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CITY COUNCIL AGENDA REPORT
City of Anaheim
PLANNING AND BUILDING DEPARTMENT
DATE: MARCH 3, 2026
FROM: PLANNING AND BUILDING DEPARTMENT
SUBJECT: THE ANAHEIM HILLS FESTIVAL PROJECT
DEVELOPMENT APPLICATION NO. 2023-00043
ATTACHMENT (Y/N): YES ITEM# 10
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council take the following actions:
1. By Resolution, certify Final Environmental Impact Report No. 358 (FEIR No. 358); adopt Findings of Fact, a Statement of Overriding Considerations and Mitigation Monitoring Program No. 397 (MMP No. 397); and, determine that FEIR No. 358 and MMP No. 397 have been prepared for the Project in compliance with the California Environmental Quality Act (CEQA), are adequate to serve as the appropriate environmental documentation for the Project and that no further environmental analysis is required (Attachment 1);
2. By Resolution, approve an amendment to General Plan Land Use Element (Attachment 2);
3. By Ordinance, approve and adopt Amendment No. 6 to the Anaheim Hills Festival Specific Plan No. 90-1 and the Zoning and Development Standards (Chapter 18.108 of Title 18) (Attachment 3);
4. By Resolution, approve a Final Site Plan to permit the 447-unit multi-family residential building and associated improvements (Attachment 4); and
5. By Ordinance, approve and adopt Development Agreement No. 2025-00001 by and between OTR, an Ohio Partnership, and the City of Anaheim (Attachment 5).
Development Application No. 2023-00043
March 3, 2026
DISCUSSION:
This item was originally noticed for the December 16, 2025 City Council meeting. During the Additions/Deletions portion of the agenda, the City Council voted to continue the item to the January 13, 2026 meeting. On January 13, 2026, the City Council opened the public hearing to hear public testimony and staff presentations. After additional discussion and closing of the public hearing, the City Council voted to continue the item to the February 3, 2026 meeting. On February 3, 2026, at the request of the applicant, the City Council voted to continue the item to March 3, 2026.
The January 13, 2026 City Council staff report with a full analysis of the project is included as Attachment 6. Project plans, supporting documents, and technical studies, including the environmental analysis, are unchanged and attached hereto (Attachments 7 through 23).
At the January 13, 2026 City Council meeting, Councilmembers discussed a variety of topics and directed staff to provide further clarification. Responses to the topics identified are provided as follows:
Density Limitations for Development Area 5 (DA 5)
The proposed Specific Plan document includes several references to the unit count in DA 5 as 447 units, which would limit the residential development capacity of DA 5. As such, to amend this limit in the Specific Plan, a future Specific Plan Amendment would need to be approved, and a new environmental analysis would be required. However, in response to Councilmember concerns regarding potential future residential development on portions of DA 5 that currently include the fitness and child care facilities, staff recommends that General Plan Figure LU-5 (Areas of the City with Special Density Limitations) and Table LU-4 (General Plan Density Provisions for Specific Areas of the City) be updated to further clarify that the maximum allowed dwelling units in DA 5 is 447 units.
The Resolution for the General Plan Amendment (Attachment 2) has been revised to include the amended map and table within the Land Use Element restricting the units in DA 5 to 447 units, as proposed under this application. If, in the future, another project proposed to redevelop DA 5 or another portion of the Festival Shopping Center with additional residential units, a Specific Plan Amendment and General Plan Amendment would be required along with additional environmental analysis. The staff-recommended changes to the General Plan Land Use Element, as described in Attachment 2, confirm the proposed development intensity for DA 5, and is not new information requiring recirculation of the Environmental Impact Report or re-noticing of the project.
