HomeMy WebLinkAboutItem 6c. Initiation of a General Plan Amendment, Specific Plan Amendment, and Modification to Development Agreement (San Luis Ranch Lot 7, 1675 Dalidio Dr., SPEC-0020-2024) Item 6c
Department: Community Development
Cost Center: 4008
For Agenda of: 12/10/2024
Placement: Public Hearing
Estimated Time: 60 minutes
FROM: Timmi Tway, Community Development Director
Prepared By: John Rickenbach, Contract Planner and Callie Taylor, Senior Planner
SUBJECT: CONSIDERATION OF INITIATION OF A GENERAL PLAN AMENDMENT,
SPECIFIC PLAN AMENDMENT, AND A MODIFICATION TO AN
EXISTING DEVELOPMENT AGREEMENT TO ACCOMMODATE AN
ADDITIONAL 276 RESIDENTIAL UNITS IN PLACE OF A PREVIOUSLY
APPROVED COMMERCIAL DEVELOPMENT
RECOMMENDATION
Direct the initiation of processing the request for a General Plan Amendment (GPA) and
Specific Plan Amendment (SPA) to accommodate an additional 276 residential units in
place of a previously-approved commercial development on Lot 7 of the San Luis Ranch
Specific Plan, and provide direction regarding the following issue areas to be addressed
in the project design and by amendment to the existing Development Agreement (DA): 1)
the number of deed-restricted affordable housing units; 2) the timing of construction of
the previously-required affordable housing component; 3) potential measures to address
ongoing fiscal impacts to the City; 4) the amount and design of tax-generating commercial
development; and 5) confirmation of the application of development fees associated with
the proposed development.
REPORT-IN-BRIEF
MI San Luis Ranch has submitted a request to amend the City’s General Plan and the
San Luis Ranch Specific Plan (SLRSP) to facilitate development of an additional 276
market rate residential units in-lieu of commercial development on Lot 7 adjacent to
Dalidio Drive. The proposed amendments would modify Lot 7 development to be primarily
residential, with an additional 276 market rate rental apartments and up to 15,000 square
feet of neighborhood commercial uses. The existing entitlements include 114,300 square
feet of commercial development on Lot 7. The original 2017 SLRSP included 150,000
square feet of commercial on Lot 7, which was decreased through an amendment in 2020.
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Item 6c
A Specific Plan Amendment for the SLRSP was previously approved in November 2020
to allow between 64-77 units of affordable housing to be consolidated on a 1.85-acre
portion of Lot 7. This affordable housing is required to fulfill the existing inclusionary
housing requirements of the San Luis Ranch Specific Plan and Development Agreement
and is expected to be constructed by People’s Self -Help Housing (PSHH). The affordable
housing portion of the Lot 7 site is proposed to remain with the current 2024 amendment.
When the existing affordable housing component on Lot 7 is combined with the proposed
additional 276 market rate units, the total development potential proposed by the
applicant on the 11.44-acre Lot 7 site is between 345 to 353 residential units and up to
15,000 square feet of commercial. This proposal would increase the overall residential
development within the SLRSP from the currently approved 654 units to a proposed 930
units. The applicant’s proposal would decrease the o verall commercial development
within the Specific Plan from the currently approved 145,536 square feet to a proposed
38,236 square feet. These totals include the existing 31,236 square feet of commercial
and agricultural processing structures at the Agricultural Heritage Center. The proposed
Lot 7 site plan is depicted in Figure 2 below and included as Attachment B.
Portion of
SLRSP
Current Lot 7 Entitlement:
Approved 2020
Proposed Lot 7
2024 Applicant Proposal
1.85-acre portion
of Lot 7
64-77 affordable units
69-77 affordable units
9.59-acre portion
of Lot 7
114,300 sq. ft. of commercial
development
276 market rate residential units; and,
Up to 15,000 sq. ft. of commercial
Total Lot 7
11.44-acres
64-77 residential units; and,
114,300 sq. ft. of commercial
development
345-353 residential units; and,
Up to 15,000 sq. ft. of commercial
Applicant
Representative
General Plan
Specific Plan,
Zoning
Site Area
Environmental
Status
MI San Luis Ranch, LLC
Rachel Kovesdi
Neighborhood Commercial
(NC); allows mixed
commercial, office, and
residential uses under the
SLRSP
11.44-acres
(Lot 7 of VTTM 3096)
To be determined;
document to tier from the
SLRSP Final EIR
Figure 1. San Luis Ranch Specific Plan Area
Lot 7 is NC parcel
at corner of Dalidio and Froom Ranch Way
Subject
Site
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Item 6c
The proposed amendments would have a substantial impact on the City’s fiscal revenues
as compared to full build-out of the previously approved project. The Lot 7 commercial
site was a key project component in the original 2017 SLR Specific Plan and was intended
to be a major tax generating revenue source for the City. The site was originally approved
for up to 150,000 square feet of commercial uses, as called for in the City’s General Plan
Special Focus Area (SP-2) and this commercial space and associated revenue was taken
into account when the City initially negotiated the Development Agreement. The site is
located across from the Madonna Plaza, adjacent to the future Prado Road/Highway 101
interchange. Fiscal impact calculations provided by the City’s consultant show that the
Lot 7 land use change from 114,300 square feet of commercial to 276 residential units
would create a net fiscal loss to the City of approximately $1 million annually. While the
proposed additional housing units would help fulfill the City’s goals for housing production,
fiscal impact to the City’s revenues and preservation of prime commercial sites should be
considered in conjunction with amendments to the City’s General Plan and SLR Specific
Plan.
If authorized by Council to proceed, the project would require a General Plan Amendment
(GPA), Specific Plan Amendment (SPA), modification s to the approved Development
Agreement and Affordable Housing Agreement, as well as a new Tentative Tract Map
and Development Plan. Environmental review under the California Environmental Quality
Act (CEQA) will be required, however, the appropriate approach to CEQA has not yet
Figure 2. Applicant’s 2024 Proposed Site Plan
1.85-acre
Affordable
Housing Site
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been determined. Because there would be General Plan and Specific Plan Amendments,
the project would be referred to the San Luis Obispo County Airport Land Use
Commission (ALUC) for its review to determine conformity with the adopted Airport Land
Use Plan (ALUP). If Council provides direction to move forward, staff will process the
applications through the standard steps required as described in this report. At the
December 10, 2024 initiation meeting, City staff is requesting input from Council regarding
issues areas identified in the recommendation, which may impact the proposed project
design and terms of a future modification to the Development Agreement.
POLICY CONTEXT
The proposed project is within the San Luis Ranch Specific Plan (SLRSP) and is therefore
subject to the requirements of that plan. The Specific Plan also functions as the zoning
code for the area in terms of land use, circulation, development standards, and residential
density. The Specific Plan itself derives its authority and direction from Section 8.1.4 of
the General Plan Land Use Element, which establishes the basic development and policy
parameters of the SLRSP.
The City Council approved the SLRSP and Vesting Tentative Tract Map (VTTM) 3096 in
July 2017, which formed the basis for various subsequent applications within the Specific
Plan area, including the one currently proposed. Council also subsequently approved a
Development Agreement, which is a contract between the developer and City, adopted
by ordinance, in which the City provides the developer with vested development rights in
exchange for the developer providing “extraordinary” public or “community” benefits that
exceed what would otherwise be required through CEQA mitigation or as conditions of
approval. That Development Agreement was in part based on fiscal and development
assumptions inherent in the originally approved Specific Plan.
Several entitlements for individual development projects have already been processed
under the existing policy framework of the SLRSP, and many of these projects are either
completed or under construction, including various housing developments, an Agricultural
Heritage Center, and a hotel. Backbone roadway an d other infrastructure to support those
developments are already in place within the Specific Plan area.
Amendments to the General Plan and Specific Plans require orderly processing
consistent with the overall goals of the City’s planning program and requ irements of
California State law. Municipal Code Section 17.130.020 specifies that if an application
to amend the General Plan is submitted, the Community Development Director shall have
the authority, prior to processing the application, to forward any such application to the
City Council for early policy consideration to allow Council to determine whether the
proposed amendment is consistent with overall policy direction in the General Plan.
Council may direct the Director to either process the application or reject the application
as inconsistent with overall General Plan policy direction. The current request for City
Council initiation of the application does not constitute approval of the request and would
only begin the required process for the proposed project amendments. The project will
also need to be referred to the San Luis Obispo County Airport Land Use Commission
(ALUC) for its review to determine conformity with the Airport Land Use Plan (ALUP).
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If Council authorizes the current application, City staff will formally evaluate the project’s
consistency with the existing policy framework in order to determine the nature and extent
of amendments to the General Plan, Specific Plan, and Development Agreement that
may be required. At the initiation meeting, Council may provide direction to staff and the
applicant regarding any project design or land use modifications that Council would like
to see incorporated into the project application and during project processing and design
development. Council direction regarding specific issue areas identified in the
recommendation is also requested by staff, including: 1) the number of deed-restricted
affordable housing units; 2) the timing of construction of the previously-required affordable
housing component; 3) potential measures to address ongoing fiscal impacts to the City;
4) the amount and design of tax-generating commercial development; and 5) confirmation
of the application of development fees associated with the proposed development .
PREVIOUS ACTION
Specific Plan Amendment - November 2020
In November 2020, the City Council approved a Specific Plan amendment and density
bonus for a different mixed-use project on Lot 7. The 2020 amendment increased the
density of the overall SLRSP through a density bonus and transferred the majority of the
inclusionary housing requirements of the SLRSP to a 1.85-acre portion of Lot 7. The
remaining 9.59 acres of the 11.44-acre Lot 7 site was reserved for commercial
development in November 2020, consistent with the original project approvals and the
General Plan requirements.
Key aspects of the November 2020 Specific Plan amendment and project approval
included:
Increased the number of allowed residential units in the SLRSP from 580 to 654.
The increase was identified as a density bonus in order exceed the number of
residential units that were identified in the General Plan Special Focus Area
standards.
Decreased the commercial development on Lot 7 from 150,000 SF (originally
approved in 2017) to 114,300 SF.
Approval of VTTM 3142, which entitled 11 lots within Lot 7 of VTTM 3096 to
facilitate the subdivision of the site to accommodate mixed-use development,
including up to 77 affordable housing units and 114,300 SF of commercial
buildings.
Lot 11 within VTTM 3142 included a 1.85-acre affordable housing project to be
constructed by PSHH, a non-profit developer of affordable housing projects. This
allowed for 64 to 77 affordable units within the NC area as part of the approved
mixed-use development.
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Updated location of affordable housing. The original SLR Development Agreement
and Affordable Housing Agreement required the majority of the project’s affordable
deed-restricted housing units to be constructed within the NG-30 zoned multi-
family section of the project adjacent to Madonna Road. The 2020 SPA transferred
the project’s existing affordability requirement for 26 very-low-income units to the
1.85 PSHH site on Lot 7.
The amendment acknowledged that the commercial development in the SLRSP
must provide approximately 34 units of affordable housing to satisfy the
inclusionary housing requirements of the project, depending on the square footage
of commercial ultimately constructed. Those units were authorized to be located
on the PSHH site as part of the 64-77 affordable housing units identified.
City policy requires inclusionary units to be dispersed throughout market rate
development. This requirement was eliminated with the 2020 SLR Specific Plan
amendment in exchange for additional affordable units and deeper affordability
beyond the Inclusionary Ordinance minimum requirements. At least four (4) and
up to 17 additional very-low-income housing units were added to the project for
construction on Lot 7.
Figure 3 below shows the site plan approved by City Council in November 2020 for the
mixed-use development on Lot 7.
An EIR Addendum was prepared to address potential changes associated with the
application, and a finding was made that the SPA and VTTM were consistent with the
certified Final EIR and Supplemental Final EIR for the San Luis Ranch Specific Plan. The
Airport Land Use Commission (ALUC) reviewed the project on October 21, 2020. The
ALUC found that the project revisions would not change the previous determination that
the San Luis Ranch Specific Plan is consistent with the ALUP. The complete Council
Agenda Report outlining the 2020 amendment is available here.
VTTM 3142 (approved in 2020 to facilitate the mixed-use development) has not been
recorded by MI San Luis Ranch, and therefore PSHH does not have site control yet to
begin development plans or apply for grants or construction funding.
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DISCUSSION
Current Proposal
The currently proposed project for Lot 7 in the San Luis Ranch Specific Plan (SLRSP) is
a primarily residential mixed-use development which would include 276 market rate rental
apartments and up to 15,000 square feet of neighborhood commercial uses. A 1.85-acre
affordable housing site on Lot 7 is proposed in the location approved by City Council in
2020, with a proposal for 69 to 77 affordable units to be constructed by PSHH to fulfill the
San Luis Ranch project’s existing and additional required inclusionary housing
obligations. The proposed 276 market rate units and up to 15,000 square feet of
commercial uses would be constructed on a 9.59-acre portion of the 11.44-acre Lot 7 in
place of the previously approved 114,300 square feet of commercial. Combined, a total
of 353 market rate and affordable units are proposed on Lot 7. With the existing 577
residential units already constructed at San Luis Ranch, the proposed amendment would
increase the total residential units within the SLRSP area to 930 units.
The 276-unit market rate rental apartment component of the project is proposed to include
a mix of studios, one-bedroom, two-bedroom and three-bedroom units, designed in two
different three-story building types. There would be eight 30-unit buildings and three 12-
unit buildings in the development. Housing units would range in size from 650 to 1,150
Figure 3. Lot 7 Mixed-use Site Plan Approved by Council November 2020
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square feet and the buildings would be constructed in the farmhouse architectural style,
one of the styles allowed under the approved SLRSP. The development proposes to
include 345 residential use parking spaces and 15 commercial parking spaces, as well
as bike racks for guests and residents. The project would also include a community
center, privately maintained 2-acre public park1, and walking paths that connect the
central park with adjacent residential uses and offsite locations.
The proposed 0.52-acre commercial area on Lot 7 would be located in the southeastern
corner of the project site at the corner of Dalidio Drive and Froom Ranch Way. The project
plans show a two-story commercial building, with 3,500 square feet on each floor. A
minimum of 7,000 square feet of commercial is proposed by the applicant. However, the
applicant has requested flexibility to allow up to 15,000 square feet of commercial in order
to respond to market conditions at the time of building permit submittal. The applicant has
suggested that the site could be developed with a coffee shop, bicycle repair shop, or
similar neighborhood commercial use.
Issues areas for Council Direction:
1. Affordable Housing Requirements
The originally approved 2017 Specific Plan and Development Agreement required SLR
to construct either a total of 68 affordable units, or 34 affordable units and payment of in-
lieu fees for the commercial development, as required by the City’s Inclusionary Housing
Ordinance in place in 2017. To date, eight (8) of the affordable units have been
constructed.
The Specific Plan amendment approved in November 2020 transferred the 26 required
very-low-income affordable units from the multi-family portion of SLR to a mixed-use
project on Lot 7. As a project benefit proposed in exchange for the City allowing the
transfer of the affordable units to Lot 7, the developer offered to deliver at least four (4)
and up to 17 additional very-low-income housing units, thereby bringing the total
affordable housing units in the PSHH project on Lot 7 to between 64-77 units. With the 4
low-income and 4 moderate-income units that were constructed in the single-family
residential area, the total number of required affordable units with the SLRSP is currently
72-85. SLR has, to date, constructed 8 of these units, leaving a remaining requirement of
64-77 units unfulfilled. See Attachment P (October 31, 2024 Memo from CDD to Mayor
and City Council) for tables and full analysis of previously approved 2017 and 2020
required inclusionary housing calculations.
The current project description from SLR (Attachments A, C, D, and E) proposes that
PSHH will provide at least 69 and up to 77 inclusionary units for low and very-low income
households on Lot 7. Specific unit counts at each level of affordability (very-low, low, or
moderate income) have not yet been identified. SLR’s current proposal includes:
1 The Applicant has indicated that this park would be maintained by the management company of the
apartments and open to the general public.
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2024 SLR
Proposal
Number of
Affordable units
Location & Requirement Status
4 low-income units
Required in single-family
Zoning NG-23
completed
4 moderate income
units
Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multi-
family development - Transferred in
2020 from multi-family to Lot 7
Not constructed
* Planned to be developed
by PSHH
15 inclusionary
housing units
(income level not
defined)
Proposed for commercial
inclusionary, based on 2017
Inclusionary Ordinance:
0.5 acre Lot 7 Commercial: 1 unit
3.5 acre Hotel: 7 units
3.7 acre Office use: 7 units
Not constructed
* Planned to be developed
by PSHH
28 affordable units
(income level not
defined)
10% of the additional 276 market
rate units proposed on Lot 7
required to be affordable, based on
current Inclusionary Ordinance
requirement (ownership units)
Not constructed
* Planned to be developed
by PSHH
Potentially between
0 to 8 additional
affordable units if
PSHH can secure
funding
Additional units beyond required
minimums no longer guaranteed in
current proposal (4-17 bonus units
were required in 2020)
Not constructed
* Planned to be developed
by PSHH
2024 SLR’s
Proposed
Total:
77-85 affordable units (total units proposed within
SLRSP)
Of this total, 69-77 are proposed to be constructed on
Lot 7 by PSHH
8 constructed
69-77 remaining units
unfulfilled
Exhibit F of the DA is the project’s Affordable and Workforce Housing Plan (Attachment
K). Additional workforce and affordable housing beyond that required by the City’s
ordinances was a key project benefit of the original SLRSP and DA.
SLR’s current proposal utilizes the bonus affordable housing units approved in 2020 to
fulfill the inclusionary requirements of the 276 market rate residential units proposed on
Lot 7. Based on the current Inclusionary Housing Ordinance, 10% of the 276 market rate
units (28 affordable units) must be provided to meet inclusionary housing standards for
ownership dwelling units. The 2020 approval included at least four (4) and potentially up
to 17 additional very-low-income housing units in exchange for transferring the 26
required very-low-income units from the multi-family site to Lot 7. This allowed SLR to
develop the NG-30 site without concurrent construction and intermixing of the project’s
required 26 very-low-income affordable units. Staff recommends that the City Council
provide direction to the applicant and staff regarding whether the additional 4 to 17
bonus units should be preserved and provided in addition to the increased
requirement that would result based on the inclusionary calculations for the
currently proposed project.
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Staff’s calculations for the affordable and inclusionary housing required with the proposed
project amendment are included in the table below:
2024 Staff
Calculation
Number of
Affordable units
Location & Requirement Status
4 low-income units
Required in single-family
Zoning NG-23
completed
4 moderate income
units
Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multi-
family development - Transferred in
2020 from multi-family to Lot 7
Not constructed
* Planned to be developed
by PSHH
15 inclusionary
housing units
or payment of in-lieu
fees
(income level not
yet defined)
Required for commercial
inclusionary, based on 2017
Inclusionary Ordinance:
0.5 acre Lot 7 Commercial: 1 unit
3.5 acre Hotel: 7 units
3.7 acre Office use: 7 units
Not constructed
* Planned to be developed
by PSHH
28 affordable units
(income level not
yet defined)
10% of the additional 276 market
rate units proposed on Lot 7
required to be affordable, based on
current Inclusionary Ordinance
requirement
Not constructed
* Planned to be developed
by PSHH
Between 4 to 17
additional very-
low-income units
Project benefit in exchange for
transfer of 26 very-low-income
units from multi-family site to Lot
7 in 2020
Not constructed
* Planned to be developed
by PSHH
2024 Staff
Calculation
Total:
81-94 affordable units (total units within SLR)
Of this total, 73-86 to be constructed on Lot 7
Alternatively, 58-71 affordable units could be
constructed on Lot 7 and payment of in-lieu fees made
to fulfill commercial inclusionary requirement
8 constructed
73-86 remaining units
unfulfilled
2. Affordable Housing Project Implementation
With respect to ensuring that the previously approved affordable housing component
move forward in a timely manner, the applicant proposes that the market rate project
would be willing to post a letter of credit in the amount equal to the cost of improvements
necessary to provide PSHH with a buildable lot (access and utilities). (See Attachment F
- Term Sheet proposed by Williams Homes)
The City is agreeable to this proposal and has been recommending that SLR rec ord the
final map (or a portion of the map as a phased map) to facilitate a shovel ready project
for PSHH. Tract 3142 can be recorded by SLR at any time (in whole or as a phased final
map) to facilitate this transfer of ownership. An amendment to Lot 7 is not needed to
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Item 6c
complete this map recordation or post a letter of credit. Staff recommends that this
approach be memorialized in the DA and included as a condition of approval , with
additional specificity as to the timing of construction of the affordable h ousing units.
City staff is concerned that the SLRSP project has continued to build out without fulfilling
its existing required affordable housing. By transferring the originally required 26 very-
low-income units from the multi-family project component to Lot 7 in 2020, the
requirement for concurrent construction and intermixing of affordable units was
eliminated. As of today, the SLRSP area has constructed only 8 affordable units, while
the market rate project components of 577 total residential units are nearly complete. City
staff recommends additional timing triggers to ensure that the project’s
inclusionary requirements for affordable units are constructed concurrently with
any additional market rate units within the specific plan area. One such trigger that
could be explored includes a provision requiring that the affordable units be provided in
the market rate portion of the project if the PSHH project is not completed by a certain
date, until the PSHH project is completed, at which tim e the units could revert to market
rate. Without a requirement for concurrent construction or other timing trigger, there is no
guarantee that the affordable units will ever be constructed.
3. Fiscal Impact Analysis
The SLR Specific Plan requires that the project provide economic benefits in terms of
jobs, mix of uses, and long-term fiscal sustainability for the City. Extraordinary community
benefits are obligated under the SLR Development Agreement, and the project is
intended to create net-positive fiscal flows and economic development benefits.
Property taxes are one of the main revenue sources the City uses to fund its municipal
services; however, as annexation area, the 2018 County Tax Exchange Agreement
distributes only one-third (1/3) of the property tax increment to the City. Property taxes
alone are not sufficient to fund the cost of City services such as fire, police, parks, and
other services provided to residents. Therefore, the SLR DA requires that the City shall
be kept and/or made “whole” by the developer with respect to all aspects, including
without limitation, fiscal impacts of the planning, development, maintenance and
operation of the SLRSP area including the costs to the City of providing public services
and facilities to the project. Article 5 of the DA includes many provisions “to prevent the
Project from resulting in negative fiscal impacts on City.” The mix of uses within the
Specific Plan area, including tax generating commercial uses and minimum commercial
square footage, were intended as a key factor in maintaining a fiscally positive project.
Applicant’s Fiscal Impact Analysis
In order to provide an idea of the fiscal impact of the proposed land use change being
requested on Lot 7, the project applicant has provided a 2024 Fiscal Impact Analysis (FIA)
(Attachment L) to show the overall fiscal impact to the City of the entire combined SLR
Specific Plan area. The October 31, 2024 updated analysis (completed by ADE, the
applicant’s consultant) compared the 2017 estimated fiscal impact of the original project
(2017 FIA also completed by ADE, the applicant’s consultant), to the 2024 fiscal impact
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of the revised project proposal. In comparison to the 2017 FIA fiscal projections, SLR’s
2024 FIA shows that the revised project results in $302,836 less to City revenues each
year, in comparison to the original 2017 FIA projections.
For comparison, in 2017, the San Luis Ranch project was estimated to generate $985,976 in
fiscal gain for the City annually. SLR’s 2024 Fiscal Impact Analysis states that at full buildout,
the overall SLR Specific Plan area, including the proposed Lot 7 residential project, is
estimated to generate about $3.43 million per year in General Fund revenues and $2.67
million per year in municipal service costs. According to the applicant, an additional $75,300
shortfall will result from the recent sale of 120 multi-family units to Cal Poly Partners
(Harvest Lofts), as Cal Poly Partners is not required to pay property taxes2. This totals an
annual cost/revenue surplus of $683,140 for the City from the overall SLRSP area, which is
$302,836 less annually than the 2017 FIA projected.
The 2024 Applicant FIA applies outside market changes (such as increased property
values, inflation, and the City’s adoption of Measure G) that make the overall SLR project
appear to be more fiscally positive, despite the increased service costs and loss of
commercial revenues that would result from the proposed amendment . The applicant’s
FIA compares the revised project in 2024 dollars (taking into account increased property
values, inflation, and Measure G) to the original project in 2017 dollars, and concludes
that the SLR Specific Plan area would not be fiscally negative as a project overall, but it
would generate less revenue than originally projected in 2017.
City’s Peer Review of the Applicant’s Fiscal Impact Analysis
A peer review of the applicant’s FIA was conducted by the City’s fiscal consultant, EPS
(Attachments M and Q). In order to gain an accurate picture of the fiscal impact of the
proposed amendments, the City asked EPS to isolate the proposed land use changes and
identify the fiscal impact that would result from the land use changes in 2024 dollars. EPS
used ADE’s fiscal model to calculate the fiscal impact of the currently approved commercial
project in 2024 dollars. EPS found that the proposed land use changes on Lot 7 will create
approximately $1 million loss of revenues annually, resulting from the increased cost of
City services for the addition of 276 market rate multi-family units and the loss of 114,300
to 99,300 square feet of commercial tax generating uses on Lot 7 .
The City’s fiscal consultant has confirmed that the applicant is correct in its statement that
the overall SLR Specific Plan area has potential to remain fiscally positive for the City,
even with the proposed changes to Lot 7. However, this positive fiscal projection is a
result of other variables, mainly external variables, including Measure G, inflation, and
increased home values that have occurred in the past few years. While the overall SLR
project may still be fiscally positive as a whole, it is not as fiscally positive as initially
conceived in 2017, even with the recent market changes and Measure G considered.
There are several factors that contribute to this $1 million annual loss in revenues as well as
differences in the results of the two fiscal impact studies:
2 As a point of clarification, while the analysis provided by ADE describes that Cal Poly does not pay property
taxes as a State tax exempt institution, it is the City’s understanding that Cal Poly Partners is exempt from
paying property taxes because of its status as a non-profit entity.
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Measure G, a 2020 voter approved initiative to increase local tax revenues, would
substantially increase expected sales tax revenues to the City for a commercial
development. The EPS peer review identified an additional $457,569 annually from
Measure G revenues that would result from a 114,300 square foot commercial center.
This revenue was not taken into account in the 2017 FIA for the original project.
When the changes to Lot 7 are isolated from the rest of the Specific Plan area, fiscal
impacts on Lot 7 are estimated to shift from $819,979 in net annual revenues to the
City’s general fund that would be provided by commercial development, to between
$163,000 and $238,000 in net annual costs to the City’s general fund to serve the
residential units proposed on Lot 7. Therefore, rather than being a fiscal benefit to the
City, Lot 7 creates an ongoing annual cost to City.
TOT expected from the hotel has substantially increased in the past 7 years, with a net
increase of $436,540 annually identified in the applicant’s 2024 FIA in comparison to
2017 estimates; however, it is likely that this amount of TOT may not be realized due
to the fact that this hotel will allow visitors to use points to book rooms.
Assumed increases to property values create higher property tax revenues than were
originally anticipated in 2017. The 2024 FIA shows a net increase of $234,403 in
property taxes resulting from this market change alone.
Cost of public service expenditures for the City have increased. An increase in the
number of residential units will increase the City’s costs for services, and those service
costs are higher than they were per unit in 2017. Property taxes alone do not provide
sufficient funding necessary for the City to serve residential development. On the cost
side, the proposed additional residential development substantially adds to the level of
public service costs to support the development.
The City’s consultant, EPS, has identified potential errors in the applicant’s 2024 fiscal
model. The applicant’s project description does not match the data used in the fiscal
model calculations. The applicant’s fiscal model included only 853 residential units
rather than the 930 units currently proposed within the SLR Specific Plan area.
The Lot 7 commercial development has been a major project component since the
project’s initial conception. A requirement for 50,000 to 200,000 square feet of
commercial, tax generating uses within the SLRSP area was included in the 2014 General
Plan Land Use update, and was a major consideration during the tax negotiations with
the County prior to annexation of the SLR site. The tax revenue expected from the 2017
originally approved 150,000 square foot commercial development on Lot 7 was a factor
in the Development Agreement negotiations. The loss of expected tax revenue changes
the outcome of these previously negotiated agreements.
With the currently proposed project resulting in a Specific Plan buildout with more residential
and less commercial development, the fiscal benefits to the City will be substantially less than
originally anticipated in the DA. The unanticipated reduction in the City’s revenue stream
would likely require a modification to the financing plan included as Exhibit C in the approved
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DA. To make up for the loss in revenues resulting from the land use changes on
Lot 7, the City Council could direct the applicant and City staff to negotiate
additional strategies to increase revenues for City services. Strategies such as a
CFD or “early residential fee” have been used in DA’s previously to make up any shortfall
to the City. Other options can be researched and negotiated by City staff and the app licant
to look at ways that the proposed residential project can pay for itself.
4. Preservation of Prime Commercial Sites
While additional housing production would be beneficial to meeting the City’s housing goals,
the location of that residential and the preservation of prime commercial sites should be
considered when initiating a General Plan amendment. The current application proposes
housing along one of the City’s key commercial corridors, directly adjacent to the Madonna
Plaza commercial center. The 11.44-acre Lot 7 site is uniquely located adjacent to the future
Prado Road/Highway 101 interchange. The subject site’s location on a major interchange with
on and off-ramps has potential to draw regional shoppers and tourists to the site. Future tax
dollars would be impacted by reducing the tax generating uses within the Specific Plan
area, and the City will not be able to replace the loss of prime commercial land.
The applicant has stated that the current commercial market does not demand the amount of
new commercial square footage currently required with the San Luis Ranch Specific Plan,
and the site would be better utilized by allowing residential development (see Attachment N,
SLR response to Fiscal Peer Review). However, City staff has concerns regarding the
viability of the commercial on Lot 7 as currently designed and proposed by the applicant.
A minimum of 7,000 and up to 15,000 square feet of commercial on Lot 7 is proposed by
the applicant. The proposed project plans show a two -story commercial building, with
3,500 square feet on each floor. The applicant has suggested that the site could be
developed with a coffee shop, bicycle repair shop, or similar neighborhood commercial
use.
Given the very small size of the commercial parcel (proposed at 0.52 acres) and limited
uses that would be feasible in a two-story commercial structure, staff has concerns that
the site will not accommodate meaningful tax-generating uses or become the
neighborhood serving center that is suggested by the applicant. Staff requests that City
Council provide input regarding the design and minimum commercial square
footage that should be preserved on this commercially zoned parcel. The Council
may direct the General Plan and Specific Plan amendments to proceed, subject to
providing a larger minimum amount of tax generating commercial, or other desired
land uses, or an alternative site design in order to preserve the viability of portions
of Lot 7 as a prime commercial site.
