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HomeMy WebLinkAboutStaff Report 4.C 02/24/2020 Staff Report and Attachments 1-4p, L I85� Agenda Item #4.0 DATE: February 24, 2020 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Peggy Flynn, City Manager Heather Hines, Planning Manager Eric Danly, City Attorney SUBJECT: Consideration of and Action on Resolutions and Ordinances for the Corona Station Residential Project, including a Mitigated Negative Declaration, Appeal of a Zoning Text Amendment, Development Agreement, Density Bonus, and Vesting Tentative Subdivision Map RECOMMENDATION Consistent with the Planning Commission's recommendation, and as discussed in greater detail in the background section below, staff has prepared the following documents (Attachments 1-4) to deny the entitlements for the Council's consideration: • Resolution denying the applicant's appeal and upholding the Planning Commission's denial of a Zoning Text Amendment to conditionally allow single family detached land use in the MU 1 B zoning district (Attachment 1) • Resolution denying the Development Agreement between the City and the applicant (Attachment 2) • Resolution denying a Density Bonus Housing Agreement and concession (Attachment 3) • Resolution denying a Vesting Tentative Subdivision (Attachment 4) Environmental Review is not required for denial of a project and therefore no action on the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program is included in this set of documents to deny the project. In response to input from a majority of the City Council at the January 27, 2020 meeting, and consistent with City Council Goal #22 to "complete the second SMART station at Corona", the following documents are presented for the Council's consideration should the City Council, notwithstanding the Planning Commission recommendations, choose to approve entitlements for the Corona Station Residential Project: • Resolution approving the Mitigated Negative Declaration and MMRP (Attachment 5) • Introduction of an Ordinance approving the applicant's appeal of the Planning Commission's denial of a Zoning Text Amendment and approving the Zoning Text Amendment to conditionally allow single family detached land use in the MU 1 B zoning district when adjacent to an existing or planned SMART station (Attachment 6) Introduction of an Ordinance approving the Development Agreement between the City and the applicant (Attachment 7) Resolution approving a Density Bonus Housing Agreement and concession (Attachment 8) Resolution approving a Vesting Tentative Subdivision Map creating a 110 residential subdivision and a 1.27 -acre remainder parcel for dedication to SMART (Attachment 9) If the City Council approves the project entitlements, they may wish to also provide feedback to the applicant and the Planning Commission to consider as part of subsequent consideration of the Conditional Use Pen -nit and Site Plan and Architectural Review for the Corona Station Residential Project. BACKGROUND Planning Commission Consideration The Planning Commission considered the Corona Station Residential Project (including the Mitigated Negative Declaration, Zoning Text Amendment, Development Agreement, Density Bonus, Tentative Subdivision Map, Conditional Use Permit and Site Plan and Architectural Review) at their regular meetings on November 12, 2019, November 19, 2020, and January 14, 2020. The Planning Commission approved the following resolutions: • Reso No. 2019-17 recommending City Council approval of the MND • Reso No. 2019-18 recommending City Council denial of the Development Agreement • Reso No. 2019-19 recommending City Council denial of the Density Bonus • Reso No. 2019-20 recommending City Council denial of the Tentative Subdivision Map • Reso No. 2020-01 denying the Zoning Text Amendment The following points summarize the consensus of the Planning Commission in requesting denial of the overall project: • Overall design of the project is not Transit Oriented Development as desired adjacent to the future SMART station • Single family detached housing is not appropriate at this location • Calls for increased density of housing on the site given its location • Development doesn't relate to or adequately connect with the future SMART station • Development doesn't include a mix of use On January 15, 2020 the applicant submitted an appeal of the Planning Commission's denial of the Zoning Text Amendment. City Council Consideration The City Council considered the project at their meeting of January 27, 2020. There was considerable public comment, both written and oral, presented to the City Council in opposition of the project. Similar to previous comments, the opposition argued that the project is not I consistent with a high quality transit oriented development pattern appropriate to the location adjacent to the future SMART station and does not provide a high density mixed use project as called for in the General Plan and the Station Area Master Plan. Additionally, comments expressed opposition to the requested Zoning Text Amendment to allow single family detached housing in this area given its opportunistic location next to the future station. Several public commenters requested reconsideration of the designation and zoning for this site in order to increase density and intensity of development and encouraged the decision makers to not allow a sense of urgency regarding the second Petaluma SMART station to compromise the discretionary review of the project. After consideration, a majority of the City Council expressed a general support of the project in order to ensure construction of the second SMART station and the overall need for housing in the City. There was concern expressed by a majority of the Council, including those that indicated support of the overall project, related to the applicant's request for alternative compliance for inclusionary housing associated with development of the Downtown SMART property. The Council ultimately continued the item to a date certain of February 10, 2020. This item was rescheduled to February 24 to accommodate discussions with both the applicant and the proposed developer for the D Street property. DISCUSSION The following discussion outlines continued dialogue, clarifications, and changes to the approval documents presented for the Council's consideration. Design Considerations There were several public comments made at the January 27th hearing regarding modified site layout and housing product types to achieve a denser TOD development pattern adjacent to the station. Subsequent to the Council meeting, staff discussed these concepts with the applicant to encourage reconsideration of the layout to better respond to these principles. The applicant indicated a strong commitment to the project layout as proposed and the belief that the two housing products proposed are the best response to the current market demand in Petaluma. No changes were made to the project. Mitigated Negative Declaration A public comment at the Council meeting argued an error in the environmental analysis related to consistency with the City's General Plan and the underlying Mixed -Use land use designation. As discussed under Section 4.11 of the MND, the project was found to have a less than significant impact as it was found generally consistent with the City's General Plan. The Mixed -Use land use designation calls for a "robust combination of uses, including retail, residential, service commercial, and/or offices". Neither the land use designation nor the implementing zoning district requires a mix of land uses on each parcel. While the proposed project is solely a residential project, including a mix of two housing products, it facilitates development of the second station and the needed parking infrastructure to support the station. Additionally, the residential project is being introduced in an area with a mix of land uses within the general neighborhood. 