160 LORTON AVENUE)
City Manager Goldman opened the study session with a review of the history of the Village at Burlingame
Affordable Housing Development project. In December 2014, the City issued a Request for Proposals
("RFP") for developers interested in partnering with the City to develop City-owned Parking Lots F & N.
She stated that the City was interested in affordable housing and adding to the City's parking supply.
Responses to the RFP were due January 2015, and the City received eight proposals. She explained that a
subcommittee consisting of then-Vice Mayor Keighran, Councilmember Brownrigg, CDD Meeker, and City
Manager Goldman reviewed the eight proposals. The subcommittee recommended that the City move
forward with three developers: Mid-Peninsula Housing, The Pacific Companies, and Meta Housing.
City Manager Goldman stated that on March 26,2015, the three developers were given the opportunity to
present their proposals including concept, financial capabilities, and experience in developing affordable
housing to the fulI City Council and interested public. At the end of the meeting, the City Council asked the
three developers to refine their concepts based on the feedback they each received. Thereafter each team
Burlingame City Council ' aebruary 5, 2018
Unapproved Minutes
Agenda Item 8a
Meeting Date: 2/2O/LB
was provided the opporhrnity to present its refined concept at a study session on June 9,2015. Meta Housing
was then eliminated from further consideration.
City Manager Goldman stated that the two finalists, Mid-Peninsula Housing and The Pacific Companies,
were allowed to further refine and present their proposals at the July 6, 2015 meeting.
City Manager Goldman stated that at the July 6,2015 meeting, the City Council selected The Pacific
Companies as its preferred developer. She reviewed the City Council's decision. She explained that Mid-
Peninsula Housing's proposal had housing and parking on both lots, but The Pacific Companies had
proposed segregating the housing and parking on different lots. She stated that it was the City Council's
opinion that this segregation would make it easier on the public to find the public parking. She added that
The Pacific Companies' proposal included more new parking than Mid-Peninsula Housing's proposal.
City Manager Goldman stated that after being selected, The Pacific Companies undertook preliminary work
on the project including financing, site conditions reconnaissance, design development, and testing the soil.
The Pacific Companies has submitted development applications for both lots, and the applications are
undergoing review for completeness. Staff anticipates bringing these projects to the Planning Commission
for design review and environmental scoping in late February 2018.
City Manager Goldman discussed changes to the project that have occurred since The Pacific Companies
was selected. Originally, the project proposed 144 units of housing comprised of 78 units of workforce
housing and 66 units of affordable and market rate senior housing. Now, the project proposes 132 units
comprised of 78 units of workforce housing and 54 units of senior housing. The current proposal no longer
includes market rate housing. Additionally, the parking structure was originally designed to include 172 net
new parking spaces for the City. The current proposal contains 185 net new parking spaces.
City Manager Goldman explained that staff is looking for City Council to provide direction on the following
three questions:
1. Shall Parking Lot F be leased or sold to The Pacific Companies (with appropriate contingencies)?
(She noted that this referred to the housing portion of the project and not the parking structure, which
would remain in the City's control.)
2. The parking lot structure will be constructed using prevailing wage labor. As a public building that
will remain under City control, prevailing wage is required for the garage component of the project.
Shall The Pacific Companies also be required to pay prevailing wage to workers involved in
construction of the affordable housing development?
3. Pursuant to the Disposition and Development Agreement ("DDA") between the City and The Pacific
Companies, the City Council must approve the "sources and uses" of all project funding before
further work on the project is undertaken. This approval relates to the funding plan at a macro-level,
as the details of the project's finances may change somewhat as project construction nears. (She
explained that the'osources and uses" document describes where the money is coming from and
where the money is going, including a request that the City cover a financial gap of $ 1.85 million.)
Burlingame City Council
Unapproved Minutes
2
February 5,2018
Agenda Item 8a
Meeting Date: 2/2O/LB
City Manager Goldman stated that the developer sent a memorandum to the City Council on January 26,
2018 requesting a $ 1.85 million subsidy from the City's parking fund to cover the project's financial gap.
The memorandum also stated that the $ 1.85 million is a hard cap, and the developer will not ask for
additional funds.
City Manager Goldman introduced Debbie Kern from Keyser-Marston. Ms. Kern wrote a memorandum to
the City Council, dated December 27, 2017 , outlining the pros and cons of selling or leasing Lot F.
Mayor Brownrigg stated that he wanted the City Council to reach decisions on the three questions that the
City Manager outlined. Therefore, if necessary, he would extend the study session after the regular meeting.
Councilmember Ortiz asked if the City Council chooses to lease Lot F, would it trigger prevailing wage.
City Attorney Kane replied that she needed to further review whether a prevailing wage exception was
optional with a lease.
Councilmember Ortiz asked if the "sources and uses" document assumes a sale, and that is why it shows a
loan from the City. City Attorney Kane replied in the affirmative.
Councilmember Ortiz asked if the City decides to lease Lot F, would the "sources and use" document need to
be amended. City Attorney Kane replied in the aff,rrmative
Vice Mayor Colson asked if the City sold Lot F, would the City essentially be carrying back the loan. City
Attorney Kane replied in the affirmative.
Vice Mayor Colson asked questions about the loan including: how the City would determine the size of the
loan; if the loan is based on an appraisal; what the interest rate would be; and how would the City fall in the
line of credit. City Attorney Kane explained that the City had a Disposition and Development Agreement
(DDA) that was negotiated prior to finalizing many of the project details. Some of the DDA terms can be
amended and updated pursuant to City Council direction. However, the anticipated structure is that the City
would effectively carry back the loan, and then the City would be paid back out of operating proceeds. She
noted that the loan would be market value, established through an appraisal. She added that the details need
to be worked out with the developer.
Councilmember Keighran asked when the developer fees get paid. CDD Meeker stated that it is subject to
an agreement with the City Council. However, typically the development impact fees are paid at the time a
building permit is issued. He added that on larger projects like Burlingame Point, the City staged the fees.
City Attorney Kane clarified that the deferred developer fee is $9 million. Of that $9 million, $2.8 million
will be paid upon the project becoming operational, and the remaining $6.2 million is paid out of proceeds
once senior financing is paid.
Councilmember Keighran voiced her concern that it seemed that the City would be fronting a lot of money
for this project if the City Council decided to sell Lot F. She asked about the City's liability if Lot F is sold.
3
Burlingame City Council February 5, 2018
Unapproved Minutes
Agenda Item 8a
Meeting Date: 2/20/LB
City Attorney Kane explained that Councilmember Keighran was correct that there is no upfront transfer of
funds to the City if the City decides to sell Lot F. She stated that in terms of potential liability for the City, it
can be addressed through different mechanisms, including completion bonds.
Councilmember Keigh,ran asked if the tax credits were guaranteed. City Attorney Kane stated that the tax
credit financing mechanism was preserved under the December 2017 federal tax bill. She noted that there is
some question about how strong the market is for those tax credits.
Councilmember Beach asked Ms. Kern to elaborate on Keyser-Marston's recommendation that the City
strongly consider a lease option. Ms. Kern stated that because this is a 100% affordable project and given
that the City is not getting upfront cash payments, Keyser-Marston's general recommendation is a long-term
lease. However, she stated that leasing would affect the prevailing wage requirement. Ms. Kern explained
that the project's pro forma assumes that prevailing wages are only paid on the parking garage and not on the
residential portion. If prevailing wages were to be required on the residential portion, it would increase the
cost of the project, which would increase the project's financial gap. Ms. Kern stated that if prevailing wage
was required on the residential portion, the project's cost would be increased l5%. She stated that she
understood that a lease could be written so as to not trigger prevailing wage, but that it was more
complicated than under a sale and she had not seen one.
Ms. Kern explained that if the City was to go forward with a sale, the City would typically be paid the fair
market value of the property at the time that the affordability covenant expires.
Councilmember Beach asked if the fair market value was the amount it was originally appraised at plus
interest. Ms. Kem stated that it is typically the fair market value at the time of transaction with a low interest
rate.
Councilmember Keighran asked if the City leased Lot F what the trigger point is for requiring prevailing
wage. Ms. Kern replied that it is a legal question about whether the lease can be structured in a way that
doesn't trigger prevailing wage.
Mayor Brownrigg stated that leasing Lot F would allow the property to remain on the City's balance sheet.
Ms. Kem stated that there are a lot of benefits to the City if Lot F is leased
Councilmember Beach asked Ms. Kem to elaborate on the benefits of leasing. Ms. Kern stated that under a
lease, the property would be maintained as a City asset. Therefore, when the affordability covenant is
released in approximately 55 years, the City owns the property and can do with it as it wants. Additionally,
by leasing, the City maintains control over the property.
Councilmember Beach reviewed fees that are listed on the'osources and uses" document including the
deferred developer fee of $9 million and deferred contractor profit of $3 million. She asked what this really
means in regards to developer profit on this project. Ms. Kem explained that in the cost statement in the pro
forma, the developer has identified a $9 million developer fee. However, the developer will not receive $9
4
Burlingame City Council February 5, 2018
Unapproved Minutes
Agenda Item 8a
Meeting Date: 2/20/LB
million. Instead, this number is used because it is permitted under the tax credit program and enables the
project to achieve a larger amount of tax credits than it would if the fee were lower. She continued by
explaining that the developer will net $2.8 million upon completion of the project, and the remaining $6.2
million of the fee is deferred. The $2.8 million amounts to approximately 3.7o/o of the project's cost
(excluding land), which is consistent with other affordable projects. She stated that the $2.8 million
translates into roughly $21,000 per unit. On a similar project in El Cerrito, the developer is making $22,000
per unit. She noted that with the City's contribution of land and a subsidy of $1.85 million, it averaged out
to S 109,000 per unit.
Councilmember Ortiz explained that if the City sold Lot F, it wouldn't see a payment until the affordability
covenant expired in approximately 55 years. He asked how a lease would change the cash flow to the City.
City Attorney Kane stated that the City has a roadmap in its existing DDA. She explained that the DDA
includes a form of lease and a form of promissory note. The promissory note states that the City gets 50% of
surplus cash from operations. It defines surplus cash as being the net of certain debt and operations during
the length of the affordability covenant, and then a balloon payment upon sale or transfer to some other
interest. She stated that the City Council may wish to revisit the existing DDA.
Councilmemb er Ortiz asked if the 50o/o of surplus cash applies to both lease and purchase. City Attomey
Kane stated that the lease is more complicated and subject to greater negotiation. She noted that there is a
provision for ground rent in the lease.
Vice Mayor Colson stated that in regards to paying off the loan, there are provisions that the City can put in
place, like a lock box, to ensure that money doesn't go straight to the developer but instead to a third-party
holding agency. This agency would release funds to the developer and the City as appropriate.
Mayor Brownrigg asked Caleb Roope from The Pacific Companies to discuss the project.
Mr. Roope stated that the value proposition offered in the original proposal was to provide additional public
parking and affordable housing in exchange for land. He explained that the $109,000 per unit doesn't
include the 185 net new parking spaces, which is a cost of approximately $80,000 per unit. Therefore the
City is really only subsidizing$.29,000 per unit.
Mr. Roope explained that a problem they have as an affordable housing partnership is that if that entity takes
a grant, there are income tax complications. Therefore, a lot of times affordable housing is intentionally
structured as a loan to avoid that negative consequence.
Mr. Roope discussed ground lease versus purchase. He explained that he has done ground leases before and
that they are complex. He stated that prevailing wage would be triggered if the City gives property to a
developer at a below market rate value. Therefore, in order that prevailing wage is not triggered, Lot F
should be sold at fair market value with the City carrying back a note. He stated that he has done 50
transactions in this fashion.
Burlingame City Council
Unapproved Minutes
5
February 5, 2018
Agenda Item 8a
Meeting Date: 2/2O/18
Mr. Roope discussed the option of a ground lease instead of selling Lot F. He stated that this transaction
needed to be set up in the same fashion as a sale, where the developer leases the land at a fak market value.
For example, if the property is valued at $12 million, and the ground rent is 5o/o at $600,000, then The Pacific
Companies has to pay $600,000 every year to the City so that they maintain a fair market value structure. If
the developer is making annual paSrments of $600,000, it will need to come out of the project's budget.
Therefore, the developer will need an annual loan of $600,000 from the City to pay its lease.
Mr. Roope stated that he had seen leases structured so that all lease payments are made upfront. He
explained that the City would make a loan in the amount of that upfront transaction. However, he noted that
this is tricky, and the simplest method would be for a sale with a carry back of a note.
Mr. Roope stated that the property's affordability covenant could be for longer than 55 years. He explained
that the City could put regulatory restrictions on the property to maintain the affordability covenant for
longer than the tax credit requires.
Mr. Roope stated that the City's development impact fees including water, sewer, police, parks, etc. are all
budgeted to be paid for in the project's pro forma.
Mr. Roope explained that in the 160 projects he has done, he has never defaulted or had a foreclosure. If
something does go wrong, the lender and investor would get together and remove the developer so that
another developer could be brought in to finish the project.
Mr. Roope stated that he issues personal guarantees on all his projects. Additionally, development profits are
deferred until all risks are removed from the project.
Councilmember Beach asked about the $80,000 value of each parking space. She explained that during the
The Pacific Companies' presentation of their proposal, each parking space was valued at $25,000. Mr.
Roope replied that the $80,000 referred to if the cost of building the parking garage was divided by the
number of residential units.
Councilmember Beach discussed the contingencies in the "sources and uses" document. She noted that the
document listed $2 million for construction contingencies and $500,000 for soft costs. She stated that after
talking to some industry professionals, she was informed that the numbers were lean and that the
construction contingencies should be between $3-8 million. Mr. Roope stated that generally 5% of the
project's cost is the normal contingency for construction, and there is no general standard for soft costs. He
added that an $8 million contingency would be 20o/o, which is very high.
Councilmember Beach asked if Mr. Roope was comfortable that the contingencies were accurate. Mr.
Roope replied in the affirmative, explaining that he would be on the hook for the guarantees. He noted that
because the developer fees are not earned until the project is completed, he viewed them as an additional
contingency for the project.
Burlingame City Council
Unapproved Minutes
6
February 5, 2018
Agenda Item 8a
Meeting Date z 2/2O/LB
Councilmember Beach stated that the architecture and engineering fees were listed at $900,000. She stated
that for this project to succeed it needs to be beautiful, high quality, and fit with the City's aesthetics. After
talking with a few experts, she was told that the budget seemed to be too skinny. Mr. Roope stated that he
viewed this as a high budget for this type of project.
Councilmember Beach asked if Ms. Kern had any comments on Mr. Roope's answers. Ms. Kern stated that
in regards to the contingency fees, the contingency listed in the pro forma of 4.3%o of direct costs and 1.1olo
of direct costs for the soft costs are within the range of normalcy of projects of this level. Ms. Kern stated
that in regards to the architecture and engineering fees of $900,000, it translates into I .9o/o of direct costs.
She stated that this is approximately $6,800 per unit. She explained that this is less than what she typically
sees. In a San Jose project, the average cost was $21,000 per unit.
Mr. Roope stated that they use their in-house design team and therefore don't have a high overhead cost.
Councilmember Ortiz asked Mr. Roope to comment on the impact of requiring prevailing wage on the
housing portion of the project. Mr. Roope stated that as a general rule, prevailing wage adds about 25o/o on
average to the cost of construction. In the Bay Area, however, he agrees with Ms. Kern's assessment of a
l5% premium due to prevailing wage. He noted that he is constructing a project in Daly City right now, and
a lot of their subcontractors are union.
Vice Mayor Colson stated that the affordability covenant was for 55 years, but she was assuming that the
developer would need to do a recapitalization or reinvestment project as real estate doesn't last 55 years
without maintenance. She asked what the roll-over mechanism was for that and how it would be financed.
Mr. Roope stated that traditionally, affordable housing is financed with tax credits. He stated that the initial
compliance period ends at year 15, and at the end of year 15, a new round of tax credits is available. He
explained that assets built 15-20 years ago may have some needs. However, because the building code is
more stringent now and the quality of products is better, capital needs are much less, so buildings shouldn't
need a major rehabilitation in year 15. He stated that when you get to year 20-25, the tax credits have
historically been available for rehabilitation and refinance of the asset.
Vice Mayor Colson asked if The Pacific Companies had a thoughtful disposition plan and if they normally
hold properties for 55 years or if they sell. Mr. Roope stated that out of 160 projects, they have disposed of
two, which were sold to nonprofits.
Vice Mayor Colson stated that it sounds like The Pacific Companies have had projects go over their pro
forma. She asked if The Pacific Companies would allow staff to review the company's financial statements.
Mr. Roope replied in the affirmative.
Councilmember Keighran asked how often affordable housing projects go through maintenance and
rehabilitation. Ms. Kern stated that there is a capital replacement reserve that is funded out of the project's
cash flow that will be used for ongoing maintenance. She stated that she has not experienced major needs on
new projects within l5 years.
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Agenda Item 8a
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Councilmember Keighran asked if capital improvements are needed, do projects have a difficult time
obtaining additional tax credits to pay for those improvements. Ms. Kern replied that she has witnessed
several successful applications for major rehabilitations.
Councilmember Keighran concured with Councilmember Beach's concern about the low estimate for
architecture and engineering. She noted that in 2015, she voted against The Pacific Companies' proposal
partiallybecause ofthe lack ofarchitectural detail on the project.
Mayor Brownrigg stated that in the current pro forma there are l1 workforce units that are above the 600/o
AMI. He explained that it was his understanding that the City could work with The Pacific Companies to
offer preferences to local teachers for those 11 units. Mr. Roope replied in the affirmative, stating that
preferences could be offered, they just can't restrict.
Mayor Brownrigg stated that he was asked by a resident why there are senior apartments with two bedrooms
Mr. Roope replied that based on their experience, there is a demand for two-bedroom senior units.
