For the Planning Commission Meeting of May 30, 2018
TO: Honorable Chairman and Planning Commissioners
APPROVAL: Robb Steel, Interim City Administrator
FROM: Gina M. Gibson-Williams, Planning Manager
Title
Development Agreement No. 2018-0001: Conduct Public Hearing and Consider Adoption of a Resolution Making Certain Findings and Recommendations to City Council to Approve Development Agreement No. 2018-0001 by and between the City of Rialto and Oakmont El Rivino, LLC.
Body
APPLICANT:
The Development Agreement applicant is PDC OC/IE, LLC, a Delaware limited liability company. Oakmont El Rivino LLC is the Owner. PDC OC/IE, LLC submitted various development applications on behalf of the Owner. The Applicant and Owner shall be jointly referred to as Owner for the purposes of this report, unless otherwise specified.
LOCATION:
The Project consists of a lot line adjustment and the development of a 1,264,102 sq. ft. warehouse building and a 988,765 sq. ft. warehouse building generally located at the Northwest corner of Cactus Avenue and El Rivino Rd (“Site”) within the Light Industrial (M-1) Zone of the Rialto General Plan. A map depicting the Site is attached hereto as Exhibit A.
BACKGROUND:
The Owner will reimburse the City for administrative and legal costs incurred by the City related to the Project.
The Oakmont El Rivino Environmental Impact Report (SCH 2008031088) was certified on April 12, 2011 (“2011 FEIR”). However, on October 5, 2017, the Owner submitted formal development applications, including an Addendum (EAR No. EAR 2017-0068) (“EIR Addendum”) to the 2011 FEIR. The Project differs from the 2011 FEIR in building configuration and land use intensity--warehouse use instead of high-cube use. On December 20, 2017, the Development Review Committee (“DRC”) approved the Addendum to the previously certified 2011 FEIR. The City filed a Notice of Determination for the EIR Addendum with the Clerk of the Board of San Bernardino County on December 22, 2017. (Exhibit B).
Along with the EIR Addendum, the Owner submitted Precise Plan of Design Nos. 2017-0082 and 2017-0083 (“PPDs”) to construct two warehouse buildings and associated automobile parking, truck parking and landscaping. Building 1 is a 1,264,102 sq. ft. building area cross-dock building with truck dock doors on the northern and southern sides. Building 2 is a 988,765 sq. ft. cross-dock building with truck dock doors on the eastern and western sides. The DRC approved the PPD applications on December 20, 2017.
On March 14, 2018, the Owner filed Lot Line Adjustment No. 2018-0004 to adjust the configuration of three parcels. The Lot Line Adjustment was approved by the Planning Division and the Certificate of Compliance was recorded on May 10, 2018.
ANALYSIS/DISCUSSION:
As part of the development application and entitlements for the Project, the Owner requested to negotiate a development agreement with the City of Rialto. Development agreements are authorized under the California Government Code (Section 65864 et. seq.) and the City of Rialto Municipal Code (RMC Chapter 18.79). The purpose of such agreements is to eliminate uncertainty with respect to the development process and promote more orderly and efficient development, thereby improving the local economy. The Planning Commission is required to hold a noticed public hearing prior to the consideration of a development agreement (RMC 18.79.040).
The development agreement is a voluntary contract between the municipality and a developer, which should confer economic benefits to each party. The City mitigates development risk for the developer in the form of land use entitlement protection, by limiting the applicability of subsequent rule changes and fee increases. For this, the City typically receives consideration in the form of development agreement fees, higher development impact fees, extraordinary public improvements or significant economic development rewards.
In this case, the primary benefit is the alleviation of blighting conditions and the higher utilization of the Site and the creation of jobs and tax revenues. The City will also receive newly constructed public improvements as consideration for the benefits conferred to the Owner. By mitigating risk and uncertainty, the City improves the likelihood of Project construction in uncertain economic times.
Development Agreement
The City proposes to enter into Development Agreement No. 2018-0001 to encourage the Owner to develop the Project and construct needed public infrastructure. Development Agreement No. 2018-0001 vests certain entitlements to develop and operate the Project and ensures that the Project would be unaffected by future changes to the development standards applicable to the Site. Additionally, Development Agreement No. 2018-0001 locks in the development impact fees to be assessed against the Project for a defined period (4 years), obligates the City to reimburse or provide fee credits to Owner for certain public improvements, and establishes the amount of fair share fees due from the Owner. Proposed Development Agreement No. 2018-0001 is attached hereto as Exhibit C, the terms of which are summarized below:
Owner Obligations:
The Owner’s principal obligations under Development Agreement No. 2018-0001 are:
1. Land Use Entitlements/Construction Plans. Owner shall prepare plans and specifications for the private and public improvements, submit to the City for plan check approval, obtain all construction permits, and pay all plan check/permit and processing fees required from all appropriate governmental entities, including the City, County, State and/or Federal Governments as appropriate.
