South Lake Tahoe City Council to consider MOUs on Loop Road affordable housing efforts

South Lake Tahoe City Council to consider MOUs on Loop Road affordable housing efforts

City Council on Tuesday will consider two memorandums of understanding that staff say will give the city a more prominent role in the development of affordable housing related to the U.S. 50 South Shore Community Revitalization Project.

More commonly known as the “Loop Road” project, the U.S. 50 highway realignment project involves the demolition of as many as 76 housing units in the neighborhood west of the Crescent V Shopping Center in South Lake Tahoe.

As a requirement of the project, the Tahoe Transportation District — the lead agency on the project — has agreed to construct 109 units of replacement housing. Of those 109 units, 102 will be deed restricted for low-income people, while the other seven will be deed restricted for moderate-income people. Council will consider entering into two separate MOUs with TTD and two different affordable housing developers.

The MOUs, according to a staff report, signal the city’s willingness to work cooperatively on the development of affordable housing units on five parcels controlled by one of the developers, Pacific Development Group, and on one parcel controlled by the other developer, United Housing Corporation.

It also indicates an intent to pursue further development of affordable housing units near the housing units that will be destroyed as a result of the Loop Road project. As staff explain, the MOUs mark the first step in the affordable housing process. “Formal decisions on project sites, scopes, designs, etc. will be included in formal development agreements, and will be presented for formal City Council consideration in the future after additional project planning progresses,” states the staff report. However, the MOUs are not free of controversy in the eyes of some residents who oppose the Loop Road project. They lobbied council to delay a decision on the memorandums at the Aug. 6 meeting.

Duane Wallace, husband of Councilor Tamara Wallace, and former Councilor Bruce Grego were among those who requested council delay a vote on the MOUs until a future meeting. The request was in order to give the public more time to evaluate the MOUs and to allow for more participation in the discussion.

Mayor Brooke Laine was absent from the Aug. 6 meeting for personal reasons. With Mayor Pro Tem Jason Collin recusing himself from Loop Road discussions because he owns property in the area, only three councilors were present to discuss the MOUs at the Aug. 6 meeting.

Councilor Wallace, prior to any public comment, requested the issue be delayed so that Laine could participate in the discussion.

Members of the public expressed concerns that the MOUs effectively represented the city’s endorsement of the controversial Loop Road project. The project proposes realigning U.S. 50 behind the casino corridor and the Heavenly Village area. The newly aligned highway would cut through the Rocky Point neighborhood to connect back into the current U.S. 50 alignment just west of where Pioneer Trail currently meets the highway.

The project, in various iterations, has been debated for decades. In 2018, the Tahoe Regional Planning Agency approved environmental review documents for the project, which represented a major milestone.

But voters in the city have expressed a desire to have a greater say in the project. In 2016, nearly 60% of voters passed a ballot measure, Measure T, that would put any city decisions on the project to a vote of the people. The measure was struck down in court, and several appeal efforts were unsuccessful.

Despite those concerns about the MOUs, city attorney Heather Stroud told council at the Aug. 6 meeting that the agreements only pertain to the affordable housing aspect of the project. The MOUs do “not express the city’s approval or support for the project as a whole,” Stroud said. Councilor Cody Bass, who serves as the city representative on the Tahoe Transportation District board, made similar remarks, stating the intent was to give the city a say in the development of affordable housing — a critical issue in the city and around the lake. TTD almost approved MOUs with the development companies earlier this year, Bass said. At the request that the city be included, new MOUs involving the city were drafted. TTD was planning on considering the MOUs after council’s Aug. 6 meeting. However, TTD Director Carl Hasty told council he would recommend the board delay a vote until its September meeting so that council could continue the issue until its Aug. 20 meeting. Local attorney Lew Feldman, who was representing Pacific Development Group, said the group did not oppose continuing the conversation to Aug. 20.

Several community members, including Tahoe Chamber CEO Steve Teshara, spoke in support of the MOUs and affordable housing effort.

City Council is scheduled to meet at 5:30 p.m. in council chambers at the Lake Tahoe Airport, 1901 Lisa Maloff Way.

Two affordable housing companies interested in South Lake Tahoe projects

Two affordable housing companies interested in South Lake Tahoe projects

SOUTH LAKE TAHOE, Calif. – A Memo of Understanding (MOU) to show the cooperative and constructive intent to build affordable housing between the City of South Lake Tahoe, Tahoe Transportation District, Pacific Development Group and United Housing Corporation was to be voted on during Tuesday’s City Council meeting.

