City Council rejects loan agreement
The Vacaville City Council unanimously voted Tuesday to reject a resolution that would have approved a disposition, development and loan agreement for a proposed 187-unit multi-family apartment complex on Allison Drive.
The council members recommended the developer bring the item back after discussing the possibilities of hiring local contractors and laborers for the construction, incorporating senior units and considering a prevailing wage structure.
In 2019, the council voted to approve a zoning change and amendment to the Allison Business Park Policy Plan, which was adopted back in 1980 to further develop the area along Allison and Ulatis drives. Included in the 2019 action was the application of a Residential Overlay zone to two city-owned parcels to allow for commercial and residential uses. The city is planning to develop these parcels next to the Vacaville Transit Center into belowmarket rate apartments to house multiple families.
A year later, the council approved an agreement with Sacramento-based real estate developer CFY Development, Inc. to allow staff to negotiate with the developer to construct 187 apartments for residents with mixed-income on a portion of the property while permitting the city to develop the rest of the parcels for commercial or retail purposes in the future.
Housing Services Director Emily Cantu said CFY was chosen based on its staff’s combined 50 years of experience and 64 completed development projects, in
cluding the Kimmie’s Place Apartments on Callen Street, which were completed in 2015.
“They have a strong history and reputation with good property management and well-maintaining their properties and also meeting the financial obligations, both through other vendors and the state as a vendor as well as the city of Vacaville,” she said.
Also in 2020, Cantu said staff brought an item to the council indicating that Solano Transportation Authority was supportive of below-market rate rental housing, particularly due to its location next to the Transit Center. In support, STA agreed to provide a $1.9 million grant for the project.
As part of the proposed agreement, the city would sell the land at fair market value, based on appraisal by a third party. The city would contribute $1.9 million through its loan.
Other provisions of the proposed agreement included setting the rental values between $1,267 and $1,621 depending on the unit bedroom size, and rents would be restricted to at or below 80 percent of the area median income. This would amount to $73,950 per year for a family of four or $35 an hour if one of the household members is employed full time.
Resident Alicia Minyen asked why the project changed from 99 to 187 units as well as if there was a requirement to hire local labor workers for the project.
Cantu said the decision to double the units came about through negotiations with CFY.
“It does meet a community need and will serve our community with belowmarket rate housing units,” she said.
Cantu also said prevailing wage was not required at the time based on the structure of the city’s loan but could be required in the future if mandated by another financing source. Additionally, she said that CFY was doing what it could to hire union labor to support jobs in Vacaville.
Councilman Michael Silva asked why the project did not go out for bid. Cantu said the bidding process was not required, so staff sought out and connected with a developer the city had previously worked with.
“They have experience doing these dense projects near transit,” she said. “Based on their experience and reputation and development ability, we worked directly with them to bring this agreement to you for consideration.”
Silva asked CFY President John Cicerone if his company had a history with hiring local workers. Cicerone said the Kimmie’s Place apartments had an excess of 50 percent local workers constructing it.
Vice Mayor Nolan Sullivan asked if staff could request having 65 percent of the workers be local hires.
“I know it’s really hard to find developers to build these projects and I know we need housing, but it does sound like this is a good partnership and I’m wondering if we could get something out of it for Vacaville workers,” he said.
Sullivan also asked if prevailing wage would add to the job percentage. Cicerone said the total hard cost for the project was $45 million, and prevailing wage was estimated to add another $10 million which he opined would probably kill the deal.
“I could not be a developer and bring you a project at prevailing wage,” he said. “I’ve tried, and I couldn’t find the sources of funds necessary to overcome the increase in costs.”
In regard to hiring local workers, Cicerone said the project would be advertised locally and CFY would do everything they could to hire locally although they could not make it a requirement.
Mayor Ron Rowlett said he would like to see it be a primarily senior project.
“This is a prime location, next to a transit station,” he said. “(It’s) perfect walking distance to everything: Shopping, grocery stores, food, restaurants and obviously the Transit Center right next to it. I would like to see as many units as we can get on there.”
Councilman Roy Stockton said he was concerned other developers were not given an opportunity to bid on the project.
“We shouldn’t just be picking and choosing who we go with on a whim or just because of a past relationship,” he said. “I just think that that’s a way we could really open ourselves up to some problems in the future.”
Stockton motioned to reject the resolution until the council could receive more clarification on the concerns that were brought up. The motion was approved 6-0. Cantu said staff would work with CFY to come to terms regarding local hiring, senior units and prevailing wage.