REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Ursula Luna-Reynosa, Director of Community Development
Subject:
title
Certify Environmental Impact Report No. 17-001 by adopting Resolution No. 2021-01; Approve CEQA Findings of Fact with a Statement of Overriding Considerations; Approve with modifications General Plan Amendment No. 17-001 by adopting Resolution No. 2021-02, Zoning Map Amendment No. 17-001 by adopting Ordinance No. 4225, Zoning Text Amendment No. 17-005 by adopting Resolution No. 2021-03, Local Coastal Program Amendment No. 17-001 by adopting Resolution No. 2021-04, and Development Agreement No. 19-001 by adopting Ordinance No. 4226; and Execute an Indemnification Agreement (Magnolia Tank Farm)
body
Statement of Issue:
Transmitted for your consideration are the following items:
1. Environmental Impact Report to analyze the potential environmental impacts associated with the project;
2. General Plan Amendment to amend the land use designation from Public (P) to Open Space-Conservation (OS-C), Open Space-Park (OS-P), Residential Medium Density (RM), and Commercial Visitor (CV) (1.5 maximum floor area ratio) with a Specific Plan Overlay;
3. Zoning Map Amendment to amend the zoning designation from Public-Semipublic with Oil Overlay and Coastal Zone Overlay (PS-O-CZ) to Specific Plan 18 with Coastal Zone Overlay (SP-18-CZ);
4. Zoning Text Amendment to establish the Magnolia Tank Farm Specific Plan (MTFSP) for the subject site;
5. Local Coastal Program (LCP) Amendment to amend the City’s certified LCP to reflect the land use and zoning changes proposed by the GPA, ZMA, and ZTA subject to California Coastal Commission certification;
6. Development Agreement between the City and the applicant; and
7. Indemnification Agreement.
The Planning Commission recommends approval with modifications.
Financial Impact:
The proposed land use and zoning amendments will have no immediate fiscal impacts to the City. If the current request and future applications for actual development (i.e. tentative tract map, conditional use permit, coastal development permit, etc.) were to be approved, the fiscal and economic benefits of development of the site will begin to be realized once construction commences. The applicant submitted a fiscal impacts and economic benefits analysis comparing the proposed project, residential only project, and a senior campus development which estimates the following net, annual fiscal impact (Attachment No. 17):
§ Proposed Project (hotel and residential) - $2.5 million annually
§ Alternative 1 (residential only; no hotel) - $800,000 annually
§ Alternative 2B (senior campus) - $100,000 annually
Recommended Action:
recommendation
PLANNING COMMISSION RECOMMENDATION:
A) Certify Environmental Impact Report No. 17-001 as adequate and complete in accordance with CEQA requirements and adopt Resolution No. 2021-01, “A Resolution of the City Council of the City of Huntington Beach Certifying the Final Environmental Impact Report (SCH#2017101041)for the Magnolia Tank Farm Project” (Attachment No. 2); and,
B) Approve CEQA Findings of Fact with a Statement of Overriding Considerations (Attachment No. 18); and,
C) Approve with modifications General Plan Amendment No. 17-001 and adopt Resolution No. 2021-02, “A Resolution of the City Council of the City of Huntington Beach Approving General Plan Amendment No. 17-001” (Attachment No. 3), Zoning Map Amendment No. 17-001 with findings (Attachment No. 1) and adopt Ordinance No. 4225, “An Ordinance of the City of Huntington Beach Amending the Huntington Beach Zoning and Subdivision Ordinance to Rezone the Real Property Generally Located on the Westside of Magnolia Street at Banning Avenue from PS-O-CZ (Public-Semipublic - Oil Production Overlay - Coastal Zone Overlay) to SP-18-CZ (Specific Plan - Coastal Zone Overlay)(Zoning Map Amendment No. 17-001)” (Attachment No. 4), Zoning Text Amendment No. 17-005 with findings (Attachment No. 1) and Planning Commission and staff revisions (Attachment No. 25) and adopt Resolution No. 2021-03, “A Resolution of the City Council of the City of Huntington Beach Adopting Zoning Text Amendment No. 17-005 by Creating the Magnolia Tank Farm Specific Plan (SP-18) to Apply to Real Property on the West Side of Magnolia Street at Banning Avenue” (Attachment No. 5), Local Coastal Program Amendment No. 17-001 with findings (Attachment No. 1) and adopt Resolution No. 2021-04, “A Resolution of the City Council of the City of Huntington Beach Adopting Local Coastal Program Amendment No. 17-001 and Requesting Certification by the California Coastal Commission” (Attachment No. 6), Development Agreement No. 19-001 with findings (Attachment No. 1) and adopt Ordinance No. 4226, “An Ordinance of the City of Huntington Beach Adopting a Development Agreement By and Between the City of Huntington Beach and SLF-HB Magnolia, LLC (Developer)(Development Agreement No. 19-001)” (Attachment No. 7); and
D) Execute an Indemnification Agreement Between the City of Huntington Beach and SLF-HB Magnolia, LLC (Attachment No. 21) (staff recommendation).
