Report Prepared by: Kim Espinosa, Planning Manager, Development Services Department
Title
SUBJECT: Report for Discussion on Preliminary Annexation Application #21-04 for Virginia Smith Trust
REPORT IN BRIEF
The City Council will be asked to evaluate Preliminary Annexation Application #21-04 for the Virginia Smith Trust (VST), 654 acres of mixed-use development at the northeast corner of Cardella and Lake Roads.
RECOMMENDATION
City Council - Adopt a motion indicating general support for an official annexation application being processed for the Virginia Smith Trust project.
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 a new Annexation Pre-application Process for which this is the second pre-application to be reviewed by the City Council. The Cortese-Knox-Hertzberg Act of 2000 establishes procedures for city annexations and other local government changes in organization.
CITY COUNCIL PRIORITIES
N/A
DISCUSSION
New Annexation Pre-Application Process
On July 6, 2021, the City Council approved a new 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 or not.
VST Background
The Virginia Smith Trust (VST) role in the community is well known. VST provided land in support of the University of California Merced Campus development. VST also provides college scholarships to graduates from high schools within Merced County. The Board of Directors of the County Office of Education (MCOE) oversees the assets of VST.
The City of Merced, Merced County, UC Merced, Hunt Family Trust, and the Virginia Smith Trust have been in engaged in land planning activities for many years related to the University Community Plan (UCP). This plan essentially covers the non-campus land area between Yosemite Ave, Lake Road, and the UC Merced campus. The UCP planning process started in 2000 and was approved in 2004. The UCP area is within the City’s Sphere of Influence (SOI). The UCP also has an approved EIR.
The UCP concept was an integrated community between the adjacent land and the campus. Changes in the University’s Long-Range Development Plan (LRDP), property ownership, and economic conditions necessitate changes to the UCP. These same changes also require a need to review and update the land planning for the VST controlled area. The intent of updating the UCP and developing a Specific Plan is to provide for the development opportunity of housing which can support student, faculty, and community needs. It will be composed of both single family and multifamily units as well as retail, office/medical, hospitality, and open space.
AB 3312, which allows for the City of Merced to annex the UC Merced Campus, also allows for the potential subsequent annexation of a portion of the UCP which includes VST. However, the VST land is currently within the jurisdiction of Merced County.
Merced County has been directly involved in assisting VST by reviewing updates to the UCP and other associated work. They are the lead agency on the preparation of the Specific Plan and associated environmental or CEQA work. It is the intent to start many of the land planning and entitlements within the County, but to allow for a later possible transition to the City.
City/County Cooperation on VST Entitlements
The City and VST have a strong working relationship. To assist in the review of possible entitlements including the UCP update and Specific Plan, the City and VST entered into a reimbursement agreement in August 2020. This agreement provides for dedicated staff services and potentially other technical assistance related to the review and processing of VST entitlement documents.
In June 2021, the City of Merced and Merced County entered into a Memorandum of Understanding (MOU), which is an extension of the existing working partnership between the City and VST, but incorporates more specific roles and responsibilities by Merced County. The MOU helps serve as a processing guideline to help facilitate VST’s land use and regulatory entitlements and helps to guide the process of cooperation.
Virginia Smith Trust Pre-Application
The Virginia Smith Trustees, represented by Stephen Peck of Peck Planning and Development, have submitted detailed information about their proposed development which is included in Attachment 2. In summary, the Virginia Smith Trust (VST) project would involve the annexation of approximately 654 acres at the northeast corner of Cardella and Lake Roads, immediately south of the UC Merced campus site. The future mixed-use development would include an estimated 3,857 dwelling units (including 108 mixed use, 894 units of student housing, 1,578 apartments and townhomes, and 1,277 single-family homes) along with 862,000 square feet of retail, office, and hospitality development.
The Pre-Application packet at Attachment 2 includes detailed maps, illustrations, and narrative descriptions of the project’s proposed land use designations, densities, circulation system, street sections, parks and open space concepts, phasing, utilities and services (wastewater, water, storm drainage, fire/police), job creation, community benefits, affordable housing proposals, consistency with the General Plan, number of registered voters onsite, the experience of the development team, and the project’s financial strategy and fiscal impacts.
Merit Based Criteria
As part of the application packet at Attachment 2 (pages 125 to 131), the applicants provided their own evaluation of how their application meets the merit-based criteria as outlined in General Plan Policy UE-1.3.g and other General Plan policies. The applicant’s analysis is included below with any additional City staff comments noted in italics in the “Response” sections.
