Report Prepared by: Jonnie Lan, AICP, Principal Planner, Development Services Department
Title
SUBJECT: Report for Discussion on Preliminary Annexation Application #25-0003 to Consider Support for an Annexation of and Other Entitlements for 133+ Acres at the Southeast Corner of Mission Avenue and California State Highway 59 Submitted by Buildco
REPORT IN BRIEF
The City Council will be asked to evaluate Preliminary Annexation Application #25-0003 to consider support for the annexation and development of 133+ acres of mixed-use development mostly at the southeast corner of Mission Avenue and California State Highway 59.
RECOMMENDATION
City Council - Adopt a motion indicating general support for an official annexation application being processed.
Body
ALTERNATIVES
1. Indicate general support for an official annexation application moving forward; or,
2. Indicate general non-support for an official annexation application moving forward; or,
3. Direct staff and/or the applicants to provide additional information or analysis (to be specified in Council motion) before making a decision; or,
4. Continue to the item to a future Council meeting (date and time to be specified in motion).
AUTHORITY
On July 6, 2021, the City Council approved an Annexation Pre-application Process to give early Council input on potential annexation projects. The City Council has reviewed many annexation pre-applications since then. The Cortese-Knox-Hertzberg Act of 2000 establishes procedures for city annexations and other local government changes in organization.
CITY COUNCIL PRIORITIES
This proposal supports the following City Council goals:
• Support of CP 42
• Support commercial and job opportunities in South Merced
DISCUSSION
Annexation Pre-Application Process
On July 6, 2021, the City Council approved an Annexation Pre-application Process as outlined in detail in Attachment 1. In summary, the Pre-Application process allows for early input from the City Council into the annexation process by allowing applicants to present their proposal for a potential future annexation application to the City Council before submitting an official application. After reviewing the information and the staff analysis, the City Council will indicate either general support or non-support for an official annexation application moving forward. The applicants may then decide whether to move forward.
Since that time, the City Council has reviewed many annexation pre-applications and has indicated general support for most of them. This proposal is southeast of the City. See Attachment 2 for a map of preliminary and active annexation applications.
Background
In the past several years, the City of Merced City Council has considered, and staff has processed many preliminary and full annexations. Most of them have been located north of the City of Merced. Some comments by officials and the community express an interest in encouraging future commercial and residential development in South Merced. This proposal provides an additional opportunity to begin supportive development around the City’s newly improved park on the northwest corner of South Tyler Road and Mission Avenue also known as CP 42. CP 42 consists of South and North CP 42. The south part of CP 42 at almost 40 acres, is within the City of Merced City limits. It is currently being improved by the City with funding from other partners. The adjacent CP 42 parcel to the north is over 30 acres. It is still in Merced County. An annexation of that part of the park is being processed by the City of Merced.
Late last year, the City Council considered support for a 366-acre pre-annexation located at the corner of Tyler and Mission, across from CP 42. At that time, the Council expressed general support for the mixture of land uses that were proposed by the applicant. This preliminary annexation proposal before Council is southwest of that site and CP 42 at the southeast corner of State Highway 59 and East Mission Avenue. Similar to the previous pre-annexation, the proposed land uses will provide opportunities to support and increase park use and provide new housing in South Merced.
Proposed Project
The proposed annexation includes 133+ acres at the southeast corner of Mission Avenue and California State Highway 59 southwest of CP42. The proposed buildout calls for a mixture of uses. Since this proposal does not provide assumptions for specific development, only general land uses, the information is described in acreage. There is expected to be about 13 acres of Regional Community Commercial and 18 acres of Business Park. The latter is proposed to support the existing uses and businesses along Highway 59. Both commercial designations allow for multifamily residential development in addition to a variety of commercial uses such as retail, leisure, recreation and personal services. In addition to the proposed commercial uses, the project is expected to provide 103 acres of Low Density Residential similar to that which is being developed across Mission to the north. If the acreage is developed to its highest density allowed for the residential designation, the developer could build up to 618 dwelling units. As mentioned above, if the commercially designated properties were to develop with multi-family units, that type of development would provide for more dwelling units. This proposal once realized will be subject to the affordable housing requirement adopted by the City Council at the time of annexation. Currently the City Council requires 5% of the housing developed as a result of an annexation to be affordable. This annexation is proposed to provide for 100 permanent jobs and 400 intermittent jobs during construction.
Merit Based Criteria
As outlined in General Plan Policy UE-1.3.g and other General Plan policies, the application must meet the criteria listed below.
“1.3.g Evaluate future annexation requests against the following conditions:
a) Is the area contiguous to the current City limits and within the City’s Specific Urban Development Plan (SUDP)/Sphere of Influence (SOI)? Do the annexed lands form a logical and efficient City limit and include older areas where appropriate to minimize the formation of unincorporated peninsulas?
