REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on an Amendment to Development Agreement for Gateway Crossings Project at 1205 Coleman Avenue [Council Pillar: Promote and Enhance Economic, Housing and Transportation Development]
Report
EXECUTIVE SUMMARY
Hunter Storm (“Applicant”) through its affiliate TOD Brokaw, LLC. (“Property Owner”) is requesting an amendment of the Development Agreement (DA) to modify the requirements for timing of the construction of a hotel as part of the Gateway Crossings Project, located at 1205 Coleman Avenue. As approved, the DA requires construction of the hotel in Phase 1 of the development of the mixed-use project. Due to the economic downturn caused by the COVID19 pandemic that is impacting the restaurant, hotel and travel sectors, the Applicant is requesting to move the construction of the hotel to Phase 2 of project development. An amendment to the DA is required to alter the phasing of the approved development.
The proposed Amendment would be consistent with the City’s General Plan land use designation for the project site and applicable policies in that the proposal to modify the sequencing of hotel construction does not include changes to the approved land use types, location or intensity of development that is to occur on the site, or number of phases of Project development; and would advance residential development on the site to support housing goals. A discussion of General Plan and Zoning Code conformance is provided in the Planning Commission staff report of June 10, 2020 (Attachment 1).
BACKGROUND
The project site consists of two parcels, totaling 21.4 acres, located at the southwest corner of Coleman Avenue and Brokaw Road. The majority of the site (20.4 acres) is located in the City of Santa Clara (APN: 230-46-069). A 1.0-acre portion at the southeastern corner of the site is located in the City of San Jose (APN: 230-46-070). The project site is currently vacant and was previously developed with industrial and office/research and development uses occupied by FMC, United Defense and BAE Systems.
On July 9, 2019, the City Council approved entitlements for phased development of a mixed-use project (“Gateway Crossings”) on the project site. These entitlements include a General Plan Amendment to Santa Clara Station Very High Density Residential (51-120 du/ac) with a minimum commercial Floor Area Ratio of 0.20 and rezoning of the project site to Very High Density Mixed Use (PLN2016-12318); a Vesting Tentative Subdivision Map (PLN2016-12321); and Development Agreement (PLN2017-12481) to allow development phasing of the project. At the same meeting, the City Council approved and certified the Environmental Impact Report and the Mitigation Monitoring and Reporting Program for the Gateway Crossings Project (CEQ2016-01025 / SCH#2014072078).
The Gateway Crossings Project includes the construction of up to 1,565 multi-family residential units, 45,000 square feet of supporting retail and associated parking within four multi-story buildings on individual parcels (Buildings 1 - 4); a 152,000 square foot high-rise hotel with associated parking on a separate parcel; 2.6 acres of dedicated park land; private streets and shared surface parking on common lots; site landscaping; and public and private on- and off-site improvements.
Development phasing is specified in the DA. Project development is to occur in two phases with construction of residential Buildings 1 and 2 and the public park in Phase 1. The building permit for Building 2 is not to be issued unless and until the building permit for the hotel is issued and construction on the hotel has begun. Construction of residential Buildings 3 and 4 is to occur in Phase 2. On- and off-site public and private improvements and utilities associated with each phase would be coordinated and constructed to serve each phase of development.
The DA has a five-year term with an automatic five-year extension that occurs if the Developer physically commences construction of at least one building in accordance with the Development Plan prior to the expiration of the initial five-year period. The effective date of the DA is September 26, 2019.
The proposed DA Amendment would push back the requirement to build the hotel prior to residential Building 2 to a later point in the development project, prior to the construction of residential Building 3 (Phase 2) of the project. The purpose of the change is to allow the issuance of building permits for residential Buildings 1 and 2 concurrently in Phase 1 so that both buildings can proceed through construction while the travel and hospitality sectors of the economy recover sufficiently to support the development of a new hotel. This proposal would accordingly allow construction of a total of 725 residential units (of which 73 would be affordable units), 11,200 square feet of supporting retail, parkland, 7,500 square feet of commercial space for Police Activities League (PAL) youth programs, and on- and off-site roadway and site improvements to be constructed in Phase 1 at the same time.
DISCUSSION
At the June 10, 2020 Planning Commission meeting, staff and the applicant provided presentations on the proposed project. The Planning Commission discussion focused on the factors causing the Applicant to file the request, the proposed timing for construction of the hotel, and the benefits to the City of maintaining the DA as approved or amending as proposed.
Thirteen individuals from the public participated. Of these, 11 speakers expressed their support of the DA Amendment and advancing the construction of residential units and the PAL facility in Phase 1 without additional requirements as a condition of approval. One member of the public commented on the significance of the hotel to the project and the community. The member of the public expressed the desire to see the hotel built before Building 2 as approved and hold development of the Project if necessary while waiting to see what happens with the economy. Another individual expressed interest in switching the location of the PAL tenant space to Building 1 and retaining the sequence of development as approved in the DA.
The Planning Commission discussed the project with a focus on the potential for added community benefit that could be required as a condition of granting the requested DA. Some Commissioners expressed support for potential modification of the project to increase residential density on the site by adding more units to Phase 2.
