Report Prepared by: Kim Espinosa, Planning Manager, Development Services Department
Title
SUBJECT: Report for Discussion on Preliminary Annexation Application #21-06 for Yosemite Lake Village
REPORT IN BRIEF
The City Council will be asked to evaluate Preliminary Annexation Application #21-06 for the Yosemite Lake Village project, 764 acres of mixed-use development northwest of Lake Yosemite within a larger 1,023-acre proposed annexation area.
RECOMMENDATION
City Council - Adopt a motion indicating general support for an official annexation application being processed for the Yosemite Lake Village 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.
Yosemite Lake Village Pre-Application
The Yosemite Lake Village project involves lands owned by the Gallo family, represented by Mid-Valley Engineering, along with properties owned by others (including the Merced Golf and Country Club) that have been included in the proposed annexation area in order to provide adjacency with the City Limits. The applicants have submitted detailed information about their proposed development which is included in Attachment 2. In summary, the Yosemite Lake Village project would involve the annexation of approximately 1,023 acres northwest of Lake Yosemite, including the proposed Yosemite Lake Village project (734 acres). The future mixed-use development would include an estimated 2,708 dwelling units (including 395 “Estate,” 185 “Move-Up,” 488 “Blended,” 690 “Active Adult,” and 950 “Workforce”) along with approximately 8 acres of Neighborhood Commercial and 564 acres of Open Space/Parks.
The Pre-Application packet at Attachment 2 includes detailed maps, illustrations, and narrative descriptions of the project, including ownership and annexation boundaries, a history of previous entitlement actions, anticipated entitlement actions, community vision and guiding principles, land use, circulation, public facilities and services, common area (benefit) infrastructure and financing alternatives, potential phasing plan, project team and previous projects, merit criteria review, and closing statement. Section VI, starting on page 12, gives an overview of the proposed land use and detailed definitions and lot sizes of the dwelling unit types (“Estate,” Move-Up,” etc.) described above.
City Staff has met with the ownership and their representatives and discussed the City Council Policy Direction to ensure new housing entitlements which will require a Pre-Annexation Development Agreement (PADA) to include housing at various income levels. This approach is intended to help the City achieve Regional Housing Needs Allocation (RHNA) production goals for 2015-2023, which calls for 5,537 total units (2,348 or 42% Above Moderate, 886 or 16% Moderate, 966 or 17.3% Low, 676 or 12.2% Very Low, and 675 or 12.1% Extremely Low). Subsequently, the applicants submitted additional information regarding affordable housing goals for the project (see Slide 18 of Attachment 3) Of the 2,708 total units proposed, 1,547 or 57% would be Above Moderate or Market, 891 or 33% Moderate, 135 or 5% Low, 54 or 2% Very Low, and 81 or 3% Extremely Low.
Project Overview by Applicant
Starting on page 36 of Attachment 2, the applicants have provided the following “Closing Statement” or overview of their project, which is repeated here in its entirety.
“The Yosemite Lake Village Community provides the City of Merced with unique and innovative opportunities not offered by other proposed developments. One key element of the proposed project is an “Active Adult” component that has not been utilized previously within the Merced. This product type has typically proven itself to be low impacting on a majority of public provided services. This housing type generates approximately 1.9 persons per dwelling unit and are typically age restricted (over 55 years old). Being composed of primarily retirees, their traffic generation is during non-peak commute times, thereby reducing City wide peak hour traffic impacts. The age restriction means that there are normally very light impacts on elementary, middle, and high school demands or facilities. The neighborhood parks trails, and linear open space provided within the neighborhood (along with the proximity of Merced Golf and Country Club) reduces impacts on other recreational facilities in the City. These neighborhoods are typically low crime areas and have minimal impacts on police protection. The only services with higher potential impact than typical residential housings might be emergency medical (fire protection) and library services. The classification of “Active Adult” implies mobility and the ability to live independently. Pedestrian and Bicycle circulation have been designed throughout the community to encourage non-vehicular traffic.
The mix of “Estate” and “Move-up” housing provides housing for professionals and move up markets. “Blended” housing provided for traditional residential housing and “Work Force” provides smaller lot and denser product types to meet affordable work force and entry level housing markets. The variety of housing types and target market areas provides the perfect setting for a multi-generational project that offers a socio-economic mix that offers complete diversity.
Almost 50% of the annexation area is set aside for open space, parks, and trails (see Figure 17 -Preservation, Open Space, and Parks). The open space elements include habitat conservation and view corridor open space, active parks, and recreational open space, and they are interconnected with pedestrian and bicycle trails that provide access to amenities throughout the project (see Figure 18 - Community Amenities) and connect with City wide pedestrian and bicycle master plan systems that include connections to U.C. Merced. The open space also offers the opportunity to provide ground water recharging areas to meet the City of Merced Master Water Plans policies and goals. Finally, most of the Project environmental studies have been previously completed and accepted by Local, State, and Federal agencies. There is a potential for some of the studies will need to be updated or expanded to cover additional areas , such as the Rogina Property. This means that most of the lands within the proposed Yosemite Lake Village annexation area can proceed with subsequent entitlement applications without environmental based delays.”
