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HomeMy WebLinkAbout01/06/2004, BUS 2 - DISCUSSION AND DIRECTION REGARDING PROPOSED TERMS OF TENTATIVE DEVELOPMENT AGREEMENT FOR THE SAN LU coup ci t 1-6-04 j acEnaa Repoat "®Hum6w a CITY OF SAN LUIS OBISPO FROM: Wendy George,Assistant City Administrative Officer Ml Jonathan Lowell,City Attorney Prepared By: Shelly Stanwyck,Economic Development Manager SUBJECT: DISCUSSION AND DIRECTION REGARDING PROPOSED TERMS OF TENTATIVE DEVELOPMENT AGREEMENT FOR THE SAN LUIS OBISPO MARKETPLACE PROJECT CAO RECOMMENDATION 1. Review and conceptually approve major terms to be included in a development agreement and authorize staff to proceed with negotiations. 2. Authorize CAO to hire the consultants necessary to comprise our"Bond Team" and enter into a third party reimbursement agreement with San Luis Obispo Marketplace Associates for the costs of these specialized consultants. REPORT-IN-BRIEF The possible development of a portion of the 131-acre Dalidio Farm has been the topic of much discussion over the years and recent history goes back more than 10 years. Presently, as shown in the attached locational map (Attachment 1) the City is processing an application for a proposed project that is substantially consistent with previous Council direction found in the September 21, 1999 Dalidio Memorandum of Understanding (MOU) as well as the principles arising out of the City-County negotiations undertaken in 2002. The land use and financial tracks for the proposed project have been proceeding simultaneously. At this point, it is necessary for the Council and the public to consider the main concepts that would be involved in crafting a development agreement. Staff is seeking formal Council direction on several key terms that could be included in a development agreement so that a draft of such an agreement can be completed and presented to Council in conjunction with its review of the Environmental Impact Report (EIR) and final project currently planned for Spring 2004. This direction will provide a framework for the terms to be included in a final development agreement, but does not preempt the remaining development review process, including review and recommendation by advisory bodies prior to a final action. The preparation of a development agreement following the guidelines recommended in this report would facilitate many City objectives including: a - i Proposed Dalidio Development Agreement Terms Page 2 1. Providing funding for the completion of a major General Plan goal — .the Prado Road Interchange — by using a portion of sales tax revenues_ that we do not presently have, without the development of the San Luis Marketplace. 2. Assisting in accomplishing the Council's major goals for 2003-05 to increase sales tax and transient occupancy tax (TOT). 3. Protecting the retail strength of the downtown through new provisions that discourage the developer from direct retail competition with the downtown. 4. Potentially providing onsite affordable housing. 5. Providing increased water supply to the City. 6. Protecting agricultural land onsite, and contributing to offsite open space protection in an area where "sprawl" is a threat.. 7. Bringing to a conclusion years of uncertainty regarding the Dalidio property by reaching agreement to annex the property and determining its ultimate use under City jurisdiction. Because the proposed project is larger and has an improved financial impact to the City over what was contemplated in the 1999 Dalidio MOU, and because the City's financial circumstances have changed significantly, in negotiations with the Developer staff has sought to improve our financial position and address the issues that a larger project presents. To provide Council with a simple way to review the major issues, staff's recommendations regarding major terms to be included in a development agreement are set forth in Attachment 2 to this report. The development agreement would make clear that the proposed project would be subject to the City's usual design review processes. DISCUSSION Background Property History Over the years, the 131-acre Dalidio Farm, adjacent to the City of San Luis Obispo, has been the topic of much public discussion. A detailed and comprehensive discussion of the Farm's history could take pages. Recent history however,begins back in 1991 when the Dalidio family presented a land use concept to the City for incorporation into our General Plan (which was being updated at the time). After many years of thorough analysis of fiscal impacts, and innumerable public hearings, a "compromise" was reached to allow some of the 131-acre Dalidio Farm to be developed in exchange for protecting a portion of the property in permanent open space. This compromise, incorporated into the 1994 General Plan update, attempts to balance many things including both environmental and economic interests. It also acknowledges that for the City to have influence over the use of the property, it must be annexed into the City, and it will not be annexed without the consent of the property owner, the Dalidio family. Prior Project and Memorandum of Understanding In March of 1998, the San Luis Obispo Marketplace Development Team, led by developer Bill Bird, presented a project application for the development of San Luis Obispo Marketplace on a kA Proposed Dalidio Development Agreement Terns Page 3 portion of the Dalidio Farm. The project proposed to develop 40 acres for regional retail uses. Essentially, two stand alone "big box" stores would have anchored the site complemented by a small "main street" component. In all, 515,000 square feet of development was planned. Because of traffic demands, in order for significant retail square footage to be constructed on the Dalidio Property, a new freeway interchange at Prado Road is required. This interchange has long been part of the City's Circulation Element, but the City has not had the financial capability of building it. Accordingly, since 1994, new development has been assigned the responsibility for funding this improvement. The Developer proposed to construct the Prado Road interchange with the project. The intent was that the Developer would assume the up-front risk of financing the interchange, with fair share reimbursements from other benefiting properties as they developed. As is often the practice with major retail projects that involve achieving public and private goals, a performance based sales tax sharing (or reimbursement agreement) was proposed. Eventually the City and the Developer entered into a Memorandum of Understanding (Dalidio MOU) outlining the principles for a future development agreement. On September 21, 1999, Council approved the Dalidio MOU with San Luis Marketplace Associates that memorialized key "deal points" based on previous direction provided by Council. The key principles of the Dalidio MOU(copy provided in the Council Reading File) are as follows: DalidioKey Principles of 1.The General Plan concept for the Dalidio Property would guide the project. 2.The"open space for some development compromise"would be memorialized in a development agreement. 3. Sales tax reimbursement would help finance the Prado Road interchange. But, only up to 50% of the net new sales tax revenues generated by the proposed project would be reimbursed to the developer, and reimbursement would not exceed total debt service costs for the Prado Road interchange. 4. The shared revenues would be tied directly to the proposed project's performance — before actually sharing sales tax revenues,the proposed project would have to perform at a certain level. 5. The City would assist in forming a Mello-Roos financing district; however, the debt would be solely secured by the proposed project. 6. Other projects would eventually share in the cost of the Prado Road interchange. The City would be responsible for its appropriate share as well as advancing (referred to as "fronting")the share for other participating properties. 7.The proposed project was responsible for fully paying all other City fees. 8. Construction on the proposed project could not start until a construction contract for the Prado Road interchange had been awarded. 2001 Project Denial In February 2001, the Council did not certify the San Luis Obispo Marketplace project EIR and the project was denied due to concerns about open space protection and drainage. After this denial, the San Luis Obispo Marketplace Development Team took a substantially changed development � of "� Proposed Dalidio Development Agreement Terms Page 4 proposal to the County of San Luis Obispo for processing. The proposal had far less land designated for open space than did the prior proposal. Because of concerns that the project might develop in the County (resulting in a loss of City control over the development, lost sales tax revenues, inability of the County to provide adequate urban services, and the City's greater ability to assure environmental impacts of the project are mitigated), the City opposed the development application in the County. In January 2002, based on a letter from the San Luis Obispo City Council asking that the project be returned to the City for further processing, the Board of Supervisors agreed that a Board Subcommittee (Supervisors Pinard and. Achadjian), San Luis Obispo Marketplace representatives, and a City Subcommittee(Council members Ewan and Marx) should meet to explore further options for the Marketplace Project proceeding under the City's jurisdiction. Subcommittee Process,Recommendation to Council and Council Direction Several times during the period between February 2002 and May 2002, the parties met and eventually came to conceptual agreement on terms to continue project processing in the City. On May 21, 2002, the San Luis Obispo City Council approved the Subcommittee recommendations regarding the Dalidio Property/Marketplace Development Proposal and authorized the Vice-Mayor to send a letter requesting that the Board of Supervisors refer the project back to the City for further work and processing (the Dalidio Council Letter, Attachment 3). The principles set forth in the Subcommittee recommendations and letter were generally consistent with prior principles adopted by Council regarding the Dalidio Farm and established a basis for a new City project application for the Dalidio Farm to be processed in the City. As a result of this communication, on June 4, 2002, the Board of Supervisors put the proposed project application on hold and directed the applicant back to the City for further work and processing. In following up on this direction, the developer has submitted a project that is substantially consistent with previous Council direction found in the Dalidio MOU, as well as the principles arising out of the City-County Subcommittee discussions. Highlights of those principles are as follows: Key Council Approved Subcommittee Recommendati6ns 1.The project should be largely consistent with the City's General Plan. 2. The project should be very similar to so-called Proposal 3, described in the Dalidio Council Letter, allowing significant development of the property, while protecting more open space than envisioned in the previous proposal to the City. 3. 58.7 acres of onsite open space should be protected, and if possible, be given in fee title to the City. 4. 20 acres of offsite open space should be acquired in the vicinity of Highway 101 at the southern end of the City and consisting of quality farmland.. 5.The uncertainty of a 9-acre"reserve"should be eliminated. 6. About 47 acres of commercial development should occur and should include a hotel that will help meet the community's needs for enhanced conference facilities. a -� Proposed Dalidio Development Agreement Terms Page 5 Key Council Approved Subcommittee Recommendations 7. The property owners should provide access to the groundwater basin and work conjunctively with our water reuse project. 