Planning Commission okays D.A. with Chadmar
When you’re a large-scale real estate developer accustomed to gambling tens, if not hundreds of millions of dollars on an investment, I suppose you become accustomed to the many zeros attached to the end of some numbers.
But to be able to sit quietly without flinching while a bunch of clueless Mammoth Lakes Planning Commissioners debate whether or not to grant you what amounts to a $5 million tax break … now that takes some cojones.
All in a day’s work for the Chadmar Group’s Chuck Lande and son, Chad.
Mammoth Lakes Planning Commission approved a 20-year development agreement with the Chadmar Group at its regular meeting Wednesday for Snowcreek VIII.
As part of the rather complex agreement, Chadmar agreed to an “Additional Financial Contribution” (AFC) intended to provide greater “community benefits” to the Town.
Some, like Council candidate Kirk Stapp, view the AFC as a sop to the Town for gutting its housing mitigation requirements.
On Wednesday, Planners gutted the sop to the gutting.
Let me explain.
Smartly included by Lande in the development agreement was a clause which said that the approximate $10 million AFC “shall not be subject to a COLA (cost-of-living adjustment) to adjust for inflation over time.”
As the AFC is only collected at the time of issuance of building permits (for residential units) and upon issuance of a certificate of occupancy (for resort hotel rooms), the Town will only see that AFC in increments, with the initial payments likely several years down the road.
Commissioner Sharon Clark recommended that the AFC be subjected to a COLA (after all, 2010 dollars are not worth the same as 2030 dollars) and Commissioner Elizabeth Tenney quickly agreed with her.
Commissioner Tony Barrett argued in the other direction, supporting the D.A. as is. “The benefits there [in the D.A.] are better than whatever we’ve negotiated in the past.”
He said the people who spoke out against the D.A., namely Stapp, are responsible for the failed D.A.s of the past.
“What’s been brought up by my fellow commissioners [COLA] could be detrimental to the success [of the agreement],” he concluded.
So Tenney asked Community Development Director Mark Wardlaw what the Town stood to lose by not adjusting the AFC for inflation.
Wardlaw said he couldn’t make that calculation off-hand.
Interestingly, The Sheet could, and did, in a matter of seconds, using the Rule of 72.
According to the Rule of 72, which is a math formula that tells you how long it will take to double the value of the money you invest (and believe me, I have no clue regarding the methodology, but I remember my father yammering about it at some point in my distant childhood), the amount of time it takes for money to double is 72 divided by the interest rate. Or, if you’re trying to calculate how long it takes for today’s dollar to halve in value, divide 72 by the inflation rate. The historical inflation rate over the past 100 years is 3.4 percent. Meaning money halves in value every 21 years. Meaning $10 million today would be worth about $5 million when the Snowcreek D.A. expires.
Another area of disagreement lies in the negotiated housing mitigation proposal, which Stapp and fellow Mammoth Lakes Housing Board member Bill Taylor go into in some detail in this week’s letters section.
Back in November, Mammoth Lakes Housing determined that the financial “gap” to build an affordable housing unit was $209,000 (the difference between what a typical unit would cost to build and what a typical workforce housing applicant could afford to pay).
The Development Agreement lowers that number to $80,000.
The D.A. also calls for the “affordable” units Lande plans to build on-site be priced for buyers who make 175-200 percent of AMI (Area Median Income).
The higher the AMI benchmark = the more Lande can sell the units for = a smaller financial “gap.”
Which is great for Lande, but as Taylor points out in his letter, it does nothing to serve Council’s targeted housing needs population which makes between 80-120 percent of AMI.
Stapp says that by the time you get through all the housing giveaways, the juicy $10 million carrot (the AFC) Lande has proferred will already have been chewed down to the nub just backfilling it all.
The Town’s Economic consultant Walter Kieser, however, determined that the housing proposal was reasonable.
In so many words, local resident John Wentworth said he doesn’t think much of Kieser these days.
“Mr. Kieser is starting to smell like a hired gun. His name always comes forward in connection with something that doesn’t smell right … There’s a lot of fuzzy logic and fuzzy reasoning coming out of Mr. Kieser.”
When Commissioner Tenney asked for an example of this fuzziness, Wentworth said Kieser has tried to define trails as a greater community benefit when they’re already part of the Master Plan.
In other words, good works shouldn’t get you double the extra credit.
Wardlaw hotly defended Kieser. “It’s always difficult when someone attacks the professionalism of [our] consultants. If he was wrong, we wouldn’t hire him.”
The D.A. was approved as is, save for a final look at housing. MLH Exec. Director Pam Hennarty and Mr. Lande said they would work out some mutually agreeable amendment to what is already on the table (Hennarty suggested less units priced at a lower AMI as one possibility).
I’d gamble that Lande will negotiate a pretty good deal for himself.