Gonzales City Council
September 2, 2025

City of Gonzales

COMMUNITY DEVELOPMENT DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 2, 2025
FROM: Taven Kinison Brown, Community Development Director THROUGH: Carmen Gil, City Manager
SUBJECT: Vista Lucia Specific Plan Annexation & Tentative Map Project

RECOMMENDATION
It is recommended that the City Council take the following actions to approve the Project as recommended by the Planning Commission:
• Receive the staff report;
• Open the public hearing;
• Close the public hearing; and
• Adopt Resolution No. 2025-09, A Resolution of the City Council of the City of Gonzales Certifying the Vista Lucia Project Final Environmental Impact Report (SCH#2020039056), Adoption of the Mitigation Monitoring Reporting Program (MMRP) and Adoption of CEQA Findings of Fact and Statement of Overriding Considerations. • Adopt Resolution No. 2025-10, A Resolution of the City Council of the City of Gonzales Approving an Amendment to the Gonzales General Plan (GPA 2025-02) and Approval of the Vista Lucia Specific Plan.
• Introduce, Waive Reading and Read by Title Only Ordinance No. 2025-148, An Ordinance of the City Council of the City of Gonzales Approving the Pre-zoning of the Vista Lucia Project Area to Zoning Districts as Designated in the Vista Lucia Specific Plan. • Introduce, Waive Reading and Read by Title Only Ordinance No. 2025-149, An Ordinance of the City Council of the City of Gonzales Approving a Development Agreement by and Between the City of Gonzales and Cielo Grande Ranch, LLC Relative to the Development Known as Vista Lucia”
• Adopt Resolution No. 2025-11, A Resolution of the City Council of the City of Gonzales Approving the Vista Lucia Blocks 1-8 Tentative Map (TM 2023-01) of 796 Building Lots AGENDA
ITEM
10 accommodating 1,247 Units and 49 Common Lots on a Project Site of 236.5± acres Located East of Fanoe Road (Monterey County Assessor Parcel No. 223-031-027 & 024). • Adopt Resolution No. 2025-12, A Resolution of the City Council of the City of Gonzales Approving the Initiation of a 771 Acre Annexation Request with the Monterey County Local Agency Formation Commission (LAFCo).

BACKGROUND
The Vista Lucia property (APNs: 223-031-024, -025, and -027), located east of Fanoe Road, is currently outside of the City limits of Gonzales and is included in its entirety in the 2010 Gonzales General Plan. It was also included within the 2014 Sphere of Influence Expansion approved by LAFCo and is currently planned for Neighborhood Residential as part of a designated Specific Plan Area.

The actions to be considered at this public hearing include receiving recommendations from the Planning Commission to the City Council to take action on a number of matters including certification of the Final Environmental Impact Report under CEQA and adoption of a Mitigation Monitoring Program, approval of a General Plan Amendment and adoption of the Vista Lucia Specific Plan, Pre-Zoning by ordinance, approval of a Development Agreement by ordinance, the contingent approval of the first phase Tentative Map for the Project to allow the eventual development and associated improvements upon annexation into the City of Gonzales, and initiation of an application for annexation from the City to the Monterey County Local Agency Formation Commission (LAFCo).

Future actions that will be required beyond City Council approval of the request include the submittal of the annexation request to LAFCo by the City of Gonzales, approval of the annexation request at a public hearing by LAFCo, approval of a final map(s), the filing of subsequent tentative maps, compliance with Conditions of Approval, and Mitigation Measures and the applicant securing grading, utility, and building permits through the plan check review process, leading to the construction of the Project.

REVIEW AND ANALYSIS
• Description
• CEQA Impacts
• General Plan Consistency
• Specific Plan
• Annexation
• Pre-zoning
• Project Zoning Conformance
• Previous Action
• Key Conditions of Approval
Description
The proposed Project, named Vista Lucia, is according to the developer, “a master-planned community, comprised of two neighborhoods, with residential and commercial areas connected by design features that support sustainable development, with cultural, recreational, and civic amenities that encourage active and vibrant living. Vista Lucia is designed to include a diversity of residential housing types, supporting various lifestyles and age groups, including two mixed-use neighborhood centers, two major community parks, five residential neighborhood parks, and more than seven miles of walkable promenades, bikeways, and trails connecting neighborhoods and amenity features to one another.” The Vista Lucia Specific Plan will regulate and provide guidance for the development of up to 3,498 residential units, comprised of single family and multi-family residential units, along with two commercial/residential mixed-use centers totaling 8 acres in size, the donation of a proposed elementary school site, and provisions for two additional educational sites, and 79 acres of recreational facilities, including parks, play fields, trails, plazas, community gardens, and neighborhood squares. In addition, a pedestrian promenade system that interconnects residential and commercial areas within and between the two neighborhoods is included. Bike trails, detention and drainage areas, and other open areas will be incorporated into the open space system.

Development of the proposed Project would occur over multiple phases, depending on market demand and the ability to provide adequate infrastructure. Infrastructure will either be available prior to or built concurrently with each phase to ensure that all necessary facilities are available prior to occupancy thereby maintaining fiscal neutrality for the City.

For a greater description of the Project, goals, objectives and proposed Land Use Plan and Zoning Districts, refer to Chapter 2: Development Plan of the Draft Vista Lucia Specific Plan.

Location
Cielo Grande Ranch, LLC (Project Applicant) proposes the Vista Lucia Specific Plan project on 771 acres on three large agricultural parcels (APN’s 223-032-024, -025 and -027) on the east side of Fanoe Road as described in the Vista Lucia Specific Plan and upon application materials on file with the City (Vista Lucia Project) and as shown on the site plan on file with the City (Project Site).

Three sides of the Project (north, south, and east) are currently surrounded by active agriculture uses.

Existing residential development is located to the west of the Project site. Potential future uses to the south of the Project site include Neighborhood Residential development subject to a Specific Plan development. Property to the east is not currently within the Gonzales General Plan or growth boundaries. North of the Project is designated as a permanent agricultural edge in accordance with the 2014 City/County Memorandum of Agreement. Two existing rural residences are located immediately adjacent to the Project’s western property line, with a third one-acre rural residence located within the Project boundaries but on its own parcel near the southwestern corner of the Project site.

The site is relatively flat, ranging from approximately 125 feet in elevation at its low point in the northwest corner to approximately 250 feet in elevation in the southeast corner, draining from southeast to northwest. The land is currently used for agricultural production and related agricultural facilities, irrigation ditches, ponds, and unimproved roadways.

General Project Information
Owner: Neil Fanoe, Et Al
Applicant: Cielo Grande Ranch, LLC
Property Address: Fanoe Road, Gonzales, CA 93926
Assessor Parcel Numbers: 223-032-024, -025 and -027
General Plan Designation: Current & Proposed: Neighborhood Residential Zoning District: Current: County Agricultural / Proposed: Specific Plan Zoning CEQA Impacts
The California Environmental Quality Act (CEQA) requires that the lead agency (the City of Gonzales) first consider the environmental effects of a proposed project prior to approval of the project. The City retained EMC Planning to conduct the required environmental analysis under CEQA. Based on the scope of the proposed Project, the City determined that an Environmental Impact Report (EIR) was to be prepared. The EIR focuses on the physical changes to the environment that would result from development of the Vista Lucia Project.

An original Notice of Preparation (NOP) was circulated from March 18, 2020, to April 20, 2020, to address the potential impacts of the applicant’s original request to the City to approve only annexation and pre-zoning. After the preparation of the Vista Lucia Specific Plan document, the City issued a revised NOP from September 14, 2021, to October 29, 2021. A scoping meeting was held on October 28, 2021.