8. At the appropriate stage, a binding development agreement should be negotiated and presented to Council for consideration and approval, to create greater certainty for both the applicant and City. Project Submittal and Status of Development Review Process San Luis Obispo Marketplace and Associates submitted a new application for the development of parts of the Dalidio Farm on June 27, 2002. The project proposes to construct what is known in the shopping center industry as a"power center" —with two twists: in addition to large "box" stores, it would contain a major department store, Macy's, and a 150-room hotel (near the existing Embassy Suites). The project proposes that development occur in two distinct phases. Phase One would occur immediately upon approval and consists of 47 acres of general retail and hotel development,4 acres of affordable housing, 54.67 acres of open space, and 12.3 acres of public road right-of-way. Phase Two would occur when the property owner is ready to develop and is proposed to be 13 acres of business park that is served by then existing public roads. A contract for the EIR for the entire project was executed on February 6, 2003, and work began immediately thereafter. The public scoping session for the EIR was held on March 10, 2003. Staff is presently reviewing the draft version of the EIR and expects to release the Administrative Draft EIR in early January. It is expected that the Planning Commission will hold its hearing on the Administrative Draft EIR in February. After the 45-day public comment period closes and the EIR has been revised to reflect all comments, the Final Draft EIR will be reviewed by the Planning Commission and by Council for final adoption. Those hearings are expected to take place in spring. As is typical with projects of this complexity and size, conceptual reviews by the Architectural Review Commission and Cultural Heritage Committee have occurred on various aspects of the project to provide feedback and guidance. Final design approvals will occur only after Council has certified the EIR. Fiscal Analysis and Development Agreement Discussions In addition to the developmental review work that has been undertaken for the project thus far, on September 17, 2002, Council approved an agreement with Allan D. Kotin and Associates to perform and update an economic impact study of the proposed project on Downtown (the "2002 Kotin Study"). Council also authorized further negotiations with SC Properties (Developer Bill Bird and other members of the Dalidio property team) to review and revise slightly the Dalidio MOU to reflect new sales tax and sales tax transfer effect information as they relate to the funding of the Prado Road interchange. The 2002 Kotin Study was published in October 2002 and concluded that the project would annually add about $1.5 million net new sales tax revenues to the City, which when adjusted for transfer effects became about $1.1 million annually, and new transient occupancy tax at$280,000 annually, fora total of net new revenues of about$1.4 million. a -s Proposed Dalidio Development Agreement Terms Page 6 Background Summary As evidenced by the preceding historical summary, use of the Dalidio Property follows a chain of City actions over ten-plus years, and most recently the project has been proceeding on both land use and financial tracks, with final action on both areas to occur simultaneously this spring. At this point, however, it is important that the public and Council have an opportunity to consider the main concepts involved in crafting an eventual development agreement, and that Council provide staff with formal direction for completing the agreement. The balance of this report focuses on this aspect of the project and process. A Development Agreement Will Be Needed Upon Project Approval Purpose of a Development Agreement Since 1979, California has statutorily authorized local governments to enter into agreements for the development of property, which memorialize regulations that were in effect when the agreement was executed, along with other conditions and terms agreed to by the parties. The statutes were enacted in order to create greater certainty in the development process in exchange for unique public benefits associated with a project. By entering into a development agreement, local agencies do not need to give up rights of approval; rather they merely enshrine what rules, regulations and policies are in place when the agreement is signed. Again, the intended effect is to strengthen the public planning process and reduce the economic costs of development in situations where there exists a "quid pro quo" of benefits between the agency and developer. Thus, while a development agreement would prohibit the City from changing the zoning applicable to the subject parcel such that the proposed project would no longer be permissible, it also allows the City to obtain benefits it would not otherwise be lawfully entitled to require,e.g. construction of the freeway interchange. Why the City Will Need a Development Agreement Typical contents of a development agreement include the term of the agreement, permitted uses of the property, density or intensity of use, and provisions for reservation or dedication of land for public purposes. Development agreements also frequently include provisions for the financing of necessary public facilities. The San Luis Obispo Marketplace Project, requires the construction of a freeway interchange at Prado Road, in order to address traffic issues and to provide more efficient access to the project itself. This public improvement adds a level of cost that is disproportionate to the impact of the project, but is nonetheless triggered by the project. In the short term, the City has not planned to build an interchange at Prado Road, though it has been, since the adoption of the 1994 Circulation Element, a long-term goal to provide a cross-town connection at Prado Road. In order to make this necessary improvement feasible, some form of public-private partnership is needed. Following Council's direction on the prior MOU, and due in large part to the substantial new net sales tax the project is expected to generate, staff is proposing a sales tax reimbursement agreement that is part of a development agreement. Therefore, the purpose of tonight's meeting is not the adoption of a development agreement, but discussion and direction on an agreement's potential terms. A formal development agreement will eventually be needed due to the complexities and commitments associated with this project. a -� t Proposed Dalidio Development Agreement Terms Page 7 However, adoption of one now would be premature before the City completes the development review process. The issues and positions discussed below are summarized as recommendations in Attachment 2. Structure of Development Agreement The principles that would be contained in a development agreement would be similar to the majority of the key principles outlined in the Dalidio MOU and the Council direction following the subcommittee process. However, staff is seeking direction from Council in several different areas because the proposed project has changed from the 1998 proposal, and because the City's financial position in 2003 is dramatically different from our position several years ago. As a result, in negotiations staff has sought to improve our position financially and address the issues that a larger project presents to the City: It is contemplated that the development agreement would reflect the two phases of development by having a term of 5 years for the first phase (the retail and interchange) and a term of 15 years for the second phase (the business park). It is also contemplated that the development agreement would have a concurrent and related reimbursement agreement that survives the expiration of the development agreement to ensure satisfaction of the freeway interchange financing. Key Recitals that the City Would Like Included What the City and the developer intend to accomplish would be set forth in a recitals section of the development agreement. The recitals set forth the main principles upon which the agreement is based. The content of the recitals have been a topic of negotiations and three specific areas that the City would like included in the development agreement recitals (in addition to the basic "deal" recitals) are as follows: 1. The project is unique. This is a project that by virtue of its composition of retailers and scale is unlikely to be reproduced with the same scale, character and open space protection in the foreseeable future in San Luis Obispo. Because of its unique characteristics, certain aspects of this project will not set a precedent for other projects developed in the City. 2. It is of critical importance that the project not compete directly with downtown. The project as currently designed is not expected to harm downtown from an economic or social standpoint. Several terms within the development agreement will discourage the project from changing from a "hybrid power center" to a "mainstreet lifestyle center" by providing for financial disincentives in the event of such a shift. 3. Ability to reflect changed conditions. The development agreement will have some flexibility to reflect changes in retail conditions over time. More specifically, it is not the intent to make changes in advance, but at certain points in the process, the developer can bring forward new information for consideration. Areas of Issue Although the developer's current proposal reflects prior Council direction in many respects, further guidance is needed on several issues. The development agreement issues staff recommends for Council's consideration are organized generally into topic areas. Some of the issues are minor modifications to previously set forth principles, some are clarifications of a -� Proposed Dalidio Development Agreement Terms Page 8 previous direction, some are policy in nature and a few reflect significant changes. Staff is seeking Council review of and concurrence with the concepts outlined below and summarized in Attachment 2. 1. Open Space The preservation and protection of open space has been a critically important issue with regard to the Dalidio Property. Previous direction from Council encouraged the maximization of the amount of open space. The Dalidio Subcommittee recommended that 58.7 acres of on-site open space be provided and that the City ask the property owner for fee title to the open space. The following are issues that have arisen with regard to open space. a. The amount of onsite open space. The amount of onsite open space is proposed to decrease from approximately 58.7 acres to 54.67 acres so that affordable housing can be built on a 4-acre portion of the property that would have been open space. This is a conditional proposal; the developer must receive other agency approvals for this use, in particular the approval of the Airport Land Use Commission (ALUC). Early feedback from the ALUC has been positive. b. The City would receive the grant of an easement for the onsite open space with the possibility of fee title in the future. The property owner would like to provide an easement over the open space at this time. The property owner has estate planning issues that must be resolved prior to a donation of the land in fee.. In staff s opinion, if the goal is agricultural land protection, then an easement can fully accomplish this as well as fee title. However, staff would like to explore further with the property owner the possibility of receiving in fee a small portion of property if further study shows it is needed for water treatment facilities. c. Additional offsite open space. The amount of offsite open space is proposed to be the financial equivalent of 24 acres at the approximately price of $8,000 per acre or $192,000 (based on comparable easements presently under negotiation). This reflects the purchase of 4 additional acres to fully offset the possible use of.a portion of the onsite open space for affordable housing. d. The offsite open space to be acquired would not be along Highway 101. Per the Subcommittee process, Council expressed a desire that the offsite open space be along Highway 101. At the time, a specific property was available for this purpose, the DeVincenzo Apple Orchard. That property has subsequently been protected, although not by the City. At present, properties south of Buckley Road represent the most similar type of property from an agricultural open space perspective. Natural Resources Manager Neil Havlik is presently working with several property owners in that area to preserve their properties as open space with the purchase of various agricultural easements. The payment of$8,000 per acre or$192,000 would allow the purchase of an additional 24 acres of these prime agricultural lands at the City's southern boundaries. The Council has previously expressed a strong desire for a "hard edge" at the southern boundary of the Airport Area, where sprawl is a threat. e. Sulky Racing Stadium. The property owner would like to relocate the Sulky Racing Stadium from its current location (the Stadium resembles a large barn and its diagonal window is visible from Madonna Road) to the open space. Research of historical records � -g Proposed Dalidio Development Agreement Terms Page 9 shows that at one time from what is now Highway 101 to Madonna Road was filled with horse racing activities including the Sulky Racing Stadium. If Council is open to this relocation (the precise relocation would take into account input by the CHC, ARC and Planning Commission) staff recommends the negotiation of language in the development agreement that addresses property owner responsibility for refurbishment and maintenance of the building. f. Asian Gardens. While the developer originally proposed dedicating some of the open space as a Chinese Garden, this option has not been discussed as part of the development agreement. Should the City obtain ownership of the property in fee at a later date and wish to allow this use, or include it as an approved use in the open space easement, that would be a separate decision of the City,after appropriate advisory body review and Council decision- making. 