REPORT TO COUNCIL
SUBJECT
Title
Confirm Study Area for the Kifer North Precise Plan (Larger area) or Modify to Include Fortinet Parcels Only (Smaller area); Authorize the City Manager to Enter into Agreements with Ascent Environmental to complete the Planning Study and Environmental Document, and Hexagon Transportation Consultants to complete the associated Transportation Impact Analysis; and Approve Budget Modification No. 33 in the amount of $322,500 if the Larger Area is Confirmed
Report
BACKGROUND
On August 22, 2017 (RTC No. 17-0826), the City Council initiated a General Plan Amendment study requested by Fortinet, Inc. (a network security company headquartered in Sunnyvale) to consider an industrial-intensification designation in the General Plan to allow for development of up to 100 percent floor area ratio (FAR) on certain parcels along Kifer Road. The Council action to initiate a General Plan Amendment study specified study of a larger area beyond Fortinet’s requested parcels with the preparation of a Specific, Area, or Precise Plan. City Council further reserved the option to decrease the size of the study area to only the properties requested by Fortinet.
The larger area, consisting of approximately 35 acres, is bounded by Central Expressway to the north, Kifer Road to the south, a private park to the east (adjacent to the Texas Instruments campus), and Wolfe Road to the west.
The smaller area requested by Fortinet, consisting of approximately 18 acres, is bounded by Central Expressway to the north, Kifer Road to the south, Commercial Street to the east, and generally, by San Lazaro to the West (except for seven parcels along the east side of San Lazaro Avenue). See Attachment 1 for a map of the two study area options.
The Council directed that staff come back with consultant scopes of work for both the larger and smaller study areas so that there is maximum flexibility when presented with the contract award and a budget modification. The budget modification would be necessary should the larger study area be selected as it involves the preparation and funding of a Precise Plan beyond the pro rata share that would be provided by Fortinet.
Fortinet applied for the General Plan Amendment (GPA) and Rezoning (RZ) on September 26, 2017 (file no. 2017-7802).
EXISTING POLICY
SUNNYVALE CHARTER:
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another, or to appropriate available revenue not included in the budget.
SUNNYVALE GENERAL PLAN:
The General Plan is the primary policy plan that guides the physical development of the City. When used together with a larger body of City Council policies, it provides direction for decision-making on City services and resources. The Land Use and Transportation Element (LUTE) within the General Plan includes an integrated set of policies to guide land use, development, and transportation choices with a horizon year of 2035.
Supportive Economic Development Environment
Policy 74: Provide existing businesses with opportunities to grow in Sunnyvale and provide opportunities to expand into new technologies.
Policy 76: Promote business opportunities and business retention in Sunnyvale.
A Balanced Economic Base
Policy 82: Attract and retain a diversity of commercial enterprises and industrial uses to sustain and bolster the local economy and provide a range of job opportunities.
Policy 83: Encourage land uses that generate revenue while preserving a balance with other community needs, such as housing.
Protected Commercial Districts
Policy 95: Require high design standards for office, industrial, and research and development (R&D) buildings in all business districts.
Action 2: Maintain and review, as needed, criteria for superior quality architecture, landscaping, and site development for office, industrial, and R&D projects that request to develop beyond standard floor area ratio limits.
Policy 96: Maintain areas of Class B and C buildings to support all types of businesses and provide a complete community.
Specialized Plans and Zoning Tools
Policy 97: Prepare specific area plans and special zoning tools (including, but not limited to specific plans, precise plans, design guidelines, specialized zoning, and sense of place plans) to guide change in areas that need special attention.
Community Benefits
Policy 104: Ensure that development projects provide appropriate improvements or resources to meet the City’s future infrastructure and facility needs, and provide development incentives that result in community benefits and enhance the quality of life for residents and workers.
Action 3: Include a discussion of community benefits in area plans and specific plans that defines the City’s priorities and outlines an implementation program.
