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HomeMy WebLinkAbout11/02/1993, 2 - REQUEST TO TRANSFER WATER OFFSET CREDIT FROM ONE LOCATION TO ANOTHER (EXISTING WILLIAMS BROTHERS SITE ON BROAD STREET AT CAPITOLIO WAY TO PROPOSED VONS SITE ON BROAD STREET AT TANK FARM ROAD) IIIc^lylll�lllll�l� �I MEETING DATE: ci IUIB Ui ���� o Ui san � s oBispo - 2- no COUNCIL AGENDA REPORT ITEM NUMBER: FROM: Arnold B. Jonas, Community Development DirectorD BY. Glen Matteson, Associate Planner SUBJECT: Request to transfer water offset credit from one location to another (existing Williams Brothers site on Broad Street at Capitolio Way to proposed Vons site on Broad Street at Tank Farm Road) CAO RECOMMENDATION: Revise the offset program guidelines so that offset credits can be moved from one site to another, in limited situations. BACKGROUND . Several years ago, Williams Brothers received County planning approval for a shopping center at the site of the existing Williams Brothers supermarket on Broad Street. The project was to include expanding and remodelling the existing store, plus buildings for restaurants, shops, and services. The site was outside the City and had no City water service. However, there were previous agreements for connection to City utility lines, whether or not the site was annexed. In 1990, Williams Brothers applied to the County for building permits, and requested water connections from the City. Pursuant to the City's Water Allocation Regulations, the project had to offset twice the water allocation that would go to such development (since no allocations were available at that time). Substantial effort and expense went into the offset, which earned a credit of about 18 acre-feet by retrofitting 200 dwellings and 31 businesses. In 1991, Williams Brothers completed retrofitting to allow connection of the proposed shopping center. Soon after, Vons acquired the Williams Brothers supermarket chain. The Broad Street area was annexed, and Vons has applied to build a new store in the proposed Marigold shopping center at Broad Street afid Tank Farm Road, about one-half mile south of the existing Williams Brothers site. The City has not received any development proposal for the existing Williams Brothdrs site. Since water allocations are not available, Vons is asking the City to approve moving the 18 acre-feet offset credit earned at the existing Williams Brothers site to the site for the new Vons at the Marigold Center. Water Allocation Regulations. adopted by ordinance, do not explicitly allow or prevent transfer of a water offset credit from one site to another. Keeping in mind that an offset makes a project exempt from needing an allocation, the regulations do say, "Water allocations shall be assigned to specific construction permits or requests to connect specific structures or facilities" (Section 17.89.040), and "An allocation shall not be transferred from one site or development to another, but it may be otherwise transferred among parties" (Section 17.89.060.G). This rule was intended to simplify administration. a- � 11111$11IIIIIU11011 City Of San LaiS OBISPO COUNCIL AGENDA REPORT Land parcels are easy to identify. Identifying owners would require title reports and notarized signatures. Also, the current approach avoids having the City involved in disputes where transfers of interests in land or "water rights" are complicated. (Example: keeping track of one credit split among several parties.) The Water Allocation Regulations essentially create land use limitations or rights, which typically run with the land. Guidelines for water use offsets were first approved by the Council in 1989, and were endorsed in revised form in 1990 and in 1992, when Council considered evaluations of the effectiveness of the offset program. The purpose of the program is "to allow development which will not increase city water use and to encourage water savings which otherwise would not occur." Further, these guidelines say, "A retrofit proposal must be for a particular type of project and a specific site. Once the offset credit is earned for a specific site, it cannot be transferred to another site. However, changing the ownership of the site or the details of the project will not affect the offset credit that has been earned." Staff has allowed incomplete offset proposals to be withdrawn, and the incomplete retrofit credits to be resubmitted for another site. The following points are relevant in considering the transfer: 1. The parties