end
Alternative Action(s):
The City Council may make the following alternative motion(s):
1. Not certify Environmental Impact Report No. 17-001 as adequate and complete in accordance with CEQA requirements; Not approve CEQA Findings of Fact with a Statement of Overriding Considerations; and Deny General Plan Amendment No. 17-001, Zoning Map Amendment No. 17-001, Zoning Text Amendment No. 17-005, Local Coastal Program Amendment No. 17-001, and Development Agreement No. 19-001.
2. Continue Environmental Impact Report No. 17-001, General Plan Amendment No. 17-001, Zoning Map Amendment No. 17-001, Zoning Text Amendment No. 17-005, Local Coastal Program Amendment No. 17-001, and Development Agreement No. 19-001 and direct staff accordingly.
Analysis:
A. PROJECT PROPOSAL:
Applicant/
Property Owner: James O’Malley, SLF-HB Magnolia, LLC, 2 Park Plaza, #700, Irvine, CA 92614
The project proposal is to allow a mixed use development with commercial visitor, residential and open space at the 29-acre Magnolia Tank Farm site. In order to undertake the project proposal, the applicant requests the following approvals:
Environmental Impact Report (EIR) No. 17-001 to analyze the potential environmental impacts associated with the project;
General Plan Amendment (GPA) No. 17-001 to amend the General Plan land use designation from Public (P) to Open Space-Conservation (OS-C), Open Space-Park (OS-P), Residential Medium Density (RM), and Commercial Visitor (CV) with a Specific Plan Overlay;
Zoning Map Amendment (ZMA) No. 17-001 to amend the zoning designation from Public-Semipublic with Oil Overlay and Coastal Zone Overlay (PS-O-CZ) to Specific Plan 18 with Coastal Zone Overlay (SP-18-CZ);
Zoning Text Amendment (ZTA) No. 17-005 to establish the Magnolia Tank Farm Specific Plan including development standards for open space, residential, and visitor serving commercial uses, for the subject site;
Local Coastal Program Amendment (LCPA) No. 17-001 to amend the City’s certified Local Coastal Program to reflect the land use and zoning changes proposed by the GPA, ZMA, and ZTA; and
Development Agreement (DA) No. 19-001 to enter into a development agreement between the City of Huntington Beach and SLF-HB Magnolia, LLC to 1) vest the permitted uses, density, intensity of use, and timing of phased development for a fifteen year term, 2) to ensure provision of monetary funds to improve open space/recreational facilities, and 3) to ensure off-site improvements.
The staff report for the October 22, 2019 Planning Commission public hearing (Attachment No. 9) provides a more detailed description and comprehensive analysis of the proposed project.
B. BACKGROUND:
The 29-acre vacant subject site was previously developed with three aboveground fuel storage tanks, which provided fuel for the adjacent electrical power plant until it converted to natural gas. The fuel tanks have been demolished and the site has recently been utilized as construction worker parking and laydown area during construction of the new power plant and is currently being utilized for vehicle overflow storage.
No development is proposed at this time. Entitlement applications for the construction of the project such as a Conditional Use Permit, Coastal Development Permit, Tentative Tract Map, and Design Review will be submitted in the future if the current applications are approved.