3 Zoning Text Amendment Consistent with Council suggestion, the proposed Zoning Text Amendment (Attachment 6) has been modified to conditionally allow single family land use when part of a residential project adjacent to a planned SMART station and at a density of at least 26 units per acre. Development Agreement There was considerable discussion at the January 27th hearing regarding concern with the requested alternative compliance to satisfy the inclusionary housing requirement for the Downtown Station Residential Project. The anticipated 405 unit would require the provision of 61 onsite units under current inclusionary requirements. The applicant had requested approval of alternative compliance for the future Downtown Station Residential Project as part of the Development Agreement to include land donation and payment of $862,208 in in lieu fees. Burbank Housing has been in discussion with the applicant and presented to the City Council a concept of a 50 -unit affordable housing development for the donated site, including 15 one -bedroom units, 20 two-bedroom units, and 15 3 -bedroom units. All units are anticipated to be at the low and very -low income level, ranging from 30% to 80% of AMI and averaging 50% AMI. Burbank has indicated an approximately $2 million funding need to construct the project after the $862,208 in lieu fees. A majority of the City Council indicated a desire to see at least 61 units provided as part of any alternative compliance and a hope to see those units included onsite as part of the Downtown Station Residential Project. In response, the applicant modified their proposal for alternative compliance for the Downtown Project to include: 0 Eleven onsite inclusionary units as part of the future project affordable to low income households • A unit mix to roughly match the market rate units, including two (2) studio units, six (6) one -bedroom units, and three (3) two-bedroom units 0 Donation of 2.5 acres of undeveloped land at 1601 Petaluma Boulevard South 0 $862,208 in housing in lieu fees The Development Agreement has been modified at Section 6.3 to specify that the alternative compliance for the Downtown Station Project includes provision of I I onsite units affordable to low income households and representative of the market rate unit mix of the project, donation of 2.5 acres of undeveloped land at 1601 Petaluma Boulevard South, and payment of $862,208 in housing in -lieu fees. Additionally, the Development Agreement has been modified to require that the Downtown Station Residential Project be an all -electric development without new gas infrastructure. The requirement for gray water valves on the units within the Corona Station Project has been removed. As outlined in the draft Development Agreement both the Corona Station Project and the Downtown Station Project would be all electric developments without any new gas infrastructure. 0 Density Bonus Minor modifications were made to the draft Density Bonus Housing Agreement to specify the unit mix by income to ensure that the affordable units are representative of the market rate attached units within the Corona Station Residential Project. Tentative Subdivision Map Conditions Consistent with the Station Area Master Plan and to implement the recommendations of the City's Pedestrian and Bicycle Advisory Committee, the project was conditioned to install a crosswalk with appropriate safety crossing features at North McDowell Boulevard and Michael Drive. Upon further review by the applicant's traffic consultant (Attachment 10) and concurrence with the City Engineer and the City Sr. Traffic Engineer, the mid -block crossing location was determined unsafe and the condition has been removed from the draft conditions. More specifically, the engineering team determined that the mid -block crossing, even with the safety features of flashing beacons and a refuge island, would still create safety issues due to the speed and volume of traffic on North McDowell in combination with its proximity to the controlled intersection at Corona Rd. Given these considerations, this condition has been removed from the Conditions of Approval associated with the Tentative Subdivision Map. However, in reviewing the existing pedestrian connectivity in this area and receiving public comment from residents from both Youngstown and Petaluma Estates on the east side of North McDowell staff recognizes the need for improvement. There are several proposed conditions included in Attachment 9 Exhibit 1 that incrementally improve the neighborhood connectivity, including: 35. The existing sidewalk along the Corona frontage shall be extended to and aligned with the existing sidewalk on the eastern side of the railroad tracks. The City to coordinate with SMART and the applicant to assure accommodations for SMART & CPUC grade crossing safety standards and compliance. 36. All portions of existing broken, displaced, cracked and/or settled City sidewalk, curb and gutter along the Corona Road frontage shall be removed and replaced with City standard sidewalk, curb and gutter. 37. Frontage improvements shall include new sidewalk and new ADA ramps to Corona Road on all four points of the intersection. All pedestrian ramps shall meet current City requirements and accessibility standards. The City is seeking grant funding to assist with sidewalk improvements that could be installed with the reconstruction of North McDowell scheduled for 2021/2022. Additionally, staff is actively engaged with discussion with SMART regarding a signalized ped crossing at North McDowell just north of the SMART rail crossing (which is just south of Petaluma Estates). This location aligns with one of the proposed options for the future SMART multi use path (MUP) extension that would follow the SMART track ROW from Southpoint Blvd to the crossing. Finally, the City recently applied for designation of a Priority Development Area around the second station. This designation would make the city eligible for funding through infrastructure grants to improve connectivity and mobility in the area within the PDA boundaries. 5 SPAR Considerations The following items were mentioned for consideration as part of future Site Plan and Architectural Review (SPAR) should the project be approved and would be included in subsequent staff analysis for the Planning Commission's consideration: • Garbage collection • Usable walkways within side yards of units 103-106 • HOA maintenance responsibilities • Encouragement for shared parking (Zip Car) • Alley lighting • Photovoltaic coverage and orientation to maximize benefits Environmental Analysis An Initial Study was prepared in compliance with the California Environmental Quality Act (CEQA) on October 16, 2019. A Notice of Intent to adopt a Mitigated Negative Declaration was distributed and posted with California State Clearing House and the Sonoma County Clerk's Office on October 18, 2019, initiating a 30 -day comment period. It was determined that the proposed project could result in potentially significant impacts related to Air Quality, Biological Resources, Cultural Resources, Geology/Soils, Greenhouse Gas Emissions, Hazards, Hydrology, Noise, and Utilities. The Initial Study found that project impacts would be mitigated to a less -than -significant level through implementation of recommended mitigation measures or through compliance with existing Municipal Code requirements or City standards. The applicant has agreed to implement the mitigation measures identified and contained in the project's Mitigation Monitoring and Reporting Program. Attachment 5 - Exhibit 1 contains the Project's Initial Study and Mitigated Negative Declaration, Attachment 5 — Exhibit 2 contains the proposed Mitigation Monitoring and Reporting Program, and Attachment 5 - Exhibit 3 contains a response to comments received from SMART. COUNCIL GOAL ALIGNMENT As discussed in the January 27th Council staff report, the project is in alignment with the following City Council goals for 2019-2021: Workplan Item #22: Complete the second SMART station at Corona. Workplan Item #54: Consider requiring electric vehicle charging stations and solar energy in new or substantially -upgraded housing and commercial structures. Workplan Item #68: Implement sustainable building practices that go above and beyond basic code requirements. Workplan Item #86: Develop programs that provide affordable rental and ownership housing for the missing middle, including but not limited to public safety, municipal employees, teachers, and non-profit employees. Support and partner with organizations that help the housing insecure and unsheltered population find health care and supportive services. 3 ALTERNATIVES As outlined in the Recommendation section, staff has prepared two sets of resolutions/ordinances to ensure that the City Council has alternatives when considering the Corona Station Residential Project. The first set of documents are consistent with the Planning Commission's action at the November 19, 2019 and January 14, 2020 meetings and would deny the project entitlements (Attachments 1-4). The second set of approval documents were prepared in response to City Council direction to staff to ensure that the second Petaluma SMART station is constructed and would approve the project entitlements (Attachments 5-9). FINANCIAL IMPACTS The Corona Station Residential Project has a cost recovery account to pay for time and materials for processing the entitlements. As discussed in the Development Agreement, the agreement between SMART and the applicant provides $8M from the sale of the downtown station and dedication of the 1.27 remainder parcel at the corner of Corona Road and North McDowell needed for construction of the second Petaluma SMART station at Corona. Additionally, the draft agreement between the City and SMART allocates the City's contribution of $2M toward parking and related infrastructure needed for the construction of the second station. The $2M contribution from the City of Petaluma will come from existing funds in the Traffic Impact Fee fund specifically set aside for this purpose. ATTACHMENTS Attachment 1: Resolution Denying Appeal and Upholding the PC's Denial of ZTA Attachment 2: Resolution Denying the Development Agreement Attachment 3: Resolution Denying the Density Bonus Housing Agreement Attachment 4: Resolution Denying the Tentative Subdivision Map Attachment 5: Resolution approving MND and MMRP Exhibit 1: IS/MND (previously provided, electronic copy available online) Exhibit 2: MMRP (previously provided, electronic copy available online) Exhibit 3: Response to Comments (previously provided, electronic copy available online) Attachment 6: Ordinance Upholding the Appeal and Introducing ZTA Attachment 7: Ordinance Introducing Development Agreement Exhibit 1: Development Agreement Attachment 8: Resolution Approving Density Bonus Housing Agreement Exhibit l: Density Bonus Housing Agreement Attachment 9: Resolution Approving Tentative Subdivision Map Exhibit 1: Conditions of Approval Attachment 10: McDowell Crossing Analysis, W -Trans Attachment 11: Public Comments received prior to January 27th (previously provided, electronic copy available online) Attachment 12: Public Comments received after January 27th Attachment 13: Reduced Plan Set (previously provided, electronic copy available online) ATTACHMENT 1 RESOLUTION OF THE PETALUMA CITY COUNCIL DENYING THE APPEAL AND UPHOLDING THE PLANNING COMMISSION'S DENIAL OF A ZONING TEXT AMENDMENT OF THE IMPLEMENTING ZONING ORDINANCE ORDINANCE 2300 N.C.S., TABLE 4.3 (ALLOWED LAND USES AND PERMIT REQUIREMENTS FOR MIXED USE ZONES) TO CONDITINALLY ALLOW SINGLE FAMILY RESIDENTIAL LAND USE IN THE MU1B ZONING DISTRICT FILE NO. PLMA 18-0006 WHEREAS, Todd Kurtin with Lomas Properties LLC submitted an application for the Corona Station Residential Project, including, Zoning Text Amendment, Development Agreement, Density Bonus and Development Concession/Incentive, Tentative Subdivision Map, Conditional Use Permit and Site Plan and Architectural Review for a 110 unit residential project within the MUIB zone with Flood Plain -Combining (FP -C) Overlay, located on a 6.5 -acre site at 890 North McDowell Boulevard (APN 137-061-019) (the "Project"); and WHEREAS, the Planning Commission held a duly noticed public hearing to consider the project on November 12, 2019 at which time all interested parties had the opportunity to be heard; and WHEREAS, at the November 12, 2019 Planning Commission meeting the Planning Commission continued the item to a date certain of November 19, 2019 and directed staff to return with resolutions of denial for entitlements including the Zoning Text Amendment; and WHEREAS, in response to feedback from the November 12, 2019 Planning Commission meeting the applicant withdrew the request for a Zoning Text Amendment and moved to an entirely multi -family residential project; and WHEREAS, the Planning Commission held a duly noticed public hearing on November 19, 2019 at which time all interested parties had the opportunity to be heard; and WHEREAS, at the November 19, 2019 Planning Commission meeting the Planning Commission approved Resolution No. 2019-17 recommending approval of the Mitigated Negative Declaration finding that while the Planning Commission was not supportive of the overall project the environmental analysis contained in the Mitigate Negative Declaration was adequate to disclose potential environmental impacts of the project; and WHEREAS, also at their November 19, 2019 Planning Commission meeting the Commission approved Resolution No. 2019-18 recommending denial of the Development Agreement, Resolution No. 2019-19 recommending denial of the Density Bonus, and Resolution No. 2019-20 recommending denial of the Tentative Subdivision Map based on findings that the project is inconsistent with the General Plan and the Station Area Master Plan in that it does not create a mixed use transit oriented development to facilitate and enhance the development of the second SMART station, nor does it create a project design that adequately engages or connects with the proposed SMART station; and WHEREAS, on December 3, 2019 the applicant requested that the Zoning Text ATTACHMENT 1 Amendment be reinitiated as part of the Corona Station Residential Project; and WHEREAS, City of Petaluma Implementing Zoning Ordinance (IZO) §25.010 provides in pertinent part that no amendment that regulates matters listed in Government Code §65850 shall be made to the IZO unless the Planning Commission and City Council find the amendment to be in conformity with the General Plan; and WHEREAS, IZO §25.050.13 allows the Planning Commission to make a recommendation to the City Council to amend the text of the Zoning Ordinance if the amendment is consistent with the General Plan and if the amendment is consistent with the public necessity, convenience and general