I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 41
SUMMARY
A well-crafted set of development agreement procedures will provide a useful road map to staff and others in sheparding an agreement through the approval process. Such procedures are also useful for considering any amendments to and termination of an agreement.
Important parts of the process include the notice and hearing process, as well as mechanisms for providing decision-maker input.
76 City of San Diego, Development Agreement Monitoring System, February 2000 (Submission for League of California Cities Helen Putnam Award for Excellence).
S AN D IEGO D ATABASE K EEPS D EVELOPMENT A GREEMENTS
O N T RACK
The City of San Diego’s Development Agreement Monitoring System tracks the status of payments owed by developers to cover the cost of project -related infrastructure, facilities and public services.76 In addition to helping city staff monitor compliance with the terms and conditions of development agreements, the system also generates reminders of annual report deadlines and due dates for administrative costs owed to the city.
Before the city developed the system in 1997, several departments shared responsi bility for monitoring the status of development agreements. The lack of effective coordination made oversight of the agreements uncertain. If, for example, the city’s issuance of a building permit for the 250th unit of a residential project obligated the developer to pay the city $250,000 for completion of a library, the city had no means to ensure that it requested the funds in a timely manner.
To address this problem, city staff formed an inter-departmental task force called the Development Monitoring Team. The Monitoring Team worked with city Management Information Systems personnel to create the Development Agreement Monitoring System. The system comprises a database containing files for each development agreement. The files list developer obligations and due dates under each agreement.
The monitoring team updates the status of developer obligations and shares this information with appropriate departments on a regular basis. As a result, the city has improved the timeliness of developer invoicing and collection. By February 2000, the Development Agreement Monitoring System helped the city to collect $17 million in developer obligations, and to track another $28 million that the city is due to receive by 2005.
ITEM 18.1.
ATTACHMENT 6
42 | D EVELOPMENT A GREEMENT M ANUAL
ITEM 18.1.
ATTACHMENT 6
THE ART OF
NEGOTIATING
DEVELOPMENT
AGREEMENTS
The art of negotiation comprises several facets. Fundamentally, it is important to decide who is going to negotiate and how the parties will reach consensus. This chapter addresses the issues associated with each facet of negotiation.
WHO IS GOING TO NEGOTIATE?
Within the public agency, senior staff or their representatives typically negotiate development agreements. The manager (or representative) should be involved because he or she presumably knows the community, understands the desires of the legislative body and can gauge the agreement’s value to the community.
The agency’s planning director (or representative) is typically on the negotiating team because of his or her planning background. While the manager may focus on financial benefits to the community, the planning director will be concerned with the impact of the project on land use issues, including its compatibility with surrounding land uses. Engineering or public works staff should be included if infrastructure issues are involved.
The public agency also may want to include the attorney on the negotiating team, rather than just at the agreement’s drafting stage, especially if the project proponent is represented by legal counsel. Legal issues wi ll undoubtedly arise during negotiations, and drafting issues may overlap with substantive deal points. Whether or not legal counsel participates in the negotiations, he or she should be fully apprised as the negotiations proceed.
Who Is Going to Negotiate? ....... 43
Reaching Consensus ................... 44
Summary ...................................... 48
5 C HAPTER
ITEM 18.1.
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44 | D EVELOPMENT A GREEMENT M ANUAL
As for the project proponent, he or she (or a representative with full legal authority to bind the project proponent) should participate in the negotiations. On larger projects, the project proponent may want to assemble a team that includes the project proponent, an architect, planner and land use attorney. Depending on what aspect of the agreement is being negotiated, the project proponent may want to include one or more of the team members in the negotiations.
REACHING CONSENSUS
How parties conduct negotiations may be the best indicator of whether they will achieve consensus. Participants should be trained in the process of negotiations, and have a framework in mind to guide the negotiation process.
KNOWING WHO IS ACROSS THE TABLE
Before negotiations begin, each party should become familiar with the other’s background. In addition, the project proponent should become familiar with the local political climate, while local agency staff should learn about the project proponent’s reputation in the community, or in other communities where the proponent’s de velopments have been approved.
The parties should also determine in advance what they expect to gain through the negotiations, what the other party may need, and what they are willing to give.
SETTING EXPECTATIONS
Once the parties meet, they should frankl y discuss their respective expectations. The local agency should emphasize that it expects to gain greater exactions than it could require under its regulatory authority. The project proponent should explain why the particular project requires a development agreement. The parties should agree upon an initial timeframe in which to complete negotiations.
The agency negotiators should explain that they do not have authority to bind the agency —that is the province of the legislative body during final public hearings. The parties may benefit from adopting a “check -off” system so that once they reach a conceptual agreement on deal points, they
77 See Cal. Gov’t Code § 1090. the Attorney General reached this conclusion even though the spouse had no ownership interests in the firm, he would not work on the agency’s project, and his income would not be affected by the outcome of the development agreement or project.
The Attorney General’s opinion will be published at 85 Cal. Op. Att’y Gen.____(2002), and is available online at http://caag.state.ca.us/opinions/index.htm.
P RACTICE P OINTERS
Legislative Body Member
Participation. Veterans of the
development agreement negotiation
process typically advise against
including a governing body
representative on the negotiating
team.
Such involvement can put the
elected official in a constrained
position when the final agreement
goes before the council or board.
