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HomeMy WebLinkAboutRPT 5 E. TUSTIN DEVEL 01-16-89 .. ~ REPORTS ,: .::.,,, .-'~ ?"~\ , ~ NO. 5 TO: FROM: SUBJECT: WILLIA)I A. ItUSTON, CIl~~ MANAGER COMMUNITY DEVELOPMENT DEPARTMENT EAST TUSTIN DEVELOPMENT MONITORING AND ANNUAL' REVIEW REPORT: 1986-1987 ANO 1987-1988 REVIEW PERIOOS · REC~ENDATION ,m Receive and fi 1 e. BACKGROUND i The East Tustin Development Agreement between the City of Tustin and the Irvine Company was originally adopted on October 22, 1986 as a mechanism for implementing the East Tustin Specific Plan. The Agreement identified phased public improvements and required dedications to be accomplished by the Specific Plan, assured adequate funding of certain improvements, clarified the respective responsibilities of the City and the developer, and provided a program for monitoring and controlling the impacts of the project on the City's fiscal resources so that the phased completion of the project would not result in a negative fiscal impact on the City. Pursuant to Sectlon 3.1 of the Development Agreement, the developer's performance under the Agreement was to be reviewed at least every 12 months. Evidence of the developer's good faith compliance with the items of the agreement would be demonstrated by evidence of the following: 1. Conformance with the requirements of the Specific Plan and Development Agreement; 2. Conformance with the adopted phasing schedule; and 3. Conformance with the fiscal impact model which requires a minimum one-to-one cost vs. revenue ratio. While the' Irvine Company was informed in late 1987 of the City's intention to review their performance under the Agreement, much of the analytical information needed for the. Fiscal Impact Analysis could not be accessed until final purchase of a license agreement for the Fiscal Impact Model was made. Installation and training on the model was also needed. The City Council was previously informed of the anticipated delay in the 1986/1.987.Monitoring Report and of its consolidation wi th the 1987/1988 report. L J City Council Report E.T. Development Moni tori ng and Annual Report 1987/88 January 16, 1989 Page two Staff have now compiled all necessary information to complete the annual reviews for both reporting periods. All of the detailed findings and exhibits are compiled in the attached East Tustin Development Monitoring and annual review Report. Staff believes that the developer has acted in good faith in compliance with the terms of the Development Agreement and no cause for further action at this time is considered necessary. The remainder of this report summarizes staff findings. ANALYSIS As discussed in more detail in the attached report, the annual review includes -three major components. 'Each of these components are briefly summarized below: 1. Compliance with Development. Agreement and Specific Plan This component involves a review of the Development Agreement and Specific Plan. Staff have continued to work with the Irvine Company and 'various other developers in processing Subdivision Maps and Building Permits for specific developments within the East Tustin area. All of these projects are reviewed on a case-by-case basis and no known violations of the Specific Plan have occurred. Any variations from the requirements of the Specific Plan have been pr. ocessed through the appropriate mechanism, an administrative adjustment or variance. Both of these procedures are considered acceptable in the Plan and by State law. Compliance with the terms of the Development Agreement can be measured by considering compliance with the phasing schedule and Fiscal Impact Report as discussed below. 2. Development Phasing Schedule The overall fiscal impact of development of the East Tustin area was of substantial concern to the City of Tustin in negotiating proposed land uses in the East Tustin area. As part of the planning process a fiscal impact analysis was conducted for the purposes of evaluating the planned development to determine if the project would result in any substantial negative impact to the City during the project phasing or at completion of the development. It was, therefore, the intent of the established phasing schedule to balance the development of uses which are net revenue generators with development of uses that create costs to the City in excess of revenues to the City, so that an overall surplus of revenues over costs would be achieved. With the current number of auto dealers operating and Corn rnunity DeveloPment Depar~rnent Ci`cy Council Report E.T. Development Monitoring and Annual Report [987/88 January 16, 1989 Page three the square footage of commercial development open for business in East Tustin, the developer was authorized at the conclusion of the last two annual review periods to build and occupy up to 955 residential units. Only 736 residential units were released for occupancy as of November 1, 1988, therefore the developer is in compliance with the phasing schedule. . Fisca) Impact While closely related to the phasing schedule, the remaining component of the required annual review goes one step further in analyzing the impact of the project on the City financially. As part of the contract with Stanley Hoffman who prepared the Fiscal Impact Report (FIR) for the East Tustin Specific Plan, a computer generated model was provided to the Community Development Department. This model runs on Lotus 1,2,3 software and has been used by staff to determine compliance with this portion of the annual review. All reports generated by the model are provided as exhibits in the attached East Tustin Development Monitoring and Annual Review Report. After running all of the development related figures, staff has found that the model has provided the following cost-to-revenue ratio for the two official monitoring periods' 1986 / 1987 1987 / 1988 2.02 1'47 For every value equal to or greater than one, the number represents either a break even (1.0) or excess revenue (values over 1.0). So far, the estimated costs of the development have not exceeded the anticipated revenue; therefore, the developer is in compliance with the fiscal element of the annual review. One important caution should be indicated, in reviewing the fiscal model, for it does not reflect actual costs and revenues. All costs and revenues are only anticipated based on revenue generating examples found elsewhere or estimated based on original Fiscal Impact Model assumptions. An example would be the case of sales tax revenues which are merely projected. It can often take 2-3 quarters before actual revenues are-received from the state on any one dealership after business is opened and then it can take a significant length of time for business to build up to expected levels of sales tax generation. CONCLUSTON Based upon s`caff's considera`cion of all `chree components of the annual review, staff believes `chat the Irvine Company has exercised 9ood fai`ch compliance wi'ch the Eas`c Tustifl Developmen`c ^greement. ^11 components of .staff review indicated Corn rnunity DeveloPment DeparTment City Counci] Report E.T. Development Monitoring and Annua] Report 1987/88 January 16, 1989 Page four that the developer has met or exceeded the minimum requirements of the Agreement. Staff suggests that the City Councll recelve and file this report with the expectation of receiving a follow-up report each year as the Community Development Department updates the annual review pursuant to the Agreement. Senl or P1 anner LCK: CAS: ts Attachment: Annual Review Report ~hristlne A. Shlngl~ton Director of Communt~ty Development L Corn rnunity DeveloPment Department