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22-0215_GRIFFIN STRUCTURES, INC._D1_Agenda ReportCity of San Juan Capistrano Agenda Report TO: Honorable Mayor and Members of the City Council FROM: Benjamin Siegel, City Manager SUBMITTED BY: Joel Rojas, Development Services Director PREPARED BY: Laura Stokes, Housing Supervisor / Associate Planner DATE: February 15, 2022 SUBJECT: Architectural Control (AC) 21-023, Tree Removal Permit (TRP) 21- 036, Grading Plan Modification (GPM) 21-024, Sign Program (SP) 22-002, Zone Variance (ZV) 21-011, and Floodplain Land Use Permit (FP) 21-003; Paseo Adelanto Mixed Use Project, a Proposal to Construct 50 Apartment Units of Permanent Supportive Housing for Low-Income Households and a New 16,338 Square Foot City Hall Office Building at 32400 Paseo Adelanto (APN: 668-101-23); A Finding that the Proposed Project is Statutorily Exempt from the California Environmental Quality Act; and Related Agreements with Jamboree Housing Corporation, CBRE and Griffin Structures (Applicant: Jamboree Housing Corporation and the City of San Juan Capistrano) (Project Manager: Laura Stokes, Housing Supervisor / Associate Planner). RECOMMENDATION: Open the public hearing, receive public testimony, close the public hearing; and: 1.Adopt a resolution (Attachment 1) conditionally approving Architectural Control (AC) 21-023, Tree Removal Permit (TRP) 21-036, Grading Plan Modification (GPM) 21-024, Sign Program (SP) 22-002, Zone Variance (ZV) 21-011, and Floodplain Land Use Permit (FP) 21-003 for the proposed Paseo Adelanto Mixed Use Project, and finding that the proposed project is statutorily exempt from the California Environmental Quality Act; and, 2.Approve and authorize the City Manager to execute, substantially in the form attached, an Option to Purchase Real Property Agreement with Jamboree Housing Corporation (Attachment 2); and, 3.Approve and authorize the City Manager to execute an Exclusive Representation Agreement with CBRE for services related to securing temporary office facilities during construction of a new City Hall (Attachment 3); and, 2/15/2022 D1 Agenda Report February 15, 2022 Page 2 of 9 4. Approve and authorize the City Manager to execute a Professional Services Agreement with Griffin Structures for services related to program and construction management of the new City Hall (Attachment 4). 5. Waive the formal bidding process for retention of Griffin Structures for Program and Construction Management Services pursuant to Municipal Code section 3- 4310(e). EXECUTIVE SUMMARY: Since April 2020, staff has been working with Jamboree Housing Corporation (Jamboree) to investigate the feasibility of developing the current City Hall site with an affordable housing project as well as a new City Hall facility. As a result of these efforts, Jamboree has submitted entitlement applications for a proposed mixed-use project that would involve demolition of the existing City Hall structures and construction of a three- story, 50-unit apartment building of permanent supportive housing for low-income households adjacent to a new, two-story 16,338 square foot City Hall. Staff has analyzed the proposed entitlement applications and believes that all the necessary findings of fact for approval of the various requested applications can be made. In addition, the entitlement applications have been reviewed by the Design Review Committee, Cultural Heritage Commission and Planning Commission and all three review bodies recommend approval of the proposed project applications. Staff is recommending that the City Council adopt a Resolution conditionally approving the requested entitlements for the Paseo Adelanto Mixed Use Project, and finding that the project is statutorily exempt from the California Environmental Quality Act. In addition to the project entitlement applications, staff is recommending the City Council approve an Option to Purchase Real Property Agreement (“Option Agreement”) with Jamboree. The Option Agreement grants Jamboree the option to purchase 1.2 acres of the project site from the City (where the housing would be located), provided that the City and Jamboree agree to the terms of a Development and Disposition Agreement (DDA) within six months. In addition, the Option Agreement conditionally commits the City to providing $5.9 million in affordable housing bond monies to Jamboree for the affordable housing project. Staff is also recommending that the Council approve an Exclusive Representation Agreement with CBRE for services related to securing temporary office facilities during construction of a new City Hall, and an Amendment to an existing Professional Services Agreement with Griffin Structures for construction management of the City Hall project. DISCUSSION/ANALYSIS: Jamboree is a full-service real estate development company with more than 30 years of experience, specializing in the construction, acquisition, and management of affordable housing for lower income households. Jamboree has developed, managed, and Agenda Report February 15, 2022 