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HomeMy WebLinkAbout10/21/1991, 1 - GENERAL PLAN UPDATE WORK SESSION �11=1111111101111!11 l�l=llllllll� vJ' r MEETING ATE: _— c� o san �.��s os�spo �- � GINGm COUNCIL AGENDA REPORT ITEM NUMB: 0 FROM: Arnold B. Jonas, Community Development Director G-a'Y� PREPARED BY: Glen Matteson, Associate Planner SUBJECT: General plan update work session CAO RECOMMENDATION Consider the attached material. Identify any additional information needed to decide the issues. For those issues where the council has sufficient information, decide the overall direction staff should follow in revising the draft Land Use Element update. DISCUSSION This is one of several work sessions at which the Council is setting the direction for the general plan Land Use Element update. once the direction is set, staff will compile a revised "hearing draft, " and an environmental impact report and an economic impact report will be prepared. Then the draft Land Use Element (and circulation and housing elements) will proceed through Planning Commission and City Council hearings, with adoption anticipated by 1993 . The subject topics are important to deciding the content of the general plan update. Staff has prepared an issue paper or other material (attached) for each of the topics, following the outline endorsed by the City Council at its June 25 study session. Staff suggests the following schedule for this meeting, to cover the issues previously identified by the Council and make use of experts who are scheduled to attend. 8 : 30 - 10: 00 a.m. Topic: Response to nonresidential growth rate direction from August 5 Attachments: (A) updated issue paper; (B) draft text; (C) table of existing building area. With the exception of a minor correction to the draft text (B) , this material is the same as distributed for the September 16 meeting. 10: 15 - 12 : 00 a.m. Topic: County growth management and settlement pattern Attachments: (D) issue paper; (E) issue paper; both the same as distributed for the September 16 meeting. N , t►i��IIIII$ city of San ' 1S o61Spo COUNCIL AGENDA REPORT 1: 00 - 2 : 15 p.m. Topic: Affordable housing Attachments: (F) Addendum to Analysis of Affordable Housing Requirements, Mundie & Associates; (G) two corrected pages from the Mundie & Associates study distributed for the September 16 meeting; (H) the 1990 issue paper on converting houses to offices, as requested August 5 (same as distributed for Sept. 16) . 2: 15 - 3 :00 I I Topic: Air p Quality/Clean Air Plan Attachment: I issue Attachment: (I) paper (same as distributed for Sept. 16) i 3 : 15 - 4 : 00 I Topic: Sustainable Community Attachment: (J) issue paper (same as distributed for Sept. 16) 4 : 00 - 4 : 25 Topic: Neighborhoods Attachment: (K) issue paper (same as distributed for Sept. 16) 4 : 25 - 4 : 30 Set future meeting dates, as needed for additional general plan work sessions. 4 : 30 - 4 : 45 Identify Circulation Element issues so staff can prepare background material for upcoming work session. I I I i gmD: OCT2ICC.WP I I I i � I I I Updated Issue Paper. Nonresidential growth controls Description At the August 5 work session, Council directed staff to refine the nonresidential growth rate policy. Council comments provided the following guidance: - If a combined limit for both residential and nonresidential development is not practical, the limit for nonresidential development should be as general as possible; - There should be a reserve for downtown development; - The limits should not be an obstacle for mixed-use projects; - The limits should accommodate one major, anchor department store whenever it is proposed; Staff is responding with the attached draft section for the Land Use Element. The key features are: A. All new nonresidential building space (private and governmental) would be included in the limits, with specific, relatively minor exceptions. This approach would help accommodate "mixed-use" projects. New buildings often contain stores, restaurants, and service businesses. Dividing such space into "retail," "office," or "services/manufacturina' categories could be awkward, especially when shell buildings are approved without knowing future tenants, which may change even if known initially. Further, government and private uses share buildings: State agencies lease much space in privately owned buildings; the County Government Center includes private concessions; temporary leasing of space in a potential City Hall expansion has been considered. In August 1991, the City contained about-6.6 million square-feet of nonresidential building space, excluding schools and hotels/motels. The following draft table assumes that this total will be about 6.7 million square feet when the update is adopted. Government space is not likely to expand so quickly that it would use most of the allowed increment, thereby preventing private projects from being built. Citywide in 1991, governmental uses occupied about 386,000 square-feet, or less than six percent of the total nonresidential space. Even if government building space grows twice as fast as private space, it would use only about 11 percent of the increment �B.: The allowed increments were determined by calculating 25 years of increase at one ' percent per year, compounded, based on 6.7 million square-feet at the end of 1992, the anticipated adoption date. The overall increase was then equally divided among the five five-year intervals. 1 l� C. The Business Improvement Area (BIA), corresponding closely to the "core area" identified in the Planning Commission Draft, now contains about 17 percent of citywide, nonresidential space. The suggested reserve is about 16 percent of the allowed increase. Core area projects would count toward the overall total allowed, but projects outside the core could use not more than 319,000 square-feet (380,000 minus 61,000) in each five-year interval. As an alternative, the policy could allow approval of downtown projects which provide particular benefits, even if they exceeded the amount of development allowed within an interval. D. Since the primary reason for nonresidential growth limits is to help balance jobs and housing, each square-foot of residential space in mixed-use projects, in a nonresidential zone, would allow one square-foot of nonresidential space to be exempt from the limits. This exemption would not apply to mixed-use projects on land already zoned for housing, since they would not be expanding the city's residential capacity, even though such projects might help meet other objectives. E. A nondiscount department store (a major attraction or magnet) integrated with an existing comparison shopping area, such as downtown or Madonna Road, would be exempt. Any other retail stores proposed in conjunction with such a department store would not be exempt. Department store developers often want associated specialty shops to subsidize the department store's building space cost. However, the general plan still favors downtown as the primary location for specialty stores; also, the existing specialty stores and department stores in the Madonna Road centers would provide the market advantages of agglomeration" for any new department store in that area. A department store in the range of 80,000 to 120,000 square-feet would comprise four to six percent of the total, new nonresidential space allowed over the planning period. The exception therefore is not significant in overall volume, but may be significant in removing a time constraint for development of such a store. F. Motels and hotels are treated separately because we have not gathered floor- area data for them, and the number of rooms appears to be a better measure of development activity. If dwellings were incorporated in a hotel mixed-use project, the square-footage exemption could still be used for the hotel space. G. The limits would be applied through discretionary approvals such as annexations, use permits, planned-developments, and subdivisions, so the applicant and the public would know a project's standing before construction plans are prepared. No separate ordinance would be required. Relatively small projects not needing these types of discretionary approvals would be counted toward the allowed increments, but would not be stopped, unless the Council wishes an implementing + ordinance to do so. The Planning Commission's desire for use-permit review of significant projects that are not covered by some other planning review (besides architectural review) would bring within direct control many projects that would not be directly controlled under current rules. 2 H. A discussion of the city's policies on, and ability to influence, the expansion of nearby government agencies would be included. gmDVREsccwr 3 LAND USE ELEMENT UPDATE City Council Workshop: 9-16-91 DRAFT Nonresidential Growth Management Policy San Luis Obispo wants to balance additional job opportunities with additional housing opportunities. It also wants to accommodate moderate expansion of activities which meet residents' shopping demands and which help fund public services, while not stimulating excessive growth or exceeding the selected rate of change. Therefore, the city will aim for expansion of trade and services not to exceed an average of one percent per year during the planning period. The City will monitor the amount of new nonresidential building space approved within five-year increments, and will not approve development plans which would cause the desired amount of increase to be exceeded, except as noted below, as shown in Table —. All nonresidential building space inside the city will be monitored and included in the determinations of whether the limits are met, whether or not the City has building- permit authority over the space, except as noted below. To encourage downtown development there will be a reserve for that area, so that downtown can maintain and possibly increase its share of citywide nonresidential building area. Table -- Nonresidential Growth Limits (square-feet gross floor area) Interval Added Cumulative Total Increment reserved in interval addition for downtown core= 1992 - - 6,700,000 1,300,000 (base) 1993 - 1997 380,000 380,000. 7,080,000 61,000 1998 - 2002 380,000 760,000 7,460,000 61,000 2003 - 2007 380,000 1,140,000 7,840,000 61,000 2008 - 2012 380,000 1,520,000 8,220,000 61,000 2013 - 2017 380,000 1,900,000 8,600,000 61,000 See Figure --. [Fig. 4 from the Planning Commission draft, attached] Exceptions: (1) Public elementary and secondary schools; l'ro (2) One non-discount department store in the Madonna Road area or downtown, which is integrated with other comparison shopping (though any associated specialty stores would be subject to the limits); (3) The net increase in nonresidential floor area equal to the net increase in residential floor area, within a mixed-use project on land which was zoned for nonresidential use in 1991; (4) Buildings existing in 1992 but annexed to the City following that year. (5) Motels and hotels, which had a total of 1,800 rooms in 1992, and which may increase by a total of not more than 90 rooms in each five-year interval. Discretionary project approvals will be granted until the allowed increment for an interval is reached. If the projects waiting for City approval would then cause the limit to be exceeded, any following discretionary approval will include an earliest date to start construction, or phasing to assure that the limits for the following interval will not be exceeded. Growth of government agencies near the City Cal Poly enrollment and employment are expected to remain on a plateau during the 1990's, then increase between the years 2000 and 2010, when the university's ultimate size would be reached. An increase from the approximately 17,000 students enrolled in 1991 to about 19,200 in 2005 would correspond to about one percent annual growth over that period. The City will oppose any enrollment increases beyond the 2,700 which the state university system proposes to occur between 2000 and 2005. The City has no direct control over Cal Poly enrollment or employment. The number of California Men's Colony inmates and employees are expected to remain about the same during the planning period, as increases in the statewide prison population are accommodated by new facilities in other counties. The City will oppose further expansion of the prison. The City has no direct control over the number of inmates or employees. Cuesta College employment and enrollment are expected to increase at about the same rate as County population growth. Cuesta College attracts students from throughout the County and the State. The City has no direct control over Cuesta College enrollment or employment. gm D:ALT-G RO.W P Lj ,yo- • � e \, g • 1 ......... ........ g :i :c:: -.. Sj.• o ........... .... . . . •::::: ' r .............. .:....... . . .............. ':..... . ......... ......... ,.... ;. :.I �.. Nr �r ..t...... ... . ...... Molu .. . ....... . :::::: I... ... -::::. ... ..... �( X.t ' r.: :: � ... : ::. ::.' :. 'i ... t ::: .J ✓:::::::.'. :.. .7. . ...IN -N!" ...... . : .::............. . N . NO SCALE CORE FIGURE 4 city O� San LUIS OB1Sp0 DOWNTOWN PLANNING AREA 990 Palm StreetrPOst Office 80■ 9100 •San Luis Ooisaa.CA 93a03.8100 43 a l`O ON .O M1 � NMM •O M N A d N N N O M M m pNp�� 00 M CAO N v N M N J A I� M M ^ ^ d Y� i 07 O Ca P $ a � O O O v A m A Y+ to d v N m ^ P ^ O N N N � Q M O O O O O O O O O O 00 O O O 00 \ O N Li O O O O O. O O O ^ N pPry O O O. .C• 1� M WA O N ~ N J Z O ^ O O �T O M O CO N P d N N P N N m N WN N d v 0 iY n d W CD U O �} O O O O O O N A �.' N `MO O Q^ p M O ppppOb • CL A IM+1 ^ M .O t0 O N M go N v, M ^ Tom i-. 01 m Tom C� U N .•. . .t N N P ry M y A N CO N ' N cc 90 CO co m O r O O M P CO P YY O I(1 v QN CO N d m ^ ^ v O cr m r ^ N J M ^ W Y O O pp h d P N M O •O O CO Y` Y: M •O P �1 N d CO P O W Z 2 O N O O O O N M N O vcm N O O PN d N � m o o m U O O m N N h J h N G 10 0, V N t0 O co M M N P P d M v N M N ^ P v h h N N Y M br ry W Ol v N ^ N L J p p r v tl = d M O in z N v i 0. 0. _ O O Y J W m o tl S N CIC r. �•.� V N � P W at G V = N W 6 W O V ♦A W N W O G m J 7 J S d S W 2 v v it 7 C.i W N i.