BREAKING NEWS: Cannery Puts Changes on Hold (9:20 am update)

Cannery-TNHC

UPDATED AT 9:20 AM:

Statement by Eric Roe: “The Small Builder Group of Davis appreciates Bonnie Chiu and Kevin Carson’s withdrawal of their request to reduce the number of Small Builder lots at the Cannery.  In addition, many local residents and Small Builders interested in the opportunity to build custom homes in town look forward to seeing the downward movement to market value in the lot listing prices at the Cannery which would help make their custom home dreams a reality.

“The allotment of Small Builder lots in every new subdivision helps make the architecture and livability of Davis neighborhoods diverse and rich for all residents.  That is what makes Davis a unique and desirable place to live.”

UPDATED AT 7:35 AM:

Bonnie Chiu of the Cannery has informed the Vanguard that “The New Home Company (has) withdrawn its proposal.  She added, “Please note that we have also decided to put our proposal regarding the Stacked Flats Condominiums on hold at this time to allow additional outreach time.”

In a letter yesterday evening to Eric Roe, “In light of various reasons, including our recent discussions with members of the Small Builder community, The New Home Company has decided to withdraw our proposal to amend the small builder provision. We plan to evaluate our current lot pricing, and continue to conduct outreach to the small builder community and potential owner/builders to market these lots.”

She added, “Considering the location of the 30 lots are in the heart of The Cannery neighborhood—immediately adjacent to parks and greenbelt features that will be substantially completed in the coming weeks—we hope to see these lots develop timely. We encourage interested parties to visit the neighborhood if you haven’t been through recently to view the progress of the parks. We are really excited to bring these amenities to the community.”

In that letter last night she stated, “The proposals for the mixed use project and the stacked flat condominiums will proceed as scheduled on Wednesday.”  However, she now has told the Vanguard in her letter this morning that “the proposal for the stacked flats is on hold.”

PREVIOUS STORY:

Last week, the Vanguard reported that Cannery is looking to add 24 stacked-flats over and above the current development agreement; now the Vanguard has learned that on Wednesday, the Davis Planning Commission will hear a request to reduce the number of Small Builder lots at the Cannery subdivision from 30 to 14.

As a letter on Monday afternoon from Eric Roe of the Small Builders Group of Davis to Bonnie Chiu and Kevin Carson of New Home Company, copied to the planning commission and other city officials stated, “[T]he agreement you reached with the Small Builders Group of Davis in 2013 prior to Cannery project approval was to provide 30 lots available at the Cannery for purchase at market value to Small Builders or individuals – to remain available for sale until sold. “

Mr. Roe writes, “This is an Agreement that was reached with the understanding that the local Small Builder community would support your project during the City approval process and we expect you to honor our agreement.”

The New Home Company, according to the staff report, is requesting approval of amendments to The Cannery Development Agreement and The Cannery Planned Development.  “It includes revisions to the Final Planned Development, amendments to applicable development standards in The Cannery Design Guidelines, and updates to the Affordable Housing Plan to reflect the adjusted unit numbers, building heights, setbacks and as documents referenced in the Development Agreement.”

Proposed changes include a “Development Agreement Amendment for the 30 Small Builder Lots (Lots 220-225 and Lots 226-249 on attached exhibit) to reduce the number to 14 small builder lots and adjust the timing and requirements for sale of them.”

Second, “Amendments related to development of the Mixed-Use Commercial Site including revisions to the Planned Development and Final Planned Development to increase the number of residential units allowed from 24 units to 36 units, and update the Affordable Housing Plan to reflect the unit changes; revision to the Design Guidelines to increase the maximum building height on the West Side from 35 feet to 45 feet and incorporation in the Development Agreement of the revisions to these documents by reference.”

Third, amendments related to the University Flats stacked flat condominiums, which include “revisions to the Planned Development and Final Planned Development to increase the total number of condominium units from 96 units to 120 units, a total of 24 new units (12 additional units on each of the two University Flat sites), and update the Affordable Housing Plan to reflect the unit changes,” “revisions to the Final Planned Development and the Design Guidelines for modification to the street setback and building height increase to 56 feet,” and “Incorporation in the Development Agreement of the revisions to these documents by reference.”

All these amendments will require final approval by the Davis City Council.