On January 30, 2024, the Vista Lucia Project Draft Environmental Impact Report (DEIR) was released for a 45-day public review, where interested governmental organizations and private parties could comment on the issues related to the project.

On February 19, 2025, following public review and comment, a Final EIR for the Project was released.

Pursuant to CEQA Guidelines Section 15088, the City of Gonzales provided written responses to public agencies on comments made at least 10 days prior to considering certification of the EIR. On March 10, 2025, the Planning Commission reviewed and considered the FEIR prior to taking any action in connection with the proposed Project. In its decision, it recommended the inclusion of an errata in response to a comment by LAFCo that the Mitigation Measure 5-1, which governed agricultural mitigation, had not included more stringent language reflecting the updated adopted LAFCo policy from February 26, 2024 for agricultural mitigation.

Staff considered this request and determined that the Development Agreement has already sufficiently addressed the compliance issue as follows:

5.4 Agricultural Mitigation. On April 3, 2023, the City adopted that certain Agricultural Mitigation Resources Ordinance codified as Chapter 12.150 in the City Code. On February 26, 2024, LAFCo adopted that certain Resolution Amending the Commission’s Adopted Policy for Preservation of Open Space and Agricultural Lands (the “LAFCo Ag. Policy”). The Parties have agreed and do hereby agree that Master Developer shall comply with the LAFCo Ag. Policy.

After the Final EIR was completed and circulated to the agencies/interests that provided comments on the DEIR, and after the Planning Commission recommendation to certify the Final EIR in March 2025, the applicant submitted a letter on June 26, 2025, to the City of Gonzales. The letter is included as part of Exhibit L to the staff report. The applicant requested clarifications to Mitigations 7-2a and 7-2b in the DEIR regarding the potential impact of the project on the California tiger salamander and issues raised by the California Department of Fish and Wildlife. In the letter, the applicant’s biologist reiterated that based on prior surveys of the site, suitable habitat for the California tiger salamander is not present. Past and current land use practices, which include ongoing agricultural activities, largely preclude the site from supporting habitat for the California tiger salamander.

The applicant’s basis for requesting to clarify the mitigation measure was to recommend more precise, step-by-step direction for determining whether suitable habitat for the California tiger salamander could become present over the long-term buildout period for the project, and if so, define next steps to ensure that appropriate surveys and other protective actions are taken. The clarifications would require conducting additional habitat surveys within the boundary of each proposed tentative map prior to initial ground disturbing activities to determine if there is suitable habitat for California tiger salamander. If the habitat survey concludes that there is no suitable habitat, then no further mitigation would be required. If suitable habitat is found, protocol surveys following the Interim Guidance on Site Assessment and Field Surveys for Determining Presence or a Negative Finding of the California Tiger Salamander (USFWS 2003) would then be conducted to determine whether there are California tiger salamanders present. If protocol surveys determine that California tiger salamander are present, the applicant must seek Incidental Take Authorization pursuant to Fish and Game Code Section 2081(b) prior to ground disturbance.

Measures to avoid and/or minimize direct take and to fully mitigate impacts of the take would be implemented per conditions of the Incidental Take Permit. Subsequent habitat surveys would be required for the area within an approved tentative map boundary only if the area has not been developed within ten (10) years of the date the initial habitat survey was completed.

After thorough review of the applicant’s request, in the independent judgment of City staff, the proposed clarifications strengthen the original mitigation and provide clearer direction for protecting California tiger salamander. Therefore, staff is recommending that the City Council accept the clarifications.

The Mitigation Monitoring and Reporting Program for the project to be considered by the City Council includes the mitigation measure as clarified. An errata to the Final EIR has also been prepared to memorialize the clarified mitigation measure and verify that it replaces Mitigation Measure 7-2a and 7-2b in the DEIR. The errata is to be considered by the City Council as part of its decision whether or not to certify the Final EIR.

In addition, the errata includes the Planning Commission recommendation clarifying that agricultural mitigation activities under Mitigation Measure 5-1 will be consistent with the current LAFCo Agricultural Mitigation Policy.

The full document, including the DEIR and FEIR with errata is provided with Project application materials as Exhibit A to Resolution 2025-09.

The City Council may certify the Final EIR upon making written findings that the FEIR is adequate and complete, reflects the City’s independent judgement and analysis. In addition, the recommendation would include adoption of a Statement of Overriding Considerations and the Mitigation and Monitoring Program.

The EIR covers many items, but the key issues covered and summarized are as follows:

Agricultural Resources
The 771-acre Project site contains 202 acres of Prime Farmland and 554 Acres of Farmland of Statewide Importance for a total of 756 acres, with the remaining 15 acres being designated as Grazing Land. The conversion of this land to non-agricultural use is considered a Significant and Unavoidable Impact and there are no mitigation measures to avoid or reduce the impact to a less-than-significant level. However, consistent with the 2014 City/County Memorandum of Agreement and the City’s own agricultural mitigation ordinance, mitigation is available to lessen the significance of the impact. As such, the applicant is required to mitigate the impacts of the conversion of Prime Farmland and Farmland of Statewide Importance by implementing mitigation options included in City Ordinance No. 2023-136, subject to review and approval by the City Council.

It is typically the policy of Monterey County LAFCo to require a plan for securing acceptable agricultural easements prior to the time the matter reaches the LAFCo board so that their staff may review the suitability of such easements. At this time, despite multiple attempts, the applicant has yet to secure an agreement for an agricultural easement. Pursuant to City and updated LAFCo policy, the applicant may pursue an option to pay in-lieu fees to secure easements in the future, after making a good faith effort to secure an easement in the immediate area. In order to meet this mitigation requirement and satisfy the requirements of the Monterey County LAFCo, the applicant is proposing the use of in-lieu fees in a phased approach prior to annexation of each phase of the Project. While City staff had expected to implement Agricultural Mitigation according to the City’s adopted Agricultural Resource Mitigation Ordinance (Chapter 12.50) stemming from the City’s negotiated Memorandum of Agreement with the County of Monterey which would defer mitigation until the impact is created (converting the land from agriculture to housing), LAFCo has now “occupied” this land use control by requiring the City and Cielo Vista to demonstrated agricultural mitigation as a precondition to annexation and the potential first phase.

All written correspondence outlining the City and applicant’s “good faith effort” and request to use the inlieu alternative is included in Attachment G and would be included in the application to Monterey County LAFCo for annexation.

Additionally, the Project will introduce urban uses that will continue to be surrounded by agricultural land in active production. Agricultural buffers are a typical measure required in Monterey County and are supported in the City/County MOA to reduce the potential for land use conflicts by separating urban land uses from active agricultural operations and the nuisances that they have the potential to create.

Permanent buffers of 200 feet will be required adjacent to farmland that are not expected to develop with urban uses in the future, and temporary buffers of 200 feet will be provided in areas where urban development abuts with land also planned for future urban development located in the General Plan.

These buffers may transition to urban uses upon development and conversion of the adjacent agricultural property.

Air Quality
The EIR analyzed the potential impacts of the Project on air emissions and contaminants. This includes short-term construction emissions as well as long-term impacts of the neighborhood’s impact on air quality. Mitigation measures have been included that address the impact of fugitive dust emissions during construction activities by limiting certain activities and requiring certain dust-controlling measures.

The proposed Project is forecast to produce emissions in excess of the determined thresholds of significance, as set by the local air district. An overwhelming majority of these emissions will be eliminated by the prohibition of fireplaces within the Vista Lucia Project. The other impacts would generally be from Vehicle Miles Traveled (VMT) by future residents, and certain alternative transportation mitigations have been included in the Project such as by including a robust pedestrian and bicycle network within the Project, traffic calming, and electric vehicle charging. Further steps also include additional energy efficiency appliances and applications within residences.

