A proposal for the Hyatt House has some of our commenters complaining that it sets a negative precedent in creating an ongoing fee to the hotel that would go to a greenbelt and park enhancement fund.
As the staff report explains, “After reviewing the redesigned building, the neighborhood representatives requested the applicants consider if there is anything that could be done to help address neighborhood concerns regarding a potential change to their quality of life and property value by making a contribution to targeted park and greenbelt enhancements within the Rose Creek neighborhood.”
The applicants, based on this request, revised their project description to include a Rose Creek Neighborhood Park and Greenbelt Enhancement Fund.
“The fund contributions would be calculated based upon a formula of $1.00 per night for each guest room sold. The fund would be administered by the Parks & Community Services Department and used for targeted park and greenbelt improvements within the Rose Creek neighborhood based upon neighborhood feedback,” staff notes.
At the $1 rate, a 70 percent occupancy rate would generate around $30,000 per year. The applicants proposed this for a ten-year period. They also made it contingent “upon no legal challenges being funded or filed by or on the behalf of Rose Creek neighborhood representatives, and that should a legal challenge be brought forward by others, the Rose Creek neighborhood representatives would not participate in the suit and would act in good faith towards the project.”
However, the neighbors have proposed that contribution increase from $1 to $2-$3 per night and the term to continue as long as the hotel is in operation.
At this point, that has not been agreed to, nor has a one-time $350,000 contribution.
I noted at the outset that there was some consternation by several Vanguard readers about this potential agreement. But this would appear to be a potential way forward for both the neighborhood and the applicants.
I actually think that this could be a good precedent rather than a negative precedent. There are details that have not been agreed to and the council on Tuesday may have to be the final voice on the amount of the contribution and whether it is a ten-year commitment or in perpetuity.
Let me explore this potential deal from both sides.
We have heard from neighbors in Rose Creek, both on the Vanguard and at meetings. If they had their purest desired outcome it would be the status quo – no hotel. They cited a number of concerns – noise, privacy, sight-line impairment, and other factors. While the Vanguard has tended to believe that the impact will be less than feared, I think there are legitimate concerns on the part of the neighbors, especially those abutting the greenbelt.
From the neighbors’ standpoint first of all, the funding will enable them to redesign a mini-park along the greenbelt that can serve as a benefit to the people of the neighborhood. Second, as the project relies heavily on the trees in the greenbelt to act as a privacy buffer to the houses along the greenbelt, this would create a funding mechanism to maintain that critical buffer.
In short, the neighbors have some impact coming from the project, and this would help to offset that negative impact with some benefits to the neighborhood.
The applicants also benefit from this agreement.
First of all, they face pending litigation as Don Mooney has already sent the city a letter protesting their Mitigated Negative Declaration. Litigation would produce expenses directly to the project and would create costs by delaying the construction of the project until the litigation was resolved and that would produce costs in lost days of rental potential. Each year of delay could potentially cost the hotel $5 to $6 million in lost revenue.
The applicants were smart to link the request for contributions to the neighborhood to potential litigation.
Again, there are details that have to be worked out in terms of exact per night per room contribution, whether it is $1 as proposed by the applicant or $2 to $3 as proposed by the neighbors, but this is a potentially win-win deal where the neighbors get benefits to offset the potential impact of the hotel and the applicants get to move forward with greater certainty.
For those concerned about the precedent-setting potential of this deal – perhaps that is a good thing.
We are seeing an increased number of infill proposals. The infill proposals are often more dense than the adjacent neighborhood and therefore have impacts on the neighborhood.
What if we created a system whereby we assessed the impacts to the neighborhood, had both sides sit down to figure out ways to offset those impacts, and then created a small fund to help pay for those offsets?
Neighbors would then have a mechanism to improve their neighborhood while we could limit litigation and provide more certainty to the applicants.
Instead of being a hindrance and a cost of doing business, we could view this as a way to produce more certainty and ease the tension between neighbors and new applicants.
This might be the start of a new approach that can begin to limit litigation and reduce tensions in this community.
At the very least, it points toward potentially new ways to structure interactions between neighbors and applicants and perhaps points to be a better way forward.
