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CC 02-07-05 CUPEIQ1NO AGENDA CUPERTINO CITY COUNCIL - REGULAR ADJOURNED MEETING 10350 Torre Avenue, Community Hall, Council Chamber Monday, February 7, 2005 5:30 p.m. CITY COUNCIL MEETING PLEDGE OF ALLEGIANCE ROLL CALL ORAL COMMUNICATIONS This portion of the meeting is reserved for persons wishing to address the council on any matter not on the agenda. Speakers are limited to three (3) minutes. In most cases, State law will prohibit the council rrom making any decisions with respect to a matter not listed on the agenda. NEW BUSINESS 1. Discuss land use policies and development review processes ADJOURNMENT In compliance with the Americans with Disabilities Act (ADA), the City of Cupertino will make reasonable efforts to accommodate persons with qualified disabilities. If you require special assistance, please contact the city clerk's office at 408-777-3223 at least 48 hours in advance oj the meetin¡:. 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3308 FAX (408) 777-3333 CITY OF CUPEIQ1NO Community Development Department SUMMARY AGENDA NO. 1 AGENDA DATE February 7, 2005 SUBJECT Land Use Policies and Review Procedures Development RECOMMENDATION Review and discuss the following issues and provide direction to staff on how you would like to address land use policies and review procedures during these changing times. Staff anticipates that the Council may elect to hold further discussions due to the broad scope of the issues. Also, Council should identify other related issues that you would like to discuss at a subsequent meeting. BACKGROUND Cupertino is in the middle of updating its General Plan while the economy has gone through a significant downturn and only recently seems to be entering a recovery period. At the same time, the city electorate will be deciding an initiative petition affecting critical land use parameters in November 2005. Project applicants continue to propose development applications based on the existing policy rramework of the city. In light of all of the above changes several recent development applications have met with opposition rrom individual members of the Council questioning the appropriateness of a particular land use or land use mix otherwise allowed by the current policy structure in General Plan or the specific plan. In the face of all of these changes, members of the City Council asked that land use policies and procedures be reviewed to determine if there is a strategy and/or administrative procedures that will enable the city to provide better guidance to applicants during these changing times. Attached is a copy of the Heart of the City Specific Plan to reacquaint the Council with the existing policy structure in this area. Also, staff sent a post card mailer to all Cupertino residential addresses in the city advising residents of this meeting (see attached) and is sending this staff report to the Chamber of Commerce representatives. DISCUSSION The policy rramework of the city has been developed over the past ten to twenty years after extensive public hearings and considerable discussion by the then City Council(s) and Planning Commission(s) and with the community. The city policy structure is contained in the General Land Use Policies and Review Procedures Development February 7, 2005 Page 2 Plan, Heart of the City Plan, North De Anza Boulevard Plan, numerous other policy plans and the zoning ordinance (e.g. the Rl ordinance and the parking ordinance) and Municipal Code of the city. As we have seen with the General Plan and the Rl zoning Ordinance, it takes considerable effort and hearings to amend the existing policy/ordinance structure of the city. If the Council wishes to amend these rules it is best done after reviewing the possible rationale, after which it would be necessary to advertise public hearings and invite affected property owners or stakeholders to comment on the proposed changes. The purpose of this memo is to discuss the possible rationale and options to facilitate the Council discussion of these issues. Since it takes considerable Council, staff and community effort to amend the policy structure it seems most appropriate to identify the policy issues through the current update process to the General Plan. In the meantime, it may be necessary to prioritize the most important conflict points and consider establishing a moratorium on all new development in certain categories or to establish a more informal Council direction for developments seeking approval in mixed-use areas. Following your discussion, the Council can decide if the work program should include some high priority changes to this policy rramework. Land Use and Procedural Issues The following list contains issues that have been raised in conjunction with development applications or questions council members have raised during these rapidly changing times. Following the issue title is a brief commentary to rrame the issue and identify possible strategies to leverage the city's interests. 1) Development Review Procedures: . Should the City Council function as General Plan "gatekeepers" and continue to determine whether applicants can apply for General Plan Amendments and should the Council continue to hold study sessions on preliminary development applications? The "gate keeper" function that the Council performs for general plan amendment requests has the advantage that development proposals can be re- directed into formats that are more compatible with the community and the public isn't invited to public hearings to comment on clearly inappropriate applications. Similarly, study sessions can be used to redirect major projects into projects that are more consistent with community goals. In some cases, the applicants use the early review to "test run" different proposals or "shop" individual ideas, hoping to find the right mix of enticements that will increase their chances of approval. The downside of these practices is that the public gets the impression that the Council is deciding whether to approve the application when you are only deciding if the applicant should be allowed to file an application. Frequently, individual council comments on the preliminary project submittal have been misconstrued as endorsements in advance of the formal public hearing process. Land Use Policies and Review Procedures Development February 7, 2005 Page 3 Staff believes the Council should abandon this practice while the General Plan update and initiative vote is taking place. The Council can re-evaluate re- instituting the practice at a later date following the election and general plan update. . When should city-wide notification be used? City-wide notification has been used three times in the past two months to advertise the Planning Commission General Plan community meetings, the Toll Bros. request to proceed with a general plan amendment and this discussion on land use policies and development review processes. The city funded two of the advertisements. The cost is about $3,000 for residential customers and $5,000 for all postal customers. At that rate, if the city funded one city-wide advertisement per month there is a budget impact of approximately $36,000 to $60,000 per year (one per month = 12 x $3k to 5K per notice = $36K to $60k per year). The number of city paid advertisements will probably not exceed 10 to 12 per year. Staff is comfortable determining when a project has city-wide significance or asking the Council if there is any question. Applicants will decide if they wish to proceed with a general plan amendment application and the City Council can remain separate rrom the process and evaluate the application on its merits once it is submitted for your review. Staff will keep the Council informed of significant proposals through the Development Activity Report and/or weekly notes. . What is the appropriate method to determine residential densities for vertical mixed-use proiects? The current General Plan contains no methodology for determining residential density on vertical mixed-use sites. Presumably this was a conscious intent to encourage vertical mixed-use instead of horizontal mixed-use. With Council direction it is simple to calculate the proportionate share of the square footage in the project and allocate this proportion to the available land area. Then the residential density of the vertical residential component will be based on the relative portion of the land area occupied by the residential component. This would be a similar methodology to the allocation for horizontal mixed-use where the site is apportioned based on the actual area occupied by each use. 2) Where should residential land uses be allowed? The General Plan has a few remaining units in the Heart of the City and units remaining in the North De Anza Boulevard and Bubb Road Industrial park areas. Applicants have applied for portions of these units to be allocated to the sites at the Adobe Lounge (29 units), Santa Barbara Grill (46 units) and Results Way (94 Land Use Policies and Review Procedures Development February 7, 2005 Page 4 units). The Council has discussed reallocating units away from school impact areas into the Vallco Park area. The city could establish criteria to determine where and how many residential units should be reallocated and may be able to identify other strategies to soften or mitigate the impacts such as working with the districts on mitigation fees and directing that projects on the edge of attendance boundaries be directed to the school best able to accommodate the students. Residential uses in the Heart of the City should be considered in areas that are served by parks and where residents can access community facilities such as retail and restaurants. Residential uses should be established where it can integrate into an existing mixed-use or predominately residential fabric. Sites that are adjacent to existing or planned residential developments should be considered for residential uses. Adjacency can be loosely interpreted when residential uses seems to provide much needed housing and solves a land use issue. The Hamptons is an example of a stand-alone residential project that is proximate to services at Cupertino Village and near other residential developments across Wolfe Road. The following section elaborates on using housing to the city's advantage. 3) Can housine: be offered as an incentive to provide retail or contribution to an in-lieu fee? Housing has been credited with undermining the service levels in our schools and usurping the opportunity to ever develop the site for sales tax generating retail uses. This is a switch rrom the recent past when residential was viewed as addressing the jobslhousing imbalance and higher density was seen as providing a mix of more affordable units to accommodate a wider spectrum of the market. There is a level of validity to both perceptions ofresidential impacts. There is validity to the concept that once devoted to ownership residential a site designated for commercial will not be available again for retail uses. For these reasons the General Plan Task Force recommended policies discouraging residential uses in commercial districts. The issue of where, what type, and how much housing should factor into the equation. We need to get better at predicting the impact of different densities of residential and determining if it is an asset or a detriment to our schools. The Bay Area Economics study of the initiatives generally concluded that higher or lower density residential generated about the same number of high school students; however, the higher density generated more property tax to compensate the Fremont High School District for on-going operating costs to serve the students. In a recent application the district cited a standard student generation rate that was four times the actual number generated rrom a comparable density project. The use of "one size fits all" generation rates unfairly projects the actual impact because of the predominance of higher student generating single-family uses in the city. Staff will be working with the high Land Use Policies and Review Procedures Development February 7, 2005 Page 5 school district to get a better understanding of residential proj ect impacts following publication ofthe district impact study. Residential is the current market preference and may be judiciously used to encourage the preferred mix of uses. That is, the Council could specify that approval of residential will be a function of the mix of retail, appropriateness of the site and/or payment of an equivalent in-lieu fee. The Council should leverage the current market land use preference (whether it is residential or office or commercial) in mixed-use areas to ensure the most beneficial and complementary combination of uses for the site and revenue generation for the city. Also, affordable housing has consistently been ranked in the Community Surveys as one of the most important issues facing Cupertino. Providing a greater variety of housing types seems like a favorable manner to address this concern. 4) Should the City insist on retail on all commercial sites where it is allowed as a land use option? The Heart of the City plan and the North De Anza Boulevard plan allow commercial as part of the mixed-use options available to applicants. The North De Anza Boulevard area is predominantly an office park with ancillary commercial (e.g. Outback, BJs, and Donut Wheel) and limited quasi-public and instruction (e.g. church and swim school). The North De Anza Boulevard area is surrounded by residential uses. Council will recall that the issue of critical mass came up when reviewing the church application and we committed to monitoring the introduction of alternate uses allowed in the area to maintain the office park as the predominant use. Similarly, the Heart of the City encompasses the Stevens Creek Boulevard block rrom the easterly city limits to Highway 85. The plan identifies three primary commercial nodes, including the Oaks Shopping Center, Crossroads/City Center and Valko Fashion Park. The intervening area between Vallco and the Crossroads/City Center is identified for supporting uses such as residential and office. The concept seems to be that these "supportive uses" would be populated by residents of the homes and workers in the offices that would rrequent the business in the primary commercial nodes. The plan also implies that it did not envision stringing commercial uses along the entire length of Stevens Creek Boulevard in the Heart of the City. This concept that there is a limited demand for retail seems to intuitively make sense. The city should determine if the limited market demand should be protected for the three commercial areas. Commercial policies could advocate creating a critical mass of commercial tenants in close proximity to encourage shoppers to walk rrom shop to shop and combine multiple visits into one shopping trip. The Stevens Creek properties outside of the three nodes are a mixed pattern including office, residential, De Anza College, Memorial Park and Sports Center, and single purpose commercial such as furniture stores and larger Land Use Policies and Review Procedures Development February 7, 2005 Page 6 format restaurants. The larger predominantly retail shopping centers are clustered near Vallco Fashion Park and Crossroads/City Center. Also, we have witnessed that the current market prefers to keep some of these commercial sites vacant for long periods rather than re-tenant the space with retail or restaurant uses. Also, it is important to understand that the policy of allowing residential to infill in the Heart of the City, Vallco and North De Anza Boulevard is an essential element of the Housing strategy of the General Plan to meet our inventory of adequate sites. Should the plan be amended to reallocate or eliminate this option it may be necessary to amend the Housing Element and go back through the State HCD review process. Therefore, staff believes the current policy of allowing mixed use in the mid-block areas is still sound and that perhaps the city should be looking to retain an in-lieu fee to compensate for the lost opportunity cost of allowing these sites to have non- traditional retail uses. It is likely that these fees could only be collected through a development agreement. 5) How realistic is the current General Plan incentive to provide a bie: box retailer in the city? Clearly, this is a difficult question to address absent a study. Staff has received inquiries rrom two big box retailers who have indicated there is a "hole in the market" in this area, meaning this area is underserved and they would like to find a site to accommodate their use. Intuitively this assessment seems to match our understanding of the proximity of big box to the West Valley. Presumably if it is not filled in Cupertino it will be filled on a large site in an adjacent community, reducing sales to Cupertino businesses. We have seen this impact with the big box Home Depot that located in San Jose and the smaller box Trader Joe's that located in Los Altos, both of which are immediately adjacent to our border. When this happens we inherit the traffic, market impacts on our retail (e.g. Minton's Lumber and Oakville Market) without the sales tax benefits. The question is exacerbated by the fact that big box can only pay about half the value for land compared to a residential developer. Staff believes we should aggressively promote a big box somewhere in the Vallco park area and should anticipate that we may need to facilitate the location by assisting with inrrastructure, or other means, where feasible. 6) What is mixed-use? Is residential a sie:nificant economic ene:ine or driver for Quality commercial development in the city? Mixed-use commonly refers to the practice of moving away rrom single purpose zones in the core areas of cities and instead allowing a greater variety of uses. The presumption is this provides a greater land use texture and greater walk- ability to more proximate uses. We have seen this in the City Center where corporate and local service offices are joined by residential, retail, restáurants, Land Use Policies and Review Procedures Development February 7, 2005 Page 7 lodging, civic uses, plazas and parks into a rich suburban and urban fabric. In some cases, mixed-use has been heralded as the "new urbanism" and "smart growth" because it purposely blends uses in a manner that allows for multiple walking trips and diminishes the necessity of driving to multiple single pUrpose use sites. It is the antidote to the traditional concept of urban sprawl where the automobile is a necessity with all of its air pollution and congestion impacts instead of a choice. The experience at Santana Row in San Jose and the proposal rrom at the Rosebowl in Vallco Park seem to support the premise that residential is an economic engine in the current market and can drive higher quality retail uses. Also, we have seen numerous mixed-use with residential over retail in building in otherwise traditional suburban settings such as Los Gatos and Palo Alto. The city should be aggressive about leveraging current market trends, whèther the current trends support residential, office or quasi-public uses, to accomplish other community objectives such as retail sales tax offices, in-lieu fees and the highest quality development. ~ D~P City Manager Ste Piasecki Director of Community Development CC: Chamber of Commerce City of Cupertino Department Directors Enclosures: Copy of the post card notice sent to all Cupertino residential customers Heart of the City Specific Plan City of Cupertino Cupertino City Hall 10300 Torre Avenue Cupertino, CA 95014 PRSRT-STD U.S. Postage PAID Cupertino, CA Permit No. 239 ECRWSS Residential Customer Special Meeting of the City Council During this meeting the City Council will discuss land use policies and development review processes. Some of the topics to be discussed may include: · Where are the appropriate locations for commercial and residential land uses on properties in the Heart of the City along Stevens Creek Boulevard and De Anza Boulevard? · Should the council determine whether applicants can apply for General Plan amendments? · How should the city handle major development applications while the General Plan is being reviewed and updated? For more information contact the Community Development Department at 408.777.3308. This meeting will be shown on Cable channel 26 and webcast at www.cupertino.org. Monday, February 7, 2005 5:30 to 8:30 p.m. Community Hall Council Chamber 10350 Torre Avenue Cupertino, CA 95014 , E IBIT B Speci~J Meeting of the City Council fXHI-BIT aj <7- 7-05 ---------.-- During this meeting the City Council will discuss land use policies and development review processes. Some of the topics to be discussed may include: · Where are the appropriate locations for commercial and residential land uses on properties in the Heart of the City along Stevens Creek ~Ievard and De Anza Boulevard? II ú · Should the council determine whether applièants can apply for General Plan amendments? I(~ · How should the city hand)\, maj,or de~elopme. nt applicati9ns while the Gen. eral Plan is being reviewed and updated? ;it){)..J.. ".,j;ç.- )l"'.c¡,.iA~.' .." ;, ~~l:m:t::-I!LL II ~fj ~~~!~~~::A ,...._,--,...,.._....,.,,_..".....~ Community Hall Council Chamber 10350 Torre Avenue Cupertino, CA 95014 /;--:-;c" d' ", /j h j, ," '4jl j{\~J GROSVENOR Mr. Stephen Piasecki Director of Community Development City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 /, i ;'::"../..; c:': ¡ \/e...D - . FEB 0 7 2005 BY: February 4, 2005 Re: Residential DeveloDment in the Bubb Road Plannina District Dear Mr. Piasecki: As you are aware, Grosvenor's history of development in Cupertino includes over one million feet of R&D/office space. We currently own 10400 Ridgeview Court (in the Ridgeview Court office park we developed), and Results Way Corporate Park (previously the Honeywell-Measurex campus at One Results Way). As you know, we have owned the Results Way property since 1998 and have had an active program to improve the property ever since our purchase. In 2003 Honeywell moved out of +/-200,000 square feet at the rear portion of the park, and despite a re-Ieasing effort that started in 2002, we have been unsuccessful in re- tenanting the buildings. After a thorough architectural evaluation, we determined that the buildings were functionally obsolete and uneconomic to retrofit due to the very specific manufacturing build-out utilized by Honeywell. This was exacerbated by the very soft Silicon Valley leasing market. As a result of our failed efforts to re-tenant the property, we have been in contract with Taylor Woodrow for several months to entitle and sell the rear portion of the site (the Honeywell portion). As you are aware, this property is located within the "Bubb Road Planning District" as designated in the City's General Plan. The purpose of this letter is to strongly oppose any amendment to the General Plan that might put on hold, or interfere with the development of housing on this property. The General Plan's Housing Element identifies the Bubb Road District as the possible site of 150 new housing units. 56 of these units were built in the adjacent Astoria project, and the remaining 94 units are available. Given the present poor market for R&D/office space, and the long-term negative forecasts for the region, we want to convert this property to residential use. Taylor Woodrow Homes is proposing to build 94 single-family detached homes on the site, and is expecting to use the remaining Bubb Road housing units for this development. As of this date, Taylor Woodrow has been actively working on the design and planning for this site for more than nine months. We are alarmed to hear of two different attacks on our ability to develop this project. First, the proposed General Plan Update suggests reducing the amount of additional housing in the Bubb Road District from 94 to 81. There does not appear to be any valid justification for this change. Second, the City has discussed moving the 94 Bubb Road units, to the Vallco Park South area where all of the housing allocations have apparently been used up. We strongly oppose this change as it benefits another property owner's investment at the expense of our project. Furthermore, due to the very different impacts associated with the two developments, there appears to be no valid, quantitative reason GROSVENOR USA LIMITED ONE EMBARCADERO CENTER SUITE 3900 SAN FRANCISCO CALIFORNIA 941 I I Telephone (4-15) 434-0175 Facsimile (415) 434--2742 Iféb www.geh.com Mr. Stephen Piasecki February 4, 2005 Page 2 '~--'\~,> (/'i'I, , ~ßI \~ S':}/J "- to justify the moving of the Bubb Road units other than to benefit the Vallco development. For a long time the General Plan (including every previously proposed version for the recent Update to the General Plan) has anticipated building 94 more housing units in the Bubb Road area. According to your testimony at the January 18, 2005 City Council hearing on the Vallco project, the traffic from such housing was factored into studies of the area when the General Plan was adopted. Thus the City's traffic assumptions and road improvements for the vicinity were based on that traffic. In fact, the traffic from 94 homes likely would be less than from fully utilized office space had the zoned office conversion taken place. Given the General Plan's housing allocation, all other public services for the Bubb Road area should have also taken into consideration this potential development. By comparison, additional units shifted to another site will only shift traffic and other burdens to an area that has not been studied and has not been planned to absorb those impacts. During the January 18 hearing, Council members recognized several important City goals and growing problems that the City faces. Development of housing on our property will serve those goals and reduce those problems: · Sites for urban infill housing are scarce, and the public does not want more housing in suburban areas of the City. Results Way satisfies this test, with a small in-fill development that will blend into and join the community through a design that includes significant park elements and connecting pedestrian walking paths. · Below-market housing should be scattered throughout a project rather than clustered, and should include for-sale units rather than only rentals. Taylor Woodrow Homes proposes 14 houses to be offered for sale at below-market prices distributed around the site. · The State's requirement of 2,300 new housing units imposes a substantial burden on the City. Our project will reduce that figure by removing +/-200,000 square feet of existing business space, while also providing 94 new homes to serve the community's housing needs. Grosvenor has always been a good corporate owner and investor in Cupertino. We regularly contribute to community efforts and over the years have supported the Cupertino Senior Center, The DeAnza College Infant Development Center, the Kennedy Junior High School fine arts project, as well as the City's outreach program on drinking and driving. The Results Way property has for years had residential uses as a contemplated use, and we feel the Taylor Woodrow development is well designed to serve the needs and wants of the City, We strongly oppose any amendment to the General Plan that might interfere with the development of housing on this property, and hope that the City will ultimately approve Taylor Woodrow's plans for the residential re- development of this site. Mr. Stephen Piasecki February 4, 2005 Page 3 'Û~) '1"1 " ;1 i.li ~~ ~ Please keep this information in mind as the City considers the General Plan Update and the Valko project. The 94-unit allocation for Bubb Road should be preserved, and made available for the Taylor Woodrow Homes subdivision. Thank you for your consideration. I would be happy to discuss this further should you have any questions. Alan V. Chamorro Vice President Grosvenor USA, Limited, and manager of RWC, LLC. cc: Cupertino City Council: Sandra L. James Patrick Kwok Richard Lowenthal Dolly Sandoval Kris Wang Taylor Woodrow Homes Page I ot I From: Holmes, Shawna (Palo Alto) [shawna.holmes@hp,com] Sent: Friday, February 04, 2005 5:44 PM To: Sandy James; Richard Lowenthal; Dolly Sandoval; Kris Wang; Patrick Kwok Cc: Roberts, Bill; Holmes, Shawna (Palo Alto); David Knapp; Steve Piasecki Subject: Big Box in Vallco Park r~'''' " David Knapp \¡..... .. <:..c.../2-1-65 Dear Mayor Kwok and City Council Members, Today HP received a copy of the Land Use Policies and Development Review Procedures report that City Staff has put together for your meeting on Monday, February 7, 2005, Section 5 of the report recommends the pursuit of Big Box Retail in the Vallco Park Area and thus as a large land owner in the target area, we felt it important to make sure that you are aware of our position on that matter as it pertains to our property, While we understand the City's interest in generating additional sales tax revenue, HP does not believe that Big Box 'Retail would be an appropriate use of our property and therefore would not consider selling our land for that use. Should you have any questions about this matter, please feel fÌ'ee to contact me. Thank you for the opportunity to communicate our position, HP looks forward to our continued work together. Regards, Shawna Holmes Shawna Holmes US Public Affairs HP 650-857-2523 2/7/2005