title
AN AMENDMENT TO SUBDIVISION AGREEMENT FOR NORCAL LOGISTICS CENTER PROJECT, PHASE 2 PARCEL MAP AND RELINQUISHMENT OF ACCESS RESTRICTION ALONG PROPERTY FRONTAGE ON MARIPOSA ROAD
recommended action
RECOMMENDATION
It is recommended that City Council adopt a Resolution approving the following:
1. An amendment to the Subdivision Agreement for Norcal Logistics Center Project, Phase 2 Parcel Map to change conditions of approval; and
2. Relinquishment of access restriction along the entire property site frontage of Mariposa Road, as shown on Parcel Map Book 26, Page 119, San Joaquin County Records.
3. An Addendum to the Environmental Impact Report for NorCal Logistics Center Project (P12-110 certified by the City of Stockton on May 14, 2015).
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
body
Summary
CT Realty Investors (Developer), filed an application to amend the NorCal Parcel Map Agreement (COS 18-04). The application includes changes to the development conditions of approval and requests a relinquishment of access restriction along the site frontage of Mariposa Road. The revised project includes logistical warehouse distribution in large buildings (sizes ranging between 300,000 and in excess of 1 million square feet), as opposed to a combination of light industrial and traditional warehouse storage uses with smaller buildings (sizes ranging between 100,000 and less than 300,000 square feet). The original approved project was projected to yield 6.2 million square feet of light industrial and traditional warehouse building area with accessory office space. The revised plan for the site will yield approximately 4.75 million square feet of predominantly logistical distribution, with accessory general office and traditional warehouse. The resulting traffic intensity is less than originally forecasted.
Based on a review of the application and supporting analysis, Staff recommends approval of the requested amendment to Condition Numbers 14 and 16 and relinquishment of restricted access along the project site frontage of Mariposa Road. Condition Number 14 is proposed to be deleted since the project is less intense than originally analyzed and does not need Newcastle Road to be extended to Mariposa Road to accommodate project traffic. Condition Number 16 is proposed to be changed to address the timing and extent of frontage improvements to be constructed along the project site frontage of Mariposa Road. The developer will construct interim frontage improvements estimated to cost $6.4 million when the parcel fronting on Mariposa Road is developed. Additional frontage improvements, estimated to cost $978,000, will not be constructed and the developer agreed to enter into a Deferred Improvement Agreement. Existing County roadside ditch drainage on both sides of the project site make the improvements not feasible to construct at this time.
The Stockton Municipal Code (SMC) Section 16.72.070C allows the City Engineer to approve a Deferred Improvement Agreement, whereby the developer agrees to install the frontage improvements along Mariposa Road when conditions change in the future. The Developer requests the Agreement include an option to pay the City for the cost of the improvements (with an inflation factor applied) so they are not perennially obligated if the County never constructs the permanent road drainage system for Mariposa Road.
An Addendum to the Environmental Impact Report (EIR) for NorCal Logistics Center Project (P12-110 certified by the City of Stockton on February 2015) is proposed that considers all potential environment effects associated with proposed amendment to the Parcel Map Agreement (COS 18-04). The Addendum does not identify the need for new or more effective mitigation measures than those described in the certified EIR and complies with CEQA Guidelines Section 15162. Staff recommends adoption of the proposed resolution.
DISCUSSION
Background
On May 14, 2015, the Stockton Planning Commission approved (by Motion 2015-05-14-0503) two Vesting Tentative Maps (Tract 3732 and Tract 3733) and certified a Final Environment Impact Report for the NorCal Logistics Center Project. The Project is an industrial subdivision located north of Arch Road and southwest of Mariposa Road. The project site contains approximately 325 acres, consisting of two non-adjacent properties, one of which is a 50-acre property at the southern end of the project site adjacent to Arch Road and the second is a 275-acre property at the northerly end of the project site adjacent to Mariposa and Newcastle Roads (Attachment A - Vicinity Map).
