PUBLIC STORAGE
701 Western Avenue Glendale CA 92101
publicstorage.com
February 22, 2022
Mr. Edgar Maravilla, Senior Planner
Planning Division
Community Development Department
City of Mountain View
500 Castro Street
Mountain View, CA 94041
Re: Transmittal of Material requested for Study Sessions Public Storage Redevelopment of Existing Facility
1040 Terra Bella Avenue
PL2021-170&171
Dear Mr. Maravilla:
As requested, this letter includes information, documents and background related to the direction we are seeking from the EPC and City Council on the following topics:
• Approval to move forward with the current design of one 4 story building and one 6 story building in lieu of two 5 story buildings
• Support for current architectural design
• Land contribution and Community Benefit valuation
• Confirmation of Housing fee waiver
• Development Agreement basic terms
Project Background
On August 25, 2020, the Mountain View City Council authorized staff to consider the joint application for redevelopment of the Public Storage (PS) self-storage facility and construction of an Alta Housing (AH) affordable housing facility at 1020-1040 Terra Bella Avenue.
The project site includes an existing 188,890 SF self-storage facility owned by Public Storage (PS) and a 20,618 SF property owned by Alta Housing (AH). The proposed project would include Public Storage’s contribution of a portion of their existing property with a net site area of 24,531 SF to AH. The additional property will allow AH to increase the number of affordable housing units from 56 units to 108 units and to provide a significant community benefit.
The land identified for contribution by PS contains valuable frontage on Terra Bella. By facilitating residential development along the street-frontage, PS and AH will help foster a pedestrian-friendly environment within the Terra Bella neighborhood. The PS project would be located behind the AH project and adjacent to the freeway, with the PS project creating an attractive buffer between the freeway effects and the future residents of the AH project. See Attachment 1 for an updated Project Description and Attachment 2 for the existing and proposed site areas.
Justification for change in building heights
On April 19, 2021, with AH, a joint informal application was submitted for rezoning, a General Plan designation change, a General Plan text amendment as well as individual applications for Planned Community Permits. This informal application and the consequent full application submittal on August 23, 2021, depicted a revised design of one 6 story building and one 4 story building from the gatekeeper reviewed design of two 5 story buildings.
Attachment 6
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2 On September 23, 2021, PS received staff comments on the full submittal. At that point, meetings with staff were set up to clarify the comments including discussions on the architectural design. On November 11, 2021, a meeting was held with City staff and PS was informed that design of one 6 story building and one 4 story building is different than the originally approved Gatekeeper with two 5 story buildings and that direction from the EPC and City Council would be needed before proceeding.
In order to maintain storage units for existing customers and facilitate the land transfer, Public Storage has always proposed that the project would be built in two Phases. Phase I would demolish the existing office and storage buildings on the land to be donated along with a portion of the storage buildings on the remaining property. Building 1 will be constructed on the cleared property, then when Building 1 is fully occupied, and depending on market conditions, the remaining existing storage units will be demolished, and the second new Building 2 constructed.
After a detailed study of this process, Public Storage determined that the only option to make the phases economically feasible is to construct a larger six story Building 1 on the west side of the property in Phase I, and a smaller four-story Building 2 on the east side of the property in Phase II, instead of two five story buildings as originally presented at Gatekeeper. This is for several reasons. About two-thirds of the existing eighteen fully occupied self-storage buildings need to be demolished for the land transfer to AH and construction of Building 1. To offset that loss in income to PS and because of site configuration and access available to each portion of the property, Phase I Building 1 was increased in area, and Building 2 in Phase II was consequently reduced in size. As shown below, the total area for the PS project will be slightly smaller and the FAR slightly reduced from the drawings proposed at Gatekeeper.
Gatekeeper Current proposal
Total building area 441,185 SF 408,964 SF
Maximum height of buildings 69’ 63’-3” and 84’-7”
Number of stories 5 story/ 5 story 4 story/6 story FAR 2.63 2.49
We believe that the revised plan is consistent with the gatekeeper proposal and compatible with the Terra Bella neighborhood.
Project Architecture
During the past year, Public Storage has been working with staff in response to extensive comments on the building architecture. The current proposal has significantly more design features, varied materials, glass, and change in horizontal and vertical projections than the gatekeeper proposal. Although it is a warehouse building with no windows to the interior except at the ground floor retail office, customer lobbies and manager’s apartment, the revised architecture will attractively blend with the surrounding industrial, office, and residential buildings. Only one short façade of each building has frontage on a public street. The longest façade of each building is against the elevated freeway ramp. Please see the drawing package included with this submittal.