Development Impact Fees
The Draft Development Agreement (Attachment 15) includes Exhibit D, which establishes the Development Impact Fees that the proposed project would be subject to at the rate applicable at the time of building permit issuance. Below are the key fees that the developer would be required to pay, estimated at the currently established rates, for reference:
Parks and Recreation Fee: Approximately $2.4 million
Transportation Fee: Approximately $1.8 million
Development Application No. 2023-00043
March 3, 2026
Applicability of additional impact fees was discussed at the January 13th City Council meeting, including Police and Fire Impact Fees and Affordable Housing In-Lieu Fees. The following provides a breakdown of the Impact Fee calculation (estimated at the currently established rates) that were discussed at the City Council meeting, based on the proposed project and unit count:
Platinum Triangle Police Impact Fee: Approximately $280,000 Platinum Triangle Fire Impact Fee: Approximately $590,000 Affordable Housing In-Lieu Fee: Approximately $4.6 million Currently, Police and Fire Impact Fees are only assessed within the Platinum Triangle as these fees are based on the specific facility needs for the Platinum Triangle area and, therefore, do not apply to this project.
The Inclusionary Housing Ordinance applies to residential development projects filed on or after October 8, 2024. Since the project application was submitted in August 2023, the project is not subject to the requirement to provide affordable housing units or alternative options, including payment of In-Lieu Fees.
While the City does not currently have Citywide Impact Fees for Police or Fire, the City Council is scheduled to consider updated Development Impact Fees during a public hearing at the March 24, 2026 City Council meeting. The proposed Fee Schedule includes Citywide Police and Fire & Rescue Development Impact Fees that future projects throughout the City would be subject to.
Based on the information provided in the required publication in advance of City Council consideration of these updated Fees, a similar future project would be required to pay approximately $504,000 in Police Development Impact Fees and approximately $339,000 in Fire & Rescue Development Impact Fees should these fees be adopted at the proposed per unit rates.
Housing Element and Regional Housing Needs Assessment (RHNA) Adequate Sites Analysis
California State law requires that the City’s Housing Element includes an inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet our local housing needs, as set by the Regional Housing Needs Assessment (RHNA) allocation process. The City’s State-certified 6th Cycle Housing Element for the 2021 – 2029 planning period includes the required Adequate Sites Analysis which identifies submitted development applications (“Pipeline Projects”), assumed accessory dwelling unit construction, sites that permit the development of housing under current regulations, and sites that required a regulatory change to permit the development of housing (the latter two collectively “Candidate Sites”). In total, the Adequate Sites Analysis identified a surplus of units across all income categories to account for market changes and potential project developments.
Based on the criteria established by the City in furtherance of State law for Pipeline Projects, the Adequate Sites Analysis included the Development Application for a 600-unit multiple-family residential development project in the Anaheim Hills Festival Shopping Center as a Pipeline Project (P-70) for the project site.
Development Application No. 2023-00043
March 3, 2026
Figure 1, from the Adequate Sites Analysis, identifies the District 6 Pipeline Projects and Candidate Sites included in the certified Housing Element. Specifically for Candidate Sites, those in District 6 account for 20% of the City-wide unit total.
FIGURE 1. District 6 Adequate Sites
Annual Housing Element Progress Report
The City is required to report to the State annually by April 1 on Housing Element implementation, including progress made toward meeting the housing goals of RHNA. The City Council is scheduled to consider the annual report for 2025 on March 24, 2026. As of the last Housing Element Annual Report for 2024, the City has permitted 2,406 units of the 17,453 units allocated during this RHNA cycle.
The Draft Development Agreement provides an Initial Term of five years with the ability to extend for an additional five-year term if the Developer has obtained a Building Permit for the multi-family building before October 1, 2029. This timing is designed to incentivize the Developer such that if approved, the project would assist the City towards meeting the RHNA requirements by producing 447 units, including 45 moderate income units.
Housing Units Built in Council District 6 Since 1980
The project site is located within District 6, in the area known as Anaheim Hills. Anaheim Hills was primarily developed in the 1970s and 1980s, while the remainder of the City was largely Development Application No. 2023-00043
March 3, 2026
developed in the early to mid-20th century. To encourage a cohesive build-out of Anaheim Hills, a variety of Specific Plans were approved in the 1980s that encouraged a mix of residential, commercial, industrial, and office uses. The following provides a summary of those Specific Plans and one Planned Unit Development and the number of residential units that were constructed in each area:
The Highlands at Anaheim Hills (SP87-1): 2,168 units
Sycamore Canyon (SP88-1): 1,119 units
The Summit of Anaheim Hills (SP88-2): 2,117 units
Bauer Ranch and East Hills Planned Community: 945 units In addition to the units built in the Specific Plan areas in the 1980s and 1990s, based on data available from the Center for Demographic Research, a total of 1,037 residential units were constructed in District 6 between 2000 to 2025. Therefore, it is estimated that over 7,300 units have been built in Anaheim Hills since 1980.