Vesting Tentative Map (VTM) Tract 3732 would subdivide a 50-acre parcel into six new developable lots, ranging in size from 5 to 11 acres and VTM Tract 3733 would subdivide a 275-acre parcel into 15 new developable lots, ranging in size from 5 to 33 acres. The combined Project site was projected to yield up to approximately 6.2 million square feet of light industrial building area with accessory office. This projection was based on an assumption that industrial development would consist of a combination of warehouse (storage of materials), high cube logistics distribution and light industrial (processing/assembly). VTM Tract 3733 included a proposed indirect extension of Newcastle Road to Mariposa Road that was intended to relieve project traffic pressures at the Arch Road/State Highway Route 99 (SR 99) interchange. These development assumptions were applied to the Project EIR analysis that resulted in certain mitigation measures being required. Analysis showed that Newcastle Road extension was needed when Project building construction reached 75% of total buildout.
On March 10, 2017, a Parcel Map and Subdivision Agreement (COS 15-03) between Arch Road Limited Partnership and the City were approved by the City Engineer, in accordance with SMC Section 16.192.020A, for Phase I, approximately 179- acre portion of VTM Tract 3733 that created four developable legal lots (See Attachment B - Phase I Subdivision Agreement). CT Realty Investors is the Developer of the overall Project and initiated building construction resulting in approximately 1.5 million square feet of high cube logistics distribution use (one of which includes Amazon) on two of the lots, and an approximately 700,000 square foot high cube logistics building permit has recently been issued for the third lot.
On November 27, 2018, a second Parcel Map and Subdivision Agreement (COS 18-04) between NORCAL LANDCO, LLC and the City were approved by the City Engineer for Phase 2, the remaining balance of VTM Tract 3733 that created two developable legal lots (See Attachment C - Phase 2 Subdivision Agreement). CT Realty Investors is the Developer and is speculating the combined Project buildout will consist of approximately 4.75 million square feet of high cube logistics distribution, 100,000 square feet of general office associated with the industrial space, and 65,000 square feet of warehousing, which is substantially less than the approximately 6.2 million square feet of mixed light industrial, warehouse and high cube logistics distribution originally analyzed.
Present Situation
CT Realty Investors (Developer) requests an amendment to the Subdivision Agreement (COS 18-04) to eliminate Condition No. 14, change Condition No. 16; and requests the relinquishment of an access restriction along the Project site frontage of Mariposa Road (See Attachment D - Amendment Request Letter).
Condition No. 14 reads as the following:
|
CONDITION |
TIMING |
|
14. The ODS shall dedicate 82’ of right of way width and design and construct street improvements to extend Newcastle Road from its current terminus north to East Mariposa Road. Improvements shall include but are not limited to all sewer, water, and storm drain lines, street lighting, street paving, curb, gutter, sidewalk, landscaping, and intersection improvements. The timing of the construction shall be allowed to occur in phases and triggered by lot development requiring Newcastle Road as a means for ingress/egress. |
Prior to issuance of building permit which would exceed 70% of project (Norcal Logistic Center) build-out (4,396,330 sf) or City approval of any building permit occupancy on property containing either lots 11, 12, 13, 14, or 15 identified on VTM |
The original condition No. 14 was developed by City staff to require the project to extend Newcastle Road from the existing cul-de-sac to a connection with Mariposa Road. The extension of Newcastle Road is not envisioned in the City’s adopted General Plan nor included in an adopted Precise Road Plan. The purpose of requiring the extension was to divert some of the Project traffic to the Mariposa Road/SR 99 interchange and avoid traffic impacts at the Arch Road/SR 99 interchange. Due to the configuration of the Project site, the roadway extension would require a couple of jogs, which is not ideal for truck traffic (See Attachment E - Newcastle Road Extension). The original traffic analysis projected that the Newcastle Road Extension would be needed at 75% of the original Project buildout to avoid impacts at the Arch Road/SR 99 interchange which equates to:
• 16,125 trips per day,
• 847 trips during the a.m. peak hour, and
• 1,037 trips during the p.m. peak hour.
