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Home My WebLink About03/06/1990, 6 - WATER ALLOCATION REGULATIONS CONCERNING TENANT IMPROVEMENTS IN SPACES WHICH HAVE BEEN VACANT SINCE yp p MEETING DATE. A� II city of San luis oBispo March 6 ]990 COUNCIL AGENDA REPORT FROM: Arnold Jonas, Community Development Director BV Glen Matteson, Associate Planner&rw SUBJECT: Water Allocation Regulations concerning tenant improvements in spaces which have been vacant sincethe regulations were adopted. ADMINISTRATIVE OFFICER'S RECOMMENDATION Introduce the attached ordinance to amend the Water Allocation Regulations so allocations can be given to low-water-use tenants in spaces which have been vacant since the regulations were adopted. SUMMARY DISCUSSION Staff has interpreted the Water Allocation Regulations as not currently providing allocations for tenant improvements in spaces that have been vacant since before the regulations were adopted in August 1988. Staff bases this interpretation on the specific categories of reserves and exemptions in the regulations as originally adopted and as amended. Staff thinks the regulations could be interpreted to allow or not allow such allocations, but is not comfortable approving allocations administratively. Staff has found so far that this issue pertains to Central Coast Plaza and Foothill Square, where about 30, 000 square feet of floor area remain unleased. These tenant spaces may need four to 30 acre- feet of water allocations, depending on the specific uses to occupy them. Other projects may be in this situation. Central Coast Plaza owners have asked for consideration of this issue (attached letter) . This is an issue of water allocations to occupy buildings not of water use targets or surcharges under mandatory conservation. SIGNIFICANT IMPACTS Granting or withholding allocations for the limited number of cases at issue will not significantly affect water availability, the environment, or city finances. CONSEQUENCES OF NOT TARING THE RECOMMENDED ACTION Without direction to the contrary, staff will continue to say that such tenant improvements must wait for water allocations or perform conservation offsets (retrofits) . G-/ city of sari Luis OBlspo MINZe COUNCIL AGENDA REPORT EVALUATION The following discussion focuses primarily on Central Coast Plaza because it is the largest project in this particular situation. However, the issue and staff's recommendation apply to all projects facing the same conditions. staff has not made an inventory of all buildings which are in this situation. Practically speaking, staff could do so only if all owners were aware and came forward. Staff thinks the total number is small, based on the accounting performed as each tenant-improvement application is received. Central Coast Plaza received its final discretionary planning approval in June 1985 and the mall building "shell" was completed in August 1987. Water use was an issue in the project's environmental impact report (primarily additional use due to the added hotel) , but no water limits were in effect. The council began discussing water allocation limits early in 1987, and adopted regulations in August 1988. The water information presented to the council when the regulations were adopted reflected measured water use in 1987 plus expected water use from projects that had received building permits since June 1987. Apparently, because of the different completion dates, expected water use from the hotel anti department store were included in water use estimates, but water use from the mall itself, at future full occupancy, was not. When the Water Allocation Regulations were adopted, they established four categories of water allocations: (1) a special reserve for large, phased projects (such as Edna-Islay) and tenant improvements and changes of use in existing buildings (such as Central Coast Plaza) ; general reserves for (2) citywide residential, (3) affordable residential, and (4) citywide nonresidential. Central Coast Plaza, Laguna Village Center, and a few industrial buildings were the principal users of the reserve for existing buildings which previously had not been occupied. They had been mentioned in the staff evaluations leading to adoption of the regulations. So long as water was available in the special category, mall tenant improvements were allocated from that. The special reserve was completely allocated by February 1989. As provided in the regulations, no additions were made to this special reserve. For a few more months in 1989, mall tenant improvements received allocations from what remained in the general nonresidential reserve. Then, the council amended the regulations to say that beginning July 1989, and while mandatory conservation is in effect, only those projects which had applied for certain types of planning approval by March 15, 1989, could receive allocations. No mention was made of exceptions for existing building sites or tenant spaces which did not need, and therefore did not apply for, the planning approvals. city of San Luis OBISPO WMIZO COUNCIL AGENDA REPORT Commercial building "shells" which have applied for permits since the regulations were adopted have been allocated sufficient water for typical, expected tenants, so only those tenants with high water use (such as restaurants or laundries) need further allocations. Most tenant changes in existing buildings do not require allocations, since there is no increase in water use; tenant changes which increase water use, such as a restaurant replacing a store, do require allocations. This is basically an equity question. _ The regulations have given allocations to new projects, some of which have not yet started construction, while a strict reading of the regulations prevents giving allocations to spaces within buildings which were built before, and have remained vacant since, the regulations were adopted. In Central Coast Plaza, about 29,400 square feet of tenant spaces, including 2,700 square feet in the "food court," remain vacant, out of a total leasable mall area of about 111,000 square-feet. Filling the remaining mall tenant spaces with retail stores and the food-court spaces with fast-food businesses would require about three acre-feet of allocations; filling the mall spaces with a large proportion of high water users (such as restaurants and laundries) could require 20 to 30 acre-feet. Creating a blanket exemption for the spaces could lead to their being taken by high water users, who currently must wait for allocations or perform offsets to locate anywhere not previously occupied by a similar type of business. At a conservation rate of 25 percent, each allocated acre-foot cancels out the water savings of about 11 single-family households on a current-year basis, or about 44 households considering a multi-year drought when normal use has been exceeding safe yield. A retail tenant would have to retrofit one apartment or motel room for each 1,000 square-feet