Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Implementation Questions topic
No spam. Unsubscribe anytime.
Council presses developers on prevailing wages, construction liability and parking for proposed city projects
Summary
Council members used the workshop to press developers on prevailing‑wage triggers, liability windows for for‑sale products, parking adequacy and the fiscal impact of land/contribution requests; staff said prevailing‑wage obligations depend on funding sources and that residual‑receipts loans defer city repayment until project cash flow is available.
During the National City workshop, council members focused substantial questioning on three cross-cutting implementation issues: prevailing wages and project labor agreements (PLAs), construction‑defect liability for for‑sale products, and on‑site parking and service costs for new affordable developments.
Consultant Lenny Gavino told the council that whether a project must pay prevailing wages often depends on the funding sources in the capital stack. "The prevailing wage line is indicating whether the pro forma assumes prevailing wages. That is usually triggered by the type of funding sources that are part of the development," he said, adding a prevailing‑wage assumption can increase development costs by roughly 20%.
Kwafi Reed of San Diego Habitat highlighted stewardship approaches for for‑sale homes and said the state’s liability framework — not a simple local fix — largely shapes the sector’s exposure. "We maintain a first right to repurchase those homes, and we see ourselves as an ongoing asset manager," Reed told the council, explaining Habitat’s approach to warranty and homeowner support.
Council members also challenged low parking ratios in several proposals. The CHW/Habitat plan for Site 3, for example, envisions 20 units with four parking spaces, which several members said would strain narrow local streets. Mayor Morrison and others asked staff to negotiate additional parking or mitigation strategies in the ENA phase where the city has leverage because the land is public.
On funding, staff clarified that some proposals treat a land contribution as a residual‑receipts loan representing the value of a ground lease (Site 1 modeling used a $2.9 million representative figure) rather than immediate cash outflow. Kevin Leichner of Community Housing Works said the land valuation would not be a cash spend from the city but rather a long‑term loan on the city books to be repaid from project cash flow, if available.
Council requests: members asked staff to return with more detailed pro formas, an accounting of the low/moderate income housing fund (staff said it held roughly $5 million), and analysis of whether a PLA or prevailing‑wage requirement should be included during ENA/DDA negotiations. Staff said ENA is the appropriate next step to test these tradeoffs.
Next step: staff will request updated pro formas and parking/circulation analyses from the proposers and evaluate prevailing‑wage/PLA options during the ENA phase; council signaled willingness to pursue PLAs where consistent with project feasibility and funding.