2. Development Impact Fees. Owner shall pay all required development impact fees and charges imposed by City and any other regulatory agencies with jurisdiction over the Project, subject to any credits or reimbursements as provided for in the Development Agreement. Development impact fees currently assessed by the City shall be fixed for a period of four (4) years, provided that the Owner commences development on the first phase within one year after the Effective Date (otherwise, the lock period is two years). The Development Agreement does not fix the Regional Traffic Fee. A summary of the development impact fees and charges imposed is provided below.
3. Public Improvements. Owner shall dedicate public right-of-way and construct certain public improvements:
A. Cactus Avenue (Between the northerly Property boundary and approximately 300' north of the intersection of Cactus Avenue and Cricket Drive) (collectively, the "Cactus North Improvements"): Construct improvements along and in Cactus Avenue (ultimate half-width of 32' west of centerline) along Property frontage. The Cactus North Improvements shall consist of the following: Property frontage 5' wide sidewalk, streetlights, and signage & striping. All Cactus North Improvements are to meet standard City requirements as stated in the City's standard plans and drawings for public improvements then in effect and uniformly applied. (The foregoing are the "Cactus North Improvements" referred to in the Development Agreement).
B. Cactus Avenue (Between El Rivino Road and approximately 300' north of the intersection of Cactus Avenue and Cricket Drive) (collectively, the "Cactus South Improvements"): Construct improvements along and in Cactus Avenue (ultimate half-width of 32' west of centerline) along Property frontage. The Cactus South Improvements shall consist of the following: Property frontage 8" curb & gutter, 5' wide sidewalk, asphalt paving and grind/overlay of existing asphalt paving (varying width as required to complete the ultimate half-width of asphalt improvements of 22’ east of the curb and gutter), streetlights and signage & striping. All Cactus South Improvements are to meet standard City requirements as stated in the City's standard plans and drawings for public improvements then in effect and uniformly applied. (The foregoing are the "Cactus South Improvements" referred to in the Development Agreement). The Cactus North Improvements and the Cactus South Improvements are sometimes collectively referred to as the "Cactus Improvements."
C. Cactus Avenue - Dry Utility Undergrounding (Between El Rivino Road and the northerly Property boundary) (collectively, the "Cactus - Dry Utility Undergrounding"): Underground the overhead dry utilities on the existing poles for the service providers (e.g., SCE, AT&T, etc.) with lines 16,000 volts or less; provided, however, if there are any lines 16,000 volts or more, Owner shall not be required to underground any of the lines currently on the poles and the poles/lines shall remain in place above ground.
D. El Rivino Road (Between Cactus Avenue and the westerly Property boundary) (collectively, the "El Rivino Improvements"): Construct improvements along and in El Rivino Road (modified ultimate half-width of 39.5' north of centerline) along the Property frontage. The ultimate right-of-way (north of centerline) has been reduced from a previously required width of 44' to 39.5' due to an existing SCE easement that runs along El Rivino Road that prevents dedication of the full width of 44'. The El Rivino Improvements shall consist of the following: Property frontage 8" curb & gutter, 5' wide sidewalk, 30' wide asphalt paving (as required) grind and overlay of existing asphalt paving (south of centerline up to approximately 3'), street lights, hydrants, signage & striping, and underground storm drain retention system to accept El Rivino storm water runoff at the historic low point in El Rivino Road. Unless otherwise set forth herein, all El Rivino Improvements are to meet standard City requirements as stated in the City's standard plans and drawings for public improvements then in effect and uniformly applied. (The foregoing are the "El Rivino Improvements" referred to in the Development Agreement)
4. Fair Share Fees. The Owner shall pay $1,134,699 in fair share fees for transportation improvement costs (at $9,296.24 per acre) to mitigate impacts at the following locations:
a. Cedar at Valley Boulevard
b. Cedar at I-10 Fwy WB Ramps (EW)
c. Cedar at I-10 Fwy EB Ramps (EW)
d. Riverside Avenue at Rail Road Bridge S of I-10 Fwy
e. Cactus Avenue at El Rivino
f. Rubidoux Boulevard at SR-60 Fwy EB Ramps/30t St.
g. Agua Mansa Road at Market St.
The Owner entered into a Settlement Agreement with the County and City of Riverside wherein Owner will make a mitigation payment (“TUMF Fee”) for transportation improvements. If the City/County of Riverside confirms that the TUMF Fee compensates for the projects listed under 4(f) and 4(g) above, then the fair share fees shall reduce to $1,060,281 or $8,686.55 per acre.
5. Public Contracting. Owner shall bid and construct all required public improvements in compliance with Public Works Requirements, including but not limited to Labor Code Section 1720, et. seq. (Prevailing Wages).