Mayor Brownrigg noted that part of the public benefit of the project as a whole is the public park that will be
created on Lot F. It will be an asset for the people living there as well as the neighborhood. Mr. Roope
noted that the park portion of Lot F will not get transferred-the City will continue to maintain ownership of
the park land.
Councilmember Keighran asked if the funding gap that Mr. Roope would like the City to provide is $ 1.85
million. Mr. Roope replied in the affirmative.
Councilmember Keighran asked about the request to underground utilities. Mr. Roope stated that he didn't
yet know what it would cost but if it was above $200,000, it would become too expensive to do. He doesn't
know yet if it's feasible.
Mayor Brownrigg opened the item up for public comment.
Burlingame resident Mark Burri discussed the importance of prevailing wage and asked the City not to sell
the property.
David Mauru voiced his support for prevailing wages. He explained that prevailing wage attracts higher
skilled workers and helps to fund the apprentice program.
James Ruigomez voiced his support for prevailing wages.
Former Mayor Nagel stated that she didn't want the City to sell Lot F. She recommended that the project be
constructed using prevailing wage and asked the City Council to underground utilities.
Burlingame resident Bobbi Benson discussed design aesthetics that she wanted included in the project such
as: solar panels, LEED certification and charging stations for electric vehicles.
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Agenda ftem 8a
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Former Councilmember Root voiced his support for undergrounding utilities and discussed his concern about
the low architecture fees.
Burlingame resident Jennifer Pfaff asked City Council not to sell Lot F and voiced her concern about the low
architecture fees.
At this point, it was close to 7:00 p.m. Mayor Brownrigg stated that the City Council would return to the
study session after the close of the regular meeting.
The study session was brought back at7:28 p.m.
Mayor Brownrigg asked if the financing for the project would be in a special purpose vehicle ("SPV"). Mr
Roope replied in the affirmative.
Mayor Brownrigg asked if the SPV had a board of directors and if so, would it be appropriate to ask for the
City to have a seat on the board. Mr. Roope replied that the project owner will be a special purpose entity
that will consist of general and limited partners. He stated that it is not normal for a city to have a seat on the
board.
Vice Mayor Colson asked if the new state housing legislation would affect how the project goes through the
planning process. CDD Meeker replied that the project would go through the normal planning process. He
explained that currently the project is undergoing internal review by various departments, but that he hopes
to have it before the Planning Commission later this month.
Vice Mayor Colson stated that it is important to note that the City controls the planning process for this
project. She explained that if the Planning Commission and/or staff determine that changes need to be made
and The Pacific Companies exceeds its $900,000 architecture budget, the developer will have to bear that
cost. Mr. Roope replied in the affirmative.
Vice Mayor Colson asked if the development budget was just for the housing portion. Mr. Roope replied
that the development budget was for both housing and the parking garage. He added that the $46 million in
construction costs was just for the housing component.
Vice Mayor Colson asked if it was Mr. Roope's position that if the project had to be done with prevailing
wages, the cost would increase by l5%. Mr. Roope replied in the affirmative and explained that it would
cost roughly an additional $6 million.
Vice Mayor Colson stated that the residual value at the end of the deal is not a part of the developer's
financial analysis. She explained that in a normal real estate pro forma, the property is held for 10 years with
a disposition at the end. The disposition is the net present value and that is how the project is priced and
valued. However, The Pacific Companies' pro forma doesn't include this information and therefore the
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Agenda Item 8a
Meeting Date: 2/20/LB
disposition value is almost impossible to determine. Mr. Roope replied in the affirmative and stated that they
hadn't relied on a disposition value of any kind.
Vice Mayor Colson asked if this is the case, has Mr. Roope structured transactions where acity has the first
right of refusal to repurchase at a certain strike price. Mr. Roope replied in the negative and explained that
he had seen agreements where a nonprofit organization has this option. He added that he didn't know if
there were any legal prohibitions in allowing the City this option but that he had no objections and could
research further.
Councilmember Beach asked if it was accurate to say that while Mr. Roope works in the realm of affordable
housing, he is a for-profit developer. Mr. Roope replied in the affirmative. He explained that The Pacific
Companies is a for-profit development organization, but a nonprofit organization will be attached to the
project as a partner.
Councilmember Beach asked if The Pacific Companies do market rate projects. Mr. Roope replied in the
affirmative. He added that 85o/o of The Pacific Companies' work is affordable housing. They also do some
public schools and market rate apartments.
Councilmember Beach discussed the new State housing legislation and asked what the impact of the "rule of
objective standards" would be on this project. CDD Meeker stated that staff hasn't fully evaluated the
impact. He noted that this project is a little different, as the City is a partner in the project and serving as co-
applicant. City Attorney Kane stated that staff is still evaluating the impact of the State legislation and is not
yet ready to opine on this matter.
Councilmember Beach discussed Ms. Kern's memorandum from October which reviewed the financial
feasibility of this project based on the tax credits. She asked if Ms. Kern was confident with the proposal
considering the new tax laws and the market rate of tax credits. Ms. Kern stated that there may be a
decreased demand for tax credits as a result of the tax reform measure and corporations having a reduction in
their tax obligations. If this occurs, then the pricing of tax credits will be decreased. She explained that the
developerhad assumed pricing of $1.12 for every dollar of tax credit, but $l to $1.05 is more realistic. She
stated that this will increase the project's financial gap.
Councilmember Keighran discussed the implications of the housing legislation's "rule of objective
standards." She asked if the City would lose its potential control over the design aesthetics of the project if
the City sold Lot F. CDD Meeker replied that staff is still reviewing the impact of the legislation but that he
imagines if sold, the City would be in the same situation as it is with any private developer.
Mayor Brownrigg stated that the next step for this project would be to go into the planning process. In the
course of that process, the Planning Commission will review the design and make any necessary changes.
He asked if it was at that point that Mr. Roope would go out for bidding and final costing. Mr. Roope stated
that they will do a cost estimate after they get through the planning process, but they won't have working
drawings at that time, which are needed to go out to bid. He explained that working drawings would take
two to four months to produce, and contractors would be given 30-45 days to bid out the work. Therefore,
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Meeting Date: 2/2O/LB
he stated that if the planning process took three months, in approximately six to seven months they would
have estimates.
Mayor Brownrigg stated that he was trying to understand the process and get to the risk for the City. Mr.
Roope stated that the risk for the City wouldn't start until they close the financing and the disposition
actually happens.
Mayor Brownrigg agreed with Mr. Roope. He explained that the City's risk would be if the project was
underway and the developer was no longer able to finish the project. However, he stated that this is always a
risk. He asked if the financing that Mr. Roope put together has all the capital up front. Mr. Roope replied in
the negative. He explained that the lenders and the investors have the capital and as the developer performs
on the project, they will be reimbursed upon completion of different milestones.
Mayor Brownrigg asked if the capital is in a form of escrow that is callable. Mr. Roope replied in the
affirmative.
Mayor Brownrigg discussed Mr. Roope's statement that he makes personal guarantees on projects and stated
that this is not done in his business world. Mr. Roope explained that he has done this his whole life and
career.
Vice Mayor Colson asked Mayor Brownrigg to explain what a personal guarantee is. Mayor Brownrigg
stated that a personal guarantee is when an individual guarantees that the company will perform, and if it
doesn't, the individual is on the hook to repay all the investment, debt, and employee wages. He stated that
this can quickly add up and bankrupt an individual.
Councilmember Keighran asked if Mr. Roope's company was an LLC. Mr. Roope replied that it is a limited
partnership. He explained that the property was going to be owned by a limited partnership that will consist
of limited and general partners. The limited partners are investors like banks and insurance companies that
buy the tax credits, and he is one of the general partners. As a general partner, he has the general liability
that comes with those limited partnerships. He stated that the lenders and investors in this project require
him to provide personal guarantees to repay their investment or loan if anything goes wrong.
Vice Mayor Colson explained that nonprofit developers do make profits on their projects. She stated that
they still have developer fees and developer equity. Mr. Roope agreed and explained that the State regulates
all the fees that can be charged on a project. He stated that in the realm of affordable housing, the main
difference between a for-profit and nonprofit developer, is that for-profit developers pay income tax on profit
and nonprofit developers don't pay income tax. He explained that the tradeoff is that as a for-profit
developer he can keep the profits, while a nonprofit can't keep profits.
Councilmember Beach reviewed the timeline Mr. Roope discussed earlier in the meeting. She explained that
he had stated that the project would take three months to get through the planning process, two to four
months for working drawings, and two months for the contractor. She asked staff if three months was a
realistic amount of time for this project to get through the planning process. CDD Meeker replied that three
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Agenda Item 8a
Meeting Date z 2/20/Lg
months seemed a little short and that it would more likely be four to six months. He added that it depends on
changes requested and how quickly the developer makes the changes.
Councilmember Beach stated that if it was six months, it could be about ayear before The Pacific
Companies breaks ground on this project. Mr. Roope replied in the affirmative.
Councilmember Keighran asked what would be built first: the residential portion or the parking garage. Mr.
Roope replied that the strong preference was to simultaneously build both portions. He noted that this would
mean that the two parking lots are out of service for a few years.
Vice Mayor Colson asked about the breakdown of income levels in this project. City Manager Goldman
reviewed the2017 San Mateo County income limits.
1. One bedroom/one bath at 50% AMI is $46,100 for a household of one
2. One bedroom/one bath at 60% AMI is $55,320 for a household of one
3. One bedroom/one bath at 1I0% AMI is $101,420 for a household of one
4. One bedroom/one bath at 120% AMI is $ 1 1 0,640 for a household of one
CDD Meeker stated that this is based upon an AMI of $l15,300
City Manager Goldman stated that those were the 2017 income limits but she didn't believe 2018 were
available yet. CDD Meeker stated that2018 numbers would be available in May or June.
Vice Mayor Colson asked if when the new income limits come out, if Mr. Roope would re-run the numbers
Mr. Roope replied in the affirmative.
Mr. Roope stated that he agreed with Ms. Kern that it is speculated that the tax credit pricing will decrease,
which will create an additional financial gap. However, he explained that the 2018 AMIs will likely include
a bump, and therefore it will help to minimize the financial gap.
Vice Mayor Colson noted that she sits on the Measure K funding committee for the NOFAs. She stated that
the City will not be competitive for the funding. This is because they are targeting lower-income units,
veterans housing, homeless housing, and transitional housing.
Mayor Brownrigg stated that a resident asked whether or not The Pacific Companies would continue to
manage the affordability program. Mr. Roope explained that they will hire a management company. The
City will be able to sign off on the management company.
Mayor Brownrigg asked what happens when a family gets a salary increase and is priced out of an affordable
unit. Mr. Roope replied that generally, in affordable housing, the income of the individual living there can
go up to 140o/o AMI before they would be asked to vacate. He stated that in the context of tax credits, this
project is technically a mixed-income project. Therefore, if a 60% unit goes over income, then the developer
is required to flip a ll}Yo unit (when it becomes available) to a 60% unit.
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Meeting Date: 2/2O/L8
Councilmember Keighran asked what the point of having60Yo AMI units, if there is that much flexibility.
Mr. Roope explained that the way the rules work is that no one has to vacate if they go above that 60% limit.
He stated that it is rare for a 600/o unit to find its way to ll0%.
Councilmember Keighran asked if an individual is in a ll}Yo unit, how much higher their income can go
before they would be asked to vacate. Mr. Roope replied that the 110% doesn't have the 140% rule. The
110% AMI units can have local restrictions that trigger requests to vacate.
Mr. Roope then addressed the earlier comments, stating that The Pacific Companies has done many
prevailing wage projects. He explained that it is really about the subsidy that you need for a prevailing wage
project. He stated that if they were now asked to do the project with prevailing wages, they would need to
find additional funds and it would create delays. Mr. Roope stated that he is happy with the union labor that
The Pacific Companies does work with but there will be additional costs and delays associated with
requiring prevailing wages.
Mr. Roope stated that 60Yo AMI household makes approximately $55,000, and 100% AMI household makes
$92,000. He explained that the general hourly wage for a union carpenter with all their benefits is $75,
which equates to an annual income of $150,000.
Mayor Brownrigg stated that he wanted to ensure that the City Council didn't underestimate the challenges
of obtaining an additional $6 million, if prevailing wage is required for the project. Mr. Roope agreed, noting
that additional funds could require additional strings, such as deeper income targeting.
Chris Collins, a representative from the San Mateo County Plumbers and Pipefitters' local union, spoke in
favor of requiring prevailing wage.
Mayor Brownrigg closed public comments.
Mayor Brownrigg asked the City Council to first discuss the second question in the staff report:
The parking lot structure will be constructed using prevailing wage labor. As a public building that
will remain under City control, prevailing wage is required for the garage component of the project.
Shall The Pacific Companies be also required to pay prevailing wage to workers involved in
construction of the affordable housing development?
Councilmember Beach stated that she appreciated Mr. Roope's clarification that it would be approximately a
15%o increase in cost to require prevailing wage on the affordable housing portion of the project. She stated
that she had frustration with Mr. Roope's recent memorandum that stated he was never asked to contemplate
prevailing wage. She explained that it was her recollection, that at a previous study session, prevailing wage
was discussed, and he had stated that he would make the numbers work.
Councilmember Beach stated that she had a hard time getting her head around the fact that this project is on
public land, for public benefit, and that it might not be a prevailing wage project. She explained that it struck
her as bizarre that the City would be building an affordable housing project and not pay prevailing wage.
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Meeting Date: 2/20/LB
Councilmember Ortiz explained that he was bothered by how long this project was taking. He stated that the
RFP went out in 2014 and details are still being worked out. He explained that he agreed with
Councilmember Beach that it seemed wrong to not pay prevailing wage on an affordable housing project.
Vice Mayor Colson stated that this is a hard conversation but that it was a mistake that was made 2.5 years
ago when the RFP didn't state that developers had to pay prevailing wage. She stated that since then, the
City has always included this language in their RFPs.
Vice Mayor Colson listed upcoming City projects that require prevailing wage: the $40 million Topgolf
project, $40 million community center, and $20 million parking garage. She stated that this is $100 million
in projects with prevailing wage.
Vice Mayor Colson stated that the City Council has to figure out a way to build housing for the lower
income residents of Burlingame. She explained that it is a difficult decision but the City is 2.5 years into this
project and this needs to be moved forward. Accordingly, she stated she was okay with the tradeoff of
building affordable housing and not being able to pay prevailing wage on the entire project. She asked Mr.
Roope to keep the Council updated on which portions of the project go to union labor.
Councilmember Keighran stated that she agreed with Vice Mayor Colson. She stated that prevailing wage
wasn't established as a requirement ahead of time. She explained that she had always felt that the AMIs
weren't high enough and therefore there would be financial issues. Lastly, she noted that because the City
has other projects where they are paying prevailing wage, she could be a little more flexible with this one.
Mayor Brownrigg stated that the City should have specified in the original RFP that prevailing wage was a
requirement. He explained that the State has told the City that they are 400 units short of housing for very
low (0-30% AMD and low (30-60% AMD. If this project goes forward, it builds 120 units, which deals with
about 1/3 of what the City needs. He stated that the fact that the developer has come back to the City and
asked for $ 1.85 million to cover the financial gap conveys the fact that there is not a lot of extra fat in the pro
forma. Therefore, if the City needs to find an additional $4-6 million, the project might disappear.
Mayor Brownrigg explained that the project was also providing the City with much-needed additional
parking. He explained that the City didn't have the funds to build a parking garuge and therefore this project
offered the City not only opportunity to build affordable housing but also to provide a great benefit to the
downtown.
The City Council next discussed the following question:
Shall Parking Lot F be leased or sold to The Pacific Companies (with appropriate contingencies)?
City Manager Goldman noted that this referred to the housing side of the project and not the parking
structure.
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Councilmember Ortiz stated that he was in favor of leasing Parking Lot F. He explained that he had thought
the City had to sell Lot F to make the project work. However, the best option would be if the City could
maintain control of the land.
Mayor Brownrigg asked Councilmember Ortiz if the sale was structured so that it carried a seller's note
which accrued interest, and the City is given the right to buy back the land for the price of the note, would
this be different. He added that his goal is to ensure that Lot F is on the City's balance sheet.
Councilmemb er Ortiz replied in the affi rmative.
Councilmember Keighran stated that she didn't want to sell Lot F; she wanted the City to maintain
ownership and control.
Mayor Brownrigg asked Councilmember Keighran the same question he asked Councilmember Ortiz.
Councilmernber Keighran stated that the Mayor was making an assumption that the land returns.
Mayor Brownrigg asked what if it was contractual that it retums.
Councilmember Keighran stated that with the way state regulations are she wants control of the property in
regards to design.
Vice Mayor Colson stated that she took a more flexible approach to this because she has watched a lot of
institutional real estate investors over the years buy and structure real estate transactions that are goal
oriented. She explained that if the goal is to maintain certain rights around the maintenance of the property,
these can be structured into a lease or a sale. She stated a lot could be achieved through a contract.
Councilmember Beach stated that she was in favor of leasing the property. She explained that she believed
this was a standard practice and that she would be open to making it a longer lease if it assisted the developer
in getting tax credits. Lastly, she stated that she didn't want to hamstring future councils and wanted to keep
the property within the City's control.
Vice Mayor Colson asked if there are any legal liabilities the City may face as a result of a trip and fall on
the property. She explained that if the property was leased, the City is clearly in the chain of title, but if they
conveyed it they are not. She asked if there was any risk or differential in selling versus leasing. City
Attorney Kane replied that with a properly structured ground lease, you can address some of that risk.
However, if the City is the property holder, than they are an attractive defendant.
Mayor Brownrigg stated that the preference he was hearing is for a long-term ground lease. He proposed
that the City Attomey work with the developer on drafting a ground lease.
Vice Mayor Colson stated that if the City enters into a ground lease, staff will need to work through the legal
implications with regard to liability and prevailing wage.