5. Development Fees
The 2018 SLR Development Agreement included provisions to lock in development
impact fees for construction of the units approved at the time of original entitlement. These
fees are substantially lower than impacts fees charged on permits today. It is the City
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Attorney’s position that the provision for lower fees does not extend to the additional 276
market rate units currently proposed for entitlement on Lot 7, as the se units were not
contemplated during the development and approval of the DA. Based on the 2018 DA,
SLR has paid permit and impact fees of approximately $21,000 per multi -family unit.
Current development fees for multi-family units are approximately $41,000 per unit. The
difference in fees between what the DA locked in for the original 580 units and current
fees today equates to a total of about $5.5 million in permit and impact fees for the
additional 276 housing units proposed.
The applicant is proposing to amend the DA to lock in current (2024) impact fees,
amounting to approximately $5.5 million in additional development impact fee revenues
to the City in comparison to the fees locked in by the 2018 DA. The additional $5.5 million
identified in the applicant’s proposed term sheet (Attachment F) reflects the standard
development fee required for any residential project submitted under the 2024 fee
schedule. Development impact fees are adopted by City Council to cover the cost of
development, including impacts to citywide transportation, fire and police, parks, and
other City facilities. The City is currently working on an impact fee update, which is
expected to go to Council for adoption in 2025. Payment of current fees is a standard
project requirement.
City staff agrees that “then-current” fees should be applied to the additional 276
proposed residential units. The date of “current” fees shall depend on the timely
submittal of the application materials and terms negotiated in the DA amendment. As
required by law, development impact fees are based on the date that a vesting tentative
map for the project is deemed complete, or as determined through DA negotiations. It is
recommended that the fees applied to the project depend on the “then-current” fees in
effect on the date that those project components are completed, rather than today’s date
(December 2024) at initiation of the project.
REQUIRED ENTITLEMENTS TO IMPLEMENT THE PROPOSED PROJECT
The currently proposed San Luis Ranch Lot 7 development will require the following
applications if Council authorizes the project to proceed:
General Plan Amendment –
General Plan Land Use Element Section 8.1.4 “Special Focus Area #2” provides
direction for development within the San Luis Ranch area, including 14 goals,
objectives, and requirements for development. The General Plan currently
identifies a maximum of 500 residential units and requires between 50,000 to
200,000 SF of commercial to be constructed in the SLR Specific Plan area. The
applicant is proposing to amend Section 8.1.4 to allow a maximum of 930
dwelling units and reduce the minimum commercial requirement to allow a
combination of 38,000 SF (minimum) of either agricultural (Ag Heritage Center)
or commercial uses. The proposed commercial/agricultural minimum reflects
the commercial and agricultural processing uses in the Agricultural Heritage
Center (about 31,000 SF) as well as a minimum of 7,000 SF commercial on Lot
7. (See Applicant’s project description, Attachment C.)
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Under the General Plan, Lot 7 is currently designated as Neighborhood
Commercial (NC). The General Plan limits residential development in this
designation to a maximum of 12 dwelling units per acre. The proposed project
would exceed this allowed residential density, therefore a General Plan
Amendment to change the underlying land use designation is required.
Specific Plan Amendment – SLR Specific Plan would be updated to reflect proposed
Lot 7 changes, proposed land use plan, and update d development standards.
Increase the overall residential development potential within the Specific Plan
from 654 to 930 dwelling units;
Decrease the minimum commercial development required under the Specific
Plan to identify a minimum 38,000 SF of either commercial or Ag Heritage
Center uses;
No zone change is required because the Specific Plan designation also
functions as zoning within the Specific Plan area.
Development Agreement Amendment – The approved 2018 San Luis Ranch
Development Agreement (DA) established a framework for future development of up
to 580 units within the Specific Plan area, as well as the responsibilities of the developer
to provide public and community benefits to the City beyond those otherwise required
through mitigation measures and project conditions. Several aspects of the current
development proposal, including addition of the additional residential units, would
require an amendment to the existing DA.
Affordable Housing Agreement Amendment – The SLR Affordable Housing Agreement
was recorded in September 2020. It currently requires that the project’s 26 very-low-
income inclusionary housing units shall be constructed in proportion to the construction
of the other units in the NG-30 Zone, which has not been done. Timing of affordable
housing construction and revised number of required affordable housing units will need
to be updated.
Tentative Tract Map – Tract 3142 was approved in 2020 for an 11-lot primarily
commercial development, and would not allow development of the site as the applicant
now proposes. A new tentative map is required to correspond to proposed residential
development, including lot configuration, grading and drainage, and site improvements.
Development Plan – ARC and PC review of proposed site development plan and
architectural review will be required.
Environmental Review – Environmental review under the California Environmental
Quality Act (CEQA) will be required, but the appropriate approach to CEQA has not yet
been determined.
ALUC Review – Because there would be General Plan and Specific Plan Amendments,
the project would be referred to the San Luis Obispo County Airport Land Use
Commission (ALUC) to determine conformity with the adopted Airport Land Use Plan
(ALUP).
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Next Steps
Staff is seeking City Council direction on whether to proceed with the applicant’s proposed
amendments. This early consideration referral to Council by the Community Development
Director is an opportunity for Council to provide input on the proposed project. The current
request for City Council initiation of the application does not constitute a pproval of the
request and only begins the required process for the proposed project amendments.
If the Council provides direction to process the project applications, staff is also
seeking Council direction on the specific issue areas discussed in the staff report
that should be considered during the project review process and for DA term
negotiations. Council may provide direction regarding any other design, land use, fiscal,
or related project elements at the time of initiation in order for staff and the applicant to
address these items during the entitlement processing.
Such topics could include, but not be limited to:
1) The number of deed-restricted affordable housing units
Council may identify a minimum amount of affordable housing that would be
expected with a revised project and amended Development Agreement.
Staff’s recommendation is for the Council to consider whether SLR should
provide 86 affordable housing units on Lot 7 to fulfill the inclusionary
requirements of both the existing project (including the additional affordable
units approved in 2020) and the proposed amendments. This would fulfill the
inclusionary requirements of the overall commercial (15 affordable units
required), the additional 276 unit market rate residential project (28
affordable units required), the project’s originally required 26 very-low-
income units, and the 17 bonus affordable units required with the 2020
amendment.
An alternative would be to provide 71 affordable units on Lot 7 and allow
SLR to pay in-lieu fees to substitute for the 15 units required for the
commercial inclusionary.
2) Timing of construction of the previously-required affordable housing
component
City staff recommends additional timing triggers to ensure that the project’s
inclusionary requirements for affordable units are constructed concurrently
with any additional market rate units within the Specific Plan area.
As described in the report, the applicant stated that they are willing to post a
letter of credit in the amount equal to the cost of improvements necessary to
provide PSHH with a buildable lot, which staff is agreeable to. Staff
recommends that the Council provide direction to staff regarding requiring a
letter of credit for such purposes.
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In addition, the City Council could provide direction to explore a timing
threshold that would require the provision of the required affordable housing
in the Lot 7 market rate project if the PSHH units are not completed by a
certain date, until the PSHH units were completed at which time the units
could revert back to market rate.
3) Ongoing fiscal impacts to the City
To make up for the loss in revenues resulting from the land use changes on
Lot 7, the City Council could direct the applicant and City staff to modify the
financing plan included as Exhibit C in the approved DA and to negotiate
additional strategies to increase revenues for City services. Strategies such
as a CFD, increased commercial square footage, or other Council direction
could be added to make up revenue impacts to the City.
4) The amount and design of tax-generating commercial development, or
other land uses, within the project
Staff requests that City Council provide input regarding the design and
minimum commercial square footage, or other land uses, that should be
preserved or created on Lot 7.
5) Development fees associated with the proposed development.
City staff agrees that “then-current” fees should be applied to the additional
276 proposed residential units. The date of “current” fees shall depend on
the timely submittal of the application materials and terms negotiated in the
DA amendment and, thus, may not be the 2024 fee amounts.
If Council authorizes the proposed project and related amendments to proceed, staff will
process the project through the following standard steps, including:
1. Development review of all applications by City staff
2. Environmental review under the California Environmental Quality Act (CEQA)
3. Referral to the Airport Land Use Commission for conformity with the ALUP
4. Architectural Review Commission public hearing
5. Parks and Recreation Commission public hearing
6. Planning Commission public hearing for recommendation
7. City Council public hearing for consideration of project approval
Public Engagement
The item is on the December 10, 2024 Council Agenda for consideration of the initiation
of this application. The public has an opportunity to comment on this item at or before the
meeting. If the Council authorizes staff to proceed with processing, additional public
hearings and legal notices would be provided for the ALUC, Architectural Review
Commission, Parks and Recreation Commission, Planning Commission, and City Council
meetings as part of the process for consideration of the application.
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CONCURRENCE
The Council Agenda Report was reviewed by the Community Development Department,
Utilities Department, Finance Department, City Attorney, and City Administration for
concurrence. If the Council directs staff to proceed with the application, relevant
departments and divisions would evaluate the project in detail as part of the application
review.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
action in this report because Council’s action does not constitute a “Project” under Section
15378 (Project) of the CEQA Guidelines nor does the action commit the agency to a
definite course of action in regard to a project as described in Section 15352 (Approval)
of the CEQA Guidelines. If the General Plan, Specific Plan, and Development Agreement
amendment applications and other necessary decisions move forward, the project would
be subject to the appropriate environmental review as required per CEQA , which will be
presented at the public hearings.
FISCAL IMPACT
Budgeted: No Budget Year: 2023-25
Funding Identified: Applicant funded
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 considering the initiation of the proposed
annexation. If Council directs staff to proceed, the applicant will be required to fund the
review and processing of the applications and associated analysis according to the City’s
fee schedule. The applicant has already paid a Specific Plan Amendment fee deposit for
this initiation process and has paid for the fiscal impact analysis and peer review that
have been completed to facilitate this process. Additional fees will be required to be paid
by the developer including fees related to the General Plan Amendment, Development
Agreement Amendment, Development Review, Subdivision Map, and ALUC. In addition,
the applicant would pay for the cost of the environmental review of the project as well as
a contract planner to process the applications required for the project.
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If the proposed project revisions are ultimately approved by the City Council upon
completion of application processing, there would be fiscal impacts related to the
provision of municipal services to the subject property that would be evaluated in detail
as part of the application. Fiscal impact of residential verses commercial development is
discussed in detail above. Development impact fees associated with the existing
Development Agreement are also a major consideration for the proposed project, and
should be fully evaluated as part of any DA or project amendment.
ALTERNATIVES
1. Continue review of initiation to later date and request additional information in
order to evaluate the application, such as:
a. A feasibility study to evaluate the amount of vacant commercial buildings
currently in the City, and evaluate the future commercial need based on
buildout of the General Plan.
b. Any other studies or information deemed necessary by the City Council in order
to evaluate the application for processing.
2. Direct staff to not move forward with processing the application for General
Plan and Specific Plan amendments. Per San Luis Obispo Municipal Code Section
17.130.020 “The Council, upon making specific findings in reference to specific
general plan provisions, may direct the director to reject the application as inconsistent
with overall general plan policy direction.”
ATTACHMENTS
A - San Luis Ranch Lot 7 Project Application and Project Description (April 29,2024)
B - SLR Proposed Plan Set for Lot 7 (Site Plan and Elevations)
C - Applicant’s Response to Questions and Updated Project Description (July 18, 2024)
D - Letter from SLR to Mayor and City Council (October 9, 2024)
E - Updated Project Description from Kovesdi Consulting (October 24, 2024)
F - Term Sheet proposed by Williams Homes (Sent on November 13, 2024)
G - SLR Letter with attachments (November 13, 2024)
H - DA Operating Memorandum #1 (May 8, 2019)
I - DA Operating Memorandum #2 (August 20, 2020)
J - DA 1st Administrative Amendment (February 23, 2021)
K - DA Exhibit F - Affordable and Workforce Housing Plan (March 6, 2018)
L - San Luis Ranch Fiscal Impact Analysis (October 31, 2024 by ADE)
M - Fiscal Impact Analysis Peer Review #1 (August 14, 2024 by EPS)
N - SLR Response to Fiscal Peer Review (September 6, 2024)
O - Memo from CDD to Mayor and City Council (September 24, 2024)
P - Memo from CDD to Mayor and City Council (October 31, 2024)
Q - Fiscal Impact Analysis Peer Review #2 (October 30, 2024 by EPS)
Page 486 of 641
3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948
A CALIFORNIA CORPORATION
“Building Legacies”
April 29, 2024
Callie Taylor, Community Development Department
City of San Luis Obispo County
919 Palm Street
San Luis Obispo, CA 93401
Via email
Re: San Luis Ranch Lot 7 Residential Mixed-Use Application Submittal
Dear Callie,
I hope you’re doing well.
Per our discussions over the past year, attached please find an application submittal
package for a multifamily residential mixed-use project on Lot 7 of recorded Tract 3096.
Background
Since it’s conception more than a decade ago, San Luis Ranch Specific Plan has had four
overarching goals:
o Diverse Range of Housing Types
o Multimodal Connectivity
o Agricultural Preservation
o Outdoor Recreation Opportunities
To date, the Specific Plan has been implemented to meet its original objectives, along with
the developing needs of our dynamic community.
As we’ve discussed, the demands of City residents and workers have changed significantly
since the adoption of the Specific Plan in 2018, particularly since the Covid-19 pandemic.
Prior to the pandemic, consumers were already turning to online retail vendors. The
pandemic and associated lockdowns solidified and supercharged the trend toward online
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shopping, resulting in increasing commercial vacancy rates, even in our beloved
downtown. Higher commercial vacancies in turn have led to decreases in sales tax revenue
to the City, as well as direct costs, in the form of lower downtown rents, which affect
everything from the City’s parking fund to its tourism budget.
At the same time, housing, particularly multifamily rental product, has become
increasingly difficult to come by. Much of the SLO workforce still has to commute from
outside of the City, contributing to traffic congestion, noise and air pollution, and
greenhouse gases.
Having monitored these developments over the past few years and experienced the
undesirability of additional commercial space through the unsuccessful marketing of Lot 7
as entitled, the San Luis Ranch team has partnered with Williams Homes and People’s
Self-Help Housing to bring the City a project that will address the prevailing conditions in
the City and help the City prosper well into the future.
Project Description
Containing 276 market rate rental apartments, 70 affordable units, and 7,000 square feet of
neighborhood commercial, Lot 7 will give City residents another opportunity to live where
they work and love where they live. Across Froom Ranch Way from the Agricultural
Heritage Center’s local eateries and markets, Lot 7 will be one of the most walkable
neighborhoods in San Luis Obispo. The plan also contains a community gathering center,
privately maintained public park, and the multimodal connectivity envisioned in the
Specific Plan.
The proposed mixed-use project on San Luis Ranch Lot 7 (SLR7) will offer a dynamic and
engaging new neighborhood of 276 apartment residences with a mix of studios, one-
bedroom and two-bedroom homes on roughly 9-acres. These homes are designed in two
different three-story building types, a 12-plex building and a 30-plex, with units ranging in
size from 594 SF- 896 SF. This mix of home types will be attractive to a variety of
interested renters including singles, couples and small families who want to live close to
all of the amenities that San Luis Ranch provides. The buildings are creatively situated on
the site to respect the surrounding context and maximize the livability and pedestrian
connectivity of the community. Attractive, modern farmhouse elevations in great color
palettes will make the neighborhood a well sought after place to live.
Located in the middle of the new neighborhood and over existing drainage improvements
is the nearly 2-acre Central Park, envisioned as an open area for programmed activities
such as sand volleyball, picnic area, outdoor gym, bocci ball courts and open areas.
Adjacent to the multi-modal path, Central Park will be interconnected with extensive
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walking paths and will be open to the public. Given its proximity to the locally produced
food at the Agricultural Heritage Center across Froom Ranch Way, this central park will
offer lots of seating to enjoy offerings of the day.
The residents of the neighborhood will also enjoy a private recreation amenity (Central
Amenity) which will include a pool and spa area, sunbathing areas, BBQs and gathering
space and restroom buildings. Together, the Central Amenity (private) and the Central
Park (public) will provide the community with active and welcoming open spaces within
the higher density neighborhood. With a focus on bike trails throughout the neighborhood
and the community, 55 open bike racks for guests and 3 bike barns for residents, along
with in-home bike racks will further support and encourage the use of bikes of all sizes and
styles.
Perhaps the most exciting feature of this bicycle centric neighborhood will be the vibrant
small-scale commercial building, sensibly located at the corner of Froom Ranch Way and
Dalidio Drive. Designed to reinforce the agricultural setting of the area, this space will
feature an attractive habitable silo structure, recognizable as a landmark for the community.
This structure is envisioned to contain a bike shop for service, repair, and rentals, a small,
locally sourced coffee/sweets shop for locals and visitors alike, and a mailroom/leasing
office for the residents. A grand second floor multi-purpose space will offer flexibility in
programming of events, social gatherings or simply relaxing and enjoying the views and
delightful weather of San Luis Ranch.
Entitlements to Implement the Project
Entitlement processing is expected to include Development Plan with ARC review,
General and Specific Plan Amendments with ALUC referral, Vesting Tentative Tract Map
conformance evaluation, and environmental review.
General and Specific Plan Conformance and Requested Modifications
General Plan:
The San Luis Ranch Specific Plan Area is governed in the City’s 2014 Land Use Element
Section 8.1.4. That section identifies 14 goals, objectives, and requirements for the entire
San Luis Ranch planning area. These include:
a. Provide land and appropriate financial support for development of a Prado Road
connection. Appropriate land to support road infrastructure identified in the Final
Project EIR (overpass or interchange) at this location shall be dedicated as part of
any proposal and any area in excess of the project’s fair share of this facility shall
not be included as part of the project site area used to calculate the required 50%
open space.
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b. Circulation connections to integrate property with surrounding circulation network
for all modes of travel.
c. Connection to Froom Ranch and Calle Joaquin, if proposed, shall not bifurcate on-
site or neighboring agricultural lands. Any connection to Calle Joaquin shall be
principally a secondary / emergency access by design.
d. Development shall include a transit hub. Developer shall work with transit officials
to provide express connections to Downtown area.
e. Maintain agricultural views along Highway 101 by maintaining active agricultural
uses on the site and maintain viewshed of Bishop Peak and Cerro San Luis.
f. Maintain significant agricultural and open space resources on site (see Policy
1.13.8.B). Land dedicated to Agriculture shall be of size, location, and
configuration appropriate to maintain a viable, working agricultural operation.
g. Where buffering or transitions to agricultural uses are needed to support viability
of the agricultural use, these shall be provided on lands not counted towards the
minimum size for the agriculture / open space component. Provide appropriate
transition to agricultural uses on-site.
h. Integrate agricultural open space with adjacent SLO City Farm and development
on property.
i. Site should include walkable retail and pedestrian and bicycle connections to
surrounding commercial and residential areas.
j. Commercial and office uses shall have parking placed behind and to side of
buildings so as to not be a prominent feature.
k. Neighborhood Commercial uses for proposed residential development shall be
provided.
l. Potential flooding issues along Perfumo Creek need to be studied and addressed
without impacting off-site uses.
m. All land uses proposed shall be in keeping with safety parameters described in this
General Plan or other applicable regulations relative to the San Luis Obispo
Regional Airport.
n. Historic evaluation of the existing farm house and associated structures shall be
included.
All of these goals, objectives, and requirements continue to be met with the proposed Lot
7 mixed-use project.
Additionally, the Land Use Element specifies the following performance standards for the
San Luis Ranch Specific Plan Area:
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(Please note that Specific Plan Table 2-1 replicates this General Plan Table.) While the
proposed Lot 7 mixed-use project meets all other Land Use Element performance
standards, it will require two modifications:
1) Increasing the maximum number of residential units from 500 to 941.
The new maximum residential reflects:
• 654 residential units approved as part of a Specific Plan Amendment by City
Council in November 2020,
• The 30 units per acre density allowed by the Specific Plan in the Neighborhood
Commercial (NC) zone, and
• A minimum of 70 and up to 77 low-income affordable units to be provided by
Peoples Self-Help Housing on a parcel donated by San Luis Ranch.
This residential density will generate projected traffic counts and VTM below the levels
contemplated with the originally proposed retail development in the San Luis Ranch
certified Final Environmental Impact Report (July 2017) and the Final Supplemental
Environmental Impact Report (July 2018) as well as the Addendum to the certified Final
Environmental Impact Report (August 2020).
* Inclusionary housing - the change in use from 114,300 square feet of commercial to an
additional 296 market rate multifamily residential units changes the calculation in required
affordable units. The 2020 Specific Plan Amendment allowed 26-low-income affordable
units to be transferred from the existing multi-family site to the proposed Lot 7. The
proposed Lot 7 mixed use development, along with the remaining affordable units to be
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constructed for other uses in the Specific Plan Area will result in a requirement for 70
affordable units on the Lot 7 site:
Lot 7 Retail 2 units (2/acre)
Hotel 7 units (2/acre)
Office 7.4 units (2/acre)
Lot 7 MFR 27.6 units (10%)
Transferred 26 units
Total 70 units
2) Decreasing the minimum square footage of Commercial from 50,000 square feet
to 38,000 square feet.
The new minimum reflects the commercial uses available to San Luis Ranch and City
residents, as well as visitors, in the Agricultural Heritage Center, as well as the
neighborhood serving commercial uses proposed on Lot 7. See discussion pertaining to the
challenges of retail development above, under “Background”.
Below is an approximate timeline of changes to the SLRSP’s total commercial square
footage:
• The City’s 2014 General Plan Land Use Element establishes a performance
standard/commercial minimum of 50,000 square feet for the SLRSP. This aligns
with SLRSP Table 2-1 (General Plan San Luis Ranch Performance Standards).
• Council Resolution No. 11192 (November 2020) approved up to 114,300 square
feet of commercial.
• As reported in the 2024 Annual Monitoring staff report (April 2024), the 53-acre
AG-zoned portion of the Specific Plan includes 31,236 square feet of commercial
buildings, including retail, restaurant, a market, and agricultural processing uses.
The Project proposes 7,000 square feet of commercial space, bringing the total commercial
square footage within the SLRSP area to 38,236 square feet, which is below the
performance standard minimum of the 2014 adopted General Plan.
Specific Plan:
The San Luis Ranch Specific Plan allows for a wide range of potential land uses, including
multifamily residential. That document also establishes a variety of standards and
requirements for development within the Neighborhood Commercial (NC) zone.
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Specific Plan Table 2-3 identifies the maximum land area and number of units or square
footage allowed within the Specific Plan area, and will be adjusted to comport with the
General Plan table:
Table 3-3 identifies multifamily dwellings as uses allowed by right, citing the City of San
Luis Obispo Zoning Code Section 17.22.010, which states the goal of allowing “dense
housing close to concentrations of employment and college enrollment, in the Downtown
core, along transit corridors and nodes, and in areas largely committed to high-density
residential development”. Table 3-7 establishes the development standards for
development within the NC zone.
Section 3.7.1 (Residential Design Guidelines) apply to residential projects regardless of
zone designation. Residential development standards are found in Table 3-3. Section 3.7.2
guidelines apply only to commercial development.
The proposed mixed-use Lot 7 project conforms to Specific Plan requirements and
standards, including lot coverage, building height and design features, setbacks,
landscaping, automobile and bicycle parking, and public improvements (Transit Center).
VTTM 3142 Conformance and Development Agreement Status
With this application, San Luis Ranch is submitting an application for review and approval
of a proposed final map for Lot 7 of Tract Map 3142. As approved initially, the Lot 7 was
proposed to be subdivided into 11 lots, including the affordable housing lot to be granted
to People’s Self-Help Housing (PSHH), which is identified as Lot 11 on the
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Map. Recordation of this final phase of Tract 3142 is necessary to be able to convey Lot
11 to PSHH.
We are requesting that the City find the current proposed final map to be in substantial
compliance with the previous approved tentative map. Per Section 66474.1 of the
Subdivision Map Act, the City shall not deny the recordation of a final map where it finds
that “the final … map is in substantial compliance with the previously approved tentative
map.” Here, the proposed final map is in substantial compliance with the approved
tentative map. Both maps result in the same number of lots and identical locations of
ingress and egress to adjacent public streets. The internal configuration of several lots has
changed in order to provide more logical lot lines to run through the middle of drive aisles,
as opposed to the original parcel lines that now cross yards, drainage features, and areas
occupied by structures.
We also note that the City has requested confirmation as to whether San Luis Ranch is
amenable to discussing changes to certain portions of the previously approved
Development Agreement. San Luis Ranch is willing to discuss changes to the
Development Agreement in the event that legislative amendments, such as approval of an
amendment to the Specific Plan, is required in conjunction with the approved project.
Please let me know if you have any preliminary questions regarding this application
package. Thanks so much for your time and consideration. We look forward to working
with you on this exciting project.
Very best regards,
Rachel Kovesdi
Attachments:
1. Planning Application
2. WHA Lot 7 Mixed-Use Residential Plan Set
3. Wallace Group VTTM 3142 Proposed Final Map Exhibit
4. Wallace Group Existing Drainage Facilities Exhibit
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San Luis Obispo, CA 93401
(805) 471-2948
Rachel@KovesdiConsulting.com
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Cc: Whitney McDonald, City of SLO Interim City Manager
Timmi Tway, City of SLO Community Development Director
John Rickenbach, City of SLO Contract Planner
Josh Bivin, San Luis Ranch COO
Lance Williams, Williams Homes CEO
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PO Box 3460, San Luis Obispo, CA 93403 www.sanluisranch.org
Date: July 18, 2024
To: City of San Luis Obispo Community Development Department
Attn: Callie Taylor
From: Josh Bivin
Subject: San Luis Ranch Lot 7 GPA/SPA Authorization - Response to Info Hold
Dear Callie,
Thank you for your Initiation Review letter of May 30,2024. We appreciate your preliminary
comments and expect that our responses below will contain all information required to allow staff
to schedule a City Council hearing to authorize the proposed General Plan and Specific Plan
amendments.
Planning Division - Community Development Department
Please update the project description and submit additional information to address the follow
items which are needed for City Council review and initiation:
1. Project Description: Sheet SP1 of the plans indicates the project would include 276
dwelling units and 7,000 SF of commercial. This is potentially inconsistent with the project
description in the Kovesdi Consulting letter of 4-29-24 that indicates up to 346 dwelling
units (276 apartments and 70 affordable units) proposed on Lot 7. Does the Kovesdi letter
include the portion of Lot 7 that had been previously approved for up to 77 affordable units,
and indicated as “NAP” on Sheet SP1? Please clarify what is actually being proposed.
Response:
276 market rate rental units are proposed to be constructed on Lot 7 of San Luis Ranch by Williams
Homes (WHA). This number of market rate units is reflected in the WHA site plan, as well as the
project description. Additionally, San Luis Ranch is partnering with People’s Self-Help Housing
(PSHH) to bring the City deed-restricted inclusionary rental housing units. PSHH competes for a
variety of grant funding sources, which have different eligibility requirements. The California
State budget fluctuates each year, and the amount of funding available from nonprofit housing
grant programs changes each budget cycle. PSHH has guaranteed SLR that they will construct, at
a minimum, the 64 units required by prior approvals, as well as additional units required with the
approval of the WHA project proposed by this application. Here are the calculations for
inclusionary housing:
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Current Approvals Proposed WHA/PSHH Lot 7 Project Proposal
Acreage Multiplier Required Acreage Multiplier Required
Retail 9.45 2 18.9 Retail 0.5 2 1
Hotel 3.5 2 7 Hotel 3.5 2 7
Office 3.7 2 7.4 Office 3.7 2 7.4
33.3 Residential 276 10% 27.6
Rounded 34 43
Transferred from MFR 26 Rounded 43
Total Required 60 Transferred from MFR 26
Approved with 3142 VTTM 64-77 Total Required 69
Approved with 3142 VTTM 64-77
In order to maximize PSHH funding opportunities, San Luis Ranch is proposing a total Lot 7
residential density of between 345 units: 276 WHA units + 69 inclusionary PSHH units (26
transferred from the multifamily site by VTTM 3142, and 10% of WHA units, rounded up) and
358 (276 WHA units + 82 inclusionary PSHH units, depending on funding source). The site plan
will be updated to show the PSHH site as part of the Lot 7 development project. We understand
that the project will be reviewed based on the maximum potential number of PSHH inclusionary
units (82) in order to appropriately evaluate potential impacts.
2. Project Description, Specific Plan Amendments: Clarify all statistics and make consistent,
indicating on the plans how these relate to the overall buildout of the SLRSP. The original
EIR and SEIR examined a project with up to 580 dwelling units, 150,000 SF of retail,
100,000 SF of office, and 200 hotels rooms. The subsequent approved Lot 3142 application
increased development potential to 654 dwelling units but a reduction in retail development
in the NC zone to 114,300 SF. The current application would include up to 276 dwelling
units (or is it 346 units?) and 7,000 SF of commercial (or is it 15,000 SF?). Overall, it
appears the SLR Specific Plan buildout would be 930 units (Kovesdi letter indicates 941
units), but only 7,000 SF of commercial, while office and hotel buildout would remain
unchanged.
Response:
Existing Uses
The current/near-term buildout of San Luis Ranch to date (approved with building permits)
consists of the following components already approved with the original Specific Plan, 2020
Amended Specific Plan, and VTTM 3142:
• 577 single and multifamily residential units
• 200-room hotel
• Allowed uses of the Agricultural Heritage Center per Specific Plan Table 3-10:
o 3,000 sf Learning Center
o 3,000 sf Market
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o 10,000 sf Agricultural Processing
o 5,000 sf Food Services,
o 15,000 sf General Retail
Proposed Project
The proposed project would construct 276 market rate rental units, 64 units of inclusionary housing
required by VTTM 3142, along with additional PSHH inclusionary units (see discussion above),
and up to 15,000 square feet of commercial/retail development. Williams Homes will refine their
plan for the retail component of Lot 7 prior to architectural review and has requested flexibility to
respond to market conditions at time of building permit submittal. As with the PSHH component
of the project, we request that the maximum potential retail square footage (15,000 sf.) be included
in the staff’s review. No development of the office site is proposed with this application.
