DATE: September 15, 2015
TO: Mayor and City Council
FROM: Development Services Director
SUBJECT
Title
Proposed Subdivision and Construction of Four Office/Light Industrial Buildings on a 14.41-acre site at 28803 Marina Drive, requiring Adoption of a Resolution and Introduction of an Ordinance for a Zone Change from Business Park to Planned Development, Tentative Parcel Map 10363, and an Addendum to the previously certified Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program. Elizabeth Cobb, Shea Properties (Applicant), Eden Shores Associates I, LLC (Owner).
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RECOMMENDATION
Recommendation
That the City Council adopts the attached resolution (Attachment I), adopting an Addendum <http://www.hayward-ca.gov/CITY-GOVERNMENT/BOARDS-COMMISSIONS-COMMITTEES/PLANNING-COMMISSION/2015/PCA15PDF/pca072315full.pdf> to the adopted 2007 Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP) <http://www.hayward-ca.gov/CITY-GOVERNMENT/DEPARTMENTS/DEVELOPMENT-SERVICES/documents/planning/2007/FINAL_MND_June_2007_and_Tech_Memo.pdf>, and approving the Tentative Parcel Map application; and introduces the attached ordinance (Attachment II), approving the Zone Change Application to construct four office/light industrial buildings.
Body
SUMMARY
The proposed Zone Change is requested to allow for the construction of flexible industrial use space that is not allowed by the existing Business Park zoning district designation. This change is consistent with the Economic Development Division’s Industrial Technology and Innovation Corridor Baseline Profile <http://www.hayward-ca.gov/haywardupward/wp-content/uploads/2015/06/IndustrialBaselineReport.pdf>, which was presented to the Council Economic Development Committee on March 3, City Council on March 17, and the Planning Commission on April 9. The study recommends that the City attract and expand advanced industries by supporting land use policies that encourage redevelopment and development of new “Class A” industrial spaces. The study states, “Supporting increases in the supply of new facilities will help mitigate two barriers of entry into Hayward’s industrial corridor: 1) the lack of modern buildings and spaces and 2) the time and materials associated with upgrading existing buildings to meet operation demands.” The proposed Zone Change addresses this recommendation by adding Class “A” light industrial/flex inventory to the industrial corridor that is not currently available. The Zone Change will improve the City’s ability to attract small to mid-size light manufacturing, biotechnology, and research and development firms. These businesses create quality jobs and economic advancement opportunities for Hayward’s workforce.
BACKGROUND
In 1998, the City of Hayward certified a Program Environmental Impact Report (EIR) associated with the approval of the South of Route 92 General Plan Amendment, Zone Change and Specific Plan for the Oliver Estate/Weber Properties. In 1999, the City approved and executed the Mount Eden Business and Sports Park Community Development Agreement in connection with the Oliver Estate properties. The original Specific Plan provided for a mixed-use development consisting of a business park, high-quality single-family housing, light manufacturing, open space and a 25-acre sports park on 333.5 acres. The Plan sought to expand the supply of owner-occupied housing and increase the variety of the City’s housing stock, particularly housing for professionals, technical specialists and managers and business owners, and create opportunities for businesses that provided higher wage jobs and/or sales tax revenues to develop and expand in Hayward. The sports park and the Oliver West portion of the Eden Shores residential community (534 homes) have been completed.
In November of 2005, the Specific Plan, Development Guidelines and Development Agreement were amended, as were the City’s General Plan and Zoning Ordinance, to allow for residential development (Eden Shores East comprised of the Bridgeport and The Crossings communities) on approximately 29 acres formerly designated for light manufacturing just east of the railroad tracks. Those developments, consisting of 139 single-family units (Bridgeport development) and 122 condominiums (Crossings development), respectively, have been completed.
In 2006, Legacy Eden Shores, which acquired the property from Standard Pacific, expressed an interest in exploring other potential land uses for the remaining undeveloped approximately 60 acres.
In October 2007, City Council approved a General Plan amendment, Specific Plan amendment, Development Guidelines revisions, Zone Change application, Zoning Text amendment, an amendment to the Mount Eden Business and Sports Park Community Development Agreement (Development Agreement), and Partial Assignment of the Development Agreement associated with a conceptual development plan showing an approximately 500,000 square foot business park. The proposal also included providing residential development and future regional commercial, and neighborhood retail on undeveloped land generally located west of Hesperian Boulevard, along Marina Drive, south of Industrial Boulevard and north of Eden Park Place.
