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Home My WebLink AboutItem 7b. Initiation of General Plan and Specific Plan amendments for Mixed-Use Development at 365 Prado Road Item 7b Department: Community Development Cost Center: 4008 For Agenda of: 4/2/2024 Placement: Business Estimated Time: 45 minutes FROM: Timmi Tway, Community Development Director Prepared By: Rachel Cohen, Senior Planner SUBJECT: INITIATION OF GENERAL PLAN AND SPECIFIC PLAN AMENDMENTS TO CHANGE BUSINESS PARK ZONING TO SERVICE COMMERCIAL ZONING AND ALLOW MIXED-USE DEVELOPMENT AT 365 PRADO ROAD LOCATED WITHIN THE MARGARITA AREA SPECIFIC PLAN RECOMMENDATION Provide direction to staff on whether to proceed with processing the General Plan and Specific Plan amendments to change Business Park (BP) zoning to Service Commercial (C-S) zoning and allow mixed-use development at 365 Prado Road. POLICY CONTEXT Why is this coming to City Council? Amendments to the General Plan require orderly processing consistent with the overall goals of the City’s planning program and requirements of California state law. A General Plan Amendment is any change to General Plan maps or text. State law provides th at each mandatory General Plan element (Land Use Element, Housing Element, etc.) may be amended no more than four times per year. Municipal Code Section 17.130.020 specifies that the Council may initiate General Plan amendments at any time by directing staff to prepare the necessary analysis and scheduling the proposed amendment for consideration at a hearing. On November 15, 2023, the City received an application from the applicant, Covelop, for a project at 365 Prado Road that requires General Plan and Specific Plan amendments. Staff is seeking City Council direction to proceed with this application. DISCUSSION Background The Margarita Area Specific Plan (MASP) was adopted in 2004 to support the General Plan’s goal for a compact urban form and to provide permanent open space and a mix of housing with supporting services and infrastructure. The MASP was envisioned on properties in the vicinity of the San Luis Obispo County Regional Airport, and any Page 569 of 596 Item 7b proposed development was subject to the 2002 Airport Land Use Plan (ALUP). The ALUP identified safety subareas that limited residential and non -residential density based on potential aviation hazards. Certain portions of the MASP were within these safety subareas that prohibited or significantly limited residential and non -residential development and required a close look at land use and density considerations to assure that new development would be compatible with the 2002 ALUP. In 2021 the County of San Luis Obispo amended the 2002 ALUP. The size and shape of the safety subareas around the airport changed and now several areas of the MASP are either available for residential development (where not allowed before) or available for higher density residential development (see Attachments A and B). 2023-25 Financial Plan Margarita Area Specific Plan Update As part of the City’s 2023-25 Financial Plan (Housing & Homelessness MCG Task 3.1.b), Council identified the task to initiate amendments and an update to the entire MASP that would increase density on existing residentially zoned land and consider allowing mixed - use development on commercially zoned land, where appropriate and consistent with the updated ALUP. Staff has moved forward with this MCG task and a Request for Proposals (RFP) has been included as a consent item as a part of this April 2, 2024 Council Agenda. The RFP would allow the City to bring on a consultant to assist with the initiation and completion of the proposed amendments to the MASP. As proposed, a consultant would be selected in June 2024 to begin work on the update. The applicant, through this initiation, is requesting to move forward on the rezoning of 365 Prado Road independent of the City’s update of the MASP. Project Description The applicant, Covelop, has submitted a request to amend the MASP and the General Plan Land Use Map to change 365 Prado Road from Business Park (BP) zoning to Service Commercial (C-S) zoning and allow mixed-use development (see Attachment C, Project Proposal) independent of the City’s MASP Update described above. Along with the amendments, the applicant is proposing a mixed -use, common interest subdivision development that would include 224 residential units, approximately 30,000 -60,000 square feet of commercial space, and a 1.2 -acre Homeowners Association (HOA) managed and maintained park. The proposed residential units would be a mix of attached and detached units with one-bedroom, two-bedroom and three-bedroom configurations ranging in size from 630 square feet up to 2,002 square feet with an average dwelling unit Page 570 of 596 Item 7b size of less than 1,300 square feet. The applicant has described their project as a “greenfield missing middle project” because it utilizes a vacant parcel to construct house - scale buildings with multiple units that are compatible in scale and form with detached single-family homes, while located in a walkable neighborhood. The project proposal does not include an affordable housing plan but proposes the provision of a limited number of deed-restricted, below market rate (BMR) affordable housing units in conjunction with a density bonus and would request several concessions and waivers per State law (the number of units and affordability level has not yet been defined by the applicant, as the application is still conceptual in nature). Most of the proposed units would be market rate. If the project moves forward, it would require General Plan and Specific Plan Amendments, Rezoning, Major Development Review, Subdivision Review, and Environmental Review. Site Data Location 365 Prado Road Parcel Size 19.35 acres General Plan Business Park Zoning Business Park (BP) Site Condition Vacant, relatively flat Surrounding Uses North: Residential South: County (Chevron Property) East: Mini Storage / RV storage / Kennel West: Entitled Business Park Project Consistency with Community Goals and General Plan Goal, Policies, and Programs Staff has provided a preliminary analysis of the proposed amendment’s consistency with the General Plan, the City’s Major City Goals, and the Airport Land Use Plan (ALUP). Additional analysis and consideration would be included as part of a full project analysis if Council provides direction to staff to move forward with processing the project. 