The Commission also discussed increasing the amount of affordable housing within the project to 15 percent to align with the City’s current requirements, reflecting community input from the May 25th community meeting, at which time community participants expressed an interest in requesting the project be required to provide a greater number of affordable units or provide the same number of units with deeper affordability. (The current DA terms require that the project provide 10% of all units as affordable, split evenly with half of those affordable to households earning the 80% Annual Median Income level and half affordable to households earning 100% AMI). The current project was approved by the City Council prior to the implementation date of the City’s Affordable Housing Ordinance, which now requires that 15% of units be affordable to households at 100% Area Median Income level.
The Planning Commission further discussed the alternative actions available to the City Council in making their recommendation, including approval of the modification to the DA as requested by the Developer, denial of the request to modify the DA, or additional negotiation of terms between the Developer and the City. Possible modifications included a larger or deeper affordability requirement, a requirement to rezone Phase 2 to higher density, additional support for PAL, or other contributions toward community benefits.
At the conclusion of the Commission’s deliberation, Commissioners Jain and Becker expressed concerns about making a concession to the developer for hotel sequencing without any added benefit to the City. Other Commissioners supported the request to move back the hotel timing requirement as requested by the applicant, citing the overall benefits of the project and recognizing the impact to the hospitability and travel sectors of the economy. The Planning Commission voted (4-2-0, with Becker and Jain opposed and Biagini recused) to recommend approval of the proposed Amendment to the DA as submitted.
The proposed DA Amendment is narrowly limited in scope to the timing of the hotel construction and would not alter other aspects of the project. As currently drafted the DA Amendment preserves the City’s interest in linking construction of the hotel to the overall project by requiring construction of the hotel concurrent with Phase 2, allowing only two of four residential buildings to proceed ahead of the hotel.
ENVIRONMENTAL REVIEW
The environmental record for the Gateway Crossings Project consists of the Draft Environmental Impact Report (DEIR), Final Environmental Impact Report (FEIR), FEIR Appendices, and Supplemental Text Revisions Memorandum that together constitute the EIR and includes the Mitigation Monitoring and Reporting Program (MMRP). The documents were prepared and reviewed in accordance with California Environmental Quality Act requirements. The EIR and MMRP were approved and certified by the City Council at a public noticed meeting on July 9, 2019. Copies of the EIR and MMRP are available for review on the City’s website at: <https://www.santaclaraca.gov/Home/Components/BusinessDirectory/BusinessDirectory/157/3650?alpha=G> .
The proposed DA Amendment to move hotel construction from Phase 1 to Phase 2 of development does not modify the approved land uses, density of development or timing of full build-out of the project and therefore would not result in new significant impacts or impacts of substantially greater severity to require further environmental analysis.
FISCAL IMPACT
There is no fiscal impact the City for processing the requested application other than administrative staff time and expense typically covered by processing fees paid by the applicant. As proposed, none of the terms of the DA would be modified except for the phasing of hotel construction. The project would be subject to building permit and development fees in accordance with the City’s Fee Schedule and made payable at the time of building permit issuance.
COORDINATION
This report was coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was also 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> .
Public Notices and Comments: The notice of public hearing for this item was posted within 300 feet of the project site and mailed to property owners within 1,000 feet of the project site and to approximately 4,800 properties within the Old Quad on June 25, 2020. Newspaper notice of this item was published in The Weekly on June 24, 2020. The full administrative record is available for review during normal business hours by contacting the Planning Division. At the time of this agenda report there has been no additional public input submitted to the City is support or opposition to the proposal.
Public Outreach Meetings: A virtual public outreach meeting was conducted by the Applicant on May 28, 2020 at 6:00 p.m. Planning staff participated in the Zoom meeting to note public comment. Consistent with public outreach provided for the Gateway Crossings Project development entitlement process, notices of this outreach meeting were mailed to property owners within 1,000 of the project boundaries and approximately 4,800 properties in the Old Quad and was posted on the City’s Community Meeting. Email notifications were also provided to interested parties. The Planning Commission staff report of June 10, 2020 (Attachment 1) outlines the points of discussion provided by the applicant and captures the comments conveyed by the public on the proposed Amendment.
ALTERNATIVES
1. Introduce an ordinance approving the First Amendment to the Development Agreement for the Gateway Crossings Project between the City of Santa Clara and TOD Brokaw, LLC.
2. Introduce an ordinance approving the First Amendment to the Development Agreement for the Gateway Crossings Project between the City of Santa Clara and TOD Brokaw, LLC with additional terms.
3. Deny the Amendment to the Development Agreement for the Gateway Crossings between the City of Santa Clara and TOD Brokaw, LLC.
RECOMMENDATION
Recommendation
Alternative 1:
Introduce an ordinance approving the First Amendment to the Development Agreement for the Gateway Crossings Project between the City of Santa Clara and TOD Brokaw, LLC.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Planning Commission Staff Report of June 10, 2020
2. First Amendment to Development Agreement between the City of Santa Clara and TOD Brokaw, LLC.
3. Development Agreement Ordinance
4. Applicant Statement of Justification