City Council
MEETING DATE: 3/14/2018
TITLE:
Title
General Plan Amendment No. 17-002, Change of Zone No. 17-003, and related Memorandum of Agreement and Restrictive Covenant - Tesoro Property
End
FROM:
Pat Milos, Community Development Director
RECOMMENDATION:
Recommendation
Staff recommends that the City Council take the following actions:
(1) Approve an exemption to the California Environmental Quality Act (CEQA) pursuant to Section No. 15061 (b)(3); and,
(2) Introduce, read by title only, and waive further reading of the ordinance approving General Plan Amendment No. 17-002 and Change of Zone No. 17-003; and,
(3) Approve the Memorandum of Agreement for Community Hiring and Union Neutrality between the City of Cathedral City and Palm Canyon Group; and,
(4) Accept as to form and content the Restrictive Covenant offered by Palm Canyon Group, LLP related to the anticipated project on the site.
Body
BACKGROUND:
The applicant (George Baker representing Palm Canyon Group, LLC) submitted applications for a General Plan Amendment and Change of Zone on July 10, 2017 requesting the following: Parcel No. 1 (APN: 687-040-057), General Plan Amendment from RM (Medium Density Residential) to BP (Business Park) and Change of Zone from R-2 (Multiple Family Residential) to CBP-2 (Commercial Business Park); Parcel No. 2 (APN: 687-040-058), Change of Zone from OS-R20-H (Open Space Residential with 20 acres minimum net lot size, with a Hillside Overlay) to OS (Open Space). The general plan designation will remain the same, HR (Hillside Reserve).
The two vacant parcels are located on the south side of East Palm Canyon Drive, west of Bankside Drive. Parcel No. 1 is approximately 15.4 acres and Parcel No. 2 is approximately 10.8 acres (see Attachment 2). Both parcels were part of a previous approval for a planned unit residential development on the site.
In 2005, the property owner submitted applications for a General Plan Amendment (GPA 05-002), Change of Zone (CZ 05-003), Planned Unit Development (PUD 05-001) and Tentative Tract Map (TTM 33668) for the development of a 107-unit single family residential community on Parcel No. 1. At the time of the request, Parcel No. 1 was zoned CTR (Commercial, Tourist and Recreation), a zoning designation intended to accommodate commercial uses which serve the tourist trade including retail and service commercial uses, restaurants, hotels and motels and recreational facilities such as a golf course.
On October 26, 2005, the proposed development was approved by the City Council, amending the general plan designation of Parcel No. 1 from General Commercial (GC) to Medium Density Residential (RM) and changing the zoning designation from CTR to R2 (Multiple Family Residential). Additionally, the owner was provided an option to seek entitlements for three additional units on Parcel No. 2, which was zoned as today, OS-R20-H.
A significant portion of the hillside in this area of the City (to the western City limit) was similarly zoned, allowing for limited residential hillside development. However, on May 25, 2016, the City Council adopted an ordinance (Ordinance 778) changing the zoning designation for the area from OS-R20-H to OS (Open Space), thereby prohibiting future residential development. Parcel No. 2 was initially included in the proposed amendment. However, the owner requested that Parcel No. 2 be excluded.
The Planning Commission considered the item at the regularly scheduled meeting on December 6, 2017 and voted 3-1 to adopt the Resolution recommending that the City Council approve the General Plan Amendment and Change of Zone. Public comments were received, prior to and at the meeting, and have been attached (see Attachments 6 and 7).
The City Council Considered this item on January 24, 2018 and after Public Input and Council Deliberation A motion was made by Mayor Pro Tem Pettis, seconded by Council Member Kaplan, to table this item and to create a Council Subcommittee of Mayor Stan Henry and Council Member Shelley Kaplan to work with the staff and the developer to come up with new zone classifications that will work for this property and to bring this item back to the City Council on February 28, 2018 for discussion.
The City Council met on February 28, 2018 and were presented with the following Subcommittee recommendations:
That Palm Canyon Development file a voluntary Restrictive Covenant to run with the property to include the following:
1. Developer will provide space for 20 parking spaces and a trail head in addition to the Parcel B open space and public access easement.
