Report Prepared by: Kim Espinosa, Planning Manager, Development Services Department
Title
SUBJECT: Report for Discussion on Preliminary Annexation Application #22-02 for UC Villages Annexation
REPORT IN BRIEF
The City Council will be asked to evaluate Preliminary Annexation Application #22-02 for the UC Villages Annexation project, 35.6 acres of mixed-use development on the west side of Lake Road, south of Bellevue Road.
RECOMMENDATION
City Council - Adopt a motion indicating general support for an official annexation application being processed for the UC Villages 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 6th 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.
Since that time, the City Council has reviewed five annexation pre-applications and has indicated general support for four pre-applications (University Vista, Virginia Smith Trust, Rogina, and Yosemite Lake Estates). Of those four, Rogina already had an official annexation application on file, University Vista subsequently filed an official annexation application, and VST is being processed through the County until the UC Merced Annexation is completed. A motion by the City Council to offer general support for the Branford Point pre-application (directly south of this site) failed by a 3-3 vote on July 18, 2022, but the City Council has recently asked for the item to be brought back on a future agenda. See Attachment 2 for a map of preliminary and active annexation applications.
UC Villages Pre-Application
The UC Villages project involves lands owned by UC Village LLC, managed by Sid Lakireddy, with J.B. Anderson Land Use Planning representing Mr. Lakireddy. The applicants have submitted detailed information about their proposed development which is included in Attachment 3 along with a letter with some supplemental information at Attachment 4. In summary, the UC Villages project would involve the annexation of a total of approximately 37.2 acres with 35.6 acres for the UC Villages project and an additional 1.7 acre parcel not owned by the applicant. The future mixed-use UC Villages development would include an estimated 922 dwelling units (including 852 5-story apartments, 51 2-story apartments, and 49 4-story apartments geared toward student housing) along with approximately 1,050,818 square feet of retail and hospitality (including 35,355 square feet of retail and a 161-room, 5-story hotel of 96,675 square feet).
The Pre-Application packet at Attachment 3 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 other relevant information. The applicants also indicated that the project had already acquired its 404 permits from the federal government, which can be a significant hurdle to project development.
During the pre-application review process below, City staff provided the applicants and their representatives with the Regional Housing Needs Allocation (RHNA) Unit Production Plan, adopted by City Council in April 2022. The Plan seeks to ensure that new housing entitlements that will require a Pre-Annexation Development Agreement (PADA) shall provide 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).
In his letter at Attachment 4, Mr. Lakireddy indicates his support for the City’s RHNA Unit Production Plan and his intention to provide at least 12.5% of the proposed units as affordable and spread across all income levels. He also indicates that the affordable units will likely be in the first phase and take advantage of Density Bonus provisions. Mr. Lakireddy also indicates his goal to hire local contractors and workers to build and operate the project.
Merit Based Criteria
As part of the application packet at Attachment 3 (pages 37 to 40), 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 proposed project is located within the Specific Urban Development Plan (SUDP) Boundary and the Bellevue Community Plan Area. Annexation of the proposed project area is allowed per the special provision of AB 3312. (Staff: The project includes an additional parcel in order to avoid the formation of an unincorporated island along Lake Road.)
b) Is the proposed development consistent with the land use classifications on the General Plan Land Use Diagram?
Response: The proposed project area has a General Plan Land Use Designation of Mixed Use and Low Density. Further, the proposed project area is located within the Bellevue Corridor Community Plan (BCP) and is designated for Mixed-Use TOD Character Uses according to Figure 36 of the BCP. The proposed project includes the development of mixed-use retail, hotel and multi-story student housing which is consistent with the General Plan Policies and Implementation Measures for Mixed Use as well as the Vision and Community Character described in the BCP.
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: The proposed project can be served by City services including, but not limited to, water, sewer, storm drainage, fire and polices protection, parks, and street systems. As illustrated in the Water and Sewer Exhibits, the proposed project would connect to existing services in Bellevue Road and Lake Road. 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. (Staff: Details regarding the provision of City services will be addressed through the environmental review and entitlement process if the annexation moves forward.)