Biological Resources
Studies were completed to review the impacts of the proposed Project on special-status species. No special-status plants were observed on the site as no suitable habitat exists due to the many decades of agricultural use on the Project site. Special-status wildlife with potential to occur was also unlikely given historical activity, with the low potential for burrowing owls and the California horned lark. All impacts in this section were deemed to be less than significant or less than significant with mitigation. These mitigation measures generally focus on identification and avoiding or minimizing impacts to specialstatus plants or species should they be identified during development of the Project.

Cultural and Tribal Resources
The City submitted a formal notification letter of the Project pursuant to AB 52 to tribes to discuss the potential of tribal cultural resources. The City formally consulted with the Ohlone/Costanoan-Esselen Nation. While no resources are known to exist, standard mitigation measures are included to have tribal monitoring if requested and stop working upon any discovery of historic or archaeological resources, or human remains on the site.

Greenhouse Gas Emissions
The proposed Project was studied to determine the projected Greenhouse Gas Emissions sources and volumes resulting from operations of future uses in the Project site. This was done by evaluating the Project consistency with the City of Gonzales adopted Climate Action Plan. Mitigation measures to reduce impacts to overall GHG emissions include no natural gas within the Project, electric vehicle support infrastructure in the Project, and the planting of a significant number of trees within the Project.

Hazards and Hazardous Materials
The Project was evaluated to review the impact of potentially hazardous environmental conditions within the specific plan boundary. The primary findings were the potential for hazardous materials associated with past agricultural uses and a dairy farm, including abandoned underground fuel storage tanks. As a mitigation measure, the applicant shall be responsible for remediating all project site hazardous materials conditions consistent with direction provided in the Site Mitigation Plan, Vista Lucia (McCloskey Consultants 2022). All hazardous materials conditions within the boundaries of individual tentative maps shall be remediated prior to approval of grading permits for each individual tentative map project Noise
The Noise chapter of the EIR examined traffic noise and stationary noise commonly associated with planned commercial and school uses, and short-term noise effects of construction. The significance of noise impacts is primarily determined based on whether noise levels exceed adopted noise standards identified in the General Plan EIR and Municipal Code.

Mitigation measures have been included to require best management practices to reduce the short-term construction noise conflicts with the existing neighborhood and other nearby sensitive uses and address the potential for long-term noise conflicts from proposed commercial uses and schools.

Water
This section of the EIR assessed projected water demand from the proposed Project and focused on whether or not the City has access to sufficient water supply to meet Project demand. Since the City obtains its water supply from groundwater, potential impacts on groundwater sustainability are examined in the context of the applicable sustainable groundwater management plans. The potential physical impacts of constructing new water supply infrastructure to serve the Project are also reviewed. As a project of more than 500 residential units, a SB 610 Water Supply Assessment for the Vista Lucia Project was completed. (Attachment J)
The Project site is currently used for agricultural production. Water used for existing agricultural operations is provided by private wells. The proposed Project is expected to demand 1,501 acre-feet per year under normal conditions. This analysis demonstrates that the proposed Project is expected to generate approximately 686 to 866 AFY less consumptive demand for groundwater than the Project site’s current agricultural land use. Over the life of the project, two new municipal wells will be required along with a storage tank.

Wastewater
The City owns and operates the existing Municipal Wastewater Treatment Plant (MWWTP), which is currently permitted to accept up to 1.3 million gallons per day (MGD) of wastewater, averaged over a month. The plant is currently operating at 1.1 MGD. The City is expanding the wastewater system by constructing a separate industrial wastewater reclamation facility and associated collection system to serve select tenants of the Gonzales Agricultural Industrial Business Park. Once completed, the industrial wastewater reclamation facility would treat industrial flows that are now treated at the existing plant, thereby substantially increasing available treatment capacity. The City would then implement a major rehabilitation and upgrade of the existing MWWTP. With up to 1.0 MGD of industrial flows that were originally treated at the MWWTP being diverted to the new industrial wastewater treatment plant, and an increase at the existing plant from 1.3 MGD to 1.9 MGD, the MWWTP would have adequate treatment capacity to handle all wastewater from current customers, any new development within the existing city limits and full buildout of the Vista Lucia development. Projected wastewater flow from the Vista Lucia project is 790,000 gpd at full buildout.

With the planned industrial wastewater treatment plant and MWWTP improvements, new conveyance infrastructure will be needed. The City has designed and would construct wastewater conveyance improvements to connect Vista Lucia to the upgraded MWWTP. For the proposed Project, improvements are anticipated to include one or more new lift stations, upsizing an existing lift station, approximately 2,500 feet of new 15-inch sewer main, and upsizing 15,000 feet of existing sewer mains. Other improvements may be needed depending on the points at which wastewater from new development is discharged into the City’s system and anticipated flow volumes into the system over time. The mains would be constructed within existing city streets. These improvements are defined in the City of Gonzales Wastewater Master Plan.

Transportation
As per State law and local ordinance adopted in 2022, the EIR analysis focuses on transportation impacts not on the Level of Service of traffic upon buildout, but on the number of Vehicle Miles Traveled (VMT) that would be generated by the Project once it is built out and operating. Given the fact that the Project will result in an increase in commuting patterns for the residential portion of the Project above the threshold of significance as determined via the AMBAG regional model, the impact is considered Significant and Unavoidable.

Alternatives
CEQA also requires that the EIR evaluate a range of reasonable alternatives to the proposed Project which could feasibly attain most of the basic objectives of the Project but would avoid or substantially lessen any of the significant effects of the Project. Four alternatives were considered including a No Project alternative, reduced scale, increased density and a high density alternative. While the No Project alternative is considered the environmentally superior alternative, the high density alternative is considered to be the next most environmentally superior alternative. Detailed discussion of alternatives is included in Section 22 of the EIR document.

The high-density residential alternative consists of requiring that 40 percent of the total proposed 3,498 residential units, or 1,400 units, be developed at a minimum density of 20 units per acre. Under this alternative, all residential development would be accommodated on a total of 304 acres. This is 148 acres less than the 452 acres needed to accommodate all residential uses per the proposed project as identified in Table 4-1. The primary difference in this alternative is that it would not achieve project objectives, to “include a wide array of residential densities and housing types for people of different income levels, age groups, and lifestyles.” The high-density residential alternative would reduce housing-type choice by eliminating the 990 units proposed at an average density of 5.0 units per acre per the Neighborhood Residential Low land use designation.

This approach conflicts with the City of Gonzales commitment to design requirements and best planning practices that have been built into the City’s General Plan and to consider such new development through deliberate and purposeful specific plans, providing multiple pricing points, a spectrum of unit sizes and maintaining densities consistent with the City’s community character. Adoption of the Alternative 4 would eliminate many opportunities for market rate units and would be wholly inconsistent with the City’s obligation to enable its fair share of the Regional Housing Needs Assessment (RHNA) assignment of 657 market-rate units for the sixth cycle ending in 2031.

Given the lack of housing built in Gonzales over the past twenty years, The City has a significant need for additional roofs to be constructed as some local families have three or even four generations under one roof. The City has many first-generation college students returning home with degrees in hand, and no home to live in near their families. These graduates and so many others work as engineers, supervisors, investors, business owners, multiple-home owners, teachers, fire people and police officers, truck drivers, real estate agents, and the full spectrum of professions and practices. Limiting choice to higher densities, well above those typically found in Gonzales, would mark a significant change to the character of the community.