—David M. Greenwald reporting
David
I also see this as a positive development. While it is nice to think about benefits to the entire city, the reality is that the adverse effects ( if any) are born disproportionately by the immediate neighbors of large projects. I see it as an overall positive to admit that this is true and for developers to work with the impacted neighbors on ways to benefit the neighborhood in consideration of this disparate impact as well as for the overall community benefit. I congratulate the developers on their willingness to consider how to improve their process and hope that it will lead to a more collaborative approach for future projects.
Is Don Mooney’s litigation initiated by the neighbors? Otherwise why would that go away?
Who will administer the fund, the city?
It was a letter on behalf of one of the neighbors. The fund is administered by Parks & Community Services
I think the project developers see this as an expedient way to get their project moving, and I don’t fault them for that. However, I’m less sanguine about its future as a model of collaboration. The cynic in me believes that there are always people who materialize at the smell of money, and that a precedent like this will encourage those people to come forward upon the announcement of any new project and assert their claims for compensation. Once that ball gets rolling, the model falls apart.
In my opinion, project impact mitigation should be managed at the city government level, not at the bribe-the-squeaky-wheel level.
I agree with Jim.
We should not allow bribing or appeasing the many ‘squeaky wheels’ in town to become the normal process for development. Just another form of corruption.
Jim and Mark, I agree with your points if the money goes in any way to private parties; however, in this case it appears that the money is going into a City of Davis Fund to maintain a City asset/amenity. How is this different than any one of the myriad of current development impact fees that projects have been paying in one form or another for decades?
The money is going to the City but is earmarked for a specific neighborhood, so the impact is that specific people get the benefit above and beyond everyone else in town (who may also have a local park in need of upkeep). The City may have higher priority projects that could not be funded as the money is tied to a specific neighborhood. Add to that the neighbor’s demand for the payments to continue in perpetuity and you have a case of corruption, not good policy.
It’s not so much the localized benefit of what amounts to a settlement agreement that I look askance at. Rather, it’s the notion that henceforth groups or even individuals with tenuous relationships to a given development proposal will be motivated to assert make-whole claims. At some point the project won’t be able to satisfy all the claims and still remain viable, at which point the developer has to do triage. Then the Planning Commission or the CC has to decide whether the charges of bad faith made by those denied have merit. It seems to me that it’d be a lot cleaner to keep non-statutory impact mitigations within the project boundaries rather than allowing them to stray into the neighborhoods or beyond.
Also, there is statutory and/or case law requiring legitimate nexus between mitigations and project approval, and I’m wondering if a custom hush-money settlement to be administered by the city might not step over that line.
It would be “murky” as I opined before, but not sure who would file a complaint/suit… if the developer caves, they would not be in a position to… I’d be tempted to, as a third party, protecting ‘process’, but that temptation would probably last all of 3 seconds…
All good points Jim. I trust Harriet Steiner has taken a hard look at this proposed solution and given a legal opinion on its merits/legitimacy. I am not a lawyer (as you know) and I defer to people like Harriet who are.
Now, with that said, in this particular case what “individuals with tenuous relationships” do you think are involved. My sense is that neither the hotel team nor the neighbors fit the “tenuous relationships” description. Grok might have fit that description, but Grok has never had his hand out looking for alms.
None of which I’m aware, in this case. It’s the precedent that concerns me. As a developer acquaintance told me privately, this deal is “great for the project, but terrible policy.”
Fair enough Jim.
I would add that it is also a very compelling argument for a consolidated General Plan Update, Planning Guidelines Update, Zoning Code Update.
We are planning on a foundation of sand.
Jim
“The cynic in me believes that there are always people who materialize at the smell of money”
I agree with you. And I feel that the same applies to both sides. Many who “materialize at the smell of money” are known as developers and investors. I am not pointing fingers at others. I have investments myself. I do not however pretend that I am investing only for the betterment of the community. I am quite frank that I am investing for personal and/or family profit. If it helps others fine. What I do not choose to do is to make investments that I have been made aware will harm others. I think that too often investors only see things from one side, namely the positive, and are likely to ignore or minimize the genuine concerns of those who stand to be adversely affected.
“In my opinion, project impact mitigation should be managed at the city government level, not at the bribe-the-squeaky-wheel level.”
