EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: September 20, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Kelly Beggs, Consultant Planner
Elena Lee, Planning Manager
Hansom Hom, Deputy Manager, Special Projects
SUBJECT: Woodland Park Euclid Improvements
Recommendation
1. Adopt a resolution:
- Certifying that the Final Environmental Impact Report (FEIR) has been done in compliance with the California Environmental Quality Act (CEQA); - Adopting a Mitigation, Monitoring and Reporting Plan pursuant to Public Resources Code 21000 and the CEQA Guidelines (California Code of Regulations, Title 14, Section 15000);
- Adopting a Statement of Overriding Considerations;
- Directing the Community and Economic Development Director to File a Notice of Determination within five working days of adoption pursuant to Section 15075 of the CEQA Guidelines
2. Adopt a Resolution approving the General Plan Amendment (GP19-001) establishing the Neighborhood Center Overlay Land Use Designation;
3. Introduce Ordinances enacting the Development Code and Zoning Map amendments (ZC19-002) establishing the Neighborhood Center Overlay District;
4. Adopt a resolution:
- Approving the Design Review Permit (DR 19-028), Conditional Use Permit (CUP22- 003), and Tentative Parcel Map (TTM19-001) based on the findings, requirements and conditions of approval which are Attachments to the resolutions and incorporated by reference;
- Approving the Relocation Plan dated September 2022; and - Authorizing the City Manager to execute a Notice of Special Restrictions applying the City's Rent Stabilization Ordinance to 160 new/replacement units in a form approved by the City Attorney.
5. Introduce an Ordinance approving the Proposed Development Agreement for the Woodland Park Euclid Improvements Project
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 4: Improve Public Facilities and Infrastructure Priority No. 6: Create a Healthy and Safe Community
Background
City Council reviewed the Woodland Park Euclid Improvements project at the September 6, 2022 City Council Meeting. Council received staff’s presentation, the applicant’s presentation, heard public comment, and deliberated, but ultimately continued the item, including a limited public hearing, to the September 20, 2022 City Council Meeting. The recording of the meeting and staff report and associated attachments can be accessed here:
http://eastpaloalto.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1818 The staff report for the September 6, 2022 meeting also is included as Attachment A, and the analysis below supplements that report and responds to unresolved issues and questions from the September 6th meeting.
Analysis
NCO Zoning District
Consistency with the Westside Area Plan and General Plan Council asked staff how the implementation of the Neighborhood Center Overlay (NCO) District is consistent with the General Plan and the Westside Area Plan. The increased height and intensity of development allowed under the NCO District requires an amendment to the General Plan and accompanying amendments to the Development Code and Zoning Map.
However, Westside Area Plan Goal W-5 and other policies acknowledge that increases in height and intensity over existing zoning may be considered for future developments if certain requirements are met. Goal W-5 states, “The long-term development of new buildings and a new street network to improve housing opportunities and improve quality of life. Intent: To establish a long-term process and framework for future development, to establish clear prerequisites and parameters for any future increases in density and height on the Westside over what is currently allowed in zoning, and to ensure that the community’s vision for the Westside is maintained in the long term” (emphasis added).
The only mechanism by which a project can increase residential density and associated development standards over existing zoning is the amendment of an existing zoning district, rezoning to a higher intensity zoning district, or rezoning to a new zoning district (unless the applicant uses the State Density Bonus, which limits the City’s discretion and allows a certain number of concessions over development standards depending upon the amount of affordable housing provided). Associated amendments to the General Plan and/or General Plan Land Use Map also are required for consistency. Because the Westside Area Plan clearly sets forth a process and requirements for increases in intensity, the amendments to increase intensity are not inconsistent with the Westside Area Plan. The Westside Area Plan does not set forth a maximum allowable increase in intensity over existing zoning and only sets height maximums for certain areas of the Westside (Westside Area Plan Policy 5.14), which do not include the project site.
The Westside Area Plan does require new developments to provide community benefits. For example, Guiding Policy 11, states “Ensure that new development pays its fair share. New development on the Westside should be required to provide community benefits for Westside and East Palo Alto residents via the leveraging of the Westside’s assets for the maximum benefit of the community.” Policies 5.3 and 5.4 require that developments requesting increases in intensity support the development of new parks, open spaces, infrastructure, and community facilities. The project’s community benefit package includes these benefits through provision of a publicly accessible park, inclusion of a community room, and upgrades to City infrastructure including a new water tank, pump house, and storm drain upgrades.