Based on current trends in the industrial warehousing/distribution market, the actual buildout of the entire Project is predominantly high cube logistics distribution, with some limited office and warehouse. High cube logistics distribution use is characterized by a smaller employment count due to a high level of mechanization and truck activities frequently outside of the peak traffic times and results in less traffic generation than traditional warehouse and light industrial use. The entire Project buildout is trending to generate:
• 7,729 trips per day,
• 507 trips during the a.m. peak hour, and
• 602 trips during the p.m. peak hour.
The Developer prepared and submitted with their request an updated Traffic Impact Analysis Study to demonstrate buildout of the Project without the Newcastle extension. The traffic analysis shows the Arch Road/SR 99 interchange will operate well within the acceptable level of service with the Project buildout and does not result in any new impacts, that were not identified in the original Project EIR.
Staff recommends the elimination of Condition 14 that requires right-of-way dedication and construction of the extension of Newcastle Road based on the following:
• The Newcastle Road extension is no longer necessary to support the Project traffic
• General Plan does not specify roadway extension
• The Newcastle Road extension would have jogs in the road alignment which is not desirable for industrial truck traffic use.
• Future development areas to the east can rely on Austin Road as a viable north/south connector roadway between Arch Road and Mariposa Road.
Condition No. 16 reads as the following:
|
CONDITIONTIMING |
|
|
16. The ODS shall dedicate right of way along the entire site frontage of Mariposa Road with recordation of the Final Map contiguous to Mariposa Road. Further, the ODS shall design and construct Stockton Municipal Code required street frontage improvements, including but not limited to, installation of curb, gutter, sidewalk, landscaping, street lighting and 18’ of pavement widening along the entire site frontage of Mariposa Road. |
Such requirement is limited to mitigate the impacts of a particular building for which a Building Permit is sought, and construction is commenced on the northern lots 11, 12, 13, 14 or 15, and such requirement shall be incorporated into the building plans and made a condition of Certificate of Occupancy. |
Condition No. 16 was developed by City staff based on developer requirements specified in SMC Section 16.72.060D (Dedications and Exactions) and 16.72.070A (Improvements). Mariposa Road is currently one lane in each direction predominantly between Austin Road and SR 99, inclusive of the Project site frontage. Mariposa Road is under the County’s jurisdiction to the west of the project site all the way to SR 99 and to the east and has a roadside ditch drainage system that is typical in the County areas. The City’s adopted General Plan identifies Mariposa Road along the Project site as a future 4 lane arterial roadway, and there is no adopted Precise Road Plan that specifies the roadway alignment. The standard right-of-way width for a 4-lane arterial is 96’ wide, which includes a 14’ wide center median and a 15’ wide landscape/sidewalk parkway on both outer sides. Since there are existing railroad tracks on the opposite side of the Project site, the ultimate roadway alignment would need to shift south with more rights-of-way dedication and roadway improvement on the Project site (See Attachment F - Mariposa Interim Improvements).
The Developer created one single property (approximately 68 net acres) with their Parcel Map that fronts on Mariposa Road. The original tentative subdivision map contemplated multiple lots (lots 11, 12, 13, 14 and 15 reflected in the original condition) however, the Developer opted to record a single lot for one prospective business based on the present industrial market. Due to the uniqueness of the lot’s triangular shape, the lot has a substantial length of frontage (3,900’ feet) along Mariposa Road.
The Developer already dedicated the rights-of-way to the City with their Parcel Map that accommodates the future Mariposa Road improvements along their Project site. The Developer proposes to construct interim off-site street improvements including adding a center turn lane and a right turn deceleration/acceleration lane along their Project site frontage (estimated cost of $6.4 million). The Developer is unable to construct the ultimate second westbound travel lane, curb, gutter and sidewalk improvements along their Project site because there is existing roadside ditch on the east and west sides of the project in the County’s jurisdiction, which makes it infeasible to design the roadway drainage grades for placement of the improvements.
