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23-0815_26874 ORTEGA HWY LLC_Agenda Report_E10City of San Juan Capistrano Agenda Report TO: Honorable Mayor and Members of the City Council FROM: Benjamin Siegel, City Manager SUBMITTED BY: Matisse Reischl, Assistant City Manager PREPARED BY: Ashley Melchor, Senior Management Analyst Charlie View, Project Manager DATE: August 15, 2023 SUBJECT: License Agreements with 26874 ORTEGA HIGHWAY, LLC, for Shared Use of Two City-Owned Downtown Properties Located at 26942 Old Mission Road and 31782 El Camino Real; and, Finding Said Actions Exempt Under California Environmental Quality Act (CEQA) Guidelines Section 15332 (Class 32) RECOMMENDATION: 1.Approve and authorize the City Manager to execute two License Agreements with 26874 ORTEGA HIGHWAY LLC, to allow for certain permitted activities on two City-owned properties located at 26942 Old Mission Road and 31782 El Camino Real; and, 2.Direct the City Clerk to record the License Agreements with the County of Orange; and, 3. Find Said Actions Exempt Under State CEQA Guidelines, Section 15332 (Class 32) for Infill Development. EXECUTIVE SUMMARY: The site plan for the previously approved El Camino Specific Plan Project (on the Downtown Playhouse and adjacent parking lot site) incorporates the shared use of two City-owned properties adjacent to the development. To accommodate the shared use of these properties, staff is recommending the approval of two License Agreements. A project location map is provided as Attachment 1. The License Agreements would allow for shared vehicular and pedestrian access, outdoor dining, landscaping and other site 8/15/2023 E10 City Council Agenda Report August 15, 2023 Page 2 of 6 improvements, as well as comply with a code-required setback for the parking structure element of the approved project. DISCUSSION/ANALYSIS: On October 4, 2022, the City Council approved the entitlement actions for the El Camino Specific Plan Project, consisting of an approximately 27,457 square foot retail, restaurant and office building, and an approximately 199 space, four-story parking structure. On November 14, 2022, the City Council approved two Disposition and Development Agreements (DDAs) for the sale of the City-owned Downtown Playhouse and adjacent parking lot properties to facilitate the project. The DDA is a standard sales agreement commonly utilized by public agencies for real estate transactions. As illustrated in the project site plan shown on the following page, in addition to the land sold through the DDAs, the project site incorporates the shared use of two adjacent City- owned properties. To facilitate the shared use of these City-owned properties, two License Agreements have been negotiated with the developer of the El Camino Specific Plan Project. A portion of City property on the corner of Old Mission Road and Del Obispo, currently used for public parking and landscape entry features, would be utilized for circulation (green shading), landscaping, hardscape, and a patio (yellow shading) under the terms of the first License Agreement (Attachment 2). An approximately 19-foot-wide unimproved portion of City property just north of the Blas Aguilar Adobe (red shading), adjacent to the future parking structure (orange shading), would be designated as the required setback and landscaping buffer area for the parking structure under the terms of the second License Agreement (Attachment 3). Both license agreements are written to retain the existing use of the properties by the public and the Blas Aguilar Adobe Foundation. With respect to the second License Agreement, as there will be no structure in the setback area, the operations of the Blas Aguilar Adobe Foundation will not be impacted and the additional landscaping proposed in the setback area will be maintained by the licensee. City Council Agenda Report August 15, 2023 Page 3 of 6 Under the terms of the License Agreements, the developer will enhance the existing condition of both properties through the installation of additional landscaping, lighting, and paved pedestrian walkways and a patio open to the public on the corner of Old Mission Road and Del Obispo. The License Agreements also call for the developer to be responsible for the maintenance costs of the license areas. The assumption of all maintenance costs for the license areas is provided as financial consideration for the shared use of these areas by the licensee. FISCAL IMPACT: The City’s Public Works Department is currently responsible for maintenance of the existing parking and landscape area. Pending approval of the proposed License Agreements, the licensee would become the responsible party for that maintenance. As a result, the City would experience cost savings with respect to irrigation, landscape and tree trimming. Additionally, the applicant would be required to provide general liability insurance and name the City as an additional insured on an annual basis. ENVIRONMENTAL IMPACT: The proposed Project is categorically exempt from further environmental review under State CEQA Guidelines, Section 15332, In-Fill Development Projects (Class 32). The entire Project (which includes the project approvals on October 4, 2022, adoption of a Resolution of Intention on October 18, 2022), to sell the subject properties, the approval City Council Agenda Report August 15, 2023 Page 4 of 6 of the Disposition and Development Agreements on November 14, 2022, and any other follow-on actions, including the proposed License Agreements, is exempt per Section 15332 because the Project meets the required conditions for Class 32. The City filed and posted a Notice of Exemption for the Project on October 7, 2022, with the Orange County Clerk-Recorder. As explained in the October 4, 2022, staff report on the El Camino Specific Plan, the Project is consistent with the applicable General Plan designation and all applicable General Plan policies as well as with applicable zoning designations and regulations outlined in the El Camino Specific Plan; in all respects where the El Camino Specific Plan does not specify a development standard, the Project is consistent with the San Juan Capistrano General Plan and Title 9 of the Municipal Code, Land Use. The Project occurs within city limits on a project site of less than five acres and is substantially surrounded by urban uses. Specifically, the Project is located at 31776 El Camino Real in the City of San Juan Capistrano, consists of 