183 replies to this topic

[dave]

It isn't that the developers and buyers are paying NOTHING.  They are paying something into the system... just not enough in your eyes.  So they are not getting a pass for FREE.

DrKoz, I have a simple example for comparison.

In new home subdivisions the new homeowners share in the cost of their new neighborhood streets. Existing Folsom residents outside of that new development do not pay for those new streets.

Under your logic, those new homeowners should only have to pay 1/3 the cost of those new streets.

Please focus on that specific example and tell me if you think existing Folsom residents outside of that new development should pay 2/3 the cost of those new streets.

[DrKoz23]

Drkoz23 not only missed the boat on this, he still seems to be in Kansas, a thousand miles to the closest dock.

I do not challenge any of his opinions regarding capitalism and the right for a company to maximize their profit, but regarding the school situation in the east area (Empire Ranch and the Parkway) his ignorance of history and how development agreements are developed is very apparent.

The east area was rezoned in the late 80's from agriculture to developable land after the City annexed it. At the time, the developers, the Chamber of Commerce, and the City promised residents that new development of that area "would not cost existing residents a dime." (I have copies of the many flyers they mailed out stating this.) They also promised:
A teen center
A senior center
A library
A 50-acre regional park

None of these promises have been honored (the new library is not being funded by the east area developers, although, of course, new residents there will contribute via taxes)

In addition, the water treatment plant expansion, required only to serve that area, is being 50% paid for by existing residents and our sewer fees have already started their already Council approved quadrupling to pay for the additional sewer work required (yes, some of this increase is required for maintenance of existing lines, but most is simply for the additional 10,000+ toilets.)

Regarding schools, agreements were made long ago as to which sites the developer would make available. The City then, has allowed development to occur all around these sites. Not only was our bond money not available to actually purchase these sites when these agreements were reached, but the developer’s 1/3 was also not available as it trickles in via fees as homes are built.

In essence, the developer now holds all the cards as the City has locked the School District in to these sites. So Drkoz23 is ill informed when he equates this issue to a free-market model. It is not.

Now why the City and School Board did not also lock in an agreed price at the time, I do not know. Perhaps Tessieca can tell us.

Regards,
Bob Fish

Kansas is a nice place... you should visit it sometime. It has the biggest ball of twine ... plenty of wheat fields... and the lovely metropolis of Wichita. Plus you can take I-70 into Denver or Kansas City. Quite a lovely route. I'll have to get back to you to let you know if I left my brain there.

No... I do not know too much about the "promises" made back in the late 80s. I was pretty young back then. Was this developer of the Parkway one who agreed to this cost structure. I do not know the answer to this.

I am arguing the developers right to charge market price for the land that they own without the necessity to give a break. Is it their fault that FCUSD cornered themselves into the parcel of land where the school is planned? Would this then be the fault of the school district to make it an unfair market model... and not the developer. It is not the developer's fault that FCUSD showed them their hand while he's holding a full house.

Is the nearly $1,000,000 per acre the developer wants fairly close to what they could get if they sold it on the open market? If it is... then I cannot fault them at all. I would be interested to know how much they would be able to get if they were not trying to sell to FCUSD.

[DrKoz23]

DrKoz, I have a simple example for comparison.

In new home subdivisions the new homeowners share in the cost of their new neighborhood streets.  Existing Folsom residents outside of that new development do not pay for those new streets. 

Under your logic, those new homeowners should only have to pay 1/3 the cost of those new streets. 

Please focus on that specific example and tell me if you think existing Folsom residents outside of that new development should pay 2/3 the cost of those new streets.

'
Dave...

I guess my answer to your above question would be the following.

A means of transportation to the home is necessary for the developer to sell a home. No road = No sale. People would not be interested in a house if there was no access point. The developer knows this is a necessity. Therefore this is a cost a developer should pay.

However... the construction of a school in the neighborhood is not a necessity to the sale of their product. School or no school... the developer will make the sale. Yes it would be a nice addition to have a school built nearby... and might be a selling point... but it isn't going to keep people away if their is no neighborhood school.