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Meeting Date: 2/2O/LB
Mayor Brownrigg stated that at some point the risk of the project being derailed is on the developer
Mayor Brownrigg stated he agreed with Vice Mayor Colson that a financial transaction can be structured so
that it reads as a sale but is canceled in the future and returns to the City. He stated that he would be more
willing to see it structured this way and thought Councilmember Ortiz agreed.
Mayor Brownrigg asked if embedded in the question of sale versus lease is the potential contribution of
$1.85 million from the City.
City Manager Goldman stated that the potential contribution exists whether the City sells or leases. She also
noted that the City Council seemed to be split on the issue of sell versus lease.
Vice Mayor Colson suggested that the City Council have an overall conversation and then try to generate a
consensus.
The City Council next discussed the third question:
Pursuant to the Disposition and Development Agreement (DDA) between the City and The Pacific
Companies, the City Council must approve the "sources and uses" of all project funding before
further work on the project is undertaken. This approval relates to the funding plan at a macro-level,
as the details of the project's finances may change somewhat as project construction nears.
Councilmember Keighran stated that she had a hard time discussing the "sources and uses" document when
the City Council had not decided if they would sell Lot F. She stated that she didn't want to sell the property
under any circumstances. She stated that if she knew there was going to be a ground lease she could be more
flexible with the "sources and uses" document.
Councilmember Ortiz stated that if the City Council leases Lot F, the current version of the "sources and
uses" document is not applicable.
Mayor Brownrigg asked why the "sources and uses" document is not applicable if the City Council chooses
to lease Lot F.
City Manager Goldman asked Mr. Roope to comment on whether the lease versus sell determination affects
the "sources and uses" document. Mr. Roope stated that if the City chooses to lease, then the $10 million
under land acquisition on the "sources and uses" document goes away and the $10 million on the sources
side goes away. Nothing else in the budget would change.
Mr. Roope explained that the proper way to structure a lease transaction would be to lease the ground at fair
market value. If The Pacific Companies did anything other than lease the ground at fair market value, it
would trigger the prevailing wage requirement. Additionally, if they lease the property for fair market rent,
the developer would need to build in an annual lease payment of approximately $600,000. This lease
payment would be paid annually with a $600,000 loan from the City back to him. Mr. Roope stated that
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Agenda Item 8a
Meeting Date: 2/20/LB
another way to structure the lease would be to capitalize the lease payment on a net present value basis in his
budget, which would make the "sources and uses" document look similar to its current form.
Vice Mayor Colson stated that if the City leased Lot F to Mr. Roope for a dollar, the delta would be
$600,000 ayear, which over ten years is $6 million. She asked if this is an option so that prevailing wage
could be paid. Mr. Roope stated that because a property like this doesn't have the cash flow to support a
lease payment like that, you would prepay the lease for whatever the term is. For example, if the property is
worth $10 million and the lease is $600,000 ayear, you would take the present value discount to create the
total 55 year payments. This would get paid upfront, much like if the property was sold, and the City would
loan the developer the money to make this payment.
Councilmember Beach stated that she wanted to ground the City Council in the big picture. She thanked the
City Council for their thoughtful discussion thus far and was thankful that they were making this momentous
decision. She stated this was by far the most important housing development in Burlingame for the
foreseeable future. She explained that she has an unwavering commitment to create affordable housing on
these lots.
Councilmember Beach stated that she wanted to caution everyone that they had a great vision but might not
have a great partnership. She explained that City Council has expressed that the affordable housing project
is an urgent need for the City. However, she hasn't felt that same urgency from the developer. She
discussed the sense of frustration she was feeling with how slowly the project was moving. She stated it
seemed that this project wouldn't break ground for nearly two more years. She noted that communication
has been poor and some of the biggest tradeoffs she's seen have come tonight, two years eight months into
the project.
Councilmember Beach stated that she went back and reviewed the July 2015 meeting where The Pacific
Companies was chosen. She stated that one of the major tenets of this project, that was celebrated, was that
the City would donate the land and that there would be no additional outlay of funds. However, now the
City is being asked to contribute $ 1.85 million in subsidy. She stated that she is concemed that after reading
Keyser-Marston's memorandum the financial gap will be bigger than $1.85 million. She explained that this
could lead to further delays in this project and would undermine the urgency with which the City needs
affordable housing.
Councilmember Beach voiced her concern about aesthetics, the contingency budgets, getting through the
planning process in three months, new housing legislation, and prevailing wage. She stated that even though
the City might not have financial risk, they have a huge risk in not seeing this needed project come to
fruition.
Councilmember Beach questioned whether they had the right partnership and whether they should break
ranks and release a new RFP. She stated that she didn't want to settle for a deal. She asked if this resonated
with her colleagues.
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Agenda Item 8a
Meeting Date: 2/20/18
Mayor Brownrigg stated that the reason the City Council picked The Pacific Companies' proposal is because
there was more public benefit than in the other proposals. He stated that this was partly because the
developer has a style of financing that is unusual and has been commended to the City Council as unique.
He stated that he didn't think there was another developer out there that would build a public parking
structure, park, and affordable housing. He stated he didn't want to search for something that isn't out there.
Additionally, he believed that the Planning Commission would make the project better.
Councilmember Ortiz stated that he agreed with the Mayor. He stated that the other proposals did not
include the public benefit that the City gets from this project. He explained that it would be disappointing to
start this process over.
Mayor Brownrigg discussed the San Carlos transit village project. He stated that it was first broached in
2004 and is still underway. Accordingly, these projects do not always come to fruition as quickly as one
would like.
Councilmember Beach stated that she had full respect for what the City Council decided in2015 but her
concerns were with The Pacific Companies' performance up until today.
Councilmember Keighran stated that she didn't vote in favor of The Pacific Companies for a variety of
reasons including financing. She explained that what was done is done, and the City needs to move forward.
She stated that the ball is now in Mr. Roope's court, either he makes it work or not. She said her priority was
keeping the land, and she was perturbed over the $ 1.85 million gap. She stated that it was her understanding
that Mr. Roope knew from the beginning that there was going to be clean up.
Councilmember Keighran stated that she would have preferred someone who had a lot more local
experience. However, she stated that she doesn't want to do a new RFP and instead the responsibility is on
the developer to see if he can make it work.
Vice Mayor Colson stated that most real estate deals are extremely complicated and require extensive
amounts of negotiations. She stated that they often take months to clarify all the needs. She agreed that it
had been way too long but it is what is. She stated that she trusted the staff and Planning Commission to
make this project work.
Vice Mayor Colson stated that the $1.85 million request is for potential clean up. She stated that one of the
benefits of the transaction is that the City has a cap on its clean up because in Califomia it is the property
owner's responsibility to clean up and mitigate contaminations.
Vice Mayor Colson stated that another option is to talk to the developer that was second-in-line and ask them
if they would be willing to commit if The Pacific Companies fell through.
Mayor Brownrigg stated that the delta that was offered from the Public Parking Reserve was justified in two
ways. The first was that the developer, upon leaming how much it was going to cost to remediate, came
back with a podium project so that there would be no undergtound parking. However, the City Council
l8
Burlingame City Council February 5, 2018
Unapproved Minutes
Agenda Item 8a
Meeting Date z 2/20/LB
believed that this would lead to an inferior project. Therefore, the City agreed to contribute to the cleanup if
the developer agreed to maintain underground parking. Secondly, he stated that the contribution made sense
as a public investment. This is because the City would never be able to afford the desperately needed
parking garage on its own.
Mayor Brownrigg attempted to sum up the City Council's direction. He stated that there is a consensus that
there should a long-term lease, with one Councilmember saying it was a deal breaker. Next, he stated that
the City Council is not happy, but comfortable with the tradeoff that if they get affordable housing and a
parking structure, that prevailing wage won't be required on the affordable housing portion. He explained
that he believed the City Council was broadly comfortable with the "sources and uses" document but as
Councilmember Keighran pointed out, ultimately this is up to the developer.
Councilmember Beach asked about the $1.85 million requested contribution.
Mayor Brownrigg stated that Vice Mayor Colson and he were in favor of the contribution.
Councilmember Ortiz stated he was too.
Vice Mayor Colson asked if the $1.85 million will come out of the parking fund. CDD Meeker replied in the
affirmative.
Councilmember Beach pointed out that the City was contributing $1.85 million from the parking fund, but
the genesis of the need is from something other than parking.
Councilmember Keighran stated that she wouldn't agree with the total contribution being $1.85 million
because the developer knew there was going to be clean up. However, she explained that she was willing to
compromise and contribute $900,000.
Vice Mayor Colson stated that the nexus was that they were going to have to go with a four-story parking
garage because money was needed for the cleanup. Therefore, by contributing $1.85 million from the
parking fund, they can create the additional level of parking.
Mayor Brownrigg asked if direction had been given.
City Attorney Kane stated that she believed staff knew what they needed to work on, and the developer
would need to go back and make some changes. She added that there will need to be significant follow up
on the overall feasibility of implementing the direction given.
Mayor Brownrigg stated that he believed it is really important for this project to proceed into planning. He
stated that this would give the public a chance to weigh in and remove the City Council from being the de
facto Planning Commission. CDD Meeker and City Attorney agreed that this was the goal.
Burlingame City Council
Unapproved Minutes
t9
February 5, 2018
Agenda Iten 8a
Meeting Datez 2/2O/LB
Councilmember Keighran asked if staff could find out if the larger affordable housing projects in San Mateo
County paid prevailing wage. CDD Meeker replied in the affirmative.
5. UPCOMING EVENTS
Mayor Brownrigg reviewed the upcoming events taking place in the City.
6. PRESENTATIONS
Councilmember Keighran stated that she would not be participating in this matter as it is a County issue
which she has been working on through her position in Supervisor Canepa's office.
Supervisor Pine introduced the Get Us Moving presentation. He stated that Get Us Moving ("GUM") is a
joint effort between the County of San Mateo and the San Mateo County Transit District. He explained that
the program consists of extensive outreach to the community and City Councils to gather feedback on the
future of public transportation in the County and a potential sales tax on the November 2018 ballot.
Supervisor Pine stated that public transportation has an operational challenge in keeping what they have
working well and obtaining future capital investments for improvements.
Jessie Epstein from the San Mateo County Transit District explained that GUM's goal is to determine where
transportation dollars should be spent. Ms. Epstein reviewed the transportation agencies in the County.
o San Mateo County Transit District operates SamTrans bus and paratransit services, manages the
Caltrain system, and administers local transportation funding programs.
o City/County Association of Governments approves countywide plans and strategies to address
traffic congestion and receives local, regional, and state funding.
o Commute.org collaborates with transit agencies, employers, and cities to promote altematives to
driving alone.
Ms. Epstein talked about the projected population growth in San Mateo County. She stated that by 2040, the
population is expected to grow by over 900,000. Additionally, paratransit ridership is expected to grow from
320,000 rides in 2010 to over I million expected rides in 2040. She added that the County is seeing
thousands of new housing units built, and the State Legislature is trying to gear these developments towards
public transit hubs.
Ms. Epstein reviewed the transportation challenges the County is facing including:
o Updating aglng systems and infrastructure
o Addressing record levels of highway congestion
o Separating the Caltrain Corridor from local roads
o Increasing Caltrain capacity, frequency, and travel times
Burlingame City Council
Unapproved Minutes
20
February 5, 2018
a. GET US MOVING - SAN MATEO COUNTY
Agenda Item 8a
Meeting Date: 2/20/LB
o Evolving and expanding bus service
. Supporting expanded mobility options for seniors, disabled, and low-income residents
. Improving access and safety for cyclists and pedestrians
. Enhancing first/last mile connections to transit
o Incentivizing public transportation and other shared-ride solutions
Ms. Epstein reviewed the funding needs of transportation projects in the County including: Caltrain
Modernization, with a $400 million share required from San Mateo County, and US 101 Managed Lanes, at
a total cost of $500 million. She stated that the County applies for State and Federal grants but these grants
often require a local contribution.
Ms. Epstein reviewed the work accomplished through the Transportation Authority's direction and funding.
This included the completion of l3 grade separations. However, she noted that there are29 other crossings
in the County that need to be reviewed.
Ms. Epstein explained that the State Legislature passed AB 1613, which allows the Transit District Board
and the San Mateo County Board of Supervisors to place a Yz cent sales tax on the November ballot. The
measure requires 2l3rds approval to pass. It is estimated that this tax would bring in $80 million per year.
Ms. Epstein explained that GUM will develop an expenditure plan for how the potential sales tax will be
spent based on feedback from the community, technical advisory group, and stakeholder advisory goup.
She stated that GUM has held a series of public meetings, and has distributed postage pre-paid surveys at
city halls and other public buildings.
Ms. Epstein stated that the focus of GUM is:
o To relieve traffic congestion countywide
o Invest in a financially sustainable public transportation system
o Prioritize environmentally sustainable transportation solutions
o Promote economic vitality and economic development
o Maximize opportunities to leverage investment from public and private partners
o Enhance safety and public health
o Invest in repair and maintenance of existing and future infrastructure.
Ms. Epstein stated that in June, GUM will go to the Transit Board and the Board of Supervisors with a draft
expenditure plan to see if a sales tax should be put on the November ballot.
Mayor Brownrigg asked if AB 1613 was created so that the County could breach the sales tax limit. Ms.
Epstein stated that the legislation separated this item from the tax cap.
7. PUBLIC COMMENT
There were no public comments.
Burlingame City Council
Unapproved Minutes
2t
February 5, 2018
Agenda Item 8a
Meeting Datez 2/20/LB
8. CONSENT CALENDAR
Mayor Brownrigg asked the Councilmembers and the public if they wished to remove any item from the
Consent Calendar. Councilmember Keighran pulled 8h.
Councilmember Ortiz made a motion to adopt 8a, 8b, 8c, 8d, 8e, 8f, 8g, 8i, and 8j; seconded by Vice Mayor
Colson. The motion passed unanimously by voice vote, 5-0.
a. ADOPTION OF CITY COUNCIL TING MINUTES JANUARY 16. 2018
City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of January 16,2018.
b. ADOPTION OF CITY COUNCIL TING MINUTES JANUARY 27.2018
City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of January 27,2018.
c. OPEN NOMINATIO PERIOD TO FILL THREE VACANCIES ON THE PLANNING
COMMISSION
City Manager Goldman requested Council open the nomination period to fill the three vacancies on the
Planning Commission.
d.ADOPTION OF A RESOLUTION AUTHO THE CITY MANAGER TO EXECUTE
AN AGREEMENT FOR PROFESSIONAL SERVICES WITH MIG FOR THE
DEVELOPMENT OF A PARKS MASTER PLAN
Parks and Recreation Director Glomstad requested Council adopt Resolution Number 20-2018.
Vice Mayor Colson thanked the staff for putting this together. She stated that it was helpful to her to read
the RFP and proposals as she gained a more robust understanding of the process and project.
Councilmember Keighran voiced her appreciation for the additional information in the staff report
e. ADOPTION OF A RESOLUTION G THE CITY MANAGER TO EXECUTE
A FIVE-YEAR AGREEMENT WITH A THREE-YEAR OPTIONAL EXTENSION WITH
LWP CLAIMS SOLUTIONS FOR THIRD PARTY ADMINISTRATION OF THE CITY'S
SELF-INSURED WORKERS , COMPENSATION PROGRAM
HR Director Morrison requested Council adopt Resolution Number 2l-2018
Burlingame City Council
Unapproved Minutes
22
February 5, 2018
f. ADOPTION OF A RESOLUTION AUTH
Agenda Item 8a
Meeting Date: 2/2O/LB
G THE CITY MANAGER TO EXECUTE
A PROFESSIONAL SERVICES AGREEMENT FOR LABOR RELATIONS
CONSULTATION SERVICES WITII BURKE. WILLIAMS & SORE,NSEN. LLP
HR Director Morrison requested Council adopt Resolution Number 22-2018
p. ADOPTION OF A RESOLUTION ACCEPTING THE LORTON AVE STORM LINE
CLEANING PROJECT" CITY PROJECT NO. 84930
DPW Murtuza requested Council adopt Resolution Number 23-2018.
h. ADOPTION OF A RESOLUTION ESTABLI SHING AN AUTOMATIC ROTATION FOR
ASSIGNMENT TO TIIE ECONOMIC DEVELOPMENT SUBCOMMITTEE
City Clerk Hassel-Shearer requested Council adopt Resolution Number 24-2018.
Councilmember Keighran stated that she would be voting against this because historically, the Mayor has the
sole authority to assign all subcommittees. She explained that pursuant to the resolution, the Vice Mayor and
the third-in-line would automatically be assigned to the Economic Development Subcommittee. She added
that the Mayor's reason for treating the Economic Development Subcommittee differently was because it
had more importance in relation to other subcommittees. She explained that she didn't agree with this and
didn't want to set a precedent that rotations could be created for other committees.
Councilmember Ortiz stated that he understood the value of rotating membership on the Economic
Development subcommittee and would be voting in favor of it.
Councilmember Ortiz made a motion to adopt Resolution Number 24-2018; seconded by Mayor Brownrigg.
The motion passed by roll call,3-2 (Vice Mayor Colson and Councilmember Keighran voted against).
i. OUARTERLY TMENT REPORT. PERIOD ENDING 31.2017
Finance Director Augustine requested Council adopt the Quarterly Investment Report, period ending
December 31,2017.
APPROVAL OF THE CITY'S PARTICIPATION IN THE TION EAGLE VISIT.j
HOMECOMING 50 YEARS CELEBRATION
City Manager Goldman requested Council's approval of the City's participation in the Operation Eagle visit
homecoming 50 years celebration.
Mayor Brownrigg asked staff to be mindful of establishing a date for the joint Planning Commission and
City Council meeting so that it doesn't conflict with this celebration.