ENVIRONMENTAL REVIEW
The confirmation of the study area for a General Plan Amendment study does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) in that it has no potential for resulting in either a direct physical change in the environment, or a reasonable foreseeable indirect physical change in the environment. Environmental review under CEQA will be performed as part of the General Plan Amendment study.
DISCUSSION
Comparison of Scopes for Larger and Smaller Study Areas
The City has consulted with Ascent Environmental for planning and environmental review services and Hexagon Transportation Consultants for transportation analysis. Both firms have knowledge of existing conditions in the area and have also completed environmental and traffic documents for recent projects in the nearby Lawrence Station Area Plan (LSAP) district. Staff met with both firms to discuss the two study area options and developed draft proposals for the different scopes of work (Attachments 2 and 3).
Given previously-identified transportation impacts in the area, staff and Ascent Environmental anticipate that an Environmental Impact Report (EIR) would be required for the California Environmental Quality Act (CEQA) review, regardless of the study area option.
Both options involve the following work by two City consultants:
• Attendance at public outreach meetings and hearings
• Analysis of existing issues, constraints, and opportunities
• Infrastructure analysis
• Market analysis
• Fiscal Impact analysis
• Transportation Impact Analysis (TIA)
• CEQA review (EIR)
The larger study area also includes consultant assistance with the preparation of a Precise Plan.
Below is a summary of the scope of work, timeline, and cost for each study area option.
Larger Area (Option A in the scopes and Alternative 1 in the RTC)
The larger area includes preparation of a Precise Plan, which staff is initially naming the Kifer North Precise Plan. The Precise Plan would provide a comprehensive study of the larger area’s uses, intensities, and public realm improvements, rather than on a piecemeal basis. Additionally, the plan would be a mechanism to tie development incentives to the provision of community benefits. While the plan is being prepared, property owners can continue to exercise their development rights under the existing regulations. There would be no moratorium on development. Notably, Fortinet intends to submit an application to demolish existing buildings and construct a new office building (under the current zoning provisions) prior to any precise plan being completed. The costs for the studies would be shared by Fortinet and the City. The adoption of a Precise Plan could include provisions for the City’s costs to be reimbursed, over time, as other properties within the Precise Plan area are redeveloped or uses are changed.
Ascent Environmental estimates that completion of the Precise Plan and EIR will take one year. Staff anticipates six additional months to be added to this timeline to account for staff review, outreach meetings, and public hearings, which would bring the total schedule to one and a half years.
Below is a breakdown of costs:
|
STUDY |
CONSULTANT |
COST |
|
Kifer North Precise Plan (including infrastructure and market analysis) |
Ascent Environmental |
$238,435 |
|
CEQA Review - EIR |
Ascent Environmental |
$213,995 |
|
Contingency 10% of study cost |
|
$45,243 |
|
Sub-Total |
Ascent Environmental |
$497,673 |
|
City Administrative fee - 10% of sub-total |
|
$49,767.30 |
|
TIA (with 10% contingency and 10% administrative fee) |
Hexagon Transportation Consultants |
$97,200 |
|
Grand Total |
|
$645,000 |
Smaller Area (Option B in the scopes and Alternative 2 in the RTC)
The smaller area does not include preparation of a Precise Plan, and would focus on Fortinet’s parcels. The smaller area would not require City funds for planning analysis or environmental review. All costs would be paid by the applicant via a pass-through account. Additionally, the schedule would be less than a year (10 months) as no Precise Plan would be required.