General Plan Amendment Request for Modified Buildout
The City’s Land Use Element Section 8.1.4 establishes performance standards for the Specific
Plan according to land use type. The General Plan Amendment request would facilitate the
proposed project with the following two modifications to the performance standards table on
Page 1-88:
Project Amendments to General Plan’s San Luis Ranch Performance Standards
Designations Allowed % of Site Minimum Maximum
LDR
MDR
MHDR
HDR
NC
350 units 654 units
941 units
NC
CC
AG
50,000 SF
38,000 SF
200,000 SF
O 50,000 SF 150,000 SF
200 rooms
PARK 5.8 ac
+/- 8.8 ac TBD
OS
AG Minimum 50% No maximum
n/a
n/a
Source: San Luis Obispo General Plan, Land Use Element, Section 8.1.4 (2014)
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3. Project Description, Transportation Analysis: The CCTC transportation analysis examined
up to 358 units and 15,000 SF of commercial, which is inconsistent with the site plan and
Kovesdi letter, and appears to account for the 77 units previously approved in VTTM 3142.
Again, please clarify and revise documents as needed to be consistent, and put this in
context with the previously approved portions of Lot 7 that are “not a part” of the current
application.
Response:
As noted above, the PSHH component is now included in the project. The CCTC transportation
analysis includes evaluation of 276 WHA units and 82 PSHH maximum potential units, capturing
the maximum number of residential units, depending on funding source. The CCTC analysis also
evaluated 15,000 sf. of retail in order to capture potential transportation impacts under the
maximum retail scenario.
4. Density: When all proposed development in Lot 7 (276 units in this proposal and up to 77
units in the approved PSHH development) is considered in the aggregate, it appears to
propose up to 353 units on 11.44-acre Lot 7, or an average density of 30.85 du/ac, which
exceeds that allowed in even the highest density zone (NG-30) of the SLRSP. Please revise
project description, which could require a General Plan Amendment and rezoning, to
ensure consistency with density requirements.
Response:
Per both the originally adopted and Amended Specific Plan, residential density throughout the
project is calculated based on gross site area:
The gross site area of the WHA portion of Lot 7 is 9.59 acres. At 30 du/acre, the WHA portion of
the project can accommodate 287 residential units (9.59 X 30). (All dwelling units have been
rounded down to the nearest whole number.) The project proposed 276 units, well under the
maximum density.
The gross site area of the PSHH lot is 1.88 acres. At 30 du/acre, the PSHH portion of the project
can accommodate 56 inclusionary residential units (1.88 X 30). The PSHH portion of the project
is 100% affordable to low and very-low-income households and is therefore eligible for an 80%
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State Density bonus of 45 units, bringing the total allowed units on the PSHH site to 101
inclusionary units. PSHH is proposing up to 82 units, well under the maximum density.
5. Zoning: The subject site at Lot 7 is currently zoned Neighborhood Commercial with a
Specific Plan overlay, and has a General Plan designation of Neighborhood Commercial.
The San Luis Obispo Municipal Code Section 17.26.020 allows a maximum density of 12
units per acre in the C-N zone. General Plan Land Use Element Table 1 identifies a
maximum density of 12 du/ac in the NC designation. Please revise project description,
which could require a General Plan Amendment and rezoning, to ensure consistency with
density requirements.
Response:
Density provisions in the adopted San Luis Ranch Specific Plan and Amended Specific Plan takes
precedence over the City’s Zoning Regulations, as stated in Section 17.02.080 of that document:
17.02.080 – _Relationship to Specific Plans
Specific Plans are designed to meet the requirements of the State Government Code and the City
of San Luis Obispo General Plan. All uses, buildings, or structures located within a specific plan
area shall comply with the provisions of the applicable Specific Plan. If such provisions conflict
with the Zoning Regulations, the requirements of the adopted Specific Plan shall take precedence
over the Zoning Regulations. In instances where the Specific Plan is silent, the Zoning Regulations
shall prevail.
Residential density is capped in the Specific Plan at 30 units per acre. Please see above discussion
of density under #4.
6. Inclusionary housing. Page 6 of the project description identifies inclusionary calculations.
• Inclusionary units for the 31,000 sq. ft. of commercial at the Ag Heritage Center
are not identified.
• Provide a complete inclusionary housing plan, including proposed levels of
affordability. Show compliance with the City’s Inclusionary Ordinance, Municipal
Code Chapter 17.138, including standards for inclusionary units (Section
17.138.050) and application requirements (Section 17.138.070).
• One of the community benefits identified in the Development Agreement is the
additional affordable housing beyond code requirements. To date, the required
affordable housing has not been completed, and therefore, this community benefit
and project requirement has not been fulfilled. Please provide additional
information to explain this existing deficiency. Explain how additional affordable
housing will be provided for consistency with DA provisions to provide the
identified community benefit. How will San Luis Ranch ensure that the
inclusionary housing requirements of both the existing and the proposed project are
fulfilled?
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Response:
• The SLR Lot 7 application is a part of the San Luis Ranch Specific Plan area. All
inclusionary housing requirements for the San Luis Ranch Specific Plan area are governed
by the adopted Amended Specific Plan, Development Agreement and subsequent
Administrative Amendments to the Development Agreement. While all allowed uses at
the Agricultural Heritage Center are included in both the original and Amended Specific
Plan, the inclusionary requirements identified in the Development Agreement and
Administrative Amendments to the Development Agreement do not require any
inclusionary units for the Agricultural Heritage Center.
• As discussed above (response to #5), the San Luis Ranch Amended Specific Plan,
Development Agreement and Administrative Amendments to the Development Agreement
serve as the governing documents for all projects within the Specific Plan area. Therefore,
projects proposed as part of the SLR Specific Plan are not subject to the City’s Inclusionary
Ordinance Municipal Code. The Lot 7 inclusionary housing plan will be consistent with
the requirements of the Development Agreement and the First Administrative Amendment
to the Development Agreement. Based on the recalculation of Lot 7 (see response to #1),
the project will be required to deliver a total of sixty-nine (69) inclusionary units. Per the
First Administrative Amendment to the Development Agreement, a minimum of twenty-
six (26) of these units will be very-low-income deed restricted. The remaining units will
be a combination of low and very-low-income based on the funding sources available to
the inclusionary builder, People’s Self-Help Housing.
• The Development Agreement identifies a community benefit of the San Luis Ranch
Specific Plan area as having additional inclusionary units beyond the agreed upon
minimum requirements in the Development Agreement. To fulfill this requirement, the
Feasibility Memorandum Exhibit D of the recorded the Development Agreement agreed to
the inclusion of fourteen (14) workforce deed restricted units. To date ten (10) workforce
units have been completed. Three (3) additional workforce deed restricted units will be
completed by the end of August 2024. The final workforce deed restrict unit will be
completed at the completion of the buildout of the low-density product, per the terms of
the San Luis Ranch Affordable Housing Agreement recorded with Tract Map 3096.
Informational Notes:
7. Zoning & mixed use proposal: The project appears to propose 276 units (or is it 346 units?)
(185,340 sq. ft. residential), plus the 77 units previously approval, and 7,000 sq. ft. of
commercial. While CN zoning allows mixed use projects, the proposal is almost entirely
residential, and the commercial uses proposed are mostly residential amenities such as a
rental office, mail room, and second floor gathering space. The mix of uses will be
reviewed by City Council at the initiation hearing for input on the proposal and zoning/land
use designation.
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Response:
Per City of San Luis Obispo Zoning Regulations Section 17.02.080 (cited above) land use
provisions in the San Luis Ranch Specific Plan and Amended Specific Plan take precedence over
the City’s Zoning Regulations. Therefore, the Lot 7 site is not zoned CN, but SLR NC, in which
multifamily residential is allowed by right. (See Table 3-6, as well as density discussion, above.)
The proposed General and Specific Plan Amendments would revise the total number of residential
units, square footage of commercial uses, and minimum acreage of parks in the San Luis Ranch
Specific Plan Area. (Please note that the Specific Plan Amendment would remove the reference in
Table 3-6 to Zoning Code 17.22.010(G), prohibiting vacation rentals (2012 Zoning Regs), since
that language no longer exists in that section of the current City Zoning Regulations. However, a
note will be added to Table 3-6 prohibiting vacation rentals, thus preserving the original intent of
the Specific Plan.)
8. Parks. The GP calls for 5.8 acres of parks in SLR, but that assumed a buildout of 580
dwelling units, or 1 acre per 100 homes (which translates to about 5 acres per 1,000
population). That standard is similar to the overall Citywide standard in the GP for
annexation areas, which is 5 acres per 1,000 population. (Buildout population of all of SLR
with the current proposal is estimated to be about 2,000.) With the current proposal, there
would be up to 930 dwelling units within SLR, which suggests the need for 9.3 acres of
parkland within the Specific Plan area. With the proposed central park and central amenity
(collectively about 2 acres), the total parkland within SLR would be roughly 5 acres. (Trails
and drainage features do not count as parks.) This does not meet the existing SLRSP
requirement, particularly if the requirement is interpreted as 1 acre per 100 units rather than
5.8 acres total, which had assumed a buildout of 580 dwelling units. It also falls short of
the Citywide General Plan standard. If Council authorizes initiation of the project, the parks
proposal will be considered by the Parks and Recreation Committee before being
considered by the Planning Commission and ultimately City Council. Any parkland
acreage shortfall, even if the proposal were to be approved by PRC, would require payment
of in lieu fees to make up the acreage shortfall.
Response:
San Luis Ranch Specific Plan area Tract Maps 3096 and 3150 already provide a total of 5.8-acres
of park land, based on the 2.8-acre Central Park and $1,696,805 in-lieu fees paid in conjunction
with the recordation of Tract Map 3096. In addition, per the terms of the Development Agreement,
an additional Park In-Lieu fee in the amount of $1,478,221 was paid through building permits for
Tract Map 3150.
As you note, the San Luis Ranch Specific Plan area is required by both the General Plan and the
Specific Plan to provide a minimum of 5.8 acres of parkland. The General Plan and Specific Plan
do not require one acre of parkland for every 100 residential units. Therefore, the General Plan
requirement for five acres per 1,000 residents in annexation areas governs. The parkland
requirement for the proposed residential units on Lot 7 (not including the inclusionary units already
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approved with VTTM 3142) are as follows (based on the maximum number of PSHH inclusionary
units – 82):
SLR Lot 7 Required Parkland
WHA Portion* PSHH Portion*
Unit Type # of Units Population Unit Type # of Units Population
Studio 72 72 Studio 1 1
1BR 90 180 1BR 2 4
2BR 114 342 2BR 2 6
Total Units
Total Residents 594 11
Total Residents - WHA + PSHH 605
*1 resident per studio, 2 per 1BR unit, 3 per 2BR unit, per City of SLO 2024 Below Market Rate
Housing Standards
General Plan Requirement for Annexation Areas = 5 acres per 1,000 residents
Based on 605 new residents, 3.025 additional acres of parkland is required.
If PSHH receives funding for the maximum number of potential units proposed (82), an additional
3.025 acres of parkland or in-lieu equivalent will be required. The current WHA/PSHH proposal
includes a central park and central amenity which collectively account for just over one acre.
Coupled with the 5.8-acres already dedicated or satisfied through the payment of fees, that would
leave a maximum projected shortfall of 2.025 acres (8.825 – 5.8 – 1 = 2.025). Final park
calculations will be completed as part of the authorized GPA/SPA/Development Plan application
and will be subject to the approval of a final map and related entitlements.
Thanks for your time and consideration. We look forward to working with you to maximizing
community benefits at San Luis Ranch.
Best regards,
Josh Bivin
Josh Bivin
MI San Luis Ranch
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CC: Whitney McDonald, City of SLO City Manager
Timmi Tway, City of SLO Community Development Director
John Rickenbach, City of SLO Contract Planner
Rachel Kovesdi, Kovesdi Consulting
Don Faye, San Luis Ranch
Lance Williams, Williams Homes CEO
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Dear Mayor Stewart, Councilmembers,
Thank you very much for meeting with us last week to discuss residential uses on the San Luis
Ranch Lot 7 parcel. We truly appreciate your time and thoughtful input, as well as the opportunity
to summarize our conversations.
To recap, Williams Homes (WH) and People’s Self-Help Housing (PSHH) propose a partnership
that will provide the City with 276 market rate rental apartments and a minimum of 70 inclusionary
units for low and very low-income tenants. Both organizations have a long track record of
successfully completing projects in the City and County. The SLR Lot 7 location provides
outstanding access to schools, parks, public transportation and services, and will score well on
PSHH funding applications.
Funding Dilemma
Importantly, neither WH nor PSHH can obtain funding for their project if encumbered by the other
component. WH cannot secure bank loans for their development if their ability to obtain
certificates of occupancy is dependent on PSHH performance. And PSHH cannot secure State or
Federal grant funding for their development if they are dependent on WH construction progress
for critical infrastructure. All of you indicated that you understand that this “chicken and egg”
problem is a critical barrier to developing Lot 7.
SLR proposes the following solution to this impasse:
• SLR is willing to amend the DA to lock in current (2024) impact fees, amounting to
approximately $5.5MM in addition fee income to the City. In exchange for our agreement
to pay 2024 fees, the City will agree that upon dedication of the recorded legal parcel to
PSHH and payment to PSHH of $500,000, WH will be free of any construction start or
occupancy restrictions related to the affordable component of the project.
• To ensure PSHH has a “shovel ready” project, which is necessary for them to apply for
financing, the project would be willing to post a bond in the amount equal to the cost of
improvements necessary to provide PSHH with a buildable lot (access and utilities).
We believe that this resolution will allow both components of the Lot 7 project to move forward
expeditiously to deliver much needed affordable and workforce housing to the City. If this
resolution is deemed unacceptable, we respectfully request that City staff present to us a financial
and/or timing arrangement that would compel staff to support and City Council to approve Lot 7
as proposed.
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Fiscal Analysis
A number of you expressed concern regarding a perceived loss of sales tax revenue as reported in
the EPS memo directed by City staff. However, as we discussed, local retail vacancy and
absorption rates, as well as our two- and half-year experience attempting to market Lot 7 to retail
developers, confirm that the site will not support additional retail. We understand that you feel the
need to take this potential loss into consideration when making decisions about re-
entitlement. However, we hope that you will consider both the Fiscal Impact Analysis completed
by Applied Development Economics as well as the memo completed by San Luis Ranch. It should
be noted, that since the inception of the San Luis Ranch Specific Plan and associated Development
Agreement, the fiscal impact analyses of the project have been completed by Applied Development
Economics at the direction of the City.
We also registered your alarm regarding the sale of Harvest Loft units to Cal Poly, and the
associated loss of property tax revenue. Upon detailed review of the Fiscal Impact Analysis, the
total projected loss of property tax revenue from the Harvest Lofts is estimated at approximately
$77,000 per annum. Additionally, the City’s concern over the loss of property tax revenue seems
to directly conflict with the Lot 7 economic study commissioned by City staff and completed by
EPS where a single variable, Lot 7, was isolated. It should also be noted that when taking a holistic
approach to fiscal evaluation, which is to say including all revenue and expenses for the master
planned community, even after the loss of property taxes from the sale of the Harvest Lofts and
the proposed re-entitlement of Lot 7, the entire Specific Plan area returns an annual surplus to the
City in excess of $500,000. This figure is supported by the calculations completed in the supporting
documents for the latest EPS memo.
To continue processing the Lot 7 proposal in good faith, we request that the GPA/SPA amendment
authorization be brought to hearing prior to year-end. Mayor Stewart indicated potential
availability on November 12th and December 10th. We will be pleased to work with staff to prepare
a cohesive and comprehensive presentation for Council on either of these dates.
We look forward to working collaboratively with you to further Major City Goals and further
burnish the City’s Prohousing designation. Thanks again for your time and consideration.
Sincerely,
Josh Bivin
Cc. Whitney McDonald, City Manager
Timmi Tway, Community Development Director
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3940-7 Broad Street, #139
San Luis Obispo, CA 93401
(805) 471-2948
A CALIFORNIA CORPORATION
“Building Legacies”
October 24, 2024
Callie Taylor, Community Development Department
City of San Luis Obispo County
919 Palm Street
San Luis Obispo, CA 93401
Via email
Re: SPEC–0020-2024 San Luis Ranch Lot 7 Residential Mixed-Use Project
Clarifications
Dear Callie,
I hope you’re doing well.
Thank you for your October 11th email confirming the December 10, 2024 City Council
hearing date for the multifamily residential mixed-use project on Lot 7 of recorded Tract
3096 (site of approved VTTM 3142).
Per your direction, the applicant team has added a request for a Zoning Amendment to the
revised project description below (all additional/modified language underlined). Please
note that a General Plan Amendment request was included in the original application of
April 29, 2024, in order to modify total residential units and commercial square footage
identified by the performance standards in General Plan Section 8.1.4.
We look forward to working with Council and staff on this component of the San Luis
Ranch Specific Plan area.
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Revised Project Background and Description – 10/21/2024
Background
Since it’s conception more than a decade ago, San Luis Ranch Specific Plan has had four
overarching goals:
o Diverse Range of Housing Types
o Multimodal Connectivity
o Agricultural Preservation
o Outdoor Recreation Opportunities
To date, the Specific Plan has been implemented to meet its original objectives, along with
the developing needs of our dynamic community.
As we’ve discussed, the demands of City residents and workers have changed significantly
since the adoption of the Specific Plan in 2018, particularly since the Covid-19 pandemic.
Prior to the pandemic, consumers were already turning to online retail vendors. The
pandemic and associated lockdowns solidified and supercharged the trend toward online
shopping, resulting in increasing commercial vacancy rates, even in our beloved
downtown. Higher commercial vacancies in turn have led to decreases in sales tax revenue
to the City, as well as direct costs, in the form of lower downtown rents, which affect
everything from the City’s parking fund to its tourism budget.
At the same time, housing, particularly multifamily rental product, has become
increasingly difficult to come by. Much of the SLO workforce still has to commute from
outside of the City, contributing to traffic congestion, noise and air pollution, and
greenhouse gases.
Having monitored these developments over the past few years and experienced the
undesirability of additional commercial space through the unsuccessful marketing of Lot 7
as entitled, the San Luis Ranch team has partnered with Williams Homes and People’s
Self-Help Housing to bring the City a project that will address the prevailing conditions in
the City and help the City prosper well into the future.
Project Description
In partnership with Williams Homes and People’s Self-Help Housing, San Luis Ranch is
proud to put forward a new concept for Lot 7 that will respond directly to current and future
needs of the San Luis Obispo community. Containing 276 market rate rental apartments,
at least 69, and up to 77 affordable units, and 7,000 up to 15,000 square feet of
neighborhood commercial, Lot 7 will give City residents another opportunity to live where
they work and love where they live. People’s Self-Help Housing competes for grant
funding from a number of private and public programs, all of which have different scoring
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parameters The final number of inclusionary affordable units will be determined by the
People’s Self-Help Housing funding source. Across Froom Ranch Way from the
Agricultural Heritage Center’s local eateries and markets, Lot 7 will be one of the most
walkable neighborhoods in San Luis Obispo. The plan also contains a community gathering
center, privately maintained public park, and the multimodal connectivity envisioned in the
Specific Plan.
The proposed mixed-use project on San Luis Ranch Lot 7 (SLR7) will offer a dynamic and
engaging new neighborhood of 276 market rate apartment residences designed and
constructed by Williams Homes, with a mix of studios, one-bedroom and two-bedroom
homes on roughly 9-acres. These homes are designed in two different three-story building
types, a 12-plex building and a 30-plex, with units ranging in size from 594 SF - 896 SF.
This mix of home types will be attractive to a variety of interested renters including singles,
couples and small families who want to live close to all of the amenities that San Luis
Ranch provides. The buildings are creatively situated on the site to respect the surrounding
context and maximize the livability and pedestrian connectivity of the community.
Attractive, modern farmhouse elevations in great color palettes will make the
neighborhood a well sought after place to live.
San Luis Ranch and Williams Homes are honored to partner with People’s Self-Help
Housing to provide a minimum of 69 and up to 77 deed-restricted inclusionary affordable
rental units. These 1, 2, and 3-bedroom units will range in size from 650 SF – 1,150 SF,
and will include indoor and outdoor amenities, along with the wraparound services for
which People’s Self-Help Housing is so well recognized. Just like the market rate product,
these units will have access to all of the park and open space resources, shopping and on-
site agriculture at San Luis Ranch.
Located in the middle of the new neighborhood and over existing drainage improvements
is the nearly 1-acre Central Park, envisioned as an open area for programmed activities
such as sand volleyball, picnic area, outdoor gym, bocci ball courts and open areas.
Adjacent to the multi-modal path, Central Park will be interconnected with extensive
walking paths and will be open to the public. Given its proximity to the locally produced
food at the Agricultural Heritage Center across Froom Ranch Way, this central park will
offer lots of seating to enjoy offerings of the day.
The residents of the neighborhood will also enjoy a private recreation amenity (Central
Amenity) which will include a pool and spa area, sunbathing areas, BBQs and gathering
space and restroom buildings. Together, the Central Amenity (private) and the Central
Park (public) will provide the community with active and welcoming open spaces within
the higher density neighborhood. With a focus on bike trails throughout the neighborhood
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and the community, 55 open bike racks for guests and 3 bike barns for residents, along
with in-home bike racks will further support and encourage the use of bikes of all sizes and
styles.
One exciting feature of this bicycle-centric neighborhood will be the vibrant commercial
building, sensibly located at the corner of Froom Ranch Way and Dalidio Drive. Designed
to reinforce the agricultural setting of the area, this space will feature an attractive habitable
silo structure, recognizable as a landmark for the community. This structure is envisioned
to may contain a bike shop for service, repair, and rentals, a deli/café, a small, locally
sourced coffee/sweets shop for locals and visitors alike, and a mailroom/leasing office for
the residents. A grand second floor multi-purpose space will could offer additional retail
space, along with flexibility in programming of events, social gatherings or simply relaxing
and enjoying the views and delightful weather of San Luis Ranch.
Entitlements to Implement the Project
Entitlement processing is expected to include Development Plan with ARC review,
General and Specific Plan Amendments with ALUC referral, Zoning Amendment, Vesting
Tentative Tract Map conformance evaluation, and environmental review. Removed per
10/24/24 email from Craig Steele.
General and Specific Plan Conformance and Requested Modifications
General Plan:
The San Luis Ranch Specific Plan Area is governed in the City’s 2014 Land Use Element
Section 8.1.4. That section identifies 14 goals, objectives, and requirements for the entire
San Luis Ranch planning area. These include:
a. Provide land and appropriate financial support for development of a Prado Road
connection. Appropriate land to support road infrastructure identified in the Final
Project EIR (overpass or interchange) at this location shall be dedicated as part of
any proposal and any area in excess of the project’s fair share of this facility shall
not be included as part of the project site area used to calculate the required 50%
open space.
b. Circulation connections to integrate property with surrounding circulation network
for all modes of travel.
c. Connection to Froom Ranch and Calle Joaquin, if proposed, shall not bifurcate on-
site or neighboring agricultural lands. Any connection to Calle Joaquin shall be
principally a secondary / emergency access by design.
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d. Development shall include a transit hub. Developer shall work with transit officials
to provide express connections to Downtown area.
e. Maintain agricultural views along Highway 101 by maintaining active agricultural
uses on the site and maintain viewshed of Bishop Peak and Cerro San Luis.
f. Maintain significant agricultural and open space resources on site (see Policy
1.13.8.B). Land dedicated to Agriculture shall be of size, location, and
configuration appropriate to maintain a viable, working agricultural operation.
g. Where buffering or transitions to agricultural uses are needed to support viability
of the agricultural use, these shall be provided on lands not counted towards the
minimum size for the agriculture / open space component. Provide appropriate
transition to agricultural uses on-site.
h. Integrate agricultural open space with adjacent SLO City Farm and development
on property.
i. Site should include walkable retail and pedestrian and bicycle connections to
surrounding commercial and residential areas.
j. Commercial and office uses shall have parking placed behind and to side of
buildings so as to not be a prominent feature.
k. Neighborhood Commercial uses for proposed residential development shall be
provided.
l. Potential flooding issues along Perfumo Creek need to be studied and addressed
without impacting off-site uses.
m. All land uses proposed shall be in keeping with safety parameters described in this
General Plan or other applicable regulations relative to the San Luis Obispo
Regional Airport.
n. Historic evaluation of the existing farm house and associated structures shall be
included.
All of these goals, objectives, and requirements continue to be met with the proposed Lot
7 mixed-use project.
Additionally, the Land Use Element specifies the following performance standards for the
San Luis Ranch Specific Plan Area:
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(Please note that Specific Plan Table 2-1 replicates this General Plan Table.) While the
proposed Lot 7 mixed-use project meets all other Land Use Element performance
standards, it will require two modifications:
1) Increasing the maximum number of residential units from 500 to 930.
The new maximum residential reflects:
• 577 market rate residential units, and up to 77 deed-restricted inclusionary units,
for a total of 654 residential unit approved as part of a Specific Plan Amendment
by City Council in November 2020. (Please note that 654 units the currently
approved with the 2020 Specific Plan Amendment are not reflected in the City’s
General Plan.)
• 276 Williams Homes market rate rental units, at 30 units per acre density allowed
by the Specific Plan in the Neighborhood Commercial (NC) zone, and
• A minimum of 69 and up to 77 low-income affordable units to be provided by
Peoples Self-Help Housing on a parcel donated by San Luis Ranch.
This residential density will generate projected traffic counts and VTM below the levels
contemplated with the originally proposed retail development in the San Luis Ranch
certified Final Environmental Impact Report (July 2017) and the Final Supplemental
Environmental Impact Report (July 2018) as well as the Addendum to the certified Final
Environmental Impact Report (August 2020).
* Inclusionary housing - the change in use from 114,300 square feet of commercial to an
additional 296 market rate multifamily residential units changes the calculation in required
affordable units. The 2020 Specific Plan Amendment allowed 26-low-income affordable
930 units
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units to be transferred from the existing multi-family site to the proposed Lot 7. The
proposed Lot 7 mixed use development, along with the remaining affordable units to be
constructed for other uses in the Specific Plan Area will result in a requirement for 69
affordable units on the Lot 7 site:
Lot 7 Retail 1 units (2/acre)
Hotel 7 units (2/acre)
Office 7.4 units (2/acre)
Lot 7 MFR 27.6 units (10%)
Transferred 26 units
Total 69 units
2) Decreasing the minimum square footage of Commercial from 50,000 square feet
to 38,000 square feet.
The new minimum reflects the commercial uses available to San Luis Ranch and City
residents, as well as visitors, in the Agricultural Heritage Center, as well as the
neighborhood serving commercial uses proposed on Lot 7. See discussion pertaining to the
challenges of retail development above, under “Background”.
Below is an approximate timeline of changes to the SLRSP’s total commercial square
footage:
• The City’s 2014 General Plan Land Use Element establishes a performance
standard/commercial minimum of 50,000 square feet for the SLRSP. This aligns
with SLRSP Table 2-1 (General Plan San Luis Ranch Performance Standards).
• Council Resolution No. 11192 (November 2020) approved up to 114,300 square
feet of commercial.
• As reported in the 2024 Annual Monitoring staff report (April 2024), the 53-acre
AG-zoned portion of the Specific Plan currently includes 31,236 square feet of
commercial buildings, including retail, restaurant, a market, and agricultural
processing uses.
The Project proposes a 2-story15,000 7,000 square foot feet of commercial structure space,
bringing the total commercial square footage within the SLRSP area to 46,236 38,236
square feet, which is below the performance standard minimum of the 2014 adopted
General Plan. However, the final square footage of retail will be determined at the time of
building permit application. In order to allow Williams Homes flexibility in designing the
commercial component, the project is proposing that the General Plan identify 38,000
square feet as the minimum retail square footage on the Specific Plan area. This would
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include the existing 31,236 square feet of retail uses at the Agricultural Heritage Center, as
well as a minimum 7,000 square foot, 1-story, up to 15,000, 2-story retail building on Lot
7.
Specific Plan:
The San Luis Ranch Specific Plan allows for a wide range of potential land uses, including
multifamily residential. That document also establishes a variety of standards and
requirements for development within the Neighborhood Commercial (NC) zone.
Specific Plan Table 2-3 identifies the maximum land area and number of units or square
footage allowed within the Specific Plan area, and will be adjusted to comport with the
General Plan table:
Table 3-3 identifies multifamily dwellings as uses allowed by right, citing the City of San
Luis Obispo Zoning Code Section 17.22.010, which states the goal of allowing “dense
housing close to concentrations of employment and college enrollment, in the Downtown
core, along transit corridors and nodes, and in areas largely committed to high-density
residential development”. Table 3-7 establishes the development standards for
development within the NC zone.
572 units
69-77 units
3.8 acres
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Section 3.7.1 (Residential Design Guidelines) apply to residential projects regardless of
zone designation. Residential development standards are found in Table 3-3. Section 3.7.2
guidelines apply only to commercial development.
The proposed mixed-use Lot 7 project conforms to Specific Plan requirements and
standards, including lot coverage, building height and design features, setbacks,
landscaping, automobile and bicycle parking, and public improvements (Transit Center).
Zoning Amendment
The application includes a request to update the Lot 7 SLR Neighborhood Commercial
zoning to allow residential density of up to 30 dwelling units per acre (gross). Removed
per 10/24/24 email from Craig Steele.
VTTM 3142 Conformance and Development Agreement Status:
With this application, San Luis Ranch is submitting an application for review and approval
of a proposed final map for Lot 7 of Tract Map 3142. As approved initially, the Lot 7 was
proposed to be subdivided into 11 lots, including the affordable housing lot to be donated
granted to People’s Self-Help Housing (PSHH), which is identified as Lot 11 on the
Map. Recordation of this final phase of Tract 3142 is necessary to be able to convey Lot
11 to PSHH.
We are requesting that the City find the current proposed final map to be in substantial
compliance with the previous approved tentative map. Per Section 66474.1 of the
Subdivision Map Act, the City shall not deny the recordation of a final map where it finds
that “the final … map is in substantial compliance with the previously approved tentative
map.” Here, the proposed final map is in substantial compliance with the approved
tentative map. Both maps result in the same number of lots and identical locations of
ingress and egress to adjacent public streets. The internal configuration of several lots has
changed in order to provide more logical lot lines to run through the middle of drive aisles,
as opposed to the original parcel lines that now cross yards, drainage features, and areas
occupied by structures.
We also note that the City has requested confirmation as to whether San Luis Ranch is
amenable to discussing changes to certain portions of the previously approved
Development Agreement. San Luis Ranch is willing to discuss changes to the
Development Agreement in the event that legislative amendments, such as approval of an
amendment to the Specific Plan, is required in conjunction with the approved project.