1.68 acres, and is surrounded by Town Center (commercial), Community Park (public), and Town Center Edge (commercial) zoning to the north, south, and east, respectively, and Town Center (commercial) zoning to the west. The Project site has no value, as a habitat for endangered, rare, or threatened species because the majority of the Project site has already been developed and is currently improved with a commercial building, parking lot, and associated improvements on the parcels. Therefore, the site is not habitat for endangered, rare, or threatened species. Approval of the Project would not result in any significant effects relating to traffic, noise, air quality, or water quality. Analysis has been conducted to ensure the Project does not result in any significant effects relating to traffic and water quality, including the following: a Traffic Sensitivity Analysis accepted by the City Traffic Engineer and the Preliminary Water Quality Management Plan approved by the Public Works Department. Further, there is no evidence that the Project would result in significant effects relating to air quality or noise. The site can be adequately served by all required utilities and public services; the Project site is currently serviced by all required utilities, including but not limited to electricity, gas, garbage, water, and sewer and therefore would remain adequately serviced. None of the exceptions to the categorical exemptions identified in CEQA Guidelines, section 15300.2 apply. There is nothing unusual about the Project site or the Project itself that would lead to a potentially significant impact. And, even if an unusual circumstance did exist (one does not), based on the studies performed, there is no reasonable possibility that the Project would have a significant effect on the environment. The Project site is already developed with a commercially operating playhouse, the Project’s Traffic Sensitivity Analysis concluded that the Project would not result in a significant increase of inbound and outbound traffic, would provide adequate access, and would provide adequate off-street parking. Further, the Project will not result in damage to scenic resources within a highway officially designated as a state scenic highway; the closest officially designated state scenic highway is located near Anaheim and therefore the Project will not result in damage to scenic resources within or near such highway. Further, the Project is not located on a site which is included on any list compiled pursuant City Council Agenda Report August 15, 2023 Page 5 of 6 to Government Section 65962.5; the Project site has not been designated as a hazardous waste site. Further, the Project will not cause a substantial adverse change in the significance of a historic resource; specifically, there would be no substantial adverse change in the significance of the Blas Aguilar Adobe, as discussed in the report, the Agreement will not result in any physical or operational change to the Adobe. Thus, the exceptions are not triggered, and the Class 32 categorical exemption applies. PRIOR CITY COUNCIL REVIEW: • On November 14, 2022, the City Council approved Disposition and Development Agreements to sell 1.2-acres of City-owned property located at 31776 El Camino Real and 26874 Old Mission Road (formerly Ortega Highway) to 26874 Ortega Highway LLC. • On November 1, 2022, the City Council continued the Public Hearing for consideration of the purchase agreements for the properties to November 14, 2022. • On October 18, 2022, the City Council adopted a Resolution of Intention declaring its intent to sell the City-owned properties, declaring the properties exempt surplus land pursuant to the Surplus Land Act, and set a hearing date of November 1, 2022, for consideration of purchase agreements to effectuate the transaction. • On October 4, 2022, the City Council approved the entitlement actions for the proposed development of an approximately 27,457 square foot retail, restaurant, and office building, and an approximately 196 space, four-story parking structure. • On October 17, 2017, the City Council approved an Exclusive Negotiation Agreement with Frontier Real Estate Investments (26874 Ortega Highway LLC) for the possible sale and development of the properties. • On May 16, 2017, the City Council voted to enter into exclusive negotiations with Frontier Real Estate Investments for the potential sale of the Parking Lot and Playhouse properties. • On April 26, 2017, the City Council conducted a Community Workshop to review development proposals for the Parking Lot and Playhouse properties. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: • On August 24, 2022, the Planning Commission reviewed the Ortega and El Camino Project proposed for the subject property and adopted a resolution recommending that the City Council approve the Applicant’s requested General City Council Agenda Report August 15, 2023 Page 6 of 6 Plan Amendment, Rezone and Code Amendment and finding that said action is categorically exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15332, In-Fill Development Projects (Class 32). • On July 26, 2021, the Cultural Heritage Commission reviewed the Ortega and El Camino Project proposed for the subject property and in accordance with City Council Policy 603, found that the proposed land use improvements associated with the El Camino Specific Plan are physically and aesthetically compatible with the Blas Aguilar Adobe, a structure identified on the City’s Inventory of Historic and Cultural Landmarks, the California Register of Historical Resources, and the National Register of Historic Places. • On December 9, 2021, the Design Review Committee reviewed the conceptual plans of the proposed Ortega and El Camino project proposed for the subject property and forwarded a recommendation of approval to the Planning Commission. • On January 14, 2021, the Design Review Committee reviewed the conceptual plans for the proposed Ortega and El Camino project proposed for the subject property and provided preliminary feedback on the design aspects of the project to the Applicant. NOTIFICATION: Michael W. Burnett, Almquist Development Blas Aguilar Adobe Foundation Adjacent Property Owners Interested Parties Notification List ATTACHMENT(S): Attachment 1: Project Location Map Attachment 2: Proposed Roundabout License Agreement Attachment 3: Proposed Setback and Landscape Buffer License Agreement Attachment 1- Project Location Map