2023-25 Major City Goals Housing and Homelessness has been identified as one of the 2023-25 Major City Goals. As such, the 2023-25 Financial plan includes efforts to support housing development including a task to update the MASP to consider more housing options, as discussed above. One benefit of the MASP update is to create additional residential capacity ahead of the RNHA allocation for the 7th Cycle Housing Element, which is expected in 2026. Currently, the City has sufficient inventory of zoned land for the purpose of accompl ishing build-out as anticipated by the Land Use Element and the 6th Cycle Housing Element. The applicant is requesting to move forward independent of the City’s MASP update and introduce a new land use to 365 Prado that currently does not exist in the MASP . Staff Page 571 of 596 Item 7b has planned for work on the MASP Update to begin in June 2024 and anticipates that the two projects would be reviewed and processed with similar timeframes. It should be noted that if both efforts move forward they will include support from consult ants to assist staff with processing of the projects, however, concurrent processing will take time and resources away from each other. Reginal Housing Needs Allocation (RHNA) The City has been allotted 3,354 residential units that it must be able to acco mmodate within the City limits as part of the 2020 Housing Element. The City has made significant progress toward meeting its RHNA mandate, meeting 54% of the total RHNA halfway through the 2020-2028 6th Cycle Housing Element period. However, while the City has issued permits for Above Moderate dwelling units in excess of its requirement for this income category (Above Moderate RHNA target is 1,406 and 2,143 have been completed), more progress is needed in the BMR income categories (RHNA target 1,948; completed 407). The proposed project at 365 Prado is conceptual in nature and does not provide sufficient details on all aspects of the project, including affordable housing. However, the proposal does state that the project will include a density bonus. If the project requests a 20% density bonus, for example, it would be required to provide 5% of the base density as very low-income deed restricted units. Based on the project proposing 224 dwelling units, 212 units would be market rate and 12 units would be very low-income. If the 224-dwelling unit project provides 10% of the base density as low-income units to receive a 20% density bonus, 25 would be low-income deed restricted units and the remaining 199 units would be market rate. General Plan Goals, Policies and Programs Housing Element Policy 5.3 states “Encourage the development of a variety of ‘missing middle’ housing types and Housing Element Program 5.4 states “Evaluate and implement ‘missing middle’ housing types (e.g., duplex, quadplex, cottages, etc.) to increase housing options in the City within three years of adopting the Housing Element.” The different unit types within the project would be designed and constructed in clusters rather than in homogenous pods as is typical of product-segmented neighborhoods. The various unit types would be connected and organized through a central walkway in the “Mews” portion of the project. Overall, the proposed project would include 159 for-sale single family attached and detached units and 65 for-rent apartments. Land Use Element Policy 8.1.3 states in part that “The City shall consider this area [MASP] as potentially appropriate to accommodate additional housing. Revisions to the Margarita Area Specific Plan will be required if residential development in excess of that accommodated in the plan is proposed.” The proposed project would amend the MASP to introduce a new land use (Service Commercial) to the Plan to allow a mixed -use development on property that currently does not allow such development. Airport Land Use Plan (ALUP) Most of 365 Prado Road parcel is not located within any safety zones of the 2021 ALUP. However, one portion, the southwestern corner of property, is located within Safety Zone 3 and shown with a red line in Attachment C, page 5, Figure 1. The project is proposing Page 572 of 596 Item 7b park space and commercial development in this area of the property and appears to be consistent with the lower density development requirements for Safety Zone 3. Impacts on Adjacent Areas and Shared Resources Impacts of the proposed amendment and associated development on adjacent parcels and resources would be analyzed in detail as part of the project if Council provides direction to staff to proceed with processing the project. However, as noted above, analysis of the proposed General Plan and Specific Plan amendment would be focused on 365 Prado and would not include a comprehensive review of the entire MASP, as included in Council’s MCG work plan for Housing & Homelessness. Next Steps Staff is requesting that Council provide direction to staff and the applicant regarding next steps based on the following menu of actions: 1. Direct staff to initiate and move forward with the proposed amendments to the MASP and associated development plan for 365 Prado as described in the applicant’s project proposal (Attachment C). 2. Direct staff to move forward with the proposed amendments and associated development plan but with direction to staff and the applicant on Council ’s desired revisions to the development plan. 3. Direct staff to not move forward with the proposed project. 365 Prado, along with the other Business Park zoned parcels along Prado Road , will be considered for additional housing options as part of the City’s MASP update. Public Engagement This item is on the Council Agenda for April 2, 2024, and staff has provided all required notifications. The public may have an opportunity to comment on this item at or before the meeting. CONCURRENCE This staff report was reviewed and approved by the C ommunity Development Department, Finance Department, City Attorney and City Administration. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. If the project moves forward, the project would be subject to the appropriate environmental review as required per the California Environmental Quality Act (CEQA) for the proposed amendments. Page 573 of 596 Item 7b FISCAL IMPACT Budgeted: No Budget Year: 2023-25 Funding Identified: No Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $0 $0 $0 $0 State Federal Fees Other: Total $0 $0 $0 $0 There will be no net fiscal impact related to initiating the proposed project. If directed to proceed, the applicant will be required to fund the review and processing of the proposed amendments and associated analysis (including a fiscal analysis of the proposed project and if there are any impacts to the City). ALTERNATIVES 1. Direct staff to initiate and move forward with the proposed amendments to the MASP and associated development plan for 365 Prado. 2. Direct staff to move forward with the proposed amendments and associated development plan but with direction to staff and the applicant on Council desired revisions to the development plan. 3. Direct staff to not move forward with the proposed project. ATTACHMENTS A - MASP zoning map with 2021 ALUP safety zones B - MASP zoning map with old 2002 ALUP safety zones C - Project Proposal – 365 Prado Residential Mixed-Use Project, General Plan and MASP Amendment Initiation Request Page 574 of 596 !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!! 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!!!!!! !!!!!! !!!!!!business park - outdoor use only !!!!!!!! !!!!!!!! !!!!!!!! !!!!!!!!Greenspace Greenway High Density Residential Low Density Residential Medium Density Residential ##### ##### #####Medium Density Residential SF Medium High Density & Minor Commercial Neighborhood Commercial #### ####Neighborhood Commercial SF Open Space Open Space - Hills Open Space - Riparian rs rs rs rsrsrsrsrs Neighborhood Park Streets Y Y Y Y Y Y Y YSports Fields Special Use street_medians . trails Ac a c i a Cre e k 1:8,500 Airport Safety Zone 2 3 4 6 Page 575 of 596 Page 576 of 596 !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! 