David Taormino and Bretton Woods Are Attempting a "Bait-and-Switch" with the Davis-Based Buyers Program
by Alan Pryor
David Taormino, the developer of the Bretton Woods senior housing development just west of Sutter Hospital, is trying to pull another fast one on the City of Davis' senior population. Taormino just proposed, and City Staff supports, that the Davis-Based Buyers Program be rescinded from the signed Development Agreement for the Project that already exists between him and the City. This local senior-preferential buying program reserved 90% of the 560 new homes in the project for seniors that have a pre-existing connection to the City of Davis. It promised that the project would be for local or Davis-connected seniors and not just a high-end enclave for rich retirees fleeing from the Bay Area.
This requirement to preferentially sell to existing Davis seniors was widely promoted and promised to voters in actual ballot language when the project was approved in the November, 2018 general election (then known as the West Davis Active Adult Community). Well, after Taormino and all his lawyers and the Davis City Council all loudly and adamantly proclaimed the project was definitely and undeniably legal in all respects, now David Taormino claims he has new "concerns" about the legality of the program and he wants to rescind it and its promises to Davis seniors. There has been no new legal opinion or justification provided by Mr. Taormino to substantiate this newfound concern.
Of course the real reason that Taormino has this newfound concern for the law is that he realizes that by selling his new homes to wealthier Bay Area expatriates instead of the local senior voters he so ardently-courted (but who have far less home equity in their existing homes), Mr. Taormino can probably get an extra 10 - 15% or more for each home he sells to out-of-towners. And he can market the homes to a whole lot more people than he would if otherwise restricted to Davis.
But Taormino heavily sold this project directly to Davis senior voters by promising them that this project would be just for them and not cater to Bay Area transplants. He even collected hundreds and hundreds of names and email addresses of senior voters by claiming he was putting them on a buyers "waiting list" for the new homes and then proceeded to bombard them with campaign literature in the guise of project "updates" throughout the election campaign.
This whole bait and switch process is fundamentally dishonest and reprehensible. And for City Staff to recommend that Taormino be allowed to remove this obligation from the Development Agreement while getting really noting of substance in return, it shows City Staff is once again willing to play ball accommodating developers without regard to what is best for the City and, in this case, its senior residents.
On this Wednesday's Planning Commission agenda is a proposal by Staff to allow the 560-unit Bretton Woods senior housing development on West Covell to drop the Davis-Based Buyers Program from the project's Development Agreement previously signed by Taormino and the City.
Bretton Woods (formerly known as the West Davis Active Adult Community) was approved as Measure L in the November, 2018 election. The senior project guarantees that 80% of the units would be reserved for seniors age 55 or older. Further, one of the key selling features of the project touted to voters was the very heavily promoted Davis-Based Buyers Program. This provision in the Development Agreement between the developer and the City provides that 90% of the units at the project would be reserved for seniors with a pre-existing connection to the City of Davis. The pre-existing connection with the City of Davis was defined as a current resident or family member of a current resident or a current of past City or UCD employee, among others.
The Complicated Legal History of the Davis-Based Buyers Program
Right from the start the Davis-Based Buyers Program was controversial. Many ardent senior supporters of the project touted this feature as demonstrating the commitment of Taormino to seniors to bring a project to the community that met the needs of its own seniors. The oft-stated rationale by Taormino for this program was that too often these types of housing developments in Davis (referring to the Cannery, in particular) were primarily marketed and sold to Bay-Area buyers that brought checkbooks flush with selling high-priced homes in the Bay Area.
In contrast, claimed Taormino, the "Davis-Based Buyers Program" would serve the real needs of Davis residents because sales would be primarily made to local seniors who wanted to remain in the area but wished to downsize their homes as they aged in place. This in turn, claimed Taormino, would free up their larger older homes for resale to young families. Taormino claimed it was a "win-win" for Davis and its seniors. And Taormino further claimed this feature was "locked" into the Development Agreement between Bretton Woods and the City of Davis so Davis residents could rely on the "promises" made by the developer
Indeed, some of this information was actually also included in the ballot language presented to voters which stated that the purpose of the law requiring the vote to allow the project to be built on the periphery of the City was to provide “an adequate housing supply to meet internal city needs”. It also stated, “90 percent of the home sales will be limited to Davis-connected buyers.” Further, every yard sign and every piece of campaign promotional literature also had the campaign motto,“Taking Care Of Our Own” prominently displayed as the central selling point of the project. Voters and the politicians loved it and, based in part on these promises, the vote to allow the development based overwhelmingly by a 59% to 41% margin.