welfare; and WHEREAS, IZO §25.05013 further states that a denial of an amendment by the Planning Commission shall terminate the proceedings unless such decision is appealed to the City Council; and WHEREAS, the Planning Commission held a duly noticed public hearing to consider the Zoning Text Amendment on January 14, 2020, at which time all interested parties had the opportunity to be heard; and WHEREAS, at the January 14, 2020 public hearing the Planning Commission approved Resolution No. 2020-01 denying the Zoning Text Amendment; and WHEREAS, on January 15, 2020 the applicant submitted an appeal of the Planning Commission's denial; and WHEREAS, the City Council held a duly noticed public hearing on January 27, 2020 and February 24, 2020 to consider the appeal of the Planning Commission's denial of the Zoning Text Amendment at which time all interested parties had the opportunity to be heard; and WHEREAS, the City Council considered the project and all staff reports, documents, comments, and other information in the record. NOW THEREFORE BE IT RESOLVED that the City Council hereby denies the appeal and upholds the Planning Commission's denial of the proposed Zoning Text Amendment to conditionally allow single family residential land use in the MU1B zoning district based on the following: 1. The proposed amendment to the Implementing Zoning Ordinance Table 4.3 to conditionally allow single family residential use in the MU1B zoning district when part of a residential project adjacent to existing or planned SMART rail station is inconsistent with the City's General Plan and the Station Area Master Plan in that it does not facilitate a mixed use transit oriented development to enhance the development of the second SMART station or adequately engage or connect with the proposed SMART station. 2. The proposed amendment is inconsistent with General Plan Policy 1-P-2 in that it does not 109 ATTACHMENT 1 promote infill development at an appropriate intensity and land use type given its location directly adjacent to the future SMART station. 3. The proposed amendment is inconsistent with General Plan policy 5-P-43 in that single family land use does not reflect transit oriented development along the McDowell corridor and directly adjacent to the future SMART station. 4. The record lacks substantial evidence to support a finding that the proposed Zoning Map Amendment is consistent with the public necessity, convenience, and general welfare. 5. Based on its review of the entire record herein, including the November 12, 2019, November 19, 2019, and January 14, 2020 Planning Commission staff reports, the January 27, 2020 and February 24, 2020 City Council staff reports, all supporting, referenced, and incorporated documents, and all comments received, the City Council hereby denies the appeal and upholds the Planning Commission's denial of the Zoning Text Amendment to conditionally allow single family residential land use in the MUIB zoning district. 1-3 ATTACHMENT 2 RESOLUTION OF THE PETALUMA CITY COUNCIL DENYING A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF PETALUMA AND LOMAS CORONA STATION LLC AND LOMAS SMART LLC CONCERNING DEVELOPMENT OF THE CORONA STATION RESIDENTIAL PROJECT LOCATED AT 890 NORTH MCDOWELL BOULEVARD (APN 137-061-019) AND PROPERTY OWNED BY THE SONOMA MARIN AREA RAIL TRANSIT DISTRICT LOCATED AT 315 D STREET (APN 007-131-003) WHEREAS, Government Code §65864, et seq., ("State Development Agreement Law") and Chapter 23, entitled "Development Agreements" ("City Development Agreement Requirements") of the Petaluma Implementing Zoning Ordinance, Ordinance no. 2300 N.C.S, ("IZO"), specifically including IZO Section 23.010, authorize the City of Petaluma ("City") to enter into development agreements which may provide certainty to project applicants that upon approval of a project, the applicant may proceed with the project in accordance with the existing City policies, rules, and regulations, and subject to conditions of approval so as to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs of development; and WHEREAS, in accordance with Section 23.020 of the City Development Agreement Requirements, City development agreements are considered a combining zone with the existing district; and WHEREAS, in accordance with Section 23.030 of the City Development Agreement Requirements, the City may enter into a development agreement with any person having a legal or equitable interest in real property for the development of the property, so long as the person's interest entitles him or her to engage in such development; and WHEREAS, the City Development Agreement Requirements provide that development agreement applications shall be made in the same fashion as applications to amend the IZO, subject to the additional requirements specified in the City Development Agreement Requirements; and WHEREAS, such additional City Development Agreement Requirements include, as specified in Section 23.060, a copy of the proposed development agreement, or substantive summary of the terms proposed to be included in the development agreement, a statement signed by the applicant setting out the justification for the agreement, including a statement of special financial or long-term project considerations which make preservation of existing zoning requirements desirable throughout the life the project, and submission of the filing fee as established by City Council resolution, or absent such resolution, the fee for a rezoning application; and WHEREAS, Lomas Corona Station LLC, the owner of property at 890 North McDowell Boulevard, APN 137-061-019, in Petaluma ("Corona Property") and Lomas SMART LLC, which is in contract to purchase property owned by the Sonoma Marin Area Transit District ("SMART") located at 315 D Street, APN 007-131-003, in Petaluma ("Downtown SMART Property") are under the same management and ownership, referred to in this ordinance as the "Developer;" and WHEREAS, Developer has submitted applications to the City for approval of development of the Corona Station Residential Project (the "Corona Project") on the Corona Property, including applications for a Zoning Text Amendment ("Corona Zoning Amendment"), a Development Agreement ("Agreement"), a Density Bonus and Development Concession/Incentive ("Corona Density Bonus"), a Tentative Subdivision Map ("Corona Tentative Map"), Conditional Use Permit ("Corona Use Permit"), and Site Plan and Architectural Review ("Corona SPAR") for a 110 unit residential project within the MUIB zone with Flood Plain -Combining (FP -C) Overlay, on the Corona Property; and WHEREAS, Developer has also proposed alternative compliance with the City's Inclusionary Housing requirements pursuant to Section 3.040 of the IZO ("Inclusionary Housing Requirements") for the Corona Project in the form of 10% of the residential units in the Corona Project being affordable to persons of moderate income level, and 5% of the residential units being affordable to persons of low income level, and the affordable units provided as single family attached units with an affordability term of at least 99 years ("Corona Alternative Inclusionary Compliance"); and WHEREAS, Developer is also in contract with SMART to purchase the Downtown SMART Property which shall in turn be sold to the Hines company ("Hines") for development of a residential project ("Downtown Project") on the Downtown SMART Property; and WHEREAS, Developer has provided the City conceptual plans for the Downtown Project, but no application has been submitted to the City for the Downtown Project, and the conceptual plans for the Downtown