If you want those who are causing the growth of Folsom to pay for the new schools. How do you handle those without kids... they are not adding to the problem. Would you propose a pay for use type tax/fee in the city of Folsom for all types of services?

[benning]

You are exactly right. The developer knows that it's not a necessity. Rather, the developer knows that any potential purchaser will not have the expectation to see a school building upon move in. However, there is an expectation that a school will be built in that neighborhood. Ask at any sales office. The sales person will be happy to point out where the proposed school is and will also many times tell you that the developer provided the site. (provided here means defined the property that would be sold should negotiations with the school district go favorably).

Here is a quote from www.theparkway.com. The Parkway features more than 200 acres of open space, miles of nature trails, friendly neighborhoods, multi-purpose parks and top schools.
hmmmm, I guess they know that schools are an important selling point.

Here's what I would propose:
Each prospective homebuyer should sign a disclosure saying they are OK with the fact that the developer is providing a maximum of 1/3 of the cost of the school and that there should be no expectation that any child living in the home would have a neighborhood school. For full disclosure, they would also have to agree that children in the neighborhood may have to be bussed and/or put on an alternative schedule to accommodate them.

My guess is that even those without children would be dissuaded from purchase. Why?, because the resale value of the home just went down.

[Terry]

DrKoz, I have a simple example for comparison.

In new home subdivisions the new homeowners share in the cost of their new neighborhood streets.  Existing Folsom residents outside of that new development do not pay for those new streets. 

Under your logic, those new homeowners should only have to pay 1/3 the cost of those new streets. 

Please focus on that specific example and tell me if you think existing Folsom residents outside of that new development should pay 2/3 the cost of those new streets.

So under your logic, if I live in a Folsom home built in the 1950s (or historic), I have to stay on streets that were built only during that time?

[benning]

Weak try, Terry...nowhere in his post does it imply that logic.

[DrKoz23]

Here is a quote from www.theparkway.com.  The Parkway features more than 200 acres of open space, miles of nature trails, friendly neighborhoods, multi-purpose parks and top schools.
hmmmm, I guess they know that schools are an important selling point.

Here's what I would propose:
Each prospective homebuyer should sign a disclosure saying they are OK with the fact that the developer is providing a maximum of 1/3 of the cost of the school and that there should be no expectation that any child living in the home would have a neighborhood school. For full disclosure, they would also have to agree that children in the neighborhood may have to be bussed and/or put on an alternative schedule to accommodate them. 

My guess is that even those without children would be dissuaded from purchase.  Why?, because the resale value of the home just went down.

A developer should be able to maximize their profits... but I will agree with you that it has to be in a legal and honest way. If in fact they are still telling possible buyers of their homes that a school is guaranteed... I do disagree with their selling tactics knowing about the struggles between themselves and FCUSD.

In your statement that most people would buy a home in a neighborhood where a school is guaranteed over one that is not... I would have to agree assuming that the homes are valued very similar per square foot. If the home without a neighborhood school was considerably cheaper... there would be people willing to take the risk with these homes.

This is where the developer has to figure the correct balance to maximize their profits...

1) How much do they sell a home for if they do not guarantee a school (probably less if no school is to be built)... while profiting nicely by being able to sell the school site to another purchaser for market value.

2) They can sell houses for more if the school is guaranteed. However... they may not be able to charge FCUSD the amount they could charge another private investor.

The developer would have to figure which is best for themselves. Look we can agree on some issues. We both must have had a good weekend and started off the new week in a good mood.

[DrKoz23]

Weak try, Terry...nowhere in his post does it imply that logic.

I'll even agree with those I like to disagree with on this one.

[benning]

A developer should be able to maximize their profits... but I will agree with you that it has to be in a legal and honest way.  If in fact they are still telling possible buyers of their homes that a school is guaranteed... I do disagree with their selling tactics knowing about the struggles between themselves and FCUSD. 