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Please let me know if you have any preliminary questions regarding this application
package. Thanks so much for your time and consideration. We look forward to working
with you on this exciting project.
Very best regards,
Rachel Kovesdi
Cc: Timmi Tway, City of SLO Community Development Director
John Rickenbach, City of SLO Contract Planner
Josh Bivin, San Luis Ranch COO
Glenn Adamick, Williams Homes Entitlement Manager
Ken Triguiero, People’s Self-Help Housing CEO
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TERM SHEET
DEVELOPMENT OF LOT 7 – SAN LUIS RANCH SPECIFIC PLAN
Williams Homes (Williams) is proposing to develop Lot 7 of the San Luis Ranch Specific Plan with up to 276
market rate rental apartments and up to 15,000 square feet of neighborhood commercial. A 1.88-acre
parcel within Lot 7 would be created and given to People’s Self-Help Housing (People’s) for the
development of at least 69, and up to 77 affordable units. Consistent with the existing Development
Agreement, San Luis Ranch is dedicating the parcel and will provide a $500,000.00 contribution to People’s
for use in construction of the affordable units.
During discussions with City staff, it has become clear there are concerns about the timing of the
construction of the affordable units. Presently, the City is requiring construction of the affordable units
in conjunction with the market rate units. As People’s competes for grant funding from a number of
private and public programs potentially over multiple years to construct their projects, tying the
affordable and market rate units together makes it very difficult if not impossible to finance the market
rate apartments.
To address this issue initially, San Luis Ranch and Williams Homes offered to post a bond with the City in
an amount equal to the extension of utilities and access to the People’s parcel. City staff is still concerned
with this “bond offer” as there can be difficulties and costs, along with timing issues associated with calling
a bond and obtaining the funding from the bonding company.
To address this issue and allow the affordable and market rate units to move forward independently
Williams is proposing the following:
• As a condition of the formal project entitlement for the market rate units, Williams within 30 days
of approval would post a cash Letter of Credit in favor of the City in an amount equivalent to the
costs associated with the extension of utilities and access to the People’s parcel (presently it is
estimated that those costs are approximately $1.5 million). This along with providing People’s
with their parcel will allow People’s to start securing grant funding for their project. This Letter
of Credit would be released to Williams upon completion of the access and utility extension to
People’s parcel. If for some reason the Williams market rate project is delayed for an extended
period the City would have the ability to use the cash Letter of Credit funds to complete the
improvements for People’s if they are in a position to move forward. We can work with staff on
a recommended “delay” time frame during the formal entitlement process. A Letter of Credit in
favor of the City is basically cash sitting in an account that the City can obtain much quicker and
easier than calling a bond.
• As a condition of the formal project entitlements for the market rate units, Williams within 30
days of approval would post a second Letter of Credit in favor of the City in the amount of $1.5
million to motivate Williams to assist People’s to ensure completion of the People’s project. The
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Letter of Credit would be reduced to $750,000 at such time that People’s confirms to the City in
writing that they have secured the necessary funding for their project. The Letter of Credit would
be completely released at such time People’s commences construction of their project.
• Willams and San Luis Ranch agree to amend the Development Agreement to pay impact fees to
the City in an amount equal to the fees in effect in December 2024, rather than the 2018 fees
locked in by the approved Development Agreement. This results in an additional approximately
$5.5 million to the City.
• Williams has also confirmed to City staff that as a condition of the formal entitlement approvals
Williams would complete any additional landscape improvements within the parkway along the
project frontage as well as maintaining those ultimate parkway improvements.
Williams would like to thank City staff for continuing to collaborate with us on this exciting project. They
have provided great feedback and direction as we have moved through the conceptual plan for Lot 7. We
strongly believe we will be able to work with the City and People’s to make this project happen. Finally, it
is Williams intent to develop and hold the market rate units for the long-term and we have no intent or
interest to sell the market rate units to Cal Poly.
Thanks for your consideration and we look forward to working with the City through the entitlement and
development process.
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P.O. Box 273
Pismo Beach, CA 93448
(805) 471-2948
A CALIFORNIA CORPORATION
“Building Legacies”
November 13, 2024
Timmi Tway, Community Development Director
City of San Luis Obispo County
919 Palm Street
San Luis Obispo, CA 93401
Via email
Re: San Luis Ranch Lot 7 Amendments GPA/SPA Authorization
Dear Timmi,
Thank you for forwarding your memo to Council of 10/31/24.
In preparation for the December 10, 2024 City Council authorization hearing, please find
the following documents related to the construction of inclusionary units on Lot 7 and the
fiscal effects of the requested General and Specific Plan amendments:
• Operating Memorandum Number One Between the City of San Luis Obispo and
MI San Luis Ranch, LLC, signed by City Manager on May 8, 2019;
• Operating Memorandum Number Two Between the City of San Luis Obispo and
MI San Luis Ranch, LLC, signed by City Manager on August 20, 2020;
• First Administrative Amendment to Development Agreement, recorded on
February 23, 2021;
• ADE Revised Fiscal Impact Analysis of the Proposed San Luis Ranch Project,
revised October 31, 2024 (revised to omit nano units transferred to Cal Poly.
We respectfully request that these documents be included in the Council staff report
package.
Please let me know if you have any questions. Best regards,
Rachel Kovesdi
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OPERATING MEMORANDUM NUMBER ONE
BETWEEN
THE CITY OF SAN LUIS OBISPO
AND MI SAN LUIS RANCH, LLC
The Development Agreement by and among the City of San Luis Obispo (the "City") and
MI San Luis Ranch LLC ("SLR") adopted by the City Council by Ordinance No. 1649 (2018
Series) (the "Development Agreement'), provides in Section 9.03 of the Development
Agreement that compliance with the requirements of the San Luis Ranch Specific Plan (the
Specific Plan"), the Conditions of Approval (the "Conditions of Approval") for the San Luis
Ranch Project (the "Project"), the conditions of approval for Vesting Tentative Tract Map. No.
3 096 (the "VTTM"), and provisions of the Development Agreement (collectively, the Specific
Plan, the Conditions of Approval, the VTTM, and the Development Agreement may be referred
to collectively as the "Project Approvals") require a close degree of cooperation between the
City and SLR and refinements and further development of the Project may demonstrate that
clarifications are appropriate with respect to the details of performance. The Development
Agreement further provides that if and when City and Owner agree that such clarifications are
necessary or appropriate, they may effect such clarifications through operating memoranda
approved by the City and SLR.
With this Operating Memorandum, City and SLR wish to clarify certain conditions in the Project
Approvals in order to carry out the intent of the City and SLR with respect to the design and
development of the Project. Capitalized terms used in this Operating Memorandum shall carry
the same definitions as those set forth in the Development Agreement.
A. PURPOSE.
The purpose of this Operating Memorandum is to identify a basic framework between the City
and SLR, for allowing SLR to proceed with the recording of a Final Map with respect to the
VTTM and to facilitate the construction of the improvements as contemplated under the terms of
the Development Agreement. This Operating Memorandum will reduce certain uncertainties
associated with the orderly development of the Project, provide for the effective and efficient
development of public facilities, infrastructure and services, a wide range of housing types,
densities and affordable housing options, and provide significant public benefits to the City and
its residents. The parties acknowledge that a credit and reimbursement agreement will be duly
approved and executed between the parties prior to the recording of the Final Map.
B. CLARIFICATIONS:
1) The Intersection of Dalidio Drive and:
a) Froom Ranch Wav -In accordance with Section 6.03.1(c) of the
Development Agreement, the City hereby allows as an interim design alternative the
conceptual intersection as depicted in the attached Exhibit A. The interim design
alternative will be shown as an acceptable alternative on the Final Map prior to recording.
071928\10447582vlA 1
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Followin rr January and upon 60 -day notice agrees
I r
complete necessary acquisitions and begin construction of the Multilane Roundabout at
Prado & Froom as approved in the Public Improvement Plans, prior to City Submission
of Draft Determination
Following the 60 -day notice from City, SLR agrees to substantially complete
construction of 1 iI!'!ut (such that there are o conflicts with interchange
1 on before October
The City's agreement hereunder shall be conditioned upon. SLR. posting a bond
with the City in the amount reasonably estimated for the acquisition and construction of
the ultimate roundabout improvements contemplated for said location. Nothing herein
shall relieve SLR of the responsibility of constructing such improvements, including any
costs associated with removal of any interim improvements, if necessary.
b} AdjacentOff-Site Par - The City and SLR contemplate that off-site
right of way acquisitions from either or both of the adjacent Embassy Suites and
Madonna Plaza properties may impact existing parking on such properties, and the
parties anticipate currently that such acquisitions are not likely to create a conflict with
current zoning code minimum parking space requirements. In the event that a future
conflict is identified, the City shall diligently review a Minor Use Permit submitted to
i) reduce the parking requirements for such properties and/or Lot 9 of the VTTM and/or
ii) allow shared parking between such properties with the goal that such off-site
acquisitions will not inhibit future development of those properties or otherwise affect
their development value. Nothing herein shall be deemed to be a pre -committal on the
part of the City to approval such Minor Use Permit.
C) Madonna Road - The City will allow interim improvements to be
constructed at the intersection of Dalidio Drive and Madonna Road that do not require
off-site acquisitions from the adjoining U.S. Postal Office as the processing time for
acquisition of federal property could unreasonably delay the project. Prior to approval of
such interim improvements SLR shall complete the intersection design in accordance
with its mitigation measures and conditions of approval and enter into an off-site
acquisition agreement with the City which shall include an estimated schedule on --time
performance measures.
Nothing herein shall relieve SLR of the responsibility for construction of its
mitigation and conditions of approval requirements, including any costs associated with
removal of any such interim improvement, if actually constructed and shall post bonds in
an amount sufficient to construct SLR's approved PIP improvements.
d} Prado Road Interchange: Various Access/Drainage/Aesthetic area
reservations on Hotel and office Lots - There shall be a reservation of easements, both
temporary and permanent, to construct and maintain necessary structures, access
easements, maintenance easements, flood control and treatments infrastructure and the
Prado Road interchange, which shall minimize to the greatest extent feasible any
permanent easements on the Hotel (VTTM Lot ) and Office (VTTM Lot 9) Lots. No
slopes shall be constructed and no slope easements shall be reserved or required on
VTTM Lots 8 or 9 with respect to the support of the contemplated Prado
interchange/bridge improvements. SLR shall work cooperatively with the City and
071928110447582vl4 2
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CalTrans for the design and construction of the structures required for the Prado
interchange/bridge improvements,, which such costs shall be included in the cost of the
bridge and overpass 'improvements. The City shall reasonably consider SLR's
reservation of parking and access easements to Lot 303 under the proposed overpass
unless the area is needed for implementation of the Prado Road Interchange or if such
reservations would impair necessary flood conveyance/treatment,, and subject to approval
by CalTrans. SLR shall have the right to reserve easements for parking and access to
Lot 303 under the proposed overpass if reasonably feasible.
Regarding the Prado Road Interchange, the City agrees to notify and meet with
SLR if any material changes occur that may affect the interface between the 'interchange
and SLR properties, at key project mile stones, and City shall include SLR in the review
of the Draft Environmental Determination, Draft Project Report, and Project Plans &
Specification materials. The City agrees to accommodate meeting,, status updates, and
information requests from SLR that are within its authority. The City will endeavor to
include SLR in all relevant meetings it hosts with CalTrans, however nothing in this
agreement should be construed to commit or obligate the State to attendance.
2) Left Turn Access to Retail and Hotel Lots - Mitigation measure T 1(i} requires
access restrictions on Prado/Dalidio and Map Condition #10 requires dedication of access rights
to the City along Madonna, Dalidio, Prado, and Froom Ranch Way. The City agrees to
reasonably consider the approval of design exceptions for left turn in only lanes/pockets
submitted by SLR, which shall not be unreasonably withheld, delayed, or conditioned except as
required within the context of public health and safety and applicable standards and design
guidelines. ul
16
3) Oversizing of Facilities & Infrastructure, including Off -Site and On -Site
Roundabout Design and Protected Bike Intersections: Per Section 6.02.2 Oversizim4 o
project Facilities & Infrastructure of the San Luis Ranch Development Agreement, the City will
reasonably consider reimbursement and/or fee credits for costs & expenses associated with
oversized -public facilities including without limitation, Roundabouts and/or Protected Bike
Intersections design elements required by the City that are above and beyond the applicable
express standards and/or design guidelines.
For each design element, request for reimbursement and/or fee credits shall be made in
writing and include the following:
a. Identify FMAP #, Submittal #, & City Comment #.
b. Identify the applicable mitigation measure/condition of approval, and the standard
and/or design guideline document associated with the oversized design element.
C. Identify the FMAP #, Page #, and provide a brief description of where and how
the associated changes have been made.
d. Provide supporting explanation on how the design element is oversized.
e. Provide a line item accounting of the cost difference between baseline
requirement and oversized requirement.
4) Reimbursement of excess costs above SLR Fair Share Obligations I
FL,OVR/Froom Ranch Way and Tank Farm and Higuera Right Turn — Section 5.03.2(e
071928\10447582v14 3
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provides that in the event that SLR installs infrastructure improvements beyond its "fair share"
obligations, then the City would "provide credits against any fees charged by the City for such
improvements beyond the Project's "fair share" obligation and to provide reimbursements,
funded by Development Impact Fees paid by other developers, including traffic impact fees, or
funded from other sources, but excluding sewer and water connection fees." With regard to
Froom Ranch Way and LOVR Intersection Widening, SLR's fair share is 20%, and with regard
to Higuera & Tank Farm Road, SLR's fair share is 5%. With respect to Higuera & Tank Farm
Road, Mitigation measure T -1(g} requires a channelized 230' NB right turn pocket to be
constructed as part of SLR offsite mitigation requirements. The parties acknowledge that it is
unlikely that others shall construct such improvements. SLR has agreed that it will design,
acquire right-of-way, and construct such improvements. The City, however, has concluded that
these improvements were not included within the City's Citywide Transportation Impact Fee in a
manner that would allow the City to provide fee credits as contemplated by Section 5.03.2(e) of
the Development Agreement. In light of the foregoing the parties agree as follows:
a) With the exception of Improvements at Froom & LOVR, the City shall
present to City Council for consideration an update of the Citywide Transportation
Impact Fee program 'incorporating the above described improvements and their costs,
currently scheduled for July 2, 2019.
i) Costs for consideration of inclusion in the fee program shall be
0
limited to engineering, right of way acquisitionand construction.
ii) Any general fund reimbursements that may arise as a result of
inclusion in the fee program shall not be recommended for appropriation before
fiscal year 2024-25.
b) For Improvements at Froom & LOVR the City shall prepare the necessary
Travel demand modeling & AB 1600 nexus studies and present to Council for
consideration of inclusion into the fee program and corresponding development
agreement amendments, currently scheduled for October 1, 2019, to include the
following:
i) Costs for consideration of inclusion in the fee program
shall be limited to only engineering, construction, and right of way acquisition of
mitigation measure T -2(f). All costs associated with the protected bicycle
intersection elements shall not be considered for inclusion in the fee program.
ii) SLR shall provide line 'item construction cost estimates and
corresponding schematic of improvements specific to mitigation measure T -2(f)
excluding bicycle protected intersection elements.
iii) SLR shall fund, via a development services agreement, the
necessary travel demand modeling & AB 1600 nexus studies.
iv) Any general fund reimbursements that may arise as a result
of inclusion in the fee program shall not be recommended for appropriation before
fiscal year 202425.
071928\10447582v14 4
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c) If the Council Adopts the impact fee amendments as described above,
SLR agrees to process an amendment of Sections 5.03.2(b)(1)(i) and 5.03.2(b)(2)(i) of
the Development Agreement to include the amount of the increase in the Transportation
DIF fee resulting from the City's inclusion of such improvements in the Citywide
Transportation Impact Fees as contemplated in section 4(a) of this Operating
Memorandum (i.e., the amount of change in the Transportation Impact Fees from the
2018 DIF Update to the amount of the new Transportation Impact Fees resulting from the
City's inclusion of such 'improvements in the Transportation Impact Fees) as an element
of the Vested DIF (i.e., the amount of the Vested DIF shall be increased by the change
resulting from the inclusion of such improvements in the Citywide Transportation Fees).
d) If the Council Adopts the transportation impact fee amendment as
described above SLR shall be entitled to transportation impact fee crediting for project
costs as adopted within the updated transportation impact fee program.
e) Any further requests for additions of eligible costs into the Citywide
Transportation Impact Fee program shall require renegotiation of the Development
Agreement.
5) Off -Site Dedications: The City agrees that the completion, bonding, or waiver,
as provided in the Development Agreement, of Off -Site Dedications for purposes of the
contemplated construction of improvements at the property shall be deemed, in all instances, to
be a condition for the issuance of occupancy permits, and not building or construction permits as
allowed under the Development Agreement, and to avoid undue delay, prejudice and additional
costs to SLR. Further,, for purposes of completion of such Off -Site Dedications, SLR shall be
deemed to have satisfied the same if: (i) the Off -Site areas to be acquired for dedication have
been appraised; (ii) a reasonable purchase offer has been made to the landowner based upon such
appraisal-, and (iii) the purchase offer has been rejected, refused or ignored. For avoidance of
doubt, SLR agrees that (1) no rental units shall be rented and (ii) there shall be no close of escrow
to a future homebuyer of any for sale residential unit until the construction of such improvements
has been completed, bonded for, or waived in accordance with the Development Agreement.
SLR shall include such restriction in any sales of undeveloped land to any future builders.
6) Extension of 101 off -ramp at LOVR: SLR EIR mitigation measure T -2(g)
requires the extension of the SB left turn pocket at LOUR & US 101 SB Ramps, as described in
the EIR. SLR has agreed to submit to CalTrans an alternative configuration of a two-lane
offramp configuration in lieu of mitigation measure T -2( g) provided CalTrans accepts design
exceptions as necessary to make a two-lane offramp configuration cost comparable to the
improvements contemplated by mitigation measure T -2( g). If CalTrans does not accept the
design exceptions necessary to make the two-lane offramp configuration cost comparable to the
improvements described in mitigation measure T -2(g) as submitted by SLR (the "Submission"),
the City shall accept implementation of the Submission as SLR's full and complete satisfaction
of such mitigation measure.
7) Relocation of Small Billboards for Prado Interchange: SLR and City agree
that under the terms of the Agricultural Conservation Easement approved by the City, that the
small billboards located at the site of the proposed Prado Interchange are Improvements which
the terms of the easement allowed to be relocated. To the extent that such relocation requires
further review and approval of the City under City Ordinance Section 15.40.600, the City shall
071928\10447582vl4 5
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not unreasonably delay such review by the Community Development Director under
Section 15.40.480 and/or the Architectural Review Commission if so required.
8) Offer of Dedication Large Billboard Location: SLR shall dedicate the portion
of Lot 309 required for the Prado Interchange/Southbound ramp in accordance with the express
provisions of Section 6.02.3(b) of the Development Agreement. SLR agrees to submit a draft
ordinance for City Attorney and City Manager review, and for Council consideration for the sole
and limited purpose of relocating the Large Billboard on the Dalidio property.
9) Relocation of Very Low Income Residential Units: SLR proposes to work with
Peoples' Self -Help Housing for construction of the Project's affordable housing units, as
follows: the 26 units proposed to be located on NG -30 would be relocated to VTTM Lot 7 and
constructed in conjunction with 34 units proposed thereon as part of mixed use project on VTTM
Lot 7. The City shall reasonably consider and diligently process an application to facilitate such
proposal. In the event that SLR determines that such proposal is infeasible or if the City does not
approve the moving of the 26 affordable units from the NG -30 site, then SLR will build the 26
affordable units on NG -30 and shall either (i) pay the affordable housing fee in lieu of
construction of the 34 units or (ii) construct the 34 units on or offsite as allowed by the
Development Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the last written
date below.
MESM
Date:
Date:
Derek" Jo l J (son City Manager
g,
Walter Heiberg, Manager
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RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:
City of San Luis Obispo
c/o City Clerk
990 Palm Street
San Luis Obispo, CA 93401
Recording Fees Exempt Pursuant to
Government Code§ 27383
2021014110
Tommy Gong
San Luis Obispo -
C
o
u
n
t
y
Clerk-Recorder
02/23/2021 11:11 AM
CONFORMED COPY
Copy of document recorded.
Has not been compared with original.
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S E
FIRST ADMINISTRATIVE AMENDMENT
TO DEVELOPMENT AGREEMENT
THIS FIRST ADMINISTRATIVE AMENDMENT TO DEVELOPMENT
AGREEMENT (the' First Administrative Amendment") is made in San Luis Obispo County,
California as of February 17, 2021, by and between the City of San Luis Obispo, a California
general law city ("City"), and MI San Luis Ranch LLC ("SLR"). The City and SLR may be
referred to herein as a "Party" or, collectively, as the "Parties."
RECITALS
A. The City and SLR entered into that certain Development Agreement dated on or
about September 18, 2018 (the "Development Agreement"), which was recorded against certain
real property located within the City as described in the Development Agreement (the
"Property") as Instrument No. 2018039139 in the San Luis Obispo Recorder's Office. All terms
not specifically defined in this First Administrative Amendment shall have the meanings
ascribed to them in the Development Agreement.
B. Section 9.04 of the Development Agreement provides that minor modifications to
any Project Approval may be approved by the Planning Director through an Administrative
Amendment where such amendments or modifications are both minor and substantially conform
to the material terms of the Development Agreement.
C. In addition, Section 9.03 of the Development Agreement provides that because
the implementation of the Project requires a close degree of cooperation between the Parties
certain refinements and clarifications may be appropriate to facilitate the proposed development
and that when the Parties agree that such clarifications are necessary or appropriate, the Parties
may effect such clarifications through operating memoranda approved by the Parties. The
Parties entered into two prior Operating Memoranda setting forth clarifications to the Project
Approvals.
D. The Parties desire to enter into this Administrative Amendment to set forth the
Parties' understanding and agreement with regard to changes in the location and quantity of
affordable housing units within the Project, as approved by the Planning Commission
(Resolution #PC-I 006-20) and City Council (Resolution # 11192), which changes the Planning
Director has determined are minor and substantially conform to the material terms of the
071928112224873v3
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Development Agreement and the Applicable Law and are appropriate to be memorialized in an
Administrative Amendment.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby
incorporated into the operative provisions of this First Administrative Amendment by this
reference and other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the City and the SLR agree as follows:
Section 1. Affordable Housing Development:
(a) As of the date of this First Administrative Amendment, SLR has caused the Final
Map for Tract 3150 (NG-30) to be recorded as Instrument No. 2020064761 in the San Luis Obispo
Recorder's Office, and the City has approved a re-subdivision of VTTM Lot 7 as Tentative Tract
Map 3142 ("TTM 3142").
(b) Tract 3150 Obligations. As described in the prior Operating Memoranda, with the
approval of TTM 3142, the obligation to develop 26 very-low income units within Tract 3150 has
been transferred to TTM 3142. The 26 units within Tract 3150 previously contemplated as
affordable units may now be offered as market rate units. Tract 3150 shall continue to include I 0
workforce housing units, as follows: (1) 6 efficiency units, of which two shall be ready for
occupancy prior to the completion of the 60th unit (in building #3 ), one shall be included in each
of building #4, building #5, and building #6; (2) 2 units in the stacked flat units, of which one will
be ready for occupancy prior to the completion of the 48th unit (in building #4) and the second in
the last building; and (3) 2 units in the town home units, of which one will be ready for occupancy
prior to completion of the 60th unit and the last by completion of the 75th unit.
( c) Tract 3142 Obligations. Tract 3142 shall contain a minimum of 64 affordable
housing units with a mix of affordability at both the low- and very low-income levels. The timing
and other development requirements shall be as set forth in an Affordable Housing Regulatory
Agreement, which the Parties shall negotiate in good faith prior to recordation of the Final Map
for Tract 3142. As set forth in Operating Memorandum Number 2, SLR agrees that it will transfer
the Affordable Lot to the Affordable Developer subject to a deed restriction consistent with
Operating Memorandum Number 2 and the Project Approvals. The Affordable Housing
Regulatory Agreement will include a performance schedule for the Affordable Developer and
limitations on the amount of commercial square footage that can be occupied within Tract 3142
prior to securing of financing for such affordable housing units.
Section 2. Miscellaneous Provisions.
(a) Entire Agreement. Except for the Development Agreement which this First
Administrative Amendment amends, and the prior Operating Memoranda, this First
Administrative Amendment represents the entire agreement between the Parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings, whether oral
or written, between the Parties with respect to the matters contained in this First Administrative
Amendment.
2
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(b) Section Headings. The section headings contained in this First Administrative
Amendment are for convenience and identification only and may not be deemed to limit or
define the contents to which they relate.
(c) Counterparts. This First Administrative Amendment may be executed in any
number of counterparts, each of which will have the same force and effect as if executed in the
form of an original single document.
(d) Waiver. No waiver of any provision of this First Administrative Amendment will
be effective unless in writing and signed by a duly authorized representative of the Party against
whom enforcement of a waiver is sought.
(e) everability. If any term, covenant, condition or provision of this First
Administrative Amendment, or the application thereof to any person or circumstance, is held by
a court of competent jurisdiction or rendered by the adoption of a statute by the State of
California or the United States invalid, void or unenforceable, the remainder of the terms,
covenants, conditions or provisions of this First Administrative Amendment, or the application
thereof to any person or circumstance, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby; provided that the invalidity or unenforceability of such
provision does not adversely affect the benefits accruing to, or the obligations imposed upon, any
Party to this First Administrative Amendment of the Development Agreement.
(f) No Reliance on Other Parties. All Parties to this First Administrative Amendment
declare that, prior to the execution of this First Administrative Amendment, they have informed
themselves of sufficient relevant data, either through experts or other sources of their own
selection, and have sought and obtained legal counsel, in order that they might intelligently
exercise their own judgment in evaluating the contents of this First Administrative Amendment
and making the decision to execute it. The Parties each represent and acknowledge that in
executing this First Administrative Amendment, they do not rely and have not relied upon any
representation or statement not set forth herein made by any other Party to this First
Administrative Amendment or their respective legal counsel with regard to the subject matter,
basis or effect of this First Administrative Amendment.
(g) Con truction. The provisions of this First Administrative Amendment will be
liberally construed to effectuate its purpose. The language of this First Administrative
Amendment will be construed according to its plain meaning and may not be construed for or
against any Party, as each Party has participated in the drafting of this First Administrative
Amendment and has had its legal counsel review it. Whenever the context and construction so
require, all words used in the singular will be deemed to be used in the plural and vice versa.
(h) uccessors and Assigns. This First Administrative Amendment and the
Development Agreement that it amends are binding on and inure to the benefit of the Parties and
their respective legal representatives, successors and assigns.
(i) Governing Law. The validity and interpretation of this First Administrative
Amendment is governed by the laws of the State of California without giving effect to the
principles of conflict of laws.
3
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U) Authorizations. Each Party certifies and warrants that all individuals executing
this First Administrative Amendment and other related documents on its behalf have the capacity
and have been duly authorized to do so.
(m) Impact of first Administrative Amendment on Development Agreement. Unless
otherwise specifically amended by this First Administrative Amendment, all provisions of the
Development Agreement and the Operating Memoranda are hereby ratified and remain in full
force.
IN WITNESS WHEREOF, the Parties to this First Administrative Amendment have each
executed this First Administrative Amendment as of the date first written above.
CITY:
CITY OF SAN LUIS OBISPO,
a municipal corporation of the State of California
~?/)-By: ~ ~
Michael Codron
Community Development Director
DEVELOPER:
MI SAN LUIS RANCH LLC
a Delaware limited liability company
By: MI ENTITLEMENT IV, LLC
a Delaware limited liability company
Its: Sole Mer,' and Manager
By, M~k-?-w
Donald R. Faye
Its: Authorized Agent
4
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A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.
ST A TE OF CALIFORNIA
coUNTY oF otu') D /eqo ._,
)
) s:
)
On F-e-bvwary J'1 2021 before me, _J;;;......;;_U.....;.h---'-in=----=&~_F_:_ri----"'~=----1_-_______ _
Notary Public (insert name and title of the officer),
personally appeared --/)onald-ll, Fay<? ---. who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:--~-,---------~~~--------
[Seal]
eeee+oeeooooi
JANINE FREI J ~•"'. '""' '""' ""'"'"" : i ··· San Diego County !
• . Commission~ 2205527
My Comm. Expires Jul 16, 1021
071928112224873v3
5
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A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.
ST A TE OF CALIFORNIA )
COUNTY OF S,11\1) Wb 0bi::717O ~ ss:
On 1---l 1,,'1---}1--\ , 2021 before me, _f?,_._L-_· _(A)_.,_)( ________ _
Notary tublic (insert name and title of the officer),
personally appeared Hi v:V\t?l--c.A Cod YO n . who proved to me on the
basis of satisfactory evidence to be the person( s) whose name( s) isYare subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
oaoooooooooor
• , , R. L. COX f
• .... , • • Notary Public• caltfornia ~
:· ~ San Luis Obispo County ~
•• Commission# 2299253 I Signatur : -++---l-'---=----+-"<-----1------,. My Comm, Expires Jul 29, 2023 ,
[Seal]
6
07!928112224873v3
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Exhibit F
Affordable & Workforce Housing Plan
Affordable Housing Plan
The San Luis Ranch project will encourage long term housing affordability by including design and devel-
opment strategies that provide lower cost housing, by including a range of housing sizes and types that
are not typically provided in the community, including deed-restricted workforce units, and by providing
lower income inclusionary units as required by the City Inclusionary Housing Ordinance. Since the price
of houses over time is most closely related to the size of the dwelling unit, the size of the lot, and costs of
maintenance, the project has concentrated on lowering the overall size of market rate dwelling units, and
reducing lot size for market rate units.
Within each of the residential zones there will be dwelling unit sizes ranging from 220 square foot studios
to 2,200 square foot single family detached units. Lot sizes range from air-space studios to 3,200 square
feet. Consequently, the average size of the units and lots across the development is far smaller (less than
the size) of existing residential housing stock in the City.
Maintenance expenses, to the extent feasible, may be included in a Community Facilities District to reduce
the necessity for Homeowner’s Association fees and other costs associated with that maintenance and
governance structure. Landscape maintenance and cost of water and utilities will also be reduced through
the use of drought tolerant landscaping, smaller lots and other sustainable and cost reducing features.
