REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on an Appeal of the Planning Commission’s Denial of a Variance and Conditional Use Permit (PLN22-00282) for the Construction of a New Four-Story, 111,978 Square Foot Data Center at 1231 Comstock Street
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
On December 13, 2022, Prime Data Centers applied for a Conditional Use Permit, Variance and Architectural Review (File No. PLN22-00282) to allow for the demolition of a one-story warehouse building and construction of a new four-story, 111,978 square foot data center with rooftop mechanical equipment, landscaping, and site improvements.
Pursuant to Table 6-1 (Chapter 18.112) of the Santa Clara City Code, Conditional Use Permits and Variances are decided by the Planning Commission. For the proposed project, the Architectural Review would be decided through the Development Review Hearing process.
Much of the City’s industrial lands have historically been zoned as Light Industrial. With the 2010 comprehensive update of the City’s General Plan, these light industrial areas were divided into multiple land use designations, including the Low-Intensity Office / Research and Development land use designation currently applied to the subject property. In February 2024, the City’s adopted updated Zoning Code became effective, and in August 2024, the accompanying updated Zoning Map became effective, which rezoned the subject property to Low-Intensity Office / Research & Development (LO-RD) from Light Industrial (ML), which brought the General Plan and Zoning designations for the site into conformance.
With the adoption of the comprehensive Zoning Code Update, all sections except for Article 2, Zones, Allowable Uses, and Development Standards, went into effect on February 8, 2024. Article 2 went into effect on August 15, 2024, when the updated Zoning Map became effective. Zoning Code Section 18.02.070 - Effect of Zoning Code Amendments on Projects in Progress, states that all planning permit applications that are active and that have been determined by the Project Clearance Committee to be complete before the effective date of the Zoning Code, shall be processed in compliance with the requirements in effect when the application was deemed complete. This application was deemed complete on April 24, 2024; therefore, the project was reviewed based on the prior zoning designation of Light Industrial (ML) and using the standards of the City’s prior zoning code (the “Classic Code”).
In the ML district, a data center is not listed as an allowed use. Subject to Section 18.48.040(e) of the Classic Code, other uses that are not normally permitted, but are appropriate for the industrial district may be allowed by first securing a Conditional Use Permit (CUP).
At the publicly noticed meeting on October 23, 2024, the Planning Commission reviewed the project. The Planning Commission discussed concerns regarding power supply, how the electrical use of the proposed project would affect the City, and the possibility of this property being used for an alternative more activated land use The Planning Commission voted to deny the Conditional Use Permit and the variances (4-3 vote). As a result, the Planning Commission was not required to take any action on the environmental document pursuant to CEQA guidelines 15270 (“Projects Which Are Disapproved”).
On October 24, 2024, the applicant filed a timely appeal of the Planning Commission’s denial (Attachment 14). Pursuant to Santa Clara City Code 18.144.030, the appeal is being heard within the appropriate timeline.
DISCUSSION
At the October 23, 2024 Planning Commission meeting, staff provided a presentation and shared that the project location is a transition area adjacent to both office and industrially developed properties. Adjacent properties are developed with office and industrial uses. See Development Plans and Vicinity Map (Attachments 11 and 12, respectively). This property abuts three other properties that are also data centers and the property to the south includes industrial manufacturing. The abutting properties are zoned like the proposed project, and the property to the south is zoned LO-RD. The nearest residentially zoned property is located about 1.5 miles away to the northeast, on Lafayette Street south of Montague Expressway. As indicated in the October 23, 2024 report to the Planning Commission (Attachment 1), staff recommended approval of the CUP because (1) the project would be compatible with adjacent land uses and the existing industrial character of the area, (2) the proposal would promote the harmonious and orderly growth of the city by improving an underutilized property with an aesthetically pleasing design in an area that already contains a cluster of data centers; and (3) the lot size and access are sufficient for a data center use. Furthermore, the project is generally consistent with the General Plan and is consistent with the zoning designation with the approval of the Variance.
During the Commission meeting, the applicant team answered Planning Commission questions, which included questions about power usage, environmental concerns, and other uses that could be developed at this property. Seven Commissioners were present at the Planning Commission Hearing on October 23, 2024. In two motions, the Commission voted to deny the Conditional Use Permit and to deny the variances (4-3). For the CUP, the Commission majority made findings that the proposed use would be detrimental to the harmonious or orderly growth of the City, given the large number of data centers already present in the City and the fact that data centers result in fewer jobs and no synergistic retail or connectivity to other surrounding development. For the variance, the Commission majority found that there were insufficient special circumstances or conditions applicable to the project site that would justify granting the variance. The Planning Commission was not required to take any action on the environmental document pursuant to CEQA guidelines 15270 (“Projects Which Are Disapproved”). The minutes from this Planning Commission meeting are attached for reference as Attachment 2.
In their appeal, the applicant states that the project meets or exceeds all City of Santa Clara zoning and design requirements and requests that the City Council overturn the Planning Commission’s decision.