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!!!!!! !!!!!! !!!!!!business park - outdoor use only !!!!!!!! !!!!!!!! !!!!!!!! !!!!!!!!Greenspace Greenway High Density Residential Low Density Residential Medium Density Residential ##### ##### #####Medium Density Residential SF Medium High Density & Minor Commercial Neighborhood Commercial #### ####Neighborhood Commercial SF Open Space Open Space - Hills Open Space - Riparian rs rs rs rsrsrsrsrs Neighborhood Park Streets Y Y Y Y Y Y Y YSports Fields Special Use street_medians . trails Ac a c i a Cre e k 1:8,500 Old ALUP Zones Safety Area S-1a Safety Area S-1b Safety Area S-1c Safety Area S-2 Page 577 of 596 Page 578 of 596 Page 579 of 596 365 Prado Development Team Project Developer Covelop San Luis Obispo, California Planning and Management Peck Planning and Development, LLC Morro Bay, California Architecture Opticos Architects Berkeley, California Civil Engineering Noise and Acoustics Survey Legal/Land Use/CEQA Above Grade San Luis Obispo, California dB45 San Luis Obispo, California Above Grade San Luis Obispo, California Monchamp Meldrum LLP Sacramento, California Page 580 of 596 December 22, 2023 Rachel Cohen, Senior Planner City of San Luis Obispo Community Development Department 919 Palm Street San Luis Obispo, CA 93401-3218 Dear Rachel: Thank you for your assistance in moving the 365 Prado Project forward. On behalf of Covelop, atached is the requested informa�on to ini�ate the General Plan Amendment and the MASP Specific Plan amendments to facilitate the project. The project has benefited from staff comments, and from the input from the neigh- borhood. With regard to the jus�fica�on for the ini�a�on, the atached narra�ve and graphics provide the necessary analysis and support. In summary and rela�ve to the requirements of City Municipal Code Sec�on 17.130.020: Proposed Amendment. The project would involve the change in the current BP zoning to CS to accom- modate the residen�al and commercial components. The CS zone would apply in ALUP Zones 2 and 6, with the later airport compa�bility zone permi�ng residen�al development. Residen�al development is not per- mited in ALUP Zone 2 and none is proposed by this project. The project would include a 1.2-acre developer constructed and HOA maintained park to address the un-met need for a neighborhood park for the project, Serra Meadows and Toscana neighborhoods. Required General Plan, Zoning and MASP changes are detailed in the atached star�ng at Page 13. Beter Reflec�on of Community Desires. Housing is s�ll a high priority for the community and the pro- ject provides housing types that are not currently being provided. The project includes “Missing Middle” housing, in a greenfield development context, and directly implements Housing Element Policy 5.3 and Pro- gram 5.4 of which direct the City to “Encourage the development of a variety of “missing middle” housing types” and to “Evaluate and implement “missing middle” housing types (e.g., duplex, quadplex, cotages, etc.) to increase housing op�ons in the City within three years of adop�ng the Housing Element”. The pro- ject land uses are preferred by the neighborhood, based on two community mee�ngs on the proposal. The preference for dele�ng or significantly reducing the exis�ng office/RD designa�on was confirmed at these mee�ngs, with 23 of 24 atendees expressing a preference for the proposed project over exis�ng zoning. Fis- cal sustainability is a Major Community Goal, and the analysis in the atached narra�ve determined that the project would generate $12.7 million in City impact fees, compared to $7.1 million in impact fees with the current zoning, and without any new obliga�ons associated with those impact fees. The project would gen- erate $157.1 million in assessed value compared to $100 million under exis�ng zoning, and would generate $298,900 in annual revenue to the City, compared to $174,500 under the exis�ng zoning (if it ever fully builds out). The project would generate $1.6 million in addi�onal parks impact fees. Page 581 of 596 Re-Evalua�on of Community Needs. Housing is s�ll a Major City Goal and an economic and social need. There is no demonstrable need for the kind of development that could occur with the current zoning based on buildout projec�ons in the 2014 Land Use and Circula�on Element (LUCE) update. According to Table 2 in the atached narra�ve there is a demand for approximately 700,000 square feet of office/RD space in the community over the next ten years. According to Table 2.4-3 of the LUCE Dra� EIR, there is capacity for 450,800 square feet of office space on poten�al development sites, 1,386,200 square feet of office space in previously approved specific plans, and an addi�onal 25,900 square feet of space of previously approved projects, for a total of 1,872,900 square feet of office/RD space to meet the approximate 700,000 square feet of demand over the next ten years. The current zoning on the property was driven by the land use re- stric�ons in the 2005 Airport Land Use Plan, which has since been amended to allow residen�al uses on the property. Land Use Element Policy 8.1.3 provides that “The City shall consider this area [MASP] as poten- �ally appropriate to accommodate addi�onal housing. Revisions to the Margarita Area Specific Plan will be required if residen�al development in excess of that accommodated in the plan is proposed.” The proposed amendment implements LUCE Policy 8.1.3. Effect on Adjacent Areas. The project complements the residen�al development to the north by provid- ing needed park facili�es. The project site also shares storm drainage resources with adjacent proper�es and those will not be affected by the proposal. The project design has also been developed in considera�on of planned or exis�ng land uses. Reinforce Exis�ng Policies. The project directly implements a number of General Plan policies. First, it directly implements Housing Element Policy 5.3 and Program 5.4 of which direct the City to “Encourage the development of a variety of “missing middle” housing types” and to “Evaluate and implement “missing mid- dle” housing types (e.g., duplex, quadplex, cotages, etc.) to increase housing op�ons in the City within three years of adop�ng the Housing Element”. Second, it directly addresses a park facility services gap iden�fied in Figure 4-2 of the Parks and Recrea�on Element, and implements Parks and Recrea�on Policies 1.3 and 1.7 rela�ng to addressing such gaps. Third, the project addresses the Fiscal Sustainability Major City Goal by genera�ng addi�onal fiscal resources without genera�ng new fiscal obliga�ons In total, the project would generate $298,900 in annual revenue to the City, compared to $174,500 under the exis�ng zoning if it ever fully builds out. Fourth, the project would immediately create $3.7 million in water impact fees, $3.5 million in wastewater impact fees, $3.4 million in traffic fees, $1.6 million in park fees, and $407,000 in Public Safety Impact fees, without the need for significant infrastructure improvements. Overall, the project will generate $12.7 million in City impact fees, compared to $7.1 million in impact fees with the current zoning (if or when such development ever occurs). Fi�h, the project would provide addi�onal housing in an area adequately served by city u�li�es, without reducing commercial building area below City needs. Finally, since the pro- ject is providing predominantly housing rather than jobs, it will serve to beter balance jobs and housing in the community and likely result in a long term reduc�on in VMT in the county. Sincerely, Stephen J. Peck, AICP Page 582 of 596 Application to Initiate Amendments: General Plan Map & Margarita Area Specific Plan Map and Text 365 Prado Road APPLICANT: Covelop, Inc. REPRESENTATIVE: Stephen Peck, AICP ADDRESS: 365 Prado Road EXISTING LAND USE/ZONING: MASP Business Park PROPOSED LAND USE/ZONING: MASP CS; CS Mixed Use ; MASP Text Changes Summary A project is proposed at 365 Prado Road that will provide for a mix of residential and commercial uses that address City Coun- cil priorities for the development of work- force and “missing middle” housing in the community. “Missing Middle Housing is a range of house- scale buildings with multiple units –compati- ble in scale and form with detached single- family homes—located in a walkable neigh- borhood” (https://missingmiddlehousing.com). The term applies to such housing in an infill context on individual lots or small parcels, and to larger “greenfield” development, which is the missing middle housing type we are proposing. Opticos Design, which coined the term “missing middle,” developed the definition, and “wrote the book” on missing middle housing, has designed many greenfield missing mid- dle developments, including Prairie Queen in Pavilion, NE; Mew homes in South Jordan, UT; and Cul de Sac Tempe in Tempe, AZ. We envision our project being a fusion of the above projects, drawing the best attributes of each, while addressing the needs of the surrounding community and constraints/opportu- nities of the site. We hope it will be the demonstration project that the City has identified in the Housing Element and their Major City Goals to “…evaluate and implement “missing middle” housing types (e.g., duplex, quadplex, cottages, etc.) to increase housing options….” The proposed project would include 224 dwelling units and approximately 30,000-60,000 square feet of commercial uses consistent with the CS zone. Overall, the project would have 246 Density Units, approximately 21 density units per acre for the CS-Zoned area of the site that is eligible for residential development under the 2021 Airport Land Use Plan (ALUP). For sale single-family attached and de- tached units will have a mix of one-bedroom, two-bedroom and three-bedroom units ranging in size from 630 square feet up to 2,002 square feet with an average dwelling unit size of less than 1,300 square feet, approximately 20 percent lower than the typical offerings in the San Luis Obispo residential Page 583 of 596 365 Prado Road 2 of 14 GP and MASP Amendment Initiation November 2023 market. The project will follow Traditional Neighborhood Development (TND) guidelines, meaning that it would be designed as an integrated whole, with everything having a rhyme and reason. The project checks a lot of the city’s “boxes” as follows: 1. It directly implements Housing Element Policy 5.3 and Program 5.4 which direct the City to “En- courage the development of a variety of “missing middle” housing types” and to “Evaluate and implement “missing middle” housing types (e.g., duplex, quadplex, cottages, etc.) to increase housing options in the City within three years of adopting the Housing Element”. The project will demonstrate how Missing Middle development can be applied on a larger scale for “greenfield” projects as opposed to a more limited infill scale. 2. It implements City Parks and Recreation Element policies to urge the development of parks in neighborhoods without parks, either through access improvements or by the construction of new parks. 3. The Financial Plan which mentions “initiating a missing middle housing program” where existing infrastructure can support additional infill and intensification and promote complete neighbor- hood by including more diversity in housing options of all types. 4. Housing Element Policy 6.2 that provides priority for low income housing. Elected officials, City staff and the residents of the Serra Meadows and Toscana neighborhoods have been consulted about the advisability of moving forward with the project. All of these meetings have been met with enthusiasm and support. Implementation of the project will require certain amendments to the General Plan and Marga- rita Area Specific Plan (MASP) as specified herein. The General Plan and Zoning will be amended to show C-S land uses, and the MASP will require amendments to the text, maps and graphics as described herein. We request that the City authorize the necessary MASP and General Plan amendments to move the project forward. These changes are warranted and desirable because: 1. The proposed housing types are a high priority for the City and doing the amendment now will reduce the timeframe for development and construction by several years. 2. Direct costs of development for the project will be lower and more households will qualify. 3. There is also no demonstrable need for the office space and industrial space associated with the current zoning of the property. According to the LUCE EIR, the City currently has approximately 1.9 million square feet of available office/RD building capacity against a ten-year demand of ap- proximately 700,000 square feet communitywide. The site would reduce that potential by less than 15 percent to 1.65 million square feet. 4. Parks and Recreation Policies 1.3 and 1.7 direct that gaps in park service areas be remedied. Page 584 of 596 365 Prado Road 3 of 14 GP and MASP Amendment Initiation November 2023 5. The project generates $12.7 million in City impact fees, compared to $7.1 million in impact fees with the current zoning, and without any new obligations associated with those impact fees. The project would generate $157.1 million in assessed value compared to $100 million under existing zoning and would generate $298,900 in annual revenue to the City, compared to $174,500 under the existing zoning (if it ever fully builds out). In sum, allowing the project by initiating and approving the requested MASP and General Plan amendments would reduce housing costs and be economically positive to the City for both one-time im- pact fees and ongoing revenue. There does not appear to be a compelling reason to not initiate the amendment. Introduction A project is proposed at 365 Prado Road that will provide for a mix of residential and commer- cial uses that address City Council priorities for the development of workforce housing in the commu- nity. It is being positioned to address housing and employment needs in the community through a com- bination of design excellence, value-added features, location, design, and a range of housing types and sizes that are not being met in the community. Proposed by Covelop Holdings of San Luis Obispo, it is located at the southeast corner of Prado Road and Davis/Serra Meadows Drive. (See Figure 1.) The pro- ject involves the change in general plan designation, rezoning and an amendment to the Margarita Area Specific Plan from BP to CS for 16.4 acres of the project. There will be a1.2- acre HOA-maintained park intended to be open to the public. As currently planned, the proposed project would be a “mixed use” project within the meaning of Table 1 of the Land Use and Circulation Element, and Table 2-1 and Section 17.70.130 of the Zoning Ordinance. The project includes approximately 159 attached and detached single family homes at a density of 20.5 density units to the acre: 65 for-rent apartments units and approximately 30,000-60,000 square feet of mini storage/office/RD space. A 1.2-acre park is proposed to fill the current geographic and timing gap to provide adequate park facilities for the Serra Meadows and Toscana neighborhoods. Those neighborhoods are deficient in