title
ADOPT AN ORDINANCE AMENDING TITLE 16 OF THE STOCKTON MUNICIPAL CODE TO ESTABLISH NEW LOGISTIC WAREHOUSE STANDARDS
recommended action
RECOMMENDATION
It is recommended that the City Council:
1. Find the proposed ordinance is exempt pursuant to the California Environmental Quality Act (CEQA) Section 15061(b)(3) (Common Sense Exemption), and that no future environmental review is required for proposed code amendments pursuant to CEQA Section 15183 (Consistency with General Plan and Community Plan); and
2. Adopt an Ordinance Amending Title 16 (Development Code) of the Stockton Municipal Code (SMC) Chapter 16.80 (Standards for Specific Land Uses) to add a new Section 16.80.390 (Logistic Warehouse), including one of the Options below:
Option A - Standards that reflect Memorandum of Agreement with the State of California Attorney General; or
Option B - Standards that reflect the Memorandum of Agreement with adjustments consistent with the Agreement requirements; or
Option C - Standards that reflect industry recommendations.
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Summary
In December 2022, the City Council approved a Memorandum of Agreement (MOA) with the State of California Attorney General (AG) and a Settlement Agreement with the Sierra Club to promote responsible industrial development. Per the agreements, a new industrial warehouse ordinance, including (as a minimum consideration) 26 specified development conditions, must be presented to the City Council for consideration by December 31, 2023, for qualifying logistics warehouse buildings totaling 100,000 square feet or larger. The December deadline was established to align with the anticipated City-initiated Stockton Municipal Code Title 16 (Development Code) overhaul Project. Due to delays with the Development Code overhaul Project, the proposed warehouse ordinance is being presented separately and in advance of the Development Code overhaul.
Earlier this year, Staff initiated preparation of a warehouse ordinance by conducting research on best practices for industrial warehouse development standards. To clarify, although the MOA refers to “development conditions”, they were intended to become development standards, so this report will refer to those original conditions as “standards”. Outreach was conducted to gather feedback from community stakeholders including environmental and health advocacy organizations, industry advisors and State and regional regulatory agencies. Further, input was received through holding multiple study sessions with the Planning Commission and the Planning Commission Ad Hoc Committee. At the October 12th Planning Commission Study Session, three (3) ordinance options were solidified as 1) Option A - MOA Standards, 2) Option B - Adjusted MOA Standards, and 3) Option C - Industry Recommended Standards. The Planning Commission directed staff to proceed with scheduling a public hearing for consideration of an ordinance for their recommendation to City Council.
On October 26, the Planning Commission held a Public Hearing and considered proposed ordinance Options A, B, and C along with public written and oral comments received. The Planning Commission approved a resolution recommending the City Council adopt Ordinance Option C, amending Title 16 of the Stockton Municipal Code to establish new industrial warehouse development standards.
DISCUSSION
Background
On December 6, 2022, the City Council adopted Resolutions 2022-12-06-1602-01 to 03 certifying an Environmental Impact Report, adopting a pre-zoning ordinance, adopting a Development Agreement, authorizing annexation requests, and approving related settlement agreements for the Mariposa Industrial Park Project (P20-0805). To reduce environmental and social impacts, the City, Project Applicant, AG, and the Sierra Club collaborated in negotiating enhanced mitigation measures for the Project as part of the Final Environmental Impact Report (EIR). These enhanced measures focused on potential impacts related to Air Quality, Greenhouse Gas Emissions, and Noise, since the Project was located adjacent to a disadvantaged unincorporated residential community.
The settlement agreements with the AG (Attachment A) and the Sierra Club (Attachment B) imposed an obligation on the City Staff to prepare an industrial warehouse ordinance including, at minimum, 26 specified development standards; a portion of which were derived from the enhanced mitigation measures in the Mariposa Industrial Project EIR. City Staff must present the warehouse ordinance to the City Council for adoption consideration by December 31, 2023. The deadline was based on integrating the warehouse standards into the City’s comprehensive Development Code overhaul that was already underway and anticipated for City Council consideration by end of 2023. If adopted, the warehouse ordinance and new development standards would apply to all future industrial logistics warehouse buildings measuring 100,000 square feet and greater.