occupied. Typical, low-water- use stores -could occupy the whole remaining space by retrofitting 27 apartments or motel units. The food-court spaces would require additional retrofitting. The Foothill Square ("Burger King center") space will probably require an allocation of one acre-foot or less, for a retail store or a take-out food business. Staff believes the ordinance change is categorically exempt from environmental review as a minor change to land-use regulations. OTHER DEPARTMENT COMMENTS The Utilities Director and the City Attorney concur with the recommended approach. -3 �� ►�NVVillllll�ln ��pl city or S4M LUIS OBISPO 00174 COUNCIL AGENDA REPORT CITIZEN PARTICIPATION Staff thought the suggested ordinance amendment was within the intent of the Water and Wastewater Management Element, and therefor did not take the issue to the Planning Commission for a policy recommendation. ALTERNATIVES The council may: A. Interpret the regulations to (1) allocate or (2) not allocate water to tenant spaces which have been vacant since the regulations were adopted. If the council favors allocating, it may stipulate that allocations would be limited to uses with the lowest water consumption that would typically occupy the building (limiting the mall to stores, and excluding restaurants and laundries) . B. Determine that the inequity should be corrected, but that an amendment to the regulations is necessary. As with interpreting, the council may stipulate that allocations would be limited to uses with the lowest water consumption that would typically occupy the building. - In either case, tenants with higher water use could occupy the spaces if they performed conservation offsets, as they would in any other building. STAFF RECOMMENDATION Staff believes an ordinance amendment is more appropriate than an interpretation, because of the considerable pressure staff faces in a variety of situations to interpret the regulations in ways that will lead to granting higher allocations or allowing lower conservation offsets. The ordinance amendment should provide allocations for tenant spaces which have been vacant since the regulations were adopted, while limiting allocations to those uses with the lowest water consumption that would typically occupy the building. The attached draft ordinance would do this. ATTACHMENTS Draft ordinance Letter from Trojan Enterprises gmD: wtr-mall.wp i ORDINANCE N0. (1990 SERIES) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO AMENDING THE WATER ALLOCATION REGULATIONS CONCERNING VACANT SPACES IN CERTAIN EXISTING BUILDINGS WHEREAS, the City Council has held a hearing to consider appropriate provisions for allocating water; and WHEREAS, the City Council finds that the proposed provisions are consistent with the general plan Water and Wastewater Management Element; and WHEREAS, the Community Development Director has determined that this amendment is categorically exempt from environmental review as a minor change in land-use limitations, in accordance with the California Environmental Quality Act and the city' s Environmental Impact Procedures and Guidelines; and WHEREAS, the proposed amendment promotes the public health, safety and general welfare; BE IT ORDAINED by the Council of the City of. San Luis Obispo as follows: SECTION 1. Part J is hereby added to Section 17 . 89 . 060 of the Municipal Code, to read as follows: Despite any other provision of these regulations to the contrary, allocations shall be provided for tenant improvements within buildings constructed before August 1, 1988, within spaces which have been continuously vacant since completion of the -building shell, to the extent that the tenant's expected water. use according to city schedules does not exceed the lowest typical use for the type of building. The expected water use of such tenant improvements shall be accounted for in determining city water use and any remaining reserves which may be allocated. 1p 'J Ordinance No. (1990 Series) water Allocation Regulations amendment l Page 2 SECTION 2 . This ordinance, together with the names of councilmembers voting for and against, shall be published once in full, at least (3) days prior to its final passage, in the Telegram-Tribune, a newspaper published and circulated in this city. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage. INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at its meeting held on the day of _ 1990, on motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: Mayor ATTEST: City Clerk APPROVED• City A ministra.tive officer Cit' torney. Community Deve o ment Director Utilities Director gmD: war-ordl.wp .,,� Trojan Enterprises December 20, 1989 Mr. John Dunn San Luis Obispo City Manager 990 Palm P.O. Box 8100 San Luis Obispo, CA 93403 Dear John: As you recommended, Dan Burgner and Carol Dominguez on my behalf, met with Randy Rossi yesterday to discuss the permit problem's related to water usage for Central Coast Plaza. Although, we were able to resolve the immediate concern of the travel store permit that had been denied by transferring a previously issued permit we are not ready to use, the overall outcome of the meeting was very disappointing. As we understand it, future permit allocations have been provided for in the case of the downtown French Pavilion which is just under construction, when no provision was made for our Central Coast Plaza project which has been a known factor tong before the water issue ever arose. This is totally unbelievable. So that you understand the financial effect of`this situation, Central Coast Plaza presently operates at a $40,000 per month deficit based on its current leasing status. If that condition remained unchanged due to our inability to lease the balance of space in the mal!, you can see that we will be subjected to a substantial financial loss. To compound my disbelief of the staff's position is the fact that Sandy Merriam our architect for the last remaining pad building, encouraged us to obtain a permit and build the building by some cut-off date the city had set so it,would quality for water usage, which we did. I believe any prudent .person could assume that completed approved buildings should certainly qualify for permits to complete their tenant improvements. I truly hope this issue can be resolved between us without involving legal counsel which we would most certainly have to consider, if we do not reach a satisfactory solution. 510 SOUTH GRAND AVENUE SUITE 300 GLENDORA CALIFORNIA 91740 TELEPHONE(618)9144691 FAX(818)814-3962 / /� J. Dunn Page Two -- December 20, 1989 Although, there will always be a few backward folks who dislike the shopping mall concept, most people do, and I think it is time that all city staff members begin to appreciate that we are an asset to the community and not a liability. Merry Christmas to you and best wishes for a successful new year with your new City Council. Sincerely, WILLIAM L. BIRD PRESIDENT WLB:dm cc: Dan Burgner Carol Dominguez Michael Morris