2. Water In the Dalidio Council Letter, Council expressed a desire that a project on the Dalidio Property "provide access to the groundwater basin to improve community water supply and work conjunctively with our water reuse project." As part of the continued negotiations concerning the San.Luis Marketplace project, the developer proposed a fee waiver in exchange for the provision of access to the water basin underneath the Dalidio Property. The Dalidio Property is within the San Luis Obispo Groundwater Basin, a relatively small basin. The City presently has access to the basin at Autopark Way. Use of the basin raises a key issue, regarding the groundwater basin's close relationship to stream flow in San Luis Obispo creek and tributaries overlying the basin. As water is removed from the basin,the flow to the creeks is impacted, potentially affecting endangered species. Additionally, the groundwater underlying the Dalidio Property requires treatment prior to domestic use, due to contamination from nitrate and PCE. For the City to use the basin, other users must decrease their use (farming operations on the Dalidio property would be one such user). a. Water Supply and Credit Toward Water Impact Fee. The value of the Dalidio groundwater to the City as an addition to our water supply would come less from the access to the water itself and more from an agreement on the part of the landowner to refrain from drawing water for the open space property so long as an adequate supply of recycled water is provided. Such an agreement would allow the City to have an appropriate use for recycled water, while increasing the opportunity to use more of the water within the San Luis Obispo Groundwater Basin. In exchange for this agreement, the developer would like a credit against the water impact fee associated with the development of this project, which would be reasonable. Staff conceptually agrees with this request and the exact amount still needs to be negotiated. No credit is being sought for the sewer impact fee. b. Will-Serve Letter. A critical component of financing major projects such as the San Luis Obispo Marketplace project is the proof to a lending institution that the resources necessary for the development are available. One of the most common assurances sought is a "will- serve letter" wherein a municipality guarantees the availability of certain utilities. Such a letter is of critical importance to the developer. The City's past practice has been not to provide will-serve letters. However, in this instance, the provision of one, and the i Proposed Dalidio Development Agreement Terms Page 10 acknowledgement of adequate resources, could be provided for in the development agreement without setting a precedent for other developments for several reasons. First, development agreements have never been used before in the City and no other development agreements are foreseen in the near term. Second, the term of the development agreement for the retail portion is 5 years and the will-serve letter could be made applicable to just that portion of the project (thereby "committing" the City's water and sewer capacity resources for only a limited term and freeing them up if development has not occurred within 5 years of the development agreement). With these qualifiers, staff recommends providing such a letter. 3. Drainage During the evaluation of the first Dalidio project's EIR, drainage was a topic of much discussion. The developer is quite sensitive to the resolution of drainage issues and seeks to have clear direction on drainage prior to the adoption of the development agreement. The developer would like language in the development agreement that the project is in compliance with City guidelines as they relate to drainage. As issues of drainage are regulatory in nature, they will be thoroughly discussed as part of the project's EIR. Staff will have the opportunity to review and evaluate the project's compliance with drainage guidelines prior to adoption of a development agreement. Therefore, staff recommends once the EIR is certified, the language requested by the developer be added to the agreement. 4. Fees The following summarizes fee issues: a. Water Impact Credit. As previously discussed, there is the potential for a credit of water impact fees in exchange for the property owner's agreement to use recycled water on the Dalidio Property, thereby increasing the water available to the City within the San Luis Obispo Water Basin. b. Possible Affordable Housing Fee Credit. As discussed previously, if the developer is able to build affordable housing onsite, the project will be eligible for an affordable housing fee credit in full, since the fee can be satisfied through construction of affordable housing either onsite or offsite. If housing is not ultimately allowed, satisfaction of the fee will occur consistent with other City policy options. C. "Stay"the TIF. The City's Transportation Impact Fee (TIF) is presently under study and proposed revisions to the fee could be presented to Council prior to the start of construction on San Luis Obispo Marketplace. To provide the developer with certainty, and in recognition of the time that this project has been under review, staff recommends that the TIF rate be defined in the development agreement as the rate in effect when the project application was submitted to the City. 5. Special Tax Reimbursement.Agreement In order to particularly address the aspects of a tax sharing agreement to pay for the Prado Road interchange, a Special Tax Reimbursement Agreement is proposed to be incorporated as an exhibit to the development agreement. The Reimbursement Agreement would be concurrent to Proposed Dalidio Development Agreement Terms Page 11 the development agreement and survive its expiration. The purpose of the Reimbursement Agreement is to provide a mechanism to share 50% of the net new sales tax and transient occupancy tax (TOT) revenues (less some exclusions and adjustments described below) with the developer for the repayment of the interchange debt service(and no more). The developer's share of the revenue would be tied to the performance of the project and once the debt was retired,it would end. a. The DESTR. Defined Excess Sales Tax Revenue (DESTR) is the financial term used to describe the net new sales tax and TOT, less adjustments, that could be shared, up to 50%, between the City and the developer. The formula, including adjustments, would look like this: The 1 1 Total sales tax of all San Luis Marketplace Retail outlets(excluding those in the hotel) Less a 33%transfer effect(sales tax taken from other City businesses) Plus TOT from the hotels in the Project(less a hotel TOT transfer of 20%) Plus sales tax from retail outlets in the hotel in the Project(less a hotel transfer of 20%) Equals the DESTR b. Exclusions and Adjustments from the DESTR Intended to Provide Protection to the Downtown. There are five areas where exclusions from the DESTR could serve to (a) provide economic protection to the Downtown and (b) discourage the developer from recruiting tenants already within the City unless they are a self-supporting branch location. The exclusions and adjustments to be considered are as follows: 1) Non-Downtown Transfers. Sales from non-downtown business retail outlets that close and reopen in the project beginning one year before the opening of the project and reopening in the project within one year of its completion, should be excluded from the DESTR. 2) Downtown Transfers. Sales from an outlet that closes downtown within a 2-year period, beginning one year before the opening of the project and ending one year after, and reopens in the project should be excluded from the.DESTR. 3) Retail Chain Outlets Not Exclusively Downtown. Adjustments downward should be made to the DESTR for a new branch of a retail chain that is not located exclusively downtown that locates in the project. 4) Retail Chain Outlets Exclusively Downtown. Adjustments downward should be made to the DESTR for a new branch of a retail chain that is exclusively located in the downtown that locates in the project, to reflect the sales losses from the downtown branch. 5) Small Store Space. Sales tax exclusions will be imposed for small store space created after the project has been constructed, to preclude the subdivision of larger spaces into smaller spaces that encourage direct competition with downtown. 5,000 square feet and below will define a"small store. The developer can appeal for relief from this penalty, but is not guaranteed automatic relief. � r Proposed Dalidio Development Agreement Terms Page 12 6) Transfer.Factor Amount and Future Adjustment. The formula for the DESTR should contain an acknowledgement that the 33% Sales Tax Transfer Factor was arrived at based on assumptions about the impact of the project on existing retail outlets in the City and that those assumptions may change over time. In recognition of the tendency for transfer effects to moderate over time,the transfer factor is proposed to adjust in year six downwards by 1%, and by 1% for the next four years so that in the 10`h year of the project the Sales Tax Transfer Factor would be 28%. c. Mechanism is cumulative. As previously mentioned, the proposed sharing of revenues is performance based. The City's reimbursement of revenues under the DESTR formula will be cumulative. So, if the project receives less than the maximum amount it is eligible for in any one year, this loss can be re-captured in subsequent years. In no event, however, would the project be eligible for reimbursement for more than its cumulative debt service obligation. d. Financing Mechanism for the Interchange and Securily. The interchange would be funded by the formation of a Mello-Roos District and bond.issuance. The project would be the security for the debt issuance. The developer would be the indebted party for 70% its share and the"fronted'properties; the City would be responsible for its 30%. e. Security for Construction of the Project. To guarantee completion of the project, once the interchange construction has begun, a completion bond or similar financial guarantee would be provided so that the City does not end up with an interchange without the completion of the retail project that created the need for it. Construction on the project cannot begin until the interchange has received all of its approvals and the construction agreement for the interchange has been executed. f. Addressing the "Triple Flip" The reimbursement agreement will contain language to address the so-called"triple flip" sales tax legislation recently passed by the legislature, if it becomes effective. The developer will have the option to increase the bond size to accommodate an additional 6 months of capitalized interest created by the delay in receipt of DESTR from the"triple flip." g. Payment on behalf of Benefiting Properties. There are other properties that benefit from the construction of the Prado Road interchange. A preliminary analysis shows other benefiting properties as follows: i ' Proportional Sbare Prado Area 4.7% Margarita Area 13.0% City Share' 29.9% Project Share 52.4% Total 100% Repayment for benefiting properties would be different from what was proposed in the Dalidio MOU. Because of the City's changed financial circumstances, we have proposed that the developer front the benefiting properties' shares and receive reimbursement upon their development. This change is possible because the project is larger, has higher revenues Funded by Transportation Impact Fees. y Proposed Dalidlo Development Agreement Terms Page 13 and has TOT revenues in addition to sales tax. Upon development, a benefiting property would repay to the developer all special taxes allocated to his property that were paid by the developer, plus interest, and would either assume its share of the special tax from that time forward or pay off the proportionate share of the Mello-Roos indebtedness. 6. Street Name The developer has expressed a strong interest in having the name "Dalidio" included in the name of the street that is in front of the project and intersects with Madonna Road and the new freeway interchange. While this does not fall within the parameters of the City's naming policy, because it creates a street with two different names on each side of the freeway, it is a very strong desire of the property owner. In discussions with Caltrans, we learned that this is allowed. Therefore, staff recommends allowing Dalidio to be included in the name of the street in front of the project,from Madonna Road to the Prado Road Interchange. Bond Issuance As previously mentioned, the proposed mechanism for financing the Prado Road interchange is bond issuance. Under agreements previously approved by the Council, Fieldman, Rolapp and Associates serve as the City's financial advisors and Jones Hall is our legal counsel regarding bonds. The process for formation of a Mello-Roos Community Facilities District takes approximately 180 days. At this point, the City should begin to form the "Financing Team" by selecting our Special Tax Consultant,Underwriter,Appraiser and Absorption Study Consultant. Typically, the Financial Advisor, Bond Counsel and Underwriter are willing to defer compensation (on a contingency basis) to the proceeds of the bond issue, which is the proposed funding for these services. However, for business reasons as well as to maintain their independence, services by the Special Tax Consultant, Appraiser and Absorption Study Consultant should be fully funded by the City outside of the proceeds form the sale of bonds. The costs of these special consultants are typically home by the developer, as they are necessary for the bond issuance and eligible for repayment upon the bond issuance. As noted above, the City has already hired the Financial Advisor and Bond Counsel under master agreements. Staff recommends that the Council authorize the CAO to contract for the remaining services as follows: 1. Underwriter. Subject to compensation (on a contingency basis) from the sale of bonds. 2. Special Tax Consultan4 Appraiser and Absorption Study Consultant. Subject to full reimbursement by the developer(and advance deposit before letting the contracts). We estimate these costs at$100,000. 