Project indicate a project consisting of 402 residential units and ground floor tenant amenity uses; and WHEREAS, Developer plans to obtain agreement with the City regarding alternative inclusionary housing compliance for the Downtown Project consisting of eleven (11) low income units, two (2) studio units, six (6) one bedroom units, and three (3) two bedroom units, dispersed throughout the Downtown Project (not clustered) and constructed as part of the Downtown Project, conveyance to the City of fee title to 2.5 developable acres located at 1601 Petaluma Boulevard South in Petaluma, A.P.Ns.019-210-039, 019-210-010, and 019-210-038, for development of affordable housing, and payment of housing in -lieu fees of $862,208 ("Downtown Alternative Inclusionary Compliance"), and WHEREAS, Developer plans to use the proceeds from Developer's sale of the Corona Project to purchase the Downtown SMART Property from SMART, and to sell the Downtown SMART Property to Hines, including City -approved alternative inclusionary housing compliance, but otherwise subject to future City approval of subsequent entitlement applications to be submitted by Hines; and 01 WHEREAS, Developer's fee ownership of the Corona Property entitles Developer to engage in the development of the Corona Property in accordance with Section 23.030 of the City Development Agreement Requirements; and WHEREAS, Developer's contractual obligation to purchase the Downtown SMART Property in accordance with the Developer/SMART Agreement entitles the Developer to engage in Development of the Downtown SMART Property in accordance with Section 23.030 of the City Development Agreement Requirements subject to the terms of the Developer/SMART Agreement; and WHEREAS, the agreement between Developer and SMART dated October 12, 2019 ("Developer/SMART Agreement") is attached to and made a part of the Agreement, and in accordance with Section 9(a) of the Developer/SMART Agreement, the close of escrow on the purchase of the Downtown SMART Property is required to occur on May 19, 2020; and WHEREAS, Section 2(a) of the Developer/SMART Agreement requires as consideration for purchase of the Downtown SMART Property a payment of $8 million, and in accordance with Section 9(c) of the Developer/SMART Agreement, Developer must deposit into escrow the remainder of the $8 million purchase amount, less a non-refundable $500,000 deposit already given by Developer and closing costs allocable to Developer by May 17, 2020; and WHEREAS, section 9(e), the Developer/SMART Agreement also requires Developer to dedicate to SMART 1.27 acres of land for construction of a SMART station on land at the corner of McDowell Boulevard and Corona Road in Petaluma ("Second Petaluma Station"), and the Corona Tentative Map includes such 1.27 acres of land as a remainder parcel; and WHEREAS, SMART intends to use the proceeds from sale of the Downtown SMART Property for construction of the Second Petaluma Station, with terms regarding construction of the Second Petaluma Station to be the subject of a separate agreement to be executed between SMART and the City ("City/SMART Agreement"); and WHEREAS, among other terms, the City/SMART Agreement will provide for allocation of $2 million to the Second Petaluma Station improvements, which will provide traffic relief in Petaluma via commuter use of the Second Petaluma Station so as to be consistent with the purposes of traffic impact costs for the Second Petaluma Station to be funded by City Traffic Development Impact Fees; and WHEREAS, Developer's payment for purchase of the Downtown SMART Property in accordance with the Developer/SMART Agreement, the proceeds of which are to be used to fund construction of the Second Petaluma Station, and Developer's dedication of 1.27 acres of land at McDowell Boulevard and Corona Road for the Second Petaluma Station are critical elements of achieving the Second Petaluma Station and essential consideration regarding the City's review of the Corona Project, the Downtown Project, and the Agreement; and WHEREAS, the City's payment of $2 million in City traffic impact fee proceeds allocated to the Second Petaluma Station improvements is also a critical element of achieving the M, Second Petaluma Station and essential consideration for purchase of the Downtown SMART Property and the Agreement; and WHEREAS, SMART indicates that construction work for the second planned Petaluma SMART station must coincide with the construction work on the planned Windsor SMART station scheduled for March 2020, such that Developer's payment for the Downtown SMART Property and dedication of 1.27 acres at Corona Road and Mc Dowell Boulevard must occur by the scheduled closing on the Downtown SMART Property purchase on May 19, 2020 for the Second Petaluma Station construction to proceed after completion of the Windsor station; and WHEREAS, the justification for entering into the Agreement with the Developer regarding the Corona Station Residential Project and the Downtown Project, as further described below in this ordinance, and the special long-term project considerations that make preservation of existing zoning requirements desirable throughout the life of the Corona Project, or so long as otherwise provided in the Agreement, consist of dedication of land for, and funding of, construction of the Second Petaluma SMART Station on land at McDowell Boulevard and Corona Road in Petaluma, as well as considerations regarding inclusionary housing compliance of the Corona and Downtown projects; and WHEREAS, in accordance with Section 65867 of the State Development Agreement Law and Section 23.070 of the City Development Agreement Requirements, hearings on proposed development agreements shall be held before the City's Planning Commission and the City Council, with mailed and published notice of the Planning Commission and City Council hearings given in accordance with the requirements of the State Development Agreement Law and the City Development Agreement requirements; and WHEREAS, in connection with the development of the Corona Project and Downtown Project, City Staff have prepared the proposed Agreement in accordance with the requirements of the State Development Agreement Law and the City Development Agreement Requirements for the Corona Project, which Agreement is attached to and made a part of this ordinance as Exhibit A; and WHEREAS, in accordance with the State Development Agreement Law and the City Development Agreement Requirements, the Agreement includes provisions setting forth, among other things, the effective date and term of the agreement, applicable fees, applicable rules, regulations, and policies, required infrastructure improvements and other conditions of approval, affordable housing obligations, prevailing wage rules, provisions on amendments, annual review and default, and other provisions; and WHEREAS, the conditions of approval addressed in the Agreement also include conditions requiring the Developer to build the Corona Project to sustainability standards greater than existing code requirements in that the Corona Project shall be all -electric, without any natural gas infrastructure, shall include installation of photovoltaic panels on each residential unit, shall include installation of an electric vehicle charger in each garage, and shall include a gray water valve on each residential unit; and a] WHEREAS, the conditions of approval addressed in the Agreement also include conditions requiring the Downtown Project to be built to sustainability standards greater than existing code requirements, in that the Downtown Project shall