“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 is within the City’s SUDP (and SOI). The City has spent significant time and resources trying to identify a contiguous “path to annexation” for UC and adjacent properties. Annexation strategies which involve annexation of properties between UC and the existing city limits have been found to be infeasible. Annexation of the subject property is allowed under the special provisions of AB 3312. The City has commenced annexation of UC Merced and VST would be eligible for annexation thereafter. The property is part of the University Community Plan area that is intended for development to support the UC.
b) Is the proposed development consistent with the land use classifications on the General Plan Land Use Diagram?
Response: The General Plan designation on the property is “UC Community North.” The development of the project will be consistent with the amended University Community Plan, the County’s UCP development policies, and the City’s policies regarding development of the UCP 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. Engineering studies have confirmed that the project can be served by sewer, water and storm drainage facilities. Fire and police facilities are designed for the site, and the project will generate adequate revenues to support needed public services. Streets have been designed to accommodate planned traffic, including Campus Parkway.
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 prime farmland. The site has been designated for development by the City and the County for the past 15 years. Development of the site is necessary to support UC operations. City General plan policies recognize that development of the UCP properties will convert prime farm land, and such development is necessary to support the UC. There are no alternative locations since those alternative locations would not be next to UC as is necessary to fulfill the objective of the UCP.
e) Will a non-agricultural use create conflict with adjacent or nearby agricultural uses? If so, how can these conflicts be mitigated?
Response: The County Zoning Ordinance requires setbacks to long-term agricultural lands, and the project integrates those setbacks. In addition the amended UCP includes setbacks to existing onsite and adjacent agricultural lands.
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:. Yes. The site is within the University Community.
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 has 862,000 SF of commercial/office uses, which will generate over 2,400 jobs.
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 Campus Parkway and Cardella Road. It will also install water and sewer mains along the project frontage and to Bellevue Road and G Street. The project will also include pedestrian and bike trails, a community sports park, and a community recreational center.
City Staff/LAFCO Meeting
On October 7, 2021, City and Merced County Local Agency Formation Commission (LAFCO) staff met virtually with Mr. Peck to discuss the Pre-Application. City staff representatives from Planning, Inspection Services, Fire, Police, Engineering, and Public Works, along with LAFCO Executive Director Bill Nicholson and Ken Testa from Merced City School District, reviewed the proposal and offered comments. City staff questions and comments included the need for a City water well somewhere onsite, the need to complete a loop for water lines, the planned operation of the proposed schools onsite, and the location of the fire/police station. Bill Nicholson of LAFCO has been involved in the VST planning between the City and County and had no particular comments on the preapplication.
Subsequent to the meeting, the Fire and Police Chiefs reviewed several possible locations for a joint fire/police station with Mr. Peck and a preliminary location was agreed on which is reflected in the Land Use Plan submitted on October 26, 2021 and substituted for the original land use plan in Attachment 2.
Wastewater Analysis
The City is continuing to evaluate wastewater flow throughout the City by performing additional flow monitoring. That work should be completed later this year. The flow data will be used in the model managed by the City. The City has received independent data demonstrating a decrease in flow from the City’s current model. The City’s process is necessary to help verify the decrease.
The City has been using a model with an allocation of 85 gallons per day per person with an average of 3.02 persons per dwelling unit. The result is 257 gallons per day per dwelling unit. The independent model has demonstrated that rates are less than the allocation in the model.
Given this potential decrease in the wastewater flow, an update will be needed to the Waste Water Collection System Master Plan (a contract amendment was scheduled for consideration by the City Council on November 1, 2021). The line sizes should reflect the anticipated flow and, therefore, may need to be rescaled or decreased for the projected flows that will be generated. The environmental review process will also need to be reengaged based on this update. That will likely require amendments or updates to the Draft EIR document that was circulated for public review in September/October 2020.
Wastewater generation and system improvements for the VST project are described in detail in Attachment 2 on pages 29 to 63. A more refined analysis will need to be performed during the entitlement process to ensure adequate wastewater capacity within the City’s system. It should be noted that the City has estimated that there is at least enough interim capacity in the wastewater collection system for up to 4,637 equivalent dwelling units, but that number is still being refined and will likely increase. The VST project as a whole would exhaust that capacity, but the project is intended to be phased, so there should be enough capacity for at least part of the project. With this and other annexation projects that could be moving forward, the City’s wastewater system will certainly need to be expanded to accommodate all these new users.
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. In this case, the property will not be eligible for annexation until the UC Merced campus is annexed to the City. However, VST has been working with the County (and City staff as well) on land use entitlements and the preparation of an environmental impact report for the project which can be converted to an annexation application at the appropriate time. After the UC Merced annexation is complete, the VST project (including a Pre-Annexation Development Agreement and any required General Plan Amendments, Pre-zoning, Specific Plan adoption, etc.) can be scheduled for public hearings before the City Planning Commission and City Council and finally LAFCO.
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. Virginia Smith Trust Pre-Application Submittal
3. Presentation
4. Letter from Board of Trustees