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Mr. Bocian noted two minor amendments to the agreements: 1) Section 8 of the IUC Agreement states that the fallback provision would go into affect October 31, 2013 (should the developer fail to secure the bond financing). This date is meant to reflect the expiration of the bond allocation, which is as yet unknown. 2) He presented a slide depicting changes to a table, which acts as a placeholder should the alternative affordability plan take effect, contained within the Affordable Housing Agreement. Councilmember Brown requested clarification on 100% AMI as it relates to affordability. Mr. Bocian explained that staff anticipates the rent levels for this project to exceed 100% AMI. By restricting the 8 replacement units to 100% AMI, it still preserves a fair level of affordability. Councilmember Brown referenced the impacts of the recent Palmer case and asked how what amounts to cap and trade is more acceptable to mandate than an overall % of affordability. Mr. Bocian explained that neither can be mandated. St. Anton Partners have demonstrated a willingness to provide a certain level of affordability within their project as a result of the agreement and ultimately, the onus and impact of using those credits falls on the developer. Councilmember Brown asked if staff prepared a pro forma rent analysis, to which Mr. Bocian said "no." Councilmember Brown asked who would assume responsibility for managing the units. Mr. Bocian said he understood it to be a third party affiliated with St. Anton Partners. Councilmember Pentin inquired about the marketing and selection process for the 3 accessible units, as well as what oversight the City has of that process. Mr. Bocian said there is language requiring the property manager to market the availability of the units, though it does not specify the process. In the event that they are unable to rent the units within 10 days, they can be made available on the open market. Councilmember Pentin said he would love to see accessible units remain accessible. While he understood the larger need to rent the units, whether they be marketed for 10 days or 30 days, he worried that they could go to long-term residents not actually in need of an accessible unit. Ms. Stern concluded the staff presentation, noting several amendments to the Council's recommended action. She also stated that within the last day the applicant approached staff about entering into a development agreement in order to memorialize the City's and the applicant's obligations regarding the project. Staff is amenable to the concept but acknowledges the process required to approve such an agreement. Staff is therefore proposing that the Council introduce the PUD ordinance this evening and then complete the approval with a second reading when the development agreement is ready for review and action. Staff's recommendation includes the following findings and actions: • The addendum to the Supplemental Environmental Impact Report (SEIR) may be prepared per the California Environmental Quality Act (CEQA); • The previously prepared SEIR, including the adopted CEQA findings, is adequate to serve as the environmental documentation for the project and satisfies all CEQA requirements; • The proposed PUD Development Plan (striking out development agreement language) is consistent with the General Plan; • The exceptions to the Housing Site Development Standards and Design Guidelines are appropriate; • Approve the Affordable Housing and Inclusionary Unit Credit Agreements; • Authorize the City Manager to sign said agreement concurrent with the processing of the newly proposed development agreement; City Council Minutes Page 7 of 14 May 21,2013