park area and are currently dependent solely on the development of the MASP neighborhood park on the Garcia property, which has a low likelihood of developing over the next 20 years. The project would add needed park facilities and provide an alternate means of meet- ing such needs as provided in Parks and Recreation Policies 1.3 and 1.7. The project would provide a park in a park access gap identified in Figure 4-2 of the Parks and Recreation Element. Because of the design of the project and potential to meeting neighborhood park facility needs, the project is strongly supported by the existing neighborhood who were consulted about the project during two neighbor- hood workshops. The project will follow guidelines for Traditional Neighborhood Development (TND), meaning that it would be designed as an integrated whole, with everything having a rhyme and reason. Care is taken with details such as the height of the porches from the ground, the connectivity of homes with amenities, open spaces and other housing product types. Each neighborhood is walkable and clustered around common open space, yards, and a recreation center with a community building. No residential unit is ever more than 500 feet from a park or trail, with a variety of housing options fronting parks, Page 585 of 596 365 Prado Road 4 of 14 GP and MASP Amendment Initiation November 2023 walking paths, and streets. The development also ensures compatibility with the existing neighborhood through consistent building massing and gentle density transitions. The project will also emphasize “Missing Middle” housing types. The term "missing middle" is meant to describe housing types that were common in the pre-WWII United States such as duplexes, rowhouses, and courtyard apartments but are now less common and, therefore, "missing". Rather than focusing on the number of units in a structure, missing middle housing emphasizes scale and heights that are appropriate for single-family neighborhoods or transitional neighborhoods, but at densities that have been more typical of multi-family stacked flat developments. This approach allows the introduc- tion of smaller floor plans, but with the massing and building arrangement that are more typical of sin- gle family detached developments. Missing middle units are characterized as being within a walkable context, smaller footprint unit sizes, lower perceived density, high design and detailing, less parking de- mand and supply because they are placed in walkable neighborhoods. They are also affordable by de- sign because they rely on simple Type V construction, so that there are not the typical tradeoffs of higher density resulting in higher per-square foot costs. Missing middle housing has been used as an infill strategy to achieve higher densities in low density zoned areas while still preserving existing building massing and single family street scenes pat- terns, as well as larger scale projects that provide an integrated eclectic mix of housing types. Accord- ingly, Missing Middle housing is highly sought after by millennials and empty nester baby boomers, the two biggest elements of the local residential development market. Various studies are underway for the project, including a biological reconnaissance study, wet- land delineation, geotechnical study, noise study, traffic study (including capacity and lane configuration studies for Prado Road and Higuera), and others to satisfy City requirements. It is expected that the en- vironmental effects of the projects, and necessary mitigations, will be covered in an environmental im- pact report (EIR). Page 586 of 596 365 Prado Road 5 of 14 GP and MASP Amendment Initiation November 2023 Figure 1 Site Location and Vicinity Page 587 of 596 365 Prado Road 6 of 14 GP and MASP Amendment Initiation November 2023 Mixed Use/Common Interest Subdivision The City’s General Plan and Zoning Ordinance require that any residential development in the CS zone be “mixed use”, and Section 17.70.130 establishes guidelines for such developments. Develop- ments can be master planned and entitled as a single project, and there can be subsequent lot splits and parcelization if the parcels are subject to the necessary entitlements and maintenance and management documents to ensure ongoing operation of the project as a mixed use development. Each individual small lot or large conveyance lot in our project will not be “mixed use” and the project will use the provi- sion of Section 16.17.020 for common interest subdivisions that provide for compliance of “…property development standards such as lot coverage and density are determined by using the exterior bounda- ries of the property and where standards apply to the project as a whole instead of requiring conform- ance with all property development standards on each of the proposed parcels/units in the subdivision. These types of subdivisions can rely on shared ownerships as is the case with subdivisions with common interests (i.e., condominiums) or may also rely solely on or in part with easements for common areas such as recreation facilities, open space, parking, driveways, etc.” The park and drainage basin/infra- structure will be common ownership elements. Within our project, small lot tract maps and larger lot conveyance maps will be subject to a Homeowner’s Association, one or more Property Owner’s Associa- tions (for commercial or multifamily rental parcels), and Joint Management and Maintenance Agree- ments. It is anticipated that the project will request a concession of the ground floor use limitations in Zoning Ordinance Section 17.70.130 D. 1 relating to requirements for the minimum amount of ground floor commercial as part of its Density Bonus application, but the project will comply in all other materi- als ways with the mixed use requirements of the CS Zone. Additionally, the project will request waivers of development standards to accommodate the proposed project including setback and lot size require- ments as allowed through California Density Bonus Law. Project Data and Design The project plans in Attachment 1 show a mixture of single family attached and single family de- tached units ranging in size from 630 square feet to 2,002 square feet. The different unit types will be designed and constructed in clusters rather than in homogenous pods as is typical of product-seg- mented neighborhoods. The various unit types will be connected and organized through a central walk- way in the “Mews” portion of the project that will originate at Prado Road and Davis Street and termi- nate at the park. There is a total of 224 dwelling units, with 159 of those as single family attached and detached units which are intended for sale. The project also includes 65 for-rent apartments, ranging in size from 480 square feet to 1,000 square feet. The total density of the project is 246.26 density units, or 21.8 density units per acre. Total permitted density is 270.7 density units per acre. Table 1 shows the summary of the land uses and the development. (See Figure 2, Land Use Plan, and Figure 3, Site Plan.) Page 588 of 596 365 Prado Road 7 of 14 GP and MASP Amendment Initiation November 2023 Table 1 Land Use and Development Summary The project proposes to construct approximately up to 60,000 square feet of commercial space (potentially mini storage or light industrial uses) in the area of the site in ALUP Zone 2 that does not per- mit residential development. Under the current zoning