To be fair, when you probe further into the Parkway's website they do list Theo Judah as the elementary school. No outright dishonesty...just a few loose ends perhaps intentionally not tied.

It is refreshing to see that we can agree on some things.

[dave]

Now why the City and School Board did not also lock in an agreed price at the time, I do not know. Perhaps Tessieca can tell us.
Regards,
Bob Fish

It would be great if it worked that way. However, no developer would agree to sell land at a price that he won't receive for possibly many years.

If there is anyone out there, however, who will sell me their house at 1999 prices, let me know.

[dave]

'A means of transportation to the home is necessary for the developer to sell a home.  No road = No sale.  People would not be interested in a house if there was no access point.  The developer knows this is a necessity.  Therefore this is a cost a developer should pay.

Benning answered the rest of your post well so I will just comment on "developer should pay" regarding roads. Look at your property tax bill. Any Mello-Roos or other similar taxes on there are what pay for your roads. The developer pays little, if any, up front. They merely set up the financing for us to pay.

The term "developer fees" is a misnomer, mostly. Call them "new home" fees or taxes.

[Terry]

You are exactly right.  The developer knows that it's not a necessity. Rather, the developer knows that any potential purchaser will not have the expectation to see a school building upon move in.  However, there is an expectation that a school will be built in that neighborhood.  Ask at any sales office.  The sales person will be happy to point out where the proposed school is and will also many times tell you that the developer provided the site.  (provided here means defined the property that would be sold should negotiations with the school district go favorably).

Here is a quote from www.theparkway.com.  The Parkway features more than 200 acres of open space, miles of nature trails, friendly neighborhoods, multi-purpose parks and top schools.
hmmmm, I guess they know that schools are an important selling point.

Here's what I would propose:
Each prospective homebuyer should sign a disclosure saying they are OK with the fact that the developer is providing a maximum of 1/3 of the cost of the school and that there should be no expectation that any child living in the home would have a neighborhood school. For full disclosure, they would also have to agree that children in the neighborhood may have to be bussed and/or put on an alternative schedule to accommodate them. 

My guess is that even those without children would be dissuaded from purchase.  Why?, because the resale value of the home just went down.

Let me try to explain this - The Parkway is located within the Folsom-Cordova school district, thus, there are "top schools" to which children of the Parkway would go.

I personally know at least 5 families who moved into the Parkway during the various phases beginning 10 years ago up until 2 years ago. None of these 5 families were promised anything other than the existing schools by the Parkway sales reps. Nor did the sales reps in any way assure the buyers that the children would be attending any particular school In fact they made a point of telling prospective buyers that they needed to contact the Folsom-Cordova School district to see what schools would be the area school for Parkway residents and to determine if there were any plans for future schools to which Parkway kids might go. I obtained a copy of the disclosure agreement and it says nothing about schools other than Folsom-Cordova School district as being the jurisdiction for this area.

If anyone of this site has had a different experience with Parkway sales reps, I'd like to hear it. In fact, you can call the Parkway office right now and they'll refer you to the FCUSD for anything other than general information about FCUSD.

You're right, every home buyer in the state of California should sign a disclosure understanding that only 1/3 of the cost of schools is borne by the developer and this is BY STATE LAW.

It doesn't seem to have discouraged Parkway buyers. Oh, but I guess those buyers WHO DIDN'T TAKE THE TIME TO READ THE FULL DISCLOSURE WILL PROBABLY REGRET THEIR FAILURE NOW.

[benning]

Well, I personally think Judah is a 'top school'. But that doesn't mean that it or any other school can continue to house students it was not meant to handle, while the developer is contributing to the dilution of the quality of the schools in that community. Of course, all the houses will be sold before the real fireworks start so it's not his problem, right?

There are two issues here: 1) Is the legal minimum required impact fee that the BIA sucessfully lobbied for its members enough to build a school -- most would agree that the answer is no, and 2) In this particular case, should the developer cut the district (who will be eventually pressured to buy the parcel at any cost) a small break on a parcel of land that will help to sustain the 'top school' claim that they use to market homes here? -- I think the answer should be yes.