Earlier this year, staff initiated the preparation of the warehouse development standards by engaging in research and information gathering, with the intent of incorporating these standards into the Development Code overhaul. In the last several months, it became evident that the Development Code overhaul would not be ready for Council until early or mid-2024. As a result, the scope of work to prepare the warehouse development standards was separated from the Development Code overhaul effort and prepared as an independent amendment to the existing Development Code (Title 16) to satisfy obligations under the settlement agreements.
On August 10, 2023, staff scheduled the first of several study sessions with the Planning Commission to present preliminary warehouse development standards and gather feedback for preparing the new industrial warehouse ordinance. The Planning Commission directed staff to schedule an upcoming agenda item to form a three-member Ad Hoc Committee of the Planning Commission to expedite discussions and feedback to Staff on the initial preparation of the development standards and ordinance. On August 24th, the Planning Commission appointed Vice Chair Nathaniel and Commissioners Boparai and Hull to the Ad Hoc Committee with Chair Rizvi as an alternate member.
On August 30, 2023, staff met with the Ad Hoc Committee to lay the groundwork for reviewing potential warehouse development standards and determining Committee preferences on meeting and receiving information from staff. The Ad Hoc Committee directed staff to establish a group of advisors made up of environmental, community advocate and industrial developer stakeholders based on public written and oral communications received at the August 24th Commission meeting. Staff assembled advisory groups consisting of two environmental representatives, two community advocate representatives and two industrial development representatives. The Ad Hoc Committee directed staff to meet with the advisors independent of the Ad Hoc Committee and report back to the Committee on discussions. The Committee began meeting on a weekly basis with staff, and staff began meeting weekly with the advisors to review potential warehouse standards for the proposed ordinance.
Subsequent study sessions were held with the Planning Commission and public on September 28th and October 12th. Staff conducted over twenty (20) meetings with industry, environmental and community advisors, residents, stakeholders and had conversations with representatives from other California cities with or considering warehouse ordinances, and consultants working on similar issues throughout the state (Attachment C - Outreach and Comment Summary).
Present Situation
As a result of much outreach conducted and meetings held, Staff and the Planning Commission concluded that some adjustments and possible alternatives to the MOA standards should be considered due to potential concerns with the feasibility of implementation, ongoing monitoring, and economic effects on business development in Stockton. The MOA requires Staff to consider including all 26 standards, at minimum, in the warehouse ordinance and provides for consideration of alternative standards if certain standards are considered infeasible, with appropriate rationale as defined under CEQA.
Staff proposes three (3) ordinance options (Attachments D, E, and F) for City Council’s consideration, two of which include adjustments and/or alternatives to certain MOA standards. The options consist of:
1. Option A - MOA Standards, that consists of all 26 measures as contained in the MOA, with slight adjustment to adapt them to ordinance regulation form,
2. Option B - Adjusted Standards, that includes some adjustments and alternatives to the MOA standards based on feasibility considerations, and
3. Option C - Industry Recommended, that mostly aligns with Option B, but includes further adjustments to standards to provide greater flexibility for industrial developers based on feasibility considerations.
A comparison table is provided as Attachment G to show the similarities and differences between the options.
The following is a brief summary of the three ordinance Options:
Option A: MOA Standards
This Option includes all 26 standards from the MOA. Language for certain standards has been simplified to be more concise and align with the City’s zoning ordinance format, rather than mitigation measure format used in CEQA. This Option is the Attorney General’s preference that must be presented by City Staff and considered by City Council. Option A standards are shown as a draft ordinance in Attachment E.
Analysis
• Certain standards as drafted, pose a concern, do not respond to, or resolve, potential feasibility issues raised by staff during the study sessions (8/10, 9/28, and 10/12), however, they are the Attorney General’s preferred standards.
• As several of the standards proposed by this option have yet to be implemented by the State and are not standards in common practice, adoption of this Ordinance option could result in some ambiguity in implementation and unforeseen costs.