be all -electric, without any natural gas infrastructure; and WHEREAS, in accordance with Section 65867.5(b) of the State Development Agreement Law and Section 23.090 of the City Development Agreement Requirements, the provisions of the Agreement are consistent with the City's General Plan and Station Area Master Plan in that the Corona Property has a Mixed Use General Plan land use designation, with a density range of up to 30 units per acre, and is consistent with the Station Area Master Plan ("SAMP") in that the project introduces residential units adjacent to the future SMART station at a density higher than surrounding development but in character with residential development in the area, provides bicycle and pedestrian connectivity improvements as prioritized in the SAMP, and directly furthers the development of the Corona Station which is a priority in both the General Plan and SAMP, and the Agreement will not be detrimental to the public health, safety or welfare in that adequate public facilities exist or will be installed as part of the Corona Project, including roads, sidewalks, water, sewer, storm drains and other infrastructure, and the Corona Property is physically suitable for the density and the type of development proposed in that it is a flat, undeveloped lot within the City's urban growth boundary with direct access to North McDowell Boulevard and Corona Road, and adjacent to the planned second Petaluma SMART station, and supports efficient land use and promotes infill at a residential density consistent with the General Plan based on the proposed density of 26 units per net acre for the Corona Project; and WHEREAS, the potential environmental impacts of the Corona Project were identified and analyzed in accordance with the requirements of the California Environmental Quality Act ("CEQA") and the CEQA Guidelines, and an Initial Study/Mitigated Negative Declaration ("IS/MND") was prepared to address potential environmental impacts of the Corona Project; and WHEREAS, pursuant to the State Development Agreement Law and the City Development Agreement Requirements, notice of a public hearing before the Planning Commission on the Corona Project Approvals, including the Agreement was mailed to all property owners within a 1,000 radius of the Corona Property, and a public hearing notice was published once in the Petaluma Argus Courier on October 17, 2019, twenty-seven days prior to the Planning Commission hearing on the Project and the Development Agreement; and WHEREAS, on November 12, 2019, November 19, 2019, and January 14, 2020, the Planning Commission held public hearing on the Corona Project Approvals, including the Agreement, at which time interested persons had an opportunity to testify either in support or opposition; and WHEREAS, at the November 19, 2019 public hearing on the Corona Project Approvals, including the Agreement, the Planning Commission considered the IS/MND prepared for the Corona Project, and deliberated on the IS/MND and the Corona Project Approvals, including the proposed Agreement, and by a vote of 5-2 adopted Resolution no. 2019-017 recommending approval of the IS/MND, Resolution no. 2019-018 recommending City Council denial of the RN Agreement, Resolution No. 2019-019 recommending denial of the Corona Density Bonus, and Resolution no. 2019-020 recommending denial of the Corona Tentative Map; and WHEREAS, at the January 14, 2020 public hearing on the Corona Zoning Amendment the Planning Commission by a vote of 6-1 adopted Resolution No. 2020-01 denying the Corona Zoning Amendment; and WHEREAS, on January 15, 2020 the applicant submitted an application appealing the Planning Commission's denial of the Zoning Text Amendment; and WHEREAS, pursuant to the State Development Agreement Law and the City Development Agreement Requirements, notice of a public hearing before the City Council on the Project Approvals, including the Agreement, was mailed to all property owners within a 1,000 radius of the Property, and a public hearing notice was published once in the Petaluma Argus Courier on January 16, 2020, 11 days prior to the City Council hearing on the Project Approvals, including the Agreement; and WHEREAS, on January 27, 2020 the City Council held a public hearing on the Project Approvals, including the Agreement, at which time interested persons had an opportunity to testify either in support or opposition to the proposal; and WHEREAS, at the January 27, 2020 public hearing on the Project Approvals, including the Agreement, the City Council considered Planning Commission Resolution no. 2019-017 recommending approval of the IS/MND prepared for the Corona Project, Resolution no. 2020- 001 denying the Corona Zoning Amendment, Resolution no. 2019-018 recommending denial of the Agreement, Resolution no. 2019-019 recommending denial of the Corona Density Bonus, and Resolution no. 2019-020 recommending denial of the Corona Tentative Map, and deliberated on the IS/MND and the Project Approvals sought, including the Agreement; and WHEREAS, following the January 27, 2020 public hearing on the Project Approvals, the City Council continued the hearing to a date certain of February 10, 2020; and WHEREAS, the February 10, 2020 City Council meeting was cancelled; and WHEREAS, pursuant to the State Development Agreement Law and the City Development Agreement Requirements, notice of a public hearing before the City Council on the Project Approvals, including the Agreement, was mailed to all property owners within a 1,000 radius of the Property, and a public hearing notice was published once in the Petaluma Argus Courier on February 13, 2020, at least days prior to the City Council hearing on the Project Approvals, including the Development Agreement; and WHEREAS, on February 24, 2020 the City Council held a public hearing on the Project Approvals, including the Agreement, at which time interested persons had an opportunity to testify either in support or opposition to the proposal; and WHEREAS, at the February 24, 2020 public hearing on the Project Approvals, including the Agreement, the City Council considered Planning Commission Resolution no. 2019-017 recommending approval of the IS/MND prepared for the Project, Resolution no. 2020-001 denying the Corona Zoning Amendment, Resolution no. 2019-018 recommending denial of the Agreement, Resolution no. 2019-019 recommending denial of the Corona Density Bonus, and Resolution no. 2019-020 recommending denial of the Corona Tentative Map, and deliberated on the Corona Project IS/MND and the Project Approvals sought, including a resolution approving the IS/MND, an ordinance approving the appeal and introducing the Corona Zoning Amendment, an ordinance introducing the Agreement, a resolution approving the Corona Density Bonus, and a resolution approving the Corona Tentative Map, and considered all of the information contained in the record concerning the proposed Project Approvals including the Agreement, and approved the Project Approvals, including the ordinance introducing the Agreement; and WHEREAS, the City Council has reviewed and considered all of the information contained in the record concerning the proposed Project Approvals including the Agreement; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS: 1. The above recitals are hereby declared to be true and correct and are hereby incorporated by reference. 