have worked in good faith to complete the fust proposed project, and now the current proposal. If the prospective developers had known earlier that a new project would replace the first, they could have withdrawn the offset proposal before completing it and accomplished what they are now asking to do. 2. This situation is unusual, but not unique. Substantial research would be needed to locate all such situations, but there are other cases of retrofitting having been completed and then the intended project not built for financial or other reasons. However, this is the only pending case of one owner of two parcels wanting to move an offset credit for essentially the same project. 3. If the request is denied, water use savings in the amount of the full offset (18 acre-feet) will continue until the existing Williams Brothers building is switched from a private well to City water supply, or some other development on the site exercises the right to the offset credit, after which one-half the offset, or nine acre-feet, would continue as the long-term savings in annual water use. For comparison, the City's normal annual water usage is estimated to be about 7,900 acre-feet and its safe annual yield about 7,700 acre-feet. Therefore, this decision will not have a significant effect on the City's water situation. However, the supermarket is a significant component of the Marigold project. 4. Even if the request is approved, Vons still would need to offset roughly seven acre-feet, due to a higher water usage factor than demonstrated by Williams Brothers. This is about one-quarter as much as would be required without the I���► �IUIIIIII�Ipn ����ll MY Of San LUIS OBISPO : WNGs COUNCIL AGENDA REPORT transfer. Some retrofitting has been done for other components of the Marigold project. Staff has.been told that there are many properties waiting to be retrofitted, for Vons or other components of the project. 5. Apparently, most property owners do not care what project receives the offset credit from retrofitting their property. However, some may have been willing to have the credit go to one project, but not another. 6. Once the applicants exercise the approved request, any future development of the Williams Brothers site to be served by City water would have to wait for a water allocation or complete a sufficient offset. ENVIRONMENTAL & FISCAL IMPACTS The recommended action would be categorically exempt from environmental review as a minor change to land use limitations. None of the alternative actions will have significant fiscal impacts. ALTERNATIVES Council may let stand the existing offset program guidelines. The credit earned for the existing Williams Brothers site would continue to be available for future development of that site, and substantial additional retrofitting would be needed to build the new Vons. Council may continue action, but the applicants need a timely decision to meet their project schedule whether or not the request is approved. RECOMMENDATION Revise the water offset guidelines so that offset credits can be moved from one site to another, in limited situations: I A retrofit proposal must be for a particular type of project and a specific site. Once the offset credit is earned for a specific site, it ,....mot be •r- "r"- �e if m' :: bd r. aad: : b:d t...............riatlasate + of ti sties are owed by the S party at the i me of �arasfer Intl the Credit w l be apphedyt© a mxllm�r ..... , Changing the ownership of the site or the details of the project will not affect the offset credit that has been earned. The Utilities Department supports this approach. This change can take effect immediately, without ordinance or resolution, since the guidelines were approved simply by minute action. ATTACHED. Request letter from Courtney & Associates cMAWrRMv.CAR \\ 1 tUssoeiates AN ARCHITECTURALCORPORATION October 11, 1993 John Dunn, C.A.O. City Administration Department City of San Luis Obispo P. 0. Box 8100 San Luis Obispo, CA 93403-8100 RE: Water Allocations-Request To Transfer Water Offset Earned Williams Bros. #306 3950 Broad.Street-Marigold Center Dear Mr. Dunn: On behalf of the Vons Companies, Inc. we request the City Council consider the transferring of the allocated water offset earned(18.24 acre-feet) from the existing Williams Bros. Market at Broad Street and Capitolio Way, to the proposed Williams Bros. site(Marigold Center) located at Broad Street and Tank Farm Road within the City limits of San Luis Obispo. This