Page 3 of 9 maintained ownership of over 9,000 residential units for lower income families and seniors throughout California. On April 7, 2020, the City Council approved an Exclusive Negotiating Agreement (ENA) with Jamboree to investigate the feasibility of developing the current City Hall site with a permanent supportive housing project that includes a new City Hall facility. On March 16, 2021, the City Council approved an amended ENA to pursue a City Hall concept with reduced square footage and associated cost. Under this revised concept, the Council Chambers would be relocated to the Community Center. Staff has worked with Jamboree to develop the preliminary plans for the new City Hall building, which would include energy efficient design elements that allow the City and Jamboree to pursue additional grant funding. In October 2021, Jamboree submitted project plans and applications to begin the formal entitlement review of the proposed Paseo Adelanto Mixed Use Project. Proposed Project The 2.22-acre project site is located at the southern terminus of Paseo Adelanto, between Trabuco Creek and the railroad right-of-way (Attachment 5). The project site is City-owned, zoned Very High Density (VHD) residential and identified in the City’s 2014 -2021 Housing Element as a site which would accommodate affordable housing. The VHD zone permits a variety of uses including multifamily housing and public buildings and facilities, such as a City Hall. The project site is currently developed with City Hall offices made up of four buildings totaling approximately 15,000 sq. ft., a surface parking lot, and related landscaping. The proposal calls for demolishing the existing City Hall office buildings and constructing a new, two-story 16,338 sq. ft. City Hall and adjoining three-story, 50-unit apartment building of permanent supportive housing, ten of which will be leased to veteran households. The proposed Paseo Adelanto Mixed Use Project would involve two adjacent buildings generally in the current City Hall location, with parking wrapping around the buildings similar to the current site configuration. The project site is proposed to be divided into a 1.2-acre parcel which would be developed with a three-story, 50-unit affordable housing building, and a 1.02-acre parcel which would be developed with a two-story, 16,338 square foot City Hall building. The 1.2-acre site would be sold to Jamboree Housing as part of a Disposition and Development Agreement between the City and Jamboree that is still being negotiated. The proposed site plan also details a courtyard dedicated for City Hall activities and a separate courtyard dedicated for residential activities, which includes a 560 sq. ft. detached lattice patio cover. The reconfigured parking lot area would provide 88 parking stalls, 56 of which would be dedicated for City Hall Use, 28 which would be dedicated for residential use, and four which would be shared. The proposed buildings have been designed with Spanish Colonial architecture consistent with the traditional architecture of San Juan Capistrano. The site improvements are intended to be compatible with the Agenda Report February 15, 2022 Page 4 of 9 surrounding properties and provide a desirable environment for residents of the Jamboree project, City employees and visitors to the City Hall facility. Project Entitlement Applications In order to develop the proposed Paseo Adelanto Mixed Use Project, City approval of the following applications is required: 1) Affordable Housing Requirements & Concessions for a requested density bonus and waivers of certain development and parking standards; 2) Architectural Control (AC) 21-023 for the review of the architectural design of the structures, site amenities and landscape; 3) Tree Removal Permit (TRP) 21-036 for the proposed removal of 16 trees and replacement with 49 trees as a part of the development proposal. 4) Grading Plan Modification (GPM) 21-024 for the review of onsite grading and elevations to create building pads raised above the flood zone; 5) Sign Program (SP) 22-002 to establish uniform building mounted signage within the Very High Density residential zone, where it is currently not permitted; 6) Zone Variance (ZV) 21-011 for a proposed encroachment into the 20’ rear yard setback for the City Hall building, creating a 0’ setback with the proposed residential property; 7) Flood Plain Land Use Permit (FP) 20-001 for the review and evaluation of potential flood impacts due to nearby Trabuco Creek. As a procedural matter, the Planning Commission would typically take final action on applications one through six listed above. However, since the Land Use Code requires the Planning Commission to provide a recommendation for final action on the Floodplain Land Use Permit to the City Council, staff presented all the requested entitlements together as a single package for Planning Commission review and recommendation to the City Council, in accordance with Land Use Code Section 9- 2.301(j)(1). A detailed description of each project component