NCO District Applicability and Required Determinations
Council expressed concern about future development projects requesting application of the NCO District. Staff responded by explaining that any future rezoning could only occur through additional legislative actions for Development Code and Zoning Map amendments in addition to other approvals and processes for major development projects, including preliminary applications required by East Palo Alto Municipal Code Chapter 18.82.030, which are reviewed by Council. In addition, in any instance of perceived conflict between the Development Code and the General Plan, the General Plan policies prevail.
To address the concerns about future NCO requests, staff has strengthened the Development Code’s integration with the General Plan, including the following changes:
• Staff added
language directly
stating that the NCO
Zone may only be
applied to the area
designated by
General Plan Figure
11-12 as eligible for
increases in
intensity on a
project-by-project
basis (shown in
blue)
• Staff added
language restricting
the application of the NCO district to parcels that do not adjoin low density or medium density residential zones and parcels that are not located near the San Francisquito Creek.
Additionally, in response to Council’s request, staff has strengthened the requirement for income-restricted affordable housing to require consistency with the City’s Inclusionary Housing ordinance within the required determinations of the Development Code Amendment.
Development Agreement
Gross Receipts Tax Applicability
Council asked if the Development Agreement would exempt the project from paying a gross receipts tax that is before the electorate in November. Staff determined that if the tax is approved by the voters, the tax will apply to the proposed project. The definition of “Impact Fee” in the Development Agreement explicitly excludes taxes and assessments (Section
4.3.3). The “Freeze Period” in the Development Agreement, which freezes the amount of fees to what is existing when the freeze begins, only applies to Impact Fees.
Preference for Woodland Park Residents at Offsite Affordable Housing Project Language has been added to Section 4.5.3 of the Development Agreement to include a preference for households which, as a result of the Project, were required or elected to move to alternative housing and which are beneficiaries of the Relocation Plan. If such a household desires to reside in the offsite affordable housing, they would have to meet eligibility requirements for tenancy.
Increase the Affordable Housing Requirement
Council discussed increasing the affordable housing obligation from the alternative compliance proposal of 20% of net new units plus rent stabilized units (89 units, minimum 70 off site new units with additional in-lieu fee payment and 160 rent stabilized units on site) to a 25% net new unit requirement, of which any excess in required over constructed units could be met by an inlieu fee payment. The objective is to further incentivize the construction of more units in the offsite affordable housing project or provide the City with additional funds for affordable housing development elsewhere. The developer indicated in conversations with staff that the approximately $5.7 million difference between a 20% and 25% obligation (if met by in-lieu fee payment) would not be financially feasible for the project.
Relocation Plan
Moving Assistance Payments
Council asked if the moving assistance payments would be provided both for move out when a household moves out of an existing unit at Woodland Park and move in when that household returns to their right of return unit. Page 48 and 61 of the Relocation Plan offer the moving assistance options at both move out of existing units and move into a right of return unit.
Relocation Payment Amounts
Council asked how relocation payment amounts would be calculated for members of an extended family that live together in one household. The Ellis Act Ordinance (EPAMC Chapter
14.08) sets forth payment amounts and procedures for relocation payments.
Per EPAMC Section 14.08.060(A)(1), “Each tenant of any residential rental unit who is required to move as a result of the owner's withdrawal of the accommodation from rent or lease shall be entitled to a relocation payment from the owner. Only adults and emancipated minors occupying the rental unit at the time of service on the tenants of the notice of intent to withdraw the units from rent or lease shall be entitled to a relocation payment.” The Ordinance defines Tenant as a renter, tenant, subtenant, lessee, or sublessee of a rental unit, or successor to a renter's interest, or any group of tenants, subtenants, lessees or sublessees of any rental unit, or any other person entitled to the use or occupancy of such rental unit and includes a former tenant displaced by the withdrawal of an accommodation from rent or lease.
Pursuant to Section 14.08.060(A)(1) each adult member of a household would be entitled to a relocation payment regardless of how many adult members of the household reside in the unit, as long as such adult household member is entitled to use and occupy the rental unit. Whether each adult member of a household is entitled to use and occupy the rental unit will depend upon application of the Rent Stabilization Ordinance which provides that it is not a lease violation for certain relatives to move in with a tenant.
Section 14.08.060 (A)(2) provides that certain qualified tenants are entitled to relocation payments. Qualified Tenants include a person less than 18 years of age who is a dependent.
Qualified Tenants are entitled to additional modified relocation payments, so children under the age of 18 would be eligible for a relocation payment as a Qualified Tenant. The amount for Qualified Tenants is approximately $3,300. Other Qualified Tenants are those who are lowincome, disabled, elderly and terminally ill, as defined in Section 14.08.030.
