Clearlake City Council approves negotiating agreement with developer for housing project
LAKE COUNTY, Calif. — The Clearlake City Council voted unanimously on Thursday night to approve an exclusive negotiating agreement with an Arcata developer who has plans for a $50 million housing development in the city.
Danco Communities is proposing to build an 84-unit mixed income multifamily housing project on a five-acre parcel at 14795 Burns Valley Road, which was part of a 31-acre property the city closed escrow on in December.
The discussion begins at the 2:42:45 mark in the video above.
City Manager Alan Flora said the city has been working on plans for the larger property that include a sports complex and a new city Public Works corporation yard.
He said the northeastern portion of the property near an existing development and the community center was identified as a site for some type of housing development. In order to do that, the city needed to declare that portion of the property as surplus.
“Danco has expressed interest in doing a project there,” said Flora. “We believe they're a well-qualified developer.”
The project will apply in July for disaster tax credits, which Flora’s written report said will be the primary funding source.
Chris Dart, Danco Communities president, said the company has projects all over the state, 190 employees and six diverse companies mostly related to housing.
Dart said Danco is the development company and has two construction companies. They have brought 800 affordable housing units to the market so far and have roughly that number in the works now all over California.
The company is vertically integrated, Dart said, meaning they develop and construct projects, then hold and manage them for the long haul.
“We don’t build these projects and sell them or flip them,” he said.
Dart said they are primarily focused on multifamily developments for members of the workforce, and they also develop exclusive communities for seniors and supportive housing for veterans.
He highlighted some of the projects they’ve completed, including the 35-unit Church Hill townhomes multifamily development in Eureka, the 40-townhome Aster Place, the 18-unit Creamery Row in Arcata and the Phyllis Rex Samoa townhomes, which is a mix of one-, two-, three- and four-bedroom units with a view of Pacific, the bay and Eureka, of which 20 percent are set aside for families experiencing homelessness in Humboldt County.
Dart said the proposed Clearlake project is being designed by DG Architects, the same firm that designed the Phyllis Rex Samoa townhomes.
He said they just rolled out the site plan for the Clearlake project and that they’re in the very early phases. Dart showed a basic sketch of the development, which would include 84 units, of which 24 would be one-bedroom and 36 would have two bedrooms, along with 18 three-bedroom and six four-bedroom units.
Project plans so far include a 3,000-square-foot community room, an exercise room, lounge area, computer room, management offices, a large community kitchen that would open up to an outdoor patio, a community garden, tot lot, basketball courts and barbecue pits, “and many more amenities” to be offered on site, Dart said.
Dart said they help the city cover some off site improvements related to the adjacent park area.
Flora said the company has experience and he thinks the company has a great product. “They’re willing to move really fast,” he said, which is why he asked for the council to authorize the agreement and allow them to pursue the disaster tax credits, which come up once a year, as they don’t want to miss out on that opportunity.
He said the city should also be able to leverage some of the infrastructure development for the sports complex as part of the funding package for Community Development Block Grants, or CDBG.
Councilwoman Joyce Overton asked about how much of the CDBG funds would be used for the project.
Flora said they don’t have an exact number but expect it to be between $3 million and $4 million of the CDBG 2018 Disaster Recovery funds which were allocated to the county and which the Board of Supervisors agreed last month to relinquish to the cities of Clearlake and Lakeport.
Overton asked how much will be invested in the project. Flora said the initial estimate is $50 million.
Mayor Dirk Slooten said the entire city of Clearlake is an opportunity zone, which may benefit the project.
Councilman Russ Cremer moved to approve the city’s exclusive negotiating agreement with Danco Communities agreement, with Councilman Russ Perdock offering the second and the council voting 5-0.
In other development-related action, the council voted 5-0 to declare a 29-acre property at 2890 Old Highway 53 as surplus so it can reoffer the property to developers.
The council, which also acts as the Clearlake Redevelopment Successor Agency, approved an exclusive negotiating agreement with Summitt Development in December following a presentation in which the company had proposed eventually purchasing the property for a housing project.
However, Flora said Summitt notified the city on May 9 that it isn’t moving forward on the plan, so the city needs to start again with putting the property out for development. Like the Burns Valley property being offered for development, the council needed to first declare the Old Highway 53 property as surplus.
While Flora said there are a lot of hoops to jump through, the city already has had discussions with potential developers, and has a meeting set up with an interested developer next week.
He said he’s optimistic that the city will be able to land a developer for the property.
In other business, the council presented a proclamation declaring May 22 to 28 as Safe Boating Week. Flotilla 88 representative Dorothy De Lope thanked the council and said the group will be back out patrolling on Clear Lake this weekend.
The council also proclaimed May as California Tourism Month, heard the Lake County Tourism Improvement District’s annual report and received an update from Pacific Gas and Electric on its public safety power shut-offs and wildfire safety work.
Council members and staff held a budget workshop before the regular meeting as they work to finalize a budget document for the upcoming 2021-22 fiscal year.
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