Public Comment
At the close of the Draft EIR public comment period on March 18th, 2024, the City received written comments from six entities. The comments are included in Exhibit B to Resolution 2025-09 along with City responses to the comments. In summary, the comments and responses were as follows:

1. Monterey County Local Agency Formation Commission (LAFCo)

2. Monterey County

3. California Department of Transportation (Caltrans)

4. California Department of Toxic Substance Control

5. California Department of Fish and Wildlife

6. LandWatch Monterey County
LAFCo - LAFCo provided the majority of comments regarding agricultural mitigation requirements, and a request that the City proposal and EIR be consistent with the updated LAFCo Policy for Preservation of Open Space and Agricultural Lands. Other items included a request for a comprehensive financing plan to accompany the LAFCo application, consideration of impacts and mitigation measures related to the construction or provision of circulation, fire protection, police protection and wastewater facilities, and various requested edits to the document.

Monterey County - The Water Resources Agency had clarifying comments about updated groundwater elevation contours. Housing and Community Development had comments regarding the Project description and references to the 2014 Gonzales City/County MOA and impacts between the City/County urban/farmland interface. The Agricultural Commissioner's Office commended the developer for early consultation and provided recommendations to amend Mitigation Measure 5-2. Engineering noted the need for a legally binding agreement with the County regarding future improvements and maintenance of roads impacted by the Project (Associated Lane and Fanoe Road) that will remain in the unincorporated county.

Caltrans – Caltrans primarily provided comments about future review of intersections and interchanges that will be impacted by the development, and promoted EV infrastructure, coordination with MST, and encouraged increased residential density.

Toxic Substance Control – The DTSC identified that the Project may impact an inactive mitigation and cleanup site related to dairy farm business that ran on the site from 1938 to 1970 and the bulk storage of gasoline and diesel fuel in 1972.

Fish and Wildlife – The State Department of Fish and Wildlife commented about the Project’s impact on biological resources, primarily concerns about the California Tiger Salamander and the White-Tailed Kite. In addition, the letter provided a reminder about required filing fees upon filing of the Notice of Determination.

LandWatch - LandWatch Monterey County, a non-governmental non-profit organization wrote a lengthy letter expressing concern with the Project and EIR requesting more units zoned at densities to allow for affordable housing, concerns about meeting the 2050 goal for emissions reduction, issues with air quality impacts, concerns that the EIR does not consider effective VMT mitigation, does not match affordability levels to the local workforce household incomes, has a deficient alternatives analysis, and lacks a reasonable range of alternatives.

General Plan Consistency
The proposal to annex the property into the City Limits and construct the Project is fully consistent with the 2010 General Plan and the underlying Neighborhood Residential (Inset #2) Land Use Designation.

Pursuant to General Plan Policy LU-2.1, a Specific Plan is required with the uses prescribed by the applicable land use designations shown in the Land Use Diagram.

These Neighborhood Residential areas constitute nearly all of the opportunities for major new residential development contained within the General Plan. The Neighborhood Residential designation is to define the areas in the Gonzales General Plan that are appropriate for new residential development within the context of a neighborhood. The Neighborhood Residential designation, which is applied only within new growth areas, includes a full range of housing types typically found in healthy and diverse neighborhoods.

The Neighborhood Residential designation shall be implemented only through the development of a Specific Plan. The mix of residential uses shall be within the parameters set forth in Table II-4 of the General Plan (which generally requires a minimum of 15% of the units in the Project to be in four categories of varying densities), and the average residential density within a neighborhood shall be between seven and nine dwelling units per acre.

General Plan Objectives and Policies Supporting the Project Support for the Vista Lucia Specific Plan is contained in the following chapters and policies within the General Plan document. These objectives, implementing actions and policies include matters related to Land Use, Circulation, Housing, Community Health and Safety, Conservation and Open Space, Community Facilities and Services, Community Character, Sustainability and Health and Wellness are included in Attachment I.

The General Plan does not remain static. State law permits up to four Plan amendments each year, but any number of changes can be included in each of the four amendments (Government Code Section 65358 (b)). Both the plan diagrams and the plan text may be amended. In the latter case, the city may determine that it is necessary to revise portions of the text to reflect changing circumstances or philosophies.

Because the requirement for internal consistency is never relaxed, care must be taken to ensure that amendments maintain consistency with text and diagrams in all plan elements. Moreover, all amendments must be supported by findings that the amendment is in the public interest, consistent with the rest of the General Plan, and not detrimental to public health, safety, and welfare.

A General Plan Amendment (GPA 20205-02) will be required to install the Vista Lucia Specific Plan, by reference, into the Gonzales General Plan, consistent with all previously mentioned policies including those highlighted in Attachment I.

Tribal Consultation Requirements
SB 18, adopted in 2004 requires that the City of Gonzales refer the proposed action to California Native American tribes, as specified, prior to the adoption or amendment of a City’s General Plan. The City shall provide opportunities for involvement and conduct consultations with California Native American tribes for the purpose of preserving specified places, features, and objects that are located within the city’s jurisdiction. AB 52 is also similar legislation that applies to CEQA documents to be processed in this matter. The City initiated a formal request for consultation in April of 2020. The Ohlone/CostanoanEsselen Nation responded requesting consultation, which was subsequently conducted. The tribal representative stated that the Project site may contain tribal cultural resources, though no tribal cultural resources are known to exist within the site and requested that a tribal monitor be present at the site during ground disturbing activities.

Specific Plan
Specific Plans are envisioned by the City of Gonzales as a key building block in implementation of the General Plan and almost all of the new growth areas in Gonzales will be required to develop Specific Plans. The General Plan has been structured to anticipate subsequent adoption of Specific Plans to provide more detail and refinement about the locations of land uses, housing types, public facilities, and services and other considerations.

The preparation of specific plans is regulated by adopted Specific Plan Procedures. The procedures define the application process and required content of each specific plan and the process of public review, recommendation and formal adoption by the Planning Commission and City Council. Key features of each Specific Plan will include:
- Development plans for all land uses include detailed land use maps and proposed designations for residential, commercial, and industrial areas, a plan for housing and affordable housing, identification of and plans for community facilities and infrastructure including streets, public transportation, parks, drainage, water supply, sewer services, utilities, and public services. - Development standards and zoning designations
- Community Design Guidelines consistent with the General Plan’s Community Character Element and Neighborhood Design Guidelines
- Implementation plan including a facilities master plan consistent with the City’s master plans, independent professional fiscal impact analysis, and financing plans for all public facilities and improvements.

The Vista Lucia Specific Plan is organized into six sections that outline the detailed requirements for the Project and will guide the multiple phases of growth over the development timeline. The Specific Plan, which will be incorporated into the 2010 Gonzales General Plan by reference, is the governing document for all development within the geographic boundaries of the Specific Plan Area. The Specific Plan must remain consistent with the overall 2010 Gonzales General Plan policies, land uses, and requirements established for the property. The Vista Lucia Specific Plan Sections are as follows:

Introduction
The Introduction Section explains the purpose and basis of the Specific Plan; the organization of the Specific Plan; Project background; site opportunities and constraints; relationship to existing plans and policies; and the planning process and entitlements.

Development Plan & Affordable Housing
This section explains the goals and objectives of the Vista Lucia Project and describes the proposed Land Use Plan and Zoning Districts, demonstrating consistency with the City’s General Plan for the Project Area.

This section includes the Land Use Plan for the property, the various designations and Zoning Districts, and the general phasing concept to the property including locations of various public facilities. This graphic is located as Figure 2-1 on Page 2-7 of the Specific Plan document. The Development Plan includes the breakdown of acreages for land uses including 452 acres for residential uses, eight acres for neighborhood commercial development, 79 acres for parks, promenades and greenways, 73 acres in detention, drainage, buffers or other open space, 42 acres for educational facilities, and 114 acres for roads and other miscellaneous public infrastructure areas. The full land use Summary table (Table 2-1) is found at Page 2-9 of the Specific Plan.