While everyone present recognized affordable housing would be beneficial to the community, the Council postponed the vote due to Mayor Brooke Laine’s absence due to a family emergency. Councilmember Tami Wallace asked for the delay due to the importance of the decision before them.

The MOU lays out the roles of each party to bring forward affordable housing projects associated with the US 50 South Shore Community Revitalization Project. The Tahoe Regional Planning Agency (TRPA) permit on that project requires 109 new replacement units to be built prior to the rerouting of Highway 50 takes place.

Pacific Development Group has worked to obtain five parcels at the corner of Ski Run Boulevard and Pioneer Trail to build their project while United Housing Corporation has one lot near Raley’s at Stateline.

The proposed MOUs represent the first step in the process of pursuing the development of affordable housing units on parcels close to where people will be displaced from, per their input. Formal decisions on project sites, scopes, designs, etc. will be included in formal development agreements, and will be presented for formal City Council consideration in the future after additional project planning progresses.

There was a concern the delay in the Council vote would push the project out too far as the TTD board still has to sign their portion of the MOU. They met in Incline Village Friday and approved delay until their end of September meeting.

The Council is scheduled to have the MOU before them at their August 20 meeting.

There were a few speakers at Tuesday’s meeting spoke on the topic.

Lew Feldman, representing Pacific Development Group, said they understood Councilmember Wallace’s request to postpone the vote.

Steve Teshara, chief executive officer of the Tahoe Chamber, said while putting together an affordable housing project is timely and the sooner the Council can act on it the better, he understood the situation with Laine’s absence.

Bruce Grego said the MOU would be an impressive step for the City and all would like to see housing added to the community. He said the delay in a vote though would give everyone more time to review.

Duane Wallace of the South Tahoe Chamber questioned the motive behind the MOU and was suspicious of a hurry to get the housing elements moving forward. He said it gave the impression the City is behind the US50 project and reminded the Council that the previous group of electeds was voted out. He said he was concerned with displacing residents and the gentrification of neighborhoods.

Rebecca Bryson, a housing advocate and part of the Tahoe Prosperity Center, said she was in support of the two new proposed housing projects that would bring over 100 new units to South Lake Tahoe and was interested in hearing from the Council about their concerns.

The goal of TTD is to bring in 200 new units of affordable housing, according to their District Manager Carl Hasty.

Councilman Cody Bass said he wants the City to be in the driver’s seat and said the Council wants to support all housing projects, even those beyond the US50 project.

South Lake Tahoe City Council sets stage for future discussion on possible Loop Road vote

South Lake Tahoe City Council sets stage for future discussion on possible Loop Road vote

SOUTH LAKE TAHOE, Calif. — City Council solidified its desire Tuesday to have a say in the development of affordable housing related to the U.S. 50 South Shore Community Revitalization Project. It also set the stage for a future discussion on a possible ballot question asking voters if they support the project — commonly referred to as the Loop Road.

Councilor Tamara Wallace received support from Councilor Devin Middlebrook to put the discussion on a future agenda at the end of Tuesday’s meeting. Wallace and others have argued that a vote is crucial to help determine how the city should proceed regarding the controversial project.

Residents attempted to take similar action in 2016 when they successfully put Measure T on the ballot. Not to be confused with 2018’s Measure T that deals with vacation home rentals, the 2016 ballot question asked voters if city decisions on the Loop Road project should be put to a vote of the people.

Measure T opponents argued that the Loop Road project is a federal project and the city has little to no decision making power on whether the project proceeds.

A court eventually ruled the measure was unconstitutional.

Despite being struck down, Loop Road opponents say the outcome of the 2016 Measure T is evidence that South Lake Tahoe residents want to have a say when it comes to the Loop Road.

Wallace wants to discuss, and hopefully put forward, an advisory question asking people if they support the Loop Road project. An advisory question would not bind the city to a specific course of action.

Middlebrook said he supported having the discussion but at the appropriate time. He pointed to work on the Main Street Management Plan, which is focused on what the old U.S. 50 alignment will look like once the highway is realigned behind the Stateline casinos and Heavenly Village area, as an example of unknown details that he would like to have before discussing a ballot question.

Wallace also wants to see a citywide study on the potential economic impact of the Loop Road. A previous analysis looked at the impact on the project area and found that would lead to increased sales. Wallace said she would support the city making a financial contribution for the study in order to keep it impartial.

Middlebrook also seconded having that discussion at a future meeting.

Prior to that direction, much of the debate Tuesday centered on whether council’s approval of two memorandums of understanding dealing with affordable housing represented support for the overall Loop Road project.