The 2007 action resulted in all of this land being zoned “Business Park,” except for approximately 16.5 acres that contains the Costco store, gas station and associated parking lot (approved on December 17, 2008), approximately 5.8 acres of undeveloped land directly south of the Costco site that is zoned “Neighborhood Commercial” (CN), and approximately 14.4 acres south of Eden Shores Boulevard and north of Eden Park Place that is zoned “Medium Density Residential” (RM). As per amendments to the Development Agreement, the issuance of building permits for the development of the residential lots must be proportional to the development within the Regional Commercial (Costco), Neighborhood Commercial and Business Park zones located east of Marina Drive. To date, the only development that has occurred within these zones is the Costco site, which equates to the proportional release of 58.4 percent of the area that carries a residential zoning designation.
In May of 2014, a Zone Change from Medium Density Residential to Planned Development (PD) and a Vesting Tentative Tract Map to subdivide the property to construct one hundred and eighteen (118) detached single-family homes was approved. The project was approved to be constructed in two phases, with Phase I equaling the proportional release of 58.4 percent based on the development of Costco. Construction of Phase II will be contingent on the completion of the shells of buildings on the currently zoned neighborhood commercial and business park sites adjacent to Costco. Shortly thereafter, in February 2015, a five year extension to the Development Agreement was approved, with an expiration date of October 28, 2019.
Council Economic Development Committee Review - The applicant presented the then conceptual project to the Council Economic Development Committee <http://www.hayward-ca.gov/CITY-GOVERNMENT/COUNCIL-STANDING-COMMITTEES/COUNCIL-ECONOMIC-DEVELOPMENT-COMMITTEE/2015/CSC-CEDC020215full.pdf> (CEDC) on February 2, 2015 to obtain feedback on the concept. As reflected in the minutes <http://www.hayward-ca.gov/CITY-GOVERNMENT/COUNCIL-STANDING-COMMITTEES/COUNCIL-ECONOMIC-DEVELOPMENT-COMMITTEE/2015/CSC-CEDC040615full.pdf>, the CEDC was generally supportive of the proposed concept plan noting that it was consistent with the City’s vision for job creation in this area. However, the Committee was clear that they did not want to see strictly warehouse uses that would be incompatible with the neighboring residential development and would result in the creation of fewer jobs.
July 23, 2015 Planning Commission Hearing - The Planning Commission heard the matter at its regular meeting on July 23, 2015 <http://www.hayward-ca.gov/CITY-GOVERNMENT/BOARDS-COMMISSIONS-COMMITTEES/PLANNING-COMMISSION/2015/PCA15PDF/pca072315full.pdf> and recommended approval of the project on a 6:0:1 vote (one absence) (see draft meeting minutes, Attachment IV). As the minutes reflect, the Commission was in support of the project and in seeing “Class A” flex space being developed that would provide job opportunities, consistent with the General Plan and the Industrial Technology and Innovation Corridor Baseline Profile <http://www.hayward-ca.gov/haywardupward/wp-content/uploads/2015/06/IndustrialBaselineReport.pdf>.
DISCUSSION
Project Description - This project proposes a Zone Change from Business Park to Planned Development to develop the site with Class “A” light industrial uses, such as manufacturing, warehousing, assembling, office, and/or sales, which are not specifically identified as allowed uses in the Business Park Zoning District (see Attachment I, Exhibit B). This format of flexible uses requires smaller footprint buildings compared with traditional large industrial use buildings, accommodating both at grade loading docks (i.e. roll-up doors) and limited truck wells. The Preliminary Development Plan assumes up to 274,998 square feet on 14.63 acres (0.43 FAR).
The proposed building format of the four buildings is designed so as to adapt to the changing markets, and optimize floor area to attract and retain desired tenants. Typical uses would include, but not be limited to, manufacturing, warehouse, assembly, office and sales. Additionally, a Tentative Parcel Map is proposed to subdivide the property in order to create separate parcels for each building (Attachment V).