Although sign approval is not part of Mountain View’s entitlement process, signage is an important part of the proposed project for Public Storage. Subsequent to the property transfer, PS will no longer have frontage along Terra Bella Avenue and the new buildings will be located behind the Alta Housing Project.
Due to the layout, signs for PS are crucial. Areas for signs have been identified on the buildings. PS will submit a sign application at the appropriate time.
Development Agreement
Public Storage originally requested approval of a ten-year Development Agreement in order to lengthen
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3 the entitlement period beyond the allowed entitlement length of two years. The longer time period allows for development of the new self-storage facility in two phases. After entitlement approval, the Phase I six story Building 1 construction documents will be completed and permitted, and the building constructed.
Building 1 will become occupied, then the Phase II four story Building 2 construction documents will be completed, permitted and the building constructed, with exact timing based on market conditions.
At staff’s request, the proposed entitlement length has been shortened from a proposed ten years to seven years. In addition, staff has requested that a public benefit fee be paid to process the Development Agreement. In order to proceed with the project, Public Storage requests confirmation of the basic terms of the Development Agreement. A draft term sheet and sample Development Agreement are included in Attachment 5.
Community Benefit and Land Donation Valuation
Staff has requested that the community benefits of the project and the land donation valuation be provided in detail. See Attachment 3 for more information.
Housing Fee Waiver
The Mountain View Municipal Code provides for a waiver of the Housing fee. Please see Attachment 4 for details on how the proposed project is eligible for the waiver.
Thank you for your time and consideration reviewing this request for a study session. We are excited about the opportunity to provide new affordable housing and redevelopment in the Terra Bella community and the City of Mountain View. If you have any questions or need additional information, please do not hesitate to call or e-mail Bryan Miranda, [email protected], (714) 338-1262 x3158, or Rose Bacinski, Bacinski & Associates, (760)757-7673.
Sincerely,
Bryan Miranda, Regional Vice President
Public Storage
Enclosures
Attachment 1: Public Storage Project Description
Attachment 2: Land exchange
Attachment 3: Land Donation background valuation
Attachment 4: Housing Impact fee waiver eligibility
Attachment 5: Draft Development Agreement Term Sheet and sample agreement
Cc: Stephanie Williams, City of Mountain View
Rebecca Shapiro, City of Mountain View
Ellis M. Berns, E Berns Consulting, LLC
Rose Bacinski, Bacinski & Associates
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4 Attachment 1
Public Storage Project Description
Revised 2.10.22
Summary
Alta Housing (AH) and Public Storage (PS) own adjacent properties on Terra Bella Avenue and have agreed to a property transfer to facilitate more robust residential and industrial development. PS currently owns approximately 4.3 Acres and AH owns approximately .5 AC. PS has agreed to transfer approximately .5 acres of land to AH , which will result in an increase in affordable housing units from fifty -six units to 108 units that provide a significant community benefit. PS plans to demolish the ex isting eighteen single story storage buildings totaling 77,418 SF and redevelop the remaining 3.77 AC personal storage facility. The project will include construction of two buildings (six and four stories) totaling 408,964 SF in two phases, approximately sixty-three and eighty -five feet in height, with all new site improvements and landscaping. The proposed floor area ratio (FAR) of the completed project (Phase I and II) would be approximately 2. 49.
This property transfer between PS and AH will help foster a pedestrian friendly environment within the Terra Bell neighborhood. The PS project will be located behind the AH project and adjacent to the freeway with the PS project creating an attractive aesthetic and noise buffer between the freeway and the future residents of the AH project. These benefits cannot be achieved through the current property configuration, only through this unique collaborative venture proposed by AH and PS.
PS Existing Facility
The proposed project includes redevelopment of an existing, 188,890 SF, four and one-third acre, Public Storage facility built in 1982. The existing self-storage facility includes 77,418 SF in eighteen single story drive-up buildings including a rental office. Current access to the property, including the rental office, is on Terra Bella Avenue. An emergency only access is located on Linda Vista Avenue. All the existing buildings and site improvements will remain occupied until building permits are issued. The site currently has two employees, includ ing one onsite manager. The rental office is open Mon -Fri 9:30am to 6:00pm and Sat -Sun 9:30am to 5:00pm. Customer access hours are Mon -Sun 6:00am to 9:00pm.
