REPORT TO COUNCIL
SUBJECT
Title
Action on a Contract Amendment and Direction to Proceed with Issuance of a Notice of Preparation for the Freedom Circle Focus Area [Council Pillar: Promote and Enhance Economic, Housing and Transportation Development]
Report
BACKGROUND
On August 27, 2019, the City Council directed staff to proceed with the long-range planning process to designate the Freedom Circle area as a Future Focus Area within the General Plan instead of the preparation of a Specific Plan. This direction was given following the decision by two of the three Freedom Circle property owners funding the Specific Plan (The Sobrato Organization and Irvine Company) to withdraw from their funding of the Freedom Circle Specific Plan process, which had begun in August 2018. The remaining property owner (Greystar) is continuing to fund the Focus Area process while also moving forward with their General Plan Amendment (GPA) application.
DISCUSSION
The change from preparation of a Specific Plan to a Focus Area necessitates a change of scope of the City’s contract with Moore Iacofano Goltsman, Inc (MIG) for preparation of the Focus Area. As a next step in the creation of the Freedom Circle Focus Area and processing of the Greystar GPA, the City will start the environmental review process for both by releasing a Notice of Preparation (NOP).
Based on prior City Council direction, staff is considering preparation of the Freedom Circle Focus Area to be a precondition of the City Council for completing the processing of the GPA for the Greystar parcel.
Contract Amendment with MIG, Inc.
In conjunction with the Greystar GPA, the City Council directed Planning staff to plan for a future transition to a mix of residential and office uses in Freedom Circle by creating a new General Plan Focus Area for the properties around Freedom Circle.
To reflect this change in circumstances and scope, the City is proposing to amend its current contract with MIG. The planning document to be prepared will be an illustrated description of the Freedom Circle Focus Area, which communicates the development potential of the Focus Area and which will be incorporated into the General Plan text. Like other focus areas, the Freedom Circle Focus Area will be subject to a future planning process prior to any change in land use designation.
The contract amendment also includes the preparation of a combined Environmental Impact Report (EIR) covering both the Greystar GPA and the Freedom Circle Focus Area. Environmental Impacts of the Greystar GPA will be analyzed at a project level, meaning that the specific impacts of the 1,100 residential unit Greystar development proposal will be analyzed, including traffic and noise. Impacts of development under the proposed focus area will be described at a program level because the size and location of individual development proposals beyond the Greystar development is not known at this time.
The contract amendment reflects the change in project scope from preparation of a Specific Plan to a reduced work scope for designation of a Focus Area along with increased analysis specific to the Greystar project. The amendment also addresses the decoupling of the Freedom Circle and Patrick Henry Specific Plan processes to be independent projects. The contract amendment recognizes the $172,962 already spent on the Freedom Circle project, and describes the tasks involved with the preparation of the focus area and the associated EIR. The total of new costs in the contract amendment is $450,342. Including a 10% contingency, the total cost of the contract amendment is $685,635. This is a reduction from the original contract for $840,497 which included a 10% contingency.
Because Greystar is the sole remaining funder of the Freedom Circle Focus Area, the reimbursement agreement for the preparation of the Freedom Circle focus area and EIR by MIG, Inc. has been revised to be between Greystar and the City.
Notice of Preparation
The release of a Notice of Preparation (NOP) is the first public action in the EIR preparation process. The purpose of the NOP is to inform agencies and interested parties that an EIR will be prepared for a project, and allow an opportunity for comment on the scope and content of the environmental information to be included in the EIRAs noted above, the EIR and the NOP will address both the City’s designation of the Focus Area and the Greystar project.
The vision for the Freedom Circle Focus Area is an urban environment, with Great America Parkway and Mission College Boulevard retaining their commercial character. For the NOP the Focus Area is proposed to allow 2,500 dwelling in addition to the 1,100 proposed through the Greystar GPA, for a total of 3,600 dwelling units. The NOP also address the potential development of 2 million square feet of office space in addition to the current General Plan capacity, allowing a total of 9.6 million square feet of potential office/industrial development. The parcels designated High Intensity Office are currently developed with approximately 2.35 million square feet of building space.