• Complies with General Plan policies for environmental protection but not for policies on encouraging development or establishing jobs.
• Exceeds greenhouse gas reduction standards of the Climate Action Plan (CAP) but does not align with the CAP strategies for securing funding for proposed reduction standards and lessening the impact of private development.
• The current State objective of climate change is carbon neutrality by 2045 which will implement many of the MOA standards addressed in the letter for solar ready, energy systems, and electric and/or near zero emission vehicles. The MOA standards will ultimately be carried out by State and responsible agencies regardless of the City implementing the measure as part of the agreement.
Option B: Adjusted MOA Standards
This Option includes 14 of the 26 MOA standards that are proposed in Option A. Ten (10) of the standards have been adjusted or alternatives are proposed based on concerns with feasibility of implementation, monitoring, and economic effects on development in Stockton. Two (2) of the MOA standards were removed due to redundancy and conflict with existing practices. Option B standards are shown in ordinance format as Attachment F; the following summarizes each of the adjusted standards and alternatives:
1. MOA # 2 Off-Road Construction Equipment: This Option requires smaller construction equipment to be powered by clean fuel sources, but does not regulate fuel sources for large construction equipment since source options are limited in availability and still emerging.
2. MOA #7 Paint Coating: This Option requires paint coatings applied on site to have a Volatile Organic Compound (VOC) that complies with San Joaquin Valley Air Pollution Control District (SJVAPCD) or the current edition of the California Green Building Standards Code (CALGreen), whichever is most restrictive. In comparison, the MOA standard requires paint coatings applied on site to have a VOC compliance of <10g/L that is derived from a Southern California Air District voluntary standard.
3. MOA# 10 CAL Green Building Standards: This Option requires compliance with CAL Green Building Code Tier 1 building standards for energy efficiency for all logistics warehouse facilities 400,000 square feet or greater. Current CAL Green Building Based Code standards shall apply to warehouse facilities measuring 399,999 square feet or less. In comparison, the MOA Standard requires the higher standard CAL Green Tier 2 building standards.
4. MOA#11 Loading Docks (i.e., setbacks from sensitive receptors): This Option requires a 2:1 ratio of building setback to building height is proposed. As an example, a 50’ tall building requires a 100’ setback from any property line of a sensitive receptor. In addition, a 300-foot setback for truck loading docks is required from any property line of a sensitive receptor. In comparison, the building setback aligns with the minimum MOA Standard of a 300-foot setback - however, the MOA requires consideration of up to a 1,000-foot truck loading dock setback from a sensitive receptor.
5. MOA #12 Landscaped buffer: The Option requires a 40-foot landscape buffer consistent with current practices in the State and region. A minimum 10-foot sound wall is also proposed unless a noise analysis indicates a taller wall is necessary to bring noise levels into compliance with nighttime and daytime standards. In comparison, the MOA standard requires a 14-foot sound wall and a landscape width at minimum equal to 50% of the building setback width (i.e., 50-foot for a 50-foot tall building).
6. MOA #13 Solar Power/Battery Energy Storage Systems: A consensus on the definition of “operational base power” for solar and energy calculation is proposed. This Option requires Solar Power installation to supply operational base power, with an option to forgo solar installation if “clean” power can be obtained through procuring clean energy from Ava Community Energy (formerly known as East Bay Community Energy (EBCE) Program or participating in the California’s Clean Solar Program, as well as the option for alternative fuels and energy that can achieve Near Zero Emission (NZE) for enhanced greenhouse gas reduction. In comparison, the MOA standard requires solar power installation to supply operational base power and increased solar installation for any future increase in operational base power. Additionally, a backup battery system is required.
7. MOA #14/17 EV Fleet and Monitoring: The Option provides an alternative standard to provide electric vehicle (EV) ready conduits for future EV truck integration at delivery docks and elsewhere onsite. In comparison, the MOA standard requires Heavy Duty trucks domiciled on site to be at minimum 2014 clean model or later and phased into EV Heavy Duty Trucks by end of year 2025; and requires Medium Duty vehicles domiciled on site to be phased in with clean vehicles starting in 2025 and 100% zero emission vehicles by end of year 2027.
