REPORT TO COUNCIL
SUBJECT
Title
Proposed Project:
GENERAL PLAN AMENDMENT INITIATION (GPI): Consideration of initiating amendment of the Lakeside Specific Plan to modify the timing of development for the required hotel (approved under Project 2015-7576) and to consider alternative community benefits.
Location: 1250 Lakeside (APNs: 216-43-014, -016, -017, -037, -038, -039 and -040)
File #: 2021-7296
Zoning: Lakeside Specific Plan
Applicant / Owner: Sunnyvale Partners Ltd Co. (owner)
Environmental Review: The project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 (a).
Project Planner: Trudi Ryan, (408) 730-7444, tryan@sunnyvale.ca.gov
Report
REPORT IN BRIEF
General Plan: Lakeside Specific Plan
Existing Site Conditions: Partially Developed Residential and Hotel
Surrounding Land Uses
North: U.S. Highway 101
South: Lake, restaurant and office uses
East: Residential (Avalon apartments)
West: Hotel (Residence Inn)
Issues: Timing of hotel construction
Staff Recommendation: Initiate a General Plan Amendment (Specific Plan Amendment) study to amend the Lakeside Specific Plan and to analyze alternative community benefits related to changing the timing of the hotel construction and Find that the Action is Exempt from CEQA Pursuant to CEQA Guidelines Section15378(a).
BACKGROUND
General Plan Amendment Initiation (GPI) requests from the public are considered on a quarterly basis through a recommendation from the Planning Commission and then action by the City Council. Specific Plan Amendments are handled the same as GPIs and General Plan Amendments (GPAs). The staff may bring a GPI to the City Council and the City Council may on its own initiate a General Plan Amendment without an application and without a recommendation of the Planning Commission.
Although the property owner/developer filed an application for a GPI, staff is requesting the initiation to streamline the process in consideration of other issues with the timing of hotel construction. In this case, if the City Council approves the GPI, a formal application for a GPA and related entitlement requests may then be filed by the property owner/applicant. GPAs must be considered by both the Planning Commission and City Council.
The City Council policy is to take action on a proposed GPA and related rezoning before a specific project is considered. The potential amendment, in this case, is tied to other entitlements such as a modification to the Special Development Permit and entering into a Post Entitlement Development Agreement. Staff recommends that City Council approve the initiation and that all related requests be considered together (Specific Plan Amendment, Amendment to the Special Development Permit Conditions of Approval, and a Development Agreement).
Description of Proposed Project
The project site is 8.83 acres in size and currently has construction of 250 apartments nearing completion; the site also has approval for a 263 room hotel with conference and banquet space, a restaurant and other hotel amenities. The project includes public access along the lake in partial satisfaction of the park dedication requirements for new residential development. The Lakeside Specific Plan (LSP) and the Special Development Permit approving the development proposal require that the hotel be completed at substantially the same time as the residential development.
See Attachment 2 for more details about the approved project (SDP 2015-7576).
Previous Actions on the Site
The site was formerly developed as a hotel with amenities (including small conference and banquet facilities), which was in operation from 1979 to 2006.
The Lakeside Specific Plan was adopted in 2005 and subsequently amended in 2016 (RTC No. 16-1094). The original LSP established the ability to develop a mixed-use project of a hotel and residential uses. The 2016 amendment included switching the location of the residential and hotel orientation on the property (placing them both adjacent to similar nearby uses), an increase in allowable height (seven feet) for the residential component, and inclusion of 3.44-acre publicly accessible park area, adjacent to the lake.
Special Development Permit 2015-7576 was approved at the same time as the amendment to the Lakeside Specific Plan, in December 2016 (addressed in the same Report to Council No. 16-1094).
EXISTING POLICY
General Plan Goals and Policies:
LAND USE AND TRANSPORTATION ELEMENT
GOAL LT-11 SUPPORTIVE ECONOMIC DEVELOPMENT ENVIRONMENT - Facilitate an economic development environment that supports a wide variety of businesses and promotes a strong economy within existing environmental, social, fiscal, and land use constraints.
Policy LT-11.2 Support a full spectrum of conveniently located commercial, mixed-use, public, and quasi-public uses that add to the positive image of the community.
