SR-02-12-2013-8BCity Council Meeting: February 12, 2013
Agenda Item:
To: Mayor and City Council
From: David Martin, Director of Planning and Community Development
Subject: Development Agreement Application Processing Priorities and Guidelines
for Negotiating Unit Size/Type and Mix in Mixed -Use Residential Projects
Recommended Action
Staff recommends that the City Council:
Review, comment on and approve proposed guidelines regarding processing of
the current backlog of development agreements by prioritizing project
applications that incorporate one or more of the following characteristics:
• Revenue Generation
• Affordability
• Unit Type /Mix
• Educational institutions
• Combining of Adjacent Sites
• Batching of Near -by Projects by the same Applicant
2. Direct staff to use the guidelines for negotiating development agreements with
respect to unit size and mix of rental housing:
Executive Summary
At its January 8, 2013 meeting, Council provided direction concerning ways to address
the current backlog of development agreement applications. This report responds to
input from Council with recommendations of specific project characteristics for
prioritizing the processing of development agreement applications, and the
establishment of guidelines related to unit size and mix that staff will use in negotiating
development agreements. Clarity regarding the City's expectations will help shorten the
negotiation process and ensure that projects meet community expectations.
Background
Since the adoption of the LUCE in July of 2010, the number of Development Agreement
applications that have been submitted has outpaced expectations, with a current total of
35 Development Agreement applications pending review as of February 1, 2013. There
is limited capacity to process Development Agreement applications from the perspective
of ARB, Planning Commission and City Council workload and agenda management,
and staff time needed to thoroughly evaluate a complex project and negotiate
community benefits.
At its January 8, 2013 meeting, City Council considered a December 11, 2012 report
and a January 8 2013 supplemental report focusing on ways to address the large
number of development agreement applications. The reports provided information on
the pending development agreements and procedures for processing CEQA exempt
and non - exempt projects. The Council approved the processing procedures
recommended by staff for early conceptual review (float -up) of development
agreements (Attachment A).
Discussion
Priority Processing
At the January meeting, Council was supportive of establishing priorities for processing
projects as a way to address the backlog of projects. Council members' feedback has
been incorporated into staff's list of recommended project characteristics below.
• City Revenue /Economic Health: Projects that produce a high ratio of new revenue
through sales and other taxes with relatively fewer traffic impacts during the AM and
PM peak periods will provide benefits to the community with less impact. These
projects foster the LUCE economic development goals to maintain a healthy and
thriving economy. Examples include hotels, auto dealerships and movie theaters.
• Affordable Housing: Projects that provide a higher level of affordable housing will
help the City achieve its affordable housing goals. Through the negotiation process
for recent development agreement applications, projects have included at least 10%
low or very low affordable units. A developer that provides 20% affordable,
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comprised of 15% low or very low and at least 5% moderate family units (3
bedrooms), would be considered a priority project.
• Mix of Unit Types: Council's response in January was generally to focus on the mix
of units rather than an average unit size, with a goal of providing a range of unit
types and sizes. A way to achieve this is to encourage some two bedroom units as
well as a small amount of three bedroom units. Staff is suggesting that priority be
given to housing projects that include a unit -type mix with a maximum of 20% studio
units, at least 15% two bedroom units and at least 5% three bedroom units.
• Educational Institutions: Staff recommends a priority status for educational
institutions such as, but not limited to, schools and colleges.
Since the January meeting staff has considered an additional category for priority
processing. The current queue of projects contains several mixed use housing projects
that are proposed by the same applicant and either adjacent to or located within a few
blocks of each other.
• Combining Adjacent Sites: For projects that are adjacent to each other and
proposed by the same applicant, staff is recommending priority processing if
these projects are combined into one development agreement application. This
approach would provide an opportunity for a more comprehensive analysis of the
combined projects, allow for the coordination of community benefits which could
result in a more meaningful contribution to the city's built environment, and
ensure that project features, such as open space, parking garages and vehicular
access points, are designed and constructed in the most optimal way possible.
The combining of adjacent projects would also reduce the number of
development agreements to be negotiated, which would result in fewer hearings.
There are currently three groups of projects where the same applicant has filed
development agreement applications for adjacent properties. These include two
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projects at 1415 and 1425 5t" Street, two projects at 1640 and 1650 Lincoln, and
four projects at 1601 -1641 Lincoln.
• Batching Near -by Applications: The current list of pending development
agreements includes several projects that are proposed by the same applicant
and located within a few blocks of each other. While it is not appropriate to
combine these projects into one application, it would be beneficial to "batch" and
process the individual applications simultaneously so that the community and
decision makers have an opportunity to consider these projects
comprehensively.
In addition to the priorities outlined above, there are projects that have completed the
float up and environmental review process, where staff is either currently negotiating the
terms of the development agreement or is ready to begin the negotiations. Since these
projects are ready to move forward to hearings, staff will bring these to the Planning
Commission and City Council as soon as negotiations are complete.
Residential Unit Size
Council members provided feedback on residential unit size with a general consensus
that some small units were acceptable, but that a mix of unit sizes in future projects is
desirable. Clarity regarding the City's expectations will help shorten the negotiation
process and ensure that projects will meet community expectations. Staff is proposing
to address this concern as follows:
• Establishing minimums for projects containing market -rate residential units
would provide a guide to staff in negotiating projects through the
Development Agreement process. Staff is recommending that minimum unit
sizes adhere to the City's Affordable Housing Production Program (AHPP)
standards, with the exception of studios, where a minimum of 400 net square
feet (livable space) would apply. Staff is also recommending that single room
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occupancy units (SRO's) not be allowed. The recommended minimum unit
sizes reflecting net square feet (i.e. livable space) are:
Studio: 400 sq. feet
1 bedroom: 600 sq. feet
2 bedrooms: 850 sq. feet
3 bedrooms 1,080 sq. feet
® In order to ensure a mix of housing unit types, staff is recommending that
priority be given to housing projects that include a unit -type mix with a
maximum of 20% studio units, at least 15% two bedroom units and at least
5% three bedroom units.
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: David Martin, Director of Planning and Community Development
roved:
A &.
David Martin, Director
Planning and Community Development
Attachments:
Forwarded to Council:
P
Rod Gould
City Manager
A. Processing Charts for CEQA Exempt and Non - Exempt Projects
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DA Process for Projects Exempt from CEQA
DA Process for Projects Subject to CEQA