designation for 19.5 acres of Business Park, the project would accommodate 277,500 SF of office/RD space. Based on the projected demand for of- fice/RD space in the community as itemized in Table 2 below, it is unlikely that level of development will ever occur. According to Table 2 below, there is a demand for approximately 700,000 square feet of of- fice/RD space in the community over the next ten years. According to Table 2.4-3 of the LUCE Draft EIR, there is capacity for 450,800 square feet of office space on potential development sites, 1,386,200 square feet of office space in previously approved specific plans, and an additional 25,900 square feet of space of previously approved projects, for a total of 1,872,900 square feet of office/RD space to meet the approximate 700,000 square feet of demand over the next ten years. And there is currently 400,000 square feet of vacant building space on the market, not including office space conversions that are pos- sible in the downtown, and not including major pending projects like The Link along Tank Farm Road. If the project captures as much as 20% of total unmet demand project to occur over the next 10 years, only 40,000 to 60,000 square feet of office/RD space could reasonably be expected to occur over that time frame. Even if all of the current BP property in the MASP that is now eligible for residential devel- opment was so converted, it would result in a reduction of office/RD development capacity of the com- munity 600,000 square feet to 1,272,900 square feet of office/RD, which is four times the need over the next ten years that is not being addressed by existing vacant buildings. Data Total Sale Rent C-S Parks Streets Net Site Area 19.35 9.52 1.76 3.87 1.15 3.05 Units 224 159 65 - Studio 16 - 16 - 1BR 36 20 16 - 2BR 87 54 33 - 3BR 85 85 - - Density Units 246.26 194.70 51.56 - Density Units/Acre 21.83 20.45 29.30 Doors/Acre 19.86 16.70 36.93 FAR 53.2% 66.6% 35.6% Total Building Area 331,498 220,418 51,080 60,000 - Garage Area 16,160 16,160 - - Floor Area 315,338 204,258 51,080 60,000 - Page 589 of 596 365 Prado Road 8 of 14 GP and MASP Amendment Initiation November 2023 Table 2 Commercial Space Needs Projection The preference for deleting or significantly reducing the existing office/RD designation was con- firmed at a neighborhood meeting. Of the 24 neighbors in attendance, 23 expressed a preference for the proposed project over existing zoning. The conclusions drawn from the above analysis and the com- munity meetings is that the current office/RD designation is not needed to support employment growth in the community and is not supported by the community. Keeping the existing BP designation will only perpetuate the bloated inventory of vacant office/RD land that was created from the 2005 ALUP con- straints. Early in the project during two community meetings and design charettes, there was a need ex- pressed for a public park. Under the MASP, the parks for the neighborhood were to be provided in a central neighborhood park on the Garcia property located to the east of the current terminus of Prado Road. The Garcia property has a low likelihood of developing over the next 20 years. The Parks and Rec- reation Element identifies a park “gap” identified in Figure 4-2 of the Parks and Recreation Element. The project would add a 1.1-acre park. Figure 4 shows the open space and park proposed for the project. The project has ready access to sewer, water, storm drainage and roads. The site has drainage rights to the Serra Meadows basin, and sewer, water and storm drainage connections are available at the side of the Davis Road/Prado Road intersection. Road frontage improvements will be required, but no offsite improvements are needed. Industry Title Base Year Employment Estimate 2018[2][3] Projected Year Employment Estimate 2028 Numeric Change 2018-2028 SF per Employee Occupied Building Space Demand Vacancy Factor Total Building Demand Industrial Office/RD Hospitality Wholesale Trade 2,700 2,800 100 - - - - - - Information 1,300 1,600 300 250 75,000 3,750 78,750 78,750 Finance and Insurance 2,300 2,300 - 250 - - - - - - Real Estate and Rental and Leasing 1,600 1,800 200 250 50,000 2,500 52,500 52,500 Accommodation and Food Services 17,600 20,300 2,700 250 675,000 33,750 708,750 708,750 Other Services (excludes 814-Private Household Workers)4,000 4,400 400 250 100,000 5,000 105,000 105,000 Mining, Logging, and Construction 7,900 8,800 900 1000 900,000 45,000 945,000 945,000 Trade, Transportation, and Utilities 20,900 21,600 700 500 350,000 17,500 367,500 367,500 Transportation, Warehousing, and Utilities 3,900 4,500 600 500 300,000 15,000 315,000 315,000 Nondurable Goods Manufacturing 4,500 5,300 800 500 400,000 20,000 420,000 420,000 Manufacturing 7,700 8,800 1,100 500 550,000 27,500 577,500 577,500 Durable Goods Manufacturing 3,200 3,500 300 500 150,000 7,500 157,500 157,500 Retail Trade 14,300 14,300 - 300 - - - - - - Financial Activities 3,900 4,100 200 300 60,000 3,000 63,000 63,000 Professional and Business Services 10,800 11,600 800 300 240,000 12,000 252,000 252,000 Educational Services (Private), Health Care, and Social Assistance 17,700 21,300 3,600 300 1,080,000 54,000 1,134,000 1,134,000 Local Government 13,100 13,300 200 300 60,000 3,000 63,000 63,000 State Government 10,800 10,700 (100) 300 (30,000) (1,500) (31,500) (31,500) Self Employment[4]8,800 9,500 700 450 315,000 15,750 330,750 330,750 Total Farm 5,200 6,500 1,300 - - - - - - Private Household Workers[5]200 200 - 0 - - - - - - Total MSA 162,400 177,200 14,800 5,275,000 263,750 5,538,750 2,782,500 2,047,500 708,750 SLO City Capture @ 35%9.11%- - 1,938,563 973,875 716,625 248,063 2018-2028 Industry Employment Projections San Luis Obispo-Paso Robles-Arroyo Grande Metropolitan Statistical Area (San Luis Obispo County) Page 590 of 596 365 Prado Road 9 of 14 GP and MASP Amendment Initiation November 2023 Figure 2 Proposed Land Use and Zoning Plan Page 591 of 596 365 Prado Road 10 of 14 GP and MASP Amendment Initiation November 2023 Figure 3 Building Types Site Plan Page 592 of 596 365 Prado Road 11 of 14 GP and MASP Amendment Initiation November 2023 Figure 4 Open Space and Parks Page 593 of 596 365 Prado Road 12 of 14 GP and MASP Amendment Initiation November 2023 Entitlement and Land Use Regulations The current zoning on the property, and in fact in the entire MASP, was driven by the land use restrictions in the 2005 Airport Land Use Plan that generally prohibited residential land uses south of Prado Road, and substantially reduced the allowed number or residential units in the remainder of the specific plan area. The County completed an update to the ALUP in 2021 and residential land uses are now permitted on 12.5 acres of the project site’s 19.4 acres under the new ALUP. The LUCE has not been amended since its original adoption in 2014 to address this new information and the modified re- striction, but Land Use Element Policy 8.1.3 provides that “The City shall consider this area [MASP] as potentially appropriate to accommodate additional housing. Revisions to the Margarita Area Specific Plan will be required if residential development in excess of that accommodated in the plan is proposed.” The City has begun scoping the required studies and processes for an update to the MASP. That amend- ment will start with technical studies, followed by environmental review and will conclude with modifi- cation of the General Plan and Specific Plan. A likely timeframe for completion is three to five years. The city’s efforts in the larger amendment will be primarily focused on the evaluation and development of environmental and planning documents for the 160-acre Garcia property in the eastern portion of the MASP, which are somewhat unrelated to the subject property. There are no improvements that need to be installed or key questions answered related to the MASP that are necessary to move forward with the subject project and waiting for the MASP to be completed before starting on this project will only delay implementation by 5-7 years. Proceeding with this project will not compromise the other effort and has the following advantages: 1. Since there is no obvious demonstrated need for the office/RD space that would be eliminated from this site, there is no real need to look at this in a global context. The City is oversupplied with office/RD land. The project site has been vacant with the current land use designation for the past 20 years and it is unlikely that it will develop in the future as currently zoned. 