Conflicts of Interest Issues. In
selecting negotiating team members,
keep in mind conflicts of interest
issues. For example, the Attorney
General opined in 2002 that a senior
local agency staff member may not
participate in the negotiations and
drafting of a development agreement
if her spouse is employed by a firm
that will provide outreach services
for the developer with respect to the
project pursuant to a yearly retainer
agreement. The Attorney General
found that the staff member’s
participation would violate conflicts
of interest laws relating to
contracts,77 even though the spouse
had no ownership interest in the
firm, he will not work on the city’s
project, and his income will not be
affected by the outcome of the
development agreement or project.
For more information about ethics
laws, please See The Local Official’s
Guide to Ethics Laws published by
the Institute for Local Self
Government.
ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMU NITY LAND U SE P ROJECT | 45 do not need to continually renegotiate those points, unless circumstances change.
THE UTILITY OF GROUND RULES
Ground rules for negotiations are very important. Typical ground rules include:
• Who is the spokesperson for each side? To what
extent does that person have authority to bind their
respective principals?
• Who will take notes and document the points of
agreement?
• Where, when and for how long will the negotiators
meet? Will telephone negotiations be allowed?
• Are these meetings open to the media and public?
• When and how will issues related to the development
be presented to decisionmakers, including individual
members of the governing body?
• How will media inquiries be handled?
• What strategies, if any, will be employed if bargaining reaches an impasse?
S AMPLE GROUND R ULES FOR N EGOTIATIONS
The following types of ground rules may be adopted prior to negotiating a development agreement, in order to improve the parties’ chances of negotiating mutually acceptable terms and provisions.
The parties agree during negotiations to:
1. Listen to the other party’s needs and desires
2. Discuss mutual “interests” rather than individual “positions”
3. Encourage creative ideas by agreeing there are no stupid suggestions
4. Take into account each other’s needs and desires
5. Use objective standards and criteria to assess interests
6. Use a check-off system to conceptually approve deal points along the way
7. Avoid returning to approved points absent changed circumstances
8. Use a deal point outline rather than iterations of the agreement itself
9. Avoid drafting the agreement itself until all deal points are agreed upon
10. Develop a common understanding of the agency’s land use policies ITEM 18.1.
ATTACHMENT 6
46 | D EVELOPMENT A GREEMENT M ANUAL
Such ground rules should be memorialized in writing.
SETTING PRIORITIES
Each party should be clear on their organization’s priority issues going into the negotiations, so each priority can be addressed early on. Reaching agreement on these priority issues is, of course, the key to successful negotiations.
Typical priority issues for local agencies include:
• Land Use Issues. What regulations relating to density, design, uses, and construction standards is the agency
willing to freeze in place at the time the agreement is executed? On what issues does the agency wish to
retain the flexibility to adapt its regulations to changing circumstances and new information?
• Exaction Issues. W hich public improvements and
facilities will be constructed, dedicated or financed by the project proponent? On what schedule? Will there
be a reimbursement provision if the project proponent
fronts the financing for a facility?
• Special Issues Relating to State Requirements.
What role will school facilities and affordable housing issues play?
Thinking through these issues and what the local agency will need to make the development agreement a net gain in terms of the public’s interest is a key to successful negotiations.
HAVE A STRATEGY
Fundamentally, each party comes to the negotiations with certain priorities and objectives—some of which may be unrealistic. Finding compromise solutions can require a sense of the other party’s true objectives (and presenting one’s proposals in terms of those objectives) and patience while the other party works through what they had hoped to receive as the result of the negotiations and what they actually can receive. Moreover, negotiations can be stressful; less skilled negotiators may react to such stress with displays of anger and attempts to badger their way into prevailing.
P RACTICE P OINTERS
It can be useful to have a list
of what the agency must
receive as a condition of
agreeing to the development
agreement and what the
agency is willing to trade for
other concessions.
The list should include the
various options available to
satisfy the agency’s
objectives (for example,
building versus funding an
improvement). The list
should also include any limits
on what the agency can do
(for example, waiving a fee
that others must pay).
Making such determinations
in the heat of negotiations
can sometimes be a risky
strategy.
ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMU NITY LAND U SE P ROJECT | 47 In most instances, it is important for both sides to keep in mind that there is a long-term relationship to be fostered. This relationship is frequently more important than short-term gains or “gotchas” on elements of the deal.
INTEREST-BASED BARGAINING TECHNIQUES
The parties may also agree in advance to use a particular negotiating approach. Historically, the negotiating model has involved a static process of developing positions in advance, based on confidential parameters set by the principals. More recently, professionals have advocated a more dynamic or synergistic approach that involves both parties working together to transcend competing interests.
Advocates of synergistic negotiations suggest that parties should:
• Share interests during negotiations (for example, what they fundamentally wish to accomplish or avoid) rather
than pre-determine, then haggle over positions;
• Acquire a real (in other wor ds, empathetic)
understanding of what the other party needs;
• Use brainstorming techniques to develop lists of options from which “outside-the-box” solutions can flow; and
• Agree to rely on objective standards or third -party
authority to settle differences and overcome obstacles.
Although conducting successful negotiations is a much larger topic than can be adequately addressed here, there are a number of resources that explain the benefits of negotiating in a more dynamic or synergistic fashion.78 For the local agency, an interest-based approach works better in light of the constraints of the state’s open meeting law. As a general matter there is no exception to the open meeting