San Rafael to collect permit fees for downtown senior housing

San Rafael won’t waive permit fees for Vivalon’s senior affordable housing development downtown.

The City Council denied the request in a 4-0 vote with Maika Llorens Gulati absent at its meeting Monday.

Vivalon, formerly known as Whistlestop, is working with BioMarin and Eden Housing to bring 67 units of affordable housing for seniors, a community center and two four-story office buildings to a former Pacific Gas and Electric Co. site at 999 Third St.

Andrea Osgood, vice president of real estate development at Eden Housing, said increases in cost since the project was approved in March 2020 for lumber, commercial insurance and long-term lending spurred the request. The estimated building permit fees to provide plan review and building inspections, as required by state building codes, total $214,963.

Eden Housing estimated the total project costs to be $28.3 million, with a $2.5 million gap in project funding. This gap included building permit fees that were expected to be between $1.13 million and $1.42 million, Chief Building Official Don Jeppson said.

City staff estimated that total building permit-related fees would be approximately $561,844 with only $214,963 eligible to be waived by the council. The city is being asked to waive the full amount, Jeppson said. The money is earmarked to pay staff and an outside consultant to do a plan review.

“If we don’t pay for that, it has to come from somewhere, I’m assuming from the general budget,” he said.

Fee waivers are rarely requested or granted by the city. Exceptions include Homeward Bound’s effort to renovate the Mill Street shelter in 2020, which was associated with a state grant earmarked for affordable housing, and in 2014, when a reduction in traffic impact fees of $254,500 was granted for the San Rafael Corporate Center.

Councilmember Rachel Kertz asked that the city discuss reclassifying mixed-use projects in the future since similar requests were likely to come up. City Manager Jim Schutz said he agreed, but said asking developers to pay in-lieu fees to the city’s affordable housing trust fund might be best in the future.

Robert Pendoley of Marin Environmental Housing Collaborative urged the council to grant the fee waiver so the Vivalon project can proceed immediately, “since 67 affordable units are guaranteed.”

Anne Grey, CEO of Vivalon, said the nonprofit has not received any funds from the city for the project and said $800,000 that has been made available is partly for street improvements, not construction costs.

Mayor Kate Colin said there could be state funding for similar projects struggling to meet costs, and said she would look into opportunities that could help.