2. The project is proposing a housing type that is not currently being provided in the marketplace and provides housing at a smaller size and lower price point. The City has placed a high priority on “missing middle” housing and this project delivers the first project in a greenfield context. 3. The project will qualify for a density bonus by providing 5% very low density units (either for sale or for rent). Excluding the future public roads and the areas within Zone 6 of the ALUP, the site is 11.26 acres yielding a maximum residential density of 270.24 units. We are proposing 14 den- sity units as deed restricted to qualifying very low incomes. 4. The project requires little new infrastructure. The housing would come without any significant city obligations for infrastructure or infrastructure reimbursement. Despite little need for new infrastructure, the project would immediately create $3.7 million in water impact fees, $3.5 mil- lion in wastewater impact fees, $3.4 million in traffic fees, $1.6 million in park fees, and $407,000 in Public Safety Impact fees. Overall, the project will generate $12.7 million in City im- pact fees, compared to $7.1 million in impact fees with the current zoning (if or when such de- velopment ever occurs). Page 594 of 596 365 Prado Road 13 of 14 GP and MASP Amendment Initiation November 2023 5. The project would provide a much-needed park. The need has been identified for a park at this specific site in the Recreation and Parks Element and is a high priority of the residents in the area. The residents want something like this sooner than later. 6. The project has been reviewed by the affected neighbors and elected officials without any real objections raised. 7. This land use/zone change is supported by LUCE Policy 8.1.3, as well as MASP policies to sup- port mixed use developments; Parks and Recreation Policies 1.3 and 1.7 relating to addressing gaps in park access identified in Figure 4-2 of the Parks and Recreation Element; and, the 2020 Housing Element Policy 5.3 and Program 5.4 of which direct the City to “Encourage the develop- ment of a variety of “missing middle” housing types” and to “Evaluate and implement “missing middle” housing types (e.g., duplex, quadplex, cottages, etc.) to increase housing options in the City within three years of adopting the Housing Element”. Starting this project now helps the City meet the deadline for evaluating and encouraging missile middle housing. 8. The project would generate $157.1 million in assessed value compared to $100 million under existing zoning. While the city does not participate in the base property taxes, the proposed project would generate $84,000 per year in State Property Taxes In Lieu compared to $59,300 with the existing zoning. Further, the project would generate $110,000 per year in local sales taxes (share of Bradley-Burns plus local measure), whereas the office/RD uses would generate no sales taxes. In total, the project would generate $298,900 in annual revenue to the City, compared to $174,500 under the existing zoning if it ever fully builds out. Page 595 of 596 365 Prado Road 14 of 14 GP and MASP Amendment Initiation November 2023 Required General Plan and Zoning Changes 1. Change the land use designation for the property to CS, CS-Mixed Use, and PF as represented in Figure 2. Required MASP Changes In addition to the LUCE land use and zoning changes, there are a number of changes that are necessary to the MASP, as follows: 1. Figure 5—Residential Development Areas to be amended to include project site. Change name to “Potential Residential Development Areas”. 2. Delete the reference to “dwellings” being prohibited in Section 2.6.1 D. 3. Review and modify FAR limitations as necessary. 4. Amend Figures 10 and 11 to reflect revised ALUP safety zones. Delete references to unit limi- tations within the various subareas of the MASP and instead refer to unit limitations and de- velopment requirements in the ALUP. (The City recently amended Section 17.70.020 of the Zoning Ordinance to require that “All projects including but not limited to renovation, remod- eling, new construction, or granting of any permits for land uses or other activities, shall be consistent with the height, use, noise, safety, and density criteria of the Amended and Re- stated San Luis Obispo County Regional Airport (SBP) Airport Land Use Plan (ALUP).” This change would bring the MASP into conformance with the Zoning that is applicable to the rest of the City. 5. Figure 12—Circulation Plan is inconsistent with General Plan Circulation Figure 1—Streets Classification Diagram. The latter shows an E-W “Proposed Local Street” on the southern one- third of the property paralleling Prado Road. MASP Figure 12 and the development plan will need to be modified to be consistent with the General Plan Circulation Element. 6. Delete Table 13 and Figure 23 relating to phasing of improvements. It essentially requires completion of Prado Road to Broad Street before development on the site is permitted. Modify land use tables to reflect the addition of residential units to General BP land use category. Other Needed Entitlements 1. Concession of ground floor commercial requirement and waivers of development standards (setbacks, lot size, etc.) as part of the density bonus application. 2. Adjustment to parking and setback requirements through the MASP amendment, or density bonus program. 3. Vesting Subdivision Map, plus large lot conveyance map. Page 596 of 596 1 INITIATION OF GENERAL PLAN AND SPECIFIC PLAN AMENDMENTS TO CHANGE BUSINESS PARK ZONING TO SERVICE COMMERCIAL ZONING AND ALLOW MIXED-USE DEVELOPMENT AT 365 PRADO ROAD LOCATED WITHIN THE MARGARITA AREA SPECIFIC PLAN 2 Recommendation Provide direction to staff on whether to proceed with processing the General Plan and Specific Plan amendments to change BP zoning to C-S zoning and allow mixed-use development at 365 Prado Road. 3 Policy Context Why is this coming to City Council? •Amendments to the General Plan require orderly processing. •General Plan element may be amended no more than four times per year. •Municipal Code specifies that the Council may initiate General Plan amendments at any time. •On November 15, 2023, the City received an application for a project at 365 Prado Road that requires General Plan and Specific Plan amendments. 