In terms of residential units for the total of the Project, the full breakdown of units and Zoning Districts are provided at Table 2-2: Residential Land Use Summary on Page 2-10. The plan includes 995 units at low density (five dwelling units per acre), 1,239 units at medium density (seven dwelling units per acre), 540 units at medium-high density (12 dwelling units / acre), 620 units at high density (20 dwelling units per acre), and 104 units in the Neighborhood Commercial / Mixed Use zone (13 dwelling units / acre).

This section also covers the affordable housing for the project, which emphasizes the concept of “affordable by design” within the project, with the development of 724 units throughout the development that are projected to be in either High Density zoning at 15-24 units per acre, or Mixed Use Housing at up to 15 units per acre. In addition, 540 dwelling units are planned in medium density zoning districts at a density of 9-15 dwelling units per acre. There are additional opportunities for smaller lots and self-help housing, with the development of 3,000 to 4,000 square foot lots.

In order to memorialize the obligations to ensure the development of deed-restricted affordable housing, the City and Developer have tentatively agreed to terms that are detailed in the project Development Agreement. These terms include the donation of property by the Developer of two sites totaling 19.2 acres of land (Block 6 and Block 25) to a qualified affordable housing developer, to construct at least 211 low-income and very low-income units on each site. Affordable Housing Agreements will be required and shall require, at minimum, a homebuyer education program; a targeted marketing campaign to alert households which are eligible for affordable housing units; preparation of a list, to be maintained by the City, of households which are interested in affordable housing; a pre-qualification program offered by a qualified bank/mortgage broker; and agreement by the Owner of Block 6 and the Owner of Block 25 to fund the staff of third party services required for the City to administer and oversee the affordable housing units to be constructed.

In order to facilitate affordable housing at the earliest available point of development of the project, the Master Developer shall be responsible for including in any agreement for development of Block 2 or Block 3, whichever is developed first, the obligation to construct the Gabilan Promenade from the Project entrance at Fanoe Road to the northeast corner of Lot M, the proposed public park immediately adjacent to Block 6. This will provide the necessary infrastructure to connect to the property and allow construction of affordable housing at Block 6.

In terms of the timing for affordable housing as compared to market rate development, the Developer has entered into a MOU with CHISPA to donate the property to develop Block 6. It is the intent of the City to see the housing developed at the earliest possible opportunity, with the understanding that securing financing, completing site-specific approvals, and construction will take time to complete.

In addition, Master Developer shall set aside thirty (30) lots in Block 3 for the purpose of offering these lots to a “self-help” builder participating in a program that allows future residents to participate in building their own homes or other participants’ homes, commonly known as a “sweat equity” program.

The Developer will also set-aside nineteen (19) lots in Block 20 for similar purposes.

Circulation & Mobility
This section describes the Vista Lucia circulation and streetscape plan, including the roadway hierarchy and proposed mobility plans for motorists, pedestrians, and bicyclists. This section includes the main vehicular backbone network, which relies on the improvement of Associated Lane (to be renamed Vista Lucia Parkway) at US 101 to the connection with the extension and widening of Fanoe Road to connect to the Project. These improvements, functional prior to occupancy of the first homes and to be phased in, will significantly ease existing congestion on the 5th Street bridge and interchange, and will facilitate traffic moving north out of Gonzales on US 101.

In addition, the main pedestrian-bicycle circulation network is included, along with specific details on roadway cross sections, mobility features, street types, traffic calming measures, farm vehicle mitigation, and future transit opportunities.

Development Standards and Regulations
This section includes Specific Plan development standards and Use Regulations. It details the Zoning Regulations, which are distinct and unique to the Vista Lucia Project, and meets the requirements of the General Plan to ensure that minimum residential zoning densities are met, and that each area meets the minimum percentage requirements for the overall development. These zoning designations within the Vista Lucia Specific Plan include Neighborhood Residential Low (VL-NRL), Neighborhood Residential Medium (VL-NRM), Neighborhood Residential Medium-High (VL-NRMH), Neighborhood Residential High (VL-NRH), Neighborhood Center / Mixed-Use (VL-NC/MU), and Public/Quasi-Public (VL-P/QP).

The specific regulations for each zoning district are located at Table 4-2 on Page 4-6 and 7 of the Vista Lucia Specific Plan.

Table 4-5 on Page 4-15, 16 and 17 shows the Use Regulations for the Specific Plan area. This indicates what residential and commercial uses are permitted, conditionally permitted, or not permitted in each district. Generally, commercial uses in residential zones are limited to uses compatible in residential neighborhoods such as home occupations and educational or religious facilities. Industrial type uses are not permitted within the Vista Lucia Specific Plan area.

Infrastructure and Public Services
This section presents an overview of the plan to provide infrastructure utilities and public services for the Project. Items specifically covered in this section include provisions for water, wastewater, drainage and stormwater management, fire protection, police protection, and schools. This section not only covers the immediate infrastructure for the Project site, but how the Project site contributes in relation to the entire City master plans for each of the infrastructure systems.

Administration, Implementation and Financing
This section describes how the development plan, public facilities, and community support systems of Vista Lucia will be implemented and administered. A range of possible financing measures are discussed. The responsibilities for construction, the funding mechanisms, and the entities or agencies responsible for administering and maintaining each system or service are also identified.

In addition, this chapter includes the administrative sections that enable elements of the plan to be reviewed and/or amended and outlines the process to review potential exceptions to the strict standards for the Specific Plan.

Annexation
Annexation is the formal process required to bring the property into the City. The Project is within the Gonzales Sphere of Influence, and development of the property is consistent with the City/County MOA signed in 2014. It is important to note that the Monterey County Local Agency Formation Commission (LAFCo) has the ultimate decision authority to consider and approve the annexation; however, the City Council will take a formal action to consider initiation of the annexation application. Having the City as applicant for the Project carries greater weight with LAFCo and is an official determination that the City is on the record to want to assume the property into its city limits. All City Project approvals are contingent upon annexation approval by LAFCo.

As part of the requirements to submit to LAFCo, the application requires significant information to evaluate the proposal. These requirements are summarized here and should be considered by the City Council as part of its action.

Plan For Services
A Plan for Providing Services is a comprehensive document that is required in order for LAFCo to evaluate if the City can bring the necessary services to the annexation area. This includes the required upgrading of infrastructure, if necessary, and ensuring that these improvements can be financed and maintained over time. Items that LAFCo reviews include sewer service and capacity, fire protection and emergency medical services, water service, flood control, law enforcement, circulation, and parks and recreation. The draft Plan for Services is included as Exhibit B to Resolution 2025-12.

Phased Annexation
The requested action is to submit the full Specific Plan area for annexation to Monterey County LAFCo.

Given the overall size and the length of build-out of the Project and consistent with updated LAFCo policy, it is anticipated that the annexation would be divided into four distinct phases. The timing of the annexation of each phase would be determined specifically by securing necessary agricultural easements, which is discussed in the following section. At this time, the developer has proposed a first phase annexation of 223.9 acres, which would accommodate 1,247 units.