The City’s Housing Element provides incentives to develop housing in a denser pattern, with smaller unit
sizes to encourage affordability across the low, moderate and workforce income ranges. These incentives
include reduced inclusionary housing requirements for denser projects and for projects with lower dwell-
ing unit square footages. Conversely, more inclusionary housing is required for projects with dwelling
units that exceed unit sizes of 2,000 square feet. Table 2A of the Housing Element contains these adjust-
ment factors.
According to the City’s Inclusionary Housing Ordinance and Table 2A, the inclusionary housing require-
ment for the residential component of the San Luis Ranch project is a total of 34 units, with 26 very low,
4 low, and 4 moderate income units. These inclusionary units will be integrated throughout the project in
the single-family detached, townhome, studio, 1 and 2-bedroom condominium products. In addition, the
commercial component of the project requires a total of 34 inclusionary units. The project proposes to
meet the commercial component requirement by either constructing these units on-site or paying an af-
fordable housing in-lieu fee.
City Residential Requirements
The San Luis Ranch Specific Plan includes locations for on-site units to fulfill the affordable housing re-
quirement for the residential development planned for the Specific Plan Area. Including residential uses
only, the Specific Plan Area must provide a total of 34 deed restricted affordable units in the development,
and must provide at least 5% low and 10% moderate income affordability per Table 2 of the Housing
Page 561 of 641
San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 2 of 7
Element. Any additional units provided above the inclusionary requirement could be sold or rented at
market rate. See residential calculation below.
Residential Inclusionary Requirement Calculation
of
Units
Density
units/acre)
Unit
S.F.
Build 5%
very low
income)
Build 10%
moderate
income)
Total Base
Required
Adjust
Factor
Required
Inclu-
sionary
Units
200 NG-30 1,000 10 20 30 0 0
100 NG-23 1,300 5 10 15 0.25 3.75
200 NG-10 1,500 10 20 30 1 30
80 NG-30 NA
Total 34
City Commercial Requirements
The commercial uses envisioned in the Specific Plan Area will be required to provide an additional 34 units
of affordable housing. The commercial inclusionary calculations for the San Luis Ranch Specific Plan are
as follows:
Commercial Inclusionary Requirement Calculation
Use Acreage x 2
Required
Inclusionary
Retail 9.45 2 18.9
Hotel 3.5 2 7
Office 3.7 2 7.4
Total 34
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San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 3 of 7
The San Luis Ranch project will address housing affordability in several ways, most notably through the
design itself, which includes medium and high-density housing with lot sizes and floor areas that are well
below the typical average for existing single-family detached units in the community.
The City’s Inclusionary Housing Requirement will be addressed through deed restrictions on very low, low
income and moderate-income units to be constructed by San Luis Ranch, and/or provided by dedicating
and donating improved land to a non-profit affordable housing provider. However, should an affordable
housing provider fail to construct the units, the obligation to provide for the 34 deed-restricted affordable
housing units remains with San Luis Ranch to complete. The following highlights are summarized from the
Specific Plan:
Mix of Residential Densities and Small Lots. There is an intentional mix of residential densities in the
San Luis Ranch project that includes a range of small lot sizes, attached townhomes, and multifamily
dwellings, with an emphasis on higher density units. Floor plans ranging from 220 to 2,200 square feet
in studio, 1 BR/1BA, 2BR/1BA, 2BR/2BA and 3BR/2BA configurations. The average unit size across the
entire project is less than 1,330 square feet.
NG-10 Zoning. The San Luis Ranch Specific Plan includes 200 small-lot, single family units, which are
intended to meet the needs of young professionals, empty nesters and young families. These smaller
units, ranging in size from 1,300 square feet to 2,150 square feet, have one-or two car garages with
limited guest parking spaces. This parking reduction is justified by the lower expected occupancy for
these smaller units and the multimodal features of the overall development. The four inclusionary
moderate-income units will be provided on in Phase 1 of the project on Lots 53, 64, 174, and 191.
NG-23 Zoning. The San Luis Ranch Specific Plan includes 100 attached and detached townhome units,
close to services and open spaces. Units will range in size from 1,300 square feet to 2,110 square feet.
Four of these 2- bedroom units will be deed restricted for low-income families. The inclusionary units
will be provided on Lots 261, 267, 283, and 293.
NG-30 Zoning. Finally, the San Luis Ranch Specific Plan includes 272 studio, one to three-bedroom
multi-family units adjacent to open space and Madonna Road. Like other portions of the project, this
multi-family zone will be directly served by an on-street transit stop and located within easy walking
distance of nearby shopping. 26 of these units will be deed restricted as inclusionary housing for very
low income families. Inclusionary and other multi-family units may be either dedicated to an afforda-
ble housing provider or managed by the San Luis Ranch. Multi-family unit sizes will range from 220
square foot studios to 1,100 square foot units for larger families.
Neighborhood Commercial. The 19.6-acre Neighborhood Commercial portion of the Specific Plan
area will generate a requirement for 34 additional inclusionary units. Development of this portion of
the project site will be based on market demand. Approximately half of the NC area is currently lo-
cated in ALUP Safety Zone S1-b that precludes residential development; however, the area outside of
the S1-b zone can accommodate the required 34 units. Alternatively, the project may pay an afforda-
ble housing in-lieu fee per the Inclusionary Housing Ordinance and Table 2 of the Housing Element to
satisfy this requirement.
Overall, the project will provide a total of twenty-six (26) very low, four (4) low, and four (4) moderate
Income inclusionary units. The inclusionary housing product mix has been intentionally skewed toward
Page 563 of 641
San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 4 of 7
very low-income units to ensure that this income group is adequately represented in the project, and to
recognize that the moderate-income groups have adequate market rate opportunities in the NG-10, NG-
23 and NG-30 neighborhoods. Table 2 shows the distribution of the affordable units, and Exhibit 1 shows
the location of the moderate and low-income units. Distribution of the 26 very low-income units will be
included in NG-30 neighborhood as described below.
Inclusionary Housing Phasing Plan
Neighborhood Distribution
Program NG-10 NG-23 NG-30 Commercial Total
Moderate Income (Sale) 4 4 8
Low Income (Sale) 4 4 8
Very Low Income (Rental) 26 26 52
Units in Phase 4 4 26 34 68
Total - Inclusionary Very Low 52
Total - Inclusionary Low 8
Total - Inclusionary Moder-
ate
8
Total 68
The Commercial Development and associated Inclusionary Housing Requirement will be determined by the Com-
munity Development Department of the time of submittal of detailed plans for that component of the project. This
requirement will be met either by development of units within the commercial project, off-site construction, or by
payment of affordable housing in-lieu fee, or a combination thereof.
Inclusionary Housing Program Synopsis:
The affordable housing located within the residential portion of the San Luis Ranch Specific Plan Area will
provide 34 units on site for very low, low, and moderate income households. The applicant is committed
to including at least 5% very low income units in the project. Per Section 17.90.040.D of the City's Afford-
able Housing Incentives which follows State law, a developer that agrees to construct 5% of the total units
of a housing development for very low income households qualifies for a 20% density bonus. In this case,
5% of the allowed 500 units under the LUCE requires 25 very low income units. The project is proposing
26 very low income units.
The tables above show the required inclusionary units as well as the proposed density bonus units. Me-
dian and low income units (SFR and Townhomes) are intended to be for sale units. The applicant will retain
the flexibility to either rent or sell the very low income units.
Deed-restricted, affordable units will be located throughout the residential portion of the Specific Plan
Area, as illustrated in the above table.
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San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 5 of 7
Workforce Housing Plan
The City of San Luis Obispo has a recognized need for workforce housing (121-160 of Area Family Median
Income). The San Luis Ranch Specific Plan aims to help meet the City’s housing needs by providing a highly
desirable new home type to the San Luis Obispo housing market: small lot (1,000 to 3,200 square feet)
single family and multi-family housing types.
A primary goal of the City of San Luis Obispo, realized and implemented through the San Luis Ranch pro-
ject, is to create workforce housing and increase the supply of housing available to local employees. A
special five-point program will be provided to create workforce housing and increase the supply of hous-
ing available to local employees. This program includes 1) 14 deed-restricted workforce housing units for
eligible households earning 121-160% of the Area Median Income. Two of these workforce housing deed-
restricted units will be located in the NG10 Zone on Lots 105 and 121, two will be located in the NG23
Zone on Lots 251 and 257, and ten will located in the NG30 Zone (See Exhibit 1 for unit locations); 2)
providing local priority preferences for individuals who work within the City of San Luis Obispo to purchase
or rent a residence within the Project; 3)) Owner Occupied Restrictions; 4) “Local Heroes” discount for
public safety, hospital workers and teachers; and 5) participation in the City Equity Share program,
These housing programs seeks to target the Project to local employees, reduce the influence of investors
in the limitation of housing choice and availability, and provide for 14 deed-restricted units.
Notwithstanding anything set forth below, all preferences and/or priorities for workforce housing units
will be administered in accordance with, and subject to, all applicable federal, state and local laws and
regulations, including Fair Housing rules.
Subject to applicable law, the elements of the workforce housing programs are as follows:
Local Preference (“SLO Workers First”). Program 10.4 of the City’s Housing Element encourages resi-
dential developers to “…sell or rent their projects to those residing or employed in the City first before
outside markets.” Further, the City and project applicants recognize that one of the principal reasons
for the designation of additional residential land in the community in the 2014 Land Use and Circula-
tion Element update was to address the current jobs-housing imbalance. One direct and effective
way of achieving this is to provide priority for existing employees to rent or purchase residences within
the Project. To that end, San Luis Ranch will give first preference to rent or purchase a residence
within the Specific Plan area to local employees identified on the interest list. These areas include the
City’s corporate limits and areas outside the City limits such as Cal Poly, California Men’s Colony,
Cuesta College, agricultural lands within the Edna Valley area and business parks on South Broad
Street. Specifically, for purposes of this program, the term “local employees” shall include individuals
who are employed in business that are located in geographic areas that are customarily included in
the City’s annual jobs-housing balance analysis in its General Plan Status Report, including the follow-
ing zip codes: 93401, 93405 and 93407. New employees to businesses in these geographic areas with
bona fide employment offers will be considered “local employees” as well. San Luis Ranch will main-
tain and update the interest list through full build-out of the Project. San Luis Ranch will operate and
administer this program as follows:
a. San Luis Ranch shall maintain the interest list and shall separate and prioritize names of
local employees based on interest in product type.
Page 565 of 641
San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 6 of 7
b. When product becomes available, usually 270-360 days prior to certificate of occupancy
assuming a 180-day construction period), San Luis Ranch shall notify those individuals of
the opportunity to purchase a residence on a lottery basis. Once notified, those individu-
als shall have approximately 60 days to get pre-qualified to purchase the residence and
to provide San Luis Ranch with proof that the individual is a local employee and the time
notice (i.e. paycheck or bona fide offer of employment from a local employer.)
c. If an individual fails to get pre-qualified or fails to provide San Luis Ranch with proof of
local employment within the time periods above, then San Luis Ranch may remove or put
that name at the end of the interest list.
d. San Luis Ranch agrees not to sell any units within the Project to any individual without
first offering the unit to a local employee who is on the interest list for that product type.
Upon exhausting all local employees on the interest list for a product type, San Luis Ranch
agrees to give priority in the sale of such units to individuals employed in the County, and
finally to individuals from outside the county.
Nothing herein shall preclude San Luis Ranch from notifying multiple individuals with the opportunity
to purchase a residence and prioritizing the purchase and sale based on a lottery basis. Nothing herein
shall preclude San Luis Ranch from taking all reasonable actions necessary in order to facilitate the
sale of units within the Project provided such actions are consistent with the “SLO Workers First”
program described herein. San Luis Ranch shall, upon request, update the City on its implementation
of this program and provide City with the interest list and proof of employment for all sales made
under this program.
City and San Luis Ranch acknowledge that this program described above will accomplish three im-
portant objectives: 1) use new housing to address the current imbalance between existing jobs and
housing; 2) ensure that, to the maximum extent practicable, that the increased housing in San Luis
Obispo results in a decline in the current commute traffic; and, 3) reduce competition from outside
buyers in the initial offering and sales.
Owner-Occupancy Restrictions. San Luis Ranch agrees to include restrictions in the purchase agree-
ment and Covenants Conditions and Restrictions (CC&Rs) for all single family detached units (NG-10)
and (NG-23) (total of 300 dwelling units) requiring these units to be restricted to owner-occupants for
the first five years after sale. In the case of units with Accessory Dwelling Units (ADUs), the Principal
Dwelling or the ADU will need to be occupied by the property owner. The final form of these agree-
ments will be determined at the time of development of the first final map, and will provide for ap-
propriate monitoring and enforcement. Enforcement and monitoring of the owner occupancy re-
quirement on all single-family dwellings will be controlled by the San Luis Ranch Owners’ Association,
or in coordination with a qualified housing non-profit.
Local Heroes: San Luis Ranch will offer a special program for buyers who are considered “Local He-
roes.” These Local Heroes are Police, Firefighters, Active and Retired Military, Teachers, EMTs, Nurses
and City or County Employees. Qualification for this incentive is verified on the loan application re-
viewed by our Preferred Lender. (This provision is included to ensure consistent review parameters.
Buyers are not obligated to finance home purchase with Preferred Lender.) Military, Active or
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San Luis Ranch March 6, 2018
Affordable & Workforce Housing Plan Page 7 of 7
Veterans submit separate evidence. San Luis Ranch will provide a minimum $1,500 incentive that is
credited to the buyer at closing and can be used at the design center for upgrades and/or closing
costs.
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Page 568 of 641
Revised Report
Fiscal Impact Analysis
of the Proposed
San Luis Ranch Project
Prepared for:
City of San Luis Obispo
Prepared by:
Applied Development Economics, Inc.
3527 Mt. Diablo Blvd. #248, Lafayette, CA 94549 n 925.934.8712
www.adeusa.com
April 26, 2024 (rev. October 31, 2024)
Page 569 of 641
Applied Development Economics, Inc.
TABLE OF CONTENTS
SUMMARY ................................................................................................................ 1
PROJECT DESCRIPTION ............................................................................................. 5
FISCAL ANALYSIS ..................................................................................................... 8
CITY BUDGET AND COST/REVENUE FACTORS .......................................................................... 8
PROJECT REVENUES .......................................................................................................... 11
PROJECT SERVICES COSTS ................................................................................................. 15
COMPARISON with 2017 PROJECT ............................................................................. 16
APPENDIX .............................................................................................................. 19
LIST OF EXHIBITS AND TABLES
Exhibit A: Project Impact by Land Use………………………………………………………………………………………………………3
Exhibit B: Project Impact by Phase……………………………………………………………………………………………………………4
Table 1: San Luis Ranch Project Description…………………………………………………………………………….………………6
Table 2: Affordable Units…………………………………………………………………………………………………………………………..6
Table 3: City of San Luis Obispo FY 2016-2017 Revised General Fund Budget………………………………………8
Table 4: Fiscal Model Revenue and Expenditure Adjustments………………………………………………………………….9
Table 5: Per Capita Revenue and Cost Factors……………………………………………………………………………………….11
Table 6: Retail Taxable Sales Calculations………………………………………………………………………………………………13
Table 7: Conceptual Estimate of Proposed Project Retail Center and Onsite Household Spending………14
Table 8: San Luis Ranch Project Description (2017)………………………………………………………………………………16
Table 9: Project Impact by Phase for 2017 Project………………………………………………………………………………..17
Table 10: Cumulative Project Impact by Phase for 2017 Project………………………………………………………….18
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SUMMARY
The fiscal analysis of the San Luis Ranch Development Project (Proposed Project) has been prepared
on behalf of the developers to determine if the project would negatively impact the City of San Luis
Obispo operating costs and revenues and what level of mitigation would be needed to address the
impacts. The project design has gone through several iterations and was originally analyzed in a fiscal
report in 2017, which was revised in 2018 following renegotiation of the City/County Master Tax
Sharing Agreement. This prior project design (2017 Project) included 580 dwelling units and 370,000
sq. ft. of commercial space. The Proposed Project now includes 923 units and 238,100 sq. ft. of
commercial development. In addition, the Agricultural Heritage site is now anticipated to be run as a
private business rather than a non-profit activity, which affects the tax status of that portion of the
development.
The analysis is focused on annual General Fund operating revenues and costs as shown in the FY
2023-25 City Financial Plan, and does not address capital costs, one-time entitlement fees, or impacts
to the City’s enterprise funds. The cost analysis reflects levels of service funded in the FY 2023-24
budget and represents citywide cost averages. The analysis distinguishes impacts by phase, but does
not include inflationary adjustments for changes in costs and revenues over time.
The project’s residential units would be built at three density levels, designated Low-Medium Density,
Medium Density and High Density. The Proposed Project would provide 92 affordable units, mostly in
the High Density category. In addition, the project includes a commercial center with 7,000 sq. ft. of
building space, an office development of 80,000 sq. ft. and a 200-room hotel, as well as 7.4 acres of
active park space and 7.4 acres of natural open space. The site would also retain 52.7 acres of
agricultural land, including an Agricultural Heritage Center maintained by a private lessee. The project
is estimated to house 2,058 residents at full build out and support 446 jobs onsite. The project would
be built in six phases over approximately a ten year period.
At full build out, the project is estimated to generate about $3.43 million per year in General Fund
revenues and $2.67 million per year in municipal service costs ($2023). The annual cost/revenue
surplus of about $758,440 averages $653 per unit (including the 238 equivalent dwelling units (EDU)
in the non-residential development) (Exhibit A). (Note: As of 10/31/24, 120 multifamily units
are planned to be owned by Cal Poly and would not generate property tax for the City or
County. This would reduce the total revenues and net fiscal gain to the City by $75,300). It
should be noted that the City has made investments and anticipates additional future investments in
circulation infrastructure and other public facilities that benefit the proposed project site. At the
discretion of the City Council, any positive net revenue generated by the project may be used to
service debt for these public investments that are not funded through direct development impact fees.
Most of the residential units would be built in the first three phases, with an additional multifamily
rental complex in Phase 6. The ownership units at all densities show a small positive fiscal impact
while the rental units create a negative impact. The hotel would be built in Phase 4 and represents the
single highest fiscal net revenue of any of the land uses in the project. The office development would
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Applied Development Economics | Page 2
be built in Phase 5 and produces a neutral fiscal impact (Exhibit A). The retail commercial
development in Phase 6 would also produce a positive fiscal benefit. Exhibit B shows the cumulative
impact of the project as the phases progress.
In 2017, this project was estimated to generate just less than $1 million in fiscal gain for the City
annually. One difference in the approach is that the larger retail center is estimated draw sales away
from existing centers in San Luis Obispo, based on the retail analysis conducted in 2014 and 2017.
Therefore, the net sales taxes are lower per sq. ft. than would otherwise be expected. However, the
land owner has also indicated that they have been unable to find a retail developer willing to construct
such a large center on the site. If so, the full fiscal benefit from the 2017 project design is likely not
attainable.
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Applied Development Economics | Page 3
Exhibit A: Project Impact by Phase
BUDGET CATEGORY TOTAL PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 6
REVENUES
Taxes
Property Tax $605,026 $159,463 $61,096 $153,807 $51,927 $28,989 $149,744
Property Tax in lieu of VLF $349,060 $93,163 $35,741 $85,087 $30,226 $17,005 $87,838
Sales Tax: General $395,808 $47,881 $18,987 $123,141 $124,684 $2,168 $78,948
Sales Tax: Measure G $593,712 $71,821 $28,480 $184,712 $187,026 $3,252 $118,422
Sales Tax: Public Safety $8,747 $1,058 $420 $2,721 $2,756 $48 $1,745
Use Tax: County Pool $57,194 $6,919 $2,744 $17,794 $18,017 $313 $11,408
Transient Occupancy Tax $679,010 $0 $0 $0 $679,010 $0 $0
Utility Users Tax $194,521 $34,673 $14,535 $54,272 $19,481 $10,470 $61,090
Franchise Fees $63,160 $11,258 $4,719 $17,622 $6,325 $3,400 $19,835
Business Tax Certificates $39,157 $0 $0 $0 $10,648 $27,211 $1,299
Real Property Transfer Tax $35,244 $9,642 $3,699 $9,447 $2,190 $1,232 $9,033
Cannabis Tax $47,396 $10,167 $4,262 $15,199 $0 $0 $17,767
Service Charges
Recreation Fees $87,090 $18,682 $7,832 $27,929 $0 $0 $32,647
Other Charges for Services $68,166 $11,173 $4,684 $27,929 $1,320 $3,374 $19,686
Other Revenue
Fines and Forfeitures $4,802 $929 $390 $1,455 $110 $281 $1,638
Interest Earnings and Rents $7,247* $1,088 $430 $1,650* $2,413 $234 $1,432
Other Revenues $191,469 $36,512 $15,306 $57,546 $4,976 $12,717 $64,412
Transfers in $0 $0 $0 $0 $0 $0 $0
TOTAL REVENUES $3,426,809* $514,431 $203,323 $780,311* $1,141,108 $110,694 $676,942
EXPENDITURES
General Government $356,666 $68,681 $26,856 $100,631 $40,214 $14,597 $105,686
Police $742,094 $132,685 $55,620 $212,352 $74,550 $32,154 $234,732
Fire $602,374 $129,754 $51,907 $162,185 $56,313 $30,836 $171,379
Community Services Admin $32,666 $6,398 $2,682 $9,565 $2,839 $0 $11,181
Parks & Rec $243,099 $47,617 $19,961 $71,185 $21,127 $0 $83,209
Community Development $68,706 $12,247 $5,134 $19,169 $6,881 $3,698 $21,577
Public Works $456,371 $81,347 $34,100 $127,330 $45,706 $24,565 $143,324
Park and Open Space Maintenance $57,023 $23,983 $0 $33,040 $0 $0 $0
Utilities - Solid Waste $46,806 $2,073 $869 $3,245 $36,338 $626 $3,653
Transfers Out $62,564 $9,048 $3,793 $14,162 $16,888 $2,732 $15,941
TOTAL EXPENDITURES $2,668,369 $513,833 $200,922 $752,865 $300,858 $109,208 $790,683
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $758,440* $598 $2,400 $27,446* $840,251 $1,486 ($113,741)
TOTAL BUDGET NET (DEFICIT) PER UNIT $653* $3 $29 $84* $7,002 $19 ($322)
Source: ADE, Inc. *If 120 units are owned by Cal Poly, revenue figures in Phase 3 and the total would be reduced by about $75,300.
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Applied Development Economics | Page 4
Exhibit B: Cumulative Project Impact by Phase
BUDGET CATEGORY PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 6
REVENUES
Taxes
Property Tax $159,463 $220,559 $374,366 $426,293 $455,282 $605,026
Property Tax in lieu of VLF $93,163 $128,904 $213,991 $244,217 $261,222 $349,060
Sales Tax: General $47,881 $66,867 $190,009 $314,692 $316,860 $395,808
Sales Tax: Measure G $71,821 $100,301 $285,013 $472,038 $475,290 $593,712
Sales Tax: Public Safety $1,058 $1,478 $4,199 $6,955 $7,003 $8,747
Use Tax: County Pool $6,919 $9,662 $27,456 $45,473 $45,786 $57,194
Transient Occupancy Tax $0 $0 $0 $679,010 $679,010 $679,010
Utility Users Tax $34,673 $49,208 $103,480 $122,961 $133,432 $194,521
Franchise Fees $11,258 $15,977 $33,599 $39,925 $43,324 $63,160
Business Tax Certificates $0 $0 $0 $10,648 $37,858 $39,157
Real Property Transfer Tax $9,642 $13,342 $22,789 $24,979 $26,211 $35,244
Cannabis Tax
Service Charges $0 $0 $0 $0 $0 $0
Recreation Fees $18,682 $26,514 $54,443 $54,443 $54,443 $87,090
Other Charges for Services $11,173 $15,857 $43,786 $45,106 $48,480 $68,166
Other Revenue $0 $0 $0 $0 $0 $0
Fines and Forfeitures $929 $1,319 $2,774 $2,884 $3,165 $4,802
Interest Earnings and Rents $1,088 $1,518 $3,168 $5,581 $5,815 $7,247
Other Revenues $36,512 $51,818 $109,364 $114,340 $127,057 $191,469
Transfers in $0 $0 $0 $0 $0 $0
TOTAL REVENUES $514,431 $717,754 $1,498,065* $2,639,173 $2,749,867 $3,426,809*
EXPENDITURES
General Government $68,681 $95,537 $196,169 $236,383 $250,980 $356,666
Police $132,685 $188,305 $400,658 $475,208 $507,362 $742,094
Fire $129,754 $181,661 $343,847 $400,160 $430,996 $602,374
Community Services Admin $6,398 $9,080 $18,646 $21,485 $21,485 $32,666
Parks & Rec $47,617 $67,577 $138,762 $159,890 $159,890 $243,099
Community Development $12,247 $17,380 $36,549 $43,430 $47,128 $68,706
Public Works $81,347 $115,447 $242,777 $288,482 $313,047 $456,371
Park and Open Space Maintenance $23,983 $23,983 $57,023 $57,023 $57,023 $57,023
Utilities - Solid Waste $2,073 $2,943 $6,188 $42,527 $43,153 $46,806
Transfers Out $9,048 $12,841 $27,003 $43,891 $46,623 $62,564
TOTAL EXPENDITURES $513,833 $714,755 $1,467,621 $1,768,478 $1,877,686 $2,668,369
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $598 $2,998 $30,444* $870,695 $872,181 $758,440*
TOTAL BUDGET NET (DEFICIT) PER UNIT $3 $11 $50* $1,196 $1,079 $653*
Source: ADE, Inc. *If 120 units are owned by Cal Poly, revenue figures in Phase 3 and the total would be reduced by about $75,300.
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PROJECT DESCRIPTION
The San Luis Ranch Development Project (Proposed Project) would develop a 131-acre site into 923
residential units, a 7,000 sq. ft. commercial center, a 200-room hotel and 80,000 sq. ft. of office
space and an Agricultural Heritage Center encompassing about 31,100 sq. ft. The project includes a
3.4 acre park, 7.4 acres of natural open space and would retain 52.7 acres of agricultural land, as well
as related circulation and utilities. The dwelling units would be developed at three different densities
as shown in Table 1. The latest population figures from the State Department of Finance show an
average household size of 2.23 persons per household for all unit types, for a total project population
of 2,048 persons. The assessed values for the units are projected to range from $900,000 for the
larger units to $555,600 for the more dense housing. For the High Density units in Phase 3, the
developer has provided the following unit types and values:
Townhomes $695,000
Condos $580,000
Nano Units $440,000
The High Density units in Phase 6 will be rentals and the developer anticipates the following unit
types:
Studio 72 units
1 bd/1bath 90 units
2 bd/2 bath 114 units
276 units
ADE researched market rental rates and capitalization rates1 for similar rental units that have sold in
the San Luis Obispo market and estimates that the average assessed values would be similar to the
for-sale units, at $555,600.
The project proposes to include 74 units for a combination of low income and very low income
families, 4 for moderate income households and 14 for Workforce level household incomes. The
affordable ownership units are estimated to have an average value of about $210,800 while the rental
units would be valued at an average of $120,700 (Table 2). Qualifying household incomes for these
units range from $40,550 for a Very Low Income Studio rental to $162,880 for a Workforce level two-
bedroom for-sale unit.
Overall, the residential component of the project would generate $564.5 million in assessed value. As
of October 2024, the 120 “Nano” units are expected to be owned by Cal Poly, which is a tax exempt
1 In investment terms, the rental projects create a stream of revenue for the building owner and the capitalization
rate calculates how much an investor would be willing to pay for that income stream. ADE derived a rate of 5.8%
for this analysis.
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institution. This would reduce the assessed value by $50.9 million (114 units at $440,000 and 6
affordable units at $120,700).
Table 1: San Luis Ranch Project Description
LAND USE UNITS PHASE POPULATION
ASSESSED
VALUE PER
UNIT
TOTAL
ASSESSED
VALUE
Residential
Low-Medium Density 192 Ph 1 428 $900,000 $172,800,000
Medium Density 77 Ph 2 172 $850,000 $65,450,000
High Density 562 Ph 3,6 1,253 $555,600 $312,247,200
Very Low Income* 70 Ph 6 156 $138,500 $8,449,000
Low Income 4 Ph 2 9 $92,650 $780,000
Moderate Income 4 Ph 1 9 $372,000 $1,488,000
Workforce 14 Ph 1,2,3 31 232,900 $3,263,000
Total Residential 923 2,058 $564,477,200
Non-Residential Sq. Ft. Employment Per Sq. Ft. Hotel 120,000 Ph 4 104 $474 56,888,889
Office 80,000 Ph 5 267 $400 $32,000,000
Commercial 20,398 Ph 6 37 $500 $10,199,000
Restaurant 4,695 Ph 6 19 $500 $2,347,500
Light Industrial 9,641 Ph 6 13 $135 $1,328,535
Public/Institutional 3,208 Ph 6 6 $400 $1,283,400
Parks 6.8 ac Ph 1,3
Total 238,142 446 $104,038,235
Grand Total $668,515,435
Source: San Luis Ranch DEIR, San Luis Ranch Project Developer, ADE, Inc.*Note: some of these units may be provided at the Low
Income level.
Table 2: Affordable Units
UNIT TYPE NO. RENT
ASSESSED
VALUE
HOUSEHOLD
INCOME
Affordable Units in Phases 1, 2 and 3
Moderate 2 bd 4 $372,000 $135,700
Low 2 bd 4 $195,000 $92,650
Workforce Studio 6 $395,000 $126,640
Workforce 1 bd 2 $455,000 $144,800
Workforce 2 bd 6 $514,000 $162,880
Total Average 22 $210,800 $133,600
Affordable Units in Phase 6
Very Low Income*
Studios 18 $989 $100,000 $40,550
1 bedroom 23 $1,131 $120,000 $46,350
2 bedroom 29 $1,273 $134,000 $52,150
Total Average 70 $1,200 $120,700 $47,300
Source: ADE, Inc., based on 2023 Affordable Housing Standards from the San Luis Obispo County Department
of Planning and Building. *Note: Some of these units may be provided at higher incomes and units values than
shown, which would increase the resulting property and sales tax estimates.