The Freedom Circle area (shown in Attachment 1) is not considered for conversion to residential uses under any phase of the 2010 - 2035 General Plan, but rather is currently planned over the long-term to be preserved for employment uses. The buildings in the Freedom Circle area are a mix of concrete tilt-ups, office towers, and single-use commercial buildings such as the Santa Clara Marriott Hotel and Pedro’s Cantina. The Greystar site, which sits directly north of 101 and directly west of San Tomas Aquino Creek, is undeveloped.
Most of the proposed Specific Plan Area currently has a High Intensity Office General Plan designation, which supports high-rise and campus style office development with an allowed Floor Area Ratio (FAR) of up to 2.0. The Marriott Hotel site is the lone exception and is currently designated Regional Commercial. Unlike other focus areas where the City anticipates conversion of all or a large majority of lands to residential use, this area currently supports key commercial and office uses and a more even mix of employment and residential uses consistent with overall General Plan goals.
The Greystar General Plan Amendment proposes to change the General Plan land use designation for the 13.3 acre Greystar site, which is bounded by San Tomas Aquino Creek to the East, Freedom Circle to the West, and Highway 101 to the south from High Intensity Office (maximum Floor Area Ratio of 2.0) to Very High Density Residential (51-100 Dwelling Unit/Acre). Greystar is proposing a total of 1,100 dwelling units in three 7-story buildings, all of which are proposed to be a maximum of 100 feet in height. The proposal also includes a two-acre public park with a connection to the San Tomas Aquino Creek trail, and up to 2,000 square feet of neighborhood-serving retail. The proposal also includes removing existing view easements along the Bayshore Freeway (US 101) and relocating the City of Santa Clara/Great America sign from its current location to the southeastern corner of the property.
ENVIRONMENTAL REVIEW
The action being considered is simply to accept a report on the planning process for Greystar and the Freedom Circle focus area, and approval of the amendment to the consultant contract. These actions do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5), in that they are governmental organizational or administrative activities that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Amendment No. 1 with MIG decreases the not-to-exceed amount to $685,635 and extends the term of the agreement to December 31, 2021. The City’s consultant costs for preparation of the Freedom Circle focus area and Greystar General Plan Amendment will be covered through a reimbursement agreement with Greystar. The applicant previously deposited $300,000 under the original Greystar Reimbursement Agreement and will be expected to deposit an additional $300,000 following execution of the amended Reimbursement Agreement in order to fully fund the land use and environmental planning services. The additional funds will be collected in the City’s Deposit Fund from which payments will also be made.
While the City has not conducted a fiscal analysis for the focus area and General Plan Amendment, it is understood that residential land uses generally have a net negative fiscal impact (as increased land value revenue does not completely offset increased costs for service), but infill and higher density mixed-use development, particularly utilizing Type I or Type III construction, can provide for more efficient delivery of services and support more tax revenue generating activity, potentially resulting in net neutral or positive fiscal implications. Consistent with the General Plan, the addition of new residentially designated land helps the City to achieve its Regional Housing Needs Assessment (RHNA) goals for housing production.
COORDINATION
This report has been coordinated with the City Attorney’s Office and the City Manager’s Office.
PUBLIC CONTACT
The City held a community meeting on the North Santa Clara area including the Freedom Circle area on February 25, 2019. Approximately 28 members of the public attended the meeting.
Public contact was made by posting the Council 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>.
ALTERNATIVES
1. Approve the contract amendment and reimbursement agreement for the revised scope of services with MIG, Inc. and accept the report on the Freedom Circle / Greystar General Plan Amendment Notice of Preparation as presented by staff.
2. Do not approve the contract amendment and reimbursement agreement for the revised scope of services with MIG, Inc. and do not accept the report on the Freedom Circle / Greystar General Plan Amendment Notice of Preparation as presented by staff.
RECOMMENDATION
Recommendation
Alternative 1:
Approve the contract amendment and reimbursement agreement for the revised scope of services with MIG, Inc. and accept the report on the Freedom Circle / Greystar General Plan Amendment Notice of Preparation as presented by staff.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Proposed Freedom Circle Focus Area
2. Contract Amendment No. 1 with MIG Freedom Circle
3. Amendment to the Greystar Reimbursement Agreement, April 2020
4. Freedom Circle Draft Notice of Preparation May 2020
5. Focus Area and EIR Milestone Schedule