Burlingame City Council
Unapproved Minutes
23
February 5, 2018
Agrenda Item 8a
Meeting Date:- 2/20/L8
9. PUBLIC HEARINGS
There were no public hearings
10. STAFF REPORTS AND COMMUNICATIONS
a. ADOPTION OF A RESOLUTION WAIVING REGISTRATION FEES FOR INDIVIDUAL
MASSAGE THERAPISTS
City Attorney Kane requested Council adopt Resolution Number 25-2018. She explained that the City has a
public safety interest in individual massage practitioners registering with the police department. She stated
that the City doesn't want to put barriers in their way, in the form of the current registration fees. Therefore,
staff is recommending that the City Council suspend these fees.
Mayor Brownrigg opened the item up for public comment
Vice Mayor Colson made a motion to adopt Resolution Number 25-2018; seconded by Councilmember
Ortrz. The motion passed unanimously by voice vote, 5-0.
11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS
a. MAYOR BROWIIRIGG'S COMMITTEE REPORT
b. VICE MAYOR COLSON'S COMMITTEE REPORT
c. COUNCILMEMBER BEACH,S COMMITTEE REPORT
12. FUTURE AGENDA ITEMS
There were no future agenda items.
13. ACKNOWLEDGEMENTS
The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Parking & Safety
Commission, Beautification Commission, Parks and Recreation Commission and Library Board of Trustees
are avail abl e online at www.burlingaurB.qr.g.
14. ADJOURNMENT
Mayor Brownrigg adjourned the regular meeting at 7 :28 p.m. and the study session was adjoum ed at 9:16
p.m.
Respectfully submitted,
24
Burlingame City Council
Unapproved Minutes
February 5, 2018
Meaghan Hassel-Shearer
City Clerk
Agenda Item 8a
Meeting Datez 2/2O/LB
Burlingame City Council
Unapproved Minutes
25
February 5, 2018
STAFF REPORT AGENDA NO: 8b
MEETING DATE: February 20, 2018
To: Honorable Mayor and City Council
Date: February 20,2018
From: Lisa K. Goldman, City Manager - (650) 558'7243
Subject: Adoption of a Resolution Approving the Recommended Measure I
Expenditure Plan
RECOMMENDATION
Staff recommends that the City Council adopt a resolution approving the recommended Measure I
expenditure plan.
BACKGROUND
ln November, Burlingame's voters approved Measure l, a retail transactions and use tax of %
percent, which effectively increases the sales tax rate in Burlingame from 8.75 percent to 9 percent.
The tax will go into effect on April 1,2018, and the City will begin to see the increased revenues
from the tax a few months later. Last year, the City's sales tax consultants estimated that the
measure would yield approximately $2 million per year. A more recent analysis performed by a
different member of the sales tax consulting team indicates the measure will yield closer to $1.75
million per year. The actual yield will likely be somewhere between the two numbers, and the
amount will vary somewhat from year to year depending on how well Burlingame's local economy
is doing.
Measure I was structured as a general purpose tax, requiring a simple majority for passage. As
such, the Council was prohibited by law from approving a specific expenditure plan for the funds in
advance of the measure's passage. (With a specialtax, in contrast, the Council could have adopted
an expenditure plan in advance of the election, but a twothirds majority would have been required
for passage.)
DISCUSSION
At the January 27,2018 City Council goal-setting meeting, staff presented a recommended
expenditure plan for the Measure I funds, and a majority of the City Council agreed with staff's
recommendation. Through the adoption of the attached resolution, the City Council will formally
approve of the plan. Under the expenditure plan, funds will be distributed as follows:
Community Center:
Streets and sidewalks
Police Officer:
$1.0 million
$575,000 +/- depending on actual receipts
$200,000
1
Adoption of Measure I Expenditure Plan February 20,2018
FISCAL IMPACT
Measure I is expected to provide $1.75 to $2 million annually each year
Exhibit:
o Resolution
2
RESOLUTION
NO.
RESOLUTION OF THE CIry COUNCIL OF THE CITY OF BURLINGAME
APPROVING THE RECOMMENDED MEASURE I EXPENDITURE PLAN
WHEREAS, in November, Burlingame's voters approved Measure l, a retail
transactions and use lax of % percent, which effectively increases the sales tax rate in
Burlingame from 8.75 percent to I percent; and
WHEREAS, the tax will go into effect on April 1, 2018, and the City will begin to see
the increased revenues from the tax a few months later; and
WHEREAS, the tax is estimated to raise between $1 .75 million and $2 million
annually, and the amount will vary somewhat from year to year depending on how well
Burlingame's local economy is doing; and
WHEREAS, at the City Council's goal-setting meeting on January 27,2018, the City
Council staff presented the City Council with a recommended expenditure plan for the
Measure I funds, and a majority of the Council agreed with staff s recommendation.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Burlingame approves distributing the Measure I funds as follows:
Community Center:
Streets and sidewalks
Police Officer:
$1.0 million
$575,000 +/- depending on actual receipts
$200,000
Michael Brownrigg, Mayor
l, Meaghan Hassel-Shearer, City Clerk of the City of Burlingame, do hereby certify
that the foregoing Resolution was adopted at a regular meeting of the City Council held
on the 20th day of February,2018, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:ABSENT: COUNCILMEMBERS:
Meaghan Hassel-Shearer, City Clerk
STAFF REPORT AGENDANO: 8c
MEETING DATE: February 20, 2018
lo:Honorable Mayor and Gity Gouncil
Date: February 20,2018
From: Syed Murtuza, Director of Public Works - (650) 558-7230
Subject:Adoption of a Resolution Approving a Professional Services Agreement
with Moft MacDonald for Providing Engineering Design Service Related to
the Easton Addition Sewer Rehabilitation Project and Gitywide
Neighborhood Sewer Rehabilitation lmprovements, Phase 4 and 5, City
Project No. 84193, and Authorizing the City Manager to Execute the
Agreement
RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution approving a professional
services agreement with Mott lt/acDonald for providing engineering design services related to the
Easton Addition Sewer Rehabilitation Project and Citywide Neighborhood Sewer Rehabilitation
lmprovements Phase 4 and 5, in the amount of $427,683; and authorizing the City Manager to
execute the agreement.
BACKGROUND
The 2010 Wastewater Collection System Master Plan identified the sanitary sewer pipelines in
the Easton Addition Subdivisions and surrounding neighborhoods as the high priority areas to be
rehabilitated. The existing sewer systems in these areas consist of 6-inch to 8-inch diameter
vitrified clay pipes (VCPs) that have aged beyond their service life. Based on Closed Circuit
Television (CCTV) inspections, these pipelines have high degrees of storm water inflow and
infiltration from cracks and loose joints. Additionally, CCTV inspections also identified a citywide
list of pipelines with structural deficiencies with Pipeline Assessment and Certification Program
(PACP) ratings of 4 and 5, requiring repairs as soon as possible. The PACP ratings are industry
standards used for determining the structural integrity and conditions of the pipelines in the
wastewater collection system.
Easton Addition Subdivisions consist of large areas involving complicated work in narrow
easements behind residential homes. Based on current funding levels and available resources,
undertaking pipeline rehabilitation in these large subdivisions required meticulous planning
involving multiple phases of work. Phase 2 was successfully completed in summer 2017. Phase 3
will start construction in mid-February 2018. Phase 4 of the project consists of rehabilitating the
sewer system in Easton Addition Subdivision No. 4 and 5. Phase 5 of the project consists of
rehabilitating the sewer system in portions of Easton Addition Subdivision No. 2, as well as
pipelines with PACP ratings of 4 and 5 in several areas throughout the city.
1
Easton Addition Sewer Rehabilitation Project and Citywide
Neighborhood Seurer Rehabilitation, Phase 4 and 5
February 20, 2018
DISCUSS!ON
ln September 2015, through a competitive Request for Proposals (RFP) process, the City
selected the firm of Mott MacDonald to perform the engineering design for the sewer system
rehabilitation in the Easton Addition subdivisions, Ray Park Subdivision, and other high-priority
neighborhoods. Mott MacDonald has successfully completed the engineering design services for
Ray Park Subdivision and Easton Addition Subdivision No.7. Based on the consultant's
successful performance of work, their responsiveness to City needs, and project delivery
approach, staff has negotiated the attached Professional Services Agreement with Mott
MacDonald for engineering design services for Phases 4 and 5 of the Project in the amount of
$427,683. The professional services fee amountof $427,683 represents approximately 10o/o of
the estimated project construction cost of $4,500,000, which is well within the industry standards
given the scope of work and complexity of the project.
Following is a brief summary of the scope of engineering design services for Phases 4 and 5,
which is described in more detail in Exhibit A of the attached Professional Services Agreement:
. Perform project management functions, including attending meetings, site visits, and
agency coordination;
o Perform field surveys, geotechnical investigations, and prepare base maps;
. Prepare and review preliminary data and geotechnical report; perform laboratory testing
and topographic surveying; set horizontal and vertical pipeline alignments; prepare outline
specifications and preliminary engineer's estimate; and perform peer review;
. Complete 60% and 90% engineering design including but not limited to, reviewing and
addressing City comments; updating pipeline plans to 60% and 90% completion;
preparing draft specifications and bid package; and updating engineer's estimate based
on revisions;
. Complete and submit 100% design package including but not limited to, addressing
comments, finalizing specifications, revising cost estimates, and completing 100o/o
construction contract documents;
r Complete final construction drawings, specifications, and engineer's estimate; and
. Provide bidding assistance including but not limited to, attending pre-bid meeting,
responding to requests for information, preparing addenda, and preparing conformed set
of contract documents.
Upon completion of the engineering design, staff plans to advertise the project for bids.
Assuming no delays and funding availability, Phase 4 construction is anticipated to begin in
August 2018 and Phase 5 is anticipated to begin construction in February 2019.
FISCAL IMPACT
The following are the estimated costs relative to the project development:
2
Easton Addition Sewer Rehahilitation Project and Citywide
Neighborhood Sewer Rehabilitation, Phase 4 and 5
February 20, 2018
Consultant Design Services
Contingency (1Soh)
Project Management and Ad ministration
$427,683
$64,152
$1 08,1 65
Total $600,000
There are adequate funds in the sewer Capital lmprovement Program in projects 327-84192 and
327-84830 to complete the project design development.
Exhibits:
o Resolution
. Professional Services Agreement
. Project Location Map
3
RESOLUTTON NO._
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME
APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH MOTT
MACDONALD FOR PROVIDING ENGINEERING DESIGN SERVICES RELATED TO
THE EASTON ADDITION SEWER REHABILITATION PROJECT AND CITYWIDE
NEIGHBORHOOD SEWER REHABILITATION IMPROVEMENTS, PHASE 4 AND 5,
AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT
CITY PROJECT NO.84193
RESOLVED, by the CITY COUNCIL of the City of Burlingame, California which FINDS,
ORDERS and DETERMINES AS FOLLOWS:
1. The public interest and convenience require execution of the agreement cited in
the title above.
2. The City Manager is authorized to sign said agreement on behalf of the City of
Burlingame.
3. The City Clerk is instructed to attest such signature.
Mayor
l, Meaghan Hassel Shearer, City Clerk of the City of Burlingame, certify that the
foregoing Resolution was introduced at a regular meeting of the City Council held on the 20rH
day of Februarv, 2018 and was adopted thereafter by the following vote:
AYES:
NOES:
ABSENT
COUNCILMEMBERS:
CoUNClLlvlElr/BERS:
COUNCILMEMBERS:
City Clerk
AGREEMENT FOR PROFESSIONAL ENGINEERING DESIGN SERVICES
wlTH MOTT MACDONALD
FOR EASTON ADDITION SEWER REHABILITATION PROJECT
W]TH CITY.W|DE NEIGHBORHOOD SEWER REHABILITATION
PHASE 4 AND 5
CITY PROJECT NO.84193
A.The City is considering conducting activities for consultant engineering services
for construction management and inspection services for the Easton Addition
Sewer Rehabilitatlon Project wlth City-Wide Nelghborhood Sewer
Rehabilitation, Phase 4 and 5, City Projec-t No. 84193.
The City desires to engage a professional engineering consultant to provide survey
and engineering design services because of Consultant's experience and
qualifications to perform the desired work, described in Exhibit A.
The Consultant represents and affirms that it is qualified and willing to perform the
desired work pursuant to this Agreement.
AGREEMENTS
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Scope of Services. The Consultant shall provide professional engineering
services such as survey, design, bid assistance, and as detailed in "Proposed
Tasks" of the aftached Exhibit A of this agreement.
Time of Performance. The services of the Consultant are to commence upon
the execution of this Agreement with completion of all work as set forth in Exhibit
A.
Page 1 of I
B.
c.
THlSAGREEMENTisenteredintothis-dayof-,2018,
by and between the Citv of Burlinoame, State of California, herein called the "City", and
MOTT MACDONALD engaged in providing PROFESSIONAL ENGINEERING DESIGN
services herein called the "Consultant".
RECITALS
2.
c Comoliance with Laws. The Consultant shall comply with all applicable laws,
codes, ordinances, and regulations of governing federal, state and local laws.
Consultant represents and warrants to City that it has all licenses, permits,
qualifications and approvals of whatsoever nature which are legally required for
Consultant to practice its profession. Consultant represents and warrants to City
that Consultant shall, at its sole cost and expense, keep in effect or obtain at all
times during the term of this Agreement any licenses, permits, and approvals which
are legally required for Consultant to practice its profession. Consultant shall
maintain a City of Burlingame business lacense.
Sole Responsibilitv. Consultant shall be responsible for employing or engaging
all persons necessary to perform the services under this Agreement.
lnformation/Report Handlino. All documents furnished to Consultant by the City
and all reports and supportive data prepared by the Consultant under this
Agreement are the City's property and shall be delivered to the City upon the
completion of Consultants services or at the City's written request. All reports,
information, data, and exhibits prepared or assembled by Consultant in connection
with the performance of its services pursuant to this Agreement are confidential
until released by the City to the public, and the Consultant shall not make any of
these documents or information available to any individual or organization not
employed by the Consultant or the City without the written consent of the City
before such release. The City acknowledges that the reports to be prepared by
the Consultant pursuant to this Agreement are for the purpose of evaluating a
defined p@ect, and City's use of the information contained in the reports prepared
by the Consultant in connection with other projects shall be solely at City's risk,
unless Consultant expressly consents to such use in writing. City further agrees
that it will not approprlate any methodology or technique of Consultant which is
and has been confirmed in writing by Consultant to be a trade secret of Consultant.
Comoensation. Compensation for Consultant's professional services shall not
exceed $427.683.00; and payment shall be based upon City approval ofeach task.
Billing shall include current period and cumulative expenditures to date and shall
be accompanied by a detailed explanation of the work performed by whom at what
rate and on what date. Also, plans, specifications, documents or other pertinenl
materials shall be submitted for City review, even if only in partial or draft form.
7 . Availabilitv of Records. Consultant shall maintain the records su pporting this
billing for not less than three (3) years following completion of the work under this
4
5
6
Page 2 of 8
Agreement. Consultant shall make these records available to authorized
personnel of the City at the Consultant's offices during business hours upon written
request of the City.
Proiect Manager. The Project Manager for the Consultant for the work under this
Agreement shall be IraSie-K.SAXaXihAE-LE
Assionabilitv and Subcontractino. The services to be performed under this
Agreement are unique and personal to the Consultant. No portion of these
services shall be assigned or subcontracted without the written consent of the City.
10. Notices. Any notice required to be given shall be deemed to be duly and properly
given if mailed postage prepaid, and addressed to:
To City:Donald Chang, P.E.
Senior Civil Engineer
City of Burlingame
501 Primrose Road
Burlingame, CA 94010
To Consultant:Tracie Sakakihara, P.E.
Project Manager
Mott MacDonald
181 Meko Drive, Suite 510
San Jose, CA 951 10
or personally delivered to Consultant to such address or such other address as
Consultant designates in writing to City.
11.lndependent Contractor. lt is understood that the Consultant, in the performance
of the work and services agreed to be performed, shall act as and be an
independent contractor and not an agent or employee of the City. As an
independent contractor he/she shall not obtain any rights to retirement benefits or
other benefits which accrue to City employee(s). \Mth prior written consent, the
Consultant may perform some obligations under this Agreement by
subcontracting, but may not delegate ultimate responsibility for performance or
assign or transfer interests under this Agreement.
Consultant agrees to testify in any litigation brought regarding the subject of the
work to be performed under this Agreement. Consultant shall be compensated
for its costs and expenses in preparing for, traveling to, and testirying in such
8.
9.
Page 3 of I
matters at its then current hourly rates of compensation, unless such litigation is
brought by Consultant or is based on allegations of Consultant's negligent
performance or wrongdoing.
12. Conflict of lnterest. Consultant understands that its professional responsibilities
is solely to the City. The Consultant has and shall not obtain any holding or
interest within the City of Burlingame. Consultant has no business holdings or
agreements with any individual member of the Staff or management of the City or
its representatives nor shal! it enter into any such holdings or agreements. ln
addition, Consultant warrants that it does not presently and shall not acquire any
direct or indirect interest adverse to those of the City in the subject of this
Agreement, and it shall immediately disassociate itself from such an interest
should it discover it has done so and shall, at the City's sole discretion, divest itself
of such interest. Consultant shall not knowingly and shall take reasonable steps
to ensure that it does not employ a person having such an interest in this
performance of this Agreement. lf after employment of a person, Consultant
discovers it has employed a person with a direct or indirect interest that would
conflict with its performance of this Agreement, Consultant shall promptly notify
City of this employment relationship, and shall, at the City's sole discretion, sever
any such employment relationship.
13. Equal Ernplovment,Oppsilunitv. Consultant warrants that it is an equal
opportunity employer and shall comply with applicable regulations governing equal
emptoyment opportunity. Neither Consultant nor its subcontractors do and
neither shall discriminate against persons employed or seeking employment with
them on the basis of age, sex, color, race, marital status, sexual orientation,
ancestry, physical or mental disability, national origin, religion, or medical
condition, unless based upon a bona fide occupational qualification pursuant to the
California Fair Employment & Housing Act.
