City of Gonzales
COMMUNITY DEVELOPMENT DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 15, 2025
FROM: Taven Kinison Brown, Community Development Director THROUGH: Carmen Gil, City Manager
SUBJECT: Adoption of Ordinance No. 2025-148 and Ordinance No. 2025-149
RECOMMENDATION
Staff recommends that the City Council:
• Adopt 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.
• Adopt Ordinance No. 2025-149, An Ordinance of the City Council of the City of Gonzales Approving a Development Agreement Between the City of Gonzales and Cielo Grande Ranch, LLC Relative to the Development Known as Vista Lucia.
BACKGROUND
On September 2, 2025, the City Council introduced, waived the first reading, and read by title only Ordinance No. 2025-148 and Ordinance No. 2025-149. Public Notice for announcing the consideration and adoption of these ordinances was published on August 20, 2025. Neither ordinance will be actuated until such time as the Local Agency Formation Commission (LAFCo) has authorized annexation of the Vista Lucia project area into the City of Gonzales.
REVIEW AND ANALYSIS
Ordinance No. 2025-148 is the vehicle that puts into place the pre-zoning for the land uses to be applied to the project areas. 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 AGENDA
ITEM
20 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.
Ordinance No. 2025-149 is the vehicle that puts into place the Development Agreement between the City of Gonzales and the Cielo Grande Ranch LLC (Developer).
The City and the developer have negotiated a Development Agreement to cover 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.
ENVIRONMENTAL REVIEW
In Resolution No. 2025-09, approved by the City Council on September 2, 2025, the City Council certified the Vista Lucia Project Final Environmental Impact Report (SCH#2020039056), adopted a Mitigation Monitoring Reporting Program (MMRP), adopted CEQA Findings of Fact and a Statement of Overriding Considerations. This resolution and its associated documentation support the approval of the Vista Lucia project as a whole, and its individual components and actions, such as the prezoning and development agreement in this instance.
Explain the Recommendation and How it 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.
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.
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
Explanation: Please see the Vision above.
ALTERNATIVES
Not adopting Ordinance No. 2025-148 and Ordinance No. 2025-149 would delay the City from making our annexation application to LAFCo to expand our city limits around the project site.
BUDGET IMPACT
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. The requirement of the project proponents to create a Community Facilities Districts or other long-term financing mechanism has been 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.
SCHEDULE
Following this second reading and adoption of the ordinances, staff will be making an annexation application to the Local Agency Formation Commission, (LAFCo).
Following LAFCo staff review, and a LAFCo public hearing to the affirmative, the City and applicant will be provided with the conditional requirements to achieve incorporation. Upon incorporation, all city pre-approvals to date will come into effect and the City will formally have the authority to administer land use regulations and development within the new City areas.
RECOMMENDATION
It is Recommended that the City Council:
• Adopt 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.
• Adopt Ordinance No. 2025-149, An Ordinance of the City Council of the City of Gonzales Approving a Development Agreement Between the City of Gonzales and Cielo Grande Ranch, LLC Relative to the Development Known as Vista Lucia.
Attachments:
1. Ordinance No. 2025-148 - PreZoning
2. Ordinance No. 2025-149 - Development Agreement