Ag Mitigation
The City of Gonzales adopted its Agricultural Mitigation Ordinance on April 17, 2023 to be consistent with the City/County MOA of 2014 regarding anticipated development within the City’s Sphere of Influence. LAFCo amended its policy for Preservation of Open Space and Agricultural Lands on February 26, 2024 in LAFCO Resolution 24-03. Preservation is also addressed in the City/County Memorandum of Agreement adopted in 2014. While the City’s ordinance exempts various uses such as public parks, schools and affordable housing from agricultural mitigation requirements, LAFCo updated its own agricultural mitigation policy in that contemplates the possibility of exemptions but does not specifically identify them. LAFCo has submitted written correspondence and has been consistent in their request to the City of Gonzales requesting mitigation consistent with adopted LAFCo policies, regardless of how the City ordinance is written. As a result, in not wanting to prolong the LAFCo hearing process and in response to their comment letter, the applicant has spent a significant amount of time and energy communicating with farmers in the Gonzales area looking for appropriate agricultural mitigation easements. Unfortunately, the applicant has yet to find a willing property owner and has submitted correspondence to the City regarding its efforts to find an easement. The applicant is requesting the use of in-lieu fees to satisfy the requirements of the City ordinance and LAFCo policy. Determination of the acceptance of in-lieu fees will be required to be approved by the City of Gonzales and the Monterey County LAFCo Board prior to the completion of the annexation to the City of Gonzales. Staff have reviewed the preliminary proposal and determined it meets the intent of the City ordinance.

Jobs/Housing Policies
LAFCo also looks at issues related to jobs/housing balance and wants to ensure that the Project will meet regional goals. From the LAFCo policy, “Proposals must demonstrate through both quantitative and qualitative methods the relationship between the Proposal and the surplus or deficiency of local and county-wide housing supply and demand, and employment availability and creation. Additionally, the Proposal must demonstrate how its pattern of land use and transportation complements local and regional objectives and goals for the improvement of air quality and reduction of greenhouse gas (GHG) emissions and local vehicle miles traveled (VMT). These factors and their impacts, if any, shall be considered by the Commission in acting upon the Proposal.”
There is an extreme shortage of housing in Monterey County per the 2020 Monterey County Affordable Housing Needs Report. In addition, approximately 20 percent of the housing units in Gonzales are overcrowded. To address the housing shortage, the City had a regional housing needs allocation of 293 units for the period from 2015-2023, and few residential units (in this case ADUs) have been constructed since 2009, and no single-family dwellings have been built since 2006. The regional housing allocation for Gonzales increased substantially to 1,266 units in 2023. The proposed annexation and specifically the first phase will accommodate the regional allocation for the period ending in 2031.

The proposed Specific Plan land uses are consistent with those assumed in the General Plan and 2014 City/County MOA as a basis to provide needed housing over time. The General Plan residential density requirement applies to the Project and is intended to increase the number of units that are affordable “by design” – 30 percent of all units will be medium and high-density residential (9 to 15 and 15 to 24 units per gross acre, respectively). The Specific Plan includes an “Affordable Housing Component” which describes the number of units planned at price points that are available to very low, low, and moderate/workforce income households.

As a rural, agriculture-based community, most residents travel out of town to the north to access employment opportunities. However, the City has and is continuing to actively grow its employment base in an effort to improve its job/housing balance. The Project includes job producing components in the neighborhood commercial center area and the local employment base is expected to grow with continued expansion of the Gonzales Industrial Business Park, the recently approved light industrial annexation on Gloria Road and with other job producing uses planned within the Sphere of Influence.

It is widely acknowledged that the opportunities for rural communities to meet state VMT reduction goals (and by extension, substantially reduce air and GHG emissions from transportation sources over which local agencies and developers have control) is challenging. The proposed land use plan includes a mix of land uses and alternative transportation mode infrastructure that will help to reduce VMT. The extensive network of planned roundabouts will also help to reduce GHGs and have the co-benefit of reducing air emissions, vehicle noise and vehicle-related accidents. The FEIR includes mitigation measures that require future development to incorporate design features identified in the specific plan that are designed to reduce VMT and to reduce GHG emissions from non-transportation sources.

Fiscal Analysis
LAFCo also requires that the Project evaluate the provision of government services to the proposed area to be annexed to ensure that the City has adequate capacity to provide such services. In anticipation of the Project, the City contracted with Willdan Financial Services to perform financial analysis of the multiple areas to be considered for annexation. The resulting document is the Gonzales Sphere of Influence Fiscal Impact Analysis. As it relates to the Vista Lucia Project, the analysis projects that the City will receive $3,222,820 from residential sources and $401,949 for nonresidential sources in annual revenue with $6,496,252 in expenses, resulting in a negative of $3,273,433 per year, or about double the expenditures over revenues under existing tax sources. The report is included as Attachment H. This is consistent with the general trend that primarily residential land uses result in negative financial impacts on cities.

In order to offset this potential loss and create revenue-neutral development, the City will require the creation of a Community Facilities District prior to development of the first unit. In analysis conducted by Willdan, it is estimated that the annual charge to a single-family home and medium-density units would be $1,046, and $732 per unit for higher density apartment units.

Pre-Zoning
As part of the action to consider the Project and annex the Property into the City of Gonzales, it is required that an ordinance be adopted by the City Council approving and indicating the “pre-zoning” for the area to be annexed. This pre-zoning designation would then be applied to the official zoning map of the City upon certification of the annexation and would take immediate effect.

The purpose of pre-zoning is for the City and LAFCo to determine the impact that would occur upon annexation of lands, the conversion of lands from their existing uses, and the potential impact of future development based on the zoning changes. Pre-zoning in this case would be defined in general terms on the Zoning Map by a Vista Lucia Specific Plan Zone with specific property designations defined within the Specific Plan itself, consistent with the map identified in Figure 2-1 on Page 2-7 of the Specific Plan.

Development Agreement
The City and the developer have negotiated a Development Agreement to cover several items related to the Project and the provision and timing of infrastructure and utilities in the area. The Agreement, which is located as Exhibit A to Ordinance 2025-149, in summary addresses the following key items of significance among other items.
• Right to Development – The Agreement gives the developer the vested right to develop 3,498 residential dwelling units and up to 96,000 square feet of commercial space, per the Specific Plan. • Affordable Housing Obligations – The Agreement outlines all requirements related to Affordable Housing, which are described earlier in the report under the section outlining the Specific Plan. • Payment of Impact Fees – Impact Fees will be those in effect, and subject to increases and decreases throughout the term of the agreement. Circulation, Sewer and Water fees shall be paid at the issuance of building permits, other City impact fees at certificate of occupancy. • Community Improvement Contribution – A voluntary $200 fee per residential unit will be paid with each certificate of occupancy to benefit the Gonzales community as specified in the Development Agreement.
• Agricultural Mitigation – The project will comply with the agricultural mitigation requirements of the City and Monterey County LAFCo.
• Construction of Public Improvements – The Development Agreement outlines the requirements as it relates to the construction of the public improvements to serve the Project. • Phasing – The project has a general phasing plan within the Specific Plan; however, the Development Agreement allows for the developer to have flexibility as to the order of development, subject to available infrastructure and the annexation phasing plan. • Dedications of Land for Public Use – The Development Agreement calls for the dedication of land for public uses, such as school sites, parks, a public safety site, and storm water facilities. • Fanoe Road and Vista Lucia Parkway – The Developer is required to acquire the necessary property and build all interim improvements to ensure that the road connection is available from Fanoe Road to Associated Lane (to be renamed Vista Lucia Parkway) to US 101 prior to the issuance of the first certificate of occupancy for the project. • US 101 / North Alta Interchange – The parties acknowledge that improvements to the northern US 101 interchange will be required, and that impact fees will be used to fund construction. • Formation of Financing District – The Developer will assist in the formation and creation of the necessary District to fund the ongoing expenditures to provide public services and maintain public facilities within the development.

Tentative Map
Included in the request for approval is the first phase tentative map, which with the exceptions of Lots 7 and 8 is consistent with the first phase of annexation and will likely serve the community’s growth needs for the next five to seven years. The map includes 796 residential lots, with the potential for 1,247 units, not counting any additional Accessory Dwelling Units or Density Bonuses. The map includes more specificity on the housing lot locations, lot sizes, street network including alleys and dedicated parking areas, park locations, promenades and trail networks, agricultural buffers, future school site in the first phase, stormwater basin and the layout of underground infrastructure to serve the Project.