Policy LT-11.3 Promote business opportunities and business retention in Sunnyvale.
• LT-11.3a Encourage conveniently located retail, restaurant, and other supportive land uses near business areas.
GOAL LT-12 A BALANCED ECONOMIC BASE - Develop a balanced economic base that can resist downturns of any one industry and provides revenue for City services.
Policy LT-12.4 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.
• LT-12.4b Ensure that rezoning of industrial or commercial areas and sites will not significantly hurt the community’s economic base.
Policy LT-12.5 Encourage land uses that generate revenue while preserving a balance with other community needs, such as housing.
• LT-12.5a Monitor revenues generated by different economic sectors on an ongoing basis.
Policy LT-12.9 Consider the importance of tax generation (retail, hotel, auto, and business-to-business uses) to support the fiscal health of the community and to fund municipal services.
GOAL LT-14 SPECIAL AND UNIQUE LAND USES TO CREATE A DIVERSE AND COMPLETE COMMUNITY - Provide land use and design guidance so that special and unique areas and land uses can fulfill their distinctive purposes and provide a diverse and complete community fabric.
Existing Plans
Policy LT-14.2 Support the following adopted specialized plans and zoning tools, and update them as needed to keep up with evolving values and new challenges in the community: Downtown Specific Plan, Lakeside Specific Plan, Arques Campus Specific Plan, Lawrence/101 Site Specific Plan, Precise Plan for El Camino Real, Moffett Park Specific Plan, Peery Park Specific Plan, and Lawrence Station Area Plan. (emphasis added)
Community Benefits
Policy LT-14.8 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.
• LT-14.8c Include a discussion of community benefits in area plans and specific plans that defines the City’s priorities and outlines an implementation program.
GOAL LT-6 PROTECTED, MAINTAINED, AND ENHANCED RESIDENTIAL NEIGHBORHOODS - Ensure that all residential areas of the city are maintained and that neighborhoods are protected and enhanced through urban design which strengthens and retains residential character.
LAKESIDE SPECIFIC PLAN GOALS AND POLICIES:
The Lakeside Specific Plan (LSP) implements goals and policies of the General Plan for the project site. The purpose of the LSP is to facilitate the development of a mixed-use hotel and residential project for the 8.83-acre site located at 1250 Lakeside Drive. The site is recognized as being of significant economic benefit to the City and to the implementation of adopted goals for housing and neighborhood sensitivity.
• The goals for this site as summarized in the LSP:
w Create a landmark project that showcases the City at this important gateway site.
w Maintain a successful hotel that is an important part of the City’s economy and business environment.
w Increase the City’s supply of housing stock and improve the jobs/housing ratio.
w Residential should only be allowed if a high quality residential project is created.
Quotes from the LSP
“Maintaining a successful hotel operation for the property is an important part of the City’s economic development objectives.”
“the hotel must be a required condition for approval of residential use on the larger portion of the Lakeside Specific Plan site”
6.0 Implementation
The Specific Plan project is not dependent on any public improvements or financing. All funding will be developer driven. On-site maintenance also will be developer financed.
The project may be phased only in the sense that demolition and new construction may require a particular sequence of actions. However, the development of residential units cannot occur without replacement of the hotel use, as planned.
Special Development Permit 2015-7576
- 250 residential units (ranging from 443 to 1,417 sf)
- 263 hotel guest rooms + 3,000 sf restaurant and on-site amenities indoor meeting and banquet space, a fitness room, bar and lounges; and outdoor dining, meeting, and function space including a pool area, dining patios, and a rooftop garden and bar
- Onsite Improvements: Open space with a lakeside promenade, passive recreational space, and outdoor spaces for meetings and special events
Conditions of Approval
GC-11. PROJECT PHASING:
The project shall not be phased during construction. The residential portion of the project shall be constructed at substantially the same time as the hotel portion of the project.
ENVIRONMENTAL REVIEW
The decision to initiate a GPA study does not require environmental review under the California Environmental Quality Act (CEQA) because the mere initiation of a study does not constitute a project under CEQA pursuant to CEQA Guidelines Section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. If initiated, it is anticipated that the proposed GPA would be within the scope of the existing Environmental Impact Report; however, staff will undertake appropriate CEQA review prior to Council final approval of the Project.