2. Based on its review of the entire record herein, the City Council makes the following findings: A. The Planning Commission and City Council held duly noticed public hearings regarding the Project Approvals including the Agreement, on November 12, 2019 and November 19, 2019, January 27, 2020 and February 24, 2020 in conformance with the notice and other provisions of the State Development Agreement Law, including Government Code Sections 65090 and 65091, and the City Development Agreement requirements. B. The Corona Project application proposes a 110 unit residential development referred to as the Corona Station Residential Project and seeks related land use entitlements for the Project, including applications for a Zoning Text Amendment, Development Agreement, Density Bonus, Tentative Map, Conditional Use Permit, and SPAR for the Project on the Property which is within the MU 1 B zone with Flood Plain -Combining (FP -C) Overlay. D. The proposed Corona Project, including the implementation of the Agreement is inconsistent with the City's General Plan and the Station Area Master Plan in that it does not create a mixed use transit oriented development to facilitate and enhance the development of the second SMART station, nor does it create a project design that adequately engages or connects with the proposed SMART station. E. The Corona Project is inconsistent with General Policy 1-P-2 in that it does not promote infill development at an appropriate density or intensity given its location directly RN adjacent to the future SMART station and the lack of any proposed mix of uses or maximizing application of allowable density on the site. F. The Corona Project is inconsistent with General Plan Policy 1-P-6 in that the Corona Project has not been designed as a mixed development on the site and has not been designed to activate and engage the future SMART station or to attract transit users to capitalize on the adjacency to the SMART station. G. The Corona Project is inconsistent with General Plan Policy 5-P-43 in that the Corona Project does not reflect transit oriented development along the McDowell Boulevard corridor and directly adjacent to the future SMART station. 3. Based on its review of the entire record herein, including the November 12, 2019 and November 19, 2019 Planning Commission staff reports, the January 27, 2020 and February 24, 2020 City Council staff report, all supporting, referenced, and incorporated documents, and all comments received, the City Council hereby denies the request for a Development Agreement between the City of Petaluma and Lomas Corona Station, LLC and Lomas SMART LLC for Development of the Corona Station Residential Project Located at 890 North McDowell Boulevard (APN 137-061-019). ATTACHMENT I — EXHIBIT 3 CITY OF PETALUMA, CALIFORNIA MEMORANDUM Community Development Department, 11 English Street, Petaluma, CA 94952 Phone (707) 778-4301 Fax (707) 778-4498 E-mail: cdd @cityofpetaluma.org DATE: December 6, 2019 TO: Heather Hines, Planning Manager FROM: Olivia Ervin, Environmental Planner SUBJECT: Corona Station Response to Comment on Draft MND (Final MND) This provides a response to comments received on the Public Draft Initial Study/Mitigated Negative Declaration (IS/MND) for the Corona Station project (SCH #2019109053). Responses provided herein clarify and bolster the analysis and evidence provided in the IS/MND. In accordance with the California Environmental Quality Act (CEQA) of 1970 (as amended) (California Public Resources Code 21000 et. seq.), the IS/MND was circulated for a 30 -day public review and comment period from October 21, 2019 through November 19, 2019. CEQA Guidelines Section 15074 identifies the responsibilities of the Lead Agency when considering the adoption of a Negative Declaration or Mitigated Negative Declaration: (a) Any advisory body of a public agency making a recommendation to the decision-making body shall consider the proposed negative declaration or mitigated negative declaration before making its recommendation. (b) Prior to approving a project, the decision -snaking body of the lead agency shall consider the proposed negative declaration or mitigated negative declaration together with any comments received during the public review process. The decision-making body shall adopt the proposed negative declaration or mitigated negative declaration only if it finds on the basis of the whole record before it (including the initial study and any comments received), that there is no substantial evidence that the project will have a significant effect on the environment and that the negative declaration or mitigated negative declaration reflects the lead agency's independent judgment and analysis. Consistent with CEQA requirements, the City of Petaluma has reviewed and considered comments received on the IS/MND. The City has prepared this document to fully disclose public and agency comments received and to provide responses to those comments. One agency, Sonoma -Marin Area Rail Transit (SMART), submitted written comments to the City regarding the Draft IS/MND Corona Station Project. No comment letters were received from state regulatory agencies and comments letters received from the public related to the merits of the project and did not specifically address the environmental review. I -3-I ATTACHMENT l EXHIBIT 3 The comment letter submitted by SMART is summarized below along with responses to comments: Sonoma Marin Area Transit submitted a comment letter dated November 12, 2019. Comments relate primarily to corrections and clarifications as follows: Page 3 of the IS/MND contains a section labeled "Station Area Master Plan (SMART).: Although the Station Area Plan directly correlates with the SMART train, the acronym should be labeled as "SAMP" .. . Response: The SMART acronym on page 3 is hereby corrected to SAMP. Elsewhere in the document the SMART acronym is correctly used and references to the Station Area Master Plan do not use an acronym. 2. Page 5 of the IS/MND states: "Tube steel fencing will be installed along the north boundary of the subject property, adjacent to the SMART rail line." The paragraph then states the height of the fence along North McDowell would be up to 7 feet in height, but does not state the height of the fencing adjacent to the SMART Right -of -Way. SMART would like clarification on the proposed height of the fence. For safety and security purposes, SMART recommends a minimum height of six feet and installing "No Trespassing" signage along the fencing. Response: The tube steel fencing is 5 feet in height and will be located at the project site property line adjacent to the SMART Right -of -Way (ROW). The project includes the construction of a concrete pedestrian pathway on the project site of the tube steel fence with several planned points of through access to the future Multi -Use Path to be installed by SMART. On a temporary basis until the MUP is constructed the planned through access points will be blocked off with No Trespassing signage and will be removed once the MUP is operational. It is expected that SMART will be installing appropriate safety and security fencing between the MUP and the railway consistent with other MUP trail segments already completed within the City of Petaluma. 