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: No, the proposed project area is designated “Vacant or Disturbed Land” according to the Department of Conservation Important Farmland Maps, dated 2018. Vacant or Disturbed Land includes open field areas that do not qualify for an agricultural category, mineral, and oil extraction areas, off road vehicle areas, electrical substations, channelized canals, and rural freeway interchanges. (Staff: Impacts on agricultural land and possible mitigation will be addressed through the environmental review and entitlement process if the annexation moves forward.)
e) Will a non-agricultural use create conflict with adjacent or nearby agricultural uses? If so, how can these conflicts be mitigated?
Response: The proposed project will be required to adhere to the City’s Noise Ordinance and Development Standards with regards to reducing noise pollution and setbacks, respectively. (Staff: Impacts on agricultural land and possible mitigation will be addressed through the environmental review and entitlement process if the annexation moves forward.)
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: Responses to the specific questions are as follows:
1. The proposed project area is adjacent to the UC Merced Campus and is located on the south-west corner of the Bellevue and Lake Road intersection. This intersection is a major gateway into the UC Merced Campus. (Staff: AB 3312 would allow the annexation of this area once the UC Merced Campus is annexed because it is directly adjacent to the UC Merced Campus boundary.)
2. The proposed project includes the development of 35,355 sq. ft. of commercial uses (Neighborhood and Ground Floor Commercial (Neighborhood Commercial)), a hotel and student housing to support a total of 922 units/rooms. A total of at least 139 jobs would be created as a result of the proposed project.
3. The proposed project would involve the expansion and improvement of two (2) major roadways, Bellevue Road, and Lake Road. Additionally, the proposed project accommodates the future expansion of Mandeville Lane, consistent with the Bellevue Community Plan (BCP). A variety of amenities are planned for the proposed project including, but not limited to, a 3,000 sq. ft. recreation center, student study areas, areas for recreational activities such as corn hole, bocce ball, and pickle ball courts, bike repair stations, and recreation pool. The proposed project will connect to existing utility lines in Bellevue Road and Lake Road.
City Staff/LAFCO Meetings
On May 5, 2022, City 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 Ron Price from the Merced Irrigation District and Ken Testa from Merced City School District, reviewed the proposal and offered comments. City staff questions and comments included the need to provide a water line in Lake Road, the need for an additional water well in the area (not on this property) to serve the project, the need to underground the Yosemite Lateral, the need to address storm drainage, the need to coordinate with the future alignment of the Campus Parkway and Lake/Bellevue intersection improvements, and the need to address the City’s Regional Housing Needs Allocation Unit Production Plan, adopted by City Council in April 2022. The applicants indicated that they intend to provide affordable housing per the City’s recent RHNA Unit Production Plan and that they want to work with MID on the possibility of keeping the Yosemite Lateral open as a design feature.
Merced County Local Agency Formation Commission (LAFCO) staff could not attend the above meeting, so a separate meeting was held on May 20, 2022, with LAFCO Executive Director Bill Nicholson. LAFCO staff’s concerns included a suggestion to coordinate land use planning with UC Merced given this project’s location at the main entryway into the Campus, the need to address the ability of the City to provide the needed infrastructure and services for all the proposed pre-applications and official annexations being proposed in the area; and the potential rate of growth for the City with all the proposed annexations versus the realistic absorption rate for development.
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 and water generation estimates for the UC Villages project are described in Attachment 3 on pages 23 through 27. 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 UC Villages project, along with other annexations active and proposed, would exhaust that capacity, so the phasing of each project will be critical to ensuring capacity for each 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. Because of its location adjacent to the UC Merced Campus and not adjacent to the current City limits, per the terms of AB 3312, this project would need to wait for the City’s annexation of the UC Merced Campus to be completed before the annexation application could be forwarded to LAFCO, but the project could begin the annexation process through the City in the intervening time. Required entitlements in addition to Annexation/Pre-Zoning would be a Pre-Annexation Development Agreement, General Plan Amendments, Bellevue Community Plan amendments, 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.
Council Action
After reviewing the pre-application materials and hearing from the applicants, the City Council should indicate either general support or non-support for the applicants moving forward with an official annexation application.
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. UC Villages Pre-Application Submittal
4. Supplemental Letter from Applicant
5. Presentation