subject to the applications listed above is contained in the January 26, 2022, Planning Commission Staff Report provided as Attachment 6. Planning Commission Review On January 26, 2022, the Planning Commission conducted a public hearing to consider the proposed project applications. As discussed in the attached Planning Commission staff report, staff addressed the appropriateness of the proposed project entitlements Agenda Report February 15, 2022 Page 5 of 9 and concluded that the findings could be made to support the project approvals. The Planning Commission supported the findings and adopted Resolution 22-01-26-02, recommending that the City Council approve all the proposed entitlement applications related to the Paseo Adelanto Mixed Use Project. As described in the attached January 26 Planning Commission Staff Report, while the Design Review Committee recommended approval of the proposed project, the DRC also recommended that Jamboree, at its willingness and discretion, return to the DRC at some time in the future to further review the proposed City Hall architecture and landscaping. As a result, the Planning Commission recommended that the City Council consider adding a condition of approval that requires the City Hall architecture and landscaping to return to the Design Review Committee for further refinement. Jamboree is amenable to continuing to work with staff and the Design Review Committee to refine the architecture and landscaping of the City Hall development. However, the necessary outside funding sources for the project cannot be pursued if the project is conditioned to return for additional discretionary review. Therefore, if the City Council supports the Planning Commission’s proposed condition, staff recommends that the condition be clear that Jamboree is under no obligation to make any further refinements suggested by the Design Review Committee, and that the entitlement applications, including the Architectural Control application governing the project’s design, are approved this evening in final form. Option Agreement Between Jamboree and the City The current Exclusive Negotiating Agreement (ENA) between the City and Jamboree is set to expire on April 4, 2022. In addition to working through the specifics of the project layout and design, staff and Jamboree have been working on a Disposition and Development Agreement (DDA) that will address the transfer of 1.2-acres of City-owned land to Jamboree, identify the funding sources for the affordable housing component, and memorialize the specifications of the new City Hall building. The basic premise of the future DDA is that 1.2-acres of the City-owned site would be sold to Jamboree at fair market value for construction of the affordable housing project. The proceeds from the sale ($8,750,000) would be used to construct the new City Hall building. The City would commit $5,900,000 of bond monies from the Successor Agency, which are restricted for the purpose of developing affordable housing, as well as $1,330,000 from state Permanent Local Housing Allocation funds toward the affordable housing project. In addition, the DDA would include Jamboree’s commitment to construct a new City Hall in strict accordance with completed schematic plan drawings. The affordable housing project is proposed to be partially being funded by California Tax Credits, which require proof that a project is ready for construction and that the land is controlled by the applicant. Approval of a project’s entitlement applications Agenda Report February 15, 2022 Page 6 of 9 demonstrates that a project is ready for construction, and an executed DDA typically is used to demonstrate that the land is controlled by the applicant. Since more time is needed to negotiate and finalize the DDA, an Option Agreement has been prepared which would allow Jamboree to apply for California Tax Credits as part of the next funding cycle. The Option Agreement essentially serves as a bridge, granting Jamboree the option to purchase 1.2 acres of the project site from the City, provided that the City and Jamboree agree to the terms of a DDA within six months. In addition, the Option Agreement conditionally commits the City to providing $5.9 million in affordable housing bond monies to Jamboree for the affordable housing project. If the terms of the DDA are not mutually agreed upon by the City and Jamboree within six months, the Option Agreement would no longer be valid. The Option Agreement has been reviewed by staff and the City Attorney’s office. CBRE Exclusive Representation Agreement The first phase of the construction schedule for the new City Hall and Jamboree Housing project would be the demolition of the existing City Hall buildings, including the City Council Chambers. To effectively re-use remaining City facilities during construction, the former Utilities Administration and Operations buildings are anticipated to be utilized for relocation of the One Stop Shop, inspector workspace and miscellaneous customer service activities. Due to their location