Understanding that the program might be controversial and the legality challenged, the developer provided to voters two widely circulated letters from his different lawyers adamantly affirming the legality of the program. In one, Matt Kiesling, the current lawyer and front-man for the Davis Innovation and Sustainability Campus said of the legality of the program, "The enumerated program details are specifically crafted to comply with direction provided by the Department of Housing and Urban Development and the courts to be in compliance with the Fair Housing Act…Therefore, the program complies with state and federal fair housing laws.”.
Nevertheless, prior to the election a lawsuit was filed in U.S. District Court by opponents of the program who contended it violated federal fair housing law and was discriminatory in nature. Ultimately the lawsuit was subsequently withdrawn but not before the City Council weighed in voting to defend the lawsuit and fervently support this feature in the project.
Along with much of the political elite in the City, Mayor Brett Lee weighed-in stating, “The city has a long history of opposing discrimination in housing and the city believes the case is without merit...any program developed by West Davis Active Adult Community would be required to comply with fair housing laws.”
Some opponents of the project claimed the Davis Based Buyers Program was otherwise only window dressing and a ruse designed to favorably lure Davis senior voters to the polls. The claimed that Taormino never really intended to comply with this provision in the Development Agreement. Rather, the program simply served to entice unwitting Davis senior voters to support the projects. One long-time observer of local politics, Ron Oertel opined, “I suspect that the Davis Buyers program will actually “disappear”, if the proposal is approved. Which provides the developer with the best of both worlds: the ability to tout the program (which doesn’t yet actually exist) prior to the vote, and abandon it afterward (if the development is approved by voters). Thereby allowing seniors from outside of the area to purchase houses directly, at WDAAC.”. Mr. Oertel's words were prescient because here we are two years later and that is exactly what David Taormino is proposing.
Others pointed out that if Taormino really intended to be bound by his promises he would have put the Davis-Based Buyers Program into the Baseline Features in the ballot rather than making empty promises in a Development Agreement. They stated that the reason Taormino insisted that the language be put into the Development Agreement was that it could then be easily modified in the future by a simple majority vote of the City Council. However, to change Baseline Features at a later date would actually require a new vote of the people.
So after previously saying that "I am satisfied that our Buyers’ Program is appropriate and supported by significant legal precedence" and after all the public drum-beating about the legality of the program and after vigorously defending the program in court, Taormino is now claiming it is the "fear" of future litigation that is making him withdraw the Davis Based Buyers Program from the Development Agreement. As is stated in the Staff Report, "the applicant feels this leaves a continued threat of litigation and it is the applicant’s desire to not significantly delay the delivery of the needed housing in Davis” and "the legality of the provision would be difficult to enforce.”
The Real Reason Taormino Trying to Kill the Davis-Based Buyers Program
I believe the real reason that Taormino is trying to kill the Davis-buyers preference program is pure greed. Taking his cue from the Cannery's successful Bay-Area-focused marketing strategy, Taormino probably wants to aggressively market this project to seniors from the Bay Area or other coastal cities where potential buyers will be both far more numerous and will be selling their existing homes at astronomical prices. If he can entice these flush-with-cash buyers from the Bay Area, he can probably easily sell his high-end homes anywhere from $100,000 to $200,000 or more per unit than if he were forced to sell only to Davis seniors.
But it is the Davis seniors that are left with nothing more than their voting stubs in the hand to show for their support of the project sold under false pretenses and broken promises. Taormino has sold out the Davis seniors, pure and simple.
Taormino and City Staff are Promising All-Electric Home Construction in Return for Rescinding the Davis-Based Buyers Program. But this Actually Makes Even More Money for the Developer..
Staff is claiming that in return for dropping the "Davis-Based Buyers Program" from the Development Agreement that Taormino is willing to guarantee that all new homes constructed will be all-electric and that will reduce greenhouse gases from the project. But this offer is of almost no additional benefit to the City because new City of Davis Building Codes actually incentivize new all-electric home construction. It now actually costs less to construct all-electric homes and it is less complicated than also bringing in and installing natural lines for gas appliances in the homes.
So Taormino is actually not "giving up" anything in exchange for agreeing to drop the buyers program that he would not already be doing to save money. So his claims of sacrificing for the City and the environmental by going to all-electric construction is really all hype and he is really just padding his profit margins on the home sales.
City Staff is also very cognizant of the fact that it is cheaper to put in all-electric homes than when also using natural gas. So for them to even propose this as a fair exchange in return for dropping the buyers preference program is insulting to the citizens and voters of Davis.