� H z 3 O``C cc w 7 Z Z N V 0 O . Issue: County Growth Management DescriRtion Since 1980, the County has had a "resource management system" within its Land Use Element. The resource management system operates at a countywide level as well as within individual communities, though the County has land-use jurisdiction only within the unincorporated areas. The resource management system evaluates water, sewage disposal, schools, roads, and air quality. The system uses three levels of severity. Level 3 is the point at which a certain resource can support additional use only with "adverse community consequences," while levels 1 and 2 are intended to provide lead time before resource capacities are exceeded (attached Figure 1). The resource management system does not require that development offset or mitigate additional resource impacts or that it stop when level 3 is reached, only that such steps be considered (Figure 2). In response to resource limits, the County, the Regional Water Quality Control Board, and the California Coastal Commission have established development limits in several of the county's communities. In 1990, the Board of Supervisors adopted regulations which limit issuance of permits for dwellings in unincorporated areas, the "Growth Management Ordinance." Key provisions of these regulations, as recently amended, are: - Controlled dwellings can increase by not more than 2.3 percent per year. - The Board of Supervisors may change the allowed growth rate for controlled dwellings each year, based on the resource management system. - These types of dwellings are not controlled: Applications received before the regulations were introduced (equal to nearly four years' growth at the maximum rate); Farm worker housing; Dwellings which are affordable to low-income or moderate-income residents; Certain other applications within specific subareas of the County. - The total controlled dwellings allowed countywide are distributed geographically according to the resource management system. - The total controlled dwellings allowed countywide are distributed by type, with 20 percent reserved for multifamily and phased, master-planned projects, and 80 percent for all other types of applications. The County's resource management system and Growth Management Ordinance do not conflict with the City's adopted or proposed Land Use Element. The County's growth pules are not expected to cause substantially more or less overall growth in the San Luis Obispo planning area than called for by the Planning Commission Draft update. The resource management system may require limits on the amount of development in the airport area and Edna Valley lower than the maximum permitted by the County Land Use Ordinance categories, due to water supply and wastewater disposal limits. On the 1 l'l� other hand, the resource management system may be a catalyst for expanding the resources available to those areas, through formation of special districts, provision of "package" treatment plants, and importation of water. The provision of community water and sewer service would enable more intense development than allowed by on-site methods. Existing county zoning allows more intense development than recommended by the Planning Commission. Planning Commission recommendation The Commission recommended a countywide growth management program before the County adopted the 1990 ordinance. The Commission supported several measures to achieve more consistent regional approaches (programs 1.6 through 1.11), and in particular the following features (program 1.9): A. Population growth no faster than the statewide average growth rate for the preceding year, and no faster than can be sustained by available resources and services, whichever is less. B. No significant deterioration in air quality, due to development activities for which local government has approval. C. Voter approval for any change in designation or significant increase in development potential for land in the unincorporated area designated sensitive, open space, agriculture, or rural. D. Plans for large residential developments to include a range of housing types to provide opportunities for low- and moderate-income residents. Item A is similar to the County's adopted ordinance, but more tightly written, while items B, C and D are not in the County regulations. Alternatives to Commission recommendation 1. Do not take a position on countywide growth management. 2. Advocate a lower County growth rate, perhaps similar to the City's proposed rate of one percent. 3. Advocate a higher County growth rate, similar to the County's rate over the last ten years (3.6 percent). 4. Ask the County to consider other changes to its growth management system. Environmental and economic questions 'Council and staff have not identified questions relating to County growth management which will require answers in addition to those provided for other issue topics, such as jobs/housing balance, and air quality. &mD:000ROWCGWP 2 C Y J tl C Y L .Ti T Curt u u u y 8 m Y V Lr Y a u a a s a m 7 S V Y C Y L L C m ° V a B L Y Y 0 7 C. O u L m 0 Y r d D m tl Y a m Y C J a a V J 0 a Y C u.0 J G 0 N O D u r C Y r m m J h C m u V a .- m YA > Lm m a T e .c a d J o vrr mr Y 0a V O O D. O JT yL 8 G 4-0 m S I. 1 d N 0 7 m J Y Y V C v 0 u L a m u V 0 m 3 C r L q r Y C Y m Y H S J a m .2 u m 8 m V C S Y u } nn mG V -• O `+ ..°w ••+ C G mS O O � L m O C m ti G Y G•- -. Y m mC u Y O ++^ u m t V r •••� O V L C T Y 4 W 8 C V O m m O y u •+ m T Y Y a L r J Y Y S Y w V V 7 m O C C a a Y i'I 4I v 7 u r O J T > u u Y L V u 0 Y r 7 G-0 L u ar Y a 0 0 V W V r J 0 m a 0 7 u 7 8 p 0 d c m % a W = m J J Y m Y 0 ••. r Y r a a S a Ga Y 0 a C. 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N V �O' FIGURE 2 COUNTY LUE: RESOURCE MANAGEMENT ADVISORY PROCESS PLANNING DEPARTMENT RESEARCH: - RHS monitoring LEVEL OF SEVERITY - LUE update THRESHOLD REACHED ADVISORY MEMO - Prepared by Planning Department RESOURCE CAPACITY STUDY BOARD OF SUPERVISORS Prepared by Planning - Evaluate data Department - Determine Level of Severity - Initiate resource capacity study PLANNING COMMISSION BOARD OF SUPERVISORS Public hearing Public hearing - Review resource study Possible actions: - Recommend action - Determine Level of Severity - Initiate programs to avoid or relieve a resource problem Consider status reports - Initiate ordinances to manage growth within resource capacity 1 , �-�3 Issue: County Settlement Pattern Strategy/Development Credit Transfer Description The County Land Use Element includes a goal of directing development to land inside urban reserve lines and village reserve lines, rather than outside them. However, allowed parcel sizes and existing lot patterns, especially in some old, undeveloped rural subdivisions, can accommodate development which is not consistent with this goal. County planners have been working on a "settlement pattern strategy," assessing the potential under existing rules for more development on lands designated for rural and agricultural uses, and for redirecting that potential to locations with better services, and so the County's landscape could be better preserved. The appearance of agricultural land and open hillsides around San Luis Obispo would change significantly with construction of houses on many existing parcels, even though the resulting number of new houses may not be large compared with planned City growth. As the city grows, it is likely to attract more people who want to live near the City, but not in it, resulting in additional pressure for development outside the urban reserve line. In addition to the countywide settlement pattern strategy, the County's Land Use Element update for the San Luis Obispo area is considering ways to locate new houses so. visually sensitive areas will not be harmed, and to transfer development potential from more sensitive to less sensitive areas. Transferring development credits from areas that the City wants to keep open to areas inside the urban reserve which are planned for development is one way to permanently protect open space. A development transfer program requires sites to receive the development potential. Under a voluntary program, it may be necessary to allow more than one dwelling at the receiving location to create sufficient incentive to erase the potential for one dwelling at the sending location. A preliminary survey by County planning staff indicates potential for about 500 dwellings, in especially sensitive parts of the San Luis Obispo planning area, that could be transferred to clustered rural residential areas (such as Los Ranchos) or to the City. The key question to be answered in this discussion is: Should the City set its development capacity, in the major expansion areas or elsewhere, to create potential receiving sites for transferred development credits? The Land Use Element could do so by allowing a certain maximum number of dwellings within an area if there was no transfer, and a higher maximum with transfer. Developers of the expansion areas would have to acquire and dedicate to the City or a conservancy organization development rights from land outside the urban reserve line, to permanently protect the land, in order to build more dwellings (or nonresidential space) than set by the lower maximum. T'he City's drab Land Use Element update, as modified by the Council for the Dalidio iirea, would accommodate the following ranges of dwellings, depending on densities, in the major expansion areas. Providing receiver sites for 500 dwellings credit, at a two- to-one ratio, could comprise nearly all the 1,100 dwelling difference between the low and high ends of the total range. 1 Dalidio 700 - 1,000 Irish Hills 700 - 1,000 Margarita 800 - 11100 Orcutt 500 - 800 TOTAL 2,700 - 3,800 Plannin=g Commission_recommendation The Planning Commission draft contains several policies to protect the city's rural setting (1.4 through 1.9), including clustering incentives. Also, during it's review of the draft the - Commission discussed having major expansion areas secure open space similar to the requirement for minor expansion areas (policies 1.14 and 1.15). No specific requirement was recommended, but program 1.1 says the sequence of developing the major expansion areas will be decided based on open space protection, if affordable housing performance of the various areas is equal. Alternatives to Commission recommendation 1. Allow a major development site or expansion area to develop only if it erases a certain amount of development potential for an open area outside the urban reserve line. 2. Allow a major development site or expansion area to develop a higher number of units as it erases development potential outside the urban reserve line. Either approach could be integrated with affordable housing requirements/incentives. An example, with hypothetical numbers: 100 acres in a major expansion area, designated for residential use; 500 dwellings allowed w*h no out-of-area open-space protection, and 10010 of dwellings must be affordable to low/moderate income; For each potential dwelling erased outside the urban reserve, allow one (or two) additional dwellings; for each dwelling affordable to low/moderate income beyond the 10% required, allow one additional market-rate dwelling; up to a maximum of 800 dwellings in the expansion area. At the 800-unit maximum, as one example, 150 (or 75) dwellings would be prevented outside the urban reserve, and 75 additional affordable dwellings would be provided. Environmental and economic questions No questions have been previously identified. gmD:PATTERN.WP 2 l'�S i Addendum to Analysis of Affordable Housing Requirements Recommended in the Draft Land Use Element Prepared by: Mundie & Associates Consultants in Land Use and Economics 3452 Sacramento Street San Francisco, California 94118 September 1991 TABLE OF CONTENTS Page Number ADDENDUM TO ANALYSIS OF AFFORDABLE HOUSING REQUIREMENTS 1 Background and Purpose 1 Alternative Fee Requirement For Residential Projects Within Existing City Limits 2 Fee Equivalent of Alternative Affordable Housing Production Requirements Recommended For Major Expansion Areas 6 LIST OF TABLES Page Table Number 5A. Effects of Alternative Requirements for Affordable Housing, Low Priced-Scenario 3 6A. Effects of Alternative Requirements for Affordable Housing, Medium-Priced Scenario 4 7A_ Effects of Alernative Requirements for Affordable Housing, High-Priced Scenario 5 /-�7 ADDENDUM TO ANALYSIS OF AFFORDABLE HOUSING REQUIREMENTS BACKGROUND AND PURPOSE For the City Council work session scheduled for September 16, 1991, Mundie & Associates prepared an analysis of the affordable housing requirements for new development projects -both residential and nonresidential - recommended by the Draft Land Use Element of the San Luis Obispo General Plan. That analysis evaluates six specific hypothetical develop- ment projects to draw conclusions about three issues: ■ Would the production of market-priced housing continue with the affordable housing requirements in place, or would the requirements have such a great adverse impact on anticipated developer profits/returns that construction activi- ty in San Luis Obispo would cease? ■ What effect would the affordable housing requirements have on the price of a market-rate unit? It is not unlikely that developers would try to pass along some of the impact of the requirements to the purchasers of these units, in theform of higher prices. By what amount would the market prices have to be increased to absorb the full impact? ■ What impact would the affordable housing requirements for projects in major expansion areas have on land prices in those areas? One approach to establish- ing these requirements is based on the theory that entitlement of this land for urban development, upon annexation to the City, will greatly increase its value, and that the City should be compensated for conferring this value increase by causing the production of affordable units. This third area of investigation attempts to quantify the proportion of added value that would be captured in the form of affordable housing production. These three issues are addressed in "Analysis of Affordable Housing Requirements Recommended in the Draft Land Use Element", delivered to the City in preparation for the September 16 meeting. The analyses of the two residential projects evaluated in that report raised further ques- tions by members of the City Council. These questions addressed (1) the likely impacts of an alternative fee requirement on residential projects within the City and (2) the fee equiv- alent of the alternative affordable housing production requirements recommended for major expansion areas. These two questions are the subject of this report. i ALTERNATIVE FEE REQUIREMENT FOR RESIDENTIAL PROJECTS WITH N EXISTING CM LIMITS Bac ground The Draft Land Use Element recommends that new residential projects within the existing city limits be required either to (1) include 10 percent low income housing units or (2) include 20 percent moderate income housing units or (3) contribute 2 percent of construc- tion costs to a fund that would be used to assist the production of affordable housing offsite. The analysis of this requirement (Case 13 in the report) concludes that production of residential projects subject to these conditions would be feasible if the fee option were selected by the developer, but that both of the production