14. lnsurance.
A. Minimum Scope of lnsurance:
Consultant agrees to have and maintain, for the duration of the
contract, General Liability insurance policies insuring him/her and
his/her firm to an amount not less than: One million dollars
($1,000,000) combined single limit per occurrence and two million
dollars ($2,000,000) aggregate for bodily injury, personal injury and
i.
Page 4 of 8
property damage in a form at least as broad as ISO Occunence Form
cG 0001.
Consultant agrees to have and maintain for the duration of the
contract, an Automobile Liability insurance policy ensuring him/her
and his/her stiaff to an amount not less than one million dollars
($1,000,000) combined single limit per accident for bodily injury and
property damage.
Consultant agrees to have and maintain, for the duration of the
contract, professional liability insurance in amounts not less than two
million dollars ($2,000,000) each claim/aggregate sufficient to insure
Consultant for professional enors or omissions in the performance
of the particular scope of work under this agreement.
B. General and Automobile Liability Policies:
The City, its officers, officials, employees and volunteers are to be
covered as insured as respects: liability arising out of activities
performed by or on behalf of the Consultant; products and completed
operations of Consultant, premises owned or used by the
Consultant. The endorsement providing this additional insured
coverage shall be equal to or broader than ISO Form CG 20 10 11
85 and must cover joint negligence, completed operations, and the
acts of subcontractors. This requirement does not apply to the
professional liability insurance required for professional errors and
omissions.
The Consultants insurance coverage shall be endorsed to be
primary insurance as respects the City, its officers, officials,
employees and volunteers. Any insurance or self-insurances
maintained by the City, its officers, officials, employees or volunteers
ll.
It.
I
Page 5 of I
Any deductibles or self-insured retentions must be declared to and
approved by the City. At the option of the City, either: the insurer
shall reduce or elimlnate such deductibles or self-insured retentions
as respects the City, its officers, officials, employees and volunteers;
or the Contractor shall procure a bond guaranteeing payment of
losses and related investigations, claim administration, and defense
expenses.
l.
iv.
shall be excess of the Consultant's insurance and shall not contribute
with it.
Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the City, its officers, officials,
employees or volunteers.
The Consultanfs insurance shall apply separately to each insured
against whom a claim is made or suit is brought, except with respect
to the limits of the insurer's liability.
c ln addition to these policies, Consultant shall have and maintain Workers'
Compensation insurance as required by California law. Further,
Consultant shall ensure that all subcontractors employed by Consultant
provide the required Workers' Compensation insurance for their respective
employees.
All Coverages: Each insurance policy required in this item shall be
endorsed to state that coverage shall not be canceled except after thirty
(30) days' prior written notice by mail, has been given to the City (10 days
for non-payment of premium). Current certification ofsuch insurance shall
be kept on file at all times during the term of this agreement with the City
Clerk.
Acceptability of lnsurers: lnsurance is to be placed with insurers with a
Best's rating of no less than A-:Vll and authorized to do business in the
State of California.
Verification of Coverage: Upon execution of this Agreement, Contractor
shall furnish the City with certificates of insurance and with original
endorsements effecting coverage required by this clause. The certificates
and endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The certificates
and endorsements are to be on forms approved by the City. All certificates
and endorsements are to be received and approved by the City before any
work commences. The City reserves the right to require complete, certified
copies of all required insurance policies, al any time.
15. lndemnification. To the fullest extent permitted by law, Consultant shall save,
keep and hold harmless indemnify and defend the City, its officers, employees,
authorized agents and volunteers from all damages, liabilities, penalties, costs, or
t
iv
D
E
Page 6 of 8
F.
expenses in law or equity, including but not limited to attorneys' fees, that may at
any time arise, result from, relate to, or be set up because of damages to property
or personal injury received by reason of, or in the course of performing work which
arise out of, pertain to, or relate to, directly or indirectly, in whole or in part, the
negligence, recklessness, or willful misconduct of Consultant, or any of the
Consultant's officers, employees, or agents or any subconsultant. This provision
shall not apply if the damage or injury is caused by the sole negligence, active
negligence, or willful misconduct of the City, its officers, agents, employees, or
volunteers.
16. Waiver. No failure on the part of either party to exercise any right or remedy
hereunder shall operate as a waiver of any other right or remedy that party may
have hereunder, nor does waiver of a breach or default under this Agreement
constitute a continuing waiver of a subsequent breach of the same or any other
provision of this Ag reement.
17. Governinq Law. This Agreement, regardless of where executed, shall be
governed by and construed under the laws of the State of California. Venue for
any action regarding this Agreement shall be in the Superior Court of the County
of San Mateo.
18. Termination of Aoreement. The City and the Consultant shall have the right to
terminate this agreement with or without cause by giving not less than fifteen (15)
days written notice of termination. ln the event of termination, the Consultant
shall deliver to the City all plans, files, documents, reports, performed to date by
the Consultant. ln the event of such termination, City shall pay Consultant an
amount that bears the same ratio to the maximum contract price as the work
delivered to the City bears to completed services contemplated under this
Agreement, unless such termination is made for cause, in which event,
compensation, if any, shall be adlusted in light of the particular facts and
circumstances involved in such termination.
19. Amendment. No modification , waiver, mutuat termination, or amendment of this
Agreement is effective unless made in writing and signed by the City and the
Consultant.
20 Disoutes. ln any dispute over any aspect of this Agreement, the Prevailing party
shall be entitled to reasonable attorney's fees, as well as costs not to exceed
$7,500 in total.
Page 7 of 8
21 Entire Agreement. This Agreement constitutes the complete and exclusive
statement of the Agreement between the City and Consultant. No terms,
conditions, understandings or agreements purportlng to modiff or vary this
Agreement, unless hereafter made in writing and signed by the party to be bound,
shall be binding on either party.
lN WITNESS WHEREOF, the City and Consultant have executed this Agreement as of
the date indicated on page one (1).
City of Burlingame "Consultant'
Bv h%w
Lisa K. Goldman
City Manager
Approved as to form:
ffott frrfacOonald ( ff
Print Name. Efr*J, 4?TZ6.E/L
Title: 94 u/ee /A€rOaa:T
City Attorney - Kathleen Kane
ATTEST:
City Clerk - Meaghan Hassel-Shearer
Page I of 8
M MMOTT
MACDONALD
Exhibit "A"
Proposed Scope of Services
Easton Addition and Neighborhood Sewer Rehabilitation Projects,
Phase 4 and Phase 5
Sewer Rehabilitation Design Services
City of Burlingame, California
Objective
Mott MacDonald (MM) will provide remedial pipe design and associated Contract
Documents for the Easton Addition Neighborhood Sewer Rehabilitation projects, Phases
4 and 5. The project includes the rehabilitation and replacement ofthe approximately 6,085
linear feet of sewers that drain to the Easton/Broadway and neighboring areas as follows:
o Phase 4 - approximately 2,420 LF of 6-inch to 1S-inch sanitary sewer upsized to
8-inch to 21-inch PVC sanitary sewer which includes the following areas
between Cabrillo Avenue, Hillside Road, and El Camino Real:
o 225 LF in Cabrillo Avenue
o 510 LF between Cabrillo and Cortez Avenues (easements)
o 995 LF between Cortez and Balboa Avenues (easements)
o 440 LF in Hillside Road between the CortezlBalboa Avenues easement and
El Camino Real
o 250 LF between Balboa Avenue and El Camino Real (easement)
r Phase 5 - approximately 3,665 LF of 6-inch sanitary sewer which includes the
following:
o l,290LF in Vancouver Avenue from north of Easton Drive to Broadway
o 265 LF in El Camino Real between Easton Drive and Lincoln Avenue
and the following easement areas:
o 915 LF between Los Montes Drive and Alturas Drive
o 475 LF between Alturas Drive and La Mesa Drive
o 720LF between Chula Vista and California from Broadway to Carmelita
o Spot repairs on the 400 block of Rollins Road
all within the City of Burlingame wastewater collection system. The Phase 4 and the
Phase 5 projects will be prepared as two separate bid projects with the Phase 4 project bid
first to take advantage of the school summer recess for the Vancouver Avenue/Broadway
area.
The sewer projects include designing upsizes to the pipelines using open cut, pipe
reaming, or pipe-bursting methods.
The specific steps of this proposal are to:
e Develop plans, specifications, and cost estimates ready for bid, which include
1
M
MNIE.*If
o Project management, including meetings, site visits, and agency
coordination
o Preparation of 60%, 90yo,l00o/q and final design submittals
o Geotechnical investigation and report
o Surveying ofproject areas
o Caltrans encroachment permitting for El Camino Real
o Potholing in critical areas of unknown utility depths
Bid assistance
Proposed Tasks
The proposed scope of services will include the following tasks:
l. Project Management $ervices
1.1 General project management includes project coordination, maintaining
project schedule, internal filing, assigning team member responsibilities,
invoicing, and monthly progress reports.
1.2 Attendance at eight (8) City meetings (kickoff, 60oh,90Vo, and 100% reviews)
by the project manager and/or project engineer.
1.3 Five (5) site visits, including one with the surveyor at the initiation of field
work and atthe 600/o and90% plans-in-hand walk-throughs.
2. Preparation of 60% Desiqn Submittal.
2.1 Data Gathering and Review.
a. Collection and review of CCTV logs of existing sewers.
b. City record drawings.
c. City Standard drawings and specifications.
d. Data review for trenchless evaluation.
2.2 Geotechnical Report
a. Field Exploration
i. Exploratory Borings - Drill, log, and sample six (6) exploratory
borings in the Easton Phase 4 and 5 and the City-wide
Neighborhood area using conventional truck-mounted hollow-stem
auger drilling equipment. The borings, approximately 15 feet in
depth, will extend several feet below the assumed invert depths of
the sewers.
ii. Utility Clearance - Surface locate utilities and mark boring
locations at least two working days prior to subsurface
explorations and notifr USA.
iii. Permits, Site Access and Disposal of Drill Spoils - Subsurface
explorations permitted and backfilled with cement grout in
accordance with the County of San Mateo guidelines. Site
restoration is limited to general clean-up.
a
2
M MMOTT
MACDONALD
b. Laboratory Testing
To evaluate the index and engineering properties of the site soils, the
following laboratory tests are proposed:
i. In-situ moisflrre/density tests, ASTM D2937 test procedure
ii. Grain size distribution tests, ASTM Dl140 andD422
c. Report Preparation
Characterize subsurface conditions for new utility installation,
replacement, and upsizing using data obtained from the field
investigations and laboratory testing program. The report will include
the following items:
i. Site plan showing exploratory boring locations
ii. Log of exploratory borings, including depth to groundwater, if
encountered
iii. Laboratory test results
iv. Discussion of findings, including site conditions, subsurface
conditions, mapped geologic conditions for the area, and potential
geotechnical impacts.
2.3 Topographic Surveying
a. Establish horizontal and vertical control.
b. Perform topographic survey and data reduction to include three-point
cross-sections every 100 feet in the streets.
c. Field locate and plot existing visible utility piping, inlets, manholes,
cleanouts, valves, vaults, boxes, and utility poles.
d. Determination of fence lines in alleyways and verification of invert
elevations and pipe sizes of storm and sanitary se\ilers and the top of
nut elevation of water valves where accessible along the pipeline
routes.
e. Compile base mapping at 1"=20' horizontal scale.
2.4 Potholing for utility verification
2.5 Set horizontal pipeline alignment
2.6 Set vertical pipeline alignment
2.7 Prepare specifications
2.8 Prepare preliminary 60% engineer's estimate of probable cost
2.9 Prepare and submit Caltrans encroachment permit application
2.10 Peer review and QA/QC of 60% plans
3. Preoaration of 90% Design Submittal.
3.1 Review and address City comments from 60% design submittal.
3.2 Update plans to 90% completion and include details, connections to existing
pipelines, bedding and trench restorations, etc.
3.3 Updated specifications.
3.4 Revise Engineer's estimate of probable cost to 90% level.
3.5 Conduct QA/QC, constructability, and biddability reviews of 90% contract
documents.
3
M MMOTT
MACDONALD
4. Preparation of 100% Design Submittal.
4.1 Review and address City comments from 90% design submittal.
4.2 Update plans to 100% completion and include details, connections to
existing pipelines, bedding and trench restorations, and bypass plans (if
applicable).
4.3 Finalize specifications.
4.4 Revise Engineer's estimate of probable cost to 100% level.
4.5 Conduct QA/QC, constructability, and biddability reviews of contract
documents.
5. Final Design.
5.1 Finalize construction drawings, contract specifications, and engineer's
estimate of probable cost.
5.2 Provide final plan sheets and the electronic AutoCad drawing files, technical
specifications in Word, and a final Engineer's Opinion of Probable
Construction Cost in Excel. Forward deliverables to City for printing.
6. Bid Assistance.
6.1 Attendance at two pre-bid meetings; one for Easton Phase 4 project and one
for the City-wide Neighborhood Sewer Rehabilitation project.
6.2 Assist in responding to bidder inquiries (RFIs) and preparation of bid
addenda (assume 2 RFIs).
6.3 Incorporation of addenda into an original, reproducible, conformed set of
contract drawings and specifications.
Assumptions:
o The City of Burlingame will coordinate site access/permission to enter private
properties if necessary.
o The City of Burlingame will provide CCTV data and collect additional data as
necessary.
o The City of Burlingame will provide topo for the 400 block of Rollins Road.
o No encroachment permit fees will be required by the City of Burlingame.
. City to provide a nearby location to store drums of spoils generated during
exploratory boring drilling, prior to disposal.
o Ciry to provide general conditions and front end of specifications.
o It is assumed that this project is considered an update to existing lines and
facilities under the linear underground project (LUP) not covered by the NPDES
general permit for stormwater discharges associated with construction activity,
Therefore, preparation of a stormwater pollution and prevention plan is not
included in this scope.
o Fee proposal includes a $57,750 budget for approximately l5 days of potholing
for a maximum of 38 potholes, primarily located in easements that require hand
digging.
4
M MMOTT
MACDONALD
Items Excluded from Scope of Work:
r Assessment of environmental characteristics at the project sites, particularly those
involving hazardous substances.. Disposal of hazardous materials.
r Preparation of permit applications other than those listed in the scope of work.
r Permit application fees or any other fees that may be required by regulatory
agencies.
r Potholing for utility verification beyond the 38 potholes included in this scope of
work
c Right-of-entry onto properry.
o Preparation of property acquisition maps, surveying for easements and description
for additional rights-of-way talking for implementation of the proposed project.
o Aerial topographic mapping.
r Construction phase services including submittal, RFI and change order reviews.
Proposed Budget
These services will be performed on a time and materials, reimbursable, not to exceed fee
basis. The fee proposed to perform the services described above is $427,683, which
includes a $57,750 allowance for potholing.
Proposed Schedule
The design for both projects will be completed within nine (9) months of receipt of
authorization to proceed, allowing two weeks for City review of progress submittals and
assuming the requested background information is available to MM at the date of
authorization to proceed. It is anticipated that the Easton Phase 4 project will be bid in
June 2018 to take advantage of the summer school recess and the Easton Phase 5 project
will be bid in November 2018.
5
M MMOTTMACDONALD
Schedule of Gharges
Mott lllacDonald
2O{8 Hourly Rates*
*Other direct costs will be billed at actual cost plus l0%.
$ 265.00
$ 265.00
$ 260.00
$ 200.00
$ 1e0.00
Project Manager
$ 170.00
$ 135.00
$ 9s,00
Engineer
IV
Staff
$1
Role Hourl Rate
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E
CT
STAFF REPORT AGENDA NO: 8d
MEETING DATE: February 20, 2018
To:Honorable Mayor and City Council
Date: February 20,2018
From: Margaret Glomstad, Parks and Recreation Director - (650) 558-7307
Subject: Approva! of the Waiver of City Park Rental Fees for the Burlingame Lions
Club's Cars-in-the-Park 201 8
RECOMMENDAT!ON
Staff recommends that the City Council waive the rental fees for the Lions Club's Cars-in-the-
Park carshowon Ju|y28,2018 in exchangeforthe City being named as a Premium Sponsorof
the event.
BACKGROUND
The Lions Club has been renting the west end of Washington Park for 13 years for their annual
Cars-inthe-Park car show. The show goes from 8am to 3pm and has free admission. According
to the attached letter from Lion President Kwang Park, the net proceeds from the show go back to
the Burlingame community. Past beneficiaries have included youth and community activities and
the Lions Eye Foundation. Mr. Park further notes that the Burlingame Lions Club members have
provided hundreds of hours of volunteer work to the community over the past 90 years.
DISCUSSION
The fee for the rental of the west end of Washington Park is $432. ln lieu of the fee, the Lions
Club proposes to name the City of Burlingame as a Premium Sponsor. Premium Sponsorship
includes recognizing the City as a partner of the Lions Club, advertisement in the local newspaper
and Lions website, announcements during the show, and listing the City on the event t-shirt.
FISCAL IMPACT
There is no significant fiscal impact.
Exhibit:
o Burlingame Lions Club Request Letter
1
Exhibit A
BI.]RLINGAME
EST 1929
February 5,2018
Lion President Kwang Park
Burlingame Lions Club
P.O. Box 206
Burlingame, CA94011
Margaret Glomstad
Parks and Recreation Director
850 Burlingame Ave
Burlingame, CA 94010
Dear Parks and Recreation Director, Mrs. Margaret Glomstad,
I am writing to you in regards to our annual Burlingame Lions Cars-in-the-Park
on July 28,2018. The Burlingame Lions Club ask for the generous support of the
Burlingame City Council and Parks and Recreation by being a Premium Sponsor in lieu
of the Washington Park Permit fee for 2018. Sponsorship entails recognizing the Parks
and Recreation as a partner working with the Burlingame Lions Club to provide
community and youth activities for the City of Burlingame. Sponsorship includes
newspaper and website recognition, show announcelnent, and t-shirt listing.