Staff notes once again, “The City has determined that the proposed projects, which would increase the total number of residential units in The Cannery to 583 units and allow approximately 171,000 square feet of mixed-use development on the commercial site, would be consistent with the Environmental Impact Report that was prepared and adopted as part of The Cannery Project.”

In October 2013, a group of small builders met with Kevin Carson and Ashley Feeney of The New Home Company.  The group ultimately reached agreement on a “general understanding with The New Home Company regarding the availability of small builder lots within The Cannery subdivision.”

They identified 30, or 15 percent, of the 223 lots in the four identified villages that would be “small builder lots.”  Writes the group, “The Small Builder Group understands that 30 small builder lots will be comprised of 16 Cannery Village lots and 14 Park Homes lots. All 30 lots will be located near the Neighborhood Park in the central portion of the project site.”

The agreement placed limits on the number of lots any of the small builders could purchase in a give year in order to limit the number of homes at any time by a single contractor.

The agreement concludes, “The Small Builder Group understands that the project has not yet been approved by the City Council and the number of lots, location and mix are based upon The Cannery Subdivision 5026 Vesting Tentative Subdivsion Map on file with City of Davis, dated July 30, 2013. Should the number of total market rate units and/or the type of market rate units be modified to a lesser number and/or different housing types as part of, or before final City Council action, the number of lots and location will be revisited. Small builder participation will remain a component of project and only the total number, type and location of lots would be revisited for revision.”

They write, “Mr Carson and Mr. Feeney, this memorandum represents the Small Builder Group’s general understanding of the small builder lot program within The Cannery project. Thank you for working with the Small Builder Group.”

The agreement was signed by, among others, Ashley Feeney from The New Home Company.

In his letter on Monday, Mr. Roe notes, “The listing prices on the first phase of Small Builder lots available for purchase at the Cannery are so far over market value it is my understanding that very few buyers have been willing to waste their time to make you an offer.  If you are ready to sell your Small Builder lots, I suggest you lower your listing prices to market value.  Once the list prices reach market value, I promise you the Small Builder lots will sell.  Vacant residential lots listed at market value always sell in Davis.”

He concludes, “The Small Builders will be at the Planning Commission meeting on Wednesday night to speak against your request.  We feel strongly about this issue for many reasons.  Small Builder lots do not just create jobs for local Small Builders, local sub-contractors, local suppliers, and other local real estate professionals, but they create opportunities for citizens to purchase a vacant lot on which to design and build the custom home of their dreams.  Many of these citizens may have special needs, or may just want something different than the limited number of floor plans available for purchase at the Cannery.”

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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18 Comments

  1. Tia Will

    Chip…chip….chip….

    The sound of erosion of belief that developers will actually do what is stated in the initial agreement. And some of you express surprise and or dismay that anyone might doubt the good intentions and honest negotiation of the developers when a project is initially put forward.

    1. Mark West

      Drip…drip…drip…

      The sound of an anti-development fanatic who will use any opportunity available to question the integrity of developers. And some of you express surprise and or dismay that anyone might doubt the good intentions and honest negotiation of the anti-development fanatics when a project is initially put forward (or at any other time).

      Development agreements are based on what the parties expect before the start of the project. Sometimes the reality of the situation during construction creates opportunities that might improve the project. That is why the process allows for mutually agreeable adjustments to be made to the development agreement in order to better reflect the real world construction environment.  This is not an example of nefarious intent, as Tia wants to believe, as it is perfectly appropriate for the developer to suggest changes to the agreement. The City could suggest changes as well if it so desired. Neither party can move unilaterally as all the proposed changes would have to be approved both by the developer and by a vote of the CC.

       

      1. The Pugilist

        This is messed up.  There is no defending it.  What we have seen with Cannery is why I think most of us will not agree to end Measure R – even if Measure R is harming the community.  Until you start understanding this, you’re never going to make headway.

        1. Mark West

          “This is messed up.  There is no defending it.”

          The developers have done nothing wrong here. They suggested changes to the DA, and responded when they received feedback to those proposed changes.  This is an example of appropriate business practices.

          “What we have seen with Cannery is why I think most of us will not agree to end Measure R – even if Measure R is harming the community.” 

          The only thing that has been ‘wrong’ (if you will) about the Cannery process was the actions of the City Council to approve the CFD after the fact. The developer was in a position to request the CFD, but only the Council had the power to approve it.  If there was an integrity issue with the decision, it wasn’t on the part of the developer.