C. PLANNING COMMISSION MEETING AND RECOMMENDATION:
On October 22, 2019 the Planning Commission held a public hearing on the proposed project after conducting four study sessions starting in July. There were 39 speakers at the public hearing (17 in favor and 22 opposed). Those in favor cited the project’s potential benefits to the economy, housing stock, city revenue, job creation, neighborhood beautification, and provision of additional recreation and open space opportunities. Those in opposition indicated concerns primarily about contamination, public health, incompatibility of residential with surrounding industrial uses and Ascon, conflicts with General Plan Policy HAZ-5C which prohibits the future placement of sensitive land uses in close proximity to hazardous material and waste sites, incompatibility of the hotel with surrounding residential uses, noise, congestion, traffic, impacts to wetlands, and parking. A response to the key public comments, as they relate to environmental issues, from the Planning Commission hearing has been prepared (Attachment No. 20) for the City Council’s consideration.
After a broad discussion covering many of the same issues noted above, the Planning Commission voted to approve the request with staff suggested revisions to the MTFSP as outlined in the Planning Commission staff report and the following additional modifications:
|
Subject |
Planning Commission Modification |
|
Mitigation Measure NOI-3 |
Require peer review by a third-party expert at the applicant’s expense of documentation on the feasibility of alternative methods of hotel construction in lieu of pile driving (Attachment No. 19) At the Planning Commission hearing the applicant’s consultant added that pile driving will not be needed to construct the proposed hotel and that alternative methods more compatible with the surrounding development can be used instead. As a result, staff has added language to mitigation measure NOI-3 to prohibit pile driving and delete the requirement for submittal of a vibration control plan. NOI-2 is no longer applicable and has been deleted as well. |
|
MTFSP Section 3.4.8 Pesticide Management Plan |
Provide examples of pesticides, etc. |
|
MTFSP Section 3.7 General Parking Requirements |
Require designated parking for Marsh Park |
Lastly, the Planning Commission recommended keeping the development agreement funds for improvements near the project site as best as possible rather than putting the funds in the general fund.
Planning Commission Action on October 22, 2019:
A motion was made by Scandura, seconded by Perkins, to recommend to the City Council certification of EIR No. 17-001 with modifications to mitigation measure NOI-3; approval of CEQA Findings of Fact with a Statement of Overriding Considerations; and approval of GPA No. 17-001, ZMA No. 17-001, ZTA No. 17-005 with modifications, LCPA No. 17-001, and DA No. 19-001 carried by the following vote:
AYES: Scandura, Grant, Kalmick, Perkins, Mandic
NOES: Ray, Garcia
ABSTAIN: None
ABSENT: None
MOTION PASSED
A motion was made by Kalmick, seconded by Grant, to forward a minute action to ask City Council to keep the development agreement fees that have been exacted for use within the area as best as possible carried by the following vote:
AYES: Scandura, Ray, Grant, Garcia, Kalmick, Perkins, Mandic
NOES: None
ABSTAIN: None
ABSENT: None
MOTION PASSED
D. CITY COUNCIL STUDY SESSION:
At the November 18, 2019 study session the following questions were raised:
1. What is the density of the project with and without the hotel?
With hotel - 250 dwelling units/19 acres of residential land = 13.2 dwelling units per acre
No hotel - 250 dwelling units/23.4 acres of residential land = 10.7 dwelling units per acre
2. Can the proposed 250 dwelling units count towards the City’s Regional Housing Needs Assessment (RHNA) allocation?
If approved, the residential units would be constructed during the 2021-2029 Housing Element planning period (6th Cycle). All of the units would be counted toward the City’s RHNA targets. Most of the units would be counted toward the above moderate/ market rate income category. The proposed project is required to comply with the City’s affordable housing requirements of ten percent of the proposed dwelling units, which may be provided on-site, off-site or through in-lieu fees. In any instance, the project would also result in the creation of low-income RHNA units.
3. Is there a Coastal Commission requirement for 25 percent of the hotel rooms onsite to be low cost?
The Coastal Act does not explicitly identify a requirement for a percentage of proposed hotel rooms to be low cost. However, Coastal Commission staff has recommended the 25 percent requirement for low cost rooms and the Coastal Commission has implemented that recommendation on projects in the past. There have also been cases where an in lieu fee was required where no low cost rooms were proposed onsite; however, the Coastal Commission has, for the most part, stopped that practice in recent years.