City Obligations
The City’s principal obligations under the proposed Development Agreement are:
1. Vesting of Land Use Entitlements. City shall vest the land use entitlements for a term of 20 years, reducing the risk of a change in land use rules by a subsequent City Council or citizen initiative.
2. Development Impact Fee Lock. City shall fix the current development impact fee schedule (in effect as of the Effective Date of the Development Agreement) for a period of four (4) years from the Effective Date of the Development Agreement, provided that the Owner commences development on the first phase within one year after the Effective Date (otherwise, the lock period is two years). This reduces the risk of substantial changes that would compromise project feasibility. This vesting does not include the Regional Traffic Fee or other fees levied or required to be levied by other agencies or jurisdictions.
3. Credits/Reimbursements for Traffic Improvements. City shall provide a reimbursement or credit against Storm Drainage Fees for the cost of constructing eligible storm drain facilities.
Development Agreement Costs
The Owner will bear the cost of preparing Development Agreement No. 2018-0001 (i.e. legal, financial advisory, etc.).
The Owner bears the full cost of the Project and will be required to construct the necessary infrastructure improvements and pay fair share costs to compensate for off-site impacts. All such improvements and fair share costs will be included in the conditions of approval for the Precise Plan of Design.
The City shall provide credits or reimbursements to the Owner for the construction of public improvements that are specifically included in the capital facility plans for the various Development Impact Fee programs.
Development Agreement Benefits
The Project will pay approximately $12,342,000 in development impact fees combined as shown in the attached Exhibit D.
Upon Project completion, the Project will create over 900 new jobs and produce approximately $220,000 per year in property tax revenue for the City, given the estimated assessed valuation of $169 million. The facility will generate $113,280 in annual Utility Users Tax (“UUT”) if approved by the voters in 2018. The facility will generate $169,000 per year in business license tax revenue. This revenue should substantially exceed the City’s service costs related to the Project, including police/fire services and street maintenance.
A more recent analysis indicates that industrial uses produce a net return to the City General Fund of approximately $5,600 per acre. At 122.7 acres, this Project would project net returns (i.e. revenues in excess of costs) of approximately $687,120 per year.
Public Hearing
A public hearing was noticed for May 30, 2018 (attached hereto as Exhibit E) as required by Sections 65090-65092 of the Government Code. The City published notice in the San Bernardino Sun on May 20, 2018, and mailed notices to the Property Owner, service agencies and all property owners within 300 feet of the Property at least 10 days prior to the date of the public hearing. The Planning Commission must conduct the public hearing and provide a recommendation to the City Council by adoption of a Resolution (attached hereto as Exhibit F). If approved by the Planning Commission, the City Council will then conduct a public hearing and consider approval of an Ordinance adopting the Development Agreement.
GENERAL PLAN CONSISTENCY:
The City of Rialto has identified several goals and objectives within the City’s recently adopted General Plan through which the City looks to improve the community. The proposed action is consistent with the following goals and objectives contained in the General Plan:
Goal 3-1: Strengthen and diversify the economic base and employment opportunities, and maintain a positive business climate.
Policy 3-1.2: Encourage a variety of businesses to locate in Rialto, including retail, high technology, professional services, clean industries, logistics-based businesses, and restaurants/entertainment uses to promote the development of a diversified local economy.
Goal 3-3: Attract, expand, and retain commercial and industrial businesses to reduce blighted conditions and encourage job growth.
Goal 3-6: Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.
Policy 3-6.1: Coordinate all development proposals with other affected public entities to ensure the provision of adequate public facilities and infrastructure services.
Goal 3-7: Upgrade public infrastructure as an inducement to promote private investment.
ENVIRONMENTAL IMPACT:
The EIR Addendum for the Project and other entitlements encompasses Development Agreement No. 2018-0001. On December 20, 2017, the Rialto Development Review Committee approved the EIR Addendum and no further environmental review was warranted or required regarding the Project. The City filed a Notice of Determination (NOD) with the Clerk of the Board of San Bernardino County on December 22, 2017 (Exhibit B).
RECOMMENDATION:
It is recommended that the Planning Commission:
1. Conduct a public hearing to receive and consider all public comments related to the Project and the Development Agreement 2018-0001.
2. Adopt a Resolution of the Planning Commission of the City of Rialto, California, Recommending Approval of Development Agreement No. 2018-0001 By and Between the City of Rialto and Oakmont El Rivino, LLC and Making Certain Findings Therein Related to the Proposed Construction of two warehouse buildings and associated automobile parking, truck parking and landscaping consisting of Building 1, a cross-dock building with truck dock doors on the northern and southern sides of the 1,264,102 sq. ft. building area, and Building 2, a cross dock building with truck dock doors on the eastern and western sides of the 988,765 sq. ft. building area, located on a 122.7+/- Acre Site on the located Northwest corner of Cactus Ave and El Rivino Road within the Light Industrial (M-1) Zone.