options would drive profits below the threshold of feasibility. Alternative production requirements were formulated based on the criterion that they would generate the same developer profit as the fee option. These requirements were established at production of (1) between 1.5 and 2.5 percent low income units or (2) between 2 and 4.5 percent moderate income units. e tion The question raised in discussions of September 16 was whether residential production would remain feasible if the fee requirement were raised to five percent of the construction cost. Analysis As in the earlier analysis, the five percent fee requirement was evaluated using three alter- native sale prices for market-priced condominiums. The three scenarios were: Average Average Price of a Price of a Average 2-Bedroom 3-Bedroom Price of Scenari Unit Unit All Uni Low-Priced Alternative $132,300 $177,875 $150,000 Medium-Priced Alternative 154,375 207,520 175,000 High-Priced Alternative 172,000 231,250 195,000 2 Tables 5A, 6A and 7A present the results of the additional analysis together with the re- sults of the original evaluation(presented in Tables 5, 6 and 7 of the original report). In all three cases, the five percent fee appears to push the developer's return close to or below the threshold of production feasibility. (For this analysis, at least one developer indicated that a returns between 10 and 14 percent were required to make a project feasible. Projected returns in the range of 10 to 10.5 percent, therefore, allow no room for unfore- seen events - such as economic downturns or difficulties for purchasers in obtaining mortgages-- that would further depress realized returns.) Alternative effects would be-the reduction of land values by approximately $0.50 more per square foot than with a two percent fee, or an increase in the prices of market rate units by 2.5 to 3.5 percent above the base prices used to define the scenarios. Based on these results, a fee of five percent is the maximum that should be considered if housing production is not to be greatly inhibited. Table 5A Effects of Alternative Requirements for Affordable Housing Low-Priced Scenario (Average Price = $150,000)" . Price of Land Value Market- Percent Per Per Per Developer Rate Increase Scenario Acre Unit Sq. Ft. Profit Unit in Price 100% Market Rate Units $176,040 $17,506 4.04 12.5% $150,000 100% Market Rate Units 160,913 15,913 3.67 11.4% 151,900 1.3% with 2% Affordable Housing In-Lieu Fee 100%Market Rate Units 135,906 13,515 3.12 9.8% 154,780 3.2% with 5%Affordable Housing In-Lieu Fee 90% Market Rate Units, 111,442 11,082 2.56 8.0% 158,550 5.7% 10% Low Income Units 80% Market Rate Units, 104,039 10,346 2.39 7.4% 160,725 7.1% 20% Moderate Income Units 'A price of$150,000 is used as an index to gauge the impacts of alternative requirements on housing prices. The $150,000 figure represents a weighted average price, considering the mix and sizes of two- and three- bedroom units. More realistically, two-bedroom units would be priced at $132,300 and three-bedroom units at $177,875, assuming similar prices per square foot. Source: Mundie & Associates 3 i-ao Table 6A Effects of Alternative Requirements for Affordable Housing Medium-Priced Scenario (Average Price = $175,000)' Price of Land Value Market- Percent Per Per Per Developer Rate Increase Scenari Acre i B Fl, Profit int in Pric 100% Market Rate Units $385,990 $38,385 $8.86 125% $175,000 100% Market Rate Units 369,937 369788 8.49 11.6% 176,925 1.1% with 2%Affordable Housing In-Lieu Fee 100%Market Rate Units 345,858 34,395 7.94 10.2% 179,775 2.7% with 5%Affordable Housing In-Lieu Fee 90% Market Rate Units, 300,366 29,870 6.90 7.3% 186,325 6.5% 10%Low Income Units 80% Market Rate Units, 271,972 27,046 6.24 5.5% 191,975 9.7% 20% Moderate Income Units `A price of$175,000 is used as an index to gauge the impacts of alternative requirements on housing prices. The $175,000 figure represents a weighted average price, considering the mix and sizes of two- and three- bedroom units. More realistically, two-bedroom units would be priced at$154,375 and three-bedroom units for $207,520,assuming similar prices per square foot. Source: Mundie & Associates 4 Table 7A Effects of Alternative Requirements for Affordable Housing High-Priced Scenario (Average Price = $195,000)' Price of Land Value Market- Percent Per Per Per Developer Rate Increase ,Scenario Acre Unit Ste, Ft Profit Unit in Price 100% Market Rate Units $553,923 $552085 $12.78 12.5% $195,000 100% Market Rate Units 537,870 53,488 1235 11.7% 196,925 1.0% with 2%Affordable Housing In-Lieu Fee 100%Market Rate Units 513,791 51,094 11.80 10.4% 199,775 25% with,23 Affordable - Housing In-Lieu Fee 90% Market Rate Units, 451,506 44,900 10.37 6.9% 208,550 6.9% 10% Low Income Units 80% Market Rate Units, 406,318 40,406 9.33 4.2% 216,975 11.3% 20% Moderate Income Units 'A price of$195,000 is used as an index to gauge the impacts of alternative requirements on housing prices. The $195,000 figure represents a weighted average price, considering the mix and sizes of two- and three- bedroom units. More realistically,two-bedroom units would be priced at$172,000 and three-bedroom units for $731,250,assuming similar prices per square foot. Source: Mundie & Associates 5 FEE EQUIVALENT OF ALTERNATIVE AFFORDABLE HOUSING PRODUCTION REQUIREMENTS RECOMMENDED FOR MAJOR EXPANSION AREAS Background The Draft Land Use Element recommends that residential projects in major expansion areas be required to meet the following affordable housing requirements: (1) offer land with five percent of development capacity to the Housing Authority for production of spe- cific types of affordable housing and (2) include 40 percent moderate income and 10 percent low income units within the project. The analysis of a hypothetical development subject to these requirements (Case 14) indi- cated that the land budget of such a project would be reduced by 85 percent, or that poten- tial developer profits would be driven to negative values, or that the prices of market-rate units would be increased by approximately 35 percent if any one of these factors were to bear the entire impact of the recommended requirements. (As noted in the earlier report, the impact would most likely be distributed among the three factors, with the proportion of the burden borne by each determined by their relative bargaining strengths.) Alternative production requirements were formulated based on the criterion that land value should be reduced by no more than one-half of the estimated value in the absence of affordable housing requirements. Ignoring the requirement that land with five percent of development potential be offered to the Housing Authority (because this requirement would be value-neutral, if market price were paid for the land), this criterion prompted the following recommendation: inclusion of 15 to 20 percent moderate income units and 10 percent low income units. Ouestio The question raised in discussions of September 16 was what level of fee requirement would have the same impact on land values as the alternative recommended production requirements. Analysis Because the alternative production requirements were formulated to reduce the estimated land budget by one-half, the fee requirement would have to generate revenue equal to one- half the same land budget. The original analysis considered two cases: one in which the average price of a condomini- um is $150,000, and a second in which the average condominium price is $175,000. These two cases yielded land values of $14,051,200 and $15,620,520, respectively. These values 6 � -� 3 are adjusted to reflect the estimated time required to complete development of a project of this size: with 353 units of four different housing types (custom homes, single family tract- built homes, condominiums and apartments), a total development period of five years was assumed. Fees equal to half of these land values would total between $7 million (in the low case) and $7.8 million (in the high case). Based on an estimated construction cost in the range of $453 million, the fee in the low case would represent 15.5 percent of construction cost; in the high case, it would represent 173 percent. ANALYSIS OF AFFORDABLE HOUSING REQUIREMENTS PURPOSE This report describes the results of an analysis of requirements for the production of "affordable" housing in the City of San Luis Obispo. The requirements tested in this analy- sis are those recommended by the Planning Commission in the Draft Land Use Element of the General Plan. The analysis of recommended affordable housing requirements is intended to identify the effect of the recommended requirements on: ■ Housing production. In other words, would the recommended requirements have such a severe impact on developers' profits that it would no longer make economic sense to build new housing or nonresidential projects? ■ The prices of market-priced units. If the foregone profits from affordable units were recouped through price increases on market-priced units, by how much would the prices of the market-priced units rise? BACKGROUND The Draft Land Use Element recommends that all new development projects - whether residential or nonresidential - be required to make some sort of contribution to the produc- tion of affordable housing in San Luis Obispo. The recommended requirements for projects in major expansion areas differ from those for projects within the existing city limits. The rationale for this difference is that land values will increase significantly upon annexation to the city, because annexation brings with it the potential for more intensive development than could be achieved in the unincorporated area. The intent of the Draft Land Use Element recommendations is to enable the City to share the increase in value that it confers through benefit of urban zoning. The City would capture its share of the increase through the affordable housing requirements. These requirements would not convey any direct monetary benefit to the City; instead, they would result in a lower value increase. The difference between the land value increase that would result with no affordable housing requirement and the increase with such a requirement would be the landowner's and developer's contribution to housing subsidies. According to the summary included in the staff report prepared for the City Council workshop on July 29, 1991, the requirements for production of affordable housing recom- mended in the Draft Land Use Element are: i l-� Table 1 Summary List of Project Types to be Evaluated Affordable Housing Number Area Descrintio, Site Are Buildine Area Comments Requirement L Existing City Downtown 7,000 s.f. 18,390 s.f. 5,990 s f.retail At least one mixed use 6,400 s f.office unit or 2%fee 6,000 s f.res. (8 apts.) 2• Existing City Downtown 7,000 s f. 18,390 s f. 5,990 s.f.retail 3% fee mixed use 12,400 s.f.office 3.' Expansion Retail 20 acres 255,000 s f. 3 structures 3%fee 4.' Expansion Industrial 4 acres 60,000 s f. 3%fee 5.• Existing City Industrial 4 acres 60,000 s f. 3%fee 6. Expansion Vehicle dealer 5 acres 40,000 s.f. 3%fee 7. Existing City Vehicle dealer 3 acres 25,000 s.f. 3% fee 8. Expansion Motel 3 acres 34,000 s.f. 117 units 3%fee + mgr.unit 9. Existing City Motel 0.85 acre 21,400 s.f. 50 units 3% fee 10. Existing City Office 033 acre 17,000 s.f. 3% fee outside downtown 11. Existing City Duplex 7,500 s.f. 900 s.f. 2 450-s.f.units 2% fee addition to old-town lot 12. Expansion Duplex 6,000 s.f. 2,000 s.f. 2 1000-s.f. units One unit(?) 13.' Existing City Infill condos 1.79 acres 24,900 s.f. 18 units 2% fee or 10%low in- come units or 20%moder- ate income units 14.' Expansion Residential 127 acres 570,800 s.f. 353 units 10% low in- (exclusive come units of streets) and 20% moderate income units 15. Existing City Downtown 7,000 s.f. 18,390 s.f. 5,990 s.f. retail At least one mixed use 6,400 s.f.office unit or 2%fee 6,000 s.f. res. Analyzed in this report. Source: Community Development Department 6 .,CERPT FROM 7-31-90 C.C. AGEND, EPORT 14 LAND USE ELEMENT UPDATE ISSUES RAISED BY CITY COUNCIL Over the last two years, the council has referred to the Planning Commission and staff the following specific issues to be resolved in the update of the general plan' Land Use Element. Issue: Replacing houses with offices in the central area Background The city has been concerned with these conversions for several years. Before 1977, the medium-high density residential (R-3) zone, which applied to many blocks around the downtown core, allowed offices with a use permit. The use permits were routinely approved, resulting in loss of housing and change of neighborhood character. In the 1977general plan update and citywide rezoning, areas which had been. substantially developed with offices were zoned for that use, while most areas that were largely residential were zoned to prevent further office development. The blocks between the county courthouse and Highway 101 between Santa Rosa and Osos streets, and some blocks along Pacific Street were exceptions, and remained available for office conversions even though they were largely residential. In 1986, the council asked for another evaluation of office conversions, looking" at both the loss of housing" and the traffic and privacy impacts of large, new office buildings in the office (0) zone on residents in neighboring residential zones. That effort resulted in the 1987 adoption of a Zoning Regulations amendment requiring a use permit to convert an existing building to office use or to build a new office building in the O zone, with three new findings dealing with location and design, but not housing availability. Houses in the O zone around downtown continue to be converted to offices and replaced by new office buildings. This reconsideration is a 1990 council work program objective. Planning Commission recommendation The commission's position is stated on page 45 (Item 4.2) of the Land Use Element Update - Planning Commission Draft. Basically, it is this: The city would identify office-zoned areas which are occupied mostly by housing, and .redesignate them for residential use. It would designate for office use the areas which are completely or almost completely developed with offices. For the areas which are a mix of residential and office uses, the city would apply a "residential/office" mixed-use designation. This designation would allow existing offices to be maintained and replaced. However, enlarging an office, or replacing a residential use with office use, would require replacement dwellings to be built on site or somewhere within the "R/O" zone, or in the downtown office or commercial zones. —of / The new "R/O" designation was supported as a concept, but the commission postponed applying it to certain areas. The ratio of new office