Previous Action
Planning Commission Hearing
On March 10, 2025, the Planning Commission held a public hearing whereby it received the staff report, applicant presentation and public testimony and considered and recommended all actions to the City Council, including the adoption of six resolutions, required to proceed with approval of the Vista Lucia project by a 4-0 vote. Approximately fifteen public comments were received during the hearing touching various subjects including the lack of availability of housing in Gonzales, need for additional services, a desire for increased density under Alternative 4 as presented in the EIR, need for off-site traffic improvements, cost of housing, and the length of time since the last housing project was built in Gonzales. The meeting minutes from the Planning Commission hearing have been included along with additional written correspondence was also received from received from two organizations: LandWatch Monterey County and the Local Agency Formation Commission (LAFCo). The minutes, and public written comments to the Planning Commission are bundled together as Attachment K: 3/10/25 Planning Commission Meeting Minutes and Written Comments.

Joint Planning Commission / City Council Workshop
On November 12, 2024, the Planning Commission and City Council held a joint workshop to receive a presentation on the details of the Vista Lucia Project. The opportunity was given for the public and the members of the Planning Commission to discuss the Project and ask questions to better understand the components of the Project. This section discusses those questions with responses in further detail. • Pricing of Housing Units in the Vista Lucia Development (Public Comment) Pricing for Above Moderate units will be considered “market-rate” housing, which will reflect the local real estate market at the time that units are available for purchase. Any other affordable units will be capped at a maximum sales price or rent based on the size of the unit and the type of unit based on the Area Median Income in place in the year the units are made available. Generally, the program is designed on the principle that households should spend no more than 30% of their income on housing costs. • Lottery System for Affordable Housing (Public Comment) The City does not currently have an active Affordable Housing office in place. As per the current terms of the Development Agreement, the Owner of Block 6 is required to fund the staff of third-party services required for the City to administer and oversee the affordable housing units to be constructed. This would include the creation of programs that would include the establishment, maintenance and selection of lists of people qualified to receive the opportunity to apply for various housing opportunities in accordance with adopted State guidelines.
• Timing for Construction (Public Comment)
The developer has indicated an interest in moving forward with construction as soon as possible, however development of the project cannot begin until approval of the project by the City, approval of the annexation by LAFCo, and completion by the Developer of numerous pre-subdivision infrastructure and other technical requirements prior to the release of building permits. Therefore, it would be premature to establish a date when actual construction will begin.
• Inclusion on a List and Details for Self-Help Housing (Public Comment, Commissioner Velasquez, Councilmember Orozco)
Self-Help or “sweat-equity” units, which are for-sale affordable opportunities for households who significantly contribute to the construction of their own home, are planned for the development beginning in Block 3 of the project. The details for those units will be determined at a future date upon selection of an affordable housing provider to manage the construction and financing of these units. This is expected to occur with the first few years of development after substantial construction of Blocks 1 & 2. • Plans for Schools (Commissioner Vargas)
The developer and Gonzales Unified School District have been diligently working on an agreement that covers the first proposed school site immediately adjacent to Fanoe Road. While two other sites in the project have been committed to be reserved for educational purposes, it is unknown at the present time about the timing, need, and type of schools to be located at these sites. Given changes in demographic trends and birth rates, these decisions on future sites will be determined several years from now. • Plans for Fire Station / Police Annex and when will the housing and population trigger it? (Commissioners Vargas & Ramirez)
The project has a one-acre site dedicated to a future public safety facility. The timing of the development and construction of the station would be dependent on numerous factors, including population growth, response times, City budget, and space needs in existing facilities. The decision on when to pursue the project is not subject to a strict population count or development of a certain unit number but will be determined by the City at an unspecified date in the future as needed. • Functionality of the Water System (Commissioner Velasquez) The Vista Lucia Project site is currently used for agricultural production and the overall proposed Project is expected to generate approximately 686 to 866 Acre-Feet per Year less consumptive demand for groundwater than the Project site’s current agricultural land use. Over the life of the project, two new municipal wells will be required along with a storage tank. The water system will be connected to the City’s existing system, and existing private wells will be required to be capped in accordance with policy at such time as they are not needed for agricultural purposes. These specific plans can be reviewed in greater detail by reviewing the technical water reports attached to this staff report as Attachment J. • Use of Roundabouts (Commissioners Velasquez & Ramirez) Roundabouts or traffic circles are planned to be significantly utilized in the Vista Lucia Project. While there is certainly a learning curve to navigating roundabouts, multiple studies and data show the efficiency of roundabouts for safety and reducing traffic at intersections. As more roundabouts come online in Monterey County as a whole, driver experience and comfort using roundabouts will generally increase.
• Stormwater and Flooding Concerns (Commissioner Ramirez) The Vista Lucia stormwater plans have been designed and prepared to ensure that stormwater generated on the project on impervious surfaces can be kept on-site and properly discharged into future recreational facilities and also into a dedicated stormwater pond north of the proposed Fanoe Elementary school site. • Underground Utilities (Commissioner Ramirez)
As is standard in new residential projects, there will be a requirement within the subdivision to ensure that all utilities are placed underground throughout the project. • Widening Plans for Full Length of Fanoe Road (Commissioner Ramirez & Councilmember Silva) The developer is required to dedicate the frontage of Fanoe Road on the property it controls as a part of the project. In addition, the applicant has committed to purchasing the right-of-way necessary to build the extension of Fanoe Road up to an intersection with Associated Lane (planned to be renamed Vista Lucia Parkway). Upon construction of the first house, an interim improvement consisting of a fully improved two-lane road will be required to connect from the Project to US 101. Ultimate improvements, which will be made at a later stage in the project, would expand this corridor to four lanes.

There is also an existing two-lane segment between the southern property line and the widened right-ofway adjacent to the affordable housing community south of the project. As part of the City’s Impact Fee Program, there are plans for the City to acquire the right-of-way and expand the road in the future to four lanes. The timing of this segment will be determined by the City, based on need, traffic counts, and the ability to secure the necessary right-of-way to develop the expansion of Fanoe Road to the south. • Functionality of the Community Services District (Commissioner Ramirez) A Community Services or Facilities District is required to offset the costs of the City by providing services to the residential community that exceed the local share of property tax that the City receives.

These revenues are generated from the annual property tax bill charged by the County and these fees are passed on to the City. The district(s) are created by a vote of the property owners, in this case the developer prior to the sale of properties to the general public. These funds generated through annual assessment are used in order to fund critical infrastructure improvements, pay for ongoing services, and maintain facilities, roads, and parks, etc. The developer will be required to create these districts prior to the approval of building permits.
• Requirement for a Resident Vote (Commissioner Ramirez) Current law does not typically require that land use entitlement projects such as the Vista Lucia project be considered by the voters of either the City or of the County. The City Council makes the final decision for the City, and the annexation is governed by the Local Agency Formation Commission of Monterey County, which is a state-created entity that governs boundaries for cities and special districts within the County.
• Commercial Zoning within the Project and Size (Commissioner Paco) The commercial zoning is limited to support neighborhood-type uses within the project and given the timing of the project, the City or developer has not actively pursued end-users for these sites. It is also important to note that the City would encourage larger retailers to sites in the City that are in greater proximity to US 101 to capitalize on the potential regional traffic. • Plans to Exclude Natural Gas from the Project (Councilmembers Funk, Worthy and Mayor Rios) As part of the City’s commitment to support the State of California in its climate-change reduction goals, through the Gonzales Grows Green initiative and through the adoption of the City’s Climate Action Program (CAP), the City committed to certain programs to reduce greenhouse gas emissions and promote environmental sustainability. As such, a key component of the project was to design it as all-electric without installing the infrastructure for natural gas, consistent with the CAP, the GHG Reduction Plan, and the Project Final EIR.