3. Other Services. Other specialized services may be required related to the bond issuance. In this case, we also recommend that Council authorize the CAO to contract for them, subject to either reimbursement by the developer or contingency funding from the bond issue. In all cases, we will work closely with our Financial Advisor in the selection process. a- r3 Proposed Dalidio Development Agreement Terms Page 14 Next Steps As previously described, the land use and financial tracks for the proposed project have been proceeding simultaneously. Council's discussion and direction regarding major terms to be included in a development agreement will enable staff to complete negotiations for such an agreement. A formal development agreement will not be presented to Council for consideration and approval until the final approvals for the land use issues are presented. At this time, staff anticipates that the Administrative Draft EIR will be available for review and public comment beginning in mid-January. During the 45-day public comment period,the Planning Commission will complete its initial review and comment on the EIR. Comments about the EIR will be responded to and incorporated into a Draft Final EIR that will be reviewed by the Planning Commission for a recommendation to Council, which will make the final decision regarding certification. Other land use actions during this time could include: conceptual review by the ARC of different aspects of the project; CHC review of the Sulky Racing Track; and the Airport Land Use Commission review of the location for affordable housing. FISCAL BRACT Under the proposed sales tax/TOT sharing agreement, the new net revenue to the City from these two sources will be about $750,000 annually, in the early years. Over time, as project revenues grow and the debt service remains constant, this will increase. At the end of 25 years, when the bonds are fully repaid, net new revenues (in "2003" dollars) will be about$1.6 million annually. This summary of fiscal impacts is based on a detailed analysis of project revenues and debt service costs by Allan Kotin. As summarized below, there are two key variables in determining net new revenues from the project: There will be other ongoing revenues 1. Annual sales tax and TOT revenues from the from the project in addition to sales tax and TOT, such as utility user taxes, project, and adjustments for transfer affects. franchise fees and business taxes. On the other hand, the City will incur 2. Annual debt service costs, which are driven added operating costs for in serving by the project cost, issuance costs,interest rate the project, such as police protection and the term (repayment period): and street maintenance. Using "Year Three" as an example (when Kotin Kotin previously analyzed these added projects that all revenues will be fully on-line), costs and revenues, and found them closely matched, with revenues the following summarizes annual project exceeding operating costs by about revenues, "net" amounts after transfer affects, and $100,000. Accordingly, in the interest the distribution between the developer and the of simplicity in what is already a City. complex transaction, the agreement focuses solely on sales tax and TOT reimbursements. a i Proposed Dalidio Development.Agreement Terms Page 15 Annual Project Revenues ,Net Sales TaxiTOT Revenues ("Year-W) Gross Deduction for Transfer Revenues Percent Amount Net Sales Tax: Retail Project 1,734,000 33% (572,200) 1,161,900 Transient Occupancy Tax 443,000 20% (88,600) 354,500 Sales Tax: Hotel 2,000 20% 400 1,600 Total Net Revenues DESTR $1,518,000 Revenues are slightly different than noted above from the 2002 Kotin Study due to the use of .Year 34 projections as well as revisions to estimates since then based on more recent information. Allocationof Net Revenues ("Year W) Maximum Dedicated to Debt Service Reimbursement @ 50% $759,000 Minimum Available to the Ci @ 50% $759,000 As noted above, the"50%" sharing of revenues with the developer for debt service is a maximum: it cannot exceed the allocated amount of debt service. As such,if the allocated amount of debt service is less than 50% of the "net new" revenues—as it is likely to be in later years—this lower amount will be shared, not 50%. However, if net revenues are less than the allocated debt service for the project,the developer is responsible for making-up the difference. On the other hand,the"50V to the City is a minimum: it can be higher than this, depending on debt service costs and project performance. Debt Service Costs As noted above, annual debt service costs depend on project costs, issuance costs, interest rates and tern. Based on a detailed analysis by Allan Kotin, the following is the estimated annual debt service cost assuming project costs of $13 million, total bond issuance of $15.6 million, 5.25% interest rate and twenty-five year term: Estimated Debt Service Costs Bond Issue Siiing Project Costs 13,000,000 Issuance Costs 360,000 Capitalized Interest for 18 Months 1,191,000 Reserve Fund 1,095,000 Estimated Bond Issue Size 15,646,000 Estimated Service @ 5.25%Interest 25 Year Term $1,138 000 As discussed above, the project is not responsible for all interchange and related debt service costs: it is only directly responsible for 52.4% of costs; and will be responsible for funding the shares related to the Prado and Margarita Areas (17.7%), subject to reimbursement in the future as these areas develop. The balance of the project (29.9%) will be funded by the City via transportation impact fees. Based on these factors,the following summarizes allocated debt service costs. Proposed Dalidio Development Agreement Terms Page 16 Allocation of Estimated Debt Service Costs Percent Amount San Luis Marketplace 52.4% 596,000 Advances for Margarita Area 13.0% and Prado Area 4.7% 17.7% 201,000 Developer's Share 70.1% 797,000 City Share To Be funded via Transportation Impact Fees 29.9% 341,000 Total 100.0°k $1,138,000 Note: While we recommend funding the City's share of the project through transportation impact fees(TIF), the underlying security in the bond issue for this will be the General Fund. However, this only places the General Fund directly at risk in the event that annual TIF revenues are less than $341,000. This has never occurred. Moreover, in the event that available TIF revenues should be less than this—perhaps due to other TIF-funded projects with a priority over this use— the General Fund can be reimbursed from subsequent year TIF revenues. As reflected in the above "Year 3" example, the developer's estimated debt service obligation is about $40,000 greater than the 50% maximum sales tax reimbursement from the City ($759,000 versus $797,000). This is likely to be the case for several of the early years. However, under the proposed agreement, the developer is eligible for future reimbursement of these underages from future year surpluses (which are likely at some point, since debt service costs will be fixed while revenues will continue grow, estimated at a conservative 2.5% per year). Additionally, the developer will be reimbursed—by other, developers—for its advances on their behalf for the Margarita and Prado Areas as they develop. Kotin estimates that this will cumulatively balance- out by "Year 8." After this, debt service costs are likely to be less than 50% of the net revenues, and as such, the City's share will increase. The important concept that this example illustrates is that in no case—regardless of actual revenues or debt service costs—will the City reimburse more than 50% of the net revenues; and in no case will the City reimburse more than apportioned debt service costs (albeit on a cumulative basis). In short, the "50% of net" is a maximum for the developer; and a minimum for the City. ALTERNATIVES The Council could provide direction to stag for modification of the proposed conceptual approvals. Any modifications should be clearly stated so that staff can include them in future negotiations with the developer on the development agreement. ATTACHMENTS L. Location Map 2. Summary of Staff Recommendations Regarding Major Terms 3. May 21, 2002, Council Subcommittee Agenda Report with Dalidio Council Letter attached READING FILE 1. September 21, 1999 Agenda Report with Dalidio MOU attached ?. 2002 Kotin Study g:Administration/Staff/Smnwyck/Agenda Reports/Final DaGdio Agenda Report v.2 ATTACHMINT I SL P ME E L MARKET PLACE j: PUBLIC T 6S-I E ROAD MARKET PLACE BUSINESS \, PARK BUSINESS PARK AND PARK 9 OPEN SPACE AFFORDABLE HOUSING • PARK AND OPEN SPACE • W000 On Site Land Use Acres Commercial 47m00 Business Park 13.00 Affordable Housing 4.00 Public Roads 12.33 Park & Open Space 54.67 Total 131.00 On & Off Site A res Development 64.00 Public Roads 12.33 Sub Total 76.33 jOn oi7le, ErL& 0 n 54.67 Item Oe en pa 1104 n 24.00 I Sub Tof 1 78.67 DRAFT F Total Project DATE: DECEMBER 18, 2003 (REVISED) ATTACHMENT 1 � - (I - ATTACHMENT 2 Summary of Staff Recommendations Regarding Major Terms Major Term Conceptually Approve: Development Agreement 5 and 15-year terms for the Development Agreement Term to reflect phased development. Recitals Recitals as set forth in the agenda report. ' Amount of Onsite Open Space 54.67 acres as the amount of onsite open space allowed if affordable housing can be built on 4 acres of the Dalidio Farm property. Open Space Easement The grant of an easement for onsite open space with the possibility of fee title in the future and direct staff to explore the acquisition, if necessary, of a small portion of the property in fee if needed for water treatment facilities. Additional Offsite Open The financial equivalent of 24 acres of offsite open Space space or$192,000, assuming on-site affordable housing. Offsite Open Space Location The acquisition of offsite open space that is prime agricultural land at the City's southern boundary in the Airport Area. Sulkey Racing Stadium The possible relocation of the Sulkey Racing stadium to an open space location historically consistent with its original location, pending advisory body review and Council final approval; require the property owner's agreement to restore and maintain the structure. Credit of Water Impact Fee A credit against the project's water impact fee in exchange for an agreement by the property owner to use recycled water instead of ground water for agricultural uses on the property. Will-Serve Letter Provide, if necessary,a"will-serve letter" indicating the availability of City utilities within the timeframe of the agreement. Drainage Evaluate the project's compliance with City guidelines related to drainage through the EIR process and approve the inclusion of language in the development agreement regarding drainage compliance following EIR certification. GAStaMKiser\Agenda Prep FileASunund"of Staff Recommeudations(v1).doc ' i ATTACHMENT 2 Major Term Conceptually Approve: Affordable Housing Fee The project's satisfaction of the City's Affordable Housing Fee by the construction of onsite affordable housing if allowed, and if not allowed, satisfaction of the fee will be consistent with City policies. Transportation Impact Fee The computation of the Transportation Impact Fee Rate (TIF) rate as that which was in effect when the project application was submitted to the City. Defined Excess Sales Tax The DESTR between the City and the developer to be Revenue (DESTR) and the total sales tax of all San Luis Marketplace Retail Transfer Amounts Outlets (excluding those in the Hotel)less a 33% transfer effect (sales tax transferred from other City businesses) l�us TOT and sales tax from the Hotel in the Project, less a hotel transfer of 20%. Future Adjustments For the non-hotel 33% retail sales tax transfer, accept adjustment of this factor in year six downwards by 1% for that year and by I% for the next four years so that in the 10 h year the sales tax transfer is 28%. Non-Downtown Transfer The exclusion from the DESTR of sales tax from Exclusion from DESTR businesses that are deemed to be transfers from non- downtown retail outlets. Downtown Transfer The exclusion from the DESTR of sales tax from an Exclusion from DESTR outlet that closes downtown within a defined 2-year period and reopens in the project. Adjustment of Retail Chain Downward adjustments to the DESTR for a new Outlets Not Exclusively in the branch of a retail chain that is not located exclusively Downtown in the downtown that locates in the project. Adjustment of Retail Chain Downward adjustments to the DESTR.for a new Outlets Exclusively in the branch of a retail chain that is located exclusively in Downtown the downtown that locates in the project to reflect sales losses from the downtown branch. Small Space Penalties Penalties to the DESTR for small store space, 5,000 square feet or less, created after the project has been constructed. GASWAKiscrlAgenda Prep Files\Summary of Staff Recommendations(v2).doc a- (n ATTACHMENT 2 Ma or Term Conceptually Approve: I Cumulative mechanism A cumulative reimbursement of revenues so that the project, if it receives less than its maximum eligible amount in one year, may recapture it in subsequent years (but in no event be eligible for reimbursement that is more than its cumulative debt obligation). Financing Mechanism The interchange would be funded by a Mello-Roos District and bond issuance. Guarantee form The use of a completion bond or similar financial guarantee for the completion of the construction of the interchange. The "Triple Flip" The developer's option to increase the bond payment size to accommodate an additional 6 months capitalized interest if the so-called"triple flip" sales tax legislation becomes effective. Benefiting Properties The "fronting" by the developer for the other properties that benefit from the construction of the Prado Road interchange. Dalidio Street Name The use of the name Dalidio for the street that is in front of the project, from Madonna Road to the Prado Road interchange. G:\StaMIGser\Agenda Prep Files\Summary of Staff Recommendations(W1).doc ; ATTACHMENT council �� °°. 