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The non-residential uses are estimated to support 446 jobs and generate about $104 million in
assessed value. In addition to conventional business uses including a hotel, an office complex and a
small retail center, the proposed project includes an Agricultural Heritage site than encompasses
historic farming structures on the site along with new construction to create both a cultural as well as
commercial experience for visitors. In earlier iterations of the project design, this facility was
envisioned to be operated by a non-profit entity and was not included in the fiscal impact analysis due
to its largely non-taxable status. However, the current proposal anticipates this site will be run by for-
profit businesses. It includes the following elements:
Use Sq. Ft. _____Business Activity Land Use in Table 1
Market 4,529 Market/Grocery, Deli, Lite Retail Retail
Restaurant 4,695 Restaurant, Bar/Brewery/Tap Room Restaurant
Ag Processing 9,841 Food and Drink Production/Processing, Light Industrial
Food Service
Retail 8,869 Retail, Merchandise, Retail
(6,531 new retail, Pre-Made Food Sales
2,338 historic hay barn)
glass atrium 600 Gallery exhibit space Public/Institutional
Historic House 2,608 Day care, lite retail, museum Public/Institutional
Table 1 also shows the planned phasing for the development. The phases are anticipated to occur over
a ten year period between 2023 and 2033.
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FISCAL ANALYSIS
CITY BUDGET AND COST/REVENUE FACTORS
The City of San Luis Obispo adopts biennial budgets, with Mid-Year Reviews every six months. The
fiscal analysis is based on the Financial Plan for Fiscal Years (FY) 2023-2025 (Table 3). The analysis is
primarily focused on the General Fund, which supports general government services largely from
general tax revenues.
Table 3: City of San Luis Obispo FY 2023-2024 General Fund Budget
BUDGET CATEGORY CITY BUDGET
FISCAL ANALYSIS
ADJUSTMENTS [A]
FISCAL ANALYSIS
NET BASIS
Revenues
Taxes
Property Tax $15,524,886 $15,524,886
Property Tax in lieu of VLF $6,475,114 $6,475,114
Sales Tax: General $22,579,000 $22,579,000
Sales Tax: Measure G $30,262,000 $30,262,000
Sales Tax: Public Safety $499,000 $499,000
Transient Occupancy Tax $10,704,000 $10,704,000
Utility Users Tax $5,710,000 $5,710,000
Franchise Fees $1,854,000 $1,854,000
Business Tax Certificates/Licenses $3,711,000 $3,711,000
Cannabis Tax/Licenses $1,308,000 $207,600 $1,100,400
Subventions and Grants $665,000 $665,000 $0
Service Charges
Development Review Fees $6,276,000 $6,195,919 $80,081
Recreation Fees $2,022,000 $2,022,000
Other Charges for Services $2,190,000 $350,000 $1,840,000
Other Revenue $0
Fines and Forfeitures $153,071 $153,071
Interest Earnings and Rents $230,000 $230,000
Other Revenues $6,012,939 $6,012,939
Transfers in $0 $0
Total Revenues $116,176,010 $7,418,519 $108,757,491
Expenditures
General Government $11,167,307 $1,517,723 $9,649,584
Police $22,086,053 $235,259 $21,850,794
Fire $15,273,559 $556,329 $14,717,230
Community Services Admin $740,534 $740,534
Parks & Rec $5,706,331 $195,245 $5,511,086
Community Development $8,212,711 $6,195,919 $2,016,792
Public Works $13,591,608 $195,245 $13,396,363
Park and Landscape Maintenance $4,126,438 $4,126,438
Utilities - Solid Waste $341,459 $341,459
Capital Improvements $34,228,000 $34,228,000 $0
Debt Service $1,854,000 $1,854,000 $0
Transfers Out $1,490,000 $1,490,000
Total Expenditures $118,818,000 $44,977,721 $73,840,279
Total Net ($2,641,990) ($38,224,202) $35,582,212
Source: City of San Luis Obispo 2023-25 Financial Plan Notes: [a] See Table 3 below for adjustment detail.
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In order to develop revenue and cost factors for the fiscal analysis relevant to the San Luis Ranch
project, we have made a number of adjustments to the City budget figures, which are shown in the
second column of Table 3 and detailed further in Table 4. The right-hand column in Table 3 reflects
the basis for calculating per capita revenues and cost factors for the fiscal analysis, as shown in Table
5 below.
Table 4: Fiscal Model Revenue and Expenditure Adjustments
BUDGET CATEGORY AMOUNT ITEM
Revenues
Subventions $665,000 Subventions and Grants
Services Charges $6,195,919 Development Review Fees (except code enforcement)
Service Charges $350,000 Fire Plan Check Fees
Licenses $207,600 Cannabis Operators License Fees
Expenditures
General Government ($145,089) City Council
General Government ($195,245) IT/Finance Dir
General Government ($338,100) City Manager
General Government ($195,245) Human Res Dir
General Government ($310,552) City Attorney
General Government ($125,891) City Clerk
Public Safety ($235,259) Police Chief
Public Safety ($206,329) Fire Chief
Public Safety ($350,000) Fire Plan Check Fees
Transportation/Maintenance ($195,245) Public Works Dir
Leisure ($195,245) Parks & Rec Dir
Community Development ($195,245) CD Director
Community Development ($6,195,919) Development Review Fees (except code enforcement)
Debt Service/CalPers ($1,854,000) Debt Service
Total ($3,318,847)
Source: ADE, Inc. based on City of San Luis Obispo budget data as shown in Table 2.
In the revenue adjustments, we have deducted Subventions and Grants, which are generally one-time
revenues. We have also deducted one-time development review fees, which are typically paid during
the entitlement phase for new development but are not ongoing revenues paid by project residents
once the project is built. These fees include building permits, planning fees and various plan check
fees, including fire inspection and plan check fees. An equivalent amount of expenditure budget is
deducted from the Community Development Department and the Fire Department in the lower portion
of Table 3. The remaining $80,081 shown in this category is ongoing code enforcement.
In the expenditure categories, as detailed in Table 4, we have deducted costs that are unlikely to be
increased with new development and growth in the City. This includes mainly the City Council
expenditures and the major City Department Directors. The figures include both direct salary and
benefits.
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In the FY 2023-24 budget, the City Council has allocated about $34.2 million in General Fund reserves
to complete one-time capital improvement projects, which includes emergency storm repairs from last
year’s storms. This is not included in the analysis. In addition, the portion of Transfers Out that go to
debt service has also been deducted for purposes of the fiscal analysis.
In fiscal impact methodology, different assumptions for these types of budget adjustments are
sometimes used. For example, ADE’s adjustments to the General Government category result in a
13.5 percent reduction in the cost of these services compared to the figures shown in the budget. In
other fiscal studies, analysts sometimes assume that as much as 50 percent of this cost category is
fixed, and therefore make a higher adjustment to the cost basis for the analysis. One rationale for this
approach would be that the maintenance of existing City facilities such as City Hall and other
administrative buildings is largely fixed and does not increase with added growth. This approach would
tend to reduce the estimated costs for municipal services compared to the analysis presented in this
report. On the other side of the spectrum, over the very long term, all City costs increase with
inflation and as cities increase in size. This would argue for an approach that treated all City costs as
variable and would increase the service cost estimates. However, the approach used in this analysis is
consistent with the methodology used in the LUCE fiscal analysis, which evaluated the overall impact
of all new development permitted under the approved General Plan.
A portion of the costs and revenues in the fiscal analysis are allocated based on per capita factors
derived from the budget data in Tables 3 and 4 as well as socioeconomic data for the City of San Luis
Obispo as a whole. As of January 2023, the California Department of Finance (DOF) reports that the
City population was 47,788. The City’s recently adopted Economic Strategic Plan provides data
indicating the City supports 43,221 jobs, including both private sector and public sector employment.
It is a generally accepted fiscal methodology that jobs-based land uses exert half the demand for
municipal services as does the residential population. In addition, visitors generate some service
impacts, particularly for police protection and emergency medical services. ADE had previously
estimated in 2014 that visitors to San Luis Obispo equated to a full time population of more than
3,000 residents (1.1 million visitor days/365 days per year). Since that time Transient Occupancy
Taxes (TOT) have grown roughly at the same rate as inflation, so we assume the number of visitors
has remained steady. On a full-time equivalent basis for the services they impact, visitors are
estimated to have the same impact as the residential population.
Based on these data and assumptions about relative fiscal impact, we have assigned relative
proportions of certain revenues and costs to each major land use group as shown in Table 5.
Generally, the residential population generates about 61 percent of the demand for services while
non-residential land uses generate about 34 percent.2 Visitors equate to about four percent of service
demand for a limited number of revenues and service categories. Some exceptions to these
percentages exist in that non-residential development does not contribute significantly to subventions,
recreation fees or gas tax revenues. Conversely, all business tax revenues are assigned to the non-
residential sector, although it is likely some home occupancy businesses also pay this tax. On the
2 Note that these percentages are skewed more toward non-residential uses than was the case in the LUCE fiscal
analysis, mainly because the Beacon estimate of jobs in the City is much higher than the data available in 2014.
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expenditure side, non-residential development is not assumed to utilize recreation and leisure services
to a significant degree. Other significant revenues in the analysis, including property tax, and sales tax
are calculated using different formulas, as discussed further below.
Table 5: Per Capita Revenue and Cost Factors
BUDGET CATEGORY
LAND USE
RESIDENTIAL BUSINESS VISITORS
PROPORTION
PER
CAPITA PROPORTION
PER
EMPLOYEE PROPORTION
PER
VISITOR
Revenues
Utility Users Tax 66% $78.53 30% $39.26 4% $73.98
Franchise Fees 66% $25.50 30% $12.75 4% $20.71
Business Tax Certificates/Licenses 0% $0.00 100% $102.04
Service Charges Recreation Fees 100% $42.31 0% $0.00
Other Charges for Services 66% $25.30 30% $12.65 4% $23.28
Other Revenue Fines and Forfeitures 66% $2.11 30% $1.05 4% $2.07
Other Revenues 66% $82.69 34% $47.69
Expenditures Police 66% $300.51 30% $150.25 5% $300.51
Fire 66% $135.61 30% $67.80 5% $135.61
Community Services Admin 94% $14.49 0% $0.00 6% $14.49
Parks & Rec 94% $107.84 0% $0.00 6% $107.84
Community Development 66% $27.74 30% $13.87 5% $27.74
Public Works 66% $184.23 30% $92.12 5% $184.23
Park and Landscape Maintenance 94% $80.75 0% $0.00 6% $80.75
Utilities - Solid Waste 66% $4.70 30% $2.35 5% $4.70
Transfers Out 66% $20.49 30% $10.25 5% $20.49
Source: ADE, Inc.
PROJECT REVENUES
PROPERTY TAX
MASTER TAX SHARING AGREEMENT
The San Luis Ranch property will need to be annexed into the City of San Luis Obispo before
development can occur. The City and County of San Luis Obispo have negotiated a Master Tax Sharing
Agreement to address the distribution of property tax revenues for this project. The prior Master Tax
Sharing Agreement treated residential and non-residential property differently, but the current
Agreement treats all land uses equally in terms of future property tax distribution. The County
receives its existing property tax (in this case based on the raw land assessed value) and then
receives two-thirds of its normal property tax share for incremental assessed value (AV) generated by
future development. As shown in Table 1, the developed portion of the project is estimated to have an
assessed value of $668.5 million ($2023) when fully built out.
The project is located in Tax Rate Area (TRA) 113-002, in which the County receives 27.6 percent of
property tax revenues. For incremental AV generated by the proposed project, the County would
receive 18.4 percent of the property tax and the City would receive 9.2 percent. The total AV from the
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completed project, less the existing assessed value on the 52.7 developed acres, would generate
$605,026 for the City. These calculations are outlined below.
Projected Total Assessed Value: $668,515,435
Existing Assessed Value: $ 10,861,030
Incremental Increase in Assessed Value: $657,654,405
Total property tax @ 1%: $ 6,576,544
City’s share @ 9.2%: $ 605,026
If Cal Poly owns the 120 Nano units, it would reduce the taxable assessed value by $50,884,200. The
City’s share of property tax foregone would be $46,800.
PROPERTY TAX IN LIEU OF VEHICLE REGISTRATION FEES
The City receives an additional property tax allocation directly from the State in lieu of vehicle license
fees that were formerly distributed to cities prior to 2004. This allocation is distributed based on
annual increases in assessed value within the jurisdiction. The current AV for the City as a whole is
$12.18 billion, generating $6.47 million in property tax in-lieu revenues. The project would increase
total AV in the City by about 5.5 percent and generate $349,060 per year at build out.
If Cal Poly owns the 120 Nano units, the City’s share of foregone property tax in lieu of VLF would be
$27,000.
SALES TAX
Household spending by project residents would increase sales tax revenues for the City. ADE has
estimated household retail spending for typical households in each residential unit type in the project
based on the minimum income required to purchase the units at the prices shown in Table 1 above.
The analysis is shown in Table 6.
The assumptions for the monthly housing cost and minimum qualifying income are shown in the
footnotes to the table. The taxable sales for households in each residential unit type are estimated
using ADE’s retail demand model, which correlates consumer expenditure patterns for households at
every income level in $10,000 increments. This model has been updated to reflect the latest data
available for the Bureau of Labor Statistics and the Census of Retail Trade. Taxable purchases
represent nearly 70 percent of total retail/services spending, with mainly food, pharmaceuticals and
services labor being non-taxable. The taxable spending in the Table reflects the total for the number
of households in each unit type. (See Tables A-1 to A-6 in the Appendix for detailed household
expenditure estimates). The sales tax is one percent of taxable sales and is shown both per-unit and
per-person.
As part of the LUCE analysis in 2014, ADE conducted a retail market analysis for the City. San Luis
Obispo has the second highest taxable sales per capita of any jurisdiction in the County and sales in
the City are twice the County average. Comparing local retail demand to actual sales for each store
type category, the City captures sales in excess of its own internal demand in virtually every retail
store category. Therefore, it is likely that most of the household spending from project residents would
occur in San Luis Obispo. However, households do comparison shop for large items and spend a
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portion of their budget out of town while on vacation or other entertainment trips. This analysis
assumes 20 percent of household spending will not occur in San Luis Obispo, represented as a leakage
factor in Table 6.
Since the project also includes a retail center, it is necessary to analyze how much of the project
households’ spending would occur at that center vs. other retail locations in the City. The retail center
in the project would be 7,000 sq. ft., and is expected to include a mixture of quick serve restaurants
and personal services such as hair salons (Table 7). We estimate the food service would generate
about $578.00 in taxable sales per sq. ft. Considering the likely rates at which the project’s onsite
households would patronize such a center, in relation to competitive centers elsewhere in the City, we
estimate that the onsite center could capture about 3.2 percent of total spending from project
residents. The other 96.8 percent of household spending would occur elsewhere in the City and also at
other retail centers outside of San Luis Obispo.
Table 6: Household Retail Taxable Sales Calculations
STEPS IN THE ANALYSIS
RESIDENTIAL UNIT DENSITIES AND TYPES
LOW-
MEDIUM MEDIUM
HIGH
DENSITY
OWNERSHIP
HIGH DENSITY
RENTAL
PHASE 6
AFFORDABLE
LOW-
MODERATE-
WORKFORCE
Housing Price per Unit $900,000 $850,000 $555,600 $554,200 $120,700 $210,800
Monthly Housing Costs [a] $5,951 $5,640 $3,808 $2,700 $1,200 $3,340
Minimum Qualifying Income [b] $219,700 $208,200 $140,600 $108,000 $47,300 $133,600
Households 192 77 286 276 70 22
Total Taxable Spending $5,825,909 $2,214,134 $7,968,132 $6,023,212 $912,986 $583,681
Leakage Factor 20% 20% 20% 20% 20% 20%
Taxes per Unit $243 $230 $223 $175 $104 $212
HHS 2.23 2.23 2.23 2.23 2.23 2.23
Taxes per person $109 $103 $100 $78 $47 $95
Source: ADE, Inc.
Notes: [a] Housing costs for Low and Medium Density reflect mortgage payment at 6.5 percent interest for 30 years, 20% down
payment and about 2.0% costs for taxes and insurance. Housing costs for High Density and Affordable Units reflect anticipated rent
levels.
[b] Housing costs assumed to be a maximum of 32.5 % of income for market rate units, 30% for affordable units.
The LUCE analysis also estimated taxable purchases for office space and hotel visitors, which has been
updated for the present study to reflect current sales tax revenues in the City and the current number
of employees and visitors. In office space, very few businesses conduct point-of-sale transactions, but
office employees make taxable expenditures for lunch and other incidental items. This generates
about $8.13 in sales tax per employee annually. Hotel visitors spend approximately $174 per day on
taxable items, mostly in restaurants and gift shops. Using these factors, we estimate that the
proposed hotel will generate about $124,700 per year in sales tax but the office space would generate
only $2,200 per year.
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Table 7: Conceptual Estimate of Proposed Project Retail Center
and Onsite Household Spending
STORE TYPE
BLDG.
SQ. FT.
SALES/
SQ. FT.
(2024$)
%
TAXABLE
TOTAL
TAXABLE
SALES
TAXABLE
PROJECT
HOUSEHOLD
SPENDING
PROJECT
HOUSEHOLDS
CAPTURE
RATE
PROJECT
HOUSEHOLDS
ONSITE
SPENDING
Food service 5,000 $577.72 100.0% $2,888,600 $4,918,925 10.0% $596,553
Personal Services 2,000 $251.23 0.0% $0 $0 10.0% $0
Total 7,000 $2,888,600 $4,918,925 $596,553
Total Household Spending in SLO $18,822,427 3.2%
Total Household Spending $23,528,034 2.5%
Per Total Sq. Ft. $420.34
Source: ULI, Dollars and Cents of Shopping Centers, 2008, Bureau of Labor Statistics, All Urban Consumers Price Index, April 2017,
ADE, Inc. – See Appendix for detailed household taxable sales estimates.
In addition to the base sales tax of one percent of taxable sales, the City receives a share of the state
Proposition 172 Public Safety sales tax revenue as well, which represents about 2.5 percent of base
sales tax.
The City also has a Local Measure sales tax override (Measure G) which generates an additional 1.5
percent of sales tax.
Finally, in addition to these various sources of sales tax, the City receives a share of the County pool
of use taxes that are collected mainly from non-point source transactions such as internet sales. Each
City receives a share of the County pool revenue based on its share of point-of-sale transactions. San
Luis Obispo’s current share is 14.45 percent of its base sales tax. This is shown as an additional line
item in Exhibits A and B in the Summary above.
TRANSIENT OCCUPANCY TAX
The City receives a ten percent transient occupancy tax on hotel room revenues. The project would
include a 200 room hotel. For this analysis, we have used a projected room rate of $200 per night and
an average occupancy rate of 68.9 percent.
OTHER REVENUES
Most other revenues are calculated on a per capita basis using the factors shown in Table 4 above,
with certain exceptions. The Real Property Transfer Tax is calculated on the assumption that ten
percent of the homes in the project will be resold annually and that the non-residential properties will
turn over once every fifteen years. This does not account for the initial transfer tax that the City will
receive when the development is initially sold. That revenue would be approximately $367,700 on a
one-time basis.
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The interest earnings and rents are calculated as a percent of other revenues generated by each
Phase in the project, using the same rate of return the City receives on its other General Fund
revenues. If Cal Poly owns the 120 Nano units, the lost interest on foregone property tax revenues for
the City would be about $1,500.
PROJECT SERVICES COSTS
As with the Other Revenues, the Service Costs are generally calculated on a per capita basis using the
factors in Table 5. However, General Government is calculated as an overhead factor on the other
costs generated by each Phase and unit type in the project. Based on the adjusted budget figures
from Table 3 (Net Basis column), General Government costs represent about 15.4 percent of direct
services costs for the City.
The per capita factor for fire protection shown in Table 5 reflects the emergency medical function of
the Fire Department, estimated to consume two-thirds of the departmental budget.3 The remaining
one-third is allocated to fire suppression and prevention and is distributed to the land uses in each
Phase based on the assessed value of their improvements.
The park maintenance costs are estimated on a per acre basis using a factor of $7,054 per acre, based
on the current average expenditure from the Financial Plan. Maintenance of the natural open space is
estimated to cost $4,465 per acre. No costs have been estimated for the Agricultural preserve, as this
would likely be operated by a farm lessee.
Road maintenance and other transportation costs are estimated on a per capita basis and do not
reflect specific analysis of the proposed roads and streets in the San Luis Ranch development.
3 ADE, Inc., LUCE Fiscal Impact Analysis and Public Facilities Plan, August 2014. p. 10.
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COMPARISON WITH 2017 PROJECT
In 2017, this project was estimated to generate just less than $1 million in fiscal gain for the City
annually. One difference in the approach is that the larger retail center is estimated draw sales away
from existing centers in San Luis Obispo, based on the retail analysis conducted in 2014 and 2017.
Therefore, the net sales taxes are lower per sq. ft. than would otherwise be expected. However, the
land owner has also indicated that they have been unable to find a retail developer willing to construct
such a large center on the site. If so, the fiscal benefit from this project design is likely not attainable.
Table 8: San Luis Ranch Project Description, 2017
LAND USE UNITS PHASE POPULATION
ASSESSED
VALUE PER
UNIT
TOTAL
ASSESSED
VALUE
Residential
Low-Medium Density 220 Ph 1 504 $700,000 $154,000,000
Medium Density 120 Ph 2 275 $500,000 $60,000,000
High Density 206 Ph 3 472 $325,000 $66,950,000
Affordable Housing 34 Ph 3 78 $118,700 $4,035,100
Total Residential 580 1,328 $284,985,100
Non-Residential Sq. Ft. Employment Per Sq. Ft.
Hotel 120,000 Ph 4 104 $320 $38,400,000
Office 100,000 Ph 5 333 $254 $25,420,000
Commercial 150,000 Ph 6 273 $300 $45,000,000
Parks 3.4 ac Ph 1
Total 370,000 710 $108,820,000
Grand Total $393,805,100
Source: San Luis Ranch DEIR. ADE, Inc., Fiscal Analysis of the Proposed San Luis Ranch Project, May 25, 2017.
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Table 9: Project Impact by Phase, 2017 Analysis
BUDGET CATEGORY TOTAL PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 6
REVENUES
Taxes
Property Tax $257,424 $139,393 $54,225 $63,805 $0 $0 $0
Property Tax in lieu of VLF $279,393 $109,258 $42,568 $50,362 $27,244 $18,035 $31,926
Sales Tax: General $658,450 $51,052 $21,215 $30,047 $175,992 $2,396 $377,746
Sales Tax: Measure G $329,225 $25,526 $10,608 $15,023 $87,996 $1,198 $188,873
Sales Tax: Public Safety $16,309 $1,265 $525 $744 $4,359 $59 $9,357
Transient Occupancy Tax $569,400 $0 $0 $0 $569,400 $0 $0
Utility Users Tax $147,665 $37,269 $20,328 $40,657 $26,994 $12,329 $10,088
Franchise Fees $41,347 $10,435 $5,692 $11,384 $7,559 $3,452 $2,825
Business Tax Certificates $38,101 $0 $0 $0 $5,596 $17,878 $14,627
Real Property Transfer Tax $19,864 $8,470 $3,300 $3,904 $1,478 $979 $1,733
Service Charges
Recreation Fees $47,412 $17,984 $9,809 $19,619 $0 $0 $0
Other Charges for Services $39,192 $11,729 $6,398 $12,795 $1,215 $3,880 $3,175
Other Revenue
Fines and Forfeitures $3,493 $1,045 $570 $1,140 $108 $346 $283
Interest Earnings and Rents $12,941 $2,220 $948 $1,369 $4,741 $318 $3,346
Other Revenues $2,422 $706 $385 $770 $82 $263 $216
Transfers in
Gas Tax/TDA $28,976 $10,991 $5,995 $11,990 $0 $0 $0
Other $30,983 $9,027 $4,924 $9,848 $1,055 $3,371 $2,758
TOTAL REVENUES $2,522,597 $436,370 $187,492 $273,459 $913,821 $64,504 $646,951
EXPENDITURES
General Government $335,797 $103,984 $44,092 $90,340 $52,885 $19,633 $24,864
Police $410,202 $100,442 $54,787 $109,574 $77,953 $26,666 $40,780
Fire $374,938 $122,853 $54,607 $83,881 $51,181 $27,449 $34,967
Transportation $61,881 $15,618 $8,519 $17,038 $11,312 $5,167 $4,227
Leisure, Cultural and Social Services $129,875 $39,874 $21,750 $43,499 $24,752 $0 $0
Park and Open Space Maintenance $93,081 $60,041 $0 $33,040 $0 $0 $0
Community Development $128,175 $32,350 $17,645 $35,291 $23,431 $10,702 $8,756
Transfers Out $2,673 $675 $368 $736 $489 $223 $183
TOTAL EXPENDITURES $1,536,621 $475,837 $201,767 $413,398 $242,003 $89,839 $113,777
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $985,976 ($39,467) ($14,275) ($139,939) $671,818 ($25,335) $533,174
TOTAL BUDGET NET (DEFICIT) PER UNIT $1,038 ($179) ($119) ($583) $5,598 ($253) $3,554
Source: ADE, Inc., Fiscal Analysis of the Proposed San Luis Ranch Project, May 25, 2017.
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Table 10: Cumulative Project Impact by Phase, 2017 Analysis
BUDGET CATEGORY PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 6
REVENUES
Taxes
Property Tax $139,393 $193,619 $257,424 $257,424 $257,424 $257,424
Property Tax in lieu of VLF $109,258 $151,827 $202,188 $229,432 $247,467 $279,393
Sales Tax: General $51,052 $72,268 $102,315 $278,307 $280,703 $658,450
Sales Tax: Measure G $25,526 $36,134 $51,157 $139,154 $140,352 $329,225
Sales Tax: Public Safety $1,265 $1,790 $2,534 $6,893 $6,953 $16,309
Transient Occupancy Tax $0 $0 $0 $569,400 $569,400 $569,400
Utility Users Tax $37,269 $57,597 $98,254 $125,249 $137,578 $147,665
Franchise Fees $10,435 $16,127 $27,512 $35,070 $38,522 $41,347
Business Tax Certificates $0 $0 $0 $5,596 $23,474 $38,101
Real Property Transfer Tax $8,470 $11,770 $15,674 $17,153 $18,131 $19,864
Service Charges
Recreation Fees $17,984 $27,793 $47,412 $47,412 $47,412 $47,412
Other Charges for Services $11,729 $18,127 $30,922 $32,137 $36,017 $39,192
Other Revenue
Fines and Forfeitures $1,045 $1,615 $2,756 $2,864 $3,210 $3,493
Interest Earnings and Rents $2,220 $3,168 $4,537 $9,278 $9,595 $12,941
Other Revenues $706 $1,090 $1,860 $1,943 $2,206 $2,422
Transfers in
Gas Tax/TDA $10,991 $16,986 $28,976 $28,976 $28,976 $28,976
Other $9,027 $13,951 $23,799 $24,855 $28,225 $30,983
TOTAL REVENUES $436,370 $623,863 $897,321 $1,811,142 $1,875,646 $2,522,597
EXPENDITURES
General Government $103,984 $148,077 $238,416 $291,301 $310,933 $335,797
Police $100,442 $155,229 $264,803 $342,756 $369,421 $410,202
Fire $122,853 $177,460 $261,341 $312,522 $339,971 $374,938
Transportation $15,618 $24,137 $41,175 $52,487 $57,654 $61,881
Leisure, Cultural and Social Services $39,874 $61,624 $105,123 $129,875 $129,875 $129,875
Park and Landscape Maintenance $60,041 $60,041 $93,081 $93,081 $93,081 $93,081
Community Development $32,350 $49,995 $85,286 $108,717 $119,419 $128,175
Transfers Out $675 $1,043 $1,779 $2,267 $2,490 $2,673
TOTAL EXPENDITURES $475,837 $677,605 $1,091,002 $1,333,005 $1,422,845 $1,536,621
TOTAL BUDGET NET (DEFICIT)/ SURPLUS ($39,467) ($53,742) ($193,681) $478,137 $452,801 $985,976
TOTAL BUDGET NET (DEFICIT) PER UNIT ($179) ($158) ($334) $683 $566 $1,038
Source: ADE, Inc., Fiscal Analysis of the Proposed San Luis Ranch Project, May 25, 2017.
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APPENDIX
TAXABLE SALES ESTIMATES
The following tables show the estimates of retail/services spending and taxable sales for each of the
four income levels modeled for the project. The figures reflect the aggregate total spending from the
number of households in each density category, not per household values.
