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Development Agreement State law authorizes cities and counties to enter into binding development agreements with any person having a legal or equitable interest in real property for the development of the property. A development agreement is a commitment between the City and a property owner or developer to proceed with a specific development in accordance with the terms of an agreement that describes what land use and related processes shall apply to the application. In essence, a development agreement locks in the laws in existence at the time of entering into the agreement and the City agrees not to change its planning or zoning laws applicable to the specific development project for a specified period of time. Therefore, future land use decisions regarding such a development project will not be based on then current planning and zoning law, but rather they will be based on the laws that were in existence at the time the development agreement was executed. The developer gains certainty, through the development agreement, of the continuity of regulations that were in force at the time of entering into the development agreement and prior to a commitment of a substantial investment for project improvements. In exchange, the City gets certain benefits and concessions that it might not be able to require through conditions of approval. The applicant has proposed a 10-year term for the development agreement. The developer would be obligated to pay the applicable development impact fees which are in effect when the ordinance approving the agreement is effective. The agreement allows the City to utilize the project's in-lieu park dedication fees towards improving community parks in the City, including Phase II of Bernal Community Park. The agreement also ensures that the developer will provide a number and range of affordable housing units acceptable to the City. The draft development agreement is attached as Exhibit B. The development agreement process requires that the Planning Commission provide a recommendation to the City Council for action. Staff supports the proposed development agreement and believes that the Planning Commission should provide a positive recommendation to the City Council. Growth Management The City's Growth Management Ordinance (GMO) regulates the number of residential building permits that can be issued each year in order to assure a predictable growth rate while providing housing to meet the needs of all economic segments of the community, regional housing needs, and employment growth. On November 20, 2012, the City Council adopted revisions to the City's Growth Management Ordinance in order to ensure the City could meet its current and future Regional Housing Needs Allocations (RHNA) by the Association of Bay Area Governments (ABAG). One of these revisions eliminated the annual 350 building permit limit which could be issued for residential units. For the current RHNA cycle (the fifth cycle, ending June 30, 2014), the GMO states that the annual unit allocation shall be equal to the number of units required to meet the City's RHNA for the fifth cycle. PUD-85-08-1D-4M Page - 24 - March 27, 2013