Merit Based Criteria
As part of the application packet at Attachment 2 (pages 35 to 36), 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: A portion of the project is contiguous with the current City Limits and the majority of the land is within the SUDP and SOI. There is 150.64 acres (four parcels) of the proposed 1,171.58 acre annexation area that is not currently within the SUDP/SOI (see Figure 3 - Proposed Annexation Map). All other lands between the proposed annexation area and the current City Limits are within the SUDP/SOI, and do not create peninsulas or islands of unincorporated area. (Staff: It has since been clarified by the applicants that the proposed annexation area includes only 1,023 acres.)
b) Is the proposed development consistent with the land use classifications on the General Plan Land Use Diagram?
Response: The Proposed Land Uses are consistent with land use classifications in the General Plan Land Use Diagram. (Staff: The majority of this area is designated as “Community Plan” on the General Plan.)
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: Water and sewer impacts have been estimated in the application. Conditional capacity allocations will determine the amount of existing capacity that could be utilized for initial development. Storm Drain facilities will be developer constructed and financed. Police and fire protection services will be determined and conditioned on subsequent submittals. Parks and on-site roadway improvements will be developer provided and financed. Off-site roadway improvements and unknown public services will be provided and financed through various financing mechanisms discussed in the application. The developer/owners are willing to finance reasonable conditioned improvements and cost subject to a development agreement and repayment of fair share cost for area wide benefits to others.
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: The soils over the entire project area are of poor quality and are not included in any prime agricultural land designations. All lands within the project area have historically been used for livestock grazing only.
e) Will a non-agricultural use create conflict with adjacent or nearby agricultural uses? If so, how can these conflicts be mitigated?
Response: There are no agricultural uses on any adjacent, or nearby, lands excepting livestock grazing. Wetlands and Habitat Easements are in place on the lands to north and to the east. A golf course and developed rural residential homes are existing to the south. Low density residential development is designated on the General Plan for lands to the west.
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?
2) Does the area contain significant amounts of job-generating land uses, such as industrial, commercial, office, and business/research & development parks?
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: The annexation does not affect the U.C. Merced or University Community annexations. The plan does include some job generating land uses including 20.2 acres of Commercial and 8.0 acres of Neighborhood Commercial (with restrictions to recreational, professional office and specialty retail uses). Infrastructure improvements include improvements to sewer collection and water distribution systems improvements in “G” Street, water distribution systems in Old Lake Road, Roadway improvements to “G” Street to minor arterial collection standards, provisions to provide groundwater recharge areas in the habitat conservation area (Planning Area “A”0 and storm water detention ponds (approximately 5 different ponds located throughout the site), and expansion of wildlife habitat and visual open space of over 380 acres that is contiguous with the Cyril Smith Trust Lands currently under a conservation easement with the State Fish & Game and U.S. Army Corps of Engineers. (Staff: It has since been clarified by the applicants that the 20.2 acres of Commercial noted above are not included in the proposed annexation area.)
City Staff/LAFCO Meeting
On December 16, 2021, City and Merced County Local Agency Formation Commission (LAFCO) staff met virtually with the applicants and their representatives to discuss the Pre-Application. City staff representatives from Planning, Inspection Services, Economic Development, 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 noting that the area is outside the current service area for the Fire Department and the nearest planned fire station to the area would be in the vicinity of Bellevue Road and G Street; the need to include a water well site and a looped water line system; the need to extend sewer lines past existing development in order to get to the site; the unknown status of Old Lake Road west of G Street due to wetlands issues; and consideration of adding more commercial uses to serve the neighborhood.
LAFCO staff’s concerns include the annexation boundary not including the developed lands north of Bellevue Road and east of G Street thus creating an awkward “peninsula” of City land north of unannexed territory. It was acknowledged that during the North Merced Annexation Feasibility Study (2019-21), the existing residents of that area generally expressed very strong opposition to annexation, and that the applicants had designed their annexation boundary to try to avoid those areas per the neighbors’ preferences. The applicants also noted a desire to work with these neighbors to educated them on the potential benefits of annexation, especially as it relates to water quality and reliability issues. Correspondence from the applicants and a neighbor regarding the proposed annexation boundary can be seen at Attachment 4.
Mr. Nicholson also noted that the conservation area might not need to be included in the annexation area since it would not be developed. He also noted that perhaps an Out of Boundary Service Agreement to serve the area would be an option. It was acknowledged that the City’s stated preference through General Plan and other policies was to provide services only to annexed areas, but the City Council had some discretion to make exceptions.
The applicants indicated that they would be working on a detailed marketing study in the near future to further define their dwelling unit types, especially the “Workforce” area and affordable housing goals, and that they were open to providing a broader range of commercial uses, including offices, to serve the neighborhood.
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 approved 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 Yosemite Lake Village project are described in detail in Attachment 2 starting on page 22. 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 Yosemite Lake Village 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. Required entitlements in addition to Annexation/Pre-Zoning would be a Pre-Annexation Development Agreement, a Sphere of Influence Amendment, General Plan Amendments, and Community or Specific Plan adoption, along with the environmental review process. After completing the required application process for the above (generally takes 12 to 18 months), the project could 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. Yosemite Lake Village Pre-Application Submittal
3. Presentation
4. Correspondence