Resident Census
Council asked the status of a resident census requested at a previous Council Study Session.
Staff updated the table below, which shows prior and current occupancy at the Woodland Park Euclid Improvements Area. This table was presented at the February 15, 2022, City Council meeting. As described by the applicant, after the decision to undertake the proposed project was made, units that became vacant were not marketed for rent again, and thus, occupancy has fallen at the project site since 2017. In response to concerns of displacement from Council, the applicant added a right of return option for eight households who moved away from the Euclid Improvements area between project announcement (December 2018) and the date Woodland Park sent the final, signed relocation commitments to all affected households (October 2019).
Table 1: Woodland Park Euclid Improvements Area Occupancy Statistics Total
Households
Occupancy
%
Occupancy History of Units within Euclid
Improvements Area
2016 150 94%
2017 147 92%
December 2018 115 72%
January 2022 Occupancy Breakdown
January 2022: Occupied Units within Euclid
Improvements Area or within Relocation Apartments
87 54%
within Improvements Area 61 38%
within Relocation Apartment as part of Tenant
Requested Move (TRM)
26 --
Total
Households
Occupancy
%
Occupancy History of Units within Euclid
Improvements Area
January 2022: Households No Longer Residing
within the Euclid Improvements Area or Relocation
Apartments
28 --
TRM Households that left Relocation Apartments in
2020
3 --
Households that have left Improvements Area since
Dec. 2018
25 --
September 2022 Occupancy Breakdown
September 2022: Occupied Units within Euclid
Improvements Area or within Relocation Apartments
85 53%
within Improvements Area 58 36%
within Relocation Apartment as part of TRM 27
September 2022: Households No Longer Residing
within the Euclid Improvements Area or Relocation
Apartments
30 TRM Households that left Relocation Apartments in
2020
3 Households that have left Improvements Area since
Dec. 2018
27 Since the February 2022 meeting, two households have left the Euclid Improvements Area, and one household has participated in the optional tenant move program. Eighty-five households are currently eligible for relocation benefits as current tenants, and eight households which left between the date Woodland Park announced the Euclid Improvements (December 2018) and date Woodland Park sent the final, signed relocation commitments to all affected households (October 2019) are eligible for Right of Return units.
The applicant shared tabulated results from a survey that tenants fill out at move-out that provides tenants’ reasons for leaving the Euclid Improvements Area. This aggregated data was included in the packet for the February 2022 meeting on the Relocation Plan and is included here as Attachment U. The applicant is only able to share tabulated data because of privacy and confidentiality concerns, especially as information shared with the City is subject to California Public Records Act requests. The aggregated data indicates that of the households that moved out of the Euclid Improvement Area since the applicant acquired the property, the most common reasons for leaving were:
• Relocate City / State (12%)
• Moved to Another Community (12%)
• Job Transfer or Job Loss (12%)
• Bought or rented home/condo (7%)
• Closer to work/school (7%)
All aggregated data is available in Attachment U.
TDM Plan
Council asked staff several questions regarding the Transportation Demand Management (TDM) Plan. In response, staff has worked with the applicant to eliminate the erroneous reference to affordable housing as a TDM measure given that the project’s income restricted affordable housing will be located off-site. Council also asked why the developer gets such a high number of points (6.5 points) for unbundling parking. The point amount is set by the Residential TDM Program Guidelines, Exhibit A of the TDM Program Guidelines, adopted by Council on June 1, 2021. Unbundled parking is assigned a high point allotment due to efficacy of the measure. Council is able to require additional TDM measures at its discretion. The applicant also is required to participate in a TMA (if formed) by Condition of Approval 17.
Attachments
A. September 6, 2022 Staff Report
B. CEQA Resolution, Findings of Fact and Statement of Overriding Considerations, Mitigation, Monitoring, and Reporting Program
C. Draft EIR
D. Final EIR
E. General Plan Amendment Resolution
F. Development Code Amendment Ordinance
G. Zoning Map Amendment Ordinance
H. Resolution Approving Project, Required Findings, and Conditions of Approval I. Ordinance Approving Development Agreement (with Development Agreement) J. Architectural Plans (click link here)
K. TDM Plan and Parking Demand Analysis
L. Relocation Plan
M. Affordable Housing Alternative Compliance Milestones N. Fiscal Impact Analysis
O. Community Impact Report
P. Community Involvement Strategy
Q. General Plan Consistency Analysis
R. Planning Commission Resolution
S. Planning Commission Meeting Public Comments
T. City Council Meeting Public Comments
U. Aggregated Tenant Move Information