STAFF RECOMMENDATION
Staff recommended that the Planning Commission approve the project, and staff continues to recommend that based on the findings listed above, and the project’s consistency with the General Plan and the Santa Clara City Code, and that the City Council sustain the appeal and approve the project.
ENVIRONMENTAL REVIEW
The proposed project was not exempt from the California Environmental Quality Act (CEQA) and therefore an Initial Study (IS) was prepared to determine whether the project may have a significant adverse effect on the environment. For each resource area, the IS concluded either that there would be no adverse physical effects, or that all potential physical effects can be reduced to a level that is less than significant through project revisions and mitigations. Any project revisions needed to mitigate any potential effects have been made, and a Mitigated Negative Declaration (MND) was prepared. An MND may be used, “when the initial study has identified potentially significant effects on the environment, but (1) revisions in the project plans or proposals made by, or agreed to by, the applicant before the proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effect on the environment would occur, and (2) there is no substantial evidence in light of the whole record before the public agency that the project, as revised, may have a significant effect on the environment”
The prepared MND examined potential environmental impacts associated with project development and identified potential effects in the following resource areas:
• Biological
• Cultural resources
• Geology and soils
• Tribal cultural resources
With implementation of mitigation measures those identified impacts would be reduced to less than significant. A detailed discussion of the potential impacts and mitigation measures to be applied to the project are specified in the MND and shall be implemented through project conditions of approval for the project. A Mitigation Monitoring and Reporting Program (MMRP) was prepared to ensure the implementation of recommended mitigation measures. The MND and MMRP are both included as attachments (Attachments 3 and 4, respectively). Staff recommends that the Council adopt the IS/MND and MMRP.
FISCAL IMPACT
There is no fiscal impact on the City from processing the requested application other than administrative staff time and expenses typically covered by processing fees paid by the applicant.
Data centers within the City of Santa Clara contribute revenue to the City’s Electric Utility and the City’s General Fund.
COORDINATION
This report was coordinated with the City Attorney’s Office.
PUBLIC CONTACT
A community hearing for this project was held on July 10, 2024 at 6 pm. The meeting video can be found in its entirety on the project listing page found here: <https://www.santaclaraca.gov/Home/Components/BusinessDirectory/BusinessDirectory/525/2495>
On November 22, 2024, a notice of public hearing was sent to property owners within 1,000 feet of the project site. At the time of this staff report, Planning staff has not received public comments in support or opposition to the proposed project.
Public contact was also made by posting the Commission agenda on the City’s official notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
ALTERNATIVES
Project Approval
1. Adopt a Resolution adopting the Initial Study, Mitigated Negative Declaration, and Mitigation Monitoring and Reporting Program.
2. Sustain the Appeal and Adopt a Resolution approving a Conditional Use Permit for the demolition of the existing building and the construction of a new four-story, 111,978 square foot data center at 1231 Comstock, subject to findings and conditions of approval.
3. Sustain the Appeal and Adopt a Resolution approving the Variance to height, parking, and front setback for the new four-story, 111,978 square foot data center at 1231 Comstock, subject to findings and conditions of approval.
OR
Project Disapproval
1. Overrule the Appeal and Direct Staff to Prepare a Resolution disapproving a Conditional Use Permit for the demolition of the existing building and the construction of a new four-story, 111,978 square foot data center at 1231 Comstock, for adoption at a subsequent meeting.
2. Overrule the Appeal and Direct Staff to Prepare a Resolution disapproving the Variance to height, parking, and front setback for the new four-story, 111,978 square foot data center at 1231 Comstock, for adoption at a subsequent meeting.
RECOMMENDATION
Recommendation
Project Approval
1. Adopt a Resolution adopting the Initial Study, Mitigated Negative Declaration, and Mitigation Monitoring and Reporting Program.
2. Sustain the Appeal and Adopt a Resolution approving a Conditional Use Permit for the demolition of the existing building and the construction of a new four-story, 111,978 square foot data center at 1231 Comstock, subject to findings and conditions of approval.
3. Sustain the Appeal and Adopt a Resolution approving the Variance to height, parking, and front setback for the new four-story, 111,978 square foot data center at 1231 Comstock, subject to findings and conditions of approval.
Staff
Prepared by: Daniel Sobczak, Associate Planner
Reviewed by: Afshan Hamid, Community Development Director
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Planning Commission Staff report October 23, 2024
2. Planning Commission Minutes October 23, 2024
3. Initial Study / Mitigated Negative Declaration
4. Mitigation Monitoring and Reporting Program
5. Resolution Adopting the Initial Study and Mitigated Negative Declaration and the Mitigation Monitoring and Reporting Program
6. Resolution to Sustain an Appeal and Approve a Conditional Use Permit
7. Resolution to Sustain an Appeal and Approve Variances
8. Project Data Sheet
9. Conditions of Approval
10. San Jose Airport Comments
11. Development Plans
12. General Plan Vicinity Map
13. Zoning Vicinity Map
14. Appeal Application Form