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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/01/2018 - SECOND READING OF ORDINANCE NO. 055, 2018, AUTHORIAgenda Item 3 Item # 3 Page 1 AGENDA ITEM SUMMARY May 1, 2018 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT Second Reading of Ordinance No. 055, 2018, Authorizing the Release of a Restrictive Convenant on Property at the Colony at Rigden Farm. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on April 17, 2018, authorizes the release of a restrictive covenant for affordable home ownership on a property's title because the property developed into market rate rental housing. The project contemplated by the covenant was not built and no affordable housing incentives were provided to the developer. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, April 17, 2018 (w/o attachments) (PDF) 2. Ordinance No. 055, 2018 (PDF) Agenda Item 9 Item # 9 Page 1 AGENDA ITEM SUMMARY April 17, 2018 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 055, 2018, Authorizing the Release of a Restrictive Convenant on Property at the Colony at Rigden Farm. EXECUTIVE SUMMARY The purpose of this item is to authorize the release of a restrictive covenant for affordable home ownership on a property's title because the property developed into market rate rental housing. The project contemplated by the covenant was not built and no affordable housing incentives were provided to the developer. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION In 2006, the Colony at Rigden Farm development plan was approved. The plan included two buildings and a total of 48 dwelling units. As is customary, the approved plans did not specify whether the buildings would be a for-rent multi-family use or an owner-occupied multi-family use. A map of the location of this development is attached. (Attachment 1) In 2006 the City also entered in to an “Agreement of Restrictive Covenants Affecting Real Property” with the then owner of the project to allow the option of affordable housing incentives in exchange for 5 units of affordable home ownership units. (Attachment 2) The term of the Agreement was to begin when the City issued certificates of occupancy for the 5 affordable units. In 2007, a building permit was issued and the first building was completed with the owner electing to rent the multi-family building. No home ownership units were delivered and no incentives were provided. The parcel was sold in 2013, and a second multi-family building was then constructed. With the construction of the second building, the new owner also elected to keep the buildings as for-rent multi-family, with no home ownership product proposed and no affordable housing incentives requested or received. The development of the project is now complete and the owners elected to keep all 48 dwellings as for-rent units. The owners chose not to use the fee reductions or any affordable housing incentives offered in the agreement. There is no longer a need for the covenant, which was arguably never triggered but still affects the title to the property. The development is to be sold in 2018. The new buyer wants title cleared and has requested that the seller work to have the covenant be removed. The seller has made this request of the City. (Attachment 3) ATTACHMENT 1 Agenda Item 9 Item # 9 Page 2 Staff agrees that the restrictive covenant should be removed from the property’s title. Because ownership product was not developed, there was no trigger for the restrictive covenant. The City will not lose restricted units because none were produced as a result of this agreement. Removing this land use restriction from the chain of title is a cleanup matter. Specifically, staff is asking for Council permission to have the City Manager sign a Release of Covenant which will be filed with the County to clear the title. CITY FINANCIAL IMPACTS This action will not impact the finances of the City. BOARD / COMMISSION RECOMMENDATION At its February 1, 2018 meeting, the Affordable Housing Board voted unanimously to recommend release of the restrictive covenant. (Attachment 4) ATTACHMENTS 1. Vicinity map (PDF) 2. Restrictive Covenant Agreement (PDF) 3. Request to Remove Restrictive Covenant (PDF) 4. Affordable Housing Board minutes, February 1, 2018 (PDF) -1- ORDINANCE NO. 055, 2018, OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE RELEASE OF A RESTRICTIVE COVENANT ON PROPERTY AT THE COLONY AT RIGDEN FARM WHEREAS, on October 31, 2006, the City and Timberline at Rigden Farm, LLC (“Developer”) entered into an Agreement of Restrictive Covenants Affecting Real Property (“Covenant”) related to the Developer’s project known as the Colony at Rigden Farm, proposed to be developed on a portion of Tract C, Rigden Farm Filing One (the “Property”); and WHEREAS, the Covenant authorized the Developer to receive certain benefits from the City, including priority processing, development impact fee payment delay, and other incentives in exchange for including in the Project five home-ownership units that would meet the definition of affordable housing under the City’s Land Use Code; and WHEREAS, by its terms, the Covenant would go into effect when the City issued the certificate of occupancy for the five affordable units and would last for a period of twenty years; and WHEREAS, the Covenant was recorded in the real property records of the Larimer County Clerk and Recorder and is binding on successors in interest to the Property; and WHEREAS, since 2007 two multi-family buildings have been built on the Property, but all the units in both buildings are rentals – no ownership housing product was developed, and neither the Developer nor its successors requested or received any of the incentives permitted under the Covenant; and WHEREAS, the current owner of the Property has requested that the City release the Covenant because the owner intends to sell the Property, and the prospective buyer wants the covenant removed before it will purchase the Property; and WHEREAS, City staff recommends approving the release of the Covenant because it serves no purpose to the City – it was never triggered, as no ownership product was developed, and no incentives were provided by the City; and WHEREAS, the Property is now fully developed and the Covenant only clouds the title to the Property making it harder to sell; and WHEREAS, the City’s right under the Covenant to restrict the use of the Property constitutes an interest in real property owned by the City that the City would be giving up by releasing the Covenant; and WHEREAS, Section 23-111 of the City Code states that the City Council is authorized to sell, convey or otherwise dispose of any interest in real property owned in the name of the City, -2- provided that the City Council first finds, by ordinance, that such sale or other disposition is in the best interests of the City; and WHEREAS, at its regular meeting on February 1, 2018, the Affordable Housing Board reviewed the request and voted to recommend releasing the Covenant. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and finding contained in the recitals set forth above. Section 2. That the City Council hereby finds that releasing the Covenant on the Property on the terms and conditions described herein is in the best interests of the City. Section 3. That the City Manager is hereby authorized to execute such documents as are necessary to release the Covenant, along with such other terms and conditions as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the interests of the City or effectuate the purposes of this Ordinance. Introduced, considered favorably on first reading, and ordered published this 17th day of April, A.D. 2018, and to be presented for final passage on the 1st day of May, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 1st day of May, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk