Loading...
HomeMy WebLinkAbout05/02/2000, 1A - AUTO DEALERSHIP LOCATION STUDY MeeCng De¢ counat 11 j ac,Enba nEpont ' AW� CITY O F SAN LUIS O B I S P O U FROM: Arnold Jonas, Community Development Director Prepared By: John Mandeville, Long-Range Planning Mana SUBJECT: Auto Dealership Location Study CAO RECOMMENDATION Review and consider the Auto Dealership Location Study, but defer taking specific action regarding the Study's recommendations until after consideration of the conceptual proposal for the McBride property(companion agenda item). DISCUSSION Study Overview On November 16, 1999 the City Council directed staff to prepare an analysis of location options for auto dealerships in the City. Staff recently completed the attached Auto Dealership Location Study. The Study takes into consideration city land use, applicable adopted policies, industry standards and local dealership preferences and describes how these factors relate to the implementation of adopted City policies regarding auto dealership location. The Study identifies how obstacles to implementing the adopted dealership location policies may be overcome in a concluding discussion of recommendations. Summary of Alternative Sites Although the McBride property is not yet annexed, it is already part of the auto sales reserve (LUE Figure 3) and is still considered the best site for development of new auto sales uses in the City. Alternative sites are located in three principal areas,the Auto Park Way area, the Broad Street area and the South Higuera area,which includes sites on Prado Road and Tank Farm Road near South Higuera Street. The three top ranked alternative sites include the Los Osos Valley Gap property, 40 Prado Road, and Froom Ranch. The quality of other potential sites drops significantly after the top three. The mid-range sites include Unocal property on Tank Farm Road and a large parcel bordered by Vachell Lane and South Higuera Street that is currently used for RV storage. The lower ranked sites include property on Broad Street that is typically considered too expensive to be developed with auto sales uses. IA-1 Council Agenda Report—Report Title Page 2 Study Recommendations The Study identifies the following four implementation measures to solidify City policy with respect to the auto sales reserve, and to ensure that the objectives outlined in the General Plan are met. 1. Amend Figure 3 of the Land Use Element to add 11 acres of land into the auto sales reserve,using the alternative site analysis as a guide. 2. Amend Land Use Element Policy 1.13.5 E to allow limited off-site dedication/preservation of open space for projects in the Auto Park Way. 3. Amend the Zoning Regulations to require Administrative Use Permit approval for new auto sales uses in the C-S zone. 4. Implement an incentive program to facilitate dealership development in the auto sales reserve. Follow-up/Use of the Study The Council and its advisory bodies can use the Study and its recommendations to develop a comprehensive strategy to address auto dealership locations in the City or as a reference in the consideration of individual auto dealership proposals. However, since the Council assigned this study, a new proposal for the McBride property has surfaced, and is the subject of the companion agenda item that follows this one. Because the McBride property continues to be the best site for added new auto sales, staff recommends that Council defer taking an action on the Study until reviewing the companion agenda item regarding the McBride auto dealership proposal. FISCAL IMPACT No fiscal impacts will result from reviewing and filing the Study. Subsequent City actions based on the Study may have fiscal impacts that should be considered at the time the specific actions are considered. ALTERNATIVES Refer the Study back to staff for further analysis or refinements. ATTACHMENTS 1. Auto Dealership Location Study 1A-2 Attachment 1 city of san tins OBISpo community development oepa>ztment Auto Dealership Location Study Date: April 10, 2000 From: Arnold Jonas, Community Development Director By: Michael Codron, Planning Technician John Mandeville, Long-Range Planning Manager IA-3 Auto Dealership Location Study Introduction In recent years the area within the City designated specifically for Auto Park uses has been fully developed. Yet, there still exists a demand for sites from new and relocating dealerships. At the City Council meeting of November 16, 1999, the Council requested that staff prepare an analysis of location options for auto dealers in the City. The following study provides an analysis of General Plan policies, Zoning Ordinance requirements, land use planning criteria and auto dealership development criteria in response to the Council request. Purpose of the Study The purpose of this study is to provide the Council with a framework for implementing the goals established by the General Plan for auto sales in the City. The City is presently at a crossroads in terms of its policies towards new automobile sales. Auto dealers located downtown have shown an interest in moving to larger,more practical sites and are being invited to consider locations in other communities. Retaining existing auto dealerships is a high priority,however, available land in the Auto Park Way area has been fully developed. The General Plan identifies land presently outside of the City for auto park expansion,but constraints related to land costs and annexation requirements have stalled development of the land for many years. Scope of the Study The General Plan goals, policies and programs that direct City action with respect to auto sales determine the scope of this study. The analysis includes a span of issues, factors and criteria necessary to achieve the goals and policies of the General Plan and to evaluate the feasibility of the existing program. This study begins by looking at General Plan policy as the community's vision of how auto dealerships should be accommodated in the City. It then looks at existing dealerships to determine how their needs can best be. met, and discusses obstacles to achieving City policy goals and auto dealership goals. Finally, it looks at ways to overcome these obstacles and provides a menu of incentives intended to assist in the development of compatible sites. One of the main issues that is dealt with is expansion of land available in the City's auto sales reserve. This study presents an inventory of undeveloped land within the City's urban reserve that meets general site requirements for auto dealers, and discusses the quality of these sites in terms of General Plan consistency and consistency with other City goals. 2 IA-4 Auto Dealership Location Study Goals for Creating an Auto Dealership Center Key General Plan Policies' The Land Use Element(LUE) of the General Plan makes several policy statements with respect to the location of auto dealerships in the City, and how the City will achieve its goals. Appendix A contains the full text of these policies. The following bulleted list provides a succinct overview of the key policy statements: • The City intends to create around Auto Park Way an easily accessible and attractive auto sales and service center(LUE 3.5.7 A). • The City will reserve about 50 acres total for vehicle sales. (This amount is expected to be sufficient for relocation of dealerships located elsewhere in the City, plus expansion of dealerships in proportion to projected County population growth.) (LUE 3.5.7 A.) • Auto sales in areas of the City other than Auto Park Way should be minimized, in order to reinforce the auto sales center and to maximize space for other uses in other locations (LUE 3.5.7 B). • LUE Figure 3 identifies specific parcels in the Auto Park Way area that are to be considered part of the Auto Sales Reserve, including a portion of the McBride property, which is currently outside of the City limits (See Figure 1 on the following page). • One of three alternative uses for the Los Osos Valley Gap property is vehicle sales (LUE 8.7 A). • The City will provide incentives to encourage relocation of vehicle sales to the Auto Park Way area(LUE 3.7.8). Related City Goals The key General Plan policies listed above have implications for the City's fiscal health. New vehicle sales contribute significantly to the City's sales tax revenues, the largest component of the general fund. The pie chart below shows that in 1998, Auto Dealers and Supplies generated 20%of the total City situs sales tax revenues. As a result, it is important that the City retain existing dealerships and create an environment with opportunities for the establishment of new dealerships. Situs Sales Tax By Type Other I 27% IS Gen era] Consumer „? Goods ❑Business-to- 35% Business M Auto 18% Dealers & Supplies 20% 3 1A-5. Aft 5i PrEM11-7 MEN �k" -M. WN, 1vMV -M1 ZZ -,*,%I M2P, nr .. ...... .... Ar '17. ..... IN .74 IN ®R 0 T �eZ 4 —t�''P. yf 4-1 4. -Y' • Qr UX 51 M DOOR= Total area. of shaded N ' O properties equals: 39.3 Acres ' M W A vW -!T mg . . . . P M �R 141. M 44 City Limit Line f1cluRe i - auto saLes ReseRve Auto Sales Reserve (From LUE Figure 3) � A Auto Dealership Location Study The concept of maximizing "space for other uses in other locations" (LUE 3.5.7 B) is central to our land use and downtown goals. The properties occupied by the current dealerships outside of the Auto Park Way area present excellent redevelopment opportunities for uses more compatible with their surroundings, especially along the Monterey Street corridor. Existing Automobile Sales in the City Presently, new automobile sales occur in three principal areas (see Figure 2 - Map of Existing Auto Dealerships on the following page). Monterey Street, or Uptown, is home to three dealerships. (A fourth, San Luis Bay Motors, a Suzuki dealership, relocated to Paso Robles in 1999.) There are two dealerships on Broad Street,between South and Orcutt. The remaining City auto dealerships are located in the Auto Park Way area. The General Plan states that auto sales should be minimized outside of the Auto Park Way area to reinforce the Auto Park and to maximize space for other uses outside of the Auto Park(Land Use Element 3.5.7 B). Monterey Street (Uptown) The Uptown dealerships include Stanley Motors, Smith Volvo, and Cuesta Cadillac Oldsmobile. Both Stanley Motors and Smith Volvo have expressed significant interest in relocating their dealerships to the Auto Park Way area. Stanley Motors operates an older service facility and has had to acquire property across Monterey Street for additional vehicle display and servicing areas. Smith Volvo also runs their business on multiple lots, and has expressed a need for additional showroom and service space. Cuesta Cadillac Oldsmobile is the only dealership on Monterey Street that has enough land to maintain a large inventory of vehicles and an adequate service facility on one site. While initially interested in relocating, after a recent sale of the business, Cuesta appears satisfied with their present situation. However, their site is underdeveloped relative to City standards for the C-T(Tourist Commercial) zone. In the long range; the land has been identified as better suited for tourist serving uses such as a hotel, conference center, or restaurant. Cuesta's dealership is presently a legal, nonconforming use, and certain restrictions apply to the continuation of the use as described in the Zoning Regulations (SLOMC 17.10). Overall, City policy that promotes relocating the Uptown dealerships runs parallel to the business owners' own needs for servicing their customers. The General Plan recognizes that these properties have the potential to be utilized more efficiently from a land use perspective. And, the dealers are interested in pursuing larger, more state of the art facilities that do not create sidewalk encroachment problems, loading/unloading conflicts, damage from tree"droppings", or security issues. In the case of Cuesta Cadillac Oldsmobile, the use is nonconforming and so certain limitations already apply that could cause the dealership to prefer relocation in the future to fulfill their plans. 5 lA-7 Adak low MONTEREY 'r. __.._..T BROAD i AUTO PARK 71 //y z fIGuue 2 - exjstmG aealeztship locations City Limit Line Auto Dealership Location Study Broad Street There are also two dealerships on Broad Street, Valley Mazda and Saturn. Valley Mazda has recently redeveloped their site, giving the buildings a face-lift and expanding across Caudill Street for additional vehicle display area. Saturn has recently opened a new dealership that originally focused on used car sales,but now includes new car sales and leasing as well. Saturn is currently pleased with their arrangement since the Broad Street location offers significant drive-by traffic and easy access,but may consider other options given the opportunity. Since the dealerships on Broad Street have invested significantly in their facilities there, or are otherwise pleased with the location,relocation of these dealerships is not as likely in the near term relative to the Monterey Street dealerships. Redevelopment along Broad Street will be examined as part of the Broad Street Corridor Improvement Plan. In the long run, it is unlikely that additional new car dealerships would locate on Broad Street, north of Orcutt Road,because the parcels are too small to support vehicle display and service centers. Although, in the absence of expansion sites, the City continues to see interest from auto dealers to develop in this area. Obstacles to Achieving Policy Goals Over the past few years the City has pursued the goals identified in the General Plan. However, several obstacles have become arisen that prevent the City from achieving its General Plan Goal (LUE 3.5.7 A. The following sections outline these obstacles. Available Land Presently, the City does not have within the City limits 50 acres for auto dealerships as called for in the General Plan policy cited above. The McBride property, which is the last piece of undeveloped land designated for auto sales uses by the General Plan, is still outside of City limits. The property is currently zoned Agricultural by the County, however the County has changed the zoning of agricultural land on the edge of the City to urban uses in the past. There is no certainty that the County will continue to designate the McBride property for open space agricultural uses. Even with the annexation and development of the of the McBride property, the area designated as an auto dealership reserve is 11 acres short of providing the 50 acre goal described in the General Plan. 50 ACRES?WHERE? Another issue related to land availability has to do with the fact that Figure 3 in the Land Use Element shows only 39.3 acres of land. This includes all of the developed parcels within the City as well as half of the McBride property. This is 11 acres shy of the 50- acre target established by LUE 3.5.7 A. Although reference is made in the General Plan to the potential for including the Los Osos Valley Gap property owned by Alex Madonna (LUE 8.7), there are other, equally possible uses for that property. Consequently, this 7 1A-9 Auto Dealership Location Study approximately 11 acres of additional land in the auto sales reserve,bringing the total to 50 acres. Appendices B &C of this study describe and rank potential locations where the additional 11 acres may be available. Open Sl2ace Policies Another reason for the delay is that property owner participation has been difficult to achieve because of City open space dedication and preservation requirements for the property. The Land Use Element and Open Space Element(OSE) contain specific dedication and preservation requirements for annexations in the Auto Park Way vicinity. Appendix A contains the full text of these policies. The following bulleted statements outline the significant policies and requirements. • Each annexation shall help secure permanent protection for areas designated Open Space (LUE 1.13.5). • Dalidio area properties shall dedicate land or easements for approximately one-half of each ownership that is to be preserved as open space(LUE 1.13.5 E). • If a plan for vehicle sales expansion onto prime agricultural soils is approved, it shall provide for permanent preservation of prime soils (LUE 3.5.7 A). • If a plan for vehicle sales expansion into wetland or creek areas is approved, mitigation shall consist at least of restoration.and permanent preservation (of wetland and creek resources) (LUE 3.5.7 A). • When the remaining unincorporated area bounded by Los Osos Valley Road, Madonna Road, and Highway 101 is annexed, the northern portions of the McBride and Madonna properties should be preserved for agriculture (OSE 10.2.1 A). These open space policies are considered an obstacle to achieving City auto dealer goals because they may impact the ability of the developer to create efficient land parcels for auto dealership development. As a result, the policies make property owners reluctant to annex. In the case of the McBride property, the property owner feels that the 50% on-site dedication requirement would result in smaller and less desirable lots for auto dealership development. But, these policies are considered essential for achieving City open space goals. The City Council should consider how these policies and goals interrelate. If flexibility in the language of these policies can facilitate achievement of both open space and auto sales goals,then changes should be pursued. Other General Plan and Zoning Obstacles The City's regulatory environment has reinforced the ability of prospective and existing auto dealers to develop and expand their dealerships outside of the Auto Park Way area. Although the General Plan states that new dealerships should locate within the auto sales reserve (LUE Figure 3), the City's zoning matrix allows auto sales to be established in the Service-Commercial zoning districts without discretionary use permit review (see Figure 3 -Zoned for Auto Sales on the following page). This situation gives the City little discretionary review over new development proposals for dealerships in the C-S zone. 8 1A-10 --�- ✓ \ \, J r � Q,5 0 ao ,l pp Ri ORCUTT fro TANK FARM �J S � 1 i /7 i I IV City Limit Line fIGURE 3 - ZOTIEa fOR dUtO SALES Auto sales allowed by right Auto Dealership Location Study Dealer Preferences To a certain extent, it is possible that dealer preferences may have an impact on the City's ability to achieve its goal of minimizing auto sales uses in other areas of the City, outside of the Auto Park Way area. Certain dealers may actually prefer to be away from the auto park, and may in fact benefit from the retail environment in other areas of the City. Lack of Incentives LUE Program 3.7.8 says that the City will use incentives to "encourage" existing auto dealerships to relocate to the Auto Park Way area. At this point in time, the City has not developed an incentive program to assist auto dealer relocation efforts and to help insure achievement of City goals. A list of possible incentives is included in this study. Overcoming the Obstacles and Achieving the Goals This study identifies three key actions that the City can take to overcome the obstacles identified above. These include providing new dealership locations,modifying General Plan policies and zoning requirements, and providing incentives to facilitate relocation, as supported by the General Plan. Provide New Dealership Locations The purpose of providing new dealership locations is to insure that sufficient land is available to meet the anticipated needs of auto dealers. As noted earlier, only 39 acres has been designated in the General Plan for an auto sales reserve area while the policy states that there should be about 50 acres. If reserving 50 acres of land in the vicinity of Auto Park Way proves to be infeasible, this study provides alternative sites where auto dealerships could be considered. The following provides an overview of the McBride property, the LOUR Gap property and alternative sites that are outside of the Auto Park Way area. MCBRIDE PROPERTY Half of the McBride property(12.62 acres) is officially part of the auto sales reserve (LUE Figure 3). According to LUE Policy 1.13.5, the other 12.62 acres should be dedicated or otherwise preserved as open space upon annexation. LUE Policy 3.5.7 further requires a plan for permanent preservation of prime soils if the McBride property is annexed. The McBride property remains the last piece of undeveloped land currently identified in the City's General Plan as part of the auto sales reserve. To promote the implementation of the City's General Plan policies, City staff has been working to facilitate annexation and auto dealer development on the property. Complying with the General Plan's on-site open space dedication requirements has been a problem for the landowner and developer. To remove this obstacle on the McBride property, it may be necessary to modify the 10 1A-12 Auto Dealership Location Study City's open space dedication requirements (See "Modifying General Plan and Zoning Requirements"discussed later in this study). LOS OSOS VALLEY GAP(ALEX MADONNA, OWNER) Although not part of the auto sales reserve, LUE Policy 8.7 identifies vehicle sales as one of three potential uses for the Los Osos Valley Gap property. Development of the property, similar to McBride would require prime soil preservation and open space dedication. The Los Osos Valley Gap property includes a total of 31.28 acres, with 15.64 acres of developable land. The Los Osos Valley.Gap property is a"prime" candidate for providing the additional 11 acres necessary to bring the total auto sales reserve to 50 acres (LUE 3.5.7 A.). The Gap property is considered"prime"because it meets several land use planning and auto dealership criteria(these criteria are detailed in the following section). Although 15.64 acres of the Los Osos Valley Gap property are considered developable, the auto sales reserve is only deficient 11 acres. If approximately 11 acres of the Gap property were to be designated for the auto sales reserve, 4-5 acres of the site could be retained for other uses identified in LUE Policy 8.7. Constraints relative to the Los Osos Valley Gap property include that the property owner, Alex Madonna,has not proposed auto sales as a potential use for this land. Also, other uses identified by LUE Policy 8.7 are equally possible. ALTERNATIVE SITES If the General Plan goal to centralize auto dealerships at Auto Park Way cannot be accomplished,then the City may want to designate a second auto dealership location. A complete list and ranking of alternative sites is provided in Appendices B and C, and is summarized later in this section. Business Owner Criteria for New Dealership Development Ultimately,it is the individual auto dealer who decides where their dealership will be located. Creating successful policies and programs to guide the location of auto dealerships should take into consideration the factors used by these businesses or risk having little"real world" application. In preparing this study, planning staff interviewed several area auto dealerships, as well as trade organization representatives from the National Auto Dealer Association and the California Motor Car Dealer Association. In addition, staff researched documents prepared by other jurisdictions regarding auto park locations. The sections below describe the criteria identified by the business owners and their representatives and were used to evaluate the alternative sites listed in Appendix B. Location, Location, Location Location is one of several important factors that determine the feasibility of developing a new auto dealership. Most new dealerships nationwide are developed in auto mall areas with freeway visibility, although some dealerships prefer to be away from other dealers, or have unique marketing campaigns and do not rely on the auto mall concept. i 1 1A-13 Auto Dealership Location Study Access Easy access is another crucial criteria. Freeway visibility actually means very little if the route to get to the site is non-intuitive or circuitous. Sales Environment Overall, the most important location factor is retail synergy. The Auto Park Way dealerships create synergy by conveniently creating comparison shopping opportunities. The Monterey and Broad Street dealers have some synergy because their locations are along commercial corridors that benefit from a large number of vehicle trips and close proximity to general retail sales uses. Size Real estate professionals and business owners have indicated that 3-5 acres is a minimum size for development of a new dealership. Street Traffic Characteristics The pace of traffic on the streets is an important factor to consider. At highway speeds, very little information about vehicles is available to passers by. Away from the highway, traffic passes by at relatively slow speeds and greater vehicle exposure is possible. This is particularly important for used car sales, which is a service many large dealerships now provide. Visible pricing is considered a primary draw for used vehicle sales. Land Cost Land cost is a major factor for dealers because,by the nature of their business, they use land inefficiently. In areas where land is extremely expensive, dealerships are not able to afford to maintain an inventory on-site. Pooling inventory off-site can work well in major metropolitan areas, but may not be feasible in this area since each dealership covers a much larger geographic service area than metropolitan dealerships do. According to local real estate professionals, property along Broad Street is currently at a premium and may be too expensive to support auto dealership uses. Additional Dealership Criteria There are a number of additional criteria that dealers use to determine the feasibility and desirability of a site for development. These criteria include costs of development (including infrastructure, construction costs and fees), area demographics, growth characteristics, existing vehicle registrations for their brand, and separation from other dealers selling the same brand of vehicle. Also included are operational criteria such as site security, sidewalk encroachment and loading/unloading conflicts. While all of these factors are considered during site selection, there is no "cookie cutter"formula that can be used to weigh potential sites. Car dealerships are not franchises; these businesses are typically owned and operated by independent businesspeople that make their own decisions relative to site selection. 12 1A-14 Auto Dealership Location Study City Planning Criteria The following sections briefly discuss the land use planning factors for determining compatibility of a site for auto sales uses. Land Use Compatibility It is important that sites identified for auto sales uses are compatible with the particular characteristics of these uses, such as large amounts of pavement, auto repair activities, and bright lighting. Vehicles sales should also be compatible with adjacent uses,just as land uses surrounding the County Airport should be compatible with the Airport operations. Consideration must also be given to alternative uses for any given site. For instance,while many land uses may be compatible near the Airport, some uses may be more suitable because they actually benefit from proximity to airport facilities. In a similar way, vehicle sales benefit from proximity to land uses that improve their exposure to potential customers and neighboring uses that are not harmed by the lack of human scale street aesthetics, traffic, and noise common to auto dealerships. Traffic and Noise Impacts Auto sales uses are a regional draw. The dealerships in San Luis Obispo serve residents throughout the County. As a result, major arterial roads best serve this traffic. Noise impacts can be associated with the automotive service aspect of dealerships. Service centers are not typically appropriate adjacent to residential neighborhoods. Open Space Protection Many of the remaining large, undeveloped parcels in and around the City are associated with significant agricultural,visual or biological resources. The General Plan identifies this issue and, for certain properties, insures that protection and preservation also occur where development is approved. City Form Auto dealerships have the least impact to city form where they are clustered. Because of their size and development characteristics, they tend to detract from storefront continuity and other factors that are important in the City's retail corridors. Dispersed auto dealerships along retail corridors interrupt continuity and disrupt pedestrian activity. Typically, the desire of municipalities to keep auto sales uses on the fringes of the city is compatible with the auto dealer's strong desire for less expensive land. Summary of Alternative Sites Appendices B & C include a criteria comparison matrix of each alternative site along with a general description of each property. Although the McBride property is undeveloped, it is already part of the auto sales reserve (LUE Figure 3), and is still considered the best site for development of new auto sales uses in the City. 13 1A-15 Auto Dealership Location Study Alternative sites are located in three principal areas, the Auto Park Way area, the Broad Street area and the South Higuera area, which includes sites on Prado Road and Tank Farm Road near South Higuera Street. The three top ranked sites include the Los Osos Valley Gap property, 40 Prado Road, and Froom Ranch. Scores drop significantly after the top three. The mid-range sites include Unocal property on Tank Farm Road and a large parcel bordered by Vachell Lane and South Higuera Street that is currently used for RV storage. The lower ranked sites include property on Broad Street that is typically considered too expensive to be developed with auto sales uses. Modifying General Plan and Zoning Requirements General Plan amendments maybe necessary to overcome policy obstacles identified earlier in this study. Land Use Element Policy 1.13.5 E specifically requires dedication of approximately one-half of the land in each ownership in the Dalidio area for permanent open space protection. The Land Use Element Map depicts this dedication requirement. In order to achieve City auto dealership goals, the City Council can modify the language of this policy to allow for some off-site dedication of open space to meet the total dedication requirement. Amending the language of LUE Policy 1.13.5 E to allow some off-site dedication of open space would be similar to several dedication requirements found elsewhere in the General Plan. For instance,LUE Policy 1.8.1 allows for preserving prime agricultural land off- site but within the urban reserve or greenbelt. LUE Program 7.14 allows developers of properties in the Airport Area to pay an in-lieu fee when protecting adjacent land is not feasible. In addition, Open Space Element Policy 10.2.2, supports the potential for transferring development rights between the Cal Poly Orchard area and the Dalidio area. Other policies that relate to preserving agricultural land in the area, such as Open Space Element Policy 10.2.1 and LUE Policy 8.8 would not need to be modified, because allowing additional flexibility in meeting the total requirement need not preclude requiring significant on-site dedications of open space as well. In order to reserve the 50 acres identified in LUE Policy 3.5.7 A, the City Council can direct staff to initiate a General Plan amendment to modify LUE Figure 3 to include an additional 11 acres of land. This study provides an evaluation of alternative sites to consider for inclusion in LUE Figure 3. Regulatory obstacles to achieving the City's goals for auto dealership development can be addressed by modifying the Zoning Regulations. As previously discussed, the Zoning Ordinance matrix (SLOMC 17.16.010, Table 9) allows auto sales in the Service- Commercial zone by right. As a result, the City has little discretionary oversight of the specific locations that auto dealers choose to build or expand their dealerships. The City can amend the ordinance to require Administrative Use Permit approval for retail sales of new vehicles in the C-S zone. This process could provide a procedural opportunity for the Economic Development Manager to work with a dealer on relocating to the area preferred by the community. The prospects for successfully using such opportunities would be improved if there were incentives for dealers to locate in the desired area. 14 1A-16 Auto Dealership Location Study Incentives The General Plan supports providing incentives to encourage relocation of vehicle sales to the Auto Park Way area(Land Use Element Program 3.7.8). Because of the perceived burden of open space dedication and preservation requirements in the auto sales reserve area, incentives may be particularly important to overcome a significant obstacle. Incentives can also help prospective developers overcome high land prices resulting from supply shortages, as the auto sales reserve approaches build-out. The following paragraphs discuss incentives intended to offset increased land costs and ensure that annexation and development of auto park reserve properties remain a feasible and attractive option compared to development under County jurisdiction. TRANSFER OF DEVELOPMENT CREDITS For the McBride and Los Osos Gap properties, annexation and development would. require an on-site open space dedication equal to the developable land to be annexed, and preservation of prime soils. A Transfer of Development Rights (TDR)program would allow a property owner or developer to provide the open space off-site. Using a TDR program is one possible incentive that could allow more of the land in this area to be developed for auto sales uses, effectively reducing the price of the land per square foot. OSE Policy 10.2.2 provides for the possibility of a transfer of development credits from the Cal Poly Orchard area to the Dalidio Open Space area. INFRASTRUCTURE FUNDING Some of the most significant costs of new development are the needed infrastructure improvements. This includes building new roads, sidewalks, storm drains, sewer mains, and water and fire lines. To the extent that the City is able to develop its own infrastructure in the area of the expanded Auto Park, a significant development cost can be abated and development of the land for auto sales uses would be more feasible. SALES TAX REIMBURSEMENT Sales tax reimbursement is a way to reduce new public facility costs related to auto dealerships, and can be used to encourage relocation of existing dealerships in the City to the expanded auto park. Under a sales tax reimbursement program, the City would use a portion of any increased sales tax revenues from new or re-locating dealers to reimburse them for public facility costs they incurred as a condition of development. This would require entering into a performance-based Memorandum of Agreement setting forth the specific conditions for reimbursing sales tax revenues, including the specific time covered,public improvements funded and method for determining eligible reimbursement amounts (including maximum amounts). FEE WAIVERS The City collects a number of significant development related fees at the time of building permit issuance. The Council can waive fees as an incentive to encourage annexation and 15 1A-17 Auto Dealership Location Study development of a specific project. The development of a 4-acre site with a dealership, including an 8,000 square-foot showroom and 4,000 square-foot service facility would cost approximately$78,800 in building permit, development impact and planning application (annexation, general plan amendment, environmental review and architectural review) fees, as shown in the following table. The Council could waive all or only some of these fees. Building Permit Plan Check and Inspection Fees 12,500 Development Impact Fees Water 13,300 Wastewater 5,500 Traffic 23,000 Affordable Housing In-Lieu 11,000 Planning Application Fees 13,500 Total $789800 AUTO PARK OVERLAY ZONE An Auto Park overlay zone is another method that the City can use to potentially alleviate development costs in an expanded auto park area. By limiting allowable uses, the overlay zone could have the effect of lowering land costs, making acquisition and development more feasible. The overlay zone is a tool for the City to further implement LUE Policy 3.5.7 by specifically identifying parcels that the City would like to see added to the auto sales reserve. The overlay zone could be accommodated through the Special Considerations (S)overlay zone. "S"zoned parcels require use permit approval of new uses, thereby ensuring consistency with the "special consideration' and with the General Plan. A recent example from Santa Maria shows how an overlay zone can reduce land costs and improve the viability of auto sales uses. In this case, shopping center developers consented to auto park overlay zoning on a portion of their property. In return, they were granted more favorable zoning for another portion of the site. The developer benefited from the entitlements granted by the City, and the City was able to reserve land specifically for auto sales uses. A quid pro quo, such as one of the other incentives described above, should be used in combination with more restrictive zoning to keep this strategy from becoming a disincentive to annexation. 16 1A-18 Auto Dealership Location Study Recommended Implementation Strategy This study recommends four primary implementation measures to solidify City policy with respect to the auto sales reserve, and to ensure that the objectives outlined in the General Plan are met. 1. Amend Figure 3 of the Land Use Element, adding 11 acres of land into the auto sales reserve, using the alternative site lists (Appendix B & C) as a guide. 2. Amend Land Use Element Policy 1.13.5 E to allow for the potential of some off-site dedication of open space for projects in the Auto Park Way area under certain circumstances. 3. Amend the Zoning Regulations to require Administrative Use Permit approval for new auto sales uses in the C-S zone. 4. Implement an incentive program to facilitate dealership development in the auto sales reserve. The above measures provide a framework for implementing the existing City auto dealership policy. First, include a full 50 acres of land in the auto sales reserve. In 1994, the 50-acre total was anticipated to be sufficient for relocation of existing dealerships and to allow for expansion of dealerships in proportion to projected County population growth. According to existing policy,the 50-acre total may be reconsidered when the Land Use Element is updated in 2004 (LUE 3.5.7 A.). Second, amend Land Use Element Policy 1.13.5 E to allow for some off-site dedication of open space. The modified language should apply specifically to properties in the Auto Park Way area and should only be allowed if the City's goals for creating an easily accessible and attractive auto sales and service center are furthered. The change-would be similar to Open Space Element Policy 10.2.2 that says the City should examine the possibility of a transfer of development credit between the Dalidio open space area and the Cal Poly Orchard area. City open space goals for the Dalidio area would not be compromised by the change because other General Plan policies call for significant portions of the area to be preserved. Third,require discretionary review for new dealerships outside of the established auto sales reserve. Through the Administrative Use Permit process,the City can ensure that new development is consistent with vehicle sales policies and the Economic Development Manager can work with dealerships to encourage relocation. Fourth, use incentives to enhance the financial feasibility of relocating existing dealerships in the City into the auto sales reserve. By providing incentives, the City can help ensure that the auto sales reserve is developed with appropriate auto sales uses. Incentives can also help prospective developers overcome high land prices resulting from supply shortages, as the auto sales reserve approaches build-out. 'In conclusion, the framework presented by this implementation strategy will help the City reach the goals identified in the General Plan. Each of these measures is compatible with existing General Plan policy, and will serve to facilitate the decision making process in 17 1A-19 Auto Dealership Location Study the future. Each of these measures will require subsequent review and action by the Planning Commission and/or City Council, so many details are still to be worked out. But with this framework as a basis, Council direction on the issue would be clear. 18 1A-20 Auto Dealership Location Study Appendix A: Key General Plan Policies LU L13.5: Open Space Each annexation shall help secure permanent protection for areas designated Open Space, and for the habitat types and wildlife corridors within the annexation area that are identified in LU Policy 6.1.1. Policies concerning prime agricultural land shall apply when appropriate. The following standards shall apply to the indicated areas: E) Dalidio area properties (generally bounded by Highway 101, Madonna Road, and Los Osos Valley Road) shall dedicate land or easements for the approximately one-half of each ownership that is to be preserved as open space. LU 3.5.7:Vehicle Sales A) Auto Park Way: The City intends to create around Auto Park Way an easily accessible and attractive auto sales and service center. The City will reserve about 50 acres total for vehicle sales in this area, including the areas shown in Figure 3. (This amount is expected to be sufficient for relocation of dealerships located elsewhere in the City, plus expansion of dealerships in proportion to projected County population growth.) The areas shown for vehicle sales should be reserved for that use at least until the anticipated year 2004 update of this element, when the amount of reserved land may be reconsidered. If a plan for vehicle sales expansion onto prime agricultural soils is approved, it shall provide for permanent preservation of prime soils, within the urban reserve or greenbelt. If a plan for vehicle sales expansion into wetland or creek areas is approved, mitigation shall consist at least of restoration and permanent preservation, within.the urban reserve or greenbelt, consistent with the Open Space Element. B) Other Areas: Auto sales in areas of the City other than Auto Park Way should be minimized, in order to reinforce the auto sales center and to maximize space for other uses in other locations. LU 3.7.8: Auto Sales Relocation The City will provide incentives to encourage relocation of vehicle sales to the Auto Park Way area. LU 8.7.Los Osos Valley Cap This 16-acre site should be developed if land in common ownership to the east is permanently reserved as open space.The following are possible uses for the area designated Interim Open Space. A) Vehicle sales; B) Multifamily housing; C) An open space corridor,trail,or both, to connect Laguna Lake Park and Prefumo Creek with the Irish Hills. 19 1A-21 Auto Dealership Location Study LU 8.8: Dalidio-Madonna-McBride Area This approximately 180-acre area of prime farmland bounded by Madonna Road, Highway 101,Central Coast Plaza,and Prefumo Creek is in three ownerships. The City intends to preserve significant parts of this signature working agricultural landscape at the southern gateway to San Luis Obispo. OS 10.2.1: Preserving Agricultural Land When the remaining unincorporated area bounded by Los Osos Valley Road, Madonna Road, and Highway 101 is annexed to the City(see site#12, Site Map): A) The southern portion of the Dalidio property, and the northern portions of the McBride and Madonna properties (all designated Open Space by the Land Use Map)should be preserved as agriculture. (Digest p65, 1) OS 10.2.2: Cal Poly Orchard Area The City should work with Cal Poly to determine if the orchard area (Site Map #13) should be preserved as agricultural land and as an entry into the City) and, if appropriate, examine the possibility of a transfer of development credit between the orchard area and the Dalidio open space area. (Digest p65, 1,B) 20 1A-22 Auto Dealership Location Study Appendix B: Site Criteria Comparison Matrix In Appendix B, alternative sites are ranked based on a combination of dealer criteria ratings and planning criteria ratings. Pages 11 through 13 of the study provide a description of each of the criteria used to rank the sites, and Appendix C includes a written description of each of the properties. The ratings are based on a simple numerical scale of 1 through 5, where 5 is "Excellent" and 1 is "Unacceptable". There are 6 dealer criteria and 4 planning criteria. Planning criteria totals are double weighted because they are representative of community wide criteria as stated in the General Plan. Alternative Site Criteria Comparison Matrix Site# Site Address Loc I Acc SE Size Traf Cost Total I Comp TN OS I Form Totalx2 Score 1 LOVR Gap 5 4 5 5 4 2 25 5 5 3 5 36 61 2 40 Prado 4 5 3. 5 4 2 23 5 5 4 3 34 57 3 Froom Ranch 5 4 4 2 4 3 22 4 5 5 3 34 56 4 4353 Vachell 3 4 2 1 4 1 2 4 19 2 3 5 3 26 45 470 Tank 5 Farm 3 4 2 5 4 2 1 20 1 2 4 2 3 22 42 1515-1525 6 Calle Joaquin 4 3 2 1 3 3 16 3 4 3 3 26 42 713592 Broad 3 4 2 3 3 1 16 3 3 3 3 24 40 814451 Broad 3 5 2 3 3 1 17 2 3 3 2 20 37 9 710 Aero Vista 3 5 2 3 3 1 17 2 3 3 2 20 37 10 3985 Broad 4 5 4 3 4 1 21 1 1 2 3 1 14 35 3807-3855 11 Broad 3 3 3 2 3 1 15 2 3 3 2 20 35 KEY: Dealer Criteria City Considerations 1 -Unacceptable LOC - Location Comp - Land Use Compatibility 2 - Poor ACC - Access TN - Traffic and Noise impacts 3 -Neutral SE- Sales Environment OS - Open Space Impacts 4- Good Size-Adequacy of Size Foran - Impact to City Form 5 - Excellent Traf- Traffic Characteristics Cost- Land Affordability 21 1A-23 Auto Dealership Location Study Appendix C: Alternative Site List and Map Site 1: Los Osos Valley Gap Land Use Element Policy 8.7 identifies vehicle sales as one of three potential uses for the Los Osos Gap property. The addition of 1 I acres of land from this site into the auto sales reserve(LUE Figure 3)would bring the total area reserved for auto sales to 50 acres, and would leave approximately 5 acres of developable land for other uses identified in LUE Policy 8.7. This site is contiguous to the existing auto sales reserve, making it a very desirable alternative,particularly if development of auto sales uses does not preclude other uses, such as multi-family housing, from being developed on the site. Site 2: 40 Prado This site is within the City but designated Office on the LUE Map and zoned O-PD (Office-Planned Development). The site has excellent freeway visibility and access (assuming the highway overpass is built). At 400,000 square feet, the addition of this site to the auto sales reserve(LUE Figure 3)would bring the total area reserved for auto sales to 48.55 acres. This site is very strong in dealer criteria and planning criteria except that it is located away from the existing auto sales reserve. Site 3: Froom Ranch The EIR for the Froom Ranch project included future development of two parcels between the proposed big box retail store and Los Osos Valley Road. The site is currently outside of the City,but annexation of the entire commercial portion of the site may occur in the near term. The property is directly across LOVR from the Gap and totals 250,000 square feet(on two parcels separated by a road). This area could accommodate one or two dealerships and would bring the total area reserved for auto sales to 45 acres. This site is relatively small and is on the opposite side of LOVR from the auto sales reserve, making the site less attractive in terms of planning criteria. Site 4: 4353 Vachell This site is presently developed as a recreational vehicle storage area. At 400,000 square feet, the site could potentially accommodate 3 to 4 dealerships. The site has frontage on South Higuera Street and some freeway visibility. The site is fairly accessible, about .66 Miles from the LOVR offi-amps. The property is currently outside of the City, but within the urban reserve. If this site were added to the auto sales reserve (LUE Figure 3), the total area reserved for auto sales would be 48.55 acres. Although this site meets many critical dealer criteria and planning criteria tests, it may be too secluded to be a credible alternative and is ranked "poor"in terms of land use compatibility. 22 1A-24 Auto Dealership Location Study Site 5: 470 Tank Farm -- The land is within the Airport Area and anticipated to be designated for Business Park and Service-Commercial uses. Currently the site is in agricultural production and is identified by the State as prime farmland (as are the Los Osos Valley Gap and McBride properties). The site has no freeway visibility, but is located only 1 mile from the LOVR offramps. If this site were added to the auto sales reserve (LUE Figure 3), the total area reserved for auto sales would be 58.8 acres. This site has a lot to offer in terms of size and location,but would be difficult to integrate into the Airport Area Specific Plan. Site 6: 1515-1525 Calle Joaquin This site is included in this survey because there has been recent interest in developing the site for an auto sales use. However,the small size of the site, and its present Tourist designation, would make development for auto sales difficult. The site would accommodate a single dealership. Adding the site to the auto sales reserve (LUE Figure 3) would only bring the total area reserved for auto sales to 41 acres and would reduce land designated for development with Tourist services. Site 7: 3592 Broad This Broad Street location is inside the City, adjacent to the proposed Gateway Business Park. The zoning is C-S-S (Service-Commercial Special Considerations) and the lot area is 436,000 square feet. At 10 acres the site could accommodate 3 dealerships. The site is 3 miles from Highway 101, although it is an area that is anticipated to grow significantly with the development of the adjacent expansion areas. According to real estate professionals the cost of land on Broad Street is valued highly to reflect the strong potential for this future growth. As a result the site may not be considered feasible for development as an auto park. The total area reserved for auto sales (LUE Figure 3) with this parcel added would be 49 acres. Site 8: 4451 Broad Annexation of this parcel in the Airport Area is pending City review. An application has been submitted and public hearings may begin in Spring 2000. The property is designated as Services and Manufacturing on the LUE Map, and would likely be designated Business Park(BP) with the adoption of the Airport Area Specific Plan.. The parcel includes 430,000 square feet and could accommodate 3 dealerships. Land costs in this area may be a significant constraint for auto sales development. The total area reserved for auto sales (LUE Figure 3) with this parcel added would be 49 acres. Pre- annexation of this site is pending City review and approval. The preliminary development plan submitted by the developers indicates that large office uses are proposed. Site 9: 710 Aero Vista Adjacent to 4451 Broad,this Airport Area property has about 600,000 square feet. The property is also a likely candidate for the Business Park zoning designation with adoption 23 1A-25 Auto Dealership Location Study . of the Airport Area Specific Plan. The site is partially developed with facilities for America West Airlines and would not be entirely available for development with car sales uses. The total area reserved for auto sales (LUE Figure 3) with this parcel added would be approximately 50 acres. Although car sales is a conditionally compatible use with the Airport Land Use Plan, this site would not be a good fit considering other uses that could take advantage of the proximity to airport facilities. Site 10: 3985 Broad The site of the Touchstone Annexation, this property has excellent street frontage on Broad and Tank Farm Road. The site is 2.5 miles from the highway, and is easily accessible. The site is in the Airport Area, and is slated for the Business Park designation. The price of the property would likely make auto sales infeasible. At 400,000 square feet, the site could accommodate 3 dealerships. The addition of this site into the auto sales reserve (LUE Figure 3)would bring the total area reserved for auto sales to 48.55 acres. For aesthetic reasons the City should not consider this site high on its list of alternatives, since it is a prominent comer. Site 11: 3807-3855 Broad This property is just north of the Touchstone property. The site includes two parcels that are currently being reviewed for a pre-annexation request. The development plan shows a small commercial subdivision with a potential credit union and Internet service provider as two of the tenants. The site will likely be designated as a Business Park with adoption of the Airport Area Specific Plan, but the developers.are proposing a C-S-PD designation in the interim. The two parcels together include 300,000 square feet, could accommodate 2 to 3 dealers and would bring the total area reserved for auto sales (LUE Figure 3) to 47 acres. 24 1A-26 '\\ a111byr� • y�♦, rir.1 �c�. a\f '��y Y'1 ` `,o/,♦♦ �` \v�\ate,, `'y 42��Py\ ..vim •'�,` _ �_9R!1111!911 IIII 11111_qll!. i • 1� '•.eV ��L�iL�.�^i�• �P�� ■C 3gInITo r.?5.9m:illll er n11c i= `�llf-"�r;�-♦�♦•d i .� 4 � �i 1. c-G: 'Y_, Inc' • J .\ se Pr r f- . 1a SPA �alll I W�III I IIIH HIHIP �11� �,1 y`�Q¢/ 'p,•.��•,���^', •,w � '� 1. an_ _ ■■114 J�r u ' ?�' �". .� •. •y - - •�-I m� .\PFJ' 6.:...d`i.•e mil tiimn muffs .\�♦ r'c`: upr- � I tlllllllll l0�--` nD y'� ,.rg,r£ .d••h ;.' '.•yy �I _�� „ /ii�yi`°i�ce .,A�`�ti'' �� . u��'i1 �••��fi�„�.P ,•� 7 -7.x.::'11"f9', I�Ij_ I� � �.� .•O,y .may�� - �n nub '� ♦ r I `4 L�•III J. •y _` yw •nmm.� ' • •.'innmu. G ITM �'/� I flQUIZ6 4 - alteRnative site mAP /11\/ Urban Reserve Line ■ L i ING AGENDA . DATE=ITEM # 1 113 • San Luis Obispo Chamber of Commerce 1039 Chorro Street • San Luis Obispo, California 93401-3278 (805) 781-2777 • FAX (805) 543-1255 • TDD (805) 541-8416 David E. Garth, President/CEO EfCOUNCIL fi]EDD DIR [ICAO ❑FIN DIR EFACAO ❑FIRE CHIEF CR(ATTORNEY ❑PW DIR �CLERKIORIG ❑POLICE CHF ❑AIGMT ❑REC DIR April 21, 2000 ra' ❑uE DIR ❑PERS DIR Mayor Allen Settle Members of the San Luis Obispo City Council City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 RECEIVED Re: Quong Auto Parkway Concept APR 2 � 2000 Dear Mayor Settle and City Council Members: SLO CITY COUNCIL On behalf of the San Luis Chamber of Commerce, I want to convey to you our support of the Quong Auto Park Way Concept for the McBride property. After study and discussion at our Economic Development Committee, our Board of Directors agreed that this concept has great merit for the city. As you know, sales tax revenue from auto dealers is a major contributor to the City's General Fund. The Chamber's Economic Vision document, recognizing the importance of keeping sales tax revenue in the City, states our desire to "actively work to improve the viability of`Auto Park Way' to ensure that San Luis Obispo remains a viable automobile retail center into the next century." The Quong proposal promotes such viability and aligns well with many goals of the City's General Plan. We believe that a General Plan Amendment to allow nine acres of open space dedication is appropriate at this site, particularly in view of Mr. Quong's offer to assist in the purchase of the Morganti property. Additional sales tax generated by the enlarged Auto Park Way 0 ould also put money in the City coffers for additional open space acquisitions which would nhance the view corridor. Using a portion of the additional tax revenues to infrastructure at these sites is appropriate. RECEIVED APR 2 5 2000 e-mail: slochamber@siochamber.org • websites: www.slocharnber.org wvJw.v Sitslo.com SLO CITY CLERK The Chamber remains more committed than ever to our longstanding principle of a vibrant economy and a protected environment as integral to a healthy community. We are convinced that the Quong concept for the McBride property would promote the prosperity and the beauty qol our City. We encourage you to support this concept. Thank-you for your consideration of our recommendations in this matter. Sincerely, ', tDaw 0 Dave Cox Chairman of the Board •