|
STUDY |
CONSULTANT |
COST |
|
Infrastructure and market analysis |
Ascent Environmental |
$67,935 |
|
CEQA Review - EIR |
Ascent Environmental |
$196,945 |
|
Contingency 10% of study cost |
|
$26,488 |
|
Sub-Total |
Ascent Environmental |
$291,368 |
|
City Administrative fee 10% of sub-total |
|
$29,136.80 |
|
TIA (with 10% contingency and 10% administrative fee) |
Hexagon Transportation Consultants |
$97,200 |
|
Grand Total |
|
$418,000 |
Conclusion
The costs for the larger study area is $227,000 more than the smaller study area; however, as the costs are shared it would be $322,500 each for the City and Fortinet. The estimated schedule of one and a half years for the larger area would be approximately six months longer than the schedule for the smaller study area. Fortinet would be responsible for its pro rata share of the larger study area preparation costs. Fortinet’s parcels consist of half the land area in the larger study area, and therefore would be responsible for half the costs of the scope of work, or $322,500. With this methodology, the applicant would pay $95,500 less than the full cost of the smaller study area ($418,000).
A budget modification of $322,500 is requested to cover the balance of the study preparation costs, which assumes that the EIR option will be required. Staff anticipates that a Precise Plan Fee would be established upon adoption of the Precise Plan that would be charged to all future development projects in the plan area for their pro rata share of the study preparation costs as well as ongoing maintenance costs.
FISCAL IMPACT
If the Larger area (Alternative 1) is selected by the Council, Budget Modification No. 33 has been prepared to appropriate General Fund Budget Stabilization Fund funds in the amount of $322,500 for consulting services to a new project, the Kifer North Precise Plan. If the Smaller area (Alternative 2) is selected, then the budget modification would not be required because all costs would be paid by the applicant.
Budget Modification No. 33
FY 2017/18
|
|
Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
|
|
|
|
|
Expenditures |
|
|
|
|
New Project - Kifer North Precise Plan |
$0 |
$322,500 |
$322,500 |
|
|
|
|
|
|
Reserves |
|
|
|
|
Budget Stabilization Reserve |
$32,837,331 |
($322,500) |
$32,514,831 |
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
Staff also sent a courtesy e-mail to interested parties on the project.
ALTERNATIVES
1. Confirm a larger study area for the Kifer North Precise Plan; Authorize the City Manager to Enter into Agreement with Ascent Environmental to complete the Kifer North Precise Plan and Environmental Document in the amount of $497,673, and Hexagon Transportation Consultants to Complete the associated Transportation Impact Analysis in the amount of $97,200; and Approve Budget Modification No. 33 in the amount of $322,500.
2. Modify and select a smaller study area for the Fortinet parcels only; no further action by the City Council is required as the City Manager is authorized to Enter into Consultant Agreements when no City funding is required.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Confirm a larger study area for the Kifer North Precise Plan; Authorize the City Manager to Enter into Agreement with Ascent Environmental to complete the Kifer North Precise Plan and Environmental Document in the amount of $497,673, and Hexagon Transportation Consultants to Complete the associated Transportation Impact Analysis in the amount of $97,200; and Approve Budget Modification No. 33 in the amount of $322,500.
Staff finds that a larger study area and preparation of the Kifer North Precise Plan is a more thorough approach to planning for this area. It is possible the area will experience more redevelopment interest in the future, and studying the larger area is beneficial from a long-range planning perspective. The plan would study options for land uses and intensities, provide a holistic view of traffic impacts, and specify area improvements and sense of place additions. The City would initially fund half the cost to prepare the Precise Plan and associated environmental and traffic studies, but would recover the costs in the future with adoption of a Precise Plan Fee. Additionally, the applicant would pay less if the larger study area is selected.
Prepared by: George Schroeder, Senior Planner
Reviewed by: Andrew Miner, Planning Officer
Reviewed by: Trudi Ryan, Director of Community Development
Reviewed by: Timothy J. Kirby, Director of Finance
Reviewed by: Teri Silva, Interim Assistant City Manager
Approved by: Kent Steffens, Interim City Manager
ATTACHMENTS
1. Map of Larger and Smaller Study Area Options
2. Draft Proposal for Planning and Environmental Services
3. Draft Proposal for Transportation Impact Analysis