E. STAFF ANALYSIS:
The staff report for the October 22, 2019 Planning Commission public hearing (Attachment No. 9) provides a more detailed description and comprehensive analysis of the proposed project covering, among others, General Plan conformance, zoning compliance, and staff suggested modifications to the MTFSP recommended for approval by the Planning Commission. However, because the City Council findings for approving a DA are more extensive than the Planning Commission findings, additional analysis on the DA is provided below.
Development Agreement
The proposed DA for the Magnolia Tank Farm property is consistent with the General Plan and Local Coastal Program; will not be detrimental to the health, safety and general welfare; and will not adversely affect the orderly development of property because it assures the applicant that the proposed GPA, ZMA, ZTA, and LCPA are vested regardless of future changes in regulations. This will facilitate the development of a mixed use project on the site with additional lodging, visitor serving commercial, residential, and open space to serve residents and visitors consistent with the General Plan and Local Coastal Program. It will enhance the local economy, provide additional revenue to the City, create jobs, and provide additional attainable housing stock. The agreement will also result in payment of funds to the City, which can be used for projects that improve the health, safety, and general welfare of the community.
The proposed DA is consistent with all provisions of Chapter 246 (Development Agreements) of the HBZSO, the Municipal Code, and the State Subdivision Map Act in that all application requirements have been met and the Planning Commission held a public hearing on the proposed project and the development agreement prior to transmitting its recommendation to the City Council. The development agreement has also been reviewed for consistency and compliance with the Municipal Code and Subdivision Map Act.
The City Council is also required to consider the fiscal effect of the development agreement on the City and the effects on the housing needs of the region in which the City is situated and balance these needs against the public service needs of its residents and available fiscal and environmental resources. The proposed DA will facilitate the development of a mixed use project on the subject site including up to 250 residential units that will add to the housing stock while also providing payment of funds to the City which can be used for projects that improve public services in the community.
Environmental Status:
The staff report for the October 22, 2019 Planning Commission public hearing (Attachment No. 9) provides a detailed description and comprehensive analysis of EIR No. 17-001 including the scope of the EIR analysis, summary of project impacts, significant an unavoidable impacts, alternatives to the project that could avoid or reduce the severity of impacts, and Statement of Overriding Considerations which is required to approve the proposed project. It should be noted that since the applicant has agreed not to use pile driving to construct the hotel and mitigation measure NOI-3 has been modified to prohibit pile driving accordingly, the proposed project will no longer result in significant and unavoidable impacts to Noise (pile driving annoyance during the construction of the hotel). NOI-2 is no longer applicable and has been deleted as well.
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Suggested Findings for Approval of ZMA No. 17-001, ZTA No. 17-005, LCPA No. 17-001, and DA No. 19-001
2. Resolution No. 2021-01 for EIR No. 17-001
3. Resolution No. 2021-02 for GPA No. 17-001
4. Ordinance No. 4225 for ZMA No. 17-001
5. Resolution No. 2021-03 for ZTA No. 17-005
6. Resolution No. 2021-04 for LCPA No. 17-001
7. Ordinance No. 4226 for DA No. 19-001
8. Draft Development Agreement
9. October 22, 2019 Planning Commission Staff Report
10. Vicinity Map
11. Project Narrative received and dated January 9, 2019
12. Existing and Proposed General Plan Land Use Designation Maps
13. Existing and Proposed Zoning Maps
14. Draft Specific Plan Planning Areas
15. Zoning Compliance Matrix
16. Letters in Opposition/Support
17. MTF Net Fiscal Impacts and Economic Benefits
18. Revised CEQA Findings of Fact with Statement of Overriding Considerations EIR No. 17-001
19. Draft Mitigation Monitoring and Reporting Program with Planning Commission and staff recommended changes to NOI-3 and deletion of NOI-2
20. Response to Public Comments at the October 22, 2019 Planning Commission Hearing
21. Indemnification Agreement
22. Response to February 27, 2020 Unite Here Local 11 Comments
23. PowerPoint Presentation
24. Final EIR No. 17-001 (includes Draft EIR, Appendices, Response to Comments, and Text Changes not attached but available at
<https://huntingtonbeachca.gov/government/departments/planning/major/>)
25. Draft MTFSP Vols. I, II, and III (Not attached but available at
<https://huntingtonbeachca.gov/government/departments/planning/major/>)