3. Page 5 of the IS/MND states: "Trees and other landscaping will be planted ... along the northern boundary line, adjacent to the SMART rail line." Please note that any maintenance of trees or other landscaping will to occur on the project site. No access will be authorized or allowed from SMART's Right -of -Way to maintain the trees and landscaping. Additionally, any overhang, utility installation, or stormwater runoff onto the SMART Right -of -Way, will not be permissible. Response: Comment noted. A condition of approval has been added to the project prohibiting access for maintenance of trees and landscaping from SMART's ROW. All maintenance will occur from the project site and trees will be maintained to ensure that overhang into SMART's ROW does not occur. Similarly, utility installation and stormwater runoff will be restricted to the project site and will not extend onto SMART's ROW. 4. Page 6, under Site Access and Circulation, states: "Internal pedestrian paths throughout the site and a pedestrian pathway connection to the SMART station will also be installed." SMART would like clarification on the pedestrian pathway connection to the potential SMART station. Is it the beige line immediately west of the railroad tracks as depicted in Figure 5 Corona Road Residential: Site Plan? Is it the planned Multi -Use Pathway within the SMART corridor? I-3-2 ATTACHMENT l EXHIBIT 3 Response: The beige path immediately west of the SMART corridor is the MUP. Multiple points of access will be provided to the MUP, which presumably will provide safe pedestrian connectivity to the future SMART station. Additionally, the project design provides an opportunity to direct connectivity from the site to the future SMART station via the path near Lots 25 through 27, shown on Figure 5. Figure 5 Corona Road Residential: Site Plan lists the owner of the railroad tracks as "N.W.P.R.R." Please note that SMART is the owner and dispatcher for this active railroad corridor. Any reference to Northwest Pacific Railroad should indicate either former ownership or simply the freight operator (Northwestern Pacific Company) currently utilizing the SMART tracks as authorized. Response: Comment noted. 6. Page 40 of the IS/MND refers to SMART as "light rail commuter service." Please note that SMART is a heavy rail operation. Response: The incorrect reference to light rail commuter service on page 40 is hereby corrected to "heavy rail operations." Additionally, light rail is incorrectly referenced on page 22, and is hereby corrected to "heavy rail operations." 7. Page 61 of the IS/MND references SMART's current operating schedule under the Noise and Land Use General Plan Consistency of the Proposed Sensitive Uses Section. Please note that SMART currently anticipated that a new schedule accommodating the new Novato Downtown & Larkspur Stations will be in effect by the end of this year. This new schedule proposed to operate more than 32 trips per weekdays and 10 trips per weekend with some modification to the operating times. Additionally, freight service currently operated approximately twice per week, on Monday and Thursdays, after SMART commences passenger service for the day. Response: Comment noted. This discussion provides compatibility consideration due to placing new residents in close proximity to the SMART rail. Recommendations set forth in the IS/MND provide for the inclusion of noise compatibility standards which would be developed based on final design to achieve acceptable interior noise levels specifically taking into consideration noise from the adjacent railway. I-3-3 ATTACHMENT 4 RESOLUTION OF THE PETALUMA CITY COUNCIL DENYING A VESTING TENTATIVE SUBDIVISION MAP FOR CORONA STATION RESIDENTIAL PROJECT LOCATED AT 890 NORTH MCDOWELL BOULEVARD APN 137-061-019 File No.: PLMA — 18-0006 WHEREAS, Todd Kurtin with Lomas Properties LLC submitted an application for the Corona Station Residential Project, including a Zoning Text Amendment, Development Agreement, Density Bonus and Development Concession/Incentive, Tentative Subdivision Map, Conditional Use Permit and Site Plan and Architectural Review for a 110 unit residential project within the MU1B zone with Flood Plain -Combining (FP -C) Overlay, located on a 6.5 -acre site at 890 North McDowell Boulevard (APN 137-061-019) (the "Project"); and WHEREAS, the Planning Commission held duly noticed public hearings to consider the Project, on November 12, 2019 and November 19, 2019, at which time all interested parties had the opportunity to be heard; and WHEREAS, the Corona Station Residential Tentative Subdivision Map is subject to Title 20 (Subdivisions) of the Municipal Code (Subdivision Ordinance) and the State Subdivision Map Act, which regulate the design and improvement of the proposed subdivision. As described in the staff reports, the Corona Station Residential tentative subdivision map proposes to subdivide the project site into 110 single family lots, two common interest parcels, and one remainder parcel; and WHEREAS, the Planning Commission found the overall project inconsistent with key policies in both the General Plan and Station Area Specific Plan calling for a mixed use transit oriented development to enhance and facilitate the second SMART station and therefore did not support the approval of the project, including the Tentative Subdivision Map. WHEREAS, the Planning Commission approved Resolution No. 2019-20 recommending City Council denial of the Vesting Tentative Subdivision Map; and WHEREAS, the City Council held duly noticed public hearings on January 27, 2020 and February 24, 2020 to consider the project, including the Planning Commission's recommendation to deny the Density Bonus at which time all interested parties had the opportunity to be heard; and WHEREAS, the City Council considered the project, all staff reports, documents, comments, and other information in the record. NOW THEREFORE, BE IT RESOLVED that the City Council denies the Vesting Tentative Subdivision Map for the Project based on the findings made below: 4-1 1. The proposed Vesting Tentative Subdivision Map is inconsistent with the General Plan in that it is on property designated for Mixed use on the General Plan Land Use Map and the project does not propose a robust mix of uses as called for in the General Plan nor does it maximize residential density at the 30 unit per acre maximum allowed in the Mixed Use land use designation. 2. The proposed project is inconsistent with the City's General Plan and the Station Area Master Plan in that it does not create a mixed use transit oriented development to facilitate and enhance the development of the second SMART station, nor does it create a project design that adequately engages or connects with the proposed SMART station. 3. The project is inconsistent with General Policy 1-P-2 in that it does not promote infill development at an appropriate density or intensity given its location directly adjacent to the future SMART station and the lack of any proposed mix of uses or maximizing application of allowable density on the site. 4. The project is inconsistent with General Plan Policy I -P-6 in that the project has not been designed as a mixed development on the site and has not been designed to activate and engage the future SMART station or to attract transit users to capitalize on the adjacency to the SMART station. 5. The project is inconsistent with General Plan Policy 5-P-43 in that the project does not reflect transit oriented development along the McDowell Boulevard corridor and directly adjacent to the future SMART station. 6. Approval of the map will be detrimental to the public welfare in that the project does not create the type of transit oriented development desired to engage and support the proposed SMART station or create the desired catalyst development directly adjacent to the station. 7. The site is physically suitable for a greater density and intensity of development than proposed given that the property is a relatively flat, undeveloped lot within the Urban Growth Boundary with direct access to North McDowell Boulevard and Corona Road and adjacent to the future Corona Road SMART station. 4-2