The net proceeds from the car show go back into our community to help those in
need. The beneficiaries include our Youth and Community Activities and the Lions Eye
Foundation. The Burlingame Lions Club has provided annually l00s of man and woman
hours of service for the last 90 years for Burlingame Parks and community activities. I
look forward to your reply after conferring with City Council.
Sincerely,
Lion President Kwang Park
Burlingame Lions Club
BI-IRLINGAME LIONS CLUB - PO Box 206 - Burlingame, CA 94011
501(c)(3) non-profit TAX ID 94-3292425)
AGENDA NO: 9a
STAFF REPORT
MEETING DATE: February 20, 2018
To:Honorable Mayor and City Counci!
Date: February 20,2018
From:Syed Murtuza, Director of Public Works - (650) 558'7230
Kathleen Kane, City Attorney - (650) 558'7263
Subject: Public Hearing to lntroduce an Ordinance Amending Title 12 of the
Burlingame Municipa! Code to Update Chapter 12.12 "Sidewalk and
Parkway Maintenance"
RECOMMENDAT!ON
Staff recommends that the City Council hold a public hearing to introduce the attached ordinance
amending Title 12 of the Burlingame Municipal Code to update Chapter 12.12 "Sidewalk and
Parkway Maintenance," by:
1. Requesting the City Clerk to read the title of the attached ordinance.
2. By motion, waiving further reading and introducing the proposed ordinance.
3. Conducting a public hearing on the proposed ordinance.
4. Discussing the proposed ordinance and determining whether to bring it back for a second
reading and adoption.
5. Directing the City Clerk to publish a summary of the ordinance at least five days before
the proposed adoption.
BACKGROUND
At its December 4, 2017 City Council meeting, the Council received an update from staff
regarding the 50/50 Sidewalk Repair Program, and the associated City Ordinance No. 1858-
2010, which has been in place since 2010. Staff identified the following major challenges
associated with the 50/50 Sidewalk Repair Program:
High administrative costs due to the significant staff time involved with implementing the
program
The provision in the program that ensures that affected property owners will not be
required to pay for sidewalk repairs within 12 years. The program is cycling through
repeated areas, and staff is increasingly finding that sidewalks that have been previously
repaired in the last six years need to be repaired again. This makes it extremely difficult to
implement the program in its current form.
a
a
1
Public Hearing to lntroduce an Ordinance Amending Title 12 of the Burlingame
Municipal Code, Chapter 12.12 "Sidewalk and Parkway Maintenance"
February 20, 2018
The City Council discussed the issues associated with the 50/50 Sidewalk Program and reviewed
a number of options for the sidewalk repair program. After careful deliberation, and in
consideration of the fact that the City has additional resources to put towards sidewalk repair
thanks to the passage of l/easure l, the City Council directed staff to proceed with a fully City-
funded sidewalk repair program to be implemented annually through the Capital lmprovement
Program (ClP) as may be approved by the City Council.
ln order to implement this direction, Title 12 of the Burlingame Municipal Code needs to be
amended to remove the provisions relating to the 50/50 Sidewalk Repair Program. Staff has
accordingly prepared the attached Ordinance amending Chapter 12.12, Title 12 of the
Burlingame Municipal Code for Council's consideration.
FISCAL IMPACT
There are funds available in the current CIP from savings in prior years to cover the costs of the
next cycle of sidewalk repairs. Funding for future sidewalk repairs will need to be programmed in
future CIP budgets as may be approved by the City Council. Additionally, the recently passed
Measure I will provide additionalfunding for sidewalk repairs in future years.
Exhibits:
. Ordinance
o Draft Amended Chapter 12.12 of the Burlingame Municipal Code
o December 4, 2017 Staff Report & Attachments - City Council Direction Regarding the 50/50
Sidewalk Repair Program
2
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BURLINGAME
AMENDING CIIAPTER 12.12 OF THE BURLINGAME MUNICIPAL CODE
WHEREAS current Chapter 12.12 of the Burlingame Municipal Code provides for a 50o/ol50o/o
cost-sharing procedure for sidewalk repairs between the City and adjacent property owners; and
WHEREAS this procedure has proven to be inefficient in securing funds for repairs and may
impair the City's ability to react dynamically to the highest-need areas for repair; and
WHEREAS the economic context for the cost-sharing program's initiation has changed, with the
City being better able to cover the costs of needed repairs from available funds; and
WHEREAS the City maintains over 116 miles of sidewalk and it is important that this sidewalk
infrastructure be properly maintained to protect public health and safety of pedestrians; and
WHEREAS State law imposes the duty to maintain the sidewalk on adjacent property owners,
which duty is not relieved by this ordinance, but the City may concurrently exercise the right to
identify and pay for necessary repairs as part of its own sidewalk program; and
NOW, THEREFORE, the City Council of the City of Burlingame does hereby ordain as follows:
DIVISION 1:
Section 1: Burlingame Municipal Code Chapter 12.12 Sidewalk and Parkway Maintenance is
hereby amended as follows (deletions denoted as strikethrough text and additions as underlined
text):
12.12.010 Maintenance by property owners.
The owners of properties adjacent to or fronting on any portion of an improved street or
place, or a street whose area between the property line of the adjacent property and the street line
is maintained as a park or parking strip, shall have a duty to maintain and shall maintain any
sidewalk in such condition that the sidewalk will not endanger persons or property and in such
condition that the sidewalk will not interfere with the public convenience in the use of those
works or areas except as to those conditions created or maintained in, on, along or in connection
with such sidewalk by any person other than the owner, under and by virtue of any permit or
right granted to him or her by law or by the city authorities in charge thereof, and such persons
shall be in a like duty in relation thereto. (Ord. 1858 $ 2, (2010))
L2.L2.O2O Notice to repair-Duty to repair-€ptiens.
When any portion of any sidewalk is defective, out of repair or pending reconstruction
andlor in condition to endanger persons or property, or to interfere with the public convenience
in the use thereof, the director of public works or designee shall notify the owner or person in
possession of the property abutting or fronting on that defective or out of repair portion of the
sidewalk, to repair the sidewalk in the manner provided in this chapter and as approved by the
Public Works Director or his/her designee in accordance with Public Works Standards. (Ord.
1858 $ 2,(2010))
12. 12.030 Notice to repair-Service.
The Public Works Director or his/her designee may notify the affected property owner of
the need to repair sidewalk in accordance with the Streets and Highway Code. Notice to repair
may be given by delivering a written notice personally to the owner or to the person in
possession of the property abutting or fronting on that portion of the sidewalk so out of repaiqcr
@or by mailing a written notice pestag€-"rcpaid to the person in
possession of such property, or to the owner thereof at the last known address as the same
appears on the last equalized assessment roll or to the name and address of the person owning
suchpropertyasshownintherecordsofthe@SanMateoCounty
Recorder's Office. (Ord. 1858 $ 2, (2010))
L2.L2.0tr4O Repairs peformed by owner.
tf eleeting te perfu Upon receiving a notice to repair, the
property owner, within fourteen (14) days after receipt of the notice to repair, shall: (1) obtain an
encroachment permit from the public works department; (2) commence perfoffnance of the
work, and diligently and without intemrption prosecute the work to completion; (3) be
responsible for the full cost of the repair. If the property owner fails to timely obtain an
encroachment permit and to commence and diligently prosecute the work without intemrption,
the director of public works shall make such repair, and the cost of that repair shall be a lien on
the property pursuant to the provisions of this chapter. (Ord. 1858 $ 2, (2010))
12.12,050 Repairs pedormed bv City.
Notwithstandine the above provisions of this Cfi26fg1-14=12=01-0- the Citv Council mav
authorize the Director of Public Works or desisnee to identifv sidewalk reoairs and
implement a sidewalk repair program to address pedestrian safety concerns and to address
compliance with the Americans with Disabilities Act as part of the Capital Improvement
Proeram. The focus of the work performed by the Public Works Department shall consist of
sidewalk repairs to address pedestrian safetli concerns arisi@ in the public
pedestrian path of travel,and Americans with Disabilities Act improvements. and excludes all
private drivewav approaches and private walkways. Continuation of the sidewalk repair
proeram by the Public Works Director is contingent upon availability of fundine. and may
terminate at any time as determined by the Citlz Council. The implementation of the sidewalk
repair proeram by the Public Works Director does not relieve the adjoinine private property
owners of their responsibility for maintenance of sidewalks as specified in Section 5600 of the
Streets and Hiehway Code. and in Chapter 12.10.010 above.
@ir=
The pestal eard sh+ll eentain a netiee te repair the siden'alk se eut ef repair and the
i€eon
the preperty as previded herein; the direeter ef publie rverks er designee; net less than seven (7)
+L:. ^L^-+^* /(\*A 1a<a A 1 /rn.ln\\
ien+
The netiee te repair shall inelude the speeifieatien ef the werk required te be dene the
rnanner ef hew the we* is
ir*
'T.L^ --^-^'+', ^-"-^- .L^,l1 l^arra *rrra 11\ nntio-o foo *^ti-^ +tr'o o-,ri*o,{ .;,{^.r'^.1.1. *^^^;-..
(l) prtieipatien in the eity's "sidervalk repair pregram"; er (2) perfermanee ef repairs him er
"sidervalk repair pregrarn," (9rd, 1858 $ 2; (2010))
the direeter ef publie rverks shall repa:r the sidewalk in eertiunetien rvith etheridervalk repairs
i
(b) The publie we-ks direeter er designee shall determine the eest ef the prtieular
repair te the prepe*
thar+epair+es*
Upen eernpletion ef the repair werk; the direeter ef publie rvert<s shall de the fellewing+
(a) Shall eause netiee ef the eest ef repair tebe given in the manner speeified in this
ur and plaee n'hen
the eity eeuneil rvill hear and pass upen a repert by the direeter ef pnblie rverks ef the eestof+he
ersens,
/rL\ QL^ll **^-^t'a *.{ fi1^ ".;+1" +L^ ^i+., ^^,,-^;l ^ *^^^'+ .-^^;f-;-^ +L^ -^-^:*^ ,,,L:^L
hav€ been made, the eo
irs
te any number ef pareels ef preperty; whethe- eentigueus te eaeh ether er net, (erd, 1858 $ 2t
€e+€)
ffi
(*) l\t the time fixed for the hearing*he eity eeuneil shall*ear and pass upen the
reeert ef the direetor
(b) Thereupen, the eity eeuneil may make sueh revisien; eerreetien er medi{ieatiens
ln the reeert es it may de
(e) The eity eouneil may a4ietrn the hearings frem time te time,
(d) The deeisiens ef the eity eeuneil en all pretests and eEeetiens whieh may be
(a) The direeter ef publie rverks shall eausete be kepla permanent reeerd eentaining
the deseriptien ef eaeh pareel ef preperty upen whieh a netiee te repair has been pested; the
iofi
(b) If the eity makes er eauses te be made the repair; the eharges inetrred therefer
is
12. 12.{+906O Costs-Assessment-Lien when.
++er een+irming the rff
ass€ssm€nts;For any repair for notice was siven under Section 12.12.040 of this Chapter
were council shall
which the Director of Works shall submit the notice and costs with the repair"
owner be to
aDoear. dispute the and submit arzument or evidenqe in support of the property owner's
position. The affected propertlz owner shall be provided notice at the address as provided in
Section 12.12.030 via mail or hand delivery and registered mail at least 14 calendar
to the is to be
citlz council determines the charges to be proper. the city council shall assess the cost of repair
against the parcel of property fronting upon the sidewalk upon which such repair was made.
Such cost so assessed, if not paid within thirty (30) days of mailing the invoice, shall constitute a
special assessment against that parcel of property, and shall be a lien on the property for the
amount thereof. Such lien shall continue until the assessment and all interest thereon are paid, or
until it is discharged of record. (Ord. 1858 $ 2, (2010))
I
12.12.{3e070 Filing of notice of lien with county recorder.
The director of public works may file in the office of the county recorder a certificate
substantially in the following form:
NOTICE OF LIEN
Pursuant to the authority vested in me by the Improvement Act of 191 1, I did, on the _ day of
_,20-, cause the sidewalk, curb, or park or parking strip, bulkheads, retaining walls or other
works (as the case may be) in front of the real property hereinafter described, to be repaired and
improved, and the City Council of the City of Burlingame did, on the _ day of _,20-,by
Resolution No._ assess the cost of such repair upon the real property hereinafter described, and the
same has not been paid nor any part thereof, and the said City of Burlingame does hereby claim a lien on
said real property in the sum of DOLLARS ($ ), and the same shall be a lien upon said
real property, with interest at the rate of 7 percent per annum, from the said _ day of
20-, has been paid in full and discharged of record. The real property hereinbefore mentioned and upon
which a lien is claimed, is that certain piece or parcel of land lying and being in the City of Burlingame,
the County of San Mateo, State of California, and particularly described as follows, to wit:
(DESCRTPTTON OF PROPERTY)
Dated this _ day of 20-
Director of Public Works
(ord. 1858 $ 2, (2010))
L2.L2.#O8O Effect of recordation of lien notice.
(a) From and after the date of the recording of the notice of lien, all persons shall be
deemed to have had notice of the contents thereof. The notice of lien may include claims against
one or more separate parcels of property, whether contiguous or not, together with the amount
due, respectively, from each such parcel.
(b) The statute of limitations shall not run against the right of the city to enforce the
payment of the lien.
(c) If any such lien is not paid, the city may file and maintain an action to foreclose
such lien in the same manner and under the same procedure, so far as applicable, as that under
which delinquent bonds are foreclosed under Division 6 of the Streets and Highways Code. (Ord
18s8 $ 2,(2010))
12.12.{5eO9O Collection of lien with regular taxes.
As an alternative method of collecting the amount of the lien, the city council, after
confirmation of the report of the director of public works, may order the notice of lien to be
delivered to the county auditor. The county auditor shall enter the amount thereof on the county
assessment book opposite the description of the particular property and the amount shall be
collected together with all other taxes thereon against the property. The notice of lien shall be
delivered to the county auditor before the date fixed by law for the delivery of the assessment
book to the county board of equalization. (Ord. 1858 $ 2, (2010))
L2.L2.L*00Ti me a nd ma n ner of col lection-Pena lties-Foreclosure proced ure.
Thereafter, the amount of the lien shall be collected at the same time and in the same
manner as ordinary city taxes are collected, and shall be subject to the same penalties and interest
and to the same procedure under foreclosure and sale in case of delinquency as provided for
ordinary city taxes. All laws applicable to the levy, collection, and enforcement of city taxes are
hereby made applicable to such special assessment taxes. (Ord. 1858 $ 2, (2010))
t2.Lz.*jlello Proof of service of notice.
Proof of the posting or mailing of any notice, order, or determination provided for in this
chapter may be made by the affidavit of the person posting or mailing such document annexed to
a copy thereof. The affidavit shall specify the date when or at which the document was posted or
mailed, as the case may be. The director of public works shall keep the affidavits of posting or
mailing. No error in the name or address shall affect in any manner the validity of the procedure
or any lien imposed hereunder. (Ord. 1858 $ 2, (2010))
12.12.{Se120 Legality of charge.
No charge, or any act relating to such charge, or the collection of the same hereunder
shall be illegal on account of informality or because the same was not completed within the time
required by law. (Ord. 1858 $ 2, (2010))
DIVISION 2
If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to
be invalid, such decision shall not affect the validity of the remaining portions of this Ordinance.
The Council declares that it would have adopted the Ordinance and each section, subsection,
sentence, clause or phrase thereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses or phrases be declared invalid.
DIVISION 3:
This Ordinance shall be published in a newspaper of general circulation in accordance with
California Government Code Section 36933, published, and circulated in the City of Burlingame,
and shall be in full force and effect thirty (30) days after its final passage.
MICHAEL BROWNRIGG, Mayor
I, MEAGHAN HASSEL-SHEARER, City Clerk of the City of Burlingame, do hereby certify
that the foregoing ordinance was introduced at a regular meeting of the City Council held on the
day of 2018 and adopted thereafter at a regular meeting of the City
Council held on the day of 2018, by the following vote:
AYES : COTINCILMEMBERS :
NOES : COI.INCILMEMBERS :
ABSENT:COUNCILMEMBERS
c'
ATTEST
MEAGHAN HASSEL-SHEARER, City Clerk
STAFF REPORT AGENDA NO: 10d
MEETING DATE: December 4, 2017
To:Honorable Mayor and City Council
Date: December 4,2017
From: Syed Murtuza, Director of Public Works - (650) 558-7230
Subject: City Council Direction Regarding the 50/50 Sidewalk Repair Program
RECOMMENDATION
Staff recommends that the City Council receive an update regarding the 50/50 Sidewalk Program
and provide direction to staff.
BACKGROUND
Prior to the 2001 economic downturn, sidewalk repairs were fully funded from the City's General
Fund. Due to declining General Fund revenues in the early to mid-2000s, the City Council
implemented a pilot sidewalk repair program that was fully funded by the adjoining property
owners in accordance with State regulations. This program resulted in strong opposition from
property owners and very high staff administrative costs to implement the program. As a result,
except for sidewalks fronting City properties and interim repairs consisting of asphalt patchings
and grindings, the City did not undertake major sidewalk repairs for the next several years.
ln an effort to address the continuing backlog of sidewalk repairs, in October 2010 the City
Council adopted the 50/50 Sidewalk Repair Program (SRP) in October 2010 (City Ordinance No.
1B5B-2010). The ordinance provides for sharing the costs of the sidewalk repairs at a 50/50
participation level between the City and the adjoining property owners, and dictates procedures
for implementing the program. The ordinance also includes a clause stating that property owners
who participated in the program would not be required to pay for the same sidewalk repairs again
for a period of 12 years.