The four proposed industrial business park buildings will be accessed from Industrial Boulevard and Portland Drive, which are existing public streets. Surface parking is proposed throughout the development to provide convenient access to each building. The Project also includes bicycle storage facilities and preferential parking for carpool on site. In addition, this project will accommodate required electrical infrastructure components adequate to provide capacity for electrical vehicle charging stations, in addition to preinstalling conduits and related components that would support tenant installed solar power generation and charging systems. With the infrastructure in place, tenants have the discretion to implement added green building measures as appropriate to their use and operation.
Site Plan: Portland Drive - An approved 2007 conceptual development plan <http://www.hayward-ca.gov/CITY-GOVERNMENT/BOARDS-COMMISSIONS-COMMITTEES/PLANNING-COMMISSION/2015/PCA15PDF/pca072315full.pdf> envisioned that Portland Drive would be extended to dead-end into a cul-de-sac that would terminate at the future driveway into the project site. As proposed, the driveway entrance off Portland Drive is located along the existing segment of the roadway, closer to the intersection of Marina Drive, thus eliminating the need to extend the length of the roadway to create a cul-de-sac. The applicant is currently in negotiations with the City to purchase the remaining segment of Portland Drive to incorporate it into the project to create a larger landscape buffer between the project and the adjacent residential development. Portland Drive is currently a dead-end road and will remain so if not incorporated into the project. If the applicant is unable to acquire Portland Drive from the City, the site plan and landscape shall be revised accordingly to be reviewed and approved as part of the Precise Plan (see recommended condition of approval no. 7 in Attachment I).
Building Elevations - As shown in Attachment V, the project proposes to construct four buildings. Buildings one and four are single tenant buildings, with the ability to be demised to accommodate more than one tenant if the market demands, and Buildings two and three are designed for up to two tenants. The buildings range in size from 32,628 square feet to 115,093 square feet. The buildings will have a contemporary architectural design constructed of painted concrete panel walls with ¾” recesses on varying panels, aluminum storefront systems with glass canopy structures, and roll-up truck dock doors at the rear of buildings one, two and three. Buildings one, two and three are proposed to be 38’-0” in height and Building four is proposed at 32’-4” in height. The overall heights include parapet walls which will screen all roof mounted mechanical equipment. The proposed buildings and site design have been designed to be consistent with the City’s Design Guidelines and the South of Route 92 Development Standards, which call for prominent front entries, articulation through the use of recessed wall planes, and canopies, large landscape buffers along public right-of-ways, and thoughtful site design to shield the surrounding neighborhood from loading docks and service areas. Furthermore, the high quality design of the buildings and landscaping will improve the streetscape and provide an attractive and harmonious transition from the existing industrial/office buildings along Industrial Boulevard to the nearby residential community.
The landscape plan provides a smooth transition between the proposed project and the surrounding commercial and residential developments by continuing the existing 31.5-foot wide Public Service Easement, which includes a wide landscape buffer and continuation of the 10-foot wide meandering sidewalk along Industrial Boulevard and 5-foot wide sidewalk on Marina Drive, consistent with the South of Route 92 Development Guidelines. In accordance with the City’s Design Guidelines and Bay-Friendly Water Efficient Landscape Ordinance, the landscape will include a variety of trees, shrubs and ground cover that are water conserving and are native to California. The on-site stormwater treatment areas are located throughout the site and will be accomplished through landscaped bio-retention areas. Bio-retention areas collect water during rainstorm events where water is filtered back into the ground water ecosystem. Final landscape plan details will be reviewed and approved during the Precise Plan phase of the project.
Parking - The South of Route 92 Specific Plan and Development Guidelines do not provide parking requirements for the proposed office and light manufacturing uses; therefore, parking requirements from the City’s Off-Street Parking Regulations for similarly listed uses were applied.
Based on the parking ratio of 1.0 parking space for each five hundred square feet of gross floor area, a total of five-hundred and fifty spaces are required, in addition to 19 bicycle parking spaces. The project proposes five hundred and fifty-six parking spaces, thirty-percent of which will be compact (90 spaces), one-percent accessible spaces (11), and five-percent preferential parking spaces (27). In addition, twenty bicycle parking spaces will be provided. As proposed, the proposed parking exceeds the total minimum number of parking spaces required by eleven spaces, which includes a bicycle parking credit of five spaces.