And this would be fine if well intentioned individuals were never swayed by their own self interests and /or those of their friends or those who see the world more similarly to how they see it. I believe that corruption can apply to those who are in power as well as those who are not. This is one reason that I see it as very important to abide by the established guidelines. If those are in need of changing, then they should be updated so that everyone knows just what the rules are before they sink money into an investment which will require changes in the rules. However, decisions that have negative impacts should not be changed “by exception” regardless of the wording by which one chooses to describe it.
Isn’t the whole town affected by this hotel? I mean it will cause more traffic for everyone that travels down Covell, more traffic downtown, less available parking, more pollution, etc.
Where’s the rest of the town’s fund for goodies we might like?
Keith asked . . . “Where’s the rest of the town’s fund for goodies we might like?”
The simple answer to that question is in development impact fees. Further, the Finance and Budget Commission’s review of the Nishi proposed project ended up creating a unique Community Services District fee specific to that site alone, that the Nishi developers agreed to that would have added over $700,000 per year to the City’s revenues.
Compare the uses, area, etc. of Nishi to Hyatt… blue whale and mouse?
The Nishi revenues (the $700k) were not proposed to be set-aside for Olive Drive and nearby portions of the Core, were they?
Actually Howard, yes some of them were proposed to have designated usage in the Nishi neighborhood (approximately $181,000 per year).
You do realize that the park is an expense that would have to be paid out of the general fund and therefore by the applicant funding it, it benefits the whole town.
Perhaps… but are those facilities, at that price, our first priority for parks/greenbelts? From what I’ve seen around town, not…
Howard, creating a park on on the Nishi property fit your statement — “are those facilities, at that price, our first priority for parks/greenbelts? From what I’ve seen around town, not…” — very well. Nonetheless, there wasn’t even the slightest consideration of not creating one more park that the City would be responsible for maintaining.
Putting on my FBC analysis hat, there is no comparison between this proposal and the holistic view of the maintenance of our all existing parks/greenbelts with the City’s existing revenue stream. In the holistic case we are talking about only having the existing revenue stream. In the proposed case we are talking about having the entire existing revenue stream plus the proposed incremental revenue stream. In the holistic case we are talking about using the existing revenue stream to maintain all the greenbelts/parks. In the proposed case we are talking about using the existing revenue stream less the costs of maintaining the existing neighborhood amenities/assets.
To draw a parallel, when St. James Church gets a new donation from an outside source that designates the money should go to maintaining one of the transepts, do you think St. James will turn the money away because other parts of the church structure are more in need of maintenance?
Your example confuses a free-will, charitable contribution with a coerced one that the City will be a party to… particularly if the City goes with your concept of ‘splitting the baby’ as to the rate… which would be coercion by the CC, at this point…
At least my hands will be “clean”…
And remember, all the money appears to be off the table is ANYONE files a lawsuit…
Interesting point… why not spend the $ for roads/bikepaths/sidewalks in the area? The $ for those also comes from the GF. Seems like that would be more “mission-critical” than landscaping or playground enhancements…
This sounds basically like a tax that would indirectly handed down to the hotel visitors. Since we had to vote to increase the TOT tax would a tax like this even be legal?
The hotel could increase their room cost by a dollar or three.
Yeah, just what I said, the tax gets indirectly paid by the hotel visitors.
keith, as best as I can tell it will get paid directly by the hotel’s visitors.
Okay then Matt, since you owned up that the tax will get paid directly by the hotel visitors why shouldn’t it be put up for a vote just as the TOT was?
Or, it could be that the hotelier, reduces the room cost by the exact same amount, for competitive reasons… how many times have you seen ads where a retailer says “we’ll pay the sales tax!” [or, they may have the consumer ‘pay it’ by increasing the price, and then showing it as an ‘offset’ on the receipt]
The tax/fee is still paid… to the entity… in this case the city… the rest is an ‘accounting’ nuance. The consumer may or may not “pay”, per se… in any event, the ‘consumer’ doesn’t write a check to the entity… the ‘supplier’ does…
As I said before Keith, I am not a lawyer, so I won’t even speculate. Providing a legal opinion is what Harriet Steiner is paid to do.
BTW, welcome to the new Vanguard. It is good to see you here.