space to replacement dwellings is yet to be determined. The commission also discussed establishing an in- lieu fee as an option to actual construction of dwellings, but did not make a specific recommendation. Evaluation Housing Stock At the beginning of 1990, staff looked at some 40 blocks in the central area and found about 220 remaining dwellings in the O zone, consisting of 90 houses and 130 apartments. These dwellings represent a little over one percent of the city's housing stock, or about 15 months of residential construction at the one-percent annual rate that the general plan calls for. In seven whole or half blocks zoned O, residentially used parcels made up at least one-half of the total parcels (large working map will be available at meeting). Costs An informal survey of classified advertisements and property-management agencies found that rents for downtown houses are about the same or slightly higher than for similar size houses outside the downtown area. There were not enough current sales prices to give a valid comparison, though it appears that high land values due to location and expectations of office use prevent these houses from being more affordable than citywide averages, despite their age and smaller size in comparison with houses in new tracts. Office Demand and Supply City and county population growth create demand for offices by providers of various kinds of business and professional services. Also, San Luis Obispo is an attractive relocation area for small firms and self-employed professionals serving metropolitan, state, and even international markets. Government agencies also demand office space. The county is looking for downtown sites for offices, to consolidate and expand activities now located in leased space. Office space throughout the city has been provided by converting houses, replacing houses with new office buildings, and by constructing new buildings in office, commercial, and public-facility zones. In 1986, consultants prepared an office supply and demand study for the city, which concluded: 1. There were about 1.1 million square feet of office space in the city (the current estimate is about 1.3 million square feet); 2. Office construction was averaging about 30,000 square feet per year (since 1986, it has been about twice that rate); 2 3. Under 1986 rules, properly zoned sites could accommodate about 374,000 square feet of additional public and private office space (the current estimate is about 800,000 square feet); 4. Residential conversion accounted for about one-fifth of all occupied office space (197,000 square feet), while houses in the office zone could be converted to another 192,000 square feet (roughly 110,000 square-feet conversion potential remains). S. The strongest demand for office space would be for high-amenity spaces with at least 2,500 to 5,000 square feet (staff has not reevaluated this assessment). 6. Total office space demand in 1990 would be about 12 million square feet; in 1995 it would be about 1.3 million square feet (considering projects under construction and vacancy rates, these projections were accurate; staff has not done further projections). 7. Continuation of 1986 office development policies would lead to a shortfall of office space for large tenants and "office parks." 8. These options were evaluated: A- Continue existing policies. B. Allow offices in the C-N zone. (This idea was rejected, as it had been several times before, because in San Luis Obispo offices serve citywide or regional, not neighborhood, demands.) C. Allow offices in the C-S zone. (This has since been done by adding a "PD" ordinance provision allowing offices with tenant spaces larger than 2,500 square feet, and excluding financial, real estate, medical, and legal services; several such projects have been approved.) D. Allow offices in the M zone. (This has been done, as for the C-S zone.) E. Increase the intensity of permitted office development in the O zone. The use permit requirement adopted in 1987 has a potential for the opposite result, a reduction in the intensity of development.) F. Promote an "office park." (With the C-S and M zone changes, Higuera Commerce Park and other sites have become available for such development. However, the city has not promoted an office park as such, because it is considered growth-inducing. The city opposed a county application which would have established a light industrial/office development in the Irish Hills.) 3 G. Allow medical offices in the PF zone. This has not been done, but the council has approved a rezoning to approve a recovery care center next to County General Hospital.) H. Accommodate office development on city owned property. (The proposed Court Street project would have three floors of offices,)' I. Increase.the intensity of office development in commercial zones. (The C-C and C-R zones continue to allow fairly intense office development). Traffic Considerations A 1,200 square-foot house generates about 10 trips per day; converted to an office it would generate about 30 trips per day. A 3,000 square-foot office building replacement would generate about 75 trips per day (all from DKS Associates, SLO traffic model, December 1989). All other factors being equal, converting or replacing the remaining O-zoned houses to offices would therefore increase downtown traffic by 1,800 to 5,800 trips per day. Jobs/housing Considerations Each converted dwelling reduces the city's residential capacity by one or two adults, and increases its jobs capacity by four to six workers. A 3,000 square-foot replacement building would add 10 to 15 workers. Therefore, converting or replacing the remaining O-zoned houses would further imbalance the jobs/housing relationship by 180 to 1,300 employed residents, resulting in additional commuting. Options In addition to the commission's recommendation, the city could: A. Make no changes. The remaining dwellings in the O zone would continue to be converted or replaced. B. Require additional findings for use permits. Existing use permit considerations would be broadened to include a finding that conversion or replacement would not reduce affordable housing opportunities or further imbalance jobs and housing. This approach has the disadvantage of requiring a determination in each case. Each case by itself would not be significant, but cumulatively, they could be. Given the city's desire to at least maintain, if not improve, the jobs- housing balance, making this finding would be difficult. (The city could also set a standard, such as no conversions when the residential vacancy rate is less than a certain percentage.) 4 /-30 Issue: Air quality & Clean Air Plan Description San Luis. Obispo's relatively clean air, highly valued by residents and visitors, is threatened by increasing population and activities which generate air pollution. The key question which the city faces in this: will our air be adequately protected by proposed measures which control pollution from each source, our should we limit the growth of sources below what has been projected for our area? Also, how much should we count on potential but unproven pollution control measures? There is a dilemma: if other communities in the air basin accommodate growth that otherwise would have occurred in San Luis Obispo, especially housing for those who work in the City, air pollution will not be Tninimi ed, and may be made worse. As required by State law, the Air Pollution Control District (APCD) has prepared a Clean Air Plan ("CAP" —lune 1991 draft) for the County. The Clean Air Plan aims to reduce emissions of reactive organic gasses and oxides of nitrogen so that ozone, a primary component of smog, can be brought within limits to protect health and welfare, which are now exceeded. The plan tries to achieve the necessary reductions while the county as a whole grows as projected by the State. As shown in Figure 1, the measures contained in the draft plan are not expected to achieve the required reductions for reactive organic gasses, which would exceed the state's mandated levels by about 25 percent in the year 2010. The reductions for oxides of nitrogen would fall within the limits. According to Figure 1, assuming that the recommended control measures and vehicle emission standards set by the state will be effective, future emissions for both pollutant categories will be lower in the future, even with projected growth. However, countywide data from 1982 through 1989 show upward trends in air pollution which will be hard to reverse (Figure 2, attached). The Clean Air Plan includes recommendations for land use and circulation (Appendix E). Several features of the city's draft update anticipated and reinforce the recommended measures: - Maintaining a compact community inside the urban reserve line, with open space around it; - Allowing residential and commercial development that are relatively dense compared to other communities in the County, and close to each other; Encouraging an intensely developed, mixed-use core area which is served by local and regional transit; Trying to improve the job/housing balance. Planning Commission recommendation In addition to the broad land-use strategies noted above, the Commission's recommended draft includes a section (policy 1.15) on air quality calling for the following. 1 Consultation with the APCD on all significant development; Adoption of an updated, countywide air quality plan; Use of a model to evaluate air quality impacts of adopted plans and proposed amendments; Reduction of general-plan development capacities throughout the County if measures to control air pollution at each source prove to be inadequate to offset groom; Various transportation measures; A mitigation fee for new development. Alternatives to Commission recommendation It is difficult to identify distinct alternatives to the Commission's overall recommendation since any approach will involve whatever Clean Air Plan is adopted by the County, which in turn will call for action by the City. The basic choice, which the City cannot make by itself, is how heavily we should rely on each of the two components to protecting air quality: (a) controlling overall growth of pollution sources and (b) controlling the production of pollution from each source through such means as location, transportation modes, and alternative fuels, materials, and emission-control hardware. For any given controls at the source, more people and economic activity will result in more air pollution. On the other hand, proposed source controls may allow the area to accommodate projected growth without significant harm to air quality. Environmental and economic questions Staff believes the basic questions have been answered by the draft Clean Air Plan or will be answered in the general plan update EIR (scope reviewed by Council August 20). Council should identify any additional specific information needed to give direction on the Land Use Element update. VnD:AIRQ.CGwP 2 FIGURE 1 FORECAST EMISSIONS COUNTYWIDE REACTIVE ORGANIC GASSES (ROG) ss T 2s _ 0 n - a 20 -— P e r !s --- — D a 10 Y 0 i i i iI f I I t � . 1987 1994 1997 2000 2010 Year IMMOUT CAP -4— WITH CAP ' REQUIRED BY CC1A OXIDES OF NITROGEN (NOX) ao so T 0 40 n S P 00 e r D20 a t Y. � 10 0 1987 1994 1997 2000 2010 Year WITHOUT CAP -{— WITH CAP --*- REQUIRED BY CCAA /33 FIGURE 2 IND. aTORS OF AIR QUALITY 1982 - 1989 COUNTYWIDE DAYS EXCEEDING THE STATE OZONE STANDARD 10 8 � I 6 4 dLm 0 1982 1983 1984 1985 1986 1987 1988 1989 0z0.+R (ppm) 0.20 I MAXIMUM HOURLY OZONE CONCENTRATIONS 0.13 I i 0.19 J 9.83 NUMBER OF HOURS ;$, 0 . 07 PPM OZONE 0.00HOURS 1962 1063 196L toes 1964 1967 1966 1969 700 800 500 400 300 - 200 loo 0 1982 1983 1984 1985 1988 1987 1988 1989 Issue: Sustainable Community Description Most people using the term today would consider a "sustainable community" to be one which can continue its level of resource use generation after generation. A truly sustainable community uses resources no faster than they are renewed. Production of pollution and consumption of nonrenewable resources would be minimi ed. Encroachment into remaining natural areas would be minimised. A •sustainable community emphasizes reuse and recycling, efficiency, and use of renewable resources. A sustainable community is economically stable in the long term. It avoids 'boom and bust" cycles. It has what can be called a "stead-flow" economy, seeking prosperity without growth. However, a sustainable community need not be isolated or self sufficient (see note #1 at end). There will be movement of people and ideas in and out of the sustainable community. There could be extensive trade, with all parts of the world, in goods and services that are derived from renewable resources: information, capital, products of sustained-yield forestry and farming, products from recycled materials, and energy from solar, geothermal, and biomass sources. A sustainable community would be comprised of people whose individual livelihoods would be sustainable: an economy anchored in conserving and enjoying the region's resources, rather than seeking more. People would be moderate and selective in their personal consumption, considering its consequences for the environment. Maintenance services, in the broadest sense, would completely replace "expansion services." Compared with an economy based on past patterns and geared mainly to using nonrenewable resources, a sustainable economy would be more innovative and flexible in the near term, as it anticipated resource limits rather than being forced to respond to them as they occur. Total population or overall economic activity in a community that is not sustainable will increase until some critical resource threshold is exceeded, and then the economy will "crash" as population or levels of resource consumption respond to intolerable pollution levels or lack of resources. The greatest challenges to any community seeking to become sustainable are: Until worldwide and national populations are stabilized, accepting a fair share of population growth (see note #2); A fair distribution of opportunities among the community's residents, so that those with the least wealth do not bear a disproportionate burden for living within resource limits; Making a smooth transition from ways of earning a living that depend heavily on use of nonrenewable resources (which nearly all of us do, directly or indirectly). Some aspects of San Luis Obispo (like most of our state and country) have not developed on a sustainable basis. Water use has increased above reliable, long-term yields. Air pollution has exceeded standards to protect health and enjoyment. We have 1 /-35 become dependent on nonrenewable energy sources (see note #3). On the other hand, San Luis Obispo is moving toward sustainability in several areas. Our sewage will be