If site frontage improvements cannot be installed due to lack of adjacent improvements, SMC section 16.72.070C allows the City Engineer to approve a Deferred Improvement Agreement, whereby the developer agrees to install the frontage improvements when conditions change in the future, and the City Engineer requires the improvements to be installed. As an example, if the County decides to implement a Capital Improvement Project on Mariposa Road and constructs the ultimate improvements up to the subject property, then frontage improvements along the Developer’s property become feasible. The Developer is willing to into a Deferred Improvement Agreement with the City but is requesting an option be included that allows them to pay the City in cash for the cost of the improvements, which is estimated to cost $978,000 to extinguish the agreement. A construction inflationary factor will be applied to insure the cash-out pays for the true cost of the improvements at that time. The payment option will prevent the developer from being perennially obligated if construction of the County roadway drainage system improvements are delayed indefinitely.
A Deferred Improvement Agreement records against a property and reflects as an outstanding property obligation. The County’s General Plan shows the adjacent areas as Agricultural-Urban Reserve. This county general plan land use designation provides a reserve for urban development but is not necessary to accommodate development projected during the planning period of the County’s 2035 General Plan. The Agricultural Urban Reserve designation generally applies to areas currently undeveloped or used for agricultural production that are in the logical path of development around an Urban Community or City Fringe Area as in this case. The land use assumptions for growth with this designation are similarly very low density to necessitate the need for a capital improvement project to occur in this corridor. As a result, staff believes that Mariposa Road corridor widening in this vicinity to a 4-lane facility is less likely than capital improvement widening projects in higher priority corridors.
As discussed previously, the current market trend of industrial development has changed to larger format industrial logistics users. This industrial market trend change is significant in that it reduces the intensity of the overall development. From a development perspective, it is also important as a master developer sells off parcels to subsequent owners and developers or users where, however, the associated development requirements remained the same bearing the same development costs. In this parcel’s situation, the parcel has an existing development requirement of nearly 4,000 lineal feet of public improvements. These development costs are spread throughout the overall development, but this parcel does carry a higher load of public improvements due to its parcel shape and configuration facing Mariposa Road. Additional relief of this development cost load has been requested when balanced against the timely economic development aspects of a prospective user from the master developer (CT Realty). This was another consideration for staff’s recommendation for acceptance of the condition change.
Economic development, jobs, and a master developer providing for the investment of $6.4 million into public infrastructure improvements into the overall development site to make the overall 325-acre site is a timely response to the industrial development market will make this site more “shovel ready” as a staff consideration for recommending the acceptance of this in-lieu fee. In addition, Mariposa Road, in the recently adopted 2040 General Plan is now proposed as a 4-lane facility as opposed to a 6-lane facility as indicated in the prior 2035 general plan. This change highlighted reduced land use assumptions for this area with a corresponding change to reduced widening of Mariposa Road.
|
PROPOSED CHANGETIMING |
|
|
16. The ODS shall dedicate right of way along the entire site frontage of Mariposa Road with recordation of the Final Map contiguous to Mariposa Road. Further, the ODS shall design and construct Stockton Municipal Code required interim street frontage improvements, including but not limited to, a center turn median and a continuous right turn deceleration /acceleration lane; and the ODS shall enter into a Deferred Improvement Agreement for the construction of the ultimate frontage improvements including curb, gutter, sidewalk, landscaping, street lighting and 18’ of pavement lane widening along the entire site frontage of Mariposa Road. Said Agreement will provide an option for the ODS to pay the City $978,000 for the cost of the ultimate improvements, with an additional construction inflationary adjustment applied, to satisfy the Agreement obligation. |
Such requirement is limited to mitigate the impacts of a particular building for which a Building Permit is sought, and construction is commenced on the northern lots 11, 12, 13, 14 or 15, Parcel 7, as shown on Parcel Map Book 26, Page 119, such requirement shall be incorporated into the building plans and made a condition of Certificate of Occupancy. |
Staff recommends support for the proposed change to Condition No. 16 based on the following:
• The triangular lot configuration has extensive street frontage (approximately 3,900 feet of street frontage) and results in high off-site improvement cost burden and makes the property not feasible for development if full cost to develop required;
• There is significant uncertainty as to when Mariposa Road will be improved by the County with curb, gutter, and storm drainage infrastructure to the east and west of the Project site;
• Development of the Project site will fill in vacant property area with commercial development that will contribute tax dollars for the City and provide more job opportunities consistent with economic development goals and implementation of the City Council approved Economic Development Strategy.