adjacent to the existing City Hall building, use of the former Utilities building would provide a low-cost, convenient and established facility for those conducting regular business with City departments. These existing buildings would need to be modified to allow for their interim use prior to the demolition of the existing City Hall building. A second project to support the construction of the new City Hall is relocation of the City Council Chambers to the Community Center. This relocation would be a permanent change. The balance of the City’s administrative staff would need to be relocated to off- site office space for the duration of the construction schedule. In order to secure interim office space during construction of the new City Hall, staff recommends the City Council engage CBRE, Inc. for commercial real estate services. Rick Warner with CBRE has provided the City with excellent real estate services in the past and has submitted an Exclusive Representation Agreement (Attachment 3) for this proposed transaction. The agreement calls for CBRE to research and present properties suitable for interim City offices and assist in lease negotiations. The proposed CBRE agreement is for a twelve- month term and calls for commission to be paid by the owner/lessor. Griffin Structures Agreement for Program and Construction Management The construction of a new City Hall facility and permanent relocation of the City Council Chambers to the Community Center are an opportunity to create an inviting and efficient base for civic engagement for the next several decades. Given the importance of these facilities and the significant investment of City resources, it is appropriate to retain experts in the field of city hall construction to assist staff in effectively managing the Agenda Report February 15, 2022 Page 7 of 9 project and identifying opportunities for cost savings during design and construction. To that end, staff is recommending that the City approve an agreement with Griffin Structures, which has been advising the City throughout the conceptual design phase and supporting the City in its negotiations with Jamboree. Griffin Structures has helped numerous cities achieve the development of high-quality, cost-effective facilities. Local client agencies include the County of Orange, the cities of Brea, Irvine, Lake Forest, Orange, Rancho Santa Margarita and Yorba Linda. Griffin also has experience in similar mixed-use projects, blending civic functions and housing developments. These include the Santa Cruz Downtown Housing and Library Mixed- Use Project, and the Lillan Court and Bloomington Grove Housing project. Griffin Structures has submitted a proposal to provide program and construction management services for the new City Hall, temporary City Hall, relocation of the Council Chambers and refurbishment of the former Utilities Department space (Attachment 4). The scope includes oversight of design, schedule management, quality control, cost control, constructability review, contract administration, construction observation and project close-out. The final cost estimates for the new City Hall building and Council Chambers relocation will be determined upon completion of the final design plans and specifications. Griffin Structures proposed fee is $645,000, which is within general industry standard for a project of this scope. The agreement with Griffin includes a performance-based retention clause that provides that up to 10% of the compensation owed to Griffin is subject to release based solely on the City’s overall satisfaction with Griffin’s services. Pursuant to Municipal Code Section 3-4.310(e), staff is recommending that the City Council find that entering into an agreement with Griffin Structures is exempt from the request for proposal process. As discussed above, Griffin Structures has been working with staff and Jamboree for several months and is already very familiar with this unique mixed-use project, has provided similar services to numerous government clients, and has specialized knowledge and skills that will assist the City in overseeing the construction of high-quality, cost-effective public facilities. FISCAL IMPACT: A portion of the staff time associated with the preliminary planning phase of this project is covered by a deposit from Jamboree. The cost to build the new City Hall would be funded by the sale proceeds of the City Hall site to Jamboree. It is expected that the cost to reconfigure the Community Center to accommodate a Council Chambers, program and construction management for the new City Hall and Community Center improvements, City Hall relocation costs, information technology costs, security costs and certain internal furnishing costs would be funded by $1.5 million of American Rescue Plan Act (ARPA) funding, as provided by the City’s ARPA spending plan that was approved by City Council on October 5, 2021. The City would also commit $5.9 million in Successor Agency bond funding to Jamboree’s Permanent Supportive Housing project. Agenda Report