For Economic Development Committee [January 31, 2018]
TO: Honorable Economic Development Committee Members
APPROVAL: Robb R. Steel, Interim City Administrator
FROM: Robb R. Steel, Interim City Administrator/Development Services Director
Title
Initiate Specific Plan Amendment to Change Land Use Designation for Parcel(s) on North Fitzgerald within the Renaissance Rialto Specific Plan.
Body
BACKGROUND:
In 2017, the representative for Airport Industrial Land Trust (APN #0264-212-27) contacted the City to discuss development options for the property on Fitzgerald Avenue, just south and west of the intersection of Leiske Drive. The 2010 RSP originally designated the 3.08 acre parcel for industrial use (Employment) and the 2016 Amended RSP then designated it for residential uses. The 2010 and 2016, RSP Land Use Maps are attached hereto as Exhibit A.
The property owner contends that he did not receive notice of the public hearings on the Amended RSP. Staff determined that the City mailed notice to the property owner of record first class delivery, but we cannot ascertain that the property owner received the notice.
The property owner requests that the City re-designate his property for industrial purposes. On December 21, 2017, the property owner filed a lawsuit (Exhibit B) with the Superior Court claiming inverse condemnation, regulatory taking, lack of notice and other constitutional claims. Nevertheless, we have maintained communication toward amicably resolving the situation.
ANALYSIS/DISCUSSION:
Staff discussed several options to remedy the situation: (1) swap a City owned industrial property of equivalent value for the subject parcel, (2) City acquire the subject parcel, or (3) re-designate the parcel for industrial uses as before.
The simplest of the options is the third option. Staff contacted LHR to determine the master developer’s disposition toward this proposal. Staff wanted to make sure that a re-designation of this parcel would not substantially damage the integrity of the residential community surrounding the parcel. LHR opined that the City could designate the property with an employment overlay zone, similar to what the City adopted for the American Traffic Products property immediately south. An overlay zone permits development according to either the existing underlying residential designation or the proposed overlay industrial designation. The owner must develop the property according to the standards of the selected zone. If the owner chooses an industrial designation, the City must prepare a consistency analysis pursuant to CEQA.
The City Council may wish to consider expanding the scope of the re-designation to include an LHR property immediately north of the subject site. LHR owns a 5-acre parcel (APN #0264-212-09) that the 2010 RSP originally designated as Employment but changed to Low Density Residential in 2016. A portion of the property (say 3 acres) may be appropriate for Employment uses to square off the industrial park area on Fitzgerald and Leiske and create the optimal buffer boundary. LHR expressed indifference to the proposal to include its property, accepting the City’s preference either way.
Reducing low density residential acreage by 3.08 acres would cause a loss of approximately 25 units, replaced by approximately 50,000 square feet of industrial uses. The City could work with LHR to recover the lost units elsewhere in the RSP.
FINANCIAL IMPACT:
The re-designation of the subject site for industrial purposes would produce positive economic results for the City. Recent fiscal impact reports suggest that the City realizes approximately $500 net revenue to the General Fund for each job created, for potential net revenues of $10,000 to $20,000. Residential uses generally break even at best if a Community Facilities District is established.
The financial impact for the property owner is probably significant. Industrial land currently sells for considerably more than residential land.
If the City decides to initiate the Specific Plan Amendment, the City will incur nominal costs for processing, amending maps, and conducting environmental review. Staff assumes that the work will be completed in-house with LHR support. If the LHR property were included, the City would ask LHR to bear the full cost of the change.
RECOMMENDATION:
Review the proposed land use amendment to the RSP and direct staff to initiate the process to add the Employment overly to APN #0264-212-27 (Horvath) and possibly a portion of APN #0264-212-09 (LHR) to square off the Employment zone.