treated so that there will be more options for reusing the water, and less pollution of the creek and groundwater. The Water Allocation Regulations have been implemented, aiming for no net increase in water use as new development can proceed only if it reduces water use in existing development. More of our used paper, metal, glass, and plastic is being recycled. Our bus system can be converted to natural gas (renewable methane) and we are pursuing people-powered transportation through improved bikeways and trails. To the extent that the city's finances depend on current consumption patterns, moving further toward a sustainable community will require a shift from consumption-tax revenues to user fees and assessments, and perhaps more modest spending by the city. Planning Commission recommendation Key features of the Planning Commission Draft which may make the city more sustainable are: - Maintaining a City population growth limit about the same as the projected growth rate for the population of the country as a whole (policy 1.2); - Keeping development in balance with available resources and environmental limits (policy 1.1); - Keeping the gap between housing demand and supply from growing wider (policies 1.1.D and 1.2.); - Maintaining a limit to the City's outward expansion (policy 1.2); - Keeping the land outside the urban limit in open space uses, including agriculture (policy 1.9); - More effectively managing growth within the region (policies 1.6 through 1.11); - Creating compact, diverse neighborhoods which are easily accessible on foot, bicycle, and bus, and which preserve the most sensitive natural areas (policy 2.17); - Emphasizing reuse and more efficient development within areas already committed to nonresidential uses, rather than expansion of commercial and industrial areas (policies 33, 3.10, 3.13, and 3.23). A key feature of the draft which may not help the community become more sustainable is this: to the extent that it works against making job opportunities and housing opportunities more equal, trying to be the focus of the County's government, entertainment, cultural, and specialized retail and medical services, while county population grows at two to three percent per year, and the city's population grows at one 2 j-310 percent per year (goal 17 and policy 1.2). Accommodating trade and services in proportion to a County population that would be growing at twice the rate of City population is bound to displace additional housing demand to surrounding areas. (There is also an issue of intent conflicting with practice: the draft has been criticized for not providing the nonresidential development capacity needed to remain a regional trade and services center, despite the stated intent of doing so.) Alternatives to Commission recommendation Alternatives to the Commission recommendation which could make the community more sustainable include: - Reducing nonresidential development capacity, increasing residential development capacity, or both, to make the build-out capacities more nearly equal. - Including more specific standards for solid waste recycling, water conservation, or energy conservation, though these topics are covered in various state standards and other City "management plans." Environmental and economic questions 1. What specific steps can the City take to "Provide a resilient economic base, able to tolerate changes in its parts without overall harm to the community?" (goal #14) 2. Can a relatively painless transition to a steady-flow economy be made within the planning period of about 25 years? 3. If San Luis Obispo wishes to become "sustainable," what constraints must the community address considering the City's place within regional and statewide systems for governance and the distribution of goods and services? Notes 1. A recognized spokesman for the "sustainable" approach has criticized some thoughts of "saving the planet," suggesting the we should each focus on saving our own neighborhood and community. He suggests having cities depend as much as possible on the resources of the surrounding region, rather than imports from distant areas. He favors this because he believes people care more about resources that are close to home, and would therefore take better care of nearby resources such as forests, farmland, and groundwater that sustained them than if such resources were "out of sight, out of mind." (Wendell Berry, "Out of Your Car; Off Your Horse," The Atlantic, February 1991.) 2. Two realms of democratic choice may be in conflict: (a) accommodating all those who would prefer to live in the community, rather than where they live now, and (b) respecting the preference of a majority of the community's current residents not to grow 3 1- 37 to the extent required to accommodate all who would prefer to live in the community. This conflict becomes more acute as the state's urbanization continues. Small towns and cities become more rare and more attractive as metropolitan areas spread outward and become more intensely developed. Some people's choices are increased by having the small towns grow; other people's choices are reduced by the same growth. There is a further trade-off of choices in the sustainability question: Some people deliberately restrain their production of pollution and consumption of nonrenewable resources —and are willing to forego local shopping and entertainment opportunities— to maintain the quality of neighborhoods and of the natural environment within a community. To the extent that additional growth cancels out the benefits of such self- control, those people must move to find the quality of life they were willing to "sacrifice" for in their preferred location. 3. A question has been posed about why a community would aim for self-sufficiency with some resources (such as water) and not others (such as petroleum products or metals). This probably would not be a productive discussion unless we consider the source and re-use potential of each resource. For example, water can be recycled locally; nearly all new water sources outside the area require reduction of water use for some other purpose (agriculture, water quality in streams or bays). Most who would favor self- sufficiency in water supply would also favor minimum use of non-recycled petroleum products. Nearly all metals can be recycled, and while the extraction and processing of ore may have undesirable impacts, the ores would not be diverted from sustaining some other natural or economic function. Vnn:susTnu .WP 4 Issue: Neighborhoods Description While we have become very mobile, over a lifetime most of us still spend most of our time in a neighborhood. A neighborhood can be defined as the area surrounding a dwelling site, for which the occupant feels a greater sense of territory or common characteristics than the city as a whole. Neighborhoods typically are separated from other neighborhoods by different uses or physical features which interrupt the continuity of streets and building patterns. Neighborhoods may have a focus such as a school, park, or commercial area. Recently, citizens have shown renewed interest in: 1. Protecting existing residential and mixed-use neighborhoods from incompatible new buildings, increased traffic, and the effects of poorly maintained properties and rowdy occupants. 2. In new development areas, creating the function and feel of traditional neighborhoods, rather than simply collections of adjacent, separate projects. Planning Commission recommendation Currently, the City has no comprehensive policy on neighborhoods. The Planning Commission draft includes some 18 policies on neighborhoods generally, and 20 on downtown specifically (pages 23 through 25 and 45 through 47). The draft describes the desired features of new neighborhoods and of additions to existing neighborhoods. Neighborhoods other than the named major expansion areas would be identified as planning units. In all neighborhoods, streets, sidewalks, and yards would be deliberately used to achieve a sense of place and connection with the rest of the community. Alternatives to Commission recommendation 1. Determine whether there is a need for planning units smaller than the City as a whole, and if not continue to emphasize citywide character (possible exceptions: downtown; major expansion areas). 2. Determine that it is appropriate for individual development projects to have their own sense of place separate from surrounding development, and that continuity within neighborhoods is less important. 3. Revise the details of the approach to neighborhood planning. An example of such detail revisions is the attached June 18, 1991, statement from Residents for Quality Neighborhoods. Environmental and economic questions Council and staff have not identified questions relating to neighborhoods which will require answers in addition to those provided for other issue topics, such as traffic. gmD:NBHDSCC.WP 1 �-3� Jill W RQLl Residents for Quality Neighborhoods P.O. Box 1204. tan1,uis Obispo CA 93406MEMN AGENDA Dencts:z: „n by!ead Pgrgp. DATE /_Z lr 9e�ona fir. G�_Q7f�1 . �cVil au,ca arP)n .C M '• _ ao �,.c. L.ity Gouncl .l City O* San LUIS Odlsno 54() Palm St . cart Lui: Ooisoo . Calirornia RE: DEVELOPMENT AND CONSERVATION OF NEIGHBORHOODS POLICIES. . .LAND USE ELEMENT UF•DA?E. Dear Council Members: the enclosed material is the efforts of a committee camcnsed Jf Sever?.1 community representatives tram such crgani:atlons such es �:e_ldents 0r-Olality Neignorhoods, San Luis Drive Association and the Friends cf -'^e-.Imo Croak , as we11 as individual community residents , *ter several months of meetings to discuss these 0,01 ,.Cq - o:inion tnat tti:= enClosed Changes better reflects tr.= concept :=• Ci. �l _ in me protection and enhancement of neighborhoods. Plesse not= that Section should be deletec +rpm 1:r. >levalooment and Conservation bf Neighborhoods and moved to the C,rculatiOn 'clement +or the reason stated in the Charges . W-z WO!IIC abpreciate ':our consideration OT these cmances :when .•,,L; .=a'n dlsCus: the policies tor this portion of the Land use Element !Ipdet2 Sincerely. Dotty Conner, Chairperson . ,y Residents for Quality Neighborhoods R ,E C E 1 Y , D CC : Arnold Jona=_, Community Development Director JUN 2 A 1991 Glen Matteson . Planner g,vcjxw ex San Luis brive Assoc . & Friends of Prefumo Creek /- 1O Land Use Element Update Planning Commission Draft DEVELOPMENT AND CONSERVATION OF K016,9M AYP NEIGHBORHOODS POLICIES Neighborhood Protection and Enhancement: (Refer to page 23) 2.1 The city should assist in identification and designation of geographic x5roAcul FAA 00ggnp! neighborhoods. The city should assist in neighborhood planning to preserve and yl ,ZZ pYgpare XjeigXYgrXoed' gxFxg, .co facilitate development of a sense of place within neighborhoods. 2.2 The city should encourage and support the formation and continuation of neighborhood pxgxnXM groups, composed of neighborhood residents. 2.3 Neighborhoods should be protected from intrusive traffic. All street and circulation improvements should favor the pedestrian and local traffic. Vehicle traffic on residential streets should be slow. Z,y4 All areas should have a street and sidewalk pattern that promotes neighborhood and community cohesiveness. There should be wide and continuous sidewalks to provide unbroken pedestrian paths throughout the city. Note: Delete from this section and move to policies regarding Circulation Element. Reason: not appropriate; does not deal with neighborhood protection and enhancement. Established neighborhoods may not want sidewalks; this statement might be incorporated into new neighborhoods.) 2.5 The city should view streets, sidewalks, and front setbacks as a continuous open space that links all areas of the city and all land uses. These features should be designed as amenities for light, air, social contact, and community identity. (Note: Question the purpose of this polio•. How does it fit into neighborhood protection and enhancement. How do streets, sidewa ks, and front setbacks act as open space?) 2.9 To foster neighborhood protection and enhancement, the city will: (Refer to page 31) A. Assist in identifying geographic neighborhoods, and help to preserve and enhance their character; X�k1,cidy x�Xg'���XhfOvd� 991 7Jr97?-Ie 79iZ 0,r40AA B. Encourage the formation of voluntary neighborhood groups, ;ry Yg'gid1%M: i 4vxR ke"" fnvvXYed ga7Yy XR 7;1¢ de.YeXOPP�eH�Y1' t�W pI0�e88. C. Involve residents early in the planning, development and review process of projects with neighborhood impact. Provide neighborhood residents and property owners with written notification of such development and projects. Omigpap¢ ;r RgzOVOZMBO Pr x;[Mr X0 htzp ArZY ovz i7.exz X PrA$ 4 0,0X0, Xo xxxtew pXgFoxed PrRIWXg fAr 7rWLkf0rxza jrx-zXS, AAe XJ6 ;(0WVxX¢ 7Le3g)ptrX0zd 7VVr0Rri0;1 V%O 6`KXAneamtZ. D. Assign a planning staff member to assist, when necessary, the programs referred to in Section 2.9; A _ B and C in order that neighborhood residentrg oups will have a contact within the city to provide information and assistance with neighborhood protection and enhancement. ISSUE PAPER October 3, 1991 TO: John Dunn, CAO VIA: Arnold Jonas, Community Development Director FROM: Glen Matteson, Planner FOR: City Council general plan work session - October 21, 1991 SUBJECT: Government office locations ("tripolar" policy) SITUATION On October 1, when considering a planned-development-amendment to allow Caltrans offices on South Street, Council asked staff to prepare for further discussion of government office policies at this wort: session. The Planning Commission and City Council have considered this issue several times over the last three years, in connection with specific zoning applications and with the Land Use Element update. This is an update of the issue paper prepared for the June 25, 1991, Council meeting. DISCUSSION Current Land Use Element The adopted Land Use Element outlines policies for government office location on page 20. To summarize: - City and County administrative functions should remain and expand downtown; - County health function; shOUld Nntttin and expand on Johnson Avenue; - County, State, and Federal social services should consolidate at South Higuera Street near Prado Road; - There are no favored locations for Such functions as Highway Patrol, Caltrans, Water Quality Control, or Air Pollution Control. - Probation should he near courts or the sheriffs facility, - The juvenile facility should be near the sheriffs facility (Highway 1 and Kansas Avenue) -do Regardless of function, government facilities should: avoid residential neighborhoods; provide convenient access for clients; group related activities; be close to complementary private services; minimize the displacement of businesses or residents. These policies were