Response: The project east of California State Highway 59 and south of Mission Avenue is within the City’s SUDP (and SOI). This project site is directly contiguous to the City of Merced boundary on Mission. City staff and the applicant have discussed this annexation with LAFCO. They are generally supportive of the effort to provide resources for South Merced. During our discussion, LAFCO did not express concerns regarding the proposed annexation boundaries or city limit line, though the proposal follows the current sphere of influence in that area. As part of the annexation, LAFCO will be consulted to confirm their requirements as they relate to annexation boundaries.
b) Is the proposed development consistent with the land use classifications on the General Plan Land Use Diagram?
Response: No, the proposed development is not consistent with the land use classification or the General Plan Land Use Diagram, however the proposed annexation would include a General Plan Amendment that would allow for the diagram to be updated to reflect the uses that are being considered. Staff has determined that the proposal is an adequate mixture of uses that would provide more resources for South Merced and are supportive of the proposed change. LAFCO Staff expressed that this and future pre-annexations need to be consistent with the current General Plan and that the impacts of the potential development be fully considered in the General Plan Update. They are also concerned that so many annexations seem to be happening without the benefit of prior area planning. Staff has attached LAFCO’s written response for the Council’s review and consideration (Attachment 7). The City will work with the applicant and LAFCO to address LAFCO’s concerns and engage the community within the surrounding area.
c) Can the proposed development be served by the City water, sewer, storm drainage, fire and police protection, parks, and street systems to meet acceptable standards and service levels without requiring improvements and additional costs to the City beyond which the developer will consent to provide or mitigate?
Response: Yes. The project can generally be served by sewer, water and storm drainage from development to the north. Additional storm drainage would most likely be provided onsite as part of the physical development. However, specific details regarding the provision of City services will be addressed through the environmental review and entitlement processes if the annexation moves forward. Development of the project will require the payment of impact fees to support needed public services, including fire and protection services, parks, and street systems. With the mixture of uses planned under the development, it is expected that the project will generate adequate revenues to support needed public services.
d) Will this annexation result in the premature conversion of prime agricultural land as defined on the Important Farmland Map of the State Mapping and Monitoring Program? If so, are there alternative locations where this development could take place without converting prime soils?
Response: Development of the site will result in the conversion of farmland. Most of the farmland seems to be designated as Unique Farmland or Farmland of Statewide Importance, though a small portion of the northwestern corner of the site is designated as Prime Farmland. The site is very close to urban and industrial development, both in the City and in the County. However, as part of the environmental review, the applicant will be required to evaluate the farmland and provide mitigation, if necessary, if the annexation moves forward.
e) Will non-agricultural uses create conflict with adjacent or nearby agricultural uses? If so, how can these conflicts be mitigated?
Response: Though zoned by the County of Merced as Agricultural, there are some rural residential, utility and agricultural related support businesses to the south of the project site. There are a few properties that maintain agricultural uses to the south as well. The County Zoning Ordinance requires setbacks to long-term agricultural lands, and the project will be required to integrate those setbacks.
f) Does annexation of the area help the City reach one of the following goals?
1) Does annexation of the area bring the City closer to annexation of the UC Merced campus and University Community?
Response: This goal has already been achieved with the annexation of the University of California, Merced, campus in 2024.
2) Does the area contain significant amounts of job-generating land uses, such as industrial, commercial, office, and business/research & development parks?
Response: Yes. The project site will contain a mixture of commercial and residential uses. This could generate hundreds of jobs both temporary, as construction jobs while the project is being built, and permanent jobs due to the commercial land uses that could locate and operate once the site is developed.
3) Does the project provide key infrastructure facilities or other desirable amenities, such as the extension of major roads, utility trunk lines, parks and recreational facilities, etc.?”
Response: Yes. The project will involve the development of key portions of Mission Avenue and its intersection with California State Highway 59. It will also install and extend water and sewer mains along the project frontages as the project is built out.
Wastewater Analysis
Wastewater generation and system improvements for the project will be analyzed during the entitlement process to ensure adequate wastewater capacity within the City’s system. With this and other annexation projects in the City that could be moving forward, the City’s wastewater system will certainly need to be expanded to accommodate all these new users. Ultimately, impacts on the City’s wastewater system will be addressed through the environmental review and entitlement process if the annexation moves forward.
Next Steps
If the City Council indicates general support for the annexation, the applicants will need to decide if they want to proceed with submitting an official annexation application. Once the annexation application is submitted (including a Pre-Annexation Development Agreement and any required entitlements such as General Plan Amendments, Pre-zoning, Environmental Review, etc.) the Project can be scheduled for public hearings before the City Planning Commission, the City Council and finally LAFCO. It is estimated that the annexation would be considered an uninhabited annexation, if only the proposed project site is considered, as there are an estimated no registered voters within the project boundary.
IMPACT ON CITY RESOURCES
There will be no impacts on City resources from this pre-application. However, if an annexation moves forward, there will likely be impacts that will be outlined at that time.
ATTACHMENTS
1. Summary of Annexation Pre-Application Process (approved July 6, 2021)
2. Map of Current Preliminary and Active Annexations
3. Location Map
4. Land Use Map
5. Annexation Map
6. Presentation
7. LAFCO Comment Letter