5-21-02 agenbA RCPO 2t 3N�� CITY OF SAN LU I S Cy I FROM: Vice M Marx and Coun (Member Ewan Prepared by: a ampian,City Administrative Officer ndeville,Director of Community Development SUBJECT: COUNCIL SUBCOMMITTEE RECOMMENDATIONS REGARDING THE DALIDIO PROPERTY/MARKETPLACE DEVELOPMENT PROPOSAL. CAO RECOMMENDATION 1) Determine that the revised land use distribution, and other recommendations by the Council Subcommittee, compose an appropriate basis for a new City project application for Dalidio property; and 2) authorize the Vice-Mayor to sign a letter asking the Board of Supervisors to direct the Marketplace proposal back to the City for further work and processing. DISCUSSION Background The City General Plan designates several types of land use for the Dalidio property between Highway 101 and Madonna Road (Attachment 1 and 2). General Plan policies seek to balance preservation of open space resources on the property with future development. Efforts to plan a project that meets all the policy direction provided by the General Plan have been demanding and complex. To say that opinions "vary" regarding the development — or non-development — of the property is a major understatement. The future use of this property has been among the most controversial land use issues the City has ever faced. Ultimately, if a compromise is to be reached, it must be grounded in our General Plan (the community's "Constitution") and in the practical realities confronting the City. The Dalidio Property Dilemma in a Nutshell Many of our residents have strong, protective feelings about the Dalidio property, and for good reason. The property serves as a"signature"gateway into the City, and it is a beautiful reminder of our community's agrarian roots. Therefore, we often hear citizens say that the property should remain entirely in agriculture for all time—that the City should "just keep it open", "not allow any development". As well intended as these sentiments are, they overlook some important practical considerations — considerations that, if not addressed, could result in more intense development of the land over the long term than what we can agree to now. Outlined below are several real-world constraints associated with the Dalidio propertya __ 'o� 54 MACHMENT 3 Council Agenda Report—Council Subcommittee Recommendations for Dalidio Page 2 1. The property is surrounded by the City limits—but it is not within the City limits. 2. The only way for the City to have any formal control over the land use of the property is for the property to be annexed and become a part of the City. 3. Projects in the City are reviewed by staff, city advisory bodies (e.g. Architectural Review Commission) and the Council to assure that community standards are met. 4. The property cannot become a part of the City (annexed) without the property owners' consent. 5. The property owner will not agree to annex into the City if the City will not allow a level of development on the property acceptable to them. Thus, an agreement with the landowner is needed for the City to have formal authority over the eventual use of the Dalidio property. 6. At different times over the years, the owner has wanted to develop most, if not all, of the 131 acre property. Others have wanted the City to protect all of the property in open space. 7. Through regulation, the City cannot protect anything unless the property is within the City limits, and we do not have the millions in funding that it would.take to buy all of the property for open space (In 1991,based on an appraisal, the property owner offered about one-half of the property to the City for about $6 million. One can assume that attempting to buy all of the property over 10 years later would be even less feasible.) 8. In the early 90's, after great community debate over"development or no development', the property owner offered a compromise: if the City would agree to allow about one-half the property to develop,he would dedicate the remaining one- half in a permanent open space easement. 9. In 1994, the City Council embraced this compromise and included it in our General Plan. 10. In February 2001, a project application came to the City that did not appear to protect one-half of the property, due to the inclusion of roads in the open space"count' and because of a 9 acre"interim open space"area that the applicant eventually wanted to develop commercially. In addition, the EIR was not certified due to concerns about adequacy. 11. After the Council denied this application,the property owner took a substantially changed development proposal to the County for processing. This proposal had far less land designated for open space than in prior proposals. While there are substantial obstacles to developing such a project in the County, it may be possible. 12. If a project were approved in the County(and the Board of Supervisors has done it before), then the City would lose all access to the groundwater basin, and lose all sales tax (including new sales tax and transfer of sales tax from existing City businesses). 13. Even if an application in the County eventually stalls or fails, a different City Council could approve a larger project than presently envisioned in the General Plan some day in the future. The More Recent History As noted above, the most recent project proposal, called the Marketplace, was denied by the City Council on February 13, 2001 due to concerns regarding the amount of open space protecgo_rmnd ARACHMEW Council Agenda Report—Council Subcommittee Recommendations for Dalidio Page 3 EIR adequacy. That proposal included annexation of 131 acres and development of portions of the land area with various uses (see Table 1 for a summary of the proposed uses). The Marketplace sponsors followed the Council's denial of their proposal with an application to the County for a general plan amendment and development permit for an expanded version of the project presented to the City. The City opposed the application to the County for three main reasons: (A) Inconsistencies with both the City and County plans and policies; (B) the County's inability to provide urban services and infrastructure to such a project; and (C) the City's greater ability to assure high development standards and mitigate the environmental impacts created by the project. The County Board of Supervisors reviewed the Marketplace proposal on January 15,2002. At that meeting they determined that a Board subcommittee (Supervisors Pinard and Achadjian), Marketplace representatives, and a City Council subcommittee should meet to further explore options for the Marketplace proceeding under the City's jurisdiction. The City Council appointed Vice Mayor Marx and Council Member Ewan to represent the City. This committee met several times during the period between February 2002 and May 2002. On May 10, 2002 Supervisors Pinard and Achadjian presented the attached proposal to the Subcommittee, which was given to them by the Dalidio team as.a proposed compromise. The Council subcommittee is recommending that the full City Council consider creating a revised development scenario for the Dalidio property along the line of the attached"Proposal 3"(Attachment 3), as discussed below. Proposal Via Supervisors Pinard and Achadiian To summarize this proposal (illustrated in Attachment 3/Proposal 3 and also outlined in Table 1), overall open space protection is increased by nearly 23 acres from the prior proposal (and exceeds the General Plan 50% requirement by over 13 acres), potential long-term commercial use is decreased some (while accommodating a hotel to enhance our conference capacity), and future ambiguity over land uses is eliminated. The area previously designated as residential could change to Business Park (or, in the opinion of the Subcommittee, remain residential, if the applicant can resolve issues with the Airport Land Use Commission). The Subcommittee further suggests that the City assure groundwater access (and preserve other options) by requiring that the Dalidio property open space is dedicated to the City in fee. To be more specific, the land use distribution for the Dalidio property would recognize that about 12.3 acres are needed for a new interchange of Highway 101 and Prado Road and extension of Dalidio Way to connect the interchange with Madonna Road. The acreage for roads is reduced by about two and a half acres from previous 15 acre figures because there is no longer a roadway proposed to cross Prefumo Creek and connect the Dalidio property with the Madonna "Gap" property. An open space area would be created to preserve 51.7 acres. An additional 7 acres becomes a linear park open space that preserves the mature trees and riparian vegetation. The ultimate use of the "interim open space" shown on the General Plan Land Use Map is resolved by designating 7 of the 9 acres to commercial development with the balance going to open space. This added commercial land would allow for a hotel that would work cooperatively with the Embassy Suites to meet the City's goal of improving our conference facilities. 3-3 a-a3 ATTACHMENT 3 Council Agenda Report—Council Subcommittee Recommendations for Dalidio Page 4 In addition, it is important to note that it has always been the applicant's intention to later pursue the commercial development of the "interim open space". If successful, this would result in a total of 49 acres of commercial uses on the property. Without approval for this added commercial acreage, the property owners would only agree to an open space easement on the Dalidio open space area. However, unless the City owns the land, we cannot be assured of certain public uses, such as a well for important groundwater supply. Thus, the interim open space designation has created some uncertainly about the level of long-term development on the property and the manner of open space protection. Therefore, although not specifically offered in the proposal presented by the Supervisors, the Subcommittee recommends that agreeing to commercial uses of 47 acres (with no ambiguous "interim"use hanging in the balance) should come with the expectation of ownership of the open space on the Dalidio property(instead of an easement). The 11-acre area cur ently designated in our Land Use Element for residential land use is proposed as business park. Two acres formerly dedicated to a road to connect the Dalidio and Madonna Gap properties is added to the 11 acres for business park, totaling 13 acres. The change from the residential land use is due to County Airport Land Use Commission opposition to residential uses in this area. The Subcommittee suggests that either use should be considered acceptable to the City, with the recognition that it will depend upon what the applicant can achieve in light of the ALUC issues. This overall layout results in a split of about half of the developable land on the Dalidio property going to development and half going to open space 60 acres/58.7 acres. However, to further implement the City's goal of preserving rural landscapes at its entrances, the applicants would also permanently preserve an additional 20 acres of open space off-site(this could be via a conservation easement). The combination of a 58.7 acres of open space on-site and 20 acres off-site amounts to 78.7 acres of open space protection. This new proposal preserves substantially more open space than the previous proposals. In addition, the Subcommittee recommends that this offsite open space be in the vicinity of the Highway 101 entrance to the City and consist of quality farm land. The acreage breakdown of the proposal in comparison to the Marketplace application considered by Council in February 2001 is shown below: Table 1 Land Use Previous Marketplace "Proposal 3" Application Marketplace Revision Roads/HighwayRoads/Highway Interchange 15 acres 12.3 acres Commercial retail and hotel 40 acres 47 acres Residential 11 acres Residential or Business Park 13 Interim Open Space(applicant requested 9 acres long-term commercial -Open Space on-site) 56 acres 58.7 acres On-site Total 131 acres 131 acres Open Space off-site ag gateway) 20 acres Permanent Open Space Sub-total 56 easement 78.7 (at least 58.7 in fee title* 'Not specifically included in the proposal, but should be asked for by the City. J-4 ATTACHMENT 3 Council Agenda Report—Council Subcommittee Recommendations for Dalidio Page 5 Summary The proposal recommend by the Council Subcommittee offers the following advantages: 1. Exceeds open space requirements of the General Plan, and protects more open space along the Highway 101 corridor than prior proposals — most in fee ownership instead of only in easeriment. 2. Provides City access to very important added groundwater. 3. Allows the City to set the standards for the development by assuring that it is reviewed by City staff, city commissions (e.g. architectural review), and the City Council. 4. Provides some added commercial development in order to achieve conference center goals. 5. Recognizes and works with the practical considerations, and thus can be implemented. 6. Avoids a long,potentially costly battle with the County and the applicant. Next Steps The County Board of Supervisors will reconsider processing the more expansive Marketplace application at their June 4" meeting. Because the Mayor has previously stepped-down on this issue, a letter from the Vice Mayor has been drafted to state the recommendation of the full City Council. This letter will assist the Board of Supervisors evaluate their options for the Marketplace project, and hopefully persuade the Board to decline further processing of the general plan amendment request and refer the project back to City. A draft letter for the Vice Mayor's signature is attached to this staff report to convey the full Council's recommendation to the full Board of Supervisors, should the Council choose to proceed in this fashion(Attachment 4). It is important to note that at this point, the City Council is simply being asked to accept and communicate a land use distribution and open space protection strategy for the property that will establish an acceptable basis for a new project application to the City. However, for the project to actually be approved in the City, there remains much added work and public processes. These include amending the development application to more specifically detail the concept,renegotiating an agreement for interchange funding, EIR revision and certification,added Planning Commission, Architectural Review Commission, and City Council hearings, and securing an added 20 acres of open space along Highway 101. So, this action by the Council will essentially facilitate a new application for the project,but does not approve it in its final form. ATTACHMENTS 1. Property Area Map 2. General Plan Map of Property 3. Applicant Proposal Via Supervisors Pinard and Achadjian 4. 