adopted in 1979, when the State Employment Development Department and the County were seeking larger spaces outside downtown, and the County was considering putting a juvenile facility near General Hospital. The City was trying to (1) minimize the dispersion of income-maintenance services, while legitimizing their location outside of downtown, previously favored for all government offices; (2) keep County administrative functions downtown, to support downtown businesses; (3) respond to Flora Street area resident's opposition to a juvenile facility there. Draft Land Use Element/Planning Commission recommendation The Planning Commission's recommended draft Land Use Element update is basically a refinement of existing policies. The map on page 48 of the Planning Commission draft (attached) shows the locations of the three poles; the commission did not want the location boundaries to imply the precision of property lines. Other relevant sections of the draft are: goal #27, page 7; policies 4.3 and 4.4, page 45; policy 4.5 of page 46; .policy 4.18 on page 47; policies 5.1 through 5.7 on pages 49 - 50. Staff and the Commission tried to cover all the potential functions. The attached chart shows preferred locations for various functions, according to the current and proposed land use elements. In referring the draft update back to the Planning Commission last summer, the Council specifically asked for reconsideration of land area which could provide for expansion of the social services center, especially west of the creek. In November 1990, the commission re-evaluated projected space needs and potential expansion area, and concluded that the-potential expansion area shown in the Commission-recommended draft was adequate for the City size envisioned by the Land Use Element. That expansion area includes properties west of the creek currently zoned C-S, but not the parcels zoned for open space. On September 25, 1991, the Commission denied an application to amend the Land Use Element and to rezone so that part of the area west of the creek, now zoned open space, could be used for private and government offices. The Commission cited inconsistency with general plan policies and lack of space needs projections, among other reasons, for its action. A primary concern was that the proposed development would be another office center, separated from the existing social services pole by service commercial uses, rather than an expansion of the existing pole. Several times in the last ten vears, the Plannin; Commission and the City Council have dealt with use-permit approvals for offices other than social services within the designated social services center, as particular agencies have expanded, contracted, and relocated. 1- 419 Citizens' Advisory Committee Report Item #13 of the "Citizens' Advisory Committee Report on the City's Long-term Financial Health" (attached) says the economic contribution of government functions should not be under appreciated and the City may need to support the retention and expansion of government agencies. Public comment At the October 1 Council meeting, Keith Gurnee recommended seven points (attached) aimed at consolidating various government agencies in an enlarged center on South Higuera Street at Prado Road. Council policy statements outside the general plan On July 3, 1990, Council responded to an appeal of a staff interpretation allowing government offices (California Regional Water Control Board) in the Pacific Coast Center (C-S-S zone), indicating that such uses were not generally consistent with the tripolar concept but that the proposal was an acceptable departure. On October 1, Council allowed government transportation engineering (Caltrans) offices with no public contact in the Westwind Business Park, finding that this would be consistent with the general plan. In both cases, the Council emphasized that it generally did not want government offices which serve the public directly located outside the three poles, regardless of their function. Space demands & potential sites Staff has not been able to obtain an assessment of long-term space demands for state, county, or federal offices which may want to move, locate, expand in San Luis Obispo, despite contacting staff of their general services and real estate sections. However, the following is apparent from City staffs 1990 evaluation: If the government office functions already located in the social services area (about 100,000 Square feet) increased dicir space at the same rate which the state has forecast the count• population will grow, about 68,000 square feet of additional space would be needed by 2020. If the government office functions already located in the civic center (about 100,000 square feet) increased their space at the same rate which the state has forecast the county population will grow, about 68,000 square feet of additional space would he needed by 2020. There appears to be enough space north of the existing county Health Department buildings on Johnson Avenue and Sierra Way, at Bishop Street, to accommodate a doubling of the existing approximately 19,000 square feet. The following maps show potential expansion areas for government facilities at the three poles. The dotted Fines are intended to enclose the general areas shown on page 48 of the Land Use Element update draft text. The shaded areas are examples of sites which could accommodate certain amounts of space, and are not intended to be proposals for public acquisition or projects. Some parcels would require rezoning and replacement of existing uses. The estimates of potential added floor area shown below generally assume two-story buildings with surface parking at a ratio of 1:300 square feet (resulting in about 23% coverage), except downtown, where new buildings would provide two floors of office/meeting space, with parking below grade or off-site, and some retail or residential uses in line with the commission's preference for mixed-use development. POTENTIAL GOVERNMENT FACILITIES SPACE (1000's of square feet gross floor area) Civic center' Health care area Social Services area Court Street 53 General hospital 49 County corner 63 Morro West (net) 20 Sierra Way 42 Creekside 18 County garage 42 Prado west 72 Sperry building 29 Margarita corner 49 Morro East 18 Old library (net) 12 "Not updated to reflect all site, conSidered by downtown design team. Problems and solutions This appears to be the primary concern: Government offices sometimes have rapidly changing space needs; for Several reasons, government agencies cannot always acquire building space in advance of need. While land area for long-term space needs may be adequate, currently available building space, in locations previously used by government offices, may not be. A near-term shurtalue (or excess) can exist regardless of whether the long-term potential expands a litttr or a tot in relation to current policies. These appear to be practical Solutions Which do not compromise overall policies: Allowgovernment offices other than general administration, health, and social services, and with minimal public visitation, to locate where nongovernmental offices may be. - Allow uses other than a center's primary intended uses within that center, so long as doing so does not displace the primary uses. Designate enough land curea in certain locations to accommodate long-term government space needs for those functions which benefit by being centralized. I- �s If the Council disagrees with these approaches, it should so direct staff so appropriate changes can be included in the next draft of the Land Use Element update. Options General long-term policy options for the City include the following: - Pursue expansion of government agencies within the City, in preferred locations, by designating generous amounts of land at, and excluding competing uses from, the desired locations. (The City must be cautious in designating privately owned land for government uses only.) - Accommodate proposed expansion of government agencies within the city, but allow them the same range of options (and limits) as nongovernment offices. - Discourage further expansion of government offices in the City. ATTACHMENTS "Public Facilities Areas" map from Draft Land Use Element "Social Services Area" map from previous issue paper Excerpt - Draft Land Use Element update map - Higuera and Prado area "Health Care Area" map from previous issue paper "Civic Center" map from previous issue paper Table showing status of various agencies under general plan policies Keith Gurnee's recommended tripolar policy changes Excerpt - CAC fmcancial health report gmD:TRI-MD&V/P ---------------- FIGURE 5 \ CAL 10L► CIVIC CENTER CULTURAL FACILITIES AREA ; HEALTH-CARE AREA L#AUMA LOM i IAL SERVICES AREA r .r, - --- t AIPPOPT �N'l NOT TO SCA ' w CITY LIMIT LINE: ----- City � � ��Iii�ll�►I lOf 0 1 PUBLIC FACILITIES AREAS Sa S t SP• 990 Palm Street/Post OttICB Bos 8100•San Luis Obispo,GA 9940-8700 /286 48 ` 'Y7 _ _ILI tm ._ _ SOCIAL SEINES AREA a • 0 tt� ,., • f:;:;::::i;i::;:::iii:ii':>.:;::;:;::.:.;.. t ,.,y veem Z ,'jT± y! / �• :I t 1 t A I sT - •�, • • �� ..a.4 :OUTFI fi1MUI3RA • • • • ..'.':. 't 7F • ....: , LAn' / _ . • 'p � • • • • • • • O •�.•y;• • • • �-�! •F 11.4 � a i 0 Jb 6 O •EMPRESA DRIVE - — �t,tEu�•_-,- ,.•. �•, •• ., — _ +'�JI !x•rEe' D ALICITA CT. I � S°:. te.nx „ .•• D N - - I C •�� d j i� •� � �� (n CT.Ij 7 0 j4� C Source: City of SLO Planning Division (from Planning Commission's 1,EE draft LUE Update) Dotted line: Approximate boundary • courtT C Shaded areas: some potential development sites \\\\\\\\\\\\\ RETAIL - \\ \\\\\\\\\\\\ \•, Ai \ \\\\\\\\\\\ RECREATION \ OFFICE OPEN SPACE _ ._ __ : \\\\\\\\\\\ ■ \\\\\\\\\\\ H \ NEIGBORHOOD COMM. ������ \\\; ' •\• /// TEMPORA RY RESIDENTIAL ' /OPEN SPACE / PUBLIC \��\\\\\\\\•• . . Jim - - -- \ \ ---- SERVICES/MANUFACTURING Cz \\\\\\\\\\\\\\\\\ \\\\\\\\\\\\\\ \\\\\\\\\\\\ TANK / c -�q Pv � O v,®r O \•� \�\O p a : o ..QP O I v U :� O� r :•� .� .GG p C t � Q O • t I } �1 scc d CL lA fl:;+ O co cc d Qm �'''� o • X L _ Q E CL C c4 cts w \ �J0 cn G cn LL • ♦ J� - a .O .• P r O C o .i� S • � C a. �♦ P N Oce �.•'' I i L-1 04 1 , O X i �./ C O ..• ;� Jpy of ..o r� S ♦ 5 N •. 1 . ,fid. � `•©� Z �' _ �, \' ` O 00 • � a m 00 �,Pl% e .top � ► �� '' '' p� "'' 0 P o 1010 ca m LL CL m CL \� -L+• %,: t �_ ��•�. ✓ ;: 090 ;: 0 .,�,. � �_ c4 Lo le a 001 lre e �. > a o'" \r1 �'� .'`pvP� \ � i✓%l.�t :fit �✓ O O L 'O e � '' `'. \ ���� y9{.`•' � a ':7� `;;r''.'.:':;��'`0 't+.� �'� %,♦ •�+✓' O O %�.- :t. ,/, �i�9•. ` �" ,♦ _ �:j:�.. 1. � ;l.�,s ( �r '- O X X X . x X �C T X ; X X X X I � I rs7 R •> X I X i v ac UI i Z � ' i � 0-- X X X X X c� o E v, W v = � X O c - z .2 •o X X X W ¢ U v 3 l ^ C C Q' — n� — y c ' y C — C U n C E C = y O E L U n T > 6 7 C O y C C V �- p cu C O V 0 ♦J ca b N C Q. O y j> V — O � L •C :� r � �... V 'J CJ T :b O V... i.F, C �a — O T >1 U c7 �q _ ,r- C U U LL. C LL U U U Q U U n V-) cn c/1 U U v J� TRIPOLAR POLICY RECOMMENDED CHANGES ■ Recognize need to expand tripolar concept and do so now vs. allowing government offices to scatter throughout the City and County. ■ Need for consistent commitment to expanded tri-polar policy that outlasts elected regimes. ■ Need to prepare vision for tripolar expansion that community and other governments will respect. ■ Need for city leadership to work directly with local, state and federal leasing agents to obtain involvement and support from other government agencies to consolidate their future offices in a new expanded complex at this location. E Commence a Specific Plan for the Prado/Elks Lane/South Higuera area as a logical future site for "other" government office expansion. ■ Resolve drainage issues on the site with cut-off channel/parkway design solution vs. creek widening. ■ Support privately sponsored proposals that will contribute to this vision. SQVr�CC, kg-tp.pol �-S3 G15. c IZ��� - Z-5 - cl1 increasing San Luis Obispo' s share. We must consciously decide (a) d^ we want to retain our retailing market share, (b) is it satisfactory -1 lose a portion of market share, or (c) do we actually want to increase our market share in specific focus areas? Much City government effort must be directed to reacting to the proposals of others; greater effort must be directed to positively achieving the choices that we make. 13 . Governmental, Educational Components of Economy Often Underrated —� While the importance to the area economy of the private sector (retailing, offices, manufacturing, services) is not to be understated, the importance of the public sector (City, County, Cal Poly, Cuesta, CMC, State and Federal offices, etc. ) to the total area economy is often under-appreciated. ',There may need to be the development of programs which will be supportive of the retention/reasonable growth and ; expansion opportunities for these governmental and educational functions or, failing that, there may be the dispersal of certain of these uses to other areas, with the resultant loss to our local economic strength. 14 . Future Need for Strong Municipal Revenue Though the City's relatively positive past financial situation has caused us to spend less time on the question "can we really afford to improve our City services?" , impending operational service/workload issues do exist, and will have to be faced in our . next budget. Three quick examples of where the City may be facing manpower increase/service level improvement issues are: having sufficient law enforcement personnel to deal with escalating calls for service/gr-owina number_ of law. enforcement incidents; the need for additional personnel t monitor/operate our improved sewer treatment and water treatment plants and the need for additional personnel to deal with our increased park area, landscaping, and tree maintenance responsibilities. We have had the luxury of taking our basic services for granted, which has enabled us the opportunity to work on other community issues. The "bottom line" is that even though the City has been able to provide desired services and service improvements in the past, there is certainly no guarantee that this will be the case in the future. With insufficient revenue growth, there would have to be reassessment, with possible service decreases. 15. Importance of Tourist Economy Tourism is very important to the economy of the City. The nature of the tourist economy has changed over the years, with the City changing from an overnight stop on the way to somewhere else, to more of a destination in itself. Tourism provides all of the Transient Occupancy Tax, a substantial portion of the Sales Tax, and revenue to both the private sector (both direct and "spill-over" to non-tourist businesses) and to the City government. Tourism is a "clean industry" that needs City support, and one which, properly used, can assist the community to attain many of our objectives. The amenities that cause the City to be a nice place to live are also those which cause people to want to visit. 16. Light Industry - Benefits and Ouestions What' s the benefit of the City having light industry, in the total scheme of things? Much industry, in this day and age, can (and mus' be operated cleanly, minimizing any negative effect on the environment. 4 'EETING AGENDA DATE ' L91 ITEM # ��►����u��n�»ii���►►�Iillllllla�u�►�►�►�� 111city of SM WIS OBISPO 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100 October 18, 1991 MEMORANDUM To: City Council From: JohnL*o Subject: Daliand astewater reuse proposals and Cal Cities aipplication to expan into Airport Area Attached are correspondence from Merriam Planning Associates which formalize two proposed options for the Dalidio area (an "urban emphasis" option and an "agriculture emphasis" option) , and the other from RRM Design Group concerning the extension of a pipeline to carry reclaimed water to the La Lomita Ranch area. The Dalidios are requesting direction on their proposal from the Council during the month of November. RRM is requesting an opportunity to present their proposal in a study session. If the Council wishes to review these options and provide such direction in the near term (and staff is recommending that we do so) , then it would be appropriate to schedule a follow-up LUE workshop session. In addition to these proposals, there is another key land use issue which the Council might also want to consider: The proposed Cal Cities Water District expansion into the Airport Area. There may be other "loose ends" coming out of our past LUE workshops which can be addressed in one or two follow-up sessions. At the conclusion of next Monday' s workshop, staff will ask the Council how and when they would like to consider these issues. The staff believes it is desirable to cluster discussion of these matters which are proposed on the southern periphery of the City, as there are inter- related policy considerations. JD:mc Attachments 1. Dalidio proposal COnr$;O; 2. La Lomita memo LErDmGXff. tesAc,4on3 . Memo re Cal Cities application a7cDOD1RCAO c. Bill Hetland � ❑ NDIX Arnold Jonas K/0:C oLICE❑ F'OLicEQLJeff Jorgensen ,❑_,/tFCD7rPam Voges DfiL, 1Q UTILD*'Ken Hampian � d/dalidio MPA MERRIAM PLANNING 10 October 1991 ASSOCIATES Mayor and Members of the City Council San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 RE: Determination of appropriate land uses for the Dalidio Annexation Area Dear Mr.Mayor and Council Members: The Dalidios have asked me as their agent to formally submit for your guidance the conceptual land use options that have been considered for their land adjacent to Central Coast Plaza in the County of San Luis Obispo. These options are described in much more detail in the attached exhibits but may be summarized as follows: Option#1: Urban emphasis. (Total annexation area)This approach assumes the land to be a valuable urban resource to the City in terms of providing for additional commercial uses(additions to both the existing regional shopping area and to the auto sales uses next to Auto Park Way), neighborhood housing as well as low to moderate income apartments and condominiums. The plan has an extensive neigbborbood park and greenway system,highway buffer and dedication of 4 acres of eucalyptus trees as part of a Laguna Park extension. Option#2: A¢ricultural emphasis. (Shown for Dalidio ownership only)This option stresses the preservation of agriculture and open space in the central portion of the area. Only two urban uses are reserved: Forty acres of commercial land is adjacent to Central Coast Plaza and 13 acres of land is reserved adjacent to Madonna Road for medium high density residential. Both options are designed around an extension of Prado Road from a new interchange with U.S. 101 to Madonna Road. Under option two the City would purchase the agricultural land. The Dalidio's are asking for 587,000 per acre based upon an appraisal of residential land valued in its unannexed form. (Annexed and ready to sell to a developer, the land would be valued at a little over three times this amount). The Dalidio's desire that the City Council,in light of the General Plan Update now in progress, give them general guidance on the option that they prefer for the Specific Plan Area so that we may begin a concentrated effort to get the Specific Plan into the environmental review process in the near future. We would hope that this guidance could be given in early November 1991." Sincerely RECXW ED for the applicant, OCT 10 1991 � Q ` CITY COUNCIL f SAN LUIS OBIS 0,C9 V� Andrew G.Merriam,AIA,AICP Principal 1350 Marsh Sneer San Luis Obispo. California 93407 (805) 543.7057 Andrew G. Merriam. AIA. AICP ' z ' m �U ►.t �- ` 0 y � • p y DC Q xz a �: aQQ � z Q p Z Z o x U •4f OC - ,y 00 LLJ WCL v `�i IF:e:..IQ:;p..fr.. II � o �:.• AREM % •'� -_ ���' :Tirr_�. �.:::` _ .ilia-1:�'.he�ki. C'-� ! `\\ ''\ _ M •/ / 'ii_.R "v�]p .� Plt::r.i, :cr Yri:' `' •i•. \. i� � 4`� ���y �'� S .•• "•fes• � �� �.\'�\, \ -.�- �II 4 A. Obi 3 .� ')per) \•,\��� II Option #2: Agricultural Emphasis This option provides the extension of the Regional shopping as proposed in Option#1 which when fully developed would provide up to $1,000,000 annually to the City of San Luis Obispo general fund in sales taxes. This proposal differs significantly from Option#1 in that only the non farmed portion of the Dalidio land adjacent to Madonna Road of approximately 13 acres would be retained for residential development--a retirement community has been considered for the site. The balance of the land would be offered for sale to the City for agricultural/open space uses. Under City control there would be no further pressure for private development on this 67 acres which includes a four acre park extension along Prefvmo Creek as well as the preservation of an additional 5 acres in. eucalyptus trees in the residential arra Cost and Payment Strategy. While the details could vary, payment of the$5.8 million for the agricultural land could come from the increased sales tax generated by the commercial development mentioned in the first paragraph of option#2 over, for example, a 10 year period. This approach could avoid asking the voters to approve a bond issue or altering other commitments made on the City's general fund. It is noted that residential land annexed and ready for sale to a developer is worth in the area of$300,000 per acre. This offer to the City places a value of approximately $87,000 per acre for the 67 acres or approximately 29% of its annexed value. Page 5 TABLE 2: PROPOSED LAND USES: OPTION #2 (Dalidio Specific Plan Area)(1) (REVISED 10-6-91) Category Acres to total (2) 1. Commercial: Phase I 21.4 16.5% Dalidio 2. Commercial: Phase II 17.3 13.3% Dalidio TOTAL COMMERCIAL 38.7 29.8% 3. Medium High Den. (R-3) 12.4 9.6% Dalidio trees/open space(3.2acres) 4. Agriculture 63.4 49.0% Dalidio trees/open space(1.8 acres) 5. Park/Open Space 3_8 2.9% Dalidio TOTAL AGR/OPEN SPACE 67.2 51.9% 6. Freeway access 5.8 4.5% Dalidio 7. Public Roads: Prado Road extension 4.4 Madonna Road widening 0_9 ROADS TOTAL 5.3 4.1% Dalidio GRAND TOTAL 129.4 acres 100% NOTES TO TABLES: 1. The number of units and acreages identified in this table are for the purpose of determining the general land uses and their attendant impacts. It is possible that the actual number of units or the square footage will vary slightly up or down as actual site planning takes place. 2. This percentage is based on a base of 185 acres within the Dalidio Specific Plan Area. The individual ownerships,based on a planimeter measurement by area are: Dalidio 129.4 acres Madonna 32.2 acres McBride 23.4 acres Page 7 F. .:; ,,� \•U� J 'moi . .1�, " \• \�Q`/� ,.Ilk Jt W 0 N N Z C 'J" '� y ! /'\" Or:• i:Y•• 1 7 "�� Z � y 96 US cwoc g= 30 .e w 40i LL LL Ile zz_ VL llp ''r 1 �'1 , / 4, try. ° w ••v i� �+•,: .;�:�p!`� ..r•e .`. � }i1t,+•`� •� i •"}�. -r v _ 11 i ' l i IC' ••�� I // � 1 +nw •yam/rr'•,Ir(��' �' .u� W• /, _ ' �,1f/�, Il ■ ^. G �.�S(`�. _, 9cz 1 PIS Xt •• , .sem "! o ► I�,\,,J ,�I r '� � I. � J�n . � � �1 I�• Until we are explicit on the second question, our answer to the first question will only tantalize or frustrate others. It will not resolve the dilemma the City faces regarding the future of this area. Arnold, Jeff and I are available at your convenience to further discuss this impending situation and the City's response to it. JD:mc c. Management Team Attachment d/calcicics Page 2 -- Water Service to the Airport Area Cal Cities would be willing to work on the creation of a County Service Area (CSA) and the design and construction of a "community" water service system for the airport area. Cal Cities Water Company (actually Southern California Water Company) provides service to over a million California customers. Some of these customers are within city limits — eg. parts of Santa Maria and Simi Valley. Cal Cities maintains that other cities have no problems with their providing service. By a show of hands, the airport property owners attending the meeting supported Cal Cities filing of a request with the PUC to expand its service area. Cal Cities representative said that they could submit a PUC application by mid-September. (To date, the PUC has not notified the City that an application has been received.) Policy Issues The question of services, appropriate land use, quantity and quality of development and growth management are linked. Given this complicated linkage, there are a number of related policy questions. Assuming that both the City and County Land Use Elements are amended to show the same or similar patterns of development for the airport area, then key policy questions include the following: 1. Should the actions of the Airport Area Property Owners and C21 Cities Water Company affect the City's position concerning State %r2ter? Naciemento water? Discussion If the City intends to serve airport area development consistent with the Airport Area Concept Plan, then it should ensure that it has or will be able to secure sufficient water. In November, 1990 the City Council established the City's water supply requirements at 19,400 Acre Feet to meet current general plan needs. Water supply projects were recent4i identified in the 1991-1992 Water Operational Plan reviewed by the City Council on September 3, 1991. Boils the Stare Water Project and the Naciemento Project were described within the grater Operational Plan If the City opts for the Ataciemento Project and abandons its State Water reservation, then Cal Cities could request the use of all or pan of the City's stare water reservation If the Ciry maintains its current 3,000 AF reservation, Cal Cities might still request a Stare water allocation from those not used by other agencies -- eg. Arroyo Grande. . 2. Does it matter who provides sen°ice to the airport area if both City and County General Plans show the same type of land use in the area? Page 4 -- Water Service to the Airport Area 4. Can the City control the quality and timing of groH4h in the airport area by promising services (sewer and water)? If the City can provide services, will this be a sufficient incentive for property oAmers to pursue annexation? Will the provision of City services be sufficient to area property owners to compensate for limits imposed by City groviih management policies and design review requirements? Discussion If a property owner wants to develop, the attractiveness of annexation will depend on how much development the City will allow, the type of development allowe4 the timing of development, and the delive7y of services (water and sewer). If there are competing service providers and the level of service is similar in quality and cost, then we can assume that the property owner will pick the strategy that will enable the ultimate level of development with the least constraints -- constraints such as design controls and non-residential growth management. However, we have been infomred by area property owners that'their current desire is to be within the City. 5. NMII Cal Cities service result in the installation of"substandard" infrastructure that the City may have to take over some day if it fails? Discussion Cal Cities senice to the Airport Area may result in the construction of infrastructure which does not meet Ciry standards If the area develops under County jurisdiction, roadways, sidewalks, M,mer lines, sewer lines, etc. would be constructed to County standards which may cause problems in the future if the City allows annexation of the Airport area and assumes responsibility for the infrastructure...Accepting responsibility for maintenance of infrasrrucrure which is not constructed, tested and inspected by the City can and has lead to problems such as inadequate pipeline sizes, excessive leakage, pipelines outside of public right-of-ways, inadequate pavement and street design The Ciry could work with the Counry to establish mutually-acceptable infrastructure standards for the Airport Area and develop a master plan for infrastructure. This effort might be supported by the property owners if the cost of improvements would not be signiftcantly more than the cost of improvements now required to meet County standards. 