True or False: The Snowcreek DA
by Kirk Stapp
The following statements are predicated on the Development Agreement (DA) approved by the Planning Commission on May 26 which will go before the Town Council on June 16. A Development Agreement requires greater community benefits than would be otherwise obtained if the proposed development proceeded without a DA.
1. True or False: The $10 million, Additional Financial Contribution (AFC), being offered in the Snowcreek DA as a greater community benefit is not subject to COLA which could reduce its economic value over Snowcreek’s 20 year construction period to less than $7 million depending on inflation.
2. True or False: The DA restricts the use of the $10 million to Snowcreek’s Sphere of Influence and within the Sherwin Area Recreation Plan which compromises the Town’s funding priorities and needs. A trail, path or storm drain can’t be built on the other side of Town using the AFC.
3. True or False: There is no requirement in the DA that the Championship 18-hole golf course will ever be constructed. (The milestone of a reduction of one day for each day of non commencement of construction of the course after ten years does not guarantee that the golf course will ever be built.)
4. True or False: Because there is no phasing in the DA to speak of, the Resort Hotel could take five, ten, or fifteen years before being constructed or may never be built. (Again, the milestone of a reduction of one day for each day of non commencement of construction of the Hotel after ten years does not guarantee that the Resort Hotel will ever be built.)
5. True or False: The DA is vague as to who is responsible for constructing the multi-use paths and trails throughout the Snowcreek projects, the developer or the Town using the AFC. The DA is also vague as to the already constructed path leading to and from the Athletic Club. Is the developer given credit reducing the AFC or because the path has already been constructed it’s not included as part of the DA?
6. True or False: Because the AFC accrues funds at the rate that units are constructed, it could be years or a decade before any new path or trail is ever constructed.
7. True or False: The $10 million AFC is directly tied to the DA’s proposed affordable housing framework. The framework reduces the Snowcreek affordable housing responsibilities from $18.7 million (the Town’s adopted interim 10% inclusionary policy) to $8 million leaving a net value of the AFC of minus about a million dollars.
8. True or False: If the Town holds the developer’s feet to the fire and requires the developer to meet the Town’s interim 10% inclusionary affordable housing policy as adopted by Council on Nov. 09, the $10 million is reduced to minus a million dollars and therefore there will be tremendous pressure on the Town Council to use Measure R (and perhaps Measure U) funds to develop the multi-use paths in the Snowcreek projects.
9. True or False: The developer is not required to provide affordable housing for 75,000 square feet of non-residential or commercial uses.
10. True or False: The Town’s Development Impact Fee for the Snowcreek projects is approximately $16,000,000, not subject to COLA which could reduce its economic value over the Snowcreek’s 20 year construction period to less than $11 million depending on inflation.
11. True or False: According to the Town’s financial consultant, the “industry standard” for total fees ranges between 5 and 10% of sales cost. A new four bedroom/four bath, 2700 square foot single family transit unit selling for $1,499,000 under the Snowcreek DA will pay approximately $19,000 in DIF, $18,000 in other fees (school, water/fire districts, etc.) and $8,000 in affordable housing fees, approximately $45,000 in total fees or 3%. For a $999,000 unit the percentage is 4.5%. The Snowcreek DA proposes to lock in fees for 20 years that are below industry standards as identified by the Town’s own consultant and these fees will decline over time because of inflation.
12. True or False: Before the Town even votes on Measure U, the DA identifies increased “town revenues” including $66,000 in annual utility use tax revenues as a greater community benefit resulting from the DA.
13. True or False: The DA states that “all increases in the amount of Fees adopted by the Town on a Town-wide basis during the Term (of the DA) shall not apply to Developer and the Snowcreek Projects except Building Permit and Application Processing Fees.”
14. True or False: The Town’s vesting of “Review Times” could give preferential treatment to the applications and permits of Snowcreek projects.
15. True or False: Mayor McCarroll has argued for several years that the Town must reduce its fees to attract capital markets to invest in Mammoth Lakes. Capital markets don’t five a damn about the wellbeing of a community; there only concern is their bottom line and fees are no more or less important than land prices or other development costs.
16. True or False: The DA requests that the Town reduce its standards in exchange for benefits, but does not require delivery of those benefits by the developer other than that which would be required by the Town or special districts and the possible granting of land for propane tanks which serve the development.
17. True or False: The DA identifies “Fiscal benefits that will accrue to the Town and community through the implementation of the Project as intended that would not occur without this Agreement, including transient occupancy taxes.” The DA fails to note that regardless of the DA, property, sales, and TOT taxes will accrue to the Town under the approved Master Plan.
18. True or False: The Snowcreek DA will set recession level standards, policies and requirements which other developers will expect for their developments.
19. True or False: The Town staff and developer negotiate a DA. They will come before the Town Council June 16 and defend their deal. The Town Council is expected to read, dissect, analyze and understand the nuances and ramifications of a 20-year agreement without the benefit of a third party, independent evaluation from someone who was not directly or indirectly involved in the Snowcreek DA.
20. True or False: Depending on inflation and timing of development, the approval of the Snowcreek DA could be the financial equivalent of the Town losing half or more of the $30,000,000 Hot Creek litigation
The answers to all of the above are “True.”
The Snowcreek DA is more than a political football to be run into the in zone before the upcoming June 8 election. The Council has a responsibility to get it right.
PS. For the record, it’s okay for Council to vote NO on a DA. I voted NO to the Intrawest DA.