2. That the City Engineer will provide a diagram and any specifications necessary for the parking and trail head area to be an attachment to the Restrictive Covenant
3. That the Project site will be restricted to only 2 cultivation licenses at one time, both of which must be tied to bona fide medical, educational or research institutions / uses and the cannabis cultivated may not be sold to the public or to dispensaries selling to the public.
4. That each cultivation license will be limited to a maximum cultivation space as permitted under state law (22,000 square feet) with the square footage limit measured by the canopy or space directly related to cultivation of cannabis (i.e. not the lobby, offices, bathrooms and similar ancillary space).
5. That the Project site will be restricted to total space used by cannabis businesses of 125,000 square feet - with space allocated to cultivation measured as stated above.
6. That all cannabis uses remain subject to requirements of City’s municipal code and administrative regulations (including Cannabis Tax and fee ordinances).
7. That the owner Reimburse the City for Signalization of Intersection and all other Debts per existing MOU
8. Owner to pay to city 25% of all outstanding obligations owed to city prior to City issuance of grading permit. If not paid, City has no obligation to issue grading permit.
9. Owner to pay all unpaid remaining balance of outstanding obligations owed to City prior it City issuance off first building permit for project. If not paid, City has no obligation to issue any building permit
Prior to adoption of the zoning ordinance, the parties will draft a Memorandum of Agreement (MOA) memorializing the agreement of the developer to undertake three points. MOA to be considered for approval by Council at or before the second reading of zoning ordinance:
1. Developer will agree to participate in a local hire preference program for the uses it develops, will recommend such program to tenants, but will not have an obligation to require tenants to participate if they refuse. Local hiring preference will be implemented by advertising jobs within Cathedral City to Cathedral City residents only for 15 concurrent days prior to general job advertising.
2. Developer will remain neutral toward United Food and Commercial Workers Union (UFCW) organizing activities and will not hinder or impair the formation of a collective bargaining unit or joinder to a local UFCW union or affiliate. Developer will recommend tenants adopt the same position toward the UFCW but will have no obligation to required tenants to do so if they refuse.
After receiving Public input and deliberation the City Council directed staff to engage with the Owners team, work out the details of both the Restricted Use Convenient and the Memorandum of Agreement and have them placed on the March 14th City Council Agenda for Council Consideration prior to the Public Hearing for this item.
DISCUSSION:
The property owner attempted to move forward with the project. However, in 2007, the residential market collapsed and the project was halted. The owner has continued to try to develop the project recently but due to additional development costs, new permit requirements and a weak residential market, the project has become too difficult and financially infeasible to complete in a timely manner.
Therefore, the applicant has decided to shift their business plan for the property to a commercial business park use. This will allow the applicant to take advantage of the property’s characteristics such as direct access to East Palm Canyon Drive and develop a successful business park development in a much shorter time frame. (see Attachment 1: Applicant’s Letter).
GENERAL PLAN CONSISTENCY
Under the 2002 General Plan, Parcel No. 1 was determined to be suitable for commercial uses and was designated as CG (General Commercial) allowing for a variety of commercial uses through multiple zoning districts. The general plan amendment proposes to designate Parcel No. 1 as BP (Business Park), a designation intended for light industrial uses “compatible with neighboring residential and commercial uses”, including those uses of the CG designation.
In the time since the adoption of the General Plan, East Palm Canyon Drive has been widened and traffic signals added near the site, providing an improved level of service (LOS) to accommodate commercial usage and higher traffic flows. The site’s only access is to East Palm Canyon Drive which is designated as a major commercial arterial, and will minimize direct impacts on adjacent residential neighborhoods, complying with Policy 2 of the Commercial Goals, Policies and Programs of the General Plan.
Parcel No. 2 is designated as HR (Hillside Reserve) on the General Plan land use map and this is not proposed to change. The proposed change of zone is from OS-R20-H (Open Space Residential with 20 acres minimum net lot size, with a Hillside Overlay) to OS (Open Space), both zoning districts within the HR designation.