The MOUs involve the city, the Tahoe Transportation District (TTD) and two developers that have an interest in building new deed-restricted, affordable housing.

TTD — the lead agency on the Loop Road — is required to construct 109 units of replacement housing in order for the project to move forward. Of those 109 units, 102 will be deed restricted for low-income people, while the other seven will be deed restricted for moderate-income people.

The units would replace housing eliminated as part of the Loop Road. As many as 76 housing units in the Rocky Point neighborhood could be eliminated.

In July a pair of MOUs between TTD and the developers came before the district’s board. Councilor Cody Bass, who represents the city on the TTD board, voiced his desire to see the city be part of the MOUs because the proposed projects fall within city limits.

The board agreed and the MOUs were presented to council at its Aug. 6 meeting. The matter was postponed until the Aug. 20 meeting to allow Mayor Brooke Laine, who was absent, to participate.

As staff explained Tuesday, the MOUs are largely a first step in the process. They are not approvals of the actual development projects — that would come later. Rather, they’re agreements stating all the involved parties will work together.

The MOUs grant the city the ability to review preliminary budgets for the project costs. They also allow the developers to request the city apply for grants to assist with financing or to offset funding shortfalls. It also allows the city, TTD and developers to continue working together to identify additional funding opportunities and additional sites that could be used for affordable housing.

The MOUs also acknowledge that TTD and the developers may seek to amend the city’s tourist core area plan in order to annex parcels owned by the developers.

Slight changes were made between the Aug. 6 and 20 meetings, including the addition of a paragraph stating that the MOUs express support for affordable housing, not the Loop Road project, which the city reserves judgement on.

Still, Loop Road critics called on council to reject the MOUs as written.

Former City Manager David Jinkens described the MOUs as a “trap” to advance the Loop Road project. He said they were “bad public policy.”

Longtime resident Lou Pierini said approval of the MOUs would advance the Loop Road project and put the issue of eminent domain — the process by which the government seizes private property — on council’s plate.

Although most did, not everyone who spoke opposed the Loop Road project. Tamara Allen, a Rocky Point resident who sits on the stakeholder working group for the Main Street Management Plan, said she supports the highway realignment project but would like to see the replacement housing built closer to the Rocky Point neighborhood.

One of the developers, Pacific Development Group, is proposing affordable housing at the corner of Ski Run Boulevard and Pioneer Trail, which is farther away from the job hub of Heavenly Village and Stateline.

Carl Hasty, TTD district manager, explained that in order to develop housing in Rocky Point now, somebody would have to acquire a parcel, demolish what is currently on it and then build.

He said the timeline for developing the replacement housing — 76 units need to be constructed before the start of the Loop Road project while the other 33 will be constructed concurrent with the project — is designed to allow for the possible construction of housing within the project site, which might be more feasible once the land for the highway realignment has been acquired.

Local attorney Lew Feldman, speaking as a representative of Pacific Development Group, said it actually started the process of acquiring land at the corner of Ski Run Boulevard and Pioneer Trail two years, long before TTD was required to build replacement housing as part of the Loop Road.

The company, Feldman said, has a history of developing affordable housing in the community, including the Sierra Garden apartments.

Pacific actually approached the previous City Council about a possible partnership opportunity but that council did not express any interest in the idea, Feldman said. That led Pacific to turn to TTD for a potential partnership.

Echoing a point frequently iterated by builders and developers, Feldman said the only way affordable housing can pencil out financially is if a subsidy is provided.

Pacific, he added, welcomes involvement by the city but if the deal were to fall apart then the company would likely look to develop market-rate condos on the parcels.

That argument — that development is moving ahead with or without the city’s involvement — stuck with a majority of the councilors.

However, Wallace objected to the MOUs because of the connection to the Loop Road.

She suggested removing TTD entirely from the agreement and entering into an agreement with the developers. She also suggested striking a majority of the MOUs’ recitals, which are primarily statements of fact — and do not have any legal bearings on the MOUs — regarding the Loop Road and various entities involved in the MOUs.

After a lengthy and detailed discussion, council came to an agreement on language that was less binding for the city and less ambiguous in terms of withholding support for the Loop Road project.

Council also added a line allowing each party to exit the MOU with five days notice — a provision that Bass said was in the original MOUs between TTD and the developers.

Council approved the revised MOUs 4-0. Councilor Jason Collin was absent.

The MOUs are slated to be considered at the TTD board meeting in September.

State backs affordable-housing towers

State backs affordable-housing towers

A state agency is inclined to provide $130 million for a developer to build two apartment towers near Aloha Stadium for low-income households despite contentious community meetings over much of the project earlier this year.