6. Has the City stated its intent to provide services to the airport area and can it ensure a time table for these services? Discussion The City's Water and Wane Water Alanagernent Element (1989) includes the airport area within its service boundary. However, the current Ciry Land Use Element designates the area as 'Rural IndusmiaL" By definition, Rural Industrial uses are MEETING AGENDA DATE NREM # COKSTO: ❑• Acton ❑ FYI l!J�EAO 0CDD DIR M�d Q' o ❑ FIN.DR CAO ❑ FIRE CHIEF IE) FW DIRPacific RWG. ❑ roua Qi • ❑ mcwr.TEAM ❑ Pxc DIR. rig C-1 RFADME 13— Q FUnLDIS CorporUdon 641 HIGUERA STREET SUITE 200 October 17, 1991 SAN LUIS OBISPO. CA 93401 805/541-3848 Honorable Mayor and City Council FAX 805/541-9260 City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93403 Dear Mayor Dunin and Council Members, At the back of your staff report for the October 21 meeting is an "issues paper" regarding government office locations and the tripolar policy. Also attached is a memo from Planning Commissioner Gurnee suggesting changes and clarifications to the tripolar policy. We have a particular interest in the tripolar policy. We have been doing, advance planning for the property at the corner of Elks and Prado. We believe that this is an excellent location for larger scale, regional offices, both for government agencies as well as private businesses. Our letter to you dated July 25 summarizes our thinking. Another copy has been attached. The City has, in practice, encouraged government offices to locate in the three "poles". It has been increasingly clear that larger offices, for which downtown locations are often impractical, have had difficulty finding space in the preferred areas. We believe there are advantages to the community in having these regional-serving offices located in a consolidated area, near to the freeway. Not only does this approach facilitate multi-purpose trips by clients/customers, it also provides opportunities for car pooling and transit, for day care, for support services to reduce offsite trips, and for the open space and pleasant ambience of a "campus-like" work environment. Furthermore, by keeping these larger- scale developments from being scattered throughout the town, traffic impacts on residential areas can be reduced. Thus, we agree with the idea that the tripolar policy should be clarified to encourage other governmental offices serving a regional clientele to locate in specified areas. We also believe our property is a logical extension of the pole Mayor and City Co...ocil Page 2 which has evolved around Prado and Higuera. Including regional offices for private businesses would also seem beneficial for the reasons cited above. We have applied to the City for a General Plan amendment to allow for office development on this property, in multiple phases over a long period of time. Our request has been denied by the Planning Commission and we have appealed their action. You are scheduled to hear our appeal on November 5. We hope at that time to expand on our thinking, which we believe is sensible and convincing, that the designation of this part of the City for offices is beneficial to the community. If you have any questions, please call me. I look forward to November 5 when . we can discuss our ideas further. t;7 , Dennis Moresco Chief Executive Officer attachment: July 25 letter cc: Pam Voges, John Dunn, Arnold Jonas Mdland Pacifyc Buil 641 HIGUERA STREET SUITE 200 July 25, 1991 SAN LUIS OBISPO. CA 93401 805/541-3848 Mayor and City Council FAX 805/541-9260 City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93403 Dear Mayor Dunin and Councilmembers, We appreciate your current efforts to review the most recent draft of the Land Use Element update. Among the topics you may discuss include possible changes to the Land Use Map. We have an interest in property located at the northeast corner of Prado and Elks, across from the Corporation Yard and offices and adjacent to the freeway interchange. (This does not include the drive-in theater.) This property is currently in the "Interim Open Space" category. The existing General Plan indicates that it is appropriate for urban uses if flooding problems can be addressed. We believe that the most appropriate use for this property would be offices, including regional offices for State or federal government agencies. The property is very near the Higuera-Prado corner, which is designated as one of the government office nodes. It is directly across Prado from a major complex of City facilities including offices and other support functions. Eventually, pedestrian connections both along the Prado Road sidewalk and across the creek would provide direct links to the Walter Brothers complex and to the new County Social Services Center. Its proximity to the freeway interchange will help reduce traffic in residential neighborhoods because both employees and clients of these regional offices would have direct freeway access. We expect to offer to dedicate a significant portion of our property to accommodate the future, improved interchange, if the City and Cal Trans decide that is preferred. There are no nearby residential areas to be affected by traffic or noise; the site itself is too close to the freeway to be best used as residential. Mayor and City Cowicil Prado and Elks We have submitted a General Plan Amendment and PD Re-zoning application to the Community Development Department. We envision a plan that includes an attractive design with plazas and other amenities to create more of a "campus" like environment; some mixed use (primarily office-related retail); an on-site day care facility; and a traffic management program which we hope to be a model for other office or commercial developments. The development would be phased over several years. The Planning Commission's Draft LUE map places this property in Special, Design Area No. 7, and the accompanying text states: "This area may be further developed only if flooding can be mitigated without significant harm to San Luis Obispo Creek. Continuation of agricultural use or low-intensity recreational use is appropriate." We request that you further indicate that when this area is proposed to be taken out of interim open space and further development is considered, that office uses are appropriate for consideration, through the usual review process of a General Plan Amendment and PD Re-zone. Of course, the requirement that flooding problems be handled in an environmentally sound manner should remain. Thank you for your consideration. If you have any questions, or need further information, please let me know. S cc: Arnold Jonas, Community Development Director ATE MEETING _�� AGENDA MPA � 1O=ITEM f, _ MERRIAM PLANNING COP, ro. ASSOCIATES ❑*Den OtmAcdon ❑ Fn W CB. L�Ac'ao �ruv.DD D.D1k 16 October 1991 f3' Dir Tk Members of the City Council ❑ MF._t F ❑ M U CO Da L a11, ❑ �cSan Luis Obispo C�1D 990 Palm Street UTILD R. San Luis Obispo, CA 93401 L�— RE: Potential Regional Shopping Center and the commercial growth rate. Dear Council Members: At the risk of being repetitive, I wish to comment again on the non-residential growth rates presented in the Planning Commission and staff report. The discussion there is geared primarily toward the addition of small and incremental development much of it in the downtown area. This combination of adding 60,000 feet per year or 319,000 in any five year increment does not work for an addition to a regional shopping center such as the one at Madonna Road and U.S. 101. There are three interlocking flaws to the method presented. First,and this is most important, shopping centers function as a unit and not as a collection of individual stores. The proposal before you exempts a department store from the growth management process. Unfortunately, except in the downtown core, this does not necessarily facilitate the construction of a department store let alone a shopping center. This is true because department stores,which form the anchors of a shopping center, must be subsidized by the shopping center developer. Typically this means that the developer sells land to the anchors at a price below the purchase cost. In tum this means that a developer recoups his costs by charging relatively high rents to the smaller mall shops which wish to be next to the anchor department store which draws in the customer in the first place. A shopping center,therefore, cannot be segmented between the anchors and the shops and the growth management plan as proposed has a significant potential for doing just that. For example, the construction of a several hundred thousand square feet addition to the County government center just prior to and within the same five year increment as that desired by a shopping center could delay construction by say four years. This is a time period long enough for shopping patterns to change and the proposal become obsolete and certainly lose its financing. RECENED 7350 Marsh Street San Luis Obispo, California 93401 (805) 543.7057 Andrew G Merriam. AIA, AICPIL C1" �BIgpO. CA ,,iN. In the San Luis Obispo situation, the developers we have talked to want two department stores in the range of 90,000 to 120,000 square feet each. To support this they need approximately 60 to 70,000 square feet of shops. This size is more than justified by the consumer dollars available and currently leaking primarily to Santa Maria and Santa Barbara. This approximately 270,000 square feet of regional shopping comes in a single viable phase or unit. The proposed growth management regulations do not give adequate assurance either to the developer or to a bank or other financing institution--and every center no matter who the developer is requires some sort of financing-- that a center can be developed in a reasonable time frame or with certainty because of the potential of having to wait for two five year periods to achieve the square footage required to make a viable unit. Second,the City of San Luis Obispo expects major improvements to be made by the developer-- eg.widening of Madonna Road,installation of water and sewer mains, assistance with the costs of the Prado Road overpass at U.S. 101 etc. But, as mentioned above, the only way that a developer can get money to finance a project including the paying for the City required conditions and fees is to have a complete package that demonstrates the project's financial feasibility. This means keeping the guess work and risk to a minimum. The financing package must also provide a reasonable return to the developer or he will invest elsewhere where the return is more assured. To meet the City's off site conditions and fees requires assembly of a development package that is big enough to gain the efficiencies of scale and to cover the expenses and within a reasonable time frame. (This is often difficult as the French Pavilion and Court Street projects have proved recently.)The growth management program proposed in your packet adds complications to the reasonable size and time constraints. It will also pit one developer against another potentially leading to a political pushing and shoving contests which will embarrass all. Ultimately the City may not get the improvements that it requires. The City will then have to turn more to other smaller developments and the citizens(taxpaying consumers and homeowners)to cover such big ticket items as the Prado Road Overpass and the widening of Madonna Road, items which must ultimately be done whether or not the Dalidio area develops. (We are already seeing significant traffic congestion while,at the same time,also recognizing major voter resistance to more taxes and bond issues.) The growth management plan is at odds with potential sources of money to solve these problems. 2 Third and finally,is the question of the City's interest in purchasing open space by gaining the sales tax that an addition to the regional shopping complex at Madonna Road could provide. The longer the approval process or waiting periods, the less timely will these tax funds come available. In addition the tighter the size limitations or the more costly the conditions, the less competitive the addition will make the regional center. The result? The center will attract proportionately fewer customers and generate less sales tax for the City. The City's fair share of the dollar leakage to the south will not have been achieved. Political, social, and environmental concerns of serving our population without undue driving are also arguments in favor of a growth management plan that truly achieves the City's objectives. As I understand it the proposed plan does not do the following: 1) fully meet the City objective of securing a quality project with major department stores that City residents desire, 2) provide certainty enough in either the economic or time factors to insure that the development can gain funding and fulfill the off-site conditions that the City would attach to the development, 3) insure a timely increase of City sales tax revenue with potential for purchasing open space. In conclusion,the non-residential phasing concept as proposed is not compatible with development of large commercial facilities. It must be deleted or significantly altered if the Council wishes to strengthen the regional center and gain the related sales tax. These objectives can be met within the concept of growth management as shown in Attachment A. I am prepared to speak further on this issue at the Monday Council meeting. Sincerely, Andrew G.Merriam,AIA,AICP Principal xc. John Dunn Arnold Jonas 3 ATTACHMENT A Suggested changes to the non-commercial growth management guideline. The following proposal seeks to keep the overall growth management concept while allowing the flexibility of phasing to address the issues raised in my letter. In concept it keeps the exempt department store and reserves an additional 350,000 for use in the regional center concept. To remain within the growth management limits set out in the staff report,this square footage is reserved similarly as what the staff report shows reserved for the downtown. The only difference is that the shopping center is basically a two phased project which cannot be allocated to any one five year segment. The downtown could also be seriously hurt by the figures in the table as proposed. For example, if the commercial core grows at a regular incremental rate and San Luis Obispo County expands its office needs in one major increment, a project such as the city hall expansion or the Court Street project,when revived, could be delayed with severe negative effects on our community if the five year growth increment were used up. (The City will not, of course,be able to limit the county since they are a superior agency. Indeed the City has just made a major effort to keep them in the downtown area. The growth management ordinance is counter productive to this effort.) Changes I suggest would be as follows: Paragraph#3 amended to read: To encourage development in the downtown and Madonna Regional Shopping areas, there will be a reserve for those areas, so that downtown and the regional shopping area can maintain and possibly increase theirshare of citywide nonresidential building area, and maintain,as far as possible, consolidated locations for comparison shopping. Table--Nonresidential Growth Limits amended as follows: Interval Added Downtown Madonna Rd. All other Cumulative Total in interval increment increment increment addition (target) (target) 1992 (base) 1,300,000 627002000 1993-97 380,000 61,000 70,000 249,000 380,000 7,080,000 1998-02 380,000 61,000 70,000 249,000 380,000 7,460,000 2003-07 380,000 61,000 * 70,000 * 249,000 380,000 728402000 2008-12 380,000 61,000 70,000 249,000 3802000 8,220,000 2013-17 380,000 61.000 70.000 249.000 380.000 8,600,000 Summary 305,000(1) 350,000 1,245,000 1,900,000(1) Totals Notes *These numbers are target averages. Any amount as long as it does not exceed the summary total listed may be used in any two five year increments with the approval of a development plan or a specific plan. This flexibility shall be allowed because the economic health of the community is as important as the jobs/housing balance which is the justification of the growth management program shown in the table. 1) These figures are the same as the limits established in the current staff report.