ZONE CHANGE
The purpose and intent of the proposed CBP-2 zoning district is to “provide a land use area which creates a transition between office, commercial and light industrial uses. This district is intended to provide a stronger bridge between the commercial and light industrial use and to allow the establishment of business park areas of mixed uses composed of office, commercial and industrial uses.” The development of this site as commercial business park would be compatible with the existing commercial zoning and uses along East Palm Canyon Drive.
The intent of the proposed OS zone is to place land under this zoning when there are natural limitations such as potential for flooding or faulting that make it inappropriate for habitation or intensive development, and when property is under public control and intended for public uses and associated buildings. However, no residential development would be permitted. This zoning will be consistent with the adjacent hillside zoning recently adopted by the City.
ENVIRONMENTAL ANALYSIS
This request is not associated with a development permit or the construction of any structures. Any application for development such as a Conditional Use Permit or Design Review would require the completion of an Initial Study in accordance with the California Environmental Quality Act (CEQA) to determine whether the project may have a significant effect on the environment. Because this request will not cause a direct physical change or a reasonably foreseeable indirect physical change in the environment, it is not a “project” subject to CEQA.
Nonetheless, the City has been made aware that the California Supreme Court has granted review in a case (Union of Medical Marijuana Patients v. City of San Diego) where the appellants assert that all zoning ordinances are de facto “projects” subject to the CEQA even if they will not cause a direct physical change or reasonably foreseeable indirect physical change in the environment. Even if this request were a project subject to CEQA, it would Categorically Exempt pursuant to Section 15061 (b)(3) of the CEQA Guidelines because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
In accordance with Senate Bill 18, the project proposal was sent to California Native American tribes on August 22, 2017 for review and comment. Letters were received from five tribes indicating no further consultation was needed.
MEMORANDUM OF AGREEMENT
As of the writing of this Staff Report, the final MOA had not been received from the Developer, but the City Attorney's Office verified that the MOA would be provided before the Agenda deadline (See Attachment 8 for Developer's submitted version). The final draft of the MOA provided by the Developer and reviewed by the Ad Hoc Committee include minor changes acceptable to the Ad Hoc Committee that did not materially alter the Council directed terms for the MOA. If the MOA as submitted contains materially different terms, the City Attorney will review them with Council during Staff's presentation of the item.
RESTRICTIVE COVENANT
As of the writing of this Staff Report, the final Restrictive Covenant had not been received from the Developer, but the City Attorney's Office verified that the Restrictive Covenant would be provided before the Agenda deadline (See Attachment 9 for Developer's submitted version. Prior to the agenda deadline legal counsel for the parties were continuing to discuss three as yet unresolved items which the Developer was undecided upon as of the writing of this Staff Report. The items are:
(1) Developer's request for a total of 66,000 square feet of cannabis cultivation licenses with each license not to exceed the State maximum of 22,000. Council's prior direction was only to allow up to a total of 44,000 square feet.
(2) Developer's request for a total of 150,000 square feet of cannabis business for the entire site. Council's prior direction was only to allow up to a total of 125,000 square feet.
(3) A different of opinion on the total amount owed by Developer to City in reimbursement for certain street improvements. The Developer claims $500,000 was agreed upon, but City staff state that the total is $598,164
The City Attorney will review any terms that are materially different than Council's direction as part of the Staff's presentation of the item.
PUBLIC NOTIFICATION:
This project and the environmental determination were noticed in accordance with the City Municipal Code, State Law and CEQA.
FISCAL IMPACT:
Approval of this item will result in the City receiving reimbursement of costs related to street and traffic signal improvements in the area +-$500,000.
ATTACHMENTS:
Attachment 1: Applicant’s Letter
Attachment 2: GPA/CZ Exhibit
Attachment 3: PC Resolution
Attachment 4: Proposed Ordinance
Attachment 5: Public Hearing Notice
Attachment 6: Planning Commission Minutes
Attachment 7: Written Public Comments
Attachment 8: Restrictive Covenant and Memorandum of Agreement
Attachments 9 - 22 : Written Public Comments