request is consistent with the purpose of the Water Allocation Regulation in that it will not jeopardize adequate water service to both existing users and new users and will maintain the balance between water use and reliable levels of supply. To provide you with a little background information the following letters are enclosed: 1. Glen Matteson's letter dated September 23, 1993. Based on actual water usage of a Von's facility of similar size a water offset amount of 24.6 acre-feet for the proposed Williams Bros. store (Marigold Center) is required by the City. 2. Arnold Jonas letter dated March 21, 1991 indicating a water offset earned at the existing Williams Bros. site located at 3550/3570 Broad St. of 18.24 acre-feet. It is my understanding the intent of the City's Water Regulations, Item 17.89.060 (G), is to discourage water allocations from becomin&a commodity and land being purchased for the purpose of obtaining existing allocations then requesting they be transferred from one site or development to another. In this particular instance, The Vons Companies Inc. purchased the existing Broad St. Williams Bros. Market with the intent to expand the market and construct a 134,000 sq. ft. shopping center as approved by the County and the City. The purchase price of the Williams Bros. Market#316 included the retrofitting cost incurred to obtain the total water offset in the amount of 18.24 acre feet. - 670INDL15TRIALl1JAY. tiU1TEA LLII�__- hB1t_-P0. ALIFORNIA034�_-)1 • 605:•�41-510 J''7 I John Dunn, C.A.O. October 11, 1993 Page 2 In 1992, however, Vons agreed to relocate to the Tank Farm/Broad Street site as part of the Marigold Center. The situation that makes this circumstance unique and unprecedented is that the market relocation to this nearby site involves a condition by the City for Vons to enter into an agreement to discontinue their supermarket operations at the existing site(a recorded covenant, see Ordinance No. 1240, condition Item 4) and to down zone their 3550/3570 Broad Street property from C-S-PD to C-S-S. For these reasons,the following justification and rationale is provided to assist the City Council in their consideration to support our water allocation transfer request: 1) Supermarkets are typically higher water consumption users than businesses allowed under C-S-S zoning. It is conceivable, therefore, that down-zoning of the existing property to C-S-S and closing of the existing market will result in a reserve of the earned offset credits not likely to be used at this site. 2) Commercial development previously approved at the existing Williams Bros. site. required the retrofitting of 200 dwellings and 31 businesses. The work was completed in March, 1991, at an approximate cost of$85,470. In effect, Vons paid for the retrofitting performed by Williams Bros. when they purchased Store #316, and will be paying this cost again if they are denied the opportunity to transfer these units to the new Marigold Center market operation. It is appropriate to assume Vons will be unable to recover this cost when they sale their Broad St. property since the City's rezoning requirement in all probably will reduce the value of this property 3) The water retrofitting was completed by Williams Bros. Markets Inc. in March 1991. The City has been enjoying the water saving benefits of the retrofitting work for over 2 years since the proposed development did not take place. This will continue at Vons expense unless they are able to transfer these water allocations with their market use. In summary, we are requesting the City Council approve our request to transfer the 18.24 acre feet earned and paid for by Vons for their existing market#316 to their new market to be located nearby at the Marigold Center. The City's approval of this request: IS CONSISTENT with the objectives of the Water Allocation Regulations since the existing market will close when the new market opens thereby maintaining the balance between water use and levels of supply. When the Vons property is sold, the new property owner will be responsible for obtaining water allocations based on the actual proposed use. J John Dunn, C.A.O. October 11, 1993 Page 3 IS JUSTIFIED due to the exceptional and extraordinary circumstances and conditions applicable to this particular situation that do not apply generally to other properties in the same zoning district. IS AN EQUABLE solution to avoid Vons incurring the cost for another 18.24 acre feet at a current estimate of$98,800 