Several bus lines (AC Transit Routes 97, S and SB) that provide Transbay service and regular service to destinations in and around Hayward and to and from San Francisco can be found approximately 100 feet from the project site on Hesperian Boulevard which will provide alternative transit options for future employees.
Zone Change- The purpose of the Planned Development District is to encourage development through efficient and attractive space utilization that might not otherwise be achieved through strict application of the existing zoning development standards. The current zoning designation for the site is Business Park (BP), which allows for a wide range of administrative and professional offices/service or other uses determined to be similar by the Planning Director. The proposed development can be characterized as flexible industrial use to accommodate a spectrum of industrial related uses, office, research and development (R&D), STEM (science, technology, engineering, and math), manufacturing, assembling and high tech services that involve a combination of assembling, warehousing and/or sales. However, because the proposed project includes the potential for light industrial uses and non-office uses listed above, a zone change to Planned Development is requested to allow specific uses for the site that would include manufacturing, warehouse, assembling, office and sales.
The proposed project is otherwise consistent with the South of Route 92 Specific Plan, South of Route 92 Development Guidelines and the zoning development standards for the Business Park zoning district.
Staff worked with the applicant extensively to develop standards to meet the objective of the City and to provide flexibility of land uses for the site. The following summarizes the assumptions and methodologies employed by staff to develop the range of primary, secondary and conditional uses to be applied to the proposed District known as the Eden Shores Industrial Business Park. The following text is organized as follows:
• Section 1 below defines terms utilized in the proposed District including value added business/products, Advanced Industries and their associated economic development benefits.
• Section 2 summarizes the approach employed by staff to identify the permitted and conditional uses for the planned development, which will ensure the job creation potential and value added uses are maximized.
1. Terms
Value Added Business/Products
Value added business or products relate to the enhancement of a product or service before offering that product or service to the customer.
Advanced Industries
The following defines the composition and economic development implications of Advanced Industries.
In February 2015, the Brookings Institution (Brookings) published a study entitled, “’-Americas Advanced Industries What They Are, Where They Are and Why They Matter <http://www.brookings.edu/research/reports2/2015/02/03-advanced-industries>.” According to Brookings, the Advanced Industries sector consists of over 50 different industries that involve heavy investment in technology innovation and employ skilled technical workers that develop and apply new technologies, processes and products. Advanced Industries include a wide array of business activities spanning the manufacturing, energy and service sectors.
Advanced Industries offer multiple economic development benefits. These industries employ and continue training of STEM (Science, Technology, Engineering and Math) workers, who earn more at every level of education compared to other industry sectors. Advanced Industries also conduct more business-to-business (B2B) transactions than other sectors, which supports growth in other industry sectors. An analysis of the prevalence of Advanced Industries in Hayward and more details on their economic development benefits are detailed in the City’s Economic Development Division’s Industrial Technology and Innovation Corridor Baseline Profile <http://www.hayward-ca.gov/haywardupward/wp-content/uploads/2015/06/IndustrialBaselineReport.pdf>, which was completed in March 2015 and presented to the Council Economic Development Committee, City Council and Planning Commission.
In order to realize the economic development benefits associated with Advanced Industries in Hayward, the study recommended the City encourage redevelopment and development of new “Class A” industrial spaces. These spaces include industrial facilities for light manufacturing and small to mid-size “flex” space buildings used by laboratories and research and development operations. The proposed Planned Development District zone change seeks to address this recommendation.
2. Selection of Uses for Eden Shores Industrial Business Park
Staff identified specific permitted uses for the District in order to maximize the City’s ability to attract Advanced Industries and realize the associated economic development benefits. This approach included the following tasks, which are explained further below:
A. Distilling the range of Advanced Industries uses to ensure allowed activities are in harmony with the surrounding area, which includes residential and commercial developments;
B. Incorporating the uses under the site’s existing Business Park zoning designation to maximize tenant flexibility while maintaining the site’s job creation potential; and