If strongly worded disclosures were signed at the time of sale of the home I would be somewhat mollified. Your post suggests such disclosures are required now. Is that true?

[Terry]

Well, I personally think Judah is a 'top school'. But that doesn't mean that it or any other school can continue to house students it was not meant to handle,  while the developer  is contributing to the dilution of the quality of the schools in that community.  Of course, all the houses will be sold before the real fireworks start so it's not his problem, right?

There are two issues here:  1) Is the legal minimum required impact fee that the BIA sucessfully lobbied for its members enough to build a school  -- most would agree that the answer is no,  and 2) In this particular case, should the developer cut the district (who will be eventually pressured to buy the parcel at any cost) a small break on a parcel of land that will help to sustain the 'top school' claim that they use to market homes here?  -- I think the answer should be yes.

If strongly worded disclosures were signed at the time of sale of the home I would be somewhat mollified.  Your post suggests such disclosures are required now.  Is that true?

Here's language from the disclosure documents for the Parkway

3.03. Anticipated Development. The Initial Property is planned to include Residential Subdivision, the Association Office Parcel, certain Buffer Landscape Areas, certain landscaped medians and corridors, and entry lights and features and other Improvements in the Parkway Drive median. The Overall Property is planned so that it may include Residential Subdivision, school sites, commercial buildings and facilities, as well as business/professional buildings and facilities. It is anticipated that the Overall Property will be developed as a Master Planned Development as that term is used by the Califonria Department of Real Estate in that the development (i) will be a planned development subdivision within the meaning of subdivision (d) of Section 1351 of the California Civil Code, (ii) will be managed by the Association responsible, among other things, for the maintenance and operation of community Common Area, (iii) will be developed in two or more Phases and (iv) is proposed to consist of more than 500 Residential Units. The City furnished Declarant with the General Plan attached hereto as Exhibit C showing the City's plan for areas surrounding the Overall Property. Declarant does not represent or warrant that the attached General Plan is current, accurate or complete. Any potential Oqwner should independently verify the City's plan for surrounding areas.

3.04 Future Changes. Nothing contained herein shall obligate Declarant to refrain from the further subdivision, resubdivion or reversion to acreage of portions of the Overall Property not theretofore annexed. Notwthstanding the anticipated development of the Overall Property, nothing in this Declaration shall be construed or interpreted to commit Declarant to the development of any portion of the Overall Property in accordance with any present planning, or to the annexation of all or any part of the Overall Proeprty to this Declaration or the Property, whether or not it is so developed.

Okay, so the above is the disclosure as to the city supplying the zoning map for the area at the point in time it is supplied to the Parkway to attach to the documents. And the above also discloses that future changes are not an obligation on the part of the developer to develop as planned at this particular point in time.

Now, as far as the developer's 1/3 requirement of fees - that's state law, and the 1/3 was legislated by your representatives, and further negotiated between the BIA and the school districts WHO SIGNED THE AGREEMENT. The state recognizes that there are 3 funding sources for schools - 1/3 developer, 1/3 property owners, and 1/3 state allocations.

If you don't agree with this formula, instead of bashing the developers, why not approach your elected officials and have them increase the developers' share, or maybe the property owners' share, or maybe even the state's share. At the same time, ask your school districts to manage what money they do have better than they have been.

[bishmasterb]

It would be great if it worked that way.  However, no developer would agree to sell land at a price that he won't receive for possibly many years.

They could however sell an option to purchase the land at a certain price...the school wouldn't have to come up with all the cash right away (just the price of the option).

It's just plain naive to expect any business to sell any asset below market value out of altruism. (Not saying that you've advocated that dave, but others have).

If there is anyone out there, however, who will sell me their house at 1999 prices, let me know.

I made the same offer a few pages back, remarkably the people expecting developers to sell their land below market value were unwilling to sell me their house under the same conditions.