DISCUSSION
The Lakeside Specific Plan and the Conditions of Approval for this site require that the residential and hotel components be constructed at substantially the same time. Residential construction is nearing completion whereas permits for foundation and vertical construction of the hotel have not been issued.
Development of the site commenced in July 2019, when the building permit was issued for the residential component of the Project and site improvements for the entire property. A Building Permit application for the hotel was submitted in December 2019; the developer requested that staff wait until March 2020 to review the plans pending submittal of additional materials for the application. Public Health orders for Santa Clara County placed restrictions on construction activity; construction on this site was paused from March 29, 2020 to April 28, 2020. The additional building permit application materials for the hotel were not submitted until September 2020; staff reviewed the plans and provided plan check comments to the applicant in October 2020. No revised plans have been submitted. While permits have not yet been issued for the hotel structure, much of the site work for that portion of the property has been completed under other permits. The Developer expects that the first phase of residential units will be complete and ready for occupancy in June 2021.
Staff and the Developer have been discussing the timing requirements since early 2020, and in more depth since January 2021. The Developer has indicated that delays on the hotel construction are due to a variety of factors including embargos on pre-fab construction (an earlier concept that would have allowed quicker construction of the hotel) and the pandemic uncertainties in the hospitality industry.
Present Site Conditions
Construction of the residential portion of the site is nearing completion. Site work including grading, managing contaminated soils, and some of the utility infrastructure have been completed for the hotel side of the project. The applicant has obtained approval from Santa Clara County Health Department (the agency overseeing the soil remediation requirements) to isolate contaminated soils under the future hotel and hotel garage structures and, for the interim, to fence off the area and to provide a soil cap to the area that will be covered with structures once the hotel is constructed.
Timing of Hotel and Specific Plan Amendment
Staff recommends that the study of a potential amendment to the LSP Plan would focus solely on the timing of the hotel and alternative community benefits until its construction. While the study could examine eliminating the timing requirement entirely, this approach would be a much larger study and could require re-evaluation of the findings of overriding consideration for environmental impacts identified in the EIR (for traffic impacts which could not be feasibly mitigated). Those findings noted the economic benefit of the hotel. If an alternative community benefit were provided, the environmental review could be more streamlined.
Fiscal Impact
There is no fiscal impact to initiating a study to consider amending the Lakeside Specific Plan. The applicant would pay a fee that would cover staff time associated with the study. Fiscal impacts associated with the amendment would be included in the staff report on the specific plan amendment study.
Public Contact
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, Sunnyvale Public Library and Department of Public Safety. In addition, the agenda and report are available at the Office of the City Clerk and on the City's website.
Notice of Public Hearing, Staff Report and Agenda:
Published in the Mercury News newspaper
Posted on the City of Sunnyvale's Web site
Agenda posted on the City's official notice bulletin board
Notices mailed to property owners and tenants within 300 feet
See Attachment 1 for Vicinity and Noticing Map.
As of the date of staff report preparation, staff has received no comments from the public.
ALTERNATIVES
1. Initiate a Specific Plan Amendment study to amend the Lakeside Specific Plan and to analyze alternative community benefits related to changing the timing of the hotel construction and Find that the Action is Exempt from CEQA Pursuant to CEQA Guidelines Section15378(a).
2. Do not initiate a Specific Plan Amendment study.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Initiate a Specific Plan Amendment study amend the Lakeside Specific Plan and to analyze alternative community benefits related to changing the timing of the hotel construction and Find that the Action is Exempt from CEQA Pursuant to CEQA Guidelines Section15378(a).
The current economic situation has added uncertainty in the hotel industry. Considering alternative community benefits to the timing of hotel construction should be explored. If the City Council initiates the Specific Plan Amendment staff would schedule the public hearings for Planning Commission and City Council to consider the amendment and related actions for May and June 2021.
Staff
Prepared by: Trudi Ryan, Director, Community Development
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Vicinity and Notice Map
2. Summary of Lakeside Special Development Permit