Board members of the Hawaii Housing Finance and Development Corp. gave unanimous preliminary approval Thursday to finance the plan containing 302 homes with monthly rents as low as $568.

The approval followed three Aiea Neighborhood Board meetings earlier this year where the project encountered opposition, got scaled back and then attained neighborhood board approval even though there were lingering concerns.

Joe Michael, a principal of Halawa View Housing Partners LP heading the project, was gratified by the state’s commitment to provide tax-exempt bonds, low-interest loans and state and federal tax credits.

“This is a huge milestone, and it’s exciting to be kind of a catalyst for the neighborhood to spur redevelopment of the area around (transit-oriented development),” he said after the HHFDC decision.

Halawa View Housing figures it could start construction in April and be done by September 2021.

The project considered by HHFDC represents two of three pieces in a bigger development plan by Halawa View Housing for three new towers. The plan entails a total of 458 homes next to an existing Halawa View Apartments complex that has 121 low-income rental homes in a roughly 140-foot tower, and two three-story buildings about a half-mile from the stadium.

Halawa View Housing’s three-tower plan encountered heated opposition from residents living near the project site during Aiea Neighborhood Board meetings in January and February, largely over fear that it would produce an overflow of cars from tenants trying to park in the surrounding neighborhood filled with single-family homes.

The development partnership, formed by Michael’s California- based Pacific Development Group and the local nonprofit Hawaiian Community Development Board, had initially proposed 524 predominantly affordable homes in three towers each rising 250 to 276 feet, which would exceed the property’s 150-foot height limit. The initial plan also provided for 652 parking stalls that didn’t meet a city minimum.

But even after trimming the number of homes to 458 and reducing tower heights to between 211 and 229 feet as well as adding enough parking (658 stalls) to comply with city requirements, the neighborhood board balked at a requested endorsement in February. Then on Monday the neighborhood board voted unanimously to endorse the project, which would help address Honolulu’s chronic undersupply of low- income housing.

Under state law, developers can obtain zoning exemptions through HHFDC that allow affordable- housing projects to exceed building heights, density limits and other limitations.
Halawa View Housing said its project warrants the extra density and height in part because it is within a half-mile of a planned city rail station near the stadium, though the project site isn’t within a zone providing development bonuses under a draft city zoning plan for transit-oriented development.

The developer considered seeking an amendment to the city plan, but Michael said the exemption process under HHFDC provided a quicker route.

Much private and public land near the stadium is expected to be redeveloped over the next several years in anticipation of the rail line opening from Kapolei to the stadium late next year.
The state also enacted a law earlier this month to provide $350 million for replacing Aloha Stadium with a new facility that could be tied to residential, retail and other commercial development on the roughly 100-acre stadium site owned by the state.

Halawa View Housing acquired its 3-acre site in 2014, and renovated the existing affordable- housing apartments on the property with HHFDC financing.

For the planned addition endorsed by HHFDC, most of the 302 apartments would be two- bedroom units with monthly rents between $705 and $1,493. There also would be studios, one-bedroom units and four-bedroom units. The monthly rent range for all units is forecast to be $568 to $1,898.

Tenants would be limited to earning no more than 60% of the median income in Honolulu, which equates to $50,640 for a single person or $83,880 for a family of six. Some units also would be limited to households earning half these amounts.

The affordable rents and income restrictions would have to last 56 years under terms of the state’s financing arrangement.

Housing Advocates Might Love This Project, But The Neighbors Don’t

Housing Advocates Might Love This Project, But The Neighbors Don’t

A 52-unit affordable housing project on private property in Maili has received most of the city approvals it needs, but it’s still generating friction between the developer and residents of the quiet neighborhood.

Hale Makana O Maili is expected to break ground before the end of this year, according to developer Kali Watson, president of the nonprofit Hawaii Community Development Board. The $23 million project would be open to households earning 30% to 60% of area median income.

It’s the type of project that affordable housing advocates often say is desperately needed on Oahu.

But that’s no solace to some of the residents on Kulaaupuni Street who still hope to stop it. They complain it was rushed through the Honolulu City Council, could make the area more flood-prone and overtax the neighborhood infrastructure.

Watson said the project is already fully financed with help from grants secured from the Hawaii Housing Finance and Development Corp. and the city, along with state housing tax credits.

The project still needs various building permits from the city, including approval for electrical work and construction.

Part of the conflict seems to stem from a lack of communication between the developer and residents.