8. MOA#18 Transport refrigeration units (TRUs): This Option requires electric connectivity installation for TRUs that serve cold storage facilities. In comparison, the MOA standard also requires electric connectivity for TRUs that serve cold storage and requires the owner of the project site to record a covenant to prohibit future TRUs if they are not initially proposed with a development project. If a cold storage is proposed in the future, the owner would have to remove the covenants recorded on the property.
9. MOA #25/26 Development Agreement (DA) Reviews and Public Noticing: The City already requires annual DA reviews for compliance and requires neighborhood meetings and public hearings for certain discretionary warehouse projects. This includes projects that require California Environmental Quality Act (CEQA) analysis and public noticing. Other reviews that are ministerial require compliance with development standards and do not require public hearings, notices, and are exempt per CEQA guidelines. While Option B does not require additional meetings as they will result in longer processing times for ministerial actions, all projects are public record. As monitoring and public notification are not a common quantifiable mitigation under CEQA guidelines, and the items are already required per Stockton municipal code, no alternative is proposed.
Analysis
• Complies with General Plan policies for environmental protection and enhanced design standards without including ambiguity that could lead to confusion or added cost for the city and private developers.
• Exceeds greenhouse gas reduction standards of the Climate Action Plan (CAP) and conflicts with CAP strategies for securing funding for proposed reduction standards and lessening the impact of private development.
• Staff utilized eight different examples of Setbacks and buffers of other Cities exploring similar warehouse standards to compare what is considered acceptable practice.
• While the standard would be implemented for ministerial and discretionary projects, all development would have to indicate compliance with the current State objective of climate change being carbon neutral by 2045. This includes all air quality, stormwater, and building code compliance at the time a permit is issued.
Option C: Industry Recommended
This Option reflects recommendations of the industrial development industry. Option C standards are shown in Attachment F. While industry representatives are mostly agreeable to the standards proposed in Option B, the following summarizes adjustments to the Option B standards which are reflected in Option C.
1. MOA#2 Off-Road Construction Equipment: This Option requires smaller construction equipment to be powered by clean fuel sources, but does not regulate fuel sources for large construction equipment since fuel source options are limited in availability and still emerging.
2. MOA #10 Building Standards: Recommended CALGreen State and local standards should be used for all new building structures. This is the current practice.
3. MOA #12 Landscaped buffer: A 20-foot landscape buffer is proposed as opposed to the 40-foot landscape buffer proposed in Option B. This is consistent with current Code (SMC 16.80.170).
4. MOA #13 Solar Power/Battery Energy Storage Systems: Proposed solar shall comply with all current State and local requirements. Further, the use of non-reflective materials on the roof is proposed. Language included for procuring clean energy Ava Community Energy (formerly known as East Bay Community Energy) and participating in California’s Community Solar Program
5. MOA #15 Electric Charging: Provide EV charging for automobiles consistent with the California Building Code.
Analysis
• Complies with General Plan policies for environmental protection and enhanced design standards without including ambiguity that could lead to confusion or added cost for the City and private developers.
• Exceeds greenhouse gas reduction standards of the Climate Action Plan (CAP) and conflicts with CAP strategies for securing funding for proposed reduction standards and lessening the impact of private development.
• While the standards would be implemented for ministerial and discretionary projects, all development would have to indicate compliance with the current State objective of climate change being carbon neutral by 2045. This includes all air quality, stormwater, and building code compliance at the time a permit is issued.
Both Ordinance Options B and C propose adjustments and alternatives to certain MOA standards. If certain standards from the MOA are not included in the proposed warehouse ordinance, a justification must be provided to explain:
1. Why such standard is infeasible to include.
2. What alternative measure is being proposed for inclusion in lieu of any omitted measure.
3. How such alternative measure reduces potentially significant environmental impacts.
A feasibility analysis was prepared to address the process specified above for both Ordinance Option B ( see Attachment H - Feasibility Analysis) and Ordinance Option C (see Attachment I- Feasibility Analysis).