4 Background •The Margarita Area Specific Plan (MASP) was adopted in 2004 to provide open space and housing with supporting services and infrastructure. •The MASP was subject to the 2002 Airport Land Use Plan (ALUP) that included safety subareas that limited residential and non-residential density based on potential aviation hazards. •In 2021, the County of San Luis Obispo amended the 2002 ALUP that changed the size and shape of the safety subareas around the airport. •Now several areas of the MASP are either available for residential development (where not allowed before) or available for higher density residential development. 5 2023-25 Financial Plan MASP Update •Council identified the task to update the MASP to increase density on existing residentially zoned land and consider allowing mixed-use development on commercially zoned land. •Staff has moved forward with this MCG task and an RFP has been included as a consent item as a part of tonight’s Council Agenda. •The RFP would allow a consultant to assist with the initiation and completion of the proposed amendments to the MASP starting in June 2024. •The applicant, through this initiation, is requesting to move forward on the rezoning of 365 Prado Road independent of the City’s update of the MASP. 6 Project Description Location 365 Prado Road Parcel Size 19.35 acres General Plan Business Park Zoning Business Park (BP) Site Condition Vacant, relatively flat Surrounding Uses North: Residential South: County (Chevron Property) East: Mini Storage / RV storage / Kennel West : Entitled Business Park Project 7 Project Description 1.Amend the MASP and the General Plan Land Use Map to change 365 Prado Road from Business Park (BP) zoning to Service Commercial (C-S) zoning and allow mixed-use development. 2.Along with the amendments, the applicant is proposing a mixed-use, common interest subdivision development. 8 Project Description 1.The Development would include: a.224 residential units, b.Approximately 30,000-60,000 square feet of commercial space, and c.A 1.2 -acre HOA managed and maintained park. 2.Residential units would be a mix of attached and detached units with one-bedroom, two-bedroom and three-bedroom configurations, ranging in size from 630 square feet up to 2,002 square feet. 3.The project would provide a limited number of deed-restricted, BMR affordable housing units in conjunction with a density bonus. 9 2023-25 Major City Goal: Housing and Homelessness •The 2023-25 Financial Plan includes efforts to support housing development including a task to update the MASP for more housing. •The MASP update provides an opportunity to create additional residential capacity ahead of the 7th Cycle Housing Element, which is expected in 2026. •The City has sufficient inventory of zoned land to accomplish build-out as planned by the Land Use Element and the 6th Cycle Housing Element. •The applicant is requesting to move forward independent of the City’s MASP update and introduce a new land use to 365 Prado that currently does not exist in the MASP. 10 Regional Housing Needs Allocation •The City has been allotted 3,354 residential units as part of the 2020 Housing Element. •The City has met 54% of the total RHNA for the 2020-2028 6th Cycle Housing Element period. •The City has issued permits for Above Moderate dwelling units in excess of its requirement (Above Moderate RHNA target is 1,406 and 2,143 have been completed). •More progress is needed in the BMR income categories (RHNA target 1,948; completed 407). •The proposed project does not specify the total number of BMR units it will provide, however the project proposes to include a density bonus. 11 General Plan Goals, Policies and Programs •In response to Housing Element Policy 5.3 and Housing Element Program 5.4, the project includes: •Different unit types designed and constructed in clusters rather than units that are all the same. •Units are connected and organized through a central walkway. •159 for-sale single family attached and detached units and 65 for-rent apartments •In response to Land Use Element Policy 8.1.3, the project is proposing amendments to the MASP to allow mixed-use development on property that currently does not allow such development. 12 Airport Land Use Plan (ALUP) 13 Impacts on Adjacent Areas and Shared Resources •Impacts of the proposed project on adjacent parcels and resources would be analyzed in detail as part of the project. •Analysis of the proposed amendments would be focused on 365 Prado and would not include a comprehensive review of the entire MASP. 14 Fiscal Impact 1.There will be no net fiscal impact related to initiating the proposed project. 2.If directed to proceed, the applicant will be required to fund the review and processing of the proposed amendments and associated analysis. 15 Environmental Review •The California Environmental Quality Act does not apply to an initiation because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. •If the project moves forward, the project would be subject to the appropriate environmental review as required per the California Environmental Quality Act (CEQA) for the proposed amendments. 16 Next Steps Staff is requesting that Council provide direction to staff and the applicant regarding next steps based on the following menu of actions: 1.Direct staff to initiate and move forward with the proposed amendments to the MASP and associated development plan for 365 Prado as described in the applicant’s project proposal. 2.Direct staff to move forward with the proposed amendments and associated development plan but with direction to staff and the applicant on Council’s desired revisions to the development plan. 3.Direct staff to not move forward with the proposed project. 365 Prado, along with the other Business Park zoned parcels along Prado Road, will be considered for additional housing options as part of the City’s MASP update. 17 Recommendation Provide direction to staff on whether to proceed with processing the General Plan and Specific Plan amendments to change Business Park (BP) zoning to Service Commercial (C-S) zoning and allow mixed-use development at 365 Prado Road. 365 Prado Rd. A Traditional Neighborhood Development Missing Middle Housing is a range of house-scale buildings with multiple units —compatible in scale and form with detached single-family homes —located in a walkable neighborhood. Reasons for Independent Review Deliver project sooner, (Avoid as many years of 5%-7% home price escalation as possible) Project’s Major Development, Subdivision, and Env. Review could not START until the MASP Update is COMPLETE Increases the chance that a more neighborhood compatible mixed-use residential development gets built rather than a strictly commercial development mandated by current zoning Limits cost escalations The MASP update is of the scale of San Luis Ranch, which may result in controversy Serve as example of what a successful Missing Middle development looks like Covelop to pay for special additional staff needed to support and review the project –pre-application review already complete The Existing Affordability Gap Meets an important and underserved segment of the market Does not rely on subsidies Provides more “gap” housing in the next 3 years Deed Restricted 3 Bedroom 3 Bedroom Condo (Missing Middle) 3 Bedroom Townhome (Missing Middle) Market Rate New 3 Bedroom SFR Sales Price $494,000 $585,000 $775,000 $968,000 % AMI 120%135%180%225% Current Neighbors Future Residents SITE PLAN & PROJECT BENEFITS