Department of Community Development
Reference: The Retreat at Brighton Ridge: Request for Fee-in-Lieu of Water Dedication
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez - City Manager
Prepared By: Scott Olsen - Director of Utilities
Mike Tylka - Assistant Director of Community Development
Date Prepared: October 6, 2023
PURPOSE
The proposal before the City Council impacts an approximately 15.5-acre development, generally located to the north of Interstate 76, south of East 120th Avenue, east of Southgate Boulevard and west of South Platte Valley Avenue, formerly known as Potomac Street (the “Property”). Pedcor Investments, a Limited Liability Company, is the applicant (the “Applicant”) for the in-process Site Plan and is also the owner of the Property. Applicant requests to pay fee-in-lieu of water dedication for a portion of the water requirement for its affordable housing development known as The Retreat at Brighton Ridge (the “Project”). City staff and City Council discussed this request in depth at the City Council Study Session on October 10, 2023.
BACKGROUND / DISCUSSION
The Property was part of the Brighton Ridge Subdivision Plan which was accepted by City Council on December 20, 2022 (Resolution 2022-145). Lot layouts and tracts for the Property were finalized in May 2023 under the Brighton Ridge Subdivision Filing No. 1 Final Plat. The Property is currently zoned R-3 (Multiple Family Residential). The applicant is proposing a 264-unit affordable multi-family development which is currently under review by the Development Review Committee (DRC) as a Site Plan. The Applicant plans to rent the units out at 60% or lower of the Area Median Income (AMI).
A commitment by the City for access to Proposition 123 funds commits the City to increasing affordable housing by a total of 135 units over the next three years. As part of the City’s Housing Needs and Incentive Strategies Assessment Project, City staff and the project consultant team plan to layout options to assist with the goal of increasing affordable housing units for discussion at a future meeting of the City Council on October 24, 2023. Due to the timeframe of the Applicant in relation to this Project, City staff and the Applicant have identified a possible strategy to keep the Project on track. This would be to allow the payment of fee-in-lieu in place of a portion of the raw water dedication for this particular affordable housing project. If other projects are to be considered or a new policy is to be drafted, action will be taken on those items at a later date.
The development community has expressed to staff that the process to find, obtain, and transfer water shares required for dedication is time consuming. The Applicant has already gone through this process once for this Project and secured water shares which would have been sufficient under the average yield calculation of the previous water dedication ordinance. This dedication requirement was a lower amount than what is required today by Brighton Municipal Code § 13-4-10. City staff, with the assistance of the City’s water consultants, have determined that the City has sufficient raw water resources to allow this Project to pay fee-in-lieu for a portion of the required dedication. The payment would be used to supplement the City’s water portfolio at a later date.
In accordance with § 13-4-10, the City requires water dedication for all new development, redevelopment or expansion projects, except where there is an existing agreement granting fee-in-lieu or for projects under 1 acre and under 5 acre-feet of water use annually. The City Council is able to grant the Applicant the right to pay fee-in-lieu of water dedication for a single project by entering into an agreement with the Applicant and, alternatively, could amend the requirements of the Brighton Municipal Code.
REQUEST AND STAFF RECOMMENDATION
The Applicant is required to dedicate a total of 75.40 acre-feet of raw water for the Project. The Applicant has dedicated 31.21 acre-feet of water to the City. It is worth noting that 31.21 acre-feet of water would have been sufficient water dedication under the average yield methodology. Currently, water dedication requirements are calculated using the firm yield methodology.
City staff recommends approval of a resolution to allow the City Manager to execute an agreement with the Applicant to allow it to pay fee-in-lieu for 44.19 acre-feet of water dedication for the Project. This amount is the difference between what they currently have in shares for dedication and what is required under the current water dedication ordinance. City staff is making this recommendation as the Applicant has already spent time and resources obtaining water according to the previous requirements and as staff views this as a proper allowance to make for affordable housing projects as long as the City has the appropriate resources for service.
OPTIONS FOR CITY COUNCIL
The City Council has the following options before it:
1.) Approve the drafted resolution;
2.) Approve a modified resolution; or
3.) Not move forward.
ATTACHMENT
● Draft Resolution for Approval