AGENDA #8
MEMORANDUM
TO: Mayor and Town Council
From: W. Calvin Horton, Town Manager
Subject: Residence Inn Development – Request for Minor Change to Special Use Permit – Affordable Housing (File No. 7.27.A.3)
DATE: January 23, 2006
PURPOSE
The purpose of this memorandum is to describe a proposed Minor Change to the Residence Inn Special Use Permit and to seek advice on the amount of a payment-in-lieu of providing an affordable housing unit. In accordance with the Land Use Management Ordinance, we believe that the payment-in-lieu request by Summit Hospitality Group is a Minor Change to the Special Use Permit. We recommend that the Council adopt the attached resolution to endorse the amount of $70,000 as a payment-in-lieu as part of a Minor Change to the approved Residence Inn Special Use Permit.
On March 24, 2003, the Town Council approved a Special Use Permit for the Marriott Residence Inn development to authorize construction of a three-story, 73,120 square-foot extended-stay hotel with 108 lodging units (Attachment 1). The approval includes a two-story, 6,000 square-foot building containing 3,000 square feet of office space and 3,000 square feet of residential floor area, comprised of four dwelling units. The applicant offered one of the four dwelling units as an affordable unit for sale or rent in the Residence Inn development. The development is located in the northwest quadrant of the intersection of Fordham Boulevard and Erwin Road, adjacent to Dobbins Drive.
The Residence Inn development has received a Zoning Compliance Permit. Construction of the project has begun. The approved plan identifies an affordable dwelling unit.
THE REQUEST
We have received a request from Mr. Gene Singleton of the Summit Hospitality Group proposing to substitute a payment-in-lieu of affordable housing for the approved affordable housing provisions (Attachment 3). The request does not propose a payment-in-lieu figure. However, Robert Dowling, the Executive Director of Orange Community Housing and Land Trust, whose letter came attached to Mr. Singleton’s request, supports the request. Mr. Dowling recommended a payment-in-lieu of $60,000 to $70,000 that he believes would be sufficient to subsidize one single-family home.
Provisions in the Land Use Management Ordinance do not require that applicants provide affordable housing though it is a goal of the Comprehensive Plan. An affordable housing unit was offered by the applicant and a condition of the Special Use Permit requires the applicant to provide one affordable dwelling unit (see Attachment 2, stipulation #50).
The applicant’s reason for the request is that the Residence Inn is an undesirable location for an affordable unit as it would not be part of a neighborhood. The applicant goes on to say that he believes that a payment-in-lieu of affordable housing would provide a subsidized unit in a preferable location. Please refer to the applicant’s request (Attachment 3).
DISCUSSION
We believe the two key issues related to the request by the Summit Hospitality Group are: 1) the requested Minor Change, and 2) whether the justification is appropriate for substituting a payment-in-lieu of providing affordable housing as stipulated in the approved Special Use Permit.
1) Minor Change to Special Use Permit: The Manager is authorized to make Minor Changes to Special Use Permits according to provisions in Section 4.5.4 of the Land Use Management Ordinance. In this case, we believe that the request of Summit Hospitality Group constitutes a Minor Change rather than a modification to the Special Use Permit. Excerpts of Section 4.5.4 of the Land Use Management Ordinance are italicized below:
The Town Manager is authorized to approve Minor Changes in the approved final plans as long as such changes continue to comply with the approving action of the Town Council and all other applicable requirements, but shall not have the authority to approve changes that constitute a modification of the Special Use Permit.
Any change requiring evidentiary support in addition to that presented at a public hearing on applications for the original Special Use Permit or subsequent Modifications of Special Use Permit shall constitute a modification of the Special Use Permit. Before making a determination as to whether a proposed action is a Minor Change or a modification, the Town Manager shall review the record of the proceedings on the original application for the Special Use Permit and subsequent applications for modifications of Special Use Permit. The following shall constitute a modification of the Special Use Permit (continued below, parts 1-8):
1. A change in the boundaries of the site approved by the Town Council.
2. A change from the use approved by the Town Council.
3. An increase of five (5) percent or more in the floor area approved by the Town Council, unless proposed addition is 2,500 square feet of floor area or less, whether such addition is proposed at one time or over an extended period of time.