C. Allowing a range of uses to ensure there is a value add to the City.
Distillation of Advanced Industry Uses
To identify the range of manufacturing or assembly uses for the planned development, staff first began with the list of Advanced Industries (Brookings study referenced above) and eliminated those business activities that are traditionally characterized as “heavy” manufacturing. These advanced industry uses were eliminated as they are most likely to be in conflict with adjacent residential and commercial uses, and would be more appropriate for other areas in the city that carry an Industrial Zoning District designation. Examples of advanced industries that were screened from the use list include:
• Aluminum Production and Processing
• Basic Chemicals
• Foundries
• Iron, Steel and Ferroalloy
• Pesticides, Fertilizers and Other Agricultural Chemicals Manufacturing;
• Petroleum and Coal Products
• Railroad Rolling Stock
• Ship and Boat Building
• Energy Electric Power Generation, Transmission and Distribution
Incorporation of Business Park Uses
In the second task, staff reviewed the uses allowed under the site’s existing Business Park (BP) zone designation and incorporated those BP uses to create the list of administrative and professional offices/services uses for the District. The only BP use not carried over to the District was Travel Agency. Travel agencies typically do not have high employment numbers and are in decline as a result of the emergence and proliferation of online travel websites. The approach achieves two major objectives. First, the inclusion of the BP uses in the District helps ensure that the job creation potential of the site is maintained. Second, the added uses give the project proponent flexibility to pursue a broader range of tenants and aids in the long-term marketability of the site.
Value Add Businesses and Products
In the third task, staff reviewed other uses not necessarily related to Advanced Industries, but would still meet the intent of the District by providing opportunities for revenue generation or providing goods and services to the business community that would complement the South of Route 92 Specific Plan and Development Guidelines.
Also, staff included secondary uses to help attract users that provide the amenities the targeted primary uses consider during site selection. These include an allowance for an on-site day care facility and a gym. Listed conditional uses relate primarily to the type and quantity of hazardous materials.
Tentative Parcel Map 10363 - A tentative parcel map is being processed with the proposal to create four individual parcels of land on which each building will be constructed. If the tentative map is approved, it will be processed and a Parcel Map recorded, improvement plans submitted and a Subdivision agreement entered into with the developer.
The existing utilities in the project vicinity, including sanitary sewer, water and storm drain systems, have sufficient capacity to adequately serve the proposed development. On-site sewer and water utilities will be installed within the new public utility easements within the project site and connected to existing utilities in Industrial Boulevard, Marina Drive and Portland Drive. On-site storm drainage facilities will be connected to an existing system within Industrial Boulevard and Portland Drive. Sanitary sewer and water mains will be publicly owned and maintained by the City. However, the proposed on-site storm drain system and clean water treatment facilities for the subject property will be privately owned and maintained by a future Property Owners Association (POA). Any overhead utility lines as well as any new utility lines are recommended to be placed underground as part of the site improvements.
The existing commercial Eden Shores Owners Association is responsible for the maintenance of landscape and public improvements within the Public Service Easement (PSE). A Property Owners Association (POA) and Conditions, Covenants, and Restrictions (CC&Rs) shall be created so that the POA will be responsible for the maintenance of all private streets, private street lights, private utilities, and other privately owned common areas and facilities on the project site, including, but not limited to, parking areas, clean water treatment facilities, landscaping, preservation and replacement of trees, as shown on the proposed plans. All future maintenance costs shall be borne by the POA or the commercial associations, as appropriate. The CC&Rs for the Eden Shores Development Park contain a standard condition that the City shall have the ability to place liens on all lots within the development if the Association fails to fulfill its maintenance obligations.
Environmental Review - This proposal is defined as a “project” under the parameters set forth in the California Environmental Quality Act (CEQA) Guidelines. An Addendum to the previously adopted 2007 Mitigated Negative Declaration has been prepared, which determines that the conclusions of the Mitigated Negative Declaration remain unchanged related to the potential environmental impacts of the proposed project. The Initial Study/Mitigated Negative Declaration, Mitigation Monitoring and Reporting Program and Technical Memorandum adopted on October 23, 2007 tiers off a1998 EIR and indicates there would be no significant environmental impacts resulting from a larger business park project on this site consisting of 415,400 square feet of office space, provided the mitigation measures identified in those documents are incorporated into the project. The Addendum associated with this Project analyzes trip generation based on the current proposal of 252,266 square feet of light industrial flex space and 22,732 square feet of general office space, which results in a net decrease of trips. Therefore, the 2007 findings and mitigation measures remain valid, such as implementation of basic and enhanced dust control measures, limitation of construction hours to minimize construction noise during construction, and the development and implementation of a Transportation Management Plan (TMP) to minimize the transportation-related effects on local residents during construction and to local residents during implementation.