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OPFl•LSPACI Fn Y CG \\\•.:.:. ♦ ':N�`- ..: \ \ ( wn u' OU ST��E G . .'S+°'" �Oh: EN.$.�_'-�\ m Saq q} ` .. wi..y� ♦ 3 O a SG �.,w _ �_ a.''h'oah: !„y _IaY-.ate. 0,n �. �\\'"�'.:::___.- :: 1-A�"-,E-::'.M � r 7'Og cs" ' �-o a �" c i` p 5 `.•�' l�..w�sn r"�;o a S 1•�' '}:� t a / �-- (�rwrr~��maE Ca_� / - e^' :" •r.r sw— :e J`^�' .ri�_ f �p00 I "o+ j} ..-•.,.--4 r. NN C� 3.Vie+r `� s:WS F o 09' o• RhZa{Omtr.i V 1 wye �. o`Y• veare I .n L. 0/ Tih� y/��• �o I j �f'.' v GmvGa W� hMeRns�'Ge� ' Project Site I �e w Fp 0 S i TAN FARM ROAD TANK FARM R I c Fim + scsa 3-6 a- Dalidio Annexation L lopment Plan lNTRODUCT[O - rrrr irrr rr rr ---- •rr r rr r r r rrr C-R = r r r r -- r S r r rr rr r - :: r rr r r, r NPF •• / / r r r C-R-PD, r.R-1 rim r .• r rrr�rrr rr� rrr r r C/0S-10 C-N rr rrrrr r rr rr✓ r --_ ._-- r O-PD -_ F r r r,R-1 ••••�` rrr r r rr ••••••� r r r r r r •••••••♦ r r r r r - Ss . r ­N PF N. N. ...... °s—C-S-PD Al 11 C/OS-20 r INTERIM OPEN SPACE j ' PARK MEDIUM-HIGH DENSITY MEDIUM DENSITY �IIIIIIIIIIIIIIII GENERAL RETAIL ip @ TOURIST N.T_S_' \\\ OPEN SPACE SERVICES $ MANUFACTURING PROJECT BOUNDARY Existing General Plan Land Use and Zoning 3-7 a W-Mol April 19 2002 ¢r-✓t Re: Comparison of Various Proposals for the Dalidio Property, San Luis Obispo To follow is a comparison of three applications for Dalidio Ranch in San Luis Obispo: Proposal 1. The final application to the City of San Luis Obispo was determined by staff and the Planning Commission to be in conformity with the General Plan. An EIR was prepared for this application. At this point,the U.S. 101 interchange and the public roads component totaled less than 11 acres. The land use split was roughly 60 acres in open space and 60 acres in development. (See first proposal for layout and precise acreages.) Proposal 2.This application was prepared and submitted to the County of San Luis Obispo after denial of the above plan by the City in February 2001. Since the 50150 rule no longer applied and housing along with larger hotel facilities appeared desirable,the development portion of the site was enlarged. In addition,more detailed potential uses for the open space were identified since the City was no longer to be the holder of the Open Space Easement. The commercial area was expanded by 5 acres.The housing and future urban area (interim open space) of the proposal were replaced with 30 acres of housing. Park and open space uses dropped to just over 39 acres. Roads and the interchange requirement increased to over 16 acres. Proposal 3. This proposal is the refinement of several months of negotiations between the City,County and Dalidio. It incorporates many of the concessions agreed to by both sides to date. Development now equates to 60 acres,roads to just over 12 acres,and onsite park and open space equal 58.67 acres. The plan has been redesigned to meet the intent of the original General Plan which requires approximately a 50/50 development open space development ratio. To facilitate acceptance,the applicants agree to purchase an additional 20 acres of open space offsite based upon an inventory of land in the possession of Neil Havelik,Natural Resource Manager of the City of San Luis Obispo. Summary Table Development Park & Ratio Excluding (acres) Open Space Roads (acres) (percent) Proposal 1 60.37 60.55 49.93%/50.07% Proposal 2 75.62 39.19 65.87%/34.13% Proposal 3 Onsite 60.00 58.67 50.56%/49.44% Total On and Offsite 60.00 78.67 43.27%/56.73% 96-0705.151Wan/Option-Ltr 4.19-02.doc Z-Q ^ MACHMENT3 r. o L— CEIT"LETWD.111, aesCaen ExisiWCWm PARKING ._ PARKING \\ li ---- a -- -� II CLIA r<�.I IMI CM I Gtu i ...._ yyp P POST / OFFICE C © �i \ \ \ 1, Ax I� COMMERCIALy :�. "l r. -\ 40 acres Qi y; 6 �� \ ,1 �*7 t T3 acres 1Its t>c *r ".Y. �'T 111 f 1 w� 11 F W r'l g11 FUTURE /V URBAN USES " t 1 E.; 9.24 acres First Proposal Land Use Acres Commercial 40.00 Residential 11.13 1 INCH=500 FEET Future Urban 9.24 60.37 Linear Park 7.02 Open Space 53.53 TOTAL PARKA OPEN SPA E 5 n a� uLS 06�s Public Roads 10.08 AID TOTAL PROJECT 131.00 ✓r'- _ DATE: 1996 CITYAPPLICATIONce-ff mon f\ SS10CI - F ,, � a2kertp aoe f:broK1995\960705\9fi0705.15\Plan\Dealgnllmagesl200]\ciry-county-cvrrenbamt-lB-02.p85 4-19.02 J.1i.c iil IACflMEN 13 I SLO PR MENADE sp euamrpemu —� I rnputwec r PARKING YPARKING __--------- _ PARKING _---- �.i• L I✓ `__.__ - 5.0 acres I 64mYJ WAY 0510 Posy / OFFIE I _ I // ❑ E ' J'r� 1 BIKE PATH SENIOR : CENTER 03 Q r 00 acres #]�.b 010 'U • 4e d ij pp COMMERCIALS \ PRODU E 40 acres - SALES \ J SENIOR s SING a. = 6I�bI_b �sbA b H .. t���, rn L i1 \ •Ln •'.'.A'e �Q- i :CAL POLY STUDIES. •'„- LINEAR ASIAN ' PARK PATH LINEAR PARK BIKE PATH (4.It 00 acres - % O e6 SRu+D v' CAL POLY URBANIRURAC \\ AFFORDABLE J \ \ HOUSING ” AFFORDABLEHOUSINGBIKE:PATH . \ \ (13+8Dres)} v y z Second Proposal --- Land Use Acres Commercial 45.00 1 INCH=500 FEET Residential 28.62 Senior Center 2.00 TOTAL nF-VELOPMFNT 75.62 Linear Park 9.09 Asian Gardens 4.00 Soccer Fields/Track 12.10 Cal Poly Urban/Rural Studies 14.00 TOTALP E 39.19 Roads 16.19 -!? TOTAL PROJECT 131.00 4--: DATE:2001 COUNTYAPPLICATION Maymon ® � ® • ASSOCIATES - F:1pm11199619807051980705.1SPlanlDesign\lmapea12o021citP�u yrt ffenl-am-4-18-W.p65 4-19-02 JuliaC Al IAURNI I I ,J SLO DO PR MENAGE �.�+.�wJ EM�s*wcrmE� I � � RgE(NADE I I J PARKING PAnKING ------ 5.0 aEO cres Mu0r0 wA1 1 Ilr 00 PO � 1 PPP // GAFF CE / 1 Ud 1/ (}Oo 4 9 a •� Id�4 Jb U U COMMERCIAL� 3 G 2� n a' 4 42 acres p b �p X ifb'b �o oU$IN ao a bap a o b�0pb- 1b:in S E D�bbU t�D1b� J14�ltb 7b / Q�OQO r ITAROET) 1 � � {0�a ifi � •�aL01.VJC-S i r . / EXISTING TREES r \ 1\ Third Proposal Land Use Acres IINCH=500 FEET Commercial 47.00 Business Park 13.00 TOTAL DEVELOPMENT 60.00 Park and 0 en Space 58.67 Off-Site Open Space 20.00 I TOTAL OPEN SPACE 7897 Public Roads 12.33 a-! . TOTAL PROJECT 131.00+20.00 r DATE:APRIL 2002 DRAFT PROPOSAL ; ; �. s•r On 'Uses and locations shown are for conceptual purposes to !&I show general proportions.The plan will be refined if the ASSOCIATES proposal proceeds through the development plan process. F:\"199619807051960705.151Pimioea10n11ma0ee120021911yCOumytorten-Mm .18-02.p65 515-02 JulieC - ATTACHMENT G`t,y o� 444 o city of san tuts oaspoy �� lb OFFICE OF THE CITY COUNCIL (Its O 990 Palm Street ■ San Luis Obispo,CA 93401.3249 ■ 805/781-7119 May 22, 2002 Chairperson Shirley Bianchi Supervisor Harry Ovitt Supervisor Peg Pinard Supervisor K.H. Achadjian Supervisor Mike Ryan County Board of Supervisors County Government Center San Luis Obispo, CA 93408 Dear Chairperson Bianchi and Supervisors Ovitt, Pinard, Achadjian, and Ryan: On June 4, 2002, your Board will again consider a proposed General Plan Amendment that will allow for the processing of an application to develop the Dalidio Farm property within County jurisdiction. Development of such an urban-like project in the unincorporated area is inconsistent with both County and City policies and good planning principles. The City Council urged that your Board deny the request when you considered this amendment on January 15, 2002. However, the City also expressed a willingness to work with the applicant to find a mutually satisfactory approach to developing the property within the City of San Luis Obispo. Your Board ultimately decided to postpone action on the amendment and invited the-City to meet with a committee of Board members and applicant representatives to discuss alternatives for the development of the property. Subsequently, Supervisors Pinard and Achadjian were appointed to represent the County and Council members Marx and Ewan were appointed to represent the City. We wish to thank the Supervisors Achadjian and Pinard for the helpful and constructive role each played during these sometimes difficult discussions. We believe that their leadership helped to produce promising and workable alternatives. On May 10;2002, Supervisors Pinard and Achadjian asked to meet with the Council Subcommittee to present what they viewed as a very promising compromise(see Attached "Proposal 3"). Although there remain further questions and more details to work out, in general the Subcommittee agreed that the compromise offered some significant advantages over earlier options, including the application now before the County. Therefore,on May 21't, the Council subcommittee presented the concept to the full City Council. In summary, our Council agrees to work with the applicant to accomplish a project that will: city of San lwS OBISpo ATTACHME 1. Be largely consistent with the City's General Plan, thus reducing the amount of new studies and other application requirements; 2. Be very similar to Proposal 3 (attached), allowing significant development of the property, while protecting more open space than envisioned in the previous proposal to the City (56 acres vs. about 79 acres); 3. Protect the 58.7 acres of open space in fee title, instead of via an easement (as in the former proposal); 4. Require that the acquisition of 20 acres offsite be located in the vicinity of Highway 101 at the southern end of the City and consist of quality farmland. 5. Eliminate the uncertainty of the previous 9-acre"reserve". 6. Provide for about 47 acres of commercial development, a portion of which is to include a .hotel that would help meet the community's need for enhanced conference facilities. T Provide for access to the groundwater basin to improve the City's water supply and work conjunctively with the City's water reuse project; 8. Involve a binding development agreement at the appropriate stage in order to create greater certainty for both the applicant and the City; During the past three and a.half months, all parties have worked very hard to address the many issues involved in the future use of the Dalidio property, and more issues and some development review processes remain before development can be formally approved. We see the primary question before the Board of Supervisors to be: Is the City of San Luis Obispo willing to work with the applicant in good faith to process a revised development plan for the Dalidio property? —we think the answer is clearly"yes." The City therefore,respectfully requests that the Board terminate the General Plan Amendment before you and refer the applicants to the City of San Luis Obispo so that the process of revising the project can be initiated,consistent with the concepts outlined in this letter. Sincerely, Jan Howell Marx Vice Mayor cc: City Council Staff distribution -3a _ "Proposal 3" April 19, 2002 ATIACHME 1 3 Re: Comparison of Various Proposals for the Dalidio Property,San Luis Obispo To follow is a comparison of three applications for Dalidio Ranch in San Luis Obispo: Proposal 1. The final application to the City of San Luis Obispo was determined by staff and the Planning Commission to be in conformity with the General Plan. An EIR was prepared for this application. At this point,the U.S. 101 interchange and the public roads component totaled less than i l acres. The land use split was roughly 60 acres in open space and 60 acres in development. (See first proposal for layout and precise acreages.) Proposal 2.This application was prepared and submitted to the County of San Luis Obispo after denial of the above plan by the City in February 2001. Since the 50/50 rule no longer applied and housing along with-larger hotel facilities appeared desirable,the development portion of the site was enlarged. In addition,more detailed potential uses for the open space were identified since the City was no longer to be the holder of the Open Space Easement. The commercial area was expanded by 5 acres.The housing and future urban area (interim open space) of the proposal were replaced with 30 acres of housing. Park and open space uses dropped to just over 39 acres. Roads and the interchange requirement increased to over 16 acres. Proposal 3. This proposal is the refinement of several months of negotiations between the City,County and Dalidio. It incorporates many of the concessions agreed to by both sides to date. Development now equates to 60 acres,roads to just over 12 acres,and onsite park and open space equal 58.67 acres. The plan has been redesigned to meet the intent of the original General Plan which requires approximately a 50/50 development open space development ratio. To facilitate acceptance,the applicants agree to purchase an additional 20 acres of open space offsite based upon an inventory of land in the possession of Neil Havelik,Natural Resource Manager of the City of San Luis Obispo. Summary Table Development Park& Ratio Excluding (acres) Open Space Roads (acres) (percent) Proposal 1 60.37 60.55 49.93%/50.07% Proposal 2 75.62 39.19 65.87%/34.13% Proposal 3 Onsite 60.00 58.67 50.56%/49.44% Total O ne 60.00 78.67 43.27%/56.73% and%-0705.1&"an10;Mm-Lv4_19-Q.dm 3-8 a � �4 _ 1�f1o�IcmaL O . RED FILE ;2-COUNCIL .ADD DIR M ��IINNjP AGENDA XACAO ,FIRDIR CHIEF DATEEc,r/Ls ITEM # k!i—A 5-?ATTORNEY .0'PW DIR 2CLERKIORIG :.'POLICE CHF January rJ DE EADS ZREC DIR, EIVED Jan 4, 2004 ,,� &R ZVTILDIR REC , . , r_ HR DIR Mayor Dave Romero Council Members, Christine Mulholland, John Ewan, S LO C i T( C 0 U COUNCIL Allen Settle, and Ken Swchartz Regarding: Prado Rd ( Council meeting 1/6/04 Marketplace/Dalido agenda item) Dear City Council, Before you is a phantom project that has not been adequately addressed. It is called "Prado Road". A segment of it is in the Margarita development. Another segment of it is in the Marketplace/Dalido development. It is a big project. It incorporates a 64ane freeway interchange, loss of valuable agricultural land, a 4-lane road (future Hwy 227), mountain blasting, elevated road, tunnels, and destruction to a 5,000 yr old archeological site. These