Ending more than a year of closed door talks and the burden of
pending litigation, the Hollister City Council on Monday agreed to
a settlement with Award Homes that will likely allow the
development firm to construct the 677-home West of Fairview
project.
Ending more than a year of closed door talks and the burden of pending litigation, the Hollister City Council on Monday agreed to a settlement with Award Homes that will likely allow the development firm to construct the 677-home West of Fairview project.
In exchange for allowing the development’s progression, the city negotiated for an array of inclusions – including, among others, a $1 million injection into the ailing General Fund and a requirement that 20 percent of the homes be affordable.
Though the Council initially approved the proposal four years ago, the development agreement had expired without fruition because of the building moratorium and staunch resistance from another local agency.
With the Council being hesitant toward continual extensions to the agreement, the two sides began negotiating last spring over inclusions to sweeten the deal.
At one point, Mayor Tony Bruscia acknowledged, the Council considered squashing those talks. But with enough added compensation, he said, a majority of the Council had agreed to pull the trigger on the deal.
“We got what we wanted,” Bruscia said.
City officials emphasized that Award Homes must wait to break ground with other anxious developers until the building moratorium ends in late 2005.
Moreover, the firm still has to finish extensive environmental reviews. And it must contend with the Local Agency Formation Commission (LAFCO), which has since declined to annex the 125-acre property into Hollister limits – a refusal that led to an active $54 million lawsuit in the Superior Court.
Still, four Council members Monday lauded the settlement as a victory for the city, which otherwise faced a court battle that many officials said Hollister would lose. The $1 million boost – half received now and half when the final design is finished – also comes as Hollister grapples with layoffs, severe service cuts and impending future deficits.
With the homes being built over the next 13 years, Hollister will also get $20,000 for a fire impact study; a donation of 1/2 acre formerly designated for homeless housing; and reimbursement of Hollister’s portion for legal fees incurred during the LAFCO litigation.
The project – next to St. Benedict’s Church on the city’s west side – started as a deal with no cash down payment, almost half the agreed upon affordable housing and lower impact charges. The city plans to release a fee study within a couple of weeks that should indicate how much those impact charges will increase.
“This is pretty compelling,” Bruscia said. “This is a simple business decision.”
Award Homes’ representatives could not be reached for comment on the settlement before press time. The firm, though, had already signed the agreement before Monday’s meeting, according to Councilman Tony LoBue.
Council members voted 4-1 in favor of signing the settlement agreement. Councilwoman Pauline Valdivia stood her ground – she has objected to the project since its initial approval in 2000 – and voted against a deal.
The short-term benefits, she said, don’t outweigh the long-term detriments of the development’s stress on local infrastructure. She mentioned how skyrocketing growth has led to increasingly dangerous highway conditions. She specifically mentioned Fairview Road – the rural roadway adjacent to the proposed subdivision – because of its rising accident toll.
“You know where I stand on the project, and I continue to do that,” Valdivia said. “It’s a one-time fix only.”
Valdivia’s not alone.
Many residents, particularly environmentalists, blasted the Council in 2000 for approving the development agreement at a time when growth pains had become increasingly evident. Valdivia was one of two Council members to vote against it four years ago.
“This project came along, and it became the poster child for anti-growth sentiment,” Bruscia said.
Award Homes filed the lawsuit suit against LAFCO in mid-2001. LAFCO is composed of elected officials from area governmental agencies. Its members approve or deny annexations when proposals arise to annex county-governed land into Hollister.
Award Homes’ problems with LAFCO were compounded in May of 2002 when a 15-million gallon sewer spill – and an ensuing state-ordered building moratorium – halted all new construction within Hollister until late 2005.
Eventually the city and Award Homes’ development agreement expired, after which the two sides agreed to several extensions. But as the Council in late 2003 seemed unwilling to continue extending it through the moratorium, Award Homes in late August filed a suit against the city. It claimed the moratorium was a reasonable impediment to the project’s commencement.
The firm was demanding that the 677-home deal be honored. And any previously negotiated attachments to the agreement – at one time the firm had offered $2 million, affordable housing and land for Fire Station No. 2 – would be lost.
In the end, Council members said, the risk of losing in court, and being shafted completely, was too high.
“All indications from our legal system,” Councilman Robert Scattini said, “were that we would lose it anyhow in court.”
Ending the legal battle, Councilman Brian Conroy said, lifted “a lot of weight off our shoulders.”
He said the hostile negotiations – the suit accused Council members of leaking confidential talks to the media, and on many occasions the dialogue halted – were just part of the process.
Though other Council members held much different views over the seriousness of the suit, which could have cost Hollister millions of dollars.
“Yeah, many a times,” LoBue said he was worried over going to court. “This is probably the best outcome that could have come out of it.”
Conroy, a current member of LAFCO, is confident the development will gain the annexation it needs to move forward, he said.
“I expect it to be settled and I expect it to be built when we have the infrastructure in place,” Conroy said.