Environmental Analysis
The proposed ordinance is exempt pursuant to the California Environmental Quality Act (CEQA) Section 15061(b)(3), (Common Sense Exemption) and that no future environmental review is required for proposed code amendments pursuant to CEQA Section 15183 (Consistency with General Plan and Community Plan).
Section 15061(b)(3) Exemption (“Common Sense Exception”)
CEQA requires the analysis of agency approvals for discretionary actions that could lead to a direct or indirect physical change in the environment. The proposed project involves discretionary amendments to the Stockton Municipal Code (SMC) but is exempt from CEQA review as it would not significantly impact the environment. The Zoning Code amendments would amend the City’s zoning standards to add enhanced development standards for logistic warehouse construction and operation. These amendments are consistent with General Plan policies to enhance project reviews, environmental protections, and balance changes to encourage a strong industrial and goods movement market. The amendment would not result in a physical change to the environment as future projects would be reviewed on a case-by-case basis for this consistency to Federal, State, General Plan, zoning, and developmental standards. The Project is exempt from CEQA because it would not significantly affect the environment.
Section 15183 (General Plan Consistency) Exemption
The General Plan Environmental Impact Report (GP EIR) was prepared and certified by the City Council as part of the Envision Stockton 2040 General Plan process (SCH# 2017052062). The proposed code amendments would amend the City’s zoning standards to add enhanced development standards for logistic warehouse construction and operation. These amendments are consistent with General Plan policies to enhance project reviews, environmental protections, and balance changes to encourage a strong industrial and goods movement market. The amendment would not result in a physical change to the environment as future projects would be reviewed on a case-by-case basis for this consistency to Federal, State, General Plan, zoning, and developmental standards. No potential new impacts related to the Project have been identified that would necessitate further environmental review beyond the impacts and issues already disclosed and analyzed in the GP EIR. Therefore, no additional environmental review is required per CEQA Guidelines section 15183 (Consistency with General Plan or Community Plan).
Planning Commission
On October 26, 2023, the Planning Commission held a public hearing to consider the proposed warehouse ordinance. At the meeting, staff presented three (3) ordinance options for the Commission’s consideration that reflected discussions in the prior Commission study sessions, research efforts conducted by staff, and public input received. At the conclusion of staff’s presentation and public comments received, the Planning Commission voted 6-0 (Commissioner Nathaniel Absent) to recommend the City Council adopt Ordinance Option C (Attachment I - Approved PC Resolution). Following the Planning Commission’s approval of recommendation for Option C Ordinance to City Council for approval, City staff discovered some editorial errors and minor inconsistencies between the draft Option C ordinance and the Comparison Table provided in the Staff report. The comparison table showed that certain standards in Option C were the same as Option B, however, the draft ordinances contained in the staff report had slight clerical differences in phrasing that did not change the purpose and intent of the standard but should have been aligned. Staff performed minor clerical adjustments to the draft Option C ordinance for the City Council report to more accurately reflect the intended language. Further, staff discovered ambiguous language in the draft Option C ordinance for standard 2c, e and f that related to solar panel that have been adjusted to provide greater clarity based on consultation with the development industry that proposed the original standard language. These updates are incorporated in Attachment F for the Council’s consideration.
Public Notice
Notice for the City Council public hearing for this request was published in The Record on November 22, 2023.
A public comment was received prior to the staff report being published; included as Attachment K. Please note that Attachment K has not been reviewed or vetted by staff. The assertions within said submittal are that of the author(s).
FINANCIAL SUMMARY
The requested action to amend the Stockton Municipal Code Title 16 (Development Code) will have no immediate financial impact.
Attachment A - California Attorney General Approved Agreement
Attachment B - Sierra Club Approved Agreement
Attachment C - Outreach and Comment Summary
Attachment D - Proposed Ordinance (Option A)
Attachment E - Proposed Ordinance (Option B)
Attachment F - Proposed Ordinance (Option C)
Attachment G - Ordinance Option Comparison Table)
Attachment H - Option B Feasibility Analysis
Attachment I - Option C Feasibility Analysis
Attachment J - Approved PC Resolution
Attachment K - Public Comment