events will create significant city wide environmental impacts. According to CEQA guidelines, sections 15003 & 15121, the primary purpose of an EIR is to demonstrate to the public that the environment is being protected. The EIR also serves the purpose of ensuring political accountability. The entire Prado Rd project, from Madonna Rd to Broad Street, needs to follow CEQA guidelines It needs a separate study to demonstrate to the public that the environment is being protected and that the public is being informed. CEQA does not require perfection, only a comm and good faith effort for full disclosure. I do not believe the public is being presented with a "good faith full disclosure" regarding the Prado Rd project. First off, there is no comprehensive Prado Rd project to study, analyze, or disclose. The EIR's prepared for the Margarita and Dalido proposed projects do not adequately address Prado Rd impacts nor do they offer any viable alternatives that are specifically related to impacts of the entire Prado Rd proposed road alignment. All alternatives offered change land use. Changing land use in the alternatives presented is inadequately analyzing alternative Prado Rd. alignments. Prado Rd is being "piecemealed" into other projects and regardless who pays for the road, it still needs to be analyzed as a separate project. r pg 2 Your decisions regarding Prado Rd will turn it from phantom into reality. Sadly, this will happen and very little will be known, studied, or disclosed regarding Prado Rd's eventual cumulative impact on the entire city. The first "piecemealed" segment of Prado Rd is strategically hidden in the public hype of a big new "Macy's" department store. The second "piecemealed" segment is strategically hidden in the public hype of"Margarita housing and needs for affordable housing". Thirdly, we have already witnessed the public hype of a "sports complex" overshadowing the small road segment finally reaching Broad St. I have consistently contended that realigning a part of Prado Rd to go between the sports complex and a planned open space park (complete with playground equipment) is wrong. The Council made that decision for realignment in 2000. Is is possible that those decsions were based on inadequate and/or "strategically engineered" information? Inadequate studies, and no detailed analysis of Prado Rd, especially the small segment bisecting the sports fields and open space park, creates a endangerment probability for our youth, especially while they are utilizing the area. We can do better. Thank You. f� Bill Wilson 1690 Southwood Drive San Luis Obispo, Calif. 93401 - RECEIVED ►����������iva�����U c o n n c,L m E m o R n o u m JAN 0 s 2004 SJ_0 CITY CLER RED FILE January 5, 2004 ___ METING AGENDA amao TO: Cit Council City DATEt ITEM # ` /C 0 U N C1 L .2"CDD DIR I� 2-CAO 2' IN DIR ACAO 'FIRE CHIEF VIA: Ken Hampian, Cit Administrative Officer 'rATTO fa'FW DIR OCLERK/ORIG ;?V0LJCE CHF FROM: Mike McCluskey, Director of Public Works IID ADET4HEADS 71 1A. �RECUTIL DIR SUBJECT: History of Prado Road Interchange // Councilperson Mulholland asked for a history of Prado Road Interchange and its place in our General Plan and Circulation Element. The 1962 General Plan shows an extended Prado Road from 101 to Broad Street (Attachment #1). As this was the City's first General Plan it is unknown what, if any, official Council policy existed prior to 1962. When a roadway connects to a highway and full-blown interchange is usually associated with that connection. Thus, by inference, the need for an interchange could have been assumed in 1962. In 1982 the City's first Circulation Element was adopted. The 1982 Circulation Element has a generic category of improvements entitled "Freeway Interchange Improvements" and a map. On that map is a group of interchanges along Highway 101 with stars at the points of interchanges. And one of the stars is located at. Prado Road (Attachment #2). Thus, the 1982 Circulation Element identifies, in a generic way, that some form of improvement to the interchange of Prado Road at 101 needs to take place. No specifics are detailed but the most likely scenario would be to improve the interchange from a half-interchange to a full- interchange. In 1991 the Council approved the first rendition of the Dalidio project and a specific part of that was the Prado Road Interchange (Attachment#3). The 1994 Circulation Element again shows Prado Road Interchange at Highway 101(Attachment #4). The 1994 document expands on the 1982 Circulation Element by listing specific projects in the City for improvement. Figure#4 lists all those projects and "Freeway Interchanges" are category"C" projects. Prado Road is listed as item C.1 and lists the specific improvements as "build full interchange". It further states under the "Implementation" column that the interchange should be built .... "if funding secured from Airport area and Dalidio areas development". To conclude: 1962—General Plan—shows Prado Road extension - 101 to Broad Street (Attachment#1) 1982 — Circulation Element — sets task for multiple freeway interchange improvements and shows Prado among others (Attachment#2) 1991 —Council action—approves project including Prado Road Interchange (Attachment#3) 1994—Circulation Element—specifically describes need for Prado Road improvements (Attachment#4) I:Wdmin Division\mike's surf Trado Road\prado Road interchange history I-5-04.doc Attachment No. 1 1962 General Plan v0006NNWB[ • i /F,,. ° se's s>•�aaavai{a�s� �, 11 ' it It Iltll 1 1 1,114 1'141 11 111 1d 1 II 1 111'lll 1 11111(1 II 1111'1 111 � I bol n ' 1111 1W........ (v\ � `11 1 111 If- •.Vl•:T•�. ',• ` 4 J� 1111n1,1 . 1 1. _ _�_ 3 •!'r.; ti' 'i ii'i±'11'fI�li1. \ _ --xr.:_. .. i. #N 111n111n11 �^� l '\ � •.:�'::..: ��} 1111• 111u1f11 V� � 1 ;1111 1,1ii1'ilf - 4/ v ! 1`�•F 11111 ,1111 I �. 1n t ��1141�,/ ,Inf4r 11 O 1 fl uln I.ul 111unll �1�. �:. /� ``�� Iii 1.•;•; •••• ;d4,, 4Y.'I w` Y � �� �p 1111f,�, •i•d.�I•�1 '�; . n • • /1111q111 _1 -1 ' '� •, ' Y "Ill l��lf'll 11�y111 • •'••s�I,1•���:�:• 111 '111 �IYtlr: � , � „Ilf II 111 :';T��. IIF• •) ';II 11 ..• .. •,11(;'•� (141141•• ,I lhl .••• • rlr:;:11111•: . ' CQf.h✓• . � J t '4'iup ': �:y:llll il+�1II{::;?, + .inln 1i{,••{. . r Prado Road ;vl,,ly OT;If.1..:1Y11111..: U,1;,�I 11111111,1111111+11,.•• 1t 1111,1111111 U111�,••: ' �� 'l1y,111.11p111114 1111,...•• •\ 1 11 7. 111;11111 111..•:.•.' 111;If1IIF...•:. / `�.� 1`1111:.:.•. o o�yaa a I. I r � `• ,, TAMU. FAQ- fl4 ` r Future Highway 101 Interchange Attachment No. 2 1982 Circulation Element FREEWAY INTERCHANGE MODIFICATIONS The Situation: The Highway 101 freeway divides the City of San Luis Obispo in two. It was built in 1954 and many of the on- and off-ramps do not meet today's design standards. Some of the interchanges are too close together, requiring drivers to make dangerous wearing movements. Possible Solution: The city could ask CalTrans to consider redesigning the entire freeway ramp system in the San Luis Obispo area. Two projects (Santa Rosa Street and Los Osoa Valley Road interchanges) have already been mentioned in this report. Location Map: 0, FIs ii AMASS TO BE cai5l�El t�,t � � 1 Prado Road Attachment No. 3 Prado Road Interchange: "The remaining 10 acres of the 130 acre - ,ill. 3 Dalidio property would be used to build roads and a freeway $ „ interchange that would involve extending Prado Road across gg $q a g7 Highway 101 into the proposed shopping center" $E r i�. • 8�'• a5c mm3' 39 n � �3$a' X65 �5 8 r 9 Se9 Tm.0 vi 8 "9 e �E r..2vamfg •`qJ a $5mg� mg 8 q w 4� uy'y� c$�..ES• 0 9$$aiB g� m �2 WH W $�iy Fa y �e pq +� FaFaFFy Ty, •y � GOXO g3yS,ly'L'i3°� x 9'•od � OH €,8t8 � Y�a ca3�o8'gq1r95gWmg•a.,�,i 9yF.�. 2Ea g9 Y �c c $ aF��mg9 Cys a ��:E 'S Fr59 �rg me ,78 ,W 114 141 2 e e 1 e Ill cc 4 y m � � ai ec.�w� 9p � CtO � Cm0 .l.fi�'a.� 3C CO •� E a m sa g � oN •, mo.E 9 c 'or o �r8b bbd m ;�C Yd. mm me Y O. Y d e m m 00,0 � YgF UY �we dEEcJ� K ■1� YEN Ad rm S &I.O.�. gg��tl� $pg A 1 E a E u o e oZa g,e� m. c+p $ v 5 acumen oPwUn 8 �3 • all l mz« n —eroTemE�';6 m Y eOR B ! 9g 92-P Me 0 CLI C m ttm L �e m 8 n8 g 0 066 OC and ey l Q m9 YO7 / Y O E 96 qq E y 9 � ■ SGV was E 8 2-19 $�•� �}tq�93ga T,! L� 5� ��sro95ts 851 g � g .1VSSW- 0 RUg 41 CO lit a 6 �1 89 �� , m Attachment No. 4 1994 Circulation Element Prmtary Funding project I shut Seroma Desaioca d Fote W Change Lead Agency Raponsibilky Implementation B.1 Santa Rosa(Olive to btstall tum hoes and median City state city StatelFederel Programs Foathill) access watrols(see Appendix D) Freway Intee+ehaoges CA Prado Road(3) Build fill intacbange at 101 Caltrans Development Build if funding sawed Gom Werchanga Airport area and DaWm area development C.2 Los Osos Valley(3) Modify ramps Caltrans state/ Needed when LOUR widened as Palnvay Arterial Road luterehange Development from Madonna to Freeway(project B.6) C.3 Route 101ISanta Rase Changes to ramp system(2) CaltreaS State STIP Intarcbaa¢e u�������������iiiii��� ���►i' council memoRAnbum January 5, 2004 TO: City Council VIA: Ken Hampian, City Administrative Officer FROM: Mike McCluskey, Director of Public Workjlp� SUBJECT: History of Prado Road Interchange ��// Councilperson Mulholland asked for a history of Prado Road Interchange and its place in our General Plan and Circulation Element. The 1962 General Plan shows an extended Prado Road from 101 to Broad Street (Attachment#1). As this was the City's first General Plan it is unknown what, if any, official Council policy existed prior to 1962. When a roadway connects to a highway and full-blown interchange is usually associated with that connection. Thus, by inference, the need for an interchange could have been assumed in 1962. In 1982 the City's first Circulation Element was adopted. The 1982 Circulation Element has a generic category of improvements entitled "Freeway Interchange Improvements" and a map. On that map is a group of interchanges along Highway 101 with stars at the points of interchanges. And one of the stars is located at Prado Road (Attachment #2). Thus, the 1982 Circulation Element identifies, in a generic way, that some form of improvement to the interchange of Prado Road at 101 needs to take place. No specifics are detailed but the most likely scenario would be to improve the interchange from a half-interchange to a full- interchange. In 1991 the Council approved the first rendition of the Dalidio project and a specific part of that was the Prado Road Interchange (Attachment#3). The 1994 Circulation Element again shows Prado Road Interchange at Highway 101(Attachment #4). The 1994 document expands on the 1982 Circulation Element by listing specific projects in the. City for improvement. Figure#4 lists all those projects and"Freeway Interchanges" are category "C" projects. Prado Road is listed as item C.1 and lists the specific improvements as "build full interchange". It further states under the "Implementation" column that the interchange should be built .... "if funding secured from Airport area and Dalidio areas development". To conclude: 1962—General Plan—shows Prado Road extension - 101 to Broad Street (Attachment#1) 1982 — Circulation Element — sets task for multiple freeway interchange improvements and shows Prado among others (Attachment#2) 1991 —Council action—approves project including Prado Road Interchange(Attachment#3) 1994—Circulation Element—specifically describes need for Prado Road improvements (Attachment#4) BAdmin Division\mike's stuffiPrado Road\prado Road interchange history 1-5-04.doc Ken Hampian - Dalidio PropertyAgreeme-' - Page1 .�.._: - -� ------ RECEIVED JAN 0 6 2004 From: Ken Hampian To: Slyons@thetribunenews.cam SLO CITY CLERK Date: 1/6/04 9:18AM Subject: Dalidio Property Agreement Silas, I know that you have always objected to the fact that the 2002 County lead "subcommittee" discussions regarding the Dalidio property were not open to the public, an objection you restated today in your column.. However, I do think it is important to remember a few things regarding public access to information associated with those discussions and this transaction in general: 1. During the timeframe of those discussions(about three months), Vice Mayor Marx and Councilman Ewan briefed our City Council on various occaisions on the progress and content of those discussions. These were public briefings that occured under the Communication Section of council meetings (which, of course, are also repeatedly televised at various hours of the day/night); 2. At the conclusion of the County-City-property owner discussions, a report from the Subcommittee was prepared and placed on the public meeting agenda which fully discussed the results of the discussions and made recommendations for formalizing City positions on the broad issues that were addressed. The Council acted on the Subcommittee recommnendations on May 21, 2002, after a complete presentation, public input, and council discussion. The Council's position on the issues raised in the discussions were then forwarded to the Board of Supervisors in a letter that was reviewed, edited and approved by the Council during the May 21st meeting; 3. The Board discussed the City Council letter and took their own actions in a public meeting held on June 4, 2002; 4. One of the commitments made by Council in their letter was that the City would work with the applicant to prepare a "...binding development agreement at the appropriate stage in order to create greater certainty for both the applicant and the City". While staff was authorized to begin discussions and negotiations with the applicant as soon as a new project application was submitted to the City(guided by the principles adopted on May 21 st), the appropriate time for actually entering into a binding development agreement is when a project is ready for final action: However.... 