February 15, 2022 Page 8 of 9 ENVIRONMENTAL IMPACT: This project has been reviewed in accordance with the California Environmental Quality Act. The City's Environmental Administrator has determined that the project is statutorily exempt from further review pursuant to Government Code section 65583.2(h) and (i), which applies when sites are re-zoned to accommodate the Regional Housing Needs Assessment allocation for low and very low income housing, and results in the future approval for multifamily rental projects on those sites to be considered a “use by right,” which is defined to mean that the review shall not include approval that would constitute a “project” for purposes of CEQA. On May 6, 2016, the City adopted Resolution No. 17-05-03-01, which approved a General Plan Amendment to amend the City’s Housing Element. That resolution amending the Housing Element identified the City Hall site as a site that would be zoned for low and very-low income affordable housing. On May 17, 2016, the City adopted Ordinance No. 1032 to rezone the property to Very High Density to accommodate the City’s RHNA allocation. This rezoning ensured that the City’s inventory of housing sites in its Housing Element could accommodate all of the low and very low income RHNA assigned to the City. Because the Project site was rezoned to accommodate the City’s RHNA allocation, it would come under the provisions of Government Code Section 65583.2(i) and be considered a “use by right” that would not trigger CEQA review because it is not a “project” as that term is defined under CEQA. In conclusion, because the Project site was identified in the City’s Housing Element inventory of sites suitable for lower income housing, and was subsequently rezoned after the City adopted the Housing Element under a program to accommodate lower income housing, it should be considered a “use by right” site, and any City approvals to implement the Project would not be considered a “project” for purposes of CEQA compliance. If the Project receives final approval, a Notice of Exemption would be filed with the County Recorder’s Office within 5 days of such approval. PRIOR CITY COUNCIL REVIEW: • On March 16, 2021, the City Council authorized the City Manager to execute an Amended ENA with Jamboree for further review and consideration of the Paseo Adelanto mixed use development. • On April 7, 2020, the City Council authorized the City Manager to execute an ENA with Jamboree for review and consideration of the Paseo Adelanto mixed use development. COMMITTEE AND COMMISSION REVIEW: • On January 26, 2022, the Planning Commission reviewed all entitlements for the project and, on a 5-0 vote, adopted a resolution recommending the City Council Agenda Report February 15, 2022 Page 9 of 9 approve the Paseo Adelanto mixed use project, and recommended consideration of an additional condition that the architecture and landscape plans return to the Design Review Committee for final refinement. • On January 25, 2022, the Cultural Heritage Commission (CHC) determined that the proposed project would be physically and aesthetically compatible with the adjacent San Juan Hot Springs Dance Hall, a structure identified on the City’s Inventory of Historic and Cultural Landmarks, in accordance with City Council Policy 603, Section 5. • On January 13, 2022, the Design Review Committee (DRC) conducted a formal review of the proposed project’s development design plans. The DRC, on a 3-0 vote, recommended that the proposed project be approved by the Planning Commission with three recommended design changes. The changes were incorporated into the plans considered by the Planning Commission or were added as conditions of approval. Based on further discussions with the property owner immediately north of the City Hall property condition of approval number 65, which addresses fencing between the properties, has been further modified to allow more flexibility in providing a mutually agreeable fencing solution. NOTIFICATION: Pursuant to Title 9, Land Use Code, Section 9-2.302(f), Notification Procedures, and City Council Resolution 10-18-17-03, a public notification of the proposed project was mailed to every property owner within 1,000 feet of the project boundaries and was published in the Capistrano Valley News at least ten days prior to the February 15, 2022, public hearing date. In addition, pursuant to City Council Resolution 10-08-17-03, on-site signage was posted at least 20 days in advance of the February 15, 2022, public hearing date. ATTACHMENT(S): Attachment 1 – Resolution Approving AC 21-023, TRP 21-036, GPM 21-024, SP 22- 002, ZV 21-011, FP 21-003 and find that the project qualifies for a statutory exemption under CEQA Attachment 2 – Option Agreement for City Hall Site Attachment 3 – Exclusive Representation Agreement with CBRE Attachment 4 – Griffin Structures PSA and Proposal Attachment 5 – Project Site Map Attachment 6 – January 26, 2022, Planning Commission Staff Report ENCLOSURES: Enclosure 1 – Residential Development Architectural & Civil Plans