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RECOMMENDATION TO THE CITY COUNCIL TO ADOPT AN ORDINANCE APPROVING AN AMENDMENT TO A DEVELOPMENT AGREEMENT AND DENSITY TRANSFER AGREEMENT BETWEEN A.G. SPANOS CONSTRUCTION INC. AND THE CITY OF STOCKTON FOR THE SPANOS PARK WEST MASTER DEVELOPMENT PLAN
recommended action
RECOMMENDATION
Staff recommends that the Planning Commission adopt a resolution recommending the City Council:
1. Find that the project is categorically exempt from CEQA, pursuant to the CEQA Guidelines, section 15061(b)(3) (General Rule) of Title 14 of the California Code of Regulations; and
2. Adopt an Ordinance amending the Spanos West Business Park Development Agreement and Density Transfer Agreement.
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Summary
On January 29, 2002, Stockton City Council approved the A.G. Spanos Business Park Master Development Plan, commonly known as the Spanos Park West Master Development Plan. The approval included a Development Agreement (DA) between the City and Applicant (A.G. Spanos Construction, Inc.) to establish a 200-acre mixed-use residential and commercial center. The DA also included a Density Transfer Agreement (DTA) that allowed the applicant to construct mostly single-family housing while allowing higher-density housing to be constructed elsewhere on other Spanos Project sites. The DTA was later amended to allow the applicant to either build the high-density housing (627 units) on or within surrounding entitled A.G. Spanos projects (i.e., Westlake, Delta Cove, Crystal Bay, Greater Downtown) or pay a $2,000 in-lieu fee per unit not constructed. While the entire Master Plan is approximately 95% constructed, the high-density housing has not been constructed, nor has an in-lieu fee been paid.
In February 2022, the Applicant applied to extend the term limit for the DA and DTA by an additional 10 years as the original agreement was set to expire in 2022, and the housing obligations (construction or fees) have not been completed. The current amendment does not change the project or terms of the DA or DTA and merely gives the Applicant more time to either complete the construction of 627 new high-density housing units or pay the in-lieu fee.
DISCUSSION
Background
The subject site consists of multiple parcels located at the southwest intersection of Interstate 5 (I-5) and 8 Mile Road, north of the Spanos Delta Cove Project, Grupe Sanctuary Project (also known as Shima Tract), and Mosher Slough (Attachment A - Location and Context Map).
On January 29, 2002, the Stockton City Council approved A.G. Spanos Business Park Master Development Plan, commonly known as the Spanos Park West Master Development Plan (Attachment B - Approved Master Plan). The approval included a Development Agreement (DA) between the City and the Applicant (A.G. Spanos Construction, Inc.) to establish a 200-acre mixed-use center and a Density Transfer Agreement (DTA) that allowed the applicant to construct mostly single-family housing without providing higher-density housing as the Housing Element required at the time of approval (Attachment C - Approved DA/DTA Agreements).
At the time of the original approval, the City's Housing Element required a certain percentage of all new housing be reserved for high-density residential use. When the property owner received approval, the minimum required amount of high-density residential housing was not met so the developer and the City entered into a Development and Density Transfer agreement to construct the unmet high density housing amount at a later date and on other Project sites. These agreements commit the owners, developers and successors-in-interest (ODS) to construct at least 935 multi-family dwelling units to conform to the City’s General Plan Housing Element.
Of the 935 required units, the applicant has constructed 308 units, leaving a balance of 627 units to be constructed. In 2008, the DTA was later amended to allow the applicant to either build 627 high-density housing in the Master Plan area or in other surrounding projects (i.e., Westlake, Delta Cove, Crystal Bay, and Greater Downtown Area) or pay a $2,000 in-lieu fee per each unit not constructed. While the entire Master Plan is approximately 95% constructed, the 627-unit high-density housing units have not been constructed or the optional fee payment has not occurred.
In February 2022, the Applicant applied to extend the term limit for the DA and DTA as the original agreement was set to expire in 2022, and the housing obligations (construction or fees) had not been completed. The Applicant has applied for an amendment to ensure the completion of the project and housing obligations by extending the approval term of the project entitlements. By applying for the amendment, the expiration date for the project is paused until a final decision is made on the application request. A DA and DTA are voluntary legal contracts between a local jurisdiction and an entity that owns or controls property within the jurisdiction. The agreements detail both parties’ obligations and specify the standards and conditions that will govern the development of that property.
Per Stockton Municipal Code (SMC) Section 16.128, the Planning Commission is the recommending authority for DAs and is responsible for the DA annual compliance monitoring. The City Council is the final approving authority and must conduct a public hearing to adopt a new DA by ordinance.
Present Situation
The Applicant has applied for an amendment to the project’s existing Development Agreement and Density Transfer Agreement to preserve approved entitlements and ensure eventual completion by the construction of new high-density housing units or payment of in-lieu fees. The Agreements extends the timeframe to develop and complete the project another 10 years, from the effective date of City Council approval (30 days after approval). The proposed amendments does not propose to change the project description, standards, or required obligations, and all the original approvals will remain unchanged. The DA is solely intended to extend the approval term of the project (Proposed Ordinance Exhibit 1 -Proposed Amendment).