Watson said the project has been in the planning phase for four years, and that he’s made at least two appearances at neighborhood board meetings and several other community meetings to gather input.

But several residents, including Kathy Kamada, said they didn’t know about it until they found surveyors walking around their yards in February.

“It’s not as if I read the minutes for neighborhood board meetings every day,” Kamada said.

In April, Watson wrote a six-page response letter to the area residents addressing some of their concerns. Regarding the neighborhood board presentations, Watson said he wasn’t required to provide advance notice.

Watson says he is committed to creating affordable housing units for local families.

The former head of the Department of Hawaiian Home Lands also led development of a similar housing project in Nanakuli called Hale Makana O Nanakuli, part of the long-planned Nanakuli Village Center that Watson hopes to finish by December.

Oahu will need over 26,000 additional housing units to meet demand by 2025, according to a 2015 study of housing demand by the state Department of Business, Economic Development and Tourism.

Construction Exemptions
Hale Makana O Maili would include five units for people making less than 30% of area median income, 10 units for people making less than 50%, and 36 units for those making less than 60%, plus a unit for an on-site property manager.

At the low end, a family of four would need to make less than $30,100 to qualify.

“Not many guys want to do these kinds of projects,” Watson said.

And not many neighborhoods of mostly single-family homes want an apartment complex in their midst.

“It’s not serving our interests,” resident Gary Shinsato said. “This street alone there’s already a lot of low-income housing.”

About a mile away at the other end of Kulaaupuni Street is a state funded, 78-unit transitional housing project, Villages of Maili, which is run by Catholic Charities of Hawaii and has begun providing services to homeless on Oahu’s Leeward Coast.

Shinsato said that he and the other residents along Kulaaupuni Street aren’t necessarily opposed to more affordable housing, but he takes issue with sorme of the exemptions the city granted the development.

The City Council approved a number of construction exemptions for the project in October, including waiving about $156,118 worth of application and review fees. It also allowed the developer to build the apartment complex in a residential zone, which typically limits the allowed amount of multi-family dwellings.

Resolution 18-206 also exempted Watson’s development from a city ordinance that would otherwise require the development to conform to development standards for concrete sidewalks and gutters.

Watson said he would put in an asphalt sidewalk fronting the housing project. Right now, Kulaaupuni Street just has dirt on both sides of the road.

The council’s resolution, which passed unanimously, also requires construction to start before October 2020.

Councilwoman Kymberly Pine included an amendment in a draft of the resolution that made clear that the development meets the minimum health and safety requirements to receive the exemptions under state law, according to minutes of the October City Council meeting.

Pine did not respond to a request for comment Thursday.

Shinsato said he wants the development scaled back to comply with the usual residential zoning restrictions, similar to four duplexes several lots over from Hale Makana O Maile. He also said the residents want better infrastructure, like gutters and sidewalks, if the development is built.

“That’s all the community is asking for,” he said.

The site is in Maili’s tsunami evacuation zone.

Watson said that the 71-stall parking lot would have an exit onto Milikami Street in case evacuation is required.

Neighbors are also concerned about traffic. They say the narrow Kulaaupuni Street could become congested once the apartments go up.

There could be an additional 439 vehicular trips daily coming out of Hale Makana O Maili, according to a study conducted by traffic consultants Fehr & Peers.

Watson said he wants to work with the community to place speed bumps along the street to slow down drivers.

‘Make It A Better Neighborhood’
While the project may appear to be on a fast track with the council-granted exemptions, it took him four years to compile reviews and studies to apply for those exemptions from the city, he said.

Watson noted that while the development would provide affordable housing, it’s not public housing.

“The idea is to make it a better neighborhood and a better place and ideally get some of the homeless people off the street,” Watson said.

The 2-acre parcel where Hale Makana O Maili is to be built was previously owned by Team Real Estate, a property management company based in Haleiwa and Makaha. Property documents show the sale was completed in 2018 for $2.25 million.

The property currently has 10 houses on it. Four of them on the mauka side would be demolished, and residents in three of them were given 90 days to vacate earlier this year, said Realtor Maria Abella. One tenant is still on the property looking for a place to move to.

Watson said he’s required by federal law to provide the tenants with financial assistance for their relocation.

The other six houses on the makai side of the property are supposed to be refurbished and then sold at market rate, according to the environmental assessment on the project. Those houses still have tenants living in them, like Megan and Iokepa Waialae, who moved in about a year ago.

The Waialaes hope they won’t have to move.

“We like it. Nobody bothers. It’s real low-key. We got a big yard,” Megan Waialae said. “If they give us the option to buy, we’d like that opportunity.”