Table A-1: Taxable Household Spending, Low-Medium Density Units
192 HOUSEHOLDS WITH AVERAGE INCOME
OF $219,700 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $381,350 $381,350 100.0% 0.9% 0.9%
General Merchandise Group $1,130,403 $755,978 66.9% 2.7% 1.8%
Department Stores/Other General Merch. $267,471 $242,463 90.7% 0.6% 0.6%
Other General Merchandise $684,319 $442,070 64.6% 1.6% 1.0%
Drug & Proprietary Stores $178,613 $71,445 40.0% 0.4% 0.2%
Specialty Retail Group $310,602 $310,602 100.0% 0.7% 0.7%
Food, Eating and Drinking Group $2,145,013 $1,452,548 67.7% 5.1% 3.4%
Grocery Stores $891,834 $222,958 25.0% 2.1% 0.5%
Specialty Food Stores $28,681 $7,170 25.0% 0.1% 0.0%
Liquor Stores $49,469 $47,391 95.8% 0.1% 0.1%
Eating Places $1,175,029 $1,175,029 100.0% 2.8% 2.8%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $427,067 $427,067 100.0% 1.0% 1.0%
Automotive Group $2,327,958 $2,268,691 93.3% 5.5% 5.4%
Sub-Total Retail $6,722,393 $5,596,237 83.2% 15.9% 13.3%
SERVICES
Rental Services $77,577 $0 0.0% 0.2% 0.0%
Professional Services $26,082 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $241,884 $120,942 50.0% 0.6% 0.3%
Other Medical $721,214 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $177,159 $70,864 40.0% 0.4% 0.2%
Other Repair $83,840 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $167,242 $16,724 10.0% 0.4% 0.0%
Other Personal $105,709 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $161,876 $16,188 10.0% 0.4% 0.0%
Sporting Events $49,545 $4,955 10.0% 0.1% 0.0%
Other Entertainment $343,516 $0 0.0% 0.8% 0.0%
Sub-Total Services $2,155,644 $229,672 10.7% 5.1% 0.5%
GRAND TOTAL $8,878,037 $5,825,909 65.6% 21.0% 13.8%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
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Table A-2: Taxable Household Spending, Medium Density Units
77 HOUSEHOLDS WITH AVERAGE INCOME
OF $208,200 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $144,932 $144,932 100.0% 0.9% 0.9%
General Merchandise Group $429,609 $287,309 66.9% 2.7% 1.8%
Department Stores/Other General Merch. $101,652 $92,148 90.7% 0.6% 0.6%
Other General Merchandise $260,075 $168,009 64.6% 1.6% 1.0%
Drug & Proprietary Stores $67,882 $27,153 40.0% 0.4% 0.2%
Specialty Retail Group $118,044 $118,044 100.0% 0.7% 0.7%
Food, Eating and Drinking Group $815,211 $552,040 67.7% 5.1% 3.4%
Grocery Stores $338,941 $84,735 25.0% 2.1% 0.5%
Specialty Food Stores $10,900 $2,725 25.0% 0.1% 0.0%
Liquor Stores $18,801 $18,011 95.8% 0.1% 0.1%
Eating Places $446,569 $446,569 100.0% 2.8% 2.8%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $162,307 $162,307 100.0% 1.0% 1.0%
Automotive Group $884,739 $862,215 93.3% 5.5% 5.4%
Sub-Total Retail $2,554,842 $2,126,847 83.2% 15.9% 13.3%
SERVICES
Rental Services $29,483 $0 0.0% 0.2% 0.0%
Professional Services $9,912 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $91,928 $45,964 50.0% 0.6% 0.3%
Other Medical $274,097 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $67,329 $26,932 40.0% 0.4% 0.2%
Other Repair $31,863 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $63,560 $6,356 10.0% 0.4% 0.0%
Other Personal $40,175 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $61,521 $6,152 10.0% 0.4% 0.0%
Sporting Events $18,830 $1,883 10.0% 0.1% 0.0%
Other Entertainment $130,553 $0 0.0% 0.8% 0.0%
Sub-Total Services $819,252 $87,287 10.7% 5.1% 0.5%
GRAND TOTAL $3,374,094 $2,214,134 65.6% 21.0% 13.8%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
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Table A-3: Taxable Household Spending, High Density Ownership Units
286 HOUSEHOLDS WITH AVERAGE INCOME
OF $140,600 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $451,448 $451,448 100.0% 1.1% 1.1%
General Merchandise Group $1,607,441 $1,066,237 66.3% 4.0% 2.7%
Department Stores/Other General Merch. $346,820 $314,392 90.7% 0.9% 0.8%
Other General Merchandise $1,006,487 $650,190 64.6% 2.5% 1.6%
Drug & Proprietary Stores $254,134 $101,654 40.0% 0.6% 0.3%
Specialty Retail Group $459,392 $459,392 100.0% 1.1% 1.1%
Food, Eating and Drinking Group $3,189,188 $2,114,833 66.3% 7.9% 5.3%
Grocery Stores $1,383,293 $345,823 25.0% 3.4% 0.9%
Specialty Food Stores $45,209 $11,302 25.0% 0.1% 0.0%
Liquor Stores $70,915 $67,936 95.8% 0.2% 0.2%
Eating Places $1,689,772 $1,689,772 100.0% 4.2% 4.2%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $631,216 $631,216 100.0% 1.6% 1.6%
Automotive Group $3,111,550 $3,026,065 93.3% 7.7% 7.5%
Sub-Total Retail $9,450,235 $7,749,191 82.0% 23.5% 19.3%
SERVICES
Rental Services $73,989 $0 0.0% 0.2% 0.0%
Professional Services $24,863 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $230,583 $115,291 50.0% 0.6% 0.3%
Other Medical $687,518 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $168,882 $67,553 40.0% 0.4% 0.2%
Other Repair $79,923 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $159,428 $15,943 10.0% 0.4% 0.0%
Other Personal $100,770 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $154,313 $15,431 10.0% 0.4% 0.0%
Sporting Events $47,231 $4,723 10.0% 0.1% 0.0%
Other Entertainment $327,467 $0 0.0% 0.8% 0.0%
Sub-Total Services $2,054,968 $218,942 10.7% 5.1% 0.5%
GRAND TOTAL $11,505,203 $7,968,132 69.3% 28.6% 19.8%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 591 of 641
Applied Development Economics | Page 22
Table A-4: Taxable Household Spending, High Density Rental Units
276 HOUSEHOLDS WITH AVERAGE INCOME
OF $108,000 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $338,895 $338,895 100.0% 1.1% 1.1%
General Merchandise Group $1,217,151 $807,068 66.3% 4.1% 2.7%
Department Stores/Other General Merch. $261,526 $237,073 90.7% 0.9% 0.8%
Other General Merchandise $763,190 $493,021 64.6% 2.6% 1.7%
Drug & Proprietary Stores $192,435 $76,974 40.0% 0.6% 0.3%
Specialty Retail Group $348,424 $348,424 100.0% 1.2% 1.2%
Food, Eating and Drinking Group $2,419,346 $1,602,943 66.3% 8.1% 5.4%
Grocery Stores $1,051,153 $262,788 25.0% 3.5% 0.9%
Specialty Food Stores $34,375 $8,594 25.0% 0.1% 0.0%
Liquor Stores $53,715 $51,459 95.8% 0.2% 0.2%
Eating Places $1,280,103 $1,280,103 100.0% 4.3% 4.3%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $478,730 $478,730 100.0% 1.6% 1.6%
Automotive Group $2,349,622 $2,284,854 93.3% 7.9% 7.7%
Sub-Total Retail $7,152,168 $5,860,915 81.9% 24.0% 19.7%
SERVICES
Rental Services $54,792 $0 0.0% 0.2% 0.0%
Professional Services $18,431 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $170,926 $85,463 50.0% 0.6% 0.3%
Other Medical $509,643 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $125,189 $50,075 40.0% 0.4% 0.2%
Other Repair $59,245 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $118,181 $11,818 10.0% 0.4% 0.0%
Other Personal $74,699 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $114,389 $11,439 10.0% 0.4% 0.0%
Sporting Events $35,011 $3,501 10.0% 0.1% 0.0%
Other Entertainment $242,744 $0 0.0% 0.8% 0.0%
Sub-Total Services $1,523,249 $162,297 10.7% 5.1% 0.5%
GRAND TOTAL $8,675,417 $6,023,212 69.4% 29.1% 20.2%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 592 of 641
Applied Development Economics | Page 23
Table A-5: Taxable Household Spending, Phase 6 Affordable Units
70 HOUSEHOLDS WITH AVERAGE INCOME
OF $47,300 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $54,349 $54,349 100.0% 1.6% 1.6%
General Merchandise Group $205,108 $134,951 65.8% 6.2% 4.1%
Department Stores/Other General Merch. $41,521 $37,639 90.7% 1.3% 1.1%
Other General Merchandise $129,583 $83,710 64.6% 3.9% 2.5%
Drug & Proprietary Stores $34,004 $13,602 40.0% 1.0% 0.4%
Specialty Retail Group $52,210 $52,210 100.0% 1.6% 1.6%
Food, Eating and Drinking Group $405,914 $259,524 63.9% 12.3% 7.8%
Grocery Stores $188,435 $47,109 25.0% 5.7% 1.4%
Specialty Food Stores $6,253 $1,563 25.0% 0.2% 0.0%
Liquor Stores $8,895 $8,521 95.8% 0.3% 0.3%
Eating Places $202,331 $202,331 100.0% 6.1% 6.1%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $74,786 $74,786 100.0% 2.3% 2.3%
Automotive Group $329,941 $319,139 93.3% 10.0% 9.6%
Sub-Total Retail $1,122,307 $894,959 79.7% 33.9% 27.0%
SERVICES
Rental Services $6,089 $0 0.0% 0.2% 0.0%
Professional Services $2,047 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $18,986 $9,493 50.0% 0.6% 0.3%
Other Medical $56,610 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $13,906 $5,562 40.0% 0.4% 0.2%
Other Repair $6,581 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $13,127 $1,313 10.0% 0.4% 0.0%
Other Personal $8,297 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $12,706 $1,271 10.0% 0.4% 0.0%
Sporting Events $3,889 $389 10.0% 0.1% 0.0%
Other Entertainment $26,963 $0 0.0% 0.8% 0.0%
Sub-Total Services $169,202 $18,028 10.7% 5.1% 0.5%
GRAND TOTAL $1,291,509 $912,986 70.7% 39.0% 27.6%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 593 of 641
Applied Development Economics | Page 24
Table A-6: Taxable Household Spending, Low, Moderate, Workforce Households
22 HOUSEHOLDS WITH AVERAGE INCOME
OF $133,600 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $35,842 $35,842 100.0% 1.2% 1.2%
General Merchandise Group $120,378 $80,212 66.6% 4.1% 2.7%
Department Stores/Other General Merch. $26,658 $24,166 90.7% 0.9% 0.8%
Other General Merchandise $75,442 $48,736 64.6% 2.6% 1.7%
Drug & Proprietary Stores $18,278 $7,311 40.0% 0.6% 0.2%
Specialty Retail Group $34,207 $34,207 100.0% 1.2% 1.2%
Food, Eating and Drinking Group $236,504 $156,652 66.2% 8.0% 5.3%
Grocery Stores $102,811 $25,703 25.0% 3.5% 0.9%
Specialty Food Stores $3,368 $842 25.0% 0.1% 0.0%
Liquor Stores $5,205 $4,986 95.8% 0.2% 0.2%
Eating Places $125,121 $125,121 100.0% 4.3% 4.3%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $47,218 $47,218 100.0% 1.6% 1.6%
Automotive Group $219,891 $213,548 93.3% 7.5% 7.3%
Sub-Total Retail $694,040 $567,678 81.8% 23.6% 19.3%
SERVICES
Rental Services $5,409 $0 0.0% 0.2% 0.0%
Professional Services $1,817 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $16,854 $8,427 50.0% 0.6% 0.3%
Other Medical $50,253 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $12,344 $4,938 40.0% 0.4% 0.2%
Other Repair $5,842 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $11,653 $1,165 10.0% 0.4% 0.0%
Other Personal $7,366 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $11,279 $1,128 10.0% 0.4% 0.0%
Sporting Events $3,452 $345 10.0% 0.1% 0.0%
Other Entertainment $23,936 $0 0.0% 0.8% 0.0%
Sub-Total Services $150,205 $16,003 10.7% 5.1% 0.5%
GRAND TOTAL $844,245 $583,681 69.1% 28.7% 19.9%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 594 of 641
Applied Development Economics | Page 25
Table A-7: Taxable Household Spending, High Density Units, 2017 Project
277 HOUSEHOLDS WITH AVERAGE INCOME
OF $133,300 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $418,961 $418,961 100.0% 1.1% 1.1%
General Merchandise Group $1,502,669 $996,444 66.3% 4.1% 2.7%
Department Stores/Other General Merch. $323,084 $292,876 90.7% 0.9% 0.8%
Other General Merchandise $942,010 $608,538 64.6% 2.6% 1.6%
Drug & Proprietary Stores $237,575 $95,030 40.0% 0.6% 0.3%
Specialty Retail Group $430,046 $430,046 100.0% 1.2% 1.2%
Food, Eating and Drinking Group $2,986,003 $1,978,652 66.3% 8.1% 5.4%
Grocery Stores $1,297,011 $324,253 25.0% 3.5% 0.9%
Specialty Food Stores $42,411 $10,603 25.0% 0.1% 0.0%
Liquor Stores $66,312 $63,526 95.8% 0.2% 0.2%
Eating Places $1,580,270 $1,580,270 100.0% 4.3% 4.3%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $590,880 $590,880 100.0% 1.6% 1.6%
Automotive Group $2,902,038 $2,822,085 93.3% 7.9% 7.6%
Sub-Total Retail $8,830,599 $7,237,068 82.0% 23.9% 19.6%
SERVICES
Rental Services $67,940 $0 0.0% 0.2% 0.0%
Professional Services $22,831 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $211,732 $105,866 50.0% 0.6% 0.3%
Other Medical $631,310 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $155,075 $62,030 40.0% 0.4% 0.2%
Other Repair $73,389 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $146,394 $14,639 10.0% 0.4% 0.0%
Other Personal $92,532 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $141,697 $14,170 10.0% 0.4% 0.0%
Sporting Events $43,369 $4,337 10.0% 0.1% 0.0%
Other Entertainment $300,695 $0 0.0% 0.8% 0.0%
Sub-Total Services $1,886,964 $201,042 10.7% 5.1% 0.5%
GRAND TOTAL $10,717,563 $7,438,110 69.4% 29.0% 20.1%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 595 of 641
Applied Development Economics | Page 26
Table A-8: Taxable Household Spending, Affordable Units, 2017 Project
34 HOUSEHOLDS WITH AVERAGE INCOME
OF $54,600 TOTAL
HOUSEHOLD
SPENDING
TAXABLE
SALES
TAXABLE
PERCENT
TOTAL SALES
AS PERCENT
OF INCOME
TAXABLE
SALES AS
PERCENT OF
INCOME STORE CATEGORY
RETAIL
Apparel Store Group $26,954 $26,954 100.0% 1.5% 1.5%
General Merchandise Group $100,288 $65,954 65.8% 5.4% 3.6%
Department Stores/Other General Merch. $20,678 $18,745 90.7% 1.1% 1.0%
Other General Merchandise $62,463 $40,351 64.6% 3.4% 2.2%
Drug & Proprietary Stores $17,146 $6,858 40.0% 0.9% 0.4%
Specialty Retail Group $26,156 $26,156 100.0% 1.4% 1.4%
Food, Eating and Drinking Group $195,508 $127,676 65.3% 10.5% 6.9%
Grocery Stores $87,372 $21,843 25.0% 4.7% 1.2%
Specialty Food Stores $2,835 $709 25.0% 0.2% 0.0%
Liquor Stores $4,222 $4,045 95.8% 0.2% 0.2%
Eating Places $101,079 $101,079 100.0% 5.4% 5.4%
Building Materials And $0 $0 0.0% 0.0% 0.0%
Homefurnishings Group $36,749 $36,749 100.0% 2.0% 2.0%
Automotive Group $166,643 $161,509 93.3% 9.0% 8.7%
Sub-Total Retail $552,297 $444,997 80.6% 29.8% 24.0%
SERVICES
Rental Services $3,418 $0 0.0% 0.2% 0.0%
Professional Services $1,148 $0 0.0% 0.1% 0.0%
Medical Services
Eyecare $10,645 $5,323 50.0% 0.6% 0.3%
Other Medical $31,740 $0 0.0% 1.7% 0.0%
Repair Services
Auto Repair $7,797 $3,119 40.0% 0.4% 0.2%
Other Repair $3,690 $0 0.0% 0.2% 0.0%
Personal Services
Personal Care Services $7,360 $736 10.0% 0.4% 0.0%
Other Personal $4,652 $0 0.0% 0.3% 0.0%
Entertainment/Recreation
Movie, Theater, Opera, Ballet $7,124 $712 10.0% 0.4% 0.0%
Sporting Events $2,180 $218 10.0% 0.1% 0.0%
Other Entertainment $15,118 $0 0.0% 0.8% 0.0%
Sub-Total Services $94,871 $10,108 10.7% 5.1% 0.5%
GRAND TOTAL $647,169 $455,105 70.3% 34.9% 24.5%
Source: ADE, Inc.; retail demand model derived from U.S. Economic Census, Bureau of Labor Statistics Consumer Expenditure
Survey and PUMS database.
Page 596 of 641
M EMORANDUM
To: Callie Taylor
From: Teifion Rice-Evans and Russ Powell
Subject: San Luis Ranch Fiscal Impact Analysis Peer Review;
EPS #242055
Date: August 14, 2024
The City of San Luis Obispo (City) has engaged Economic &
Planning Systems, Inc. (EPS) to provide a peer review of fiscal
impact analyses prepared by Applied Development Economics,
Inc. (ADE) for the San Luis Ranch project (Project). The initial
fiscal impact analysis (FIA) was prepared by ADE in 2017, and
the most recent update to the FIA was prepared in 2024.
The City asked EPS to review the FIAs. The City was, in
particular, interested in understanding the impact of the
proposed land use changes in Lot 7 on the expected fiscal
outcomes. To isolate changes to fiscal impacts associated with
Lot 7 land use changes, EPS developed a simplified version of
the 2024 FIA calculations. It may be beneficial for the City to
ask the developer to run this same analysis using its full model.
As part of its review, EPS found an inconsistency between the
developer’s proposed development program and that evaluated
in their 2024 analysis that ought to be corrected. For the
purposes of the Lot 7 assessment, EPS used the developer’s
proposed development program.
The developer is proposing substantial changes from the
2017 land use development program. The 2024 land use
program reduces the scale of commercial development and
increases the scale of residential development. As shown in the
table below, the largest changes include (1) reduction of the
originally proposed 150,000-square-foot commercial center to
a 7,000-square-foot commercial development, and (2) an
expansion of the residential program from 580 units
to 923 units.
Page 597 of 641
Memorandum
August 14, 2024
Economic & Planning Systems, Inc. (EPS) 2
The changes in the land use program were primarily driven by the proposed
changes in Lot 7. The proposed Lot 7 land use changes include: (1) a reduction in
the commercial program from 150,000 square feet to 7,000 square feet, and (2)
an addition of 276 multifamily for-rent residential uses and 67 affordable units.
EPS used a simplified version of the 2024 FIA model to compare three
different Lot 7 land use programs. The three land use programs assessed
included: (1) the 2024 land use program assuming the 7,000 commercial space is
all taxable retail space; (2) the 2024 land use program assuming that the
commercial space is for services and does not generate taxable sales; and (3) the
2017 land use program. EPS identified general or simplified assumptions from
the 2024 FIA and applied them to the three land use programs. Key 2024 FIA
assumptions applied included assessed value for residential and commercial uses,
sales tax per square foot for retail, and multipliers for “persons served” to derive
“Other Revenue” and “Expenditures”. For the 150,000 square foot commercial
program under the 2017 land use program, EPS assumed an average of $348 per
square foot (equivalent to the inflated number of $260 per square foot used in the
2017 FIA).
The change in the Lot 7 land use program substantially changes the fiscal
impact picture for the City. Lot 7 fiscal impacts are estimated to shift from
$1.38 million in net annual revenues to the City’s General to between $160,000
and $240,000 in net annual costs to the City’s General Fund. As shown, the main
drivers of the estimated reduction in revenues are from both the general and
2017 Land Use and 2024 Land Use Revision
Residential 2017 Units 2024 Units
Low Density 220 192
Medium Density 120 77
High Density 206 562
Affordable Housing
Very Low Income 34 70
Low Income 4
Moderate Income 4
Work Force 14
Residential Totals 580 923
Non-Residential Bldg. SF Bldg. SF
Hotel 120,000 120,000
Office 100,000 80,000
Commercial 150,000 7,000
Non-Residential Totals 370,000 207,000
Page 598 of 641
Memorandum
August 14, 2024
Economic & Planning Systems, Inc. (EPS) 3
Measure G sales tax revenues. The new Lot 7 residential uses increase the annual
property tax and other revenues, but not sufficiently to counterbalance the loss in
sales tax revenue. On the cost side, the 2024 land use program addition of new
residential development substantially adds to the level of public service costs to
support the development.
Fiscal Impact Comparison under Current Measure G Tax Rate
2024 FIA 2024 FIA 2017 FIA
Land Uses No Sales Tax Land Uses
Property Tax $151,738 $148,518 $69,000
Sales Tax $29,976 $553 $522,129
Measure G $44,965 $829 $783,194
Property Tax In Lieu of VLF $87,681 $85,821 $39,871
Other Revenue $202,192 $196,091 $58,602
Total Revenues $516,553 $431,811 $1,472,796
Expenditures $679,660 $670,123 $91,595
Surplus/(Deficit) ($163,107) ($238,312) $1,381,201
Page 599 of 641
Page 600 of 641
Page 601 of 641
Page 602 of 641
September 24, 2024
TO: Mayor and City Council
FROM: Timmi Tway, Community Development Director
SUBJECT: San Luis Ranch Proposed Lot 7 Amendments
Approved SLR Specific Plan – Lot 7
Lot 7 of the San Luis Ranch Specific Plan (SLRSP) is a 11.44-acre commercial parcel that was
originally approved in 2017 for 150,000 sq. ft. of commercial uses. It was intended to be a major
tax revenue source for the City, as required by the City’s General Plan 1 and was meant to
complement the hundreds of housing units approved in the SLRSP. In November 2020, the City
Council approved a Specific Plan amendment to increase the number of allowed residential units
in the SLRSP from 580 to 654 and to transfer the majority of SLR’s inclusionary affordable housing
requirements to Lot 7. This amendment added 64-77 affordable housing units to a 1.85-acre
section of Lot 7. SLR proposed to have People’s Self Help Housing (PSHH) construct the units to
fulfill the inclusionary housing requirements of the SLRSP and Development Agreement. Per the
November 2020 approval, the remaining 9.59 acres on Lot 7 was to be developed with 114,300
sq. ft. of commercial uses. The location of Lot 7 is shown in Figure 1 on page 4 of this memo.
SLR Current Proposal
San Luis Ranch submitted a proposal for General Plan and Specific Plan amendments on April
29, 2024, which proposes developing Lot 7 with an additional 276 market rate residential units in-
lieu of the previously approved commercial development. In order to comply with the
Neighborhood Commercial zoning, the site is designed as horizontal mixed-use with potential for
7,000 sq. ft. of commercial. Upon submittal of the proposal, City staff requested additional
information, including a peer review of the fiscal impact analysis that was provided by the
applicant. SLR provided additional information regarding the application and responses to staff’s
questions on 7/18/24, and the fiscal analysis peer review was completed on 8/14/24.
Fiscal Impact Analysis
While the proposed additional housing units would help fulfil the City’s goals for housing
production, fiscal impact to the City’s revenues and preservation of prime commercial sites are
key factors for Council to consider in conjunction with amendments to the City’s General Plan and
the SLR Specific Plan. SLR’s consultant, Applied Development Economics (ADE), has provided
a fiscal impact analysis (FIA) which compares the 2017 estimated fiscal impact of the original
project to the 2024 fiscal impact of the revised project proposal. A summary of the SLR produced
FIA is as follows:
1 General Plan Section 8.1.4. identifies Performance Standards for the San Luis Ranch Special Focus Area.
The General Plan requires between 50,000 to 200,000 sq. ft. of commercial to be constructed in the SLRSP
area. The stated purposes of the SLRSP include providing a commercial/office transition to the existing
adjacent commercial areas and providing walkable and neighborhood commercial uses in SLRSP.
Page 603 of 641
Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 2
• SLR’s FIA analyzes the entire SLRSP as a whole, comparing the 2017 fiscal impact of the
original project to the 2024 fiscal impact of the proposal, and does not isolate the specific
impacts of the requested changes on Lot 7.
• SLR’s FIA shows the SLR specific plan area would not be fiscally negative as a project
overall, but it would create less revenue than originally identified in 2017 with the proposed
change.
• ADE’s analysis shows that the overall SLR Specific Plan area at full buildout, including the
proposed Lot 7 residential project, is estimated to generate about $3.43 million per year in
General Fund revenues and $2.67 million per year in municipal service costs. This totals an
annual cost/revenue surplus of about $758,440.
• SLR’s FIA applies market changes that make the overall SLR project appear to be fiscally
positive despite the increased service costs associated with additional housing
development and loss of commercial revenues that would result from the proposed
amendment. The applicant’s FIA compares the revised project in 2024 dollars (taking into
account increased property values and Measure G) to the original project in 2017 dollars.
In order to gain a more accurate picture of the fiscal impact of the proposed amendments to help inform
future decisions on the project, the City asked its fiscal consultant, EPS, to isolate the proposed land
use changes on Lot 7 and identify the fiscal impact in 2024 dollars that would result from the proposed
amendments. EPS used ADE’s fiscal model to calculate the fiscal impact of the currently approved
commercial project in 2024 dollars and compare it to the proposed project in 2024 dollars, which was
missing from the ADE report.
• EPS’s fiscal impact calculations show that the proposed Lot 7 land use change from
commercial to residential would create a net fiscal loss to the City of $1.54-$1.62 million
annually when comparing Lot 7 as previously approved and Lot 7 as currently proposed
in 2024 dollars.
• There are several factors that contribute to this identified shortfall in revenues which were not
taken into account in the applicant’s FIA. Measure G, a 2020 voter approved initiative to
increase local sales tax revenues, would have been expected to account for $783,194 annually
from the previous approved commercial development at this location. Changes in market
conditions, inflation, and increases in the sales and use tax rates between 2017 and 2024
improve the overall SLR project’s fiscal performance and make the applicant’s 2024 FIA appear
to close much of the gap caused by the change in the land use program.
• EPS also identified data errors in fiscal model used in the applicant’s 2024 FIA. The applicant’s
current project description proposes 923 units, while the applicant’s fiscal model included only
853 residential units.
SLR provided a follow-up memo to City staff on September 12, 2024, describing the difference in
methodology between the ADE and EPS reports. The SLR memo suggests that retail space is
overdeveloped in the City of San Luis Obispo, leading SLR to being unsuccessful in attempts to find a
buyer or operator for commercial on Lot 7. The applicant argues that a fiscal impact study that
assumes 100% absorption (no vacancy) of the commercial component is not realistic given the
current commercial climate. While the applicant and staff may not agree on the methodology of
the fiscal impact analysis, both studies are valuable, and staff intends to include all fiscal studies
and memos produced by the applicant in the City Council initiation for this item for City Council’s
consideration.
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 3
Affordable Housing Requirements
Affordable and inclusionary housing are key components of the SLRSP and are identified in the
Development Agreement. While construction of the market rate units at SLR is currently nearing
completion, the majority of SLR’s inclusionary housing requirements have not been fulfilled. SLR has
not made efforts to record the Tentative Map approved by City Council in November 2020, and
therefore SLR has not been able to provide People’s Self Help Housing (PSHH) with site control to
apply for grant funding to develop the 64-77 low and very low-income units which were required on a
portion of Lot 7.
SLR’s current proposal includes increasing the affordable units of the PSHH site to allow up to 82 units;
however, the proposal does not include any guarantee or timing for construction of the affordable units
in relation to the existing project or the additional 276 market rate units that are proposed. City staff
has had multiple meetings with SLR and PSHH in attempt to facilitate construction of the development
of the affordable units as quickly as feasible. However, until SLR records the 2020 map and transfers
the 1.85 acre affordable housing property to PSHH, PSHH cannot acquire funding for construction and
development of the site cannot move forward. Staff continues to work with all parties involved to
determine how to best move the affordable housing components to change the remainder of Lot
7 from commercial to residential.
Next Steps
As required by Municipal Code Section 17.130.020, General Plan and Specific Plan amendments
shall be referred to City Council for initiation and early consideration prior to staff processing any
applications. To prepare for the initiation, city staff have been working with the developer to
address outstanding items needed to move the item forward, including discussions about whether
the Development Agreement needs to be amended and to what extent, what fees would apply to
the project, the timing of the affordable housing development, and what the fiscal impact of the
land use change may be. City staff had planned to take the initiation request to Council on
September 17, 2024, however, the SLR applicant requested additional time to address the fiscal
impact and other project components prior to Council review. City staff met with SLR
representatives on September 12, 2024. City staff is currently planning to reschedule the item for
Council consideration as soon as an opening on a Council agenda is available (agendas are
currently full and closed to additional items for the remainder of 2024.)
If authorized by Council to proceed, the project would require a Specific Plan Amendment (SPA),
a General Plan Amendment (GPA), and potentially a Zone Change (ZCH), a modification to the
approved Development Agreement, as well as a Vesting Tentative Tract Map and Development
Plan. Environmental review under the California Environmental Quality Act (CEQA) will be
required, as well as review by San Luis Obispo County Airport Land Use Commission (ALUC).
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 4
Figure 1. San Luis Ranch Specific Plan Area – proposed project area (Lot 7) noted in blue outline
Lot 7
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 5
Figure 2. Currently Entitled Lot 7 Site Plan (Commercial Use)
Figure 3. Applicant’s Proposed Lot 7 Site Plan (Residential Use)
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October 31, 2024
TO: Mayor and City Council
FROM: Timmi Tway, Community Development Director
SUBJECT: San Luis Ranch Proposed Lot 7 Amendments
The proposed San Luis Ranch Lot 7 General Plan and Specific Plan amendments have been
scheduled for City Council review of initiation on December 10, 2024. A complete agenda report
with current project description, fiscal impact analysis considerations, and staff analysis will be
provided prior to the meeting.
City staff is providing this memo to address specific points identified in San Luis Ranch’s October
9, 2024 letter to City Council and provide additional context for Council’s benefit.
70 Affordable Units by PSHH
The 70 affordable units noted in the SLR Lot 7 project description for construction by People’s
Self Help Housing (PSHH) are an existing project requirement which are necessary to fulfill SLR’s
inclusionary housing requirement.