          Measure J/R came about because the anti-development folks disagreed with a decision of the CC. It was a ‘sledgehammer’ response to a problem that was best handled with a scalpel. It takes very little thought or skill to use a sledgehammer, which makes it a perfect solution for the uninformed masses and the fanatics who fan the flames.

           

        2. The Pugilist

          They did a lot of things wrong here.  That’s why they backed off.  They had an agreement with the small builders that they were going to renege on.  They played bait and switch with the CFD.  They built way to expensive housing.  They haven’t honored their commitments on the grade separated crossing.  What project are you following?

        3. Mark West

          “What project are you following?”

          The same one as you, but unlike you apparently, I understand that developments involve negotiations between the developer and the City and that those negotiations continue throughout the building process.  As I said, the developer cannot change anything without the consent of the City.

          “They had an agreement with the small builders that they were going to renege on.”

          Yes, they suggested changes to that agreement and backed off when they received feedback. What is wrong with their response?  

          “They played bait and switch with the CFD.”

          No, the CC did that.

          “They built way too expensive housing.”

          The community placed a number of demands on the project that combined added considerably to the costs.  Who is the responsible party for the housing being too expensive? Certainly, the developer plays a big part, but so does the community. We cannot blame others for our own decisions.

          “They haven’t honored their commitments on the grade-separated crossing.”

          If a grade-separated crossing had been a priority to the City, it would have been included in the Development Agreement (perhaps instead of the ‘toy farm’ ag buffer). Is there a ‘grade separated crossing’ specified in the DA or just a commitment to work to find a solution? All of the possible solutions require agreement with the City and neighboring land owners. Do you have evidence that the developer has not done their part to find a solution?

      2. Tia Will

        This is not an example of nefarious intent, as Tia wants to believe, as it is perfectly appropriate for the developer to suggest changes to the agreement.”

        This is how Mark wants you to believe that I am saying. I said nothing about “nefarious”. I did say plenty about not expecting that what the developer would initially propose would be what we would end up getting. Do we believe that the developer would ever say,’ gee…. the costs were less than we expected so we are going to offer to lower our prices, include more benefits that you wanted, or provide more affordable housing than we initially planned” ?  If any one can name any instances in which the changed plans are not in favor of the developer’s bottom line or were more generous to the city, I will be happy to reassess my position.

    2. Frankly

      No, it is the consequence of…

      1. Never knowing everything that is needed when making decision for a project and needed to make adjustments in the plan.

      2. Davis no-growth crazies combined with those that have no business sense that think that money grows on trees and that then can keep layering on expensive requirements on every development project without there being any consequences to the viability of the project.

  2. hpierce

    David…would be nice on these “breaking updates” to format the entire changes as bold and/or italics… meant as a friendly/constructive suggestion…

  3. ryankelly

    Maybe I’m not getting something here, but I think that this is working out as designed.  The developer is going to provide the small builder lots as agreed and will likely need to lower the cost of the lots to market levels in order to find qualified builders.  Having houses that are unique from others in the neighborhood will only add to the quality of the development.   Everything is petition-able, but not everything can be expected to be approved.  I don’t understand the heightened emotions over this.

      1. Mark West

        The Pugilist:”TNHC was attempting to unilaterally back off their deal…”

        This is the problem with your tirade…they cannot back off of anything unilaterally. It is perfectly appropriate for developers to suggest changes in response to existing conditions, but they cannot make those changes unless the City agrees. This is exactly how the process is supposed to work.

  4. nameless

    The Pugilist: “Why are you ignoring the fact that TNHC was attempting to unilaterally back off their deal until they got called on it and quickly did a 180.

    This is incorrect.  All the New Cannery was proposing was de minimus changes to the DA, because of the realities on the ground.  For instance, when the Small Builder lots were offered, only one builder was interested.  As Mark West has pointed out, it is standard practice for a developer to ask for changes to the DA depending on circumstances as the project moves forward.  The City Council can agree or not agree to any proposed changes by the developer.  There is no “bait and switch” here.

    1. hpierce

      There is another “value judgement”… what is a market rate lot, worth, given availability?  Eric is a stand-up guy… involved in the community… what is raw land, with services, worth per sq/ft of lot?  In Davis, given current situation?  I truly don’t know… suspect it is everything the seller can get, and the buyer will accept, given what the small builders demand for their cost and profit…

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