In 2021 and 2022, the Planning Commission found that the Applicant was substantially complying with the terms and obligations of the DA except for the construction of the multifamily housing units and/or in-lieu fee payment of $2,000 per multi-family unit. Extension of the DA/DTA would permit the Applicant to achieve full DA compliance and avoid breach of the original agreement.
STAFF ANALYSIS
The proposed actions have been reviewed per the policies of the 2040 General Plan, Stockton Municipal Code (SMC), and terms of the Development Agreement. Per SMC 16.128.080 (Findings), a DA amendment can be supported by the City based on the following findings or approval:
1. The Development Agreement and Density Transfer Agreement amendment is in the City’s best interests, as it would directly promote housing and economic opportunities associated with new housing units. The amendment would have the applicant develop 627 new high-density residential units or pay a fee of two thousand dollars ($2,000.00) per unit to the City or a non-profit organization for an estimated total of $1,254,000. This will benefit the community by increasing the variety of housing units, constructing new public infrastructure, and providing new construction jobs.
2. The Development Agreement and Density Transfer Agreement amendment complies with the City Development Code and other applicable ordinances and regulations, particularly the regulations of Chapter 16.128 pertaining to development agreements. The amendment will not impact the approved project nor result in a physical environmental change. The Master Development Plan for the area will remain.
3. The Development Agreement and Density Transfer Agreement amendment are consistent with the land uses, objectives, policies, and programs of the General Plan, and the original DA/DTA approval. General Plan compliance includes providing housing towards meeting the City Regional Housing Needs Allocation, providing infrastructure to greenfield areas (LU-6.1E), and providing civic amenities like open space and parks (LU-3.3E). The amended Development Agreement would permit the applicant more time to establish the housing or fee payment opportunities in Stockton, consistent with General Plan goals and policies.
4. The Development Agreement and Density Transfer Agreement amendment will not endanger, jeopardize, or otherwise constitute a hazard to the public convenience, health, interest, safety, or general welfare in that projects constructed pursuant to it are required to comply with all health and safety regulations, zoning requirements, infrastructure provisions, and General Plan policies. Future construction to implement the project would include enhanced flood protection measures, new open space and trail connections, and new streets that would include lighting and pedestrian access throughout the project.
5. The Development Agreement and Density Transfer Agreement amendment complies with the conditions, requirements, restrictions, and terms of SMC Section 16.128.060(B) (Preparation and Content - Proposed Development Agreement).
6. While the Development Agreement and Density Transfer Agreement amendment itself is not subject to the California Environmental Quality Act (CEQA) and the City’s CEQA Guidelines, the Project EIR anticipated potential impacts and proposed mitigation measures that have been incorporated to mitigate all identified impacts to a less-than-significant level. The EIR is also referenced in the DA to ensure compliance by the Applicant.
On May 10, 2023, the Development Review Committee (DRC) reviewed the requested DA amendment and recommended that the Planning Commission approve the proposed agreement. The DRC found that the request for the DA amendment would not adversely affect the provisions of the General Plan, applicable provisions of the Development Code, previous approvals, or the character of the site or its surroundings because the site is still designated for the same uses as previously approved. The capacities of community resources would not be changed because all required infrastructure and public facilities would be provided for the project, per the Conditions of Approval on the Tentative Map, which would be extended via the new DA and DTA. Therefore, the required findings in Section 16.128.080 of the SMC for Development Agreements can be made in the affirmative.
All the original approved entitlements will remain unchanged. Staff recommends approval of the amended Spanos West Business Park Development Agreement and Density Transfer Agreement based on the analysis and supported findings provided above and in the proposed Resolution.
Environmental Review
The proposed request for a DA/DTA amendment is exempt from CEQA according to CEQA Guideline Section 15061(b)(3) (General Rule) of Title 14 of the California Code of Regulations. Under the general rule exemption, a project with no potential for causing a significant effect on the environment is exempt from further CEQA review. The proposed Project amends an existing DA and DTA for an approved project and will not result in a physical change to the existing project properties.
The entire Master Plan is approximately 95% constructed. Future construction of the remaining undeveloped project area would have to adhere to the certified Spanos Master Plan Environmental Impact Report (EIR) and the project’s Mitigation Monitoring and Reporting Program. Development of housing in other areas outside the Master Plan would be reviewed on a case-by-case basis.
Public Notice
Notice for the Planning Commission meeting was published in the Record on May 15, 2023, and a mailed notice was sent to all property owners included within the DA/DTA boundary and within 300 feet of subject sites at least ten (10) days before the hearing, in accordance with SMC Section 16.88.030. To date, Staff has not received any comments from the public on this Project.
Attachment A - Location and Context Map
Attachment B - Approved Master Plan
Attachment C - Approved DA/DTA Agreements