• The revenue and job creation opportunities of this project development, versus it remaining vacant, justify the reduction in payment for the off-site improvements.
The third request of the Developer is for the City to relinquish an access restriction along the entire Project site frontage of Mariposa Road. The existing access restriction was created when the Developer filed a Parcel Map (COS 18-04) and complied with Condition No. 15 below (See Attachment G - Access Relinquishment).
|
CONDITIONTIMING |
|
|
15. The ODS shall dedicate access rights to the City of Stockton along the entire length of Mariposa Road, except at the approved opening shown on the Vesting Tentative Map. |
Prior to or upon recordation of Final Map |
The approved opening specified in the original condition was the proposed Newcastle Road intersection at Mariposa Road which is proposed to be eliminated. The Developer would like to have as much flexibility for consideration of lot access when a development proposal comes forward. The request is for lot access locations to be a staff level decision when a site plan is prepared for developing the site and submitted for Site Plan Review in accordance with the SMC Section 16.152.
Staff recommends that the Council approve the relinquishment of access restriction along the project site frontage of Mariposa Road based on the following:
• Since the property adjacent to Mariposa Road is no longer being subdivided into 5 lots, the control of driveway access will be easier to manage with a single lot development project.
• Staff reviewed site access locations in accordance with SMC section 16.36.030 (Access - General) which is commonly a part of Site Plan Review process required for of all new construction.
• Since the single lot user has not been determined at this point, it would be better to provide staff and a site user the flexibility to negotiate site access locations that will be beneficial for the City and the site user.
Environmental Clearance
An Addendum to the Environmental Impact Report (EIR) for NorCal Logistics Center Project (P12-110 certified by the City of Stockton on May 14, 2015) is proposed that considers all potential environment effects associated with proposed amendment to the Parcel Map Agreement (COS 18-04). California Environmental Quality Act (CEQA) Guidelines Section 15164 provides that an addendum may be used to make “minor technical changes or additions” that are necessary to assure that the previous EIR is “adequate under CEQA.” The Addendum contains minor changes to the certified EIR describing proposed changes in the NorCal Logistics Center conditions of approval, the associated changes to the EIR Project Description and the degree to which the project changes could result in changes to the environmental effects described in the NorCal Logistics Center EIR. The Addendum does not identify the need for new or more effective mitigation measures than those described in the certified EIR and is considered to be in compliance with CEQA Guidelines Section 15162 (See Attachment H - Addendum).
FINANCIAL SUMMARY
The developer will enter into a Deferred Improvement Agreement with the City to agree to construct the ultimate frontage improvements, estimated to cost $978,000, with an option to cash-out for entire amount, with a construction inflationary adjustment amount included at a future point in time. The combined Project buildout will consist of approximately 4.75 million square feet of high cube logistics distribution, 100,000 square feet of general office associated with the industrial space, and 65,000 square feet of warehousing, which will be a positive tax generator for the City and provide new job opportunities. As discussed above, the economic benefits of the timely development of the remainder of the overall site is balanced against the proposed relief in conditions regarding public improvements. To date, 2.4 million square feet of the Norcal Logistics Center has been constructed or is under construction in just over a 2-year period. This relief can provide for additional jobs-producing development.
If the developer opts to cash-out with the City, $978,000 plus construction inflationary adjustment amount, will be deposited into Account # 686-0000-237 for contribution toward the ultimate Mariposa Road Improvements.
Attachment A - Vicinity Map
Attachment B - Phase I Subdivision Agreement
Attachment C - Phase 2 Subdivision Agreement
Attachment D - Amendment Request Letter
Attachment E - Newcastle Road Extension
Attachment F - Mariposa Interim Improvements
Attachment G - Access Relinquishment
Attachment H - Addendum