5. In our usual open and inclusive way, we are bringing to the City Council and the public the results of our discussions and the major potential terms of such an agreement well ahead of a final project and proposed development agreement-at least 3-4 months ahead of that time-so that the public and council have the opportunity to review and comment and provide staff with direction as appropriate. Thus,when a final development agreement is brought to the council, the vast majority of issues (if not all of the issues) will not be new or without prior discussion and direction. 6. Even so, when a development agreement comes to the Council with the final project, the agreement won't be final until it once again reviewed and discussed publicly, and acted on by the City Council. While I know that you will never agree with the way the initial discussions with the county were handled, I hope this illustrates that the substance of those discussions and all formal actions that followed (which are the only ones that count) have been-and continue to be-highly sensitive to the need for open, public discusion, review and action. Ken Hampian, CAO r_ City of San Luis Obispo 805-781-7114 COUN IL .TCDD DIR CAO FIN DIR ACAO 2-FIRE CHIEF CC: Council jlynem@thetribunenews.com ATTORNEY jc!PW DIR CLERK/ORIG Z POLICE CHF ❑ DEPT HE40S Z REC DIR FZUTIL DIR RED FILE ry�- 2"HR DIR M G AGENDA DATE ITEM # r Ken Hampian� Dalidio Issues --- - ------_—______.______- Page 1 ;%COUNCIL CDD DIR ICAO LrFIN DIR RECEIVED YACAO Ef'FIRE CHIEF JAN From: Jonathan P Lowell- - 2'ATTORNEY ,7"PW DIR 0 6 2004 To: Mulholland, Christine Fz CLERK/ORIG Z POLICE CHF Date: 1/5/04 5:53PM ❑ DEPT HEAD- 2 REC DIR SLO CITY CLERK Subject: Dalidio Issues d 2 UTIL DIR DIR Dear Christine: When we spoke by telephone the other day you questioned whether the requisite support could be found to support the formation of a Mello Roos district to pay for the proposed Prado/Dalidio interchange. More specifically, you wondered whether the requisite votes or property owner consent could be obtained. In addition, by voicemail today, you asked whether the interchange truly qualifies as a public facility eligible or funding through a Mello Roos district. While I was drafting this message earlier today, you stopped by my office and expressed concern over the legality of the City participating in the Mello Roos district. I've now had a chance to look into these issues and below have set forth my conclusions. If there are less than 12 registered voters on the subject property, then a Mello Roos district may be formed through a landowner vote. In this case, it is only the Dalidio property that will initially be included in the district. The Dalidio property is uninhabited and its owner consents to formation of the district. With regard to the other benefitting properties, they will not be a part of the district initially(unless they specifically choose to be). The City will utilize its police powers, i.e. its normal land use processes, to require the benefitting properties to reimburse the burdened property (Dalidio) at such time as the benefitting properties seek to develop. Such a requirement of a property owner seeking a land use entitlement is a proper use of the City's land use/police power as there is a clear nexus between the amount to be reimbursed and the specific benefit received by each property. As we discussed this afternoon, other developing properties in the City will also contribute towards the interchange through transportation impact fees. TIF monies are being collected from developing properties throughout the City to pay for citywide traffic impacts stemming from development. Thus, it is TIF monies that will be used to pay the"City" contribution for the interchange indicated in the staff report. Ultimately, this raises a policy issue rather than a legal one. The Mello Roos statute was crafted and has been subsequently interpreted by the courts to allow for financing of'a broad range of public facilities with great flexibility in assessing liability for payment. Interestingly, the statute in two separate sections sets forth long laundry lists of the types of public facilities to be covered by a Mello Roos district, but neither specifically mentions freeway interchanges. However, Government Code section 53313.5 provides that"a community facilities district may finance facilities, including, but not limited to..."thus indicating the laundry list is not exclusive. In addition, subsection (h) provides the statute applies to"any other governmental facilities which the legislative body creating the community facilities district is authorized by law to contribute revenue to, or construct, own, or operate." In this case, the City Council may contribute revenue to and construct a freeway interchange, thus it can arrange for its financing through a Mello Roos district. Therefore, the proposed interchange is a proper subject for financing through a Mello Roos district. Allan Kotin, our economic consultant, informs me that the use of Mello Roos financing for freeway improvements is, in fact, widespread in large developments which use this form of financing. He is himself working on two such transactions now. Both the City's financial advisor and bond counsel concur that this project is an appropriate use of Mello Roos financing. Finally, a point of clarification: your voicemail message indicated that the taxpayers would be repaying the bonds. This is not the case. Only one taxpayer, namely the property owner(Dalidio)will be obligated to repay the bonds independent of any assistance from the City. Dalidio may be reimbursed by the City through Defined Excess Sales Tax Revenue,which be definition is half or less of the revenue that would not be available if the project were not developed. The Dalidio property will serve as security of the bonds. If Dalidio defaults, the bond holders will have no recourse against the City. The deal is structured to ensure that the rest of San Luis Obispo taxpayers do not contribute towards this interchange. RED FILE M�G AGENDA DATE ITEM #kLI, Ken Hamp?A - Dalidio Issues - Page 2 I hope this information is helpful, give me a call should you have any further questions. Jonathan Jonathan P. Lowell City Attorney City of San Luis Obispo 990 Palm Street San Luis Obispo, California 93401-3249 (805) 781-7140 (805) 781-7409 FAX jlowell@slocity.org CC: akotin@adkotin.com; George, Wendy; Hampian, Ken; Mandeville, John; Price, Lee; Stanwyck, Shelly; Statler, Bill Allen Settle- regarding tomorrow's City C' Icil meeting �; Page 1 From: "adrienne dickinson" <dickinsonfam@hotmail.com> To: <asettle@slocity.org>, <jewan@slocity.org>, <cmulholland@slocity.org>, <kschwartz@slocity.org>, <dromero@slocity.org>, <bmorem@TheTribuneNews.com> Date: Mon,Jan 5, 2004 7:07 AM Subject: regarding tomorrow's City Council meeting For thousands and thousands of years of creation and evolution, the rich and beautiful,fertile valley, which is now the lovely garden at the RECEIVED southern entrance to San Luis Obispo, has developed. The current owner, Dalidio, is not worthy of its trust. Bill Bird is a hovering vulture. Soon I R,.N 05, 216U4 we will have Target, housing, another hotel, and more commercial buildings. The only voice of courage and vision on the City Council is Christine SLO CITY CLERK Mulholland. This is not an appropriate use of this land. It is much too valuable as prime agricultural land,which is evaporating on the planet at a devastating rate,just as the population burgeons beyond sustainability. The others on the Council must feel impotent to successfully make this case with the County Board of Supervisors, unable to fight for proper use of resources. Christine has my vote for continuing on the Council. I also vote with my dollars. I won't spend even one in projects that cover this beautiful, necessary treasure with asphalt--ever. Future generations will not know what they missed, but they will feel the gnawing loss in their souls and in their guts. Adrienne Dickinson San Luis Obispo 543-1285 January 5, 2003 Working moms: Find helpful tips here on managing kids, home, work— and yourself. http://special.msn.com/msnbc/`workingmom.armx RED FILE MEP, NG AGENDA DATE I ITEM # -a iUNCI! CDD DIR ,✓CAO FIN DIR ZACAO "FIRE CHIEF r7ATTORNEY 21W DIR C CLERKIORIG :'POLICE CHF [] DE THEADS C DIR jdUTIL DIR /IR DIR Allen Settle- Dalidio- Marketplace Props" Page_1 From: "D. & E. Dollar" <ddollar@pacbell.net> To: John Ewan <jewan@slocity.org>, Allen Settle<asettle@slocity.org>, Ken Schwartz <kschwartz@slocity.org>, Christine Mulholland <cmulholland@slocity.org>, Dave Romero <dromero @ slocity.org> Date: Sun, Jan 4, 2004 5:20 PM Subject: Dalidio- Marketplace Proposal City Council, RECEIVED I do not feel that the proposed Dalidio - Marketplace is a good idea. We should not give in to County efforts to "box us in". Most of the jobs JAN 0 5 2004 with this proposal will only further stress our current housing situation. The Prado Road interchange is not needed. I saw an ad that SLO CITY CLERK Macy's wanted the public to contact you about the need for Macy's. Well, there is no need for Macy's with me,there is a large enough selection of shopping now. I have some concerns about the Open Space issues with this proposal. Need to clarify public access. Do not move the Sulky Racing Stadium to Open Space, make those wanting it saved, provide it's own land. Putting this stadium on Open Space land,takes the Open out of Open Space.Will there be parking with it? open to the public?who will maintain it?what will it cost to maintain and who pays? If it of historical significance, move it to a Historical Park- not good use for Open Space. Sincerely, Don Dollar SLO 781.0118 RED FILE, MEETING AGENDA COUNCIL .2-CDD DIn DA ' ITEM #6� ICAO ZFIN DIR L2 ACAO ZrFIRE CHIEF O ATTORNEY 2 PW DIR ,"CLERK/ORIG .L'POLICECHF ❑ DEPT HEADS ZREC DIR �.UTIL DIR. 2,'HR DIR Diane:'jeynolds- 1/6/04 Agenda .Prada" ,ad Page 1 From: <ANCARTER@aol.com> To: <asettle@slocity.org>, <cmulholland@slocity.org>, <kschwartz@slocity.org>, <jewan@slocity.org>, <dromero@slocity.org> Date: 1/2/04 10:04AM Subject: 1/6/04 Agenda-- Prado Road RED FILE _. Dear Council Members: MEETING AGENDA I hope you've had a wonderful holiday season. DAT ITEM # LL 1 plan on attending your meeting next Tuesday. At that time, I plan to speak on the issue of open space vs. housing as it applies to the Dalidio project. Right now, I want to write about other aspects of the project. Except as pertains to open space/housing, I support the recommendations being made by the CAO. They seem reasonable to me. With respect to open space/housing, I think we desperately need more than 4 acres of housing in the project. I do see this project as unique and therefore worthy of a development agreement. I think the size of the project,the focus on it in our General Plan,the ongoing controversy over the project, and the back-and-forth nature of the project vis a vis the County make it unique. I think we should acknowledge, however,that there may be times in the future when crafting an agreement with a developer of some other large-scale project may be appropriate. I think the idea of focusing offsite open space to the Buckley Road area is excellent. One of my concerns in reviewing the Airport Area Specific Plan and EIR has been how the creation of a greenbelt in that area would actually be accomplished. In fact, I would like to see less onsite open space on the Dalidio property and more offsite open space in the Buckley Road area(or elsewhere along the greenbelt). From a planning perspective, I think it would be wiser for the City to focus on creating the greenbelt, the outer limit of our incorporated area "donut," instead of trying to preserve an open space "hole" in that donut. I firmly believe that some future City Council will allow development of most of the currently planned Dalidio open space and we will have therefore missed an opportunity now to preserve a portion of the greenbelt. I do not have a problem with moving the Sulky Stadium. Although it is not stated, I presume the developer wants to move the stadium because the current GBS f location is within the planned business park. I am not concerned about removal of the Asian Garden from the proposal. I C3 CAO aF always viewed it as a"bell and whistle"that.would be nice to have, but not CIACAO necessary to have. r' ATTORNEY I.TPr L3'CLERK/ORIQ ' p PG:. I support the idea of providing the developer with a will-serve letter and ITD EPT EARS CYRE,. credit on the water impact fee in return for trading ground water for recycled HRi water. The amount of credit should be specifically tied to the amount of ,• a- — acre-feet that will be traded. Under any circumstance,the developer should still be liable for the portion of the water impact fee which is designed to fund increased water treatment and distribution capacity. RECEIV�[):­ Delaying resolution of the drainage issue until after the EIR is completed IAN 112 � ,11;h seems reasonable. Doing so, protects the City as well as the developer. SLO CITY CLERK Dian?.Reynolds- 004_Agenda-_Prad gad I have no problems with how the DESTR is defined. I appreciate the efforts being made in that definition to protect the downtown and to make sure the "net new" sales taxes truly are"net"and "new." The one question I do have with the Special Tax Reimbursement Agreement is how the percentages have been determined for the Prado Road"benefiting properties." To be honest, the City share seems low given the usage of Prado Road we anticipate from current residents on the south side of town. Also,what new development in the Prado Road area is envisioned which will pay that 4.7%? Allowing Prado Road to be named Dalidio Road west of 101 is certainly a gracious thing to do. I have no concerns with the specifics of issuing the bonds and creating the Mello-Roos district. 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