Public Comment Received
Following completion of the Planning Commission hearing and prior to the City Council hearing, letters and emails have been received by City Staff. Staff will address these and other comments that may be received prior to the City Council Public Hearing on September 2, 2025, and are included in the record as Attachment L: Public Correspondence Received Prior to Public Hearing.

Review of Key Conditions of Approval
As is standard with projects of this size and scope, there are a number of Conditions of Approval that are applicable to the Project in order to ensure the health, safety and welfare of the community, and to ensure that certain items of interest to the community including key infrastructure are completed as a part of the Project prior to the occupancy of the facility. The full list of Conditions of Approval is included as Exhibit B to Resolution 2025-11, which is a recommendation to the City Council of the first Tentative Map. While many of these conditions are standard with all construction projects, there are a few that are specific to this project and are discussed in greater detail here.

COA #2 – Contingent on Annexation - It has been stated earlier, but all project approvals are ultimately contingent upon annexation approval by the Monterey County Local Agency Formation Commission (LAFCo) and any condition that has a timing requirement will be based on the date annexation becomes official, not the date of project approval by the City Council.

COA #4 - Reimbursement of City Costs. - The Owner/Applicant shall reimburse the City of Gonzales for all engineering, inspection, legal, planning, and administrative expenses, included or to be incurred by the City in connection with the Project, including expenses incurred through the use of outside consultants and inspectors, where necessary, at the rates applicable at the time of billing.

COA #10 – Time Limits – The life of the Tentative Map approval is specified in the Development Agreement, as a period of 20 years after the effective date of the Agreement, unless terminated or extended pursuant to the Agreement.

COA #12 - Development Impact Fees. - Owner/Applicant shall pay all Development Impact Fees as set forth in Chapter 1.48 of the Gonzales City Code at the time and in the manner set forth in the Code, unless otherwise amended in the Development Agreement. Impact fees may be subject to credits or a reimbursement agreement for facilities constructed by the applicant that are part of the impact fee program. Such fees are subject to an annual adjustment to reflect the percentage change in the construction cost index for San Francisco as of December 1 of the previous year as reported by "Engineering News-Record".

School Facilities Impact Fees payable to the Gonzales Unified School District (GUSD) and Regional Transportation Impact Fees payable to the Transportation Agency of Monterey County (TAMC) are due at the time of issuance of a building permit.

COA #14 – Hours of Work – Construction hours are 7:00AM - 7:00PM, Monday through Friday, and 8:00AM – 5:00PM on Saturdays, with no construction on Sunday’s or City Holidays.

COA #28 – Community Facilities District. – Prior to filing the first Final Map, the Master Developer shall cooperate and diligently work with the City to form a Community Facilities District (CFD) and/or other mutually acceptable financing district or mechanism.

COA #31 – Affordable Housing – Block 6 – This outlines the requirements to ensure Block 6 is preserved for affordable housing opportunities.

COA #32 – Block 3 – Self-Help Units – This outlines the requirements to ensure opportunities for selfhelp affordable units in Block 3 of the project.

COA #40 – Underground Utilities. All utilities shall be placed underground.

How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.

Explain: Annexation and construction of the Vista Lucia Project will provide much-needed housing and additional employment opportunities, while creating a permanent northern agricultural edge for the city to ensure that it keeps its small-town character.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: Development of housing opportunities in Gonzales is needed to improve opportunities for future generations to remain in Gonzales and provide greater economic opportunities ensuring that the City can improve the quality-of-life services that are provided to the community.

City services will be delivered in a cost-effective, respectful, and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A

ALTERNATIVES
The Planning Commission reviewed all matters and per Gonzales City Code, provided a recommendation of approval to the City Council on all matters related to the project. Under Section 12.12.070, the City Council hears and determines Planning Commission recommendations for the adoption or amendment of the general plan or any specific plans and adopts ordinances and takes all related actions necessary on the project.

While staff is recommending full approval of the Project as outlined in the staff report, should the City Council have any concerns it may take a number of alternative actions. - Approve the Project with additional conditions of approval to address certain issues that arose at the public hearing or to address specific concerns about the Project.

- Request additional information regarding the Project prior to making a recommendation which would result in a continuation of the public hearing to a future date. - Deny the Project. A motion of denial would have to be supported by specific written findings outlining the reasons the proposed Project would negatively impact the health, safety and welfare of the City and its residents.

BUDGET IMPACTS
According to the report completed by Willdan Financial Services related to the Vista Lucia Project, it is projected upon buildout that the City would receive $3,222,820 in annual revenue from property taxes, increased sales taxes and other ancillary revenues with $6,496,252 in expenses to provide services to the annexation area, resulting in a deficit of $3,272,433 per year. Creation of Community Facilities Districts or other long-term financing mechanism will be required to offset this deficit and make the Project revenue-neutral. Additionally, the City would receive one-time revenues associated with permit fees, local sales taxes from construction materials, indirect taxes from short-term construction jobs, and an anticipated one-time development impact fees (adjusted for any credits for identified improvements constructed by the applicant) of over $140 million over time upon full build-out of the Project to offset the capital construction costs to accommodate future growth in the City of Gonzales.

CONCLUSION
The Vista Lucia Annexation Project represents an opportunity for Gonzales to build much-needed housing units and further the development of its General Plan. By allowing for the annexation and eventual development and construction of the Project, it will support multiple infrastructure needs in the City and meet a large number of City goals and policies outlined in the General Plan. The project and all associated required actions were recommended by the Planning Commission by a 4-0 vote.

Therefore staff recommends full approval of the Project and that the City Council take all the associated actions outlined in this staff report, including certifying the Final Environmental Impact Report, Adopting a General Plan Amendment and the Vista Lucia Specific Plan, Introduce, Waive Reading and Introduce the Development Agreement, Approve an Annexation request to Monterey County LAFCo, Introduce, Waive Reading and Introduce adoption of a Pre-Zoning Ordinance, and approval of a Tentative Map, contingent upon approval of the annexation by LAFCo.

Public Notice
The applicant’s request for the approval of the Vista Lucia Project and all related entitlements has been processed per the City's Zoning Ordinance requirements per Chapter 12.28 as follows: a) An application has been received and accepted by the City of Gonzales for processing; b) A Public Hearing Notice was published in the Salinas Valley Tribune on August 20, 2025; c) Public Hearing Notices were mailed to all property owners within 300'-0" of the site. A certification of mailing is on file at the Planning Department; d) Notice of the Hearing was placed on the City website and City social media pages and e) a public hearing was conducted by the City Council to consider the request on September 2, 2025 and members of the public were invited to comment and all comments were considered by the City Council prior to its decision on the request.

Attachments:

1. Public Notice

2. Resolution No. 2025-09 with Exhibits A-E

3. Resolution No. 2025-10 with Exhibit A

4. Ordinance No. 2025-148 with Exhibit A

5. Ordinance No. 2025-149 with Exhibit A

6. Resolution No. 2025-11 with Exhibits A-B

7. Resolution No. 2025-12 with Exhibits A-B

8. Exhibit G - Agricultural Mitigation Exhibit

9. Exhibit H - Gonzales - SOI Annexation Fiscal Impact Analysis Report - Final - 4-18-23

10. Exhibit I - General Plan Objectives and Policies

11. Exhibit J - Water Supply Assessment Final Draft_121620

12. Exhibit K - Planning Commission 03-10-25 Minutes

13. Exhibit L - LOA Response to FEIR FINAL