Now that Award Homes has cleared one major hurdle in its quest
to build 677 houses west of town, the developer is focusing on the
next difficult step
– getting the land annexed into Hollister.
Now that Award Homes has cleared one major hurdle in its quest to build 677 houses west of town, the developer is focusing on the next difficult step – getting the land annexed into Hollister.
The City Council this week extended the company’s development agreement, but Award Homes has yet to gain approval from the Local Agency Formation Commission (LAFCO), which annexes county lands into Hollister limits. LAFCO denied the project in 2001, members say, because Award Homes failed to show adequate infrastructure would be available to support the population.
Award Homes acknowledged that LAFCO’s restraint is still a serious roadblock. But the prospects of getting an approval in the coming months are stronger after the city’s settlement agreement was reached Monday, according to those involved from both sides.
“I do get the sense that there is that belief that we can resolve this,” said one of Award Homes’ lawyers, Michael Durkee, who’s part of a legal team that replaced the firm’s previous attorneys in January.
The proposal, planning on which goes back to 1989, is for 677 homes next to St. Benedict’s Church, known as the West of Fairview project.
The previous annexation denial led to major legal disputes. First against LAFCO. Then against the city of Hollister, which had hesitated to continue extending the development agreement that initially expired in late 2002.
The settlement reached Monday gave Award Homes 13 years to complete the project – annexation and construction included. It came more than a year after often contentious closed-door talks between the city and Award Homes.
LAFCO lawyer Nancy Miller said she sent Award Homes and Hollister an “outline of the documentation” needed to process a new annexation application. Although she sent it “months ago,” she’s not surprised at a lack of response, she said, because the settlement between the two was needed first.
Some general issues that still need to be addressed before an annexation is granted, Miller said, include timely availability of water, construction of roads, fire protection and sewer capacity.
For the first go-around in 2001, Miller said Award Homes provided “no sense of timing.” But the settlement, she said, provides the necessary time to plan for infrastructure upgrades.
“We’ve spilled out what those (terms) are,” Miller said Wednesday. “If they address those, I think they’ll have a much better application to LAFCO than they had before.”
Neither Award Homes nor LAFCO is clear about a timeline for the revised application’s completion, according to Miller and Durkee. The two sides are in mediation – which takes the place of court proceedings – over the $57 million suit filed in early 2002.
Miller believes the time frame is up to the city, she said, because Hollister must resubmit the annexation application. And its environmental work alone, she said, can take three to six months.
Durkee also doesn’t have a grasp on the timing of a potential deal.
“I don’t have a good answer,” Durkee said. “With Hollister, we gave ourselves three months to get it resolved, and we got it resolved in two months.” Durkee, however, acknowledged that the LAFCO talks involve a “unique set of issues.”
Still, Miller said, returning to court if the stipulations aren’t met is “absolutely” a possibility. She called LAFCO’s stance “a very defensible position.”
LAFCO’s five board members include representatives from the Hollister and San Juan Bautista councils, the San Benito County Board of Supervisors and one at-large resident.
Hollister Councilman Brian Conroy, a member of LAFCO, said he’s confident in an eventual annexation.
Jose Alvarez, the at-large member, said it still depends on whether appropriate infrastructure will be available.
San Juan Councilwoman Priscilla Hill declined to comment. And Supervisor Richard Scagliotti, the LAFCO chairman, hung up his cell phone when reached Wednesday.
Supervisor Bob Cruz is also on LAFCO and said he expects an annexation – if Award Homes shows services can support the development.
“I hope the city and Award Homes have told each other you can’t stop growth, but you can’t have growth without those services,” Cruz said.
A deal ‘highly in favor’ of Hollister
Cruz also said he was pleased about the city’s settlement agreement – especially the inclusion of extra affordable housing. He recently spearheaded an ordinance that required 30 percent affordable housing in new developments in unincorporated sections of the county.
He disagrees with notions that developers won’t come here with such stringent requirements of affordable housing.
“They will come to Hollister, and they will do the right thing,” Cruz said. “But you have to work with them.”
Council members negotiated for an array of gratuities beyond the extension. Hollister gets all the incentives agreed upon before the settlement – including more than $2,000 per unit for “fiscal neutrality fees” and traffic mitigation and $250,000 toward a new fire station.
Plus, Award Homes will pay $1 million into the city’s General Fund. Most other impact fees will not be frozen at current rates, and the city plans to raise those charges this year. Twenty percent of the units will be affordable, as opposed to 12 percent. And the firm will pay Hollister’s legal costs for the LAFCO litigation.
“It primarily cushions the blow,” City Manager Dale Shaddox said of the $1 million. “As you know, the budget deficit is substantial and ongoing. This is a one-time shot in the arm.”
Although Shaddox did call the relief “very, very welcomed.” He commended City Attorney Elaine Cass and called the agreement “highly in favor of the city’s position.”
For Award Homes, the key to the deal was getting 13 years to complete the project.
“From the city’s perspective,” Durkee said, “they wanted to make sure they were fiscally whole. We wanted to lock down fees. They carried the day on that issue.”
Durkee complimented the city’s attorneys and Council members on the settlement. And even though talks broke down during negotiations involving the firm’s previous lawyers, discussions were respectable since his arrival, he said.
“They kept you at the table because they looked truly committed to making a deal,” Durkee said.