and at the same time requiring them to down zone their existing property that will in effect create a lower property value. . The Marigold Center is currently going through the governmental review process and construction is scheduled to commence in December. The City Council's consideration of this request at their November 2, 1993 is appreciated. Sincerely, COURTI ARCF=CTS Thomas M. Courtney, A.I.A. Architect Enclosures CC: Mr. Glen Matteson, SLO City Planning Mr. Jim Stewart, Vice-President, The Vons Companies, Inc. Mrs. Mary Kasper, Attorney, The Vons Companies, Inc. n4C/cd9303/s1owatr3 IIIA',11111 {I 16111 1111111 111111!1 I. �Iilu�I�iIIIIIInIIIIIIN�����IIII uIIViiui��ill�h`li� cit of sAn luis OBISPO 990 Palm StreetIPOSI Office Box 8100 - San Luis Obispo, CA 93403.8100 March 21, 1991 Douglas F. Morris Supervising Building Plans Examiner Department of Planning and Building County Government Center San Luis Obispo, CA 93408 Subject: City utility service, construction application for Williams Shopping Center, 3550/3570 Broad Street (Proj. No. B891807-002-003-004-006-007-008-009) Vou:Mr. Morris: The applicant has completed sufficient.retrofitting to enable connection of city water service and issuance of building permits for this project, subject to all other city and county requirements. The project enabled by retrofitting consists of the following: A- Remodel of an existing supermarket of 34,116 sq. ft. B. New two-story retail/office space, 24,038 sq. ft. G New retail space, 20,700 sq. ft. D. New retail space, 8,202 sq. ft. E. New retail space, 8,655 sq. ft. F. New retail space, 12,000 sq. ft G. Addition to supermarket, 4,200 sq. ft. - H. New service-commercial building, -10,840 sq: ft. L New retail space, 8,400 sq. ft. MAR 2 5 1991 J. New restaurant, 5,000 sq. ft. Associated site improvements. Notes: 1. Potable city water is not to be used for construction operations. 2. All landscape irrigation is to be provided by an on-site well. Additional retrofitting would be required to enable use of city water supply for landscape irrigation. Williams Brothers water service Page 2 nods;" uses such as 3. Retail and service-commercials are meted to "�Y or other businesses restaurants, laundries, food or beverraagrmanufacturing, etail swould require which use more water than "dry goods" additional retrofitting. 4. Medical or dental offices would require additional retrofitting. These limitations should be made part of the record for this site, to enable proper review.of future tenant improvements. The waxer allocation necessary for this project was 9.11 acre-feet ('This amount was based on the city's standard factor based on water use histories of ot" for all. uses pher�m supermarket, for which we determined The project has been made exempt from needing an Williams Brothers chain.) P ] an offset equal to allocation under the city's Water Allocation Regulations by achieving twice the required allocation, tr 1822 200 fdw �Actually, hbusinesses.cant Thachieved r trofitting offset of 1824 acre-feet, by retrofittingthe period November was performed by the applicant and inspected by the city during 1990 through March 1991. If you have any questions, please contact Glen Matteson, Associate Planner (549-7165). f S' cere , Arnold Jo irector Community velopment Jeff Jorgensen,.SLO City Attorney Courtney & Associates copies: l�'Stt Bill Hetland, SLO city Utilities nAdministrator 870 Industrial Way - Suite A John Dunn, SLO City AginBering San Luis Obispo, CA 93401 Jerry Kenny, SLA City En Glen Matteson (file), SLO City Planning a8 lii�l���i I�IIIII�II IIII1I1lIII lIIIIIIII�II�I����'III�III�I�II� cityO SAnIS ®Bla� �A ids 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100 September 23, 1993 Thomas M. Courtney, A.I.A Courtney & Associates 656 Santa Rosa Street San Luis Obispo, CA 93401 SUBJECT: Water offset determination for new Vons (#306) in Marigold Center (3950 Broad Street) Tom: I have reviewed the alternate water usage factor and offset amount described in your September 20 letter and attached exhibits. In this case, the offset amount of 24.6 acre-feet appears reasonable. This amount will be the basis for retrofitting to obtain a construction permit for this building. Contact me if you have any questions (805 781-7165). Sincerely, Glenn Associate Planner copies: water offset file/3950 Broad Vic Montgomery, RRM Design Group The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. Telecommunications Device for the Deaf(805) 781-7410. }