Q&A: Dublin Unified School District Mitigation Agreement with SCS Development Inc.
On October 23, 2018, during the regularly scheduled Board of Trustees meeting, the Dublin Unified School Board approved an agreement with SCS Development – the owner of the AT Dublin project – that is expected to fully mitigate any impacts on the school district from students generated by the residential development at the AT Dublin project should the City ultimately approve the project.
A Q&A regarding the agreement can be found below.
AT Dublin Mitigation Agreement Q&A
Q: What was approved on October 23, 2018, during the Board of Trustees meeting?
A: The Dublin Unified School Board approved an agreement with SCS Development – the owner of the AT Dublin project – that provides funding sufficient for the District to ensure that students generated by residential development at the AT Dublin project, should the City ultimately approve that project, will have school facilities available to them, at no out-of-pocket cost to the District.
Q: Why did the School District negotiate this agreement?
A: The District must take all steps necessary to ensure the availability of adequate school facilities in the event that the City approves development. The agreement reached with AT Dublin gives assurance that adequate school facilities will be available for students who would reside in the AT Dublin project if approved.
Q: What would SCS Development be required to pay without this agreement?
As of the effective date of the agreement, the District is authorized to impose school impact fees pursuant to Education Code sections 17620, et seq., and Government Code sections 65995, et seq., at a rate of $11.00 per square foot of residential development (“Level II Fees”) and $0.61 per square foot of commercial/industrial development. Based on the Program, at the current Level II rate, the Project would generate approximately $13.5 million (the “Statutory Fee Amount”).
Q: What are the terms of the agreement? (The following is a brief summary of the more essential terms. For a more detailed description of the terms of the agreement, view the full document here.)
Payments by the Developer
Provided that the project is approved by the City, the Developer agrees to pay to District a lump sum in the amount of the Statutory Fee Amount plus an additional contribution to total $14,050,000 no later than the earlier of: (a) 12 months after approval of the project (if the project is approved by the City), or (b) issuance by the City of the first residential building permit (excluding permits solely for grading or site improvements) for the AT Dublin project. One year after the payment becomes due, the Developer will pay another $14,050,000, for a total payment within a 12 month period of $28,100,000.
Provided that the project is approved by the City, then in addition to the payments described above, the Developer will make a donation to the District of the actual costs incurred by the District, up to a maximum amount of $100,000, to fund preparation of a preliminary schematic design of a future high school at the Promenade Site.
Q: Is this a good agreement for DUSD?
Yes. The agreement provides funding equal to the full mitigation of the school facilities impact of the project, at a level previously unprecedented in the District. The effect on the District is therefore neutral with or without project approval, as funding will be available to provide facilities for all students expected to be generated by the development project.
The agreement is more than twice the Statutory Fee Amount SCS is legally required to pay, and the payments will come in much faster than if the Statutory Fee Amount was paid only at the pulling of building permits.
Q: Does the School District have a position on the approval of the AT Dublin project?
A: The District takes no position as to whether the development should or should not be approved, as that is a matter entirely within the City’s sole jurisdiction. The District’s focus is on making sure that if development is approved, adequate funding will be available for the school facilities needed for the students who will live in that development.
Q: What constitutes full mitigation?
A: The amount of mitigation needed to offset the effects of development depend on the circumstances. Currently, thanks to the City’s willingness to enter into the Dublin Crossing agreement with the District, which ensures that the District can acquire a K-8 school site at almost no cost to the District, the District’s need for land for K-8 students to be generated by this project is satisfied. The District has calculated that each student generated by this development beyond the number that would have been generated by the smaller project as previously proposed will receive approximately $120,000 in facilities funding under this agreement. Blending the increased number of students expected under the original proposed project and the current project results in a payment under the agreement of approximately $87,000 per student. The District has concluded that these figures constitute full mitigation for this particular project. Another project at another time might lead to a calculation of a need that is still higher.
Q: What if the AT Dublin project is only approved at its originally proposed size?
A: The Agreement has contingencies built into it to address what happens if the City approves a project that is different in size from what is currently being imposed. Additional development beyond what is now proposed will pay significantly higher fees than statutory rates, based on a formula set forth in the Agreement. Any reduction in the size of the project that keeps the residential portion at 90%, or commercial portion at 75% of what is proposed will not result in any decrease in the developer’s obligations. If the project were reduced beyond that, the District would meet further with the developer to determine how the school facilities issue would be addressed.
Q: How does the District plan to use the $28,100,000?
A: Monies secured from this agreement will be used by the District to support funding of new facilities, including facilities needed to house students from the AT Dublin development.
Q: Does the $28,100,000 contribution from SCS Development impact the $100,000,000 the District has already set aside for the construction of a new high school?
A: The Board remains committed to spend $100,000,000 in bond funds on a new high school. The $100,000 gift will assist with design of that school. The Board has not yet committed specifically how the $28,100,000 in fees will be expended.
Q: This agreement assumes what level of development at the AT Dublin project?
- Commercial 203,343 square feet
- Hotel 75,000 square feet/150 Keys
- Commercial 79,895 square feet
- Multi-family apartments 280 units/356,632 net rentable square feet (exclusive of the parking structure)
- Townhomes 205 units/413,015 net square feet
- Single Family Detached 180 units/459,476 net square feet
Q: What is the connection between this agreement and the proposed Dublin Crossing school site?
A: The prior agreement between the District and the City regarding the Dublin Crossing site commits the District to include in its future plans for the Dublin Crossing school site the design for a K-8 joint use gymnasium, with the funding for such gymnasium subject to negotiations between the City and District. In the At Dublin agreement with the Developer, the Developer agrees to make reasonable, good faith efforts to request that the City direct at least $5,000,000 of public facility or community benefit fees generated by the Project toward the construction of a joint use gymnasium to be constructed on the future Dublin Crossing school site, or such other site that is mutually agreed to by District and City (See section 4 of full agreement for more details).
Q: If approved, when would AT Dublin students begin to arrive in Dublin schools?
A: If the project is approved by the City, students who would live in the AT Dublin community are not expected to begin enrolling in Dublin schools until 2022. AT Dublin is planned to be fully built-out by 2025 and is projected to contribute 188 kindergarten through 5th-grade students, 71 6th through 8th-grade students, and 64 9-12-grade students.
Q: What is the School Board’s position on this agreement?
A: “We appreciate the initiative of SCS to sit down with the District early on and work with us in reaching this agreement,” says Amy Miller, Board President of DUSD. “Clearly, SCS understands the needs of our District, particularly our limited ability to access new funding sources, especially at the state level. This level of mitigation from SCS, unprecedented in our District, provides critical additional funds which will be instrumental to our facilities program, including our new high school should the AT Dublin project be approved. The agreement is critical to achieve the District’s goal that the impact of development will be at least neutral on the District, with the developer fully funding the cost for any new facilities needed to house students from that development.”
Q: What is the Superintendent’s position on this agreement?
“Given the projected student growth, one of the District’s priorities is to take immediate action to acquire and plan for a high school,” says Dr. Boozer, Superintendent. “The accelerated payment agreement for SCS’ development fees and its $100,000 donation will help the District jump start the design and planning for the new high school.”