The originally approved 2017 Specific Plan and Development Agreement required SLR to
construct either a total of 68 affordable units, or 34 affordable units and payment of in-lieu fees
for the commercial development. These calculations were based on the Inclusionary Ordinance
in place in 2017:
2017
Approval
Number of Affordable
Units
Location & Requirement Status
4 low-income units
Required in single-family
Zoning NG-23
Completed by SLR
4 moderate income
units
Required in single-family
Zoning NG-10
Completed by SLR
26 very-low-income
units
Required in multi-family
Zoning NG-30
Not yet constructed
34 inclusionary housing
units or payment of in-
lieu fees
Required to fulfill commercial
inclusionary requirement
Based on amount of commercial
acreage
Not yet constructed
2017
Total:
68 affordable units or
34 affordable units and payment of in-lieu fees
- 8 constructed
- 60 units not
constructed
A Specific Plan amendment was approved in November 2020 to transfer the 26 required very-
low-income affordable units from the multi-family portion of SLR to a mixed-use project on Lot 7
(which, at the time, was a mixed-use site proposed as a majority commercial). As a project benefit
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 2
proposed in exchange for the City allowing the transfer of the units to Lot 7, the developer offered
to deliver at least four and potentially up to 17 additional very-low-income housing units with the
2020 Specific Plan amendment, thereby bringing the total affordable housing units in the PSHH
project on Lot 7 to between 64-77 units. 4 low-income and 4 moderate-income units were
constructed in the single-family residential area, as required. Therefore, with the 2020 Specific
Plan amendment plus the 8 units that were constructed in the single-family area, the total number
of required affordable units have now reached 72-85 within the SLR Specific Plan area. SLR has,
to date, constructed 8 of these units, leaving a remaining requirement of 64-77 units. The following
table illustrates the affordable units currently required in the project and the current status of
construction:
2020
Approval
Number of
Affordable units
Location & Requirement Status
4 low-income units Required in single-family
Zoning NG-23
completed
4 moderate income
units
Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multi-family
development - Transferred in 2020
from multi-family to Lot 7
Not constructed
*Planned to be
developed by PSHH
34 inclusionary
housing units or
payment of in-lieu fees
Required to fulfill commercial
inclusionary requirement
Not constructed
*Planned to be
developed by PSHH
Between 4 to 17
additional very-low-
income units
Project benefit in exchange for
transfer of 26 very-low-income units
from multi-family site to Lot 7
Not constructed
*Planned to be
developed by PSHH
2020 Total: 72-85 affordable units (total units within SLR)
Of this total, 64-77 are to be constructed on Lot 7 by PSHH
-8 constructed
-64-77 units
unfulfilled
The October 9, 2024 letter from SLR to Council members stated that PSHH will provide at least
70 inclusionary units for low and very-low income tenants. In a July 18, 2024 response to City
staff, the applicant included the following affordable housing proposal. Levels of affordability
(very-low, low, or moderate income) have not been identified for units on Lot 7. SLR’s current
proposal includes:
2024 SLR
Proposal
Number of Affordable
units
Location & Requirement Status
4 low-income units Required in single-family
Zoning NG-23
completed
4 moderate income units Required in single-family
Zoning NG-10
completed
26 very-low-income
units
Previously required within multi-family
development - Transferred in 2020
from multi-family to Lot 7
Not constructed
*Planned to be
developed by PSHH
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 3
15 inclusionary housing
units
Proposed for commercial inclusionary,
based on 2017 Inclusionary
Ordinance:
• 0.5 acre Lot 7 Commercial – 1 unit
• 3.5 acre Hotel – 7 units
• 3.7 acre Office use – 7 units
Not constructed
* Planned to be
developed by PSHH
28 affordable units 10% of the additional 276 market rate
units proposed on Lot 7 required to be
affordable, based on current
Inclusionary Ordinance requirement
Not constructed
* Planned to be
developed by PSHH
Potentially between 0 to
13 additional affordable
units if PSHH can
secure funding
Additional units beyond required
minimums no longer guaranteed in
current proposal
Not constructed
* Planned to be
developed by PSHH
2024
Proposed
Total:
77-90 affordable units (total units within SLR)
Of this total, 69-82 are proposed to be constructed on Lot 7
by PSHH
- 8 constructed
- 69-74 remaining
units unfulfilled
Timing of Affordable Unit Construction
Currently, San Luis Ranch has an outstanding obligation for 26 very-low-income units that has
not been fulfilled, that are required due to the existing development of the multi-family portion of
the SLR project which was completed in September 2024. The SLR Affordable Housing
Agreement, which was recorded in September 2020 (prior to Council approval of the transfer of
the 26 very-low-income units) states that the 26 very-low-income units “shall be constructed in
proportion to the construction of the other units in the NG-30 Zone, or as stated in condition of
approval of future NG-30 Zone development approval.”
At the time of the 2020 Specific Plan amendment and the NG-30 development approval, SLR was
resistant to a timing condition for construction of the affordable units. City ordinance requires that
inclusionary units “be constructed concurrently with market rate units, unless an alternative
development schedule is otherwise stipulated by the applicable review authority.” City ordinance
also requires inclusionary units to be dispersed throughout the residential development project to
prevent a concentration of affordable units and ensure concurrent construction of affordable units,
and requires that the affordable units be consistent with the design of market rate units in terms
of exterior appearance, materials, and finished quality. SLR was provided some relief from strict
adherence to the Inclusionary Ordinance, including the dispersed location and design of the units,
in 2020 in exchange for 4 to 17 additional affordable housing units. A construction timing condition
was not included in the resolution of approval with the 2020 amendment or the NG-30
development approval. However, the recorded Affordable Housing Agreement still states that the
26 very-low-income units shall be constructed in proportion to the construction of the other units
in the NG-30 Zone. See Attachment 1, SLR Affordable Housing Agreement, and the following link
to the November 2020 Council Agenda Report.
City staff has concerns that the applicant has not made sufficient effort to facilitate construction of
the affordable units required as part of the 2020 Lot 7 project approval and Specific Plan
amendment. Site control of the PSHH parcel on Lot 7 is necessary for PSHH to apply for grant
funding for project construction. San Luis Ranch has expressed concern that recording the tract
map for this lot would trigger improvement requirements that will change with the new lot
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 4
configuration in the proposal that is currently being processed. In their October 9, 2024 letter, San
Luis Ranch proposes to bond for the site improvements associated with providing utilities and
access to the PSHH lot. City staff is agreeable to this and has been recommending that SLR
record the final map (or a portion of the map as a phased map) and bond for improvements to
facilitate a shovel ready project for PSHH. Tract 3142 can be recorded by SLR at any time (in
whole or as a phased final map) to facilitate this transfer of ownership. An amendment to Lot 7 is
not needed to complete this map recordation or bonding.
In their October 9th letter, SLR proposes dedication of the recorded legal parcel to PSHH and
payment to PSHH of $500,000, and in exchange requests that Lot 7 be free of any construction
start or occupancy restrictions related to the affordable component of the project. Staff has
concerns that this proposal does not ensure the project obligations to provide affordable housing
are fulfilled, and does not meet the intent of the DA or the City’s Inclusionary Ordinance. City staff
strongly recommends that any Specific Plan amendment to increase the market rate units on Lot
7 should also include a condition for timing of construction of any required affordable housing
units in order to ensure that those units are constructed.
Impact Fees
The 2018 Development Agreement for SLR included provisions to lock in development impact
fees for construction of 580 units. These fees are substantially lower than impacts fees charged
on permits today. It is City staff’s position that the provision for lower fees does not extend to the
additional 276 market rate units currently proposed for entitlement on Lot 7, as they were not
contemplated during the development and approval of the Development Agreement. Based on
the 2018 DA, SLR has paid permit and impact fees of approximately $21,000 per multi-family unit.
Current fees for multi-family units would be approximately $41,000 per unit. The difference in fees
between what the DA locked in for the original 580 units and current fees today equates to a total
of about $5.5 million in permit and impact fees for the additional 276 housing units proposed.
The $5.5 million in additional fees that is identified by SLR in the October 9, 2024 letter reflects
the standard development fee payment for any residential project submitted under the 2024 fee
schedule. These fees are adopted by City Council to cover the cost of development, including
impacts to citywide transportation, fire and police, parks, and other City facilities. The City is
currently working on an impact fee update, which is expected to go to Council for adoption in
2025. Payment of current fees is a standard project requirement. If the Developer wishes to
negotiate the payment of fees that are different from the now current fees, staff recommends that
this be considered through an amendment to the Development Agreement.
Fiscal Impact Analysis
The October 9th SLR letter is correct in its statement that as identified in the ADE Fiscal Impact
Analysis, the overall SLR Specific Plan area remains fiscally positive for the City even with the
proposed changes to Lot 7. The City’s consultant, EPS, has confirmed ADE’s overall projection.
However, this positive fiscal projection is a result of other variables, including Measure G, inflation,
and increased home values which have occurred in the past few years. The currently proposed
project amendment would create a project that is not as fiscally positive as initially conceived in
2017, even with those factors considered, and the proposed amendment removes the fiscal gains
that the City has made in recent years by increasing City expenses and removing tax generating
uses. The City has asked EPS to look into the additional issues raised by SLR, including loss of
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 5
property tax that will result from the sale of 120 units to Cal Poly (Harvest Lofts), and the updated
commercial and residential unit counts currently proposed and previously approved on Lot 7. The
City is actively working with Cal Poly to determine the amount of lost property tax revenue and to
attempt to negotiate alternative methods of payment. Additional fiscal impact calculations are
currently being developed and will be provided in the agenda report prior to the December 10th
City council meeting,
The Lot 7 commercial development has been a major project component since the project’s initial
conception. It was included in the 2014 General Plan Land Use update, and was a major
consideration during the tax negotiations with the County prior to annexation of the SLR site. The
tax revenue expected from the originally approved 150,000 square foot commercial development
within SLR was a factor in the Development Agreement negotiations and the establishment of the
Community Facilities District special taxes. The loss of expected tax revenue changes the
outcome of all of these previously negotiated agreements. The subject Lot 7 11.44-acre parcel is
uniquely positioned on a future major highway interchange, in which the City is investing
substantial tax dollars to install.
As noted in SLR’s project summary, commercial development at this location prior to construction
of highway interchange has not had much interest. The current site plan was approved by City
Council in November 2020, and SLR’s discussions with the City for the proposal to convert to the
remaining commercial property to residential began in 2022. If a General Plan amendment is
approved to allow residential at this location, future tax dollars will be impacted and the City will
not be able to replace the loss of prime commercial land. As the Council reviews this proposed
General Plan amendment, the competing Council goals of providing additional housing and future
fiscal sustainability for the City will be considered.
Required Applications for Processing Proposed Amendment
The currently proposed San Luis Ranch Lot 7 development will require the following applications
if Council authorizes the project to proceed:
• General Plan Amendment – Amend Section 8.1.4 “Special Focus Area #2” to reduce
required commercial square footage and increase allowable number of residential units.
Amend General Plan land use designation from Neighborhood Commercial (maximum 12
dwelling units per acre) to General Retail (maximum 36 dwelling units per acre.) 1
• Specific Plan Amendment – SLR Specific Plan to be updated to reflect proposed Lot 7
changes, proposed land use plan, and update development standards.
• Development Agreement Amendment – Current DA is for 580 units. Update DA to
incorporate additional 276 market rate units and affordable housing provisions.
1 City staff originally advised SLR to submit a zoning designation amendment, as the current Neighborhood
Commercial zoning limits residential density to a maximum 12 dwelling units per acre. However, following
review by counsel, it has been determined that the Specific Plan overlay supersedes the underlying zoning.
The zoning can remain as is, provided that the Specific Plan is updated to reflect the proposed density and
development standards.
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Memorandum
San Luis Ranch Proposed Lot 7 Amendments
Page 6
• Affordable Housing Agreement Amendment – The SLR AHA was recorded September
2020. Does not address Lot 7 affordable housing units.
• Tentative Tract Map – Tract 3142 was approved in 2020 for an 11-lot primarily commercial
development. New tentative map required to correspond to proposed residential
development, including lot configuration, grading and drainage, and site improvements.
• Development Plan – ARC and PC review of proposed site development plan and
architectural review.
• Environmental review – Per the California Environmental Quality Act (CEQA). Appropriate
approach to CEQA has not yet been determined.
• ALUC review – Because there would be General Plan and Specific Plan Amendments, the
project would be referred to the San Luis Obispo County Airport Land Use Commission
(ALUC) to determine conformity with the adopted Airport Land Use Plan (ALUP).
Attachment 1: SLR Affordable Housing Agreement
Attachment 2: DA Financing Plan, Community Benefits
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Memorandum May 17, 2018
San Luis Ranch Financial Feasibility Page 5
Community Benefits
The San Luis Ranch Project, by virtue of its development and conforming to City planning
policies, regulatory standards, and mitigating potential environmental impacts, will confer a
range of community benefits in the City of San Luis Obispo. These positive effects of the project
including community development objectives or social, economic and/or fiscal benefits, while a
precondition for a development agreement, are considered as extraordinary community benefits:
1. Creating a new residential neighborhood and commercial district in the City consistent with
General Plan policies.
2. Providing a range of housing prototypes that include small, higher density units that will be
affordable by design”.
3. Providing new housing targeted at the City’s lower income and working families and including
34 contractually price-restricted affordable (inclusionary) housing units, and an additional 14
price-restricted workforce housing units.
4. Achieving “net-zero” energy consumption and other energy efficiency standards.
5. Generating employment opportunities for the City’s construction-related companies and
workers.
6. Financing infrastructure that in addition to meeting travel demands created by the Project
relieves existing congestion and provides additional capacity for other future development.
7. Providing more than 50 acres of open space including land set aside for continued
agricultural use preserving the area’s agricultural heritage.
Extraordinary Community Benefits
Extraordinary” community benefits of a development project are public improvements or other
material offerings that cannot be required by the City based on its code requirements or CEQA
mitigation, each which must meet Constitutional statutory standards to achieve the “rational
nexus” test. A complete listing of the extraordinary community benefits being offered by the San
Luis Ranch Developer is shown in Table 2. Specifically, the developer has committed to
constructing or funding improvements or mitigating impacts that exceed the mitigation measures
specified in the project environmental impact report or other City-determined requirements. The
developer has also agreed to build a public improvement in advance of when it might otherwise
be required. For example, an intersection improvement that may not be required to mitigate
project-induced congestion until five years in the future could be built in advance, assuring that
the improvement is constructed and conferring congestion reduction immediately. These
improvements include the following:
1. Land and Building Dedications
2. Multi-Modal Transportation Improvements and Programs
3. Energy and Water Conservation Features
4. Affordable and Workforce Housing Programs
Taken as a whole these cited community benefits total $14.25 million. The estimates were
prepared by the Developer’s financial consultant, Kosmont Companies, and have been reviewed
for the reasonableness of the assumptions used and computational accuracy by EPS.
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Memorandum May 17, 2018
San Luis Ranch Financial Feasibility Page 6
Table 2 Summary of Extraordinary Community Benefits
Comparing the Value of Community Benefits with Value Received by Developer
As part of reaching a Development Agreement it is customary that the community benefits
offered by the Developer meet or exceed the value(s) conferred on the Developer by the City. As
a general measure the extraordinary community benefits offered should meet or exceed the
estimated value of the vested entitlement to the developer combined with the additional benefit
to the developer from other special terms granted by the City (e.g., infrastructure financing
contributions, formation of financing districts, etc.).
Value of Vesting the Entitlement
As a part of this effort a review of the Developer’s pro forma financial analysis was conducted by
EPS, subject to the terms of a non-disclosure agreement. Applying the standard method of
measuring a reduction in the “threshold IRR” associated with reduced risks and costs to the San
Luis Ranch project associated with two vesting assurances: 1) elimination of future planning or
regulatory changes (i.e., rezoning of the Project area) and 2) assuring project development
phasing through a fixed allocation of housing units pursuant to City’s Growth Management
Ordinance. These two considerations are estimated to confer a value of approximately
2.75 million to the Developer.
Dollar Value Beyond
SLR's Fair Share
1.0 Land and Building Dedications
1.1 Agricultural Heritage and Learning Center - Building Costs (Net of Mitigation Requirements)$2,025,000
2.0 Multi-Modal Transportation
2.1 Bike Share/Rental $290,000
2.2 Car Sharing/Park & Ride $290,000
2.3 Electric Car Charging Stations $240,000
3.0 Energy and Water Conservation Features
3.1 Solar PV [1]$3,204,500
3.2 Building Efficiency/Net Zero $725,000
4.0 Affordable and Workforce Housing Programs
4.0 Priority for SLO Residents, Workers (1.5% of Initial Sales Value)$4,468,875
4.2 Owner Occupancy Restriction on NG-10 and NG-23 Units (1.5% of Initial Sales Value)$2,703,000
4.3 Local Heroes Program - Minimum of $1,500 Incentive per Home (Assuming Approx. 200 Homes)$300,000
14,250,000
1]
Sources: San Luis Ranch; City of San Luis Obispo; Kosmont Companies; Economic & Planning Systems, Inc.
Extraordinary Community Benefit Items Offered by San Luis Ranch
Total Extraordinary Community Benefits (Rounded)
Total cost of Item 3.1 is $4,930,000. San Luis Ranch's fair share is 35%, or $1,725,500. The balance of $3,204,500 represents value to
the City beyond San Luis Ranch's fair share.
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M EMORANDUM
To: Callie Taylor, City of San Luis Obispo
From: Russ Powell and Teifion Rice-Evans
Subject: San Luis Ranch Fiscal Impact Analysis Peer Review;
EPS #242055
Date: October 30, 2024
The City of San Luis Obispo (City) has engaged Economic &
Planning Systems, Inc. (EPS) to provide a peer review of fiscal
impact analyses prepared by Applied Development Economics,
Inc. (ADE) for the San Luis Ranch project (Project). The initial
fiscal impact analysis (FIA) was prepared by ADE in 2017, and
the most recent update to the FIA was prepared in 2024.
The City asked EPS to review the FIAs. EPS has prepared a
series of analyses as requested by the City. The most recent
EPS analysis focused on the isolated fiscal impacts of land use
changes for Lot 7. ADE FIAs focused on the net overall fiscal
impacts for the Project.
The 2017 ADE FIA estimated a net positive fiscal impact of
approximately $986,000, while the 2024 ADE FIA shows a net
positive fiscal impact of approximately $758,000. The City is
concerned about the reduction of the total retail space
proposed for the 2024 land use plan for Lot 7.
This memorandum resummarizes the proposed developer land
use program changes and addresses the:
Fiscal impacts of reduction of allowed retail square footage
on Lot 7 from 150,000 to 114,300 building square footage.
Development team’s recommendations for retail market
analysis.
Property tax implications of the Cal Poly purchase of the
120-unit Harvest Lofts for student housing.
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Memorandum
October 30, 2024
Economic & Planning Systems, Inc. (EPS) 2
Developer-Proposed Land Use Program Changes
The developer is proposing substantial changes from the 2017 land use
development program. The 2024 land use program reduces the scale of
commercial development and increases the scale of residential development.
As shown in the table below, the largest changes include (1) reduction of the
originally proposed 150,000-square-foot commercial center to a 7,000-square-
foot commercial development and (2) an expansion of the residential program
from 580 units to 923 units.
The changes in the land use program were primarily driven by the proposed
changes in Lot 7. The proposed Lot 7 land use changes include (1) a reduction
in the commercial program from 114,300 square feet to 7,000 square feet and
(2) addition of 276 multifamily for-rent residential units and 67 affordable units.
2017 Land Use and 2024 Land Use Revision
Residential 2017 Units 2024 Units
Low Density 220 192
Medium Density 120 77
High Density 206 562
Affordable Housing
Very Low Income 34 70
Low Income 4
Moderate Income 4
Work Force 14
Residential Totals 580 923
Non-Residential Bldg. SF Bldg. SF
Hotel 120,000 120,000
Office 100,000 80,000
Commercial 114,300 7,000
Non-Residential Totals 334,300 207,000
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Memorandum
October 30, 2024
Economic & Planning Systems, Inc. (EPS) 3
Fiscal Impacts of Retail Space Reduction on Lot 7
A land use change adopted for Lot 7 in 2020 reduced the entitled retail space
from 150,000 building square foot to 114,300 building square foot. The FIA from
2017 was not updated to reflect this reduction in retail space. The City has
requested that EPS update the Lot 7 analysis of fiscal impacts shown in our
memorandum dated Augst 14, 2024.
In addition to addressing the fiscal impacts related to the reduction of retail
space, the City asked EPS to estimate the fiscal impacts of the total number of
proposed units on Lot 7. As noted in the August 2024 memo by EPS, the
applicant's fiscal model included 853 total units in error, while the project
description includes 923 units as the current proposal. The 70-unit very low
affordable housing project for Lot 7 is assumed to be tax-exempt. EPS reduced
assessed valuation for the year 2020 based on reduced retail space and 70-units
of very low affordable housing. Sales tax, Measure G sales tax, and property tax
in-lieu of VLF have been adjusted incorporating the results of the identified land
use changed as of 2020.
The table below shows net fiscal impacts of the land use changes for Lot 7.
Development Team Recommendation for Additional Lot 7/Retail
Analysis
In response to EPS’s analysis focused on net fiscal impacts for the land use
changes proposed for Lot 7, the development team noted that consumer spending
habits have changed since 2017, creating less demand in the current real estate
market for bricks-and-mortar retail space. They note that while demand for retail
space has shrunk, there is an increased demand for residential uses, as noted by
significant increases in the sales prices for new housing.
2024 FIA 2024 FIA 2020 2017 FIA
Land Uses No Sales Tax Land Uses Land Uses
Property Tax $143,965 $140,745 $52,578 $69,000
Sales Tax $29,976 $553 $307,467 $522,129
Measure G $44,965 $829 $461,201 $783,194
Property Tax In Lieu of VLF $87,681 $85,821 $30,382 $39,871
Other Revenue $202,192 $196,091 $44,655 $58,602
Total Revenues $508,780 $424,038 $896,282 $1,472,796
Expenditures $679,660 $670,123 $69,795 $91,595
Surplus/(Deficit) ($170,880) ($246,085) $826,487 $1,381,201
8/14/2024 Results ($163,107) ($238,312) n/a $1,381,201
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Memorandum
October 30, 2024
Economic & Planning Systems, Inc. (EPS) 4
The developer states that they have not been able to find a buyer for Lot 7, which
is entitled for up to 114,300 building square foot of retail space. The development
team suggests that the following retail analyses should be included when
determining the impacts of the 2024 proposed land use plan change:
Feasibility analysis of additional retail space in the City.
Absorption analysis for new retail.
Appropriately gauged vacancy factor.
EPS Input on Potential Retail Market Analysis
Context
The retail market has long been a highly competitive and dynamic industry.
Recent shifts to online shopping (accelerated by the pandemic) have reduced
demand for some types of retail stores/formats and led to the closure or
underutilization of many retail sites throughout U.S. jurisdictions.
EPS agrees that a retail market study could help determine the viability of a new
neighborhood shopping center or other retail configuration on the areas of the site
originally envisioned for retail development. To the extent there is no, limited,
or less demand for new retail development than originally envisioned, it would
be appropriate to adjust the assessment of expected fiscal impacts under the
original land use plan to recognize such market realities.
EPS Recommendation
EPS recommends that a qualified retail market specialist be hired to assess the
market prospects for new retail development at the Project site under the original
land use plan. This would be a site-specific market study that would likely take
account of primary and secondary market area demand, competitive retail supply
from existing or planned retail, as well as site location and characteristics.
Existing residential development in the market areas, as well as planned new
development in the site and market areas, would be taken into account.
Page 640 of 641
Memorandum
October 30, 2024
Economic & Planning Systems, Inc. (EPS) 5
This type of analysis would be expected to provide insight into these questions:
Is there demand for retail at the current time or would it require residential
buildout/other factors, if any, to drive demand?
What type and amount of retail space would be in demand at the site in the
short, medium, and long terms?
Would retail development be expected to occur in one phase or in multiple
phases?
It is important to note that many viable retail sites do not generate the same land
value for an owner as proposed housing developments under a residential zoning.
It will be important to clarify the definition of “viable retail” in this context.
Overall, the retail study should inform the City of the viable retail program for the
site (if any) and its expected timing. This retail program could then be compared
to what was expected under the original plan and what is proposed under the new
plan. The viable retail program could then be analyzed from a fiscal impact
perspective to assess the impact of the new land use plan relative to a “market-
tested” version of the original land use plan.
EPS Assessment of Fiscal Revenue Impacts of Harvest Lofts
Ownership Change
Cal Poly has purchased the 120-unit Harvest Lofts for student housing. As a
result, the lofts will become tax-exempt uses owned by the university. EPS
estimated the net loss of revenues resulting from the conversion of previously
taxable residential units to tax-exempt uses owned by the university. The 2024
FIA assumed these units had an assessed value of $555,600 per unit. Using this
same assumption, the reduction in annual property tax revenue to the City’s
General Fund, relative to when it was for-profit ownership, would be
approximately $60,000.
The current assessed value for these units for Fiscal Year 2024-25, based
on current property tax bills, an average of about $150,000 per unit. Relative to
the existing assessed value, EPS estimates the net loss of annual property tax
revenues would be $16,000.
Page 641 of 641
San Luis Ranch Specific Plan
1035 Madonna Road
Public Hearing to Consider Initiating an Application for
Development on Lot 7 of VTTM 3096
San Luis Ranch Specific Plan
December 10, 2024
Applicant: MI San Luis Ranch, LLC
Presentation Overview
Recommendation
Previously Approved Project (November 2020)
Proposed Project Description and Overview
Key Issues for Council Direction
2
Recommendation
3
Direct the initiation of processing the request for a General
Plan Amendment (GPA) and Specific Plan Amendment
(SPA) to accommodate an additional 276 residential units
in place of a previously-approved commercial
development on Lot 7 of the San Luis Ranch Specific
Plan, and…
Recommendation
4
…provide direction regarding the following issue areas to be addressed in the project design and by amendment to the existing Development Agreement (DA):
1)the number of deed-restricted affordable housing units;
2)the timing of construction of the previously-required affordable housing component;
3)potential measures to address ongoing fiscal impacts to the City;
4)the amount and design of tax-generating commercial development; and
5)confirmation of the application of development fees associated with the proposed development.
Project Site and Location
5
Council Approved Specific Plan: July 18, 2017
6
Specific Plan, General Plan Amendment/Pre-Zoning, and Development Plan/Tentative Tract Map for the 131-acre project site
Specific Plan guides land use, circulation, parks and open space, infrastructure, architecture/design, and phasing
Allows up to 580 Homes; up to 250,000 SF Non-Residential; 200 hotel rooms
Consistent with General Plan policies (including LUE 8.1.4)
Previous Lot 7 Approval – November 2020
7
Approved 11.44-acre VTTM 3142 (Lot 7 of VTTM 3096)
64-77 Affordable Dwelling Units
Transferred requirement for 26 Very Low Income units from
NG-30 project to Lot 7
SLR Specific Plan buildout increased from 580 to 654
dwelling units
Updated commercial buildout in SLRSP from 150K to 139.3K
(Lot 7 would have 114,300 SF)
Approved Illustrative Site Plan (Nov 2020)
8
Affordable Housing (original plan – 2017)
9
Affordable Housing (approved in Nov 2020)
10
Proposed Project Description – Lot 7
11
276 Additional Market Rate Units
No change to Affordable Units (64-77 already approved)
Reduction of Commercial from 114,300 SF to 7,000-15,000 SF
Parking – 345 residential and 15 commercial spaces
0.82-acre park
SLRSP buildout increase from 654 to 930 dwelling units
General Plan Amendment, Specific Plan Amendment, amendment to the Development Agreement
Proposed Illustrative Site Plan
12
City Council Direction Points
13
Does Council want to initiate the
processing of the application for the
proposed development?
City Council Direction Points
14
Number of deed-restricted affordable housing
units
Current proposal does not provide maximum
number of “bonus units” contemplated in 2020
Council could provide direction on minimum number
of units, or number of units and in-lieu fee payment
Staff recommends considering requiring 86 units
City Council Direction Points
15
Timing of construction of the previously-required
affordable housing component
Concern about provision of affordable housing units
required by development at SLR, including Lot 7
Applicant proposing letter of credit to facilitate
affordable housing development/site control – staff
supports this
Staff recommends Council consider direction to
develop additional triggers to ensure affordable
housing is built concurrent with market units
City Council Direction Points
16
Fiscal Impacts of Proposed Land Use Change
Fiscal impact analyses indicate that SLR project is
fiscally positive as a whole but change on Lot 7 will
result in net loss of $1 million annually
Council could consider directing staff to modify
financing plan in the DA to include additional financing
strategies, including a CFD
Council could direct the inclusion of more commercial
to reduce fiscal impact to City
City Council Direction Points
17
Amount and design of tax-generating commercial
development
Does Council have comments or direction on amount
of commercial development on the site?
Are there other uses that are of interest to the
Council?
Are there high-level comments related to the
commercial development on the site?
City Council Direction Points
18
Confirmation of the application of development
fees associated with the proposed development
Staff supports “then current” fees for 276 market rate
units (treated the same as all other projects)
Based on timing of application and what is
negotiated in revised DA
Next Steps
19
If Council recommends initiation with direction on
key points, then staff will process application
Development review
DA negotiations;
GP, SP Amendment
CEQA, including public input
ALUC review
Advisory Body input, including public input
City Council consideration of approval
If Council does not recommend initiation, then
existing Lot 7 project could go forward as is
Recommendation
20
Direct the initiation of processing the request for a General
Plan Amendment (GPA) and Specific Plan Amendment
(SPA) to accommodate an additional 276 residential units
in place of a previously-approved commercial
development on Lot 7 of the San Luis Ranch Specific
Plan, and…
Recommendation
21
…provide direction regarding the following issue areas to be addressed in the project design and by amendment to the existing Development Agreement (DA):
1)the number of deed-restricted affordable housing units;
2)the timing of construction of the previously-required affordable housing component;
3)potential measures to address ongoing fiscal impacts to the City;
4)the amount and design of tax-generating commercial development; and
5)confirmation of the application of development fees associated with the proposed development.
Questions and Comments
22
23
24
Affordable Housing – possible options
25
Or…
VTTM 3096 – Final Map Approved in 2018
26
VTTM 3096 shown above;
detail of Lot 7 is at right
VTTM 3142 is a subdivision
of VTTM 3096 Lot 7
VTTM 3142 – Lot Layout
27
Williams Homes
•Corporate headquarters in Santa Clarita, California; Central Coast Division in San Luis Obispo.
•Respectable and trustworthy builder.
•Has developed well-designed, attractive residential communities in California, Idaho,
Montana and Texas
•Has built projects in the Central Coast including San Luis Obispo
•Under contract to purchase the subject property
Project Details
•276 residential units
•Up to 15,000 square feet of neighborhood commercial uses
•Park and central amenity –park is available to future residents and the public
•Facilitates development of the People’s Self-Help Project
•Provides much needed housing
•Plan is to build and hold the project long term as rental units
Project Details
•
Rec Center and Commercial Elevations
Items of Concern
•Infeasible to temporarily provide affordable units in the market rate portion of the project –unabletoobtainfinancing-Williams has offered to provide a letter of credit to cover improvementsneededforPeople’s project and an additional letter or credit to incentivize Williams to ensurePeople’s project moves forward
•San Luis Ranch remains fiscally positive for the City –the subject site was marketed forcommercialusesforover2½years with the only interested potential tenants to date being a fast-food drive through restaurant and a gas station
•New residents will spend dollars at existing commercial areas in the City
•Applicants will not agree to relinquish reimbursements or CFD funds to offset a mythical loss ofrevenue–the commercial market has changed dramatically since Covid –the demand for a largecommercialcenteratthissiteissimplynotthere.Currently 75,000 sf of vacant commercialimmediatelyadjacenttothesite;15,000 sf vacant commercial space at Madonna Plaza,60,000 sfvacantatSLOPromenade
Conclusion
•Thank you staff and the City Council
•We are excited to move forward with this application and project