The existing facility is well maintained and managed, and provides self-storage services, primarily to the residents and businesses of Mountain View. Public Storage will continue to own and operate this property for the long term and is interested in a significant reinvestment in this location that would modernize and improve the self-storage product offering.
Proposed Project
The 101 freeway runs along the entire north side of the proposed PS project, San Rafael drive is to the east, and the new Alta Housing project will be to the south of Building 2. Various industrial uses are adjacent to the west side of Building 1 and the south side of Building 2. Linda Vista Avenue runs along the west side of Building 1.
After PS transfers over 20,000 S.F. of land area to AH, the PS property will be reduced to 164,396 SF(3.77 AC). The proposed PS project consists of two self-storage buildings to be constructed in two Phases. Phase I will include Building 1, on the west portion of the property. It is a six-story, approximately 285,012 SF building including a new approximately 1,000 SF rental office. Access to the new building will be from Linda Vista Avenue. Approximately 52,610 SF of the existing single story
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5 self-storage buildings will be demolished to make room for Phase 1 and to clear the land to be transferred to Alta Housing. The remaining self-storage buildings on the east side (Phase 2) of the property will remain and be occupied by the existing tenants. During construction of Phase 1 the existing units will be accessed from San Rafael Avenue and after Phase 1 is open the entire facility will be accessed from Linda Vista Avenue where the new rental office is located.
Phase II will include demolition of the remaining 24,808 SF of existing self-storage units and construction of Building 2 on the east side of the property. Building 2 will be four stories and approximately 123,952 SF. Phase II construction will begin one to three years after Phase I is complete.
This will allow time to fully occupy Building 1 (Phase 1). The total proposed building area after both phases are complete will be 408,964 SF. However, if market conditions change, and the demand for storage declines, it is possible that PS may not build Phase II.
A new locked, trash/recycling enclosure will be located adjacent to Building 1 that will accommodate trash for both Building 1 and ev entually Building 2. The trash and recycling bins are only available to Public Storage office staff. Customers are required to remove their own debris from the facility.
Since the existing PS rental office is located on the property that will be transferred to AH, a temporary office trailer will be erected on PS property near the San Rafael Avenue entrance while Building 1 is being constructed. The temporary office trailer will be removed as soon as Building 1 is approved for occupancy.
AH will provide an apartment within the affordable housing project for the PS on-site manager to replace the manager’s unit that is being demolished. If AH funding sources will not allow a unit to be occupied by the PS on-site manager, the PS drawings currently include an 800 SF manager’s apartment in Building
1. If the apartment in Building 1 is not needed, this area will be constructed as self-storage units.
PS Operations
Customers will access the new buildings and their storage spaces through secured lobbies in each building, using an individual key code. At completion of the project, all the storage units in the new buildings will be internally accessed and climate controlled, to better serve customers in Mountain View.
Customers will visit the rental office to inquire about rental space, pay rent, or purchase packing supplies such as boxes or tape. The proposed rental office hours are 9:00 a.m. to 8:00 p.m., and customer access hours will be from 6:00 a.m. to 9:00 p.m., seven days a week. Once Phase I and II are completed, one to four employees per shift will staff the facility. Based on market conditions, the office and customer hours may be revised after opening.
Parking
At completion of both Phases, PS will provide total of 75 parking spaces. PS is seeking a parking reduction of 134 spaces. This reduction is based on the operation and experience of other PS facilities in the area as well as previous PS parking studies. Parking is available adjacent to the rental office, and additional parking spaces and loading areas will be located adjacent to each of the customer lobbies.
Zoning
The site and all the adjacent properties are zoned MM – General Industrial. PS and AH are seeking a rezoning of the entire site to P (Planned Community), a General Plan designation change for the housing site to High Density Residential (36 to 80 dwelling units per acre), a Lot Line Adjustment, and a General
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6 Plan text amendment to allow greater industrial intensity under the General Industrial designation.
Design and Sustainability
The new buildings have a contemporary architectural design and will include various exterior materials, including plaster, split face CMU, showcase windows, spandrel glass, metal panels and storefront glass.
Vertical and horizontal changes in the building massing as well as color and material changes will visually break up the building facades.
Public Storage projects are energy efficient and will meet or exceed the City of Mountain View Green Building standards and the CalGreen code, as well as be LEED Certified. All PS climate-controlled projects are only heated if interior temperatures reach approximately 55 F and cooled only when interior temperatures reach approximately 85F. All the interior lights, except for emergency lights, are operated via motion detector, so are completely off most of the time. A minimum of 50% of the roof of the buildings will include solar panels.
Benefits
In addition to the contribution of approximately .5 acres to AH, we believe this redevelopment will provide several near-term and long-term benefits to the community. Public Storage requires very little in the way of public services, creates no school impacts, and would not affect the jobs/housing ratio of the city. Public Storage provides an ideal buffer between the freeway and the proposed affordable housing project as well as other surrounding uses. The design and use are appropriate for this property, are complimentary to the neighborhood, adjoining uses, and the Terra Bella community. The PS project also provides construction jobs and will significantly increase property taxes.
Public Storage has experienced significant growing demand for storage services in the community. With the residential and commercial projects currently being contemplated and processed at the City of Mountain View, we anticipate the demand will continue to increase. Public Storage believes they are best suited to meet this increased need with this proposed modern, safe, and secure storage facility.
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PUBLIC STORAGE
701 Western Avenue Glendale CA 92101
publicstorage.com
10 Attachment 3
Land Contribution and Community Benefit valuation
from
Public Storage to ALTA Housing
for
Redevelopment of 1040 Terra Bella
Valuation As of March 8, 2022
Public Storage (PS) is proposing to transfer .56 net AC (24,531 SF) of land to ALTA Housing (AH) as a Community Benefit for the project. Following is a revised estimate of the Community Benefit value of the land contribution.
In conclusion, it is estimated that the total value of the land contribution as a community benefit is valued at approximately $10.2 M.
COMMUNITY BENEITS
In the original Gatekeeper letter, March 2, 2020, the PS donation of land was valued at $9 million. We recently review ed that value and determined that the current Community Benefit value is closer to a total of $ 10.2 million. This value is based on comparable land sales between 2017- 2022 in Mountain View and Palo Alto that ranged in size from .367 AC to 2.53 AC and value from $315/sq. ft to $490/sq. ft. which resulted in an estimated value of $415/s.f. for Medium to High Density Multifamily residential development.
PS is seeking an increase in the FAR from .56 to 2.49 FAR. To achieve this higher FAR, projects may propose community benefits that are proportional to the project’s building square footage in excess of the Base FAR as allowed by the City Council.
One of the allowed community benefits is the provision of affordable housing. PS contribution of .56 AC of land to AH will allow them to add an additional 54 units to the project. In addition, following are other community benefits of this contribution for consideration:
Achieves one of the City’s goals to offer a variety of housing types at varying income levels
Doubles the number of AH affordable housing units from 54 to approximately 108 units. An increase of 54 additional units.
Creates a 100% affordable, family housing community with one, two- and three- bedroom units.
Improves layout, quality, and design of the affordable housing project. PS is prepared to relinquish frontage on Terra Bella and place their project behind the AH project. This proposed layout buffers the AH project from the freeway and creates a more pedestrian friendly environment on Terra Bella Avenue. PS has one manager residential unit that would be incorporated into the AH project. Increase in number of bedrooms from 101 to approximately 220. Increase in the number of extremely low- and low-income individuals housed from less than 150 to over 320.
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11 Attachment 4
Housing impact fee waiver eligibility
Rev 2.11.22
PS is seeking a Housing Fee Waiver pursuant to City Code Section 36.40.65 (d)(3) “Commercial and industrial development: Housing Impact Fee Program – Adjustment, reduction or waiver.” If the nonresidential development project is constructed for a specific use involving no employees or fewer than one (1) employee per two thousand (2,000) square feet of gross floor area, the project may be eligible for a waiver of the fees. To be eligible for a waiver, the building must be designed and built such that it cannot be converted to a use capable of housing a larger number of employees except by major reconstruction. The burden of proof shall be on the applicant . If a waiver is granted, a "notice of conditional waiver of housing impact fee" shall be recorded in the Santa Clara County Office of the Recorder. If a subsequent change in the use or structure of the building occurs which involves additional employees, the waiver granted herein shall be deemed revoked, subject to a hearing before the zoning administrator, who shall make a recommendation on the revocation to the city council. The decision of the city council shall be final. Mountain View Municipal Code, Section
36.40.65(d)(3)
Currently the existing self-storage facility has been in operation since 1982 and includes 77,418 SF in eighteen single story drive-up buildings including a rental office. The site currently has two employees, including a manager living onsite .
The existing facility provides self-storage services, primarily to the residents and businesses of Mountain View. Public Storage will continue to own and operate this property for the long term and is planning to make a significant reinvestment in this location that would modernize and improve the self-storage product offering.
The proposed redevelopment of the PS site at 1040 Terra Bella for Phases I and II includes 408,964 SF of building area. The proposed project will have two to four employees including one manager th at will either live in an apartment in the adjacent Alta Housing project or onsite in an apartment provided by Public Storage. The increase in employees at the site due to the proposed project will be zero to two. The number of employees is significantly below the waiver threshold of one employee per two thousand (2,000) square feet of floor area .
Further, the PS buildings are highly specialized and only designed as a storage facility. The building will not have any windows to the interior except at the first-floor rental office, customer lobbies, and manager’s apartment. All windows on the upper floors will be spandrel glass or showcase windows only. The building will include utilities only for a few single occupan cy restrooms, limited HVAC, motion detection lighting, and no natural gas. It will not have infrastructure or facilities that are capable of being converted to a facility of another use that could house a larger number of employees unless the project is c ompletely reconstructed. In addition, as part of the proposed project, PS is donating land in order to construct affordable housing.
PS understands that if a waiver is granted a "notice of conditional waiver of housing impact fee" shall be recorded in th e Santa Clara County Office of the Recorder.
Thank you for considering this request for a Housing Fee Waiver .
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12 Attachment 5
Public Storage Development Agreement
Term Sheet and Sample Agreement
Revised 2.22.22
• Example Agreement - 600 Ellis Street Project (February 12, 2021) with SI 33, LLC (attached). • Parties: City of Mountain View ("City") and Storage Equities, Inc, a California corporation ("PS") (see title report).
• Property: 4.3 acres with a street address of 1040 Terra Bella Avenue, Mountain View, CA (see title report).
• Project: PS proposes to redevelop the Property with a new 4 to 6 story self-service storage facility (the “PS Project). The PS Project is currently anticipated to be developed in two phases, the northwest portion of the property will be Phase I and the southeast portion will be Phase II. It is anticipated that Phase I will consist of the development of a structure consisting of approximately 285,012 gross square feet of space, and the Phase II will consist of the development of a structure consisting of an additional approximately 123,952 gross square feet of space.
• Affordable Housing Land Contribution: As part of the PS Project, PS intends to process a lot line adjustment (the “PS LLA”) that will enable PS to convey to Alta Housing, a California nonprofit corporation ("Alta") an approximately 24,531 square foot portion of the PS Property (the “PS Contribution Parcel”). The conveyance of the PS Contribution Parcel to Alta will allow AH to increase the number of affordable housing units Alta can develop on its property (located at 1020 Terra Bella) from 56 to approximately 108 units ("Alta Affordable Housing Project"), while also buffering such affordable housing units from US Highway 101 with the reconfigured parcel of land owned by PS and the new PS Project.
• Public Benefit Fee. $1.54/SF for gross building area, paid within 20 days of entitlement approval including appeal period.
• Entitlements: It is anticipated that the applications for the PS Project and the Alta Affordable Housing Project will be submitted separately but reviewed and considered concurrently with a joint analysis under the California Environmental Quality Act. It is anticipated that the following entitlements will be required for the PS Project, in addition to CEQA: (1) General Plan amendment, (2) Planned Development/rezoning, (3) Planned Community Permit, (4) Development Review Permit, (5) Tree Removal Permit, and (6) PS LLA. • Term: In order to provide sufficient certainty to commit to the PS LLA and allow for the completion of both phases, PS requests a 7-year term.
• Vesting. In order to provide sufficient certainty to commit to the PS LLA and allow for the completion of both phases, PS requests vesting of the Entitlements for the full term, under substantially similar terms as the 600 Ellis DA.
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13 • Fees. To allow for budgeting certainty to support the PS LLA, PS requests that no new fees (or other exactions) apply after the Effective Date, but PS is willing to pay the rate of existing fees at the rate in effect as of the date of the building permit. • Other Provisions. With the exception of the necessary changes to the party, property and project information, the terms above - and the deletion of the TDR and East Whisman fee provisions - PS accepts and requests the general format and terms in the 600 Ellis Development Agreement. • Legal Counsel. PS understands it is the City's standard procedure to retain outside counsel to draft and finalize the Development Agreement. PS's counsel for negotiation would be Tamsen Plume with Holland & Knight who assisted with the review of the 600 Ellis Development Agreement ([email protected])
Attachment: 600 Ellis Development Agreement