4. An increase of five (5) percent or more in the number of parking spaces approved by the Council, unless the proposed addition is 10 or fewer spaces, shall constitute a modification, whether such addition is proposed at one time or over an extended period of time.
5. Substantial changes in the location of principal and/or accessory structures approved by the Town Council.
6. Structural alterations significantly affecting the basic size, form, style, ornamentation, and appearance of principal and/or accessory structures as shown on the plans approved by the Town Council.
7. Substantial changes in pedestrian and bicycle or vehicular access or circulation approved by the Town Council. Examples of substantial changes include, but are not limited to:
A) A change in trip distribution occurs that involves more than five percent (5%) of all projected trips; or
B) The change results in a reduction in the level of service (LOS) of a street link or intersection with-in (1/4) of a mile from the boundaries of the proposed development.
8. Substantial change in the amount or location of landscape screens approved by the Town Council shall constitute a modification.
Comment: We do not believe that the requested change requires evidentiary support in addition to that presented at the 2003 public hearing for the Special Use Permit. This request also does not propose any changes in the location, amount, or extent of items 1-8, immediately above, of the Special Use Permit approved by the Town Council. We have reviewed the record of the proceedings of the original application and have not found reason to consider the request a modification rather than a Minor Change. There have been no applications for modification of this Special Use Permit.
In summary, in accordance with the Land Use Management Ordinance, we believe that the payment-in-lieu request by Summit Hospitality Group is a Minor Change to the Special Use Permit.
2) Substituting Payment-In-Lieu of Providing Affordable Housing for Existing Provisions: Summit Hospitality Group is required by the stipulations in the approved Special Use Permit for the Residence Inn to reserve one of four dwelling units (25 percent) for qualified buyers or renters, with a gross income equal to 80 percent or less of the median family income for Chapel Hill. The affordable unit is to be encumbered with “deed restrictions to ensure that the affordable unit remains affordable, in perpetuity, to low income owners or renters.” Additionally, the affordable housing stipulations require that the applicant work in conjunction with the Orange Community Housing and Land Trust to market the units to buyers and renters.
The Summit Hospitality Group and Orange Community Housing and Land Trust agree that the Residence Inn site is less than optimal for a single affordable unit for the following reasons.
Comment: We concur with the applicant and Orange Community Housing and Land Trust that a payment-in-lieu of affordable housing could be used to provide a more appropriate affordable dwelling unit. Mr. Dowling’s letter recommended a payment amount of $60,000 to $70,000.
The Council authorized a similar Minor Change to affordable housing provisions for the Providence Glen Condominiums on October 27, 2004. The resolution adopted by the Council permitted a Minor Change to the Providence Glen Special Use Permit, whereby Providence Glen Associates was required to provide $6,000 per unit for each of 16 affordable dwelling units ($96,000). The payments-in-lieu of affordable housing were made to the Town of Chapel Hill Revolving Acquisition Fund to be disbursed to local non-profit agencies.
We believe that the request to change the affordable housing provisions of the Special Use Permit for the Residence Inn is reasonable because the proposed payment-in-lieu of affordable housing would potentially have a greater impact on the local affordable housing market than adherence to the existing stipulations.
We recommend that the Council adopt the attached resolution, endorsing a $70,000 payment-in-lieu of providing an affordable housing unit to the Town Revolving Acquisition Fund.
Following this Council action to endorse the $70,000 payment amount, we would administratively approve a Minor Change to the Special Use Permit for the Residence Inn, to adjust the affordable housing provisions of the Special Use Permit. The applicant will be required to record the Special Use Permit, with this minor change amendment noted.
We recommend that the Council adopt the attached resolution, endorsing a $70,000 payment-in-lieu of providing affordable housing for the Residence Inn.
ATTACHMENTS