Union Labor
Relationship to Development Agreement
Councilmembers discussed the possibility of requiring the developer to use union labor during the construction of the project, should it be approved. While the City can encourage the developer to do so, the City cannot require a developer to use union labor as part of Development Agreement negotiations. A Development Agreement is a mutually-agreed upon contract between the City and property owner that provides certainty to the developer that the approved project will be exempt from future changes to zoning laws, in exchange for public benefits beyond what may be otherwise required by existing regulations and ordinances. While the Development Agreement is beneficial to the developer for these reasons, it is not a required entitlement for this project. If the developer does not agree to a term in the Draft Agreement, the City can continue to negotiate the terms, but ultimately, the developer can decide not to enter into the Agreement with the City and continue to seek approvals for the other entitlements that are required to develop the project.
Disclosure Requirements for Contractors and Subcontractors As of November 2023 and as amended by City Council in April 2025, the City has codified in Anaheim Municipal Code (AMC) Section 3.04.140 specific disclosure requirements for qualifying projects to identify its contractors and subcontractors prior to building permit issuance and at any time between permit issuance and final inspection if a change occurs. For these projects, final determinations pertaining to state or federal labor code violations and criminal convictions, judgments or penalties paid to a government agency related to the provisions of the California Labor Code or the Federal Labor Standards Act within the prior five years associated with the identified contractors and subcontractors must also be disclosed.
This information is a public record and provides the public, including union labor, the opportunity to review the contractors and subcontractors associated with qualifying projects. Any issues regarding appropriate subcontractor licensure would be taken up directly with the Contractors State License Board. Additionally, the AMC identifies that failure to comply with provisions of Section 3.04.140 are a violation which can result in the suspension or revocation of building permits by the Building Official.
Development Application No. 2023-00043
March 3, 2026
This ordinance and amendment were adopted in partnership with union labor to help ensure a quality workforce on qualifying projects in the City and would apply to the project, if approved.
CONCLUSION:
The project, including the recommended project actions, has been designed to ensure compatibility with surrounding land uses, provide adequate circulation, and mitigate potential impacts to the greatest extent feasible. The project would provide for additional residential uses, including affordable units, to be introduced in the Anaheim Hills Festival Specific Plan area, creating a mixed-use community in an underutilized portion of the large retail center.
The Planning Commission found the project to be in conformance with the General Plan, Specific Plan, and Zoning Code, as amended. Staff recommends approval of this request.
IMPACT ON BUDGET:
There is no budgetary impact. The costs associated with this hearing will be incurred by the project applicant.
Respectfully submitted,
Heather Allen
Planning and Building Director
Attachments:
1. Resolution for FEIR No. 358
2. Resolution for General Plan Amendment
3. Ordinance for Specific Plan Amendment
4. Resolution for Final Site Plan
5. Ordinance for Development Agreement No. 2025-00001
6. City Council Staff Report dated January 13, 2026 (without attachments)
7. Planning Commission Staff Report dated November 17, 2025 (without attachments)
8. Draft November 17, 2025 Planning Commission Minutes
9. Summary of Additions and Amendments to Planning Commission Materials
10. Applicant Letter of Request
a.Applicant Justification Letter
11. Project Plans
12. Parking Study Analysis
13. Draft Festival Specific Plan No. 90-1
14. Draft Chapter 18.108 (Festival Specific Plan No. 90-1)
15. Draft Development Agreement No. 2025-00001
16. Table 4.11-2 (Consistency of the Project with the General Plan)
17. Evacuation Time Analysis
18. Draft Environmental Impact Report No. 358
Development Application No. 2023-00043
March 3, 2026
19. FEIR No. 358 (including Responses to Comments and Clarifications and Revisions to the Draft EIR)
20. Mitigation Monitoring Program (MMP) No. 397
21. Findings of Fact and Statement of Overriding Considerations
22. Response to Lozeau Drury LLP and Mitchell M. Tsai Letters dated November 17, 2025
23. Vicinity and Aerial Maps
24. Public Correspondence