ECONOMIC IMPACT
The proposed project would construct a modern light industrial/office park that does not currently exist in Hayward’s building inventory and that the current commercial real estate market demands. The economic impacts of the project fall across three categories - direct, indirect and induced. These impacts, as well as a discussion about the implications for the City’s economic development potential, are described below.
Direct impacts are the results of an initial investment. For this project, these impacts would materialize in two phases. First, the project would create construction jobs and generate demand for the material and support services to build the project. Once completed, the new “Class A” inventory could attract targeted businesses and create job opportunities for Hayward residents.
Indirect impacts are defined as the activities that occur after the initial investment. In this case, indirect impacts would materialize as businesses in the proposed industrial park purchase from other businesses in the area. For example, a manufacturer may purchase machinery, raw materials, transportation services, or other business services. These impacts account for the all commodities and services that business needs to operate. Business-to-business transactions would support job creation, add revenue sources to the City and help attract other supporting businesses to Hayward.
Induced impacts are changes in spending as personal income increases or decreases. The wages paid by businesses in the industrial park may encourage growth in the local economy as those employees spend on food, clothing, fuel or services. If captured locally, this spending would help expand the City’s retail base.
The project location is identified as a Catalyst site and is targeted to increase the City’s economic development potential. Since the tenant spaces are not pre-leased and the employment impacts cannot be quantified, the focused range of allowable uses applied to this proposed Planned Development District ensures the site produces quality employment opportunities or support services to our existing industrial business community. Staff carefully selected permitted uses in order to:
• Maximize the site’s potential to create job opportunities across a spectrum of skill levels and industry types;
• Improve the City’s ability to attract Advanced Industries and other supporting business by creating space not available in the City’s building inventory; and
• Encouraging the creation of an ecosystem of businesses that support one another.
The benefits of focusing on Advanced Industries uses are summarized in Section 1 - “Terms” and are discussed in detail within the Economic Development Division’s Industrial Technology and Innovation Corridor Baseline Profile <http://www.hayward-ca.gov/haywardupward/wp-content/uploads/2015/06/IndustrialBaselineReport.pdf>.
FISCAL IMPACT
Because of the speculative nature of the project, it is not possible to identify the end user(s) that will ultimately occupy the Industrial Business Park. With this in mind, staff has conducted a rough fiscal impact analysis of the project based on mix of Research and Development and Industrial/Manufacturing uses. Based on the assumption that Buildings 3 and 4 (8.8 acres) will be occupied by Industrial/Manufacturing uses and Buildings 1 and 4 (5.9 acres) will be occupied by Research and Development uses, it is estimated that the project will generate $278,643 of new General Fund revenue annually. The project is estimated to cost the City’s General Fund $162,188 annually, resulting in annual revenue to the General Fund of $116,455, which is a slight positive fiscal impact.
PUBLIC CONTACT
Two hundred and sixty-five (265) notices of this public hearing were sent to all property owners and residents within a 300-foot radius of the project site on September 4, 2015 and published in The Daily Review newspaper on September 5, 2015. No notice or public review period for the Addendum to the Mitigated Negative Declaration is required. No comments have been received as of the writing of this staff report. Any additional comments that are received before the City Council meeting will be forwarded or presented to the Council for consideration.
NEXT STEPS
Should the Council approve the project, the applicant will be required to incorporate project conditions of approval and submit a more detailed Precise Plan and Improvement Plans for staff review and approval prior to approval of the Parcel Map. Filing of the Parcel Map would then create the lots. Grading and building permit applications will then be processed and permits issued to allow for construction of the tract improvements and buildings.
Prepared by: Linda Ajello, AICP, Senior Planner and Paul Nguyen, Economic Development Specialist
Staff contact
Recommended by: David Rizk, AICP, Development Services Director
end
Approved by:
Fran David, City Manager
Attachments:
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Attachment I |
Resolution |
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Attachment II |
Ordinance |
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Attachment III |
Area and Zoning Map |
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Attachment IV |
July 23, 2015 Draft PC Meeting Minutes |
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Attachment V |
Project Plans |
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