D!SCUSSION
The administrative costs associated with the 50/50 SRP have historically been more than double
those of the previous 100% City-funded sidewalk repairs program. The 50/50 SRP is extremely
process intensive and requires significant staff time dealing with hundreds of property owners to
obtain their buy-in to implement the program. ln accordance with the program procedures, staff
spends significant time performing initial field markings; preparing accurate sidewalk quantity
reports; issuing multiple notifications to hundreds of affected property owners of sidewalk repair
needs; providing estimates; meeting with property owners in groups and one-on-one to resolve
disputes and address concerns; updating individual property work-quantities as the work
progresses; and preparing the final report after completion of work. Due to these additional tasks
1
Council Direction Regarding the 50/50 Sidewalk Repair Program December 4, 2017
and the number of properties typically involved in the program, it takes an additional 10 to 12
months of time to complete the project along with high administrative costs (see the attached
Sidewalk Program Administrative Costs Analysis for details).
Since the implementation of the 50/50 SRP in 2010, the Public Works Department has
constructed over $2,500,000 of sidewalk repairs and ADA curb ramps improvements, and has
completed one full cycle of repairs covering the city. Overall, the 50/50 SRP was effective, as a
large majority of repairs have resulted in safe sidewalks for pedestrians' use throughout the city.
However, staff is now planning the next cycle of the sidewalk repairs and finding that significant
portions of sidewalks that need repairs are the same sidewalks that have been previously
repaired in the 50/50 program cycles in the last six years. This presents a major problem in
implementing the 50/50 SRP going forurrard as the current ordinance prohibits the City from
charging the adjoining property owners for the same sidewalk repairs for a period ol 12 yearc.
Staff believes that significant additional administrative time will be needed to research and
differentiate each repair location to ensure the City is not charging the property owner for the
same sidewalks again. This task will be in addition to the various other tasks required to
implement the program as described above.
OPTIONS
Staff has identified three options for the City Council's consideration and direction:
OotionA-Continuewith e current 50/50 Prooram
The advantage of this option is that property owners are encouraged to participate in the
program, providing additional revenue to the City, though that revenue may be decreasing from
previous years due to the prohibition clause in the ordinance. The disadvantage of this option is
that it will take significantly longer to complete the project and will further increase administrative
costs because of the complexity of distinguishing between new repairs versus the recurring ones,
and increased risk exposure.
n B - Revert back to o/o C funded P
The advantage of this option is that it will allow the City to expedite sidewalk repairs as there will
be no requirements to follow the time-intensive Streets and Highways Code procedures. As a
result, the administrative costs associated with sidewalk repairs could be significantly reduced,
along with reduced exposure of risk to the City. From the property owners' perspective, this may
be viewed as an advantageous option because they would not be required to pay for the sidewalk
repairs costs. However, from a financial perspective, the City would not be receiving the property
owners' contributions for their sidewalk repair costs.
OotionC-Modifvth e currenl 50/50 Prooram.
This option retains much of the current sidewalk program in place, including the following the
Streets and Highways Code procedures. Under this option, the City would remove the clause in
the Ordinance that prohibits charging property owners for the recurring sidewalk repairs costs for
aperiodof 12 years. ln this option, all property owners, regardless ofwhether repairs were done
previously or not, would continue to pay for 50% of the costs of sidewalk repairs in front of their
properties. This option will remove the difficulties associated with identifying new repairs versus
2
Council Direction Regarding the 50/50 Sidewalk Repair Program December 4, 2077
the recurring ones in front of affected properties. However, there will continue to be high
administrative costs, and repairs will take an inordinate length of time due to the need to follow
the Streets and Highways Code procedures. ln addition, the property owners who have
previously participated in the program may voice opposition to the program as they were
previously exempted from paying for the same sidewalk repairs for a period of 12 years.
FISCAL IMPACT
Staff anticipates that continuing with the current 50/50 Sidewalk Repair Program will result in
significantly higher administrative costs, while financial participation from adjoining property
owners may decrease due to repeat areas. Conversely, the administrative costs for
implementing the 100% City funded sidewalk program would be significantly less.
Exhibits:
. Ordinance 1858-2010
. Sidewalk Program Administrative Costs Analysis
3
ORDINANCE NO. r 8s8-2010
AN ORDINANCE OF'THD CITY COUNCIL OF'THE CITY OF'BURLINGAME
AMENDING CIIAPTER I2.I2 OF TIIE BI]RLINGAME MUNICIPAL CODE
TO IMPLEMENT A CITY/PRIVATE PROPERTY OWNER SIIARED
SIDEWALI( REPAIR PRO GRAM
The City Council of the City of Burlingame finds as follows:
Section 1. Factual background
The City maintains over 116 miles of sidewalk, a significant portion of which is aging
and is impacted by the tree roots resulting in cracks and separations requiring repair.
Providing frontage access for Burlingame residents and businesses and sewing as a
primary pedeshian facility, the sidewalks are an essential part of the City infrastructure,
It is ilnportant that the sidewalk infi'astructure be property maintained to protect the
public health and safety of the pedestrians and minimize liability to property owners and
the City as a whole. In the past year, the economic condition of the country, the State, the
region and the City of Burlingame, has deteriorated significantly. The stagnant economy
has had a direct effect on the ability of the City to raise revenue tlu'ough sales and
occupancy taxes to fund the maintenance and repair of City sidewalks.
The California Streets and Highways Code requires that adjoining private property
owners maintain the sidewalks in front of theil property. In an effort to discover funds
for sidewalk repair, the Council evaluated several options. Aftel a comprehensive
analysis of options available, the Council directed staff to proceed with a 50/50 sidewalk
repair pro$am with the objective of funding sidewalk repail in a manner that will reduce
the financial and logistical burden to both property owners and the City.
NOW, THEREFORE, TIIE CITY COIINCIL OF'THE CITY OF
BURLINGAME DOES ORDAIN AS F'OLLOWS:
Section 2.Amendment to Burlingame Municipal Code Chapter 12,12
Chapter 12J2 of the Burlingame Municipal Code is hereby repealed and a new
Chapter 1"2.12 is hereby enaoted to read as follows:
"Cha pter L2.L2 SID EWALK AN D PARKWAY MAI NTENANCE
12.12.OI0 Maintenance by oroperty owners.
The ownels of properties adjacent to or fronting on any portion of an
improved street or place, or a street whose area between the propefiy line of the
adjacent ploperty and the street line is maintained as a park or parking strip, shall
have a duty to maintain and shali maintain any sidewalk in such condition that the
sidewalk will not endanger pemons or propefiy and in such condition that the
sidewalk will not interfere with the public convenience in the use of those worlcs
or areas except as to those conditions created or maintained in, on, along or in
connection with such sidewalk by any person other than the o\mer, under and by
virtue of any permit ol right granted to him by law or by the city authorities in
charge thereof and such pemons shall be in a lilce duty in relation theleto,
12.12.02O Notice to repain-Duty to repair---Options.
When any portion of any sidewalk is defective, out of repair or pending
reconstruction and/or in condition to endanger persons or properly, or to interfere
with the public convenience in the use thereof, the dilector of public works or
designee shall notify the owner or person in possession of the property abutting or
fronting on that defective or out of repair portion of the sidewalk, to repair the
sidewalk in the malrner provided inthis afiicle,.
12. I 2.03O Notice to repair-Service.
Notice of repair may be given by delivering a written notice personally to the
owner or to the person in possession of the property abutting or fi'onting on that
portion of the sidewalk so out of repair, or by mailing a postal cald, or by mailing
a wlitten notice postage prepaid to the person in possession of such proper[y, ot'to
the owner thereof at the last known address as the same appeal's on the last
equalized assessment roll or to the name and address of the person owning such
property as shown in the records of the office of the city clerk.
12.12.04O Notice to reoair
The postal card shall contain a notice to repair the sidewalk so out of repair and
the director of public works or designee shall, irnmediately upon the mailing of
the notice, cause a copy thereofprinted on a card ofnot less flran eight inches by
ten inches in size, to be posted in a conspicuoirs place on the property. In lieu of
postiuge-copy of tbe qlailgd aptice qn thg ptopgrty gs prov.ided helein, the
director of Public Works ot'designee, not less than seven nor more than ten (10)
days after the urailing of the first notice to lepair, may mail an additional notice to
repair, postage prepaid, marked "second Notice," to the person to whom the first
postal card or notice was addressed. The second notice shall otherwise contain the
material required by this article
12.12. 050 Notice to repair--Contents-Options'
The notice to repair shall include the specification of the wolk required to be done
the manner of hbw the work is to be done and the materials to be used in the
repair. The notice shall provide two options available for the propefiy owner to
make the sidewalk repair. The notice shall provide a form for the properly ownel
to use to notiff the Dipartment of Public Worhs of the sidewalk repail option
selected. And the Notice shall include the information contained in section
t2.12,070
12.12.06O Options to Make Repairs.
The property owler shall have two options for malcing the required sidewalk
repails: a) participation in the Ctty's "sidewalk Repair Program" or, b)
p.rfotmat
"e
of repairs him/herself. The property ownel shall indicate on the
form included with the notice which option the property owrer chooses and shall
delivel said form to the City within fourteen (14) days. The owner's failure to
timely respond shall constitute the owner's assent to participate in the City's
"Sidewalk Repair Program",
12.12.O70 Reoairs Peformed By Otrt{ner
If electing to perform the repairs hir::/herself, the property owner, within fourteen
(14) days after receipt of the notice to repair, shall: a) obtain an encroachment
permit f,'om the Public Works Department; b) commence performance of the
wor.k, and diligently and without inteuuption prosecute the worlc to completion; c)
be responsible for the fuIl cost of the repair'. If the property owner fails to timely
obtain an encroachment permit and to colnmence and diligently prosecute the
work without intemrption, the ditcctor of public works shall make such repail,
and the cost of that repair shall be a lien on the property pursuant to the provisions
of this Chapter,
-
A. If the property owner has not comrnenced the repair and prosecuted it to
completion with due diligence without intemrption, as required by the notice and
encroaclunent permit, or, if the property owner chooses to participate in the City's
"Sidewalk Repair Program", the director of public works shall repair the sidewalk
in conjunction with other sidewalk repairs in the same geueral area pursuant to the
provisions of this Chapter.
B. The Public Works Director or designee shall determine the cost of the
particular repail to the property olvnel's sidewalk; property owner shall be
responsible for' 50% of that total repair cost and City shall be responsible for the
other 50% of that repail cost.
C. If the property owner participates in the City's "Sidewalk Repair
Progl'am", that property ownel shall not be required to pay for repair of the same
portion of sidewalk again for a period of twelve (12) years after the date of
iompletion of the repair. The limitation of this subsection shall only apply as long
as the property o\Mler who paid for the repair remains the porerty owner of the
adjaceril properly.
12.12.090 Notice, report, and public hearing on repairs and costs.
Upon completion of the repair woIk, the director of public works shall do the
following:
A. Shall cause notice of the cost of repair to be given in the manner specified
in this article for the giving of notice to repair. Such notice shall specify the day,
hour, and place when the city council will hear and pass upon a report by the
director of public works of the cost of the repair, together with any objections or
protests, if any, which may be raised by any properly o\Mler liable to be assessed
for the cost ofsuch repair, and any other interestedpersons.
B. Shall prepare and file with the city council a report specifying the repairs
which have been made, the cost of the repairs, a description of the real properly
(by address or parcel number) in fi'ont of which the repairs have been made, and
the assessment against each iot or parcel of land pr6posed to be levied to pay the
cost theleof. Any such report may include tepairs to any number of parcels of
property, whether contiguous to each othel or not,
12 .12.1OO Report-Hearino.
A, At the time fixed for the hearing the city council shall hear and pass upon
the report of the director of public wolks, together with any objections or protests
which rnay be raised by any of the property owners liable to be assessed for the
and other intelested
B. Thereupon, the city council may make such revision, correction or
modifications in the report as it may deem just. Afterwards the city council may
confinn the report as submitted, revised, corrected, or modified
C. The city council rnay adjourn the hearings flom time to time.
D. The decisions of the city council on all protests and objections which may
be made shall be final and conclusive.
12.12.11O Records of director of public works.
A. The dilector of public wotks shall cause to be kept a permanent record
containing the description of each parcel of property upon which a notice to lepair
has been posted, the name of the owner, if lcnown, the date on which such notice
was posted, and the charges incurred by the city in causing such lepair to be
made, and all incidental expensos in connection therewith. Each such entry shall
be made as soon as practicable after completion of each act.
B. If the city makes 01'causes to be made the repair, the charges incured
therefore shall be determined by the director of public worlcs in accordance with
the provisions of this Chapter. The director of finance shall prepare and mail a
statement for the same to the last known address of the ownel of the property.
12.12,120 Costs-Assessment-Lien when,
After confirming the report, determining any objections or protests and
confuming the assessments, the City Council shall assess the cost of repair
against the palcel of property fi'onting upon the sidewalk upon which such repair
was made. Such cost so assessed, if not paid within thirty (30) days of mailing the
invoice, shall constifute a special assessment against that palcel of propefiy, and
shall be a lien on the property for the amount thereof. Such lien shall continue
until the assessment and all interest thereon are paid, or until it is discharged of
record.
12.12,130 Filinq of notice of lien with county recorder,
The director of public works may file in the office of the county recorder a
certificate substantially in the following form:
NOTICE OF LIEN
the
property hereinafter descrtbed, to be repaired and irnproved, and the City Council of the
City of Burlingarne did, on the day of . 20_,by Resolution No,_
assess the cost of such repair upon the real propelty hereinafter described, and the same
has not been paid nor any part thereof and the said City of Burlingame does hereby claim
a lien on said real propefty in the sum of
-
DOLLARS ($ ), and the same shall
be a lien upon said real property, with interest at the rata of 7 percent per annum, from ths
said of _,20_,has been paid in full and discharged of record.
The real property hereinbefore mentioned and upon which a lien is claimed, is that
certain piece or parcel of land lying and being in the City of Burlingame, the County of
San Mateo, State of Califomia, and particularly described as follows, to wit:
day of . 20-, cause the
in front ofthe real
i
(DESCRTPTION OF PROPBRTY)
Dated this
-
day of 20-,
Director of Public Works
12.12,140 Effect of recordation of lien notice.
A. From and after the date of the recording of the notice of lien, all persons
shall be deemed to have had notice of the contents thereof. The notice of lien may
include clairns against one or more separate parcels of property, whether
contiguous or not, together with the amount due, respectively, from each such
parcel.
B. The statute of limitations shall not run against the right of the city to
enforce the payment of the lien,
C. If any such lien is not paid, the city may file and maintain an action to
foreclose such lien in the same maruler a4d under the same procedure, so fal as
applicable, as that undel which delinquent bonds are foreclosed under Division 6
of the Streets and Highways Code.
12.12.150 Collection of lien with reqular taxes.
As an alternative method of collecting the amount of the lien, the city council,
after confirmation of the report of the director of public works, may order the
notice of lien to be delivered to the counfy auditor'. The county auditor shall enter
the amount thereof on the county assessment book opposite the description of the
particular property and the amount shall be collected together with all othel taxes
thereon against the property. The notice of lien shall be deliveled to the county
.auditor before the date-fixed-by-law-for the delivery ofthe-assessment-book to the - -
county board of equalization.
1 2. 1 2. 160 Time and manner of collection-Penalties-Foreclosure procedure.
Thereafter, the amount of the lien shall be collected at the samc time and in the
same manner as ordinary city taxes are collected, and shall be subject to the same
penalties and interest and to the same procedure under foreclosure and sale in case
of delinquency as provided for ordinary city taxes, All laws applicable to the levy,
collection, and enforcement of city taxes are hereby made applicable to such
special assessment taxes.
12.12.17O Proof of service of notice.
Proof of the posting or mailing of any notice, order, or determination provided for
in this arlicle may be made by the affidavit of the person posting or mailing such
document annexed to a copy thereof. The affidavit shall specify the date when or
at which the document was posted or mailed, as the case maybe. The director of
public wolks shall keep the affidavits of posting or mailing. No er:or in the natre
or address shall affect in any manner the validity of the procedure or any lien
irnposed hereunder.
12.12.180 Leqality of charqe.
No charge, or any act relating to such charge, or the collection of the same
hereunder shail be illegal on account of informality or because the same was not
completed within the tirne required by law.
Section 3. This ordinance shall be published as required by law.
CathyBaylock, Mayor
I, Mary Ellen I(earney, City Clerk of the City of Burlingame, do hereby certify
that the foregoing ordinance was inh'oduced at a regular meeting of the City Council held
on tlre z}th day of Septemb er,2O\0, and adopted thereafter at a regular meeting of the
City Council held on the l8th day of October, 2A10,by the following vote:
AYES:
NOES:
ABSENT:
Councilmembers: BAytocK, BRoIrtNRrGG, DEAL, KETGHRAII, NAGEL
Councilmemlrers: BROIiINRIGG
Councilmembeisi NSNE
Mary City
Sidewalk Program Costs From 2001 to Present
Analysis of Administration/lnspection Costs with Respect to Construction Costs
Note: All Sidewalk Programs include sidewalks in front of City owned properties and improvements such as ADA ramps and curb a.d Sutter as identified by the proje€t
Project No.Fiscal Year Construction
Total
Property Owners'
Contribution
Administration/lnspection
Costs
Admin Costs te
CoBuudlon 63ts)
Remarks
83820/a424o 2075-2016 s935,s44 s333,288 s164,928 ta%50/50 Program
83160 20!4-2075 5778,700 5772,87O 5767,622 23%50/50 Program
83050 2072-2073 s463,700 s1ss,s02 s103,558 22%50/50 Program
2077-2072 5454,743 5742,462 s131,s63 29%50/50 Program
81460 2008-2009 s42s,499 s3s,615 8%1oo% city Funded Program (city Properties only & ADA Ramps/curb/Gutters)
82070(1)2007-2004 s474,276 s34,413 a%1OO% City Funded Program (City Properties Only & ADA Ramps/Curb/Gutters)
80960 2004-2005 52s7,418 s41,931 s120,231 4A%100% Funded bv Property Owners
80700 2002-2003 s629,349 s63,688 70%100% City Funded Program
40270 2007-2002 s708,360 s71,43s to%100% City Funded Program
82O'tOl2)
STAFF REPORT AGENDA NO: 10a
MEETING DATE: February 20, 2018
To:Honorable Mayor and City Council
Date: February 20,2018
From: Lisa K. Goldman, City Manager - (650) 558-7204
Subiect: Presentation and Discussion of Traffic Safety and Parking Commission
Priorities
RECOMMENDATION
Receive a report from the Chair of the Traffic Safety and Parking Commission and discuss the
Commission's priorities for 2018.
BACKGROUND
Mayor Brownrigg has asked the Chair of the Traffic Safety and Parking Commission to present the
City Council and community with their priorities for 2018 so that the Council can provide feedback
and guidance to the Commission.
FISCAL IMPACT
There is no fiscal impact associated with this item
Exhibit:
. Memo from the Chair of the Traffic Safety and Parking Commission
1
STAFF REPORT
AGENDA ITEM NO: 10a
MEETING DATE: February 20,2018
To:Honorable Mayor and City Council
Date: February 20,2018
From: John Martos, Ghair, Traffic Safety and Parking Commission
Subject: Presentation of TSPC's 2018 Priority List
RECOMMENDATION
The Traffic Safety and Parking Commission (TSPC) recommends that the City Council review the
TSPC priority list of discussion topics and the corresponding Subcommittee topics established at
the January 11,2018 TSPC meeting. This prioritized list represents the discussion topics for
2018. The TSPC is seeking input on the both the topics and the priority.
BACKGROUND
For the past few years, the TSPC has established a list of discussion topics based on public
feedback and Commissioners' insights. This list includes specific projects as well as general
traffic-related issues. Some of these topics have required ongoing discussions and have become
the focus area for several TSPC subcommittees. ln addition, the recently re-established Bicycle,
Pedestrian Advisory Committee (BPAC) meets on the second Thursday of every month just prior
to the regularTSPC meeting. Two TSPC Commissioners attend the BPAC meetings, and at every
TSPC regular meeting, the BPAC Chair has the opportunity to provide feedback to the TSPC.
The following tables list the items for consideration:
t 2018 TSPC Discussions Topic. Current TSPC Subcommittees
o ltems included in Traffic Engineer's Report to TSPC
The Traffic Safety and Parking Commission would like to obtain input from the City Council
regarding the lists to determine if there are any additions or deletions, and if the priority ranking
is appropriate. Based on feedback from the Council, the TSPC will revise the priority list
accordingly for use as a guide for the upcoming year and beyond.
DISCUSSION
1
Presentation of ISPC3 2018 Priority List February 20,2018
Table 1: TSPC Priority List
Table 2: TSPC Subcommittees
Table 3: Traffic Engineering Projects
218118: ltem 6.b1Downtown Parking Strategies
2 Downtown ModalAccess
3 Grant Opportunities
4 Bike\Ped Plan Update. fwd to BPAC
5 Safe Routes to Schools (SR2S) Review
o SchoolTraffic lssues -
.
7 California Complete Streets
8 Neighborhood Traffic Calming
9 Broadway Parking
10 Public Shuttles/Tiansit ,
11 ECR Corridor (ECR Task Force)
'tz Bay Trail Pedestrian Safety
13 lntro to Paving
14 Halloween Traffic lmpacts (July discussion)
15 Parking and traffic considerations w/Planning Comm
DateRank TSPC Priority List
Downtown Parking Martos & Wettan Monthly
Broadway Parking Monthly :
School Speed Limits lsraelit & Londer Monthly
Londer & Wettan Monthly liCR Task Force
Subcommittee TSPC Members Meets
1 Caltrans' ECR/Floribunda
Hoover School Update2
3 Downtown Parking Strategies
4 City HallTraffic Catrning / Ftoribunda
5 California Roundabout
b General Plan - Circulation Element
7 Bike/Ped Plan Update: firud to BPAC
8 RecCenterParking . , : .:
I Carolan Complete Streets Update 218118: ltem 7.a
10 Grant'Oppo:rtunities . :
11 2l8l18.ltem 7.a
12 Peninsula Ave Overcrossing ,
.,
13 School Speed Limit Updates
3urlingarne Point: Bay Trail14
15 School Safety lmprovements
16 lalifornia Complete Streets l 218118: ltem 7.a
2
Item Staff Updates via Engineer's Report Date
Broadway Grade Separation
STAFF REPORT AGENDA NO: 10b
MEETING DATE: February 20, 2018
To:Honorable Mayor and City Council
Date: February 20,2018
From: Ana Maria Silva, Executive Assistant - (650) 558-7204
Subject: Consideration of Appointments to the Measure I Citizens' Oversight
Committee
RECOMMENDATION
Staff recommends that the City Council make appointments to fill five seats on the Measure I
Citizens' Oversight Committee or take other action.
BACKGROUND
The vacancies were posted in the January 18th and January 25h City e-newsletter. A press release
was also sent to local newspapers. The City received nine applications as of the deadline of
January 31, 2018. On February 12, 2018, the City Council interviewed the nine applicants: Neal
Kaufman, Stephanie Lee, Thomas McKay, John Pivirotto, Matt Feemster, Sandeep Shroff, Mary
Hockridge, Joe Galligan, and Jim Baleix.
For the inaugural members of the Oversight Committee, three members will serve for three years,
and two members will serve for two years in order to stagger the terms. lnitially, staff recommended
that two of the resident members and one of the business representatives serve for three years,
while the remaining resident member and the remaining business representative serve for two
years. Because of the high caliber of the applicant pool, the Council would like to select the five
members of the committee via its normal procedures, then draw names to determine which
members will serve for three years and which members will serve for two years.
1
AGENDA NO: 1la
Memorandum
To:Gity Council
Date: February 20,2018
From: Mayor Michael Brownrigg
Subject: CommitteeReport
Post Office Update
0n February 7,1attended a meeting with Planning Manager Kevin Gardiner, City Attorney
Kane, and representatives from the Post Office Development group (Mr. Lo in person, Mr. Lu
on the phone, their attorney, and a senior assistant). This meeting was organized to try and
cut through some of the miscommunications that have plagued and slowed the project over
the last several months and I believe it was successful. The two lawyers left the meeting
with explicit direction from the ownership team. The ownership team will also provide a
"project description" in the near term to the City that will enable the City to recruit and
retain a CEQA consultant to commence that part of the program. Mr. Gardiner, who will
become the point person for the ownership team at City Hall for this next phase, will develop
a calendar of action items and next steps that will help guide all parties in the work program.
FYI, City Attorney Kane will be bringing to Council a somewhat revised ENA based on the
new guidance received, and also to memorialize the MOU between ourselves with respect to
disposition of Lot E.
AT&T Buildins
With help from Vice Mayor Colson, we were able to connect by teleconference with Mark
Edgar fr, who controls AT&T facilities for 20 states west of the Mississippi, as well as Angela
Kung and Nancy Safford. Using the brieflng memo [attached), we explained the importance
of the AT&T building at one of the entrances to Burlingame Ave and how we see this eyesore
as a potential win-win improvement for both the AT&T brand and our own great shopping
street. Lisa Goldman and I tried having this discussion a few years ago (with Angela and
Nancy, coincidentally) and did not get far, but Mark is a significant step up in terms of
authority. He asked what rental prices were and seemed genuinely appalled at the upkeep of
the windows and doorway of their building on our Avenue. Vice Mayor Colson suggested
that there are inexpensive window treatments which could mark a significant near term
upgrade while AT&T figures out what else it might be able to do. AT&T asked for some time
to mull this over and promised to get back to us. We shall adhere to the Reagan doctrine:
Trust, But Verifii.
1
Brownrigg Com mittee Report February 20,2018
Property Owners' Meeting
Once a year, or so, I try to organize a meeting with significant property owners in the Cify to
review what is happening city-wide in terms of zoning, plans, and projects. I find that I learn
a lot and also can share City priorities with a group of people who do not often come to City
Council or Chamber of Commerce lunches. Councilwoman Beach was also there. We briefed
on the General Plan and affordable housing; we also asked them to give brief updates on
their projects. There was not much of a take-away message other than a growing concern
about the health and vitality of retail; several of the owners would like to find a way to keep
retail on the street frontage but be able to do more creative things [office, etc.) with space in
the back. I pointed out that the reason Burlingame insists on retail on the street front of
shopping streets is because office and medical are perceived as pedestrian interest killers.
They understood that, but nonetheless think this is a trend the City may need to start
thinking harder about. I suspect this might be a good issue to dive into either at the
Economic Development Subcommittee or by the Planning Commission. The question being:
can we maintain the liveliness of our streets and yet modify the retail-only restrictions in
ways that will lead to even more utility? To be clear, I do not have a point of view and I think
our current rules do a good job in terms of balance, but this was one of the key requests that
several of them made.
CuriOdyssey
At the request of a CuriOdyssey Board-member (and Burlingame resident), Margaret
Glomstad, Nicole, and I went over for a briefing on Curi0dyssey's capital plans and
programmatic aspirations. Our Park and Recreations team already uses Curiodyssey for
some programs but agreed to work together even more closely and to be mutually
supportive. Curiodyssey seeks an additional $20 million to complete the remodel of its
building.
Home For All Study Session
Over the period I also attended a session organized by Russ Cohen for a group from Palo Alto
wanting to see how Burlingame "got it right" on its downtown makeover and BID
relationship; met with SAMCAR to discuss affordable housing issues; met with a property
owner on El Camino Real who wanted to raise awareness on some specific challenges for
owners on the East side of El Camino Real; participated in the Measure I interviews; and
handled various other constituent letters and matters.
2
We all attended; I thought it was terrific.
1. Burlingame Avenue, our main shopping district, recently got a
$16 m makeover, to keep it one of the leading shopping destinations
in the Bay Area. Burlingame and neighboring Hillsborough are cities
with some of the most affluent consumers in the country.
3. These storefronts presently have dead landscaping, litter and graffiti. llYhen
one peers inside an office, the image on the right is what you see. This does
not enhance AfT's image and it is a pedestrian interest "killer" for the street.
2. The ATT Complex anchors the west entrance to
Burlingame Ave. The beautiful brick building is full of
switching gear but the modern addition has 5 empty
storefronts - each of which is empty and dilapidated.
4. Our hope is ATT will enliven its storefronts
with ATT sales and services, or with third party
retail, or even dioramas that relate ATT
corporate history and US innovation or local
history. This is a chance to showcase the ATT
brand, as opposed to find it embarrassing.
t::.a',
"r; v
J
l?::.:t:a
iit..,.l:.':
il , i
18:iItr,fi',ry
I
&t',.
AGENDA NO: 1'1b
Memorandum
To:City Council
Date: February 20,2018
From: Vice Mayor Donna Colson
Subject: CommitteeReport
Peninsula Clean Energy Finance Committee Meeting Tuesday. February 13 2:15 PM
PCE Offices
Topics:
. Credit card spending policy - discussed and revised.. Check disbursement policy - discussed and revised.. Working to hire a new CFO with governmental and/or energy background. Will retain
and executive search firm to manage the process.
Home For AII Steering Committee Update and Review February 15. 2018
Update
. Goalwas to create a place where everyone can call home
. Close jobs housing gap
. Ratio jobs to housing in 20L4 was 24:1. and now L6:L in 2076
. L4 Point Action Plan Adopted by Task Force
. Home For All Work Groups - Focus on four - Funding, Legislation, Mobility, and
Outreach and Education
. Developed2077 /2018 Work Plan Focus - Land, funding for affordable housing, and
community support for housing
. LAND - School districts great area for new units, ADU (invisible density)
. FUNDING - HEART, Measure A/K, Track State and Federal Funding, RHNA Sharing
Research and Proposal, Impact Fees Adoption and Allocation
. COMMUNITY SUPPORT - Learning to talk effectively, community education and
research, expanding participation in discussions, best practices and sharing between
cities (both challenges and successes)
Completed
. \7 City Councils and 16 have approved HFA
. 8 Letters of support from community organizations
1
Meeting to discuss items for B0D consideration or for staff implementation.
Col son Com m ittee ReporT February 20, 2018
Events at county library system
Presentations to non-profits
County Affordable Housing Fund
$10 MM rental housing fund has preserved 87 units of affordable housing
Increased social media and connecting with partners
Second Units
Launched our second unit ON-LINE Center and had the Second Unit convening = ns*
resources!
Post card to get to everything - website and calculator
www.SecondUnitCenterSMC.org and shows how people have done this and what the
outcome has been
Calculator - Interactive that you can choose city and will populate things like
construction costs, fees, permits, etc. and then you can determine other items like
size, costs, rent, etc. and how many years you will take to capture your investment
back to you.
Workbook - Working with homeowners and21, elements to help them start an ADU.
Launch in May the final version and how to hire the architect and how to be a
landlord - all types of information on how to do this and home share.
The share home situation is NOT currently getting credit - ONLY ADU adds, and
county does not seem interested in pushing this because it is not considered a NEW
unit (personal commentary is this seems contrary to the notion of adding housing
options), but HIP is working to get those included as increased housing stock.
Update on the Pilot Programs
1. Burlingame Feb 10 Meeting - Huge Success - Conversation Around Housing. Talking
together about Housing. Very excited about number of people and the range of
participants. Set up about range of hopes and dreams, then discussed housing. We
had a great model and it was very successful.
2. Portola Valley March 3 - How do we add second units
3. Half Moon Bay - In planning steps - Using open space for housing
4. Redwood City - How to use linkage fees. Upcoming
Learning Network - Working with elected officials, staff and created the County Learning
Network. Six in this fiscal year - very consistent attendance with about L5 jurisdictions to
create a safe space to discuss and how do you get your community to discuss housing in a
new, effective way. Getting traction and moving forward. But helping to frame discussions
around housing.
FrameWorks Institute - Group to learn about how to talk about difficult situations. They
review the website and publications to help with messaging. They are "framing" trainings.
We have a March 22 meeting with FrameWorks and a workshop for local housing partners,
county staff and city staffs. Work to talk to community members with a way to engage and
have conversation. We have had one large training session. In the future there will be more
opportunities to work with them on how to have these conversations to equip people with
knowledge and tools to discuss housing.
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February 20, 2018
Best Practices: It4obility Work - New Housing, Parking and Transportation
Huge barrier to housing creation is complaints about transport and parking
Partnering with Mineta Transportation Institute
Need toolkit to make these practices available for cities
Five categories to review: Focus on parking, commute alternative incentives,
valuation and metrics - streets do not maximize opportunities for housing, how do we
imbed things in the planning process so we can expedite.
Goals for Upcoming Fiscal Year 78/L9
. Developing draft work plan - including projects and input from Work Groups and
other stakeholders and review emerging issues
. April 12 - Draftwork plan goes to Steering Council for review
. May 10 requested approval date of work plan by Steering Council
. Revise the invitation to city councils
. Discuss or invite community groups that might want to have representation
. CASA - Regional conversation around housing with the various people in the room
and getting them to create some type of "grand bargain" between developers, the
foundations and then they come up with an idea and we disseminate and share with
locals. Unfortunately, someone from San Mateo is not invited.
Economic Development Committee Meeting Thursday Feb 15. 2018
Update on Auto Dealers
Kent Putnam - Need an on-site service location and submitted for conditional use
permit for a new Subaru service shop. Presently is a Hertz rental location. Nissan
dealership - 101 California Drive at Bayswater
Would like to enforce the two hour parking in front of their location - Lisa noted that
they are some of their employees. Some park on-site local and some park on the
streets or in the lots.
Happy about the effort to build the new parking garage.
Housing costs are impacting and squeezing out workforce. Would support greater
density for additional workforce or below market housing.
Bill gave update - higher density and wider variety of uses on the Bayfront to serve
the hotel community. More fine-tuning around workforce housing - zoning
regulations will lag until after the GP is adopted. PC will see the first EIR in second
quarter this year for the GP.
Kent asked about the new housing package from State - Bill responded with short
update on the impacts to Burlingame and how we are evaluating this.
Kent asked questions about housing options - including more density and workforce
housing. Model around a few sleeping beds and ability to share housing.
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Reformulation of the Steering Committee
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Colson Committee Report
.: Colson Committee Report February 20, 2018
Craig and Catherine - Rector Porsche Audio [BurlingameJ
600/o from San f ose but as far as Vacaville - more franchises are coming to the area
(Fremont) - bc hired away technicians and pay more to keep them, but the commutes
are getting to them.
Very strong business growth, but struggling to keep employees as well. Pay rate in
Burlingame is about 2X Central Valley so that is why commuters continue. 40 hours X
$50 = $104,000
Burlingame Avenue Downtown Business Improvement District
Lights in the trees - problem. DBID sent funding to do the lights. Need to spend too
much funding for this due to growth of trees. Would like to consider stringing lights
across the street building to building or post to post. Syed said the best first step is to
determine how to string the lights.
Stores are not keeping up the cleanliness of the stores - the merchants are not
keeping up the storefronts. The merchants wonder how often we clean Burlingame
Ave - we are going to add the dispensers and bags to the ave! Discussion of smoking
and prohibition on commercial streets - hard to enforce and would need direction
around priority to review.
Harvest Festival - Is there any way to streamline this event - obtaining signatures
from the merchants.
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Signage - Future Items - Can we allow AT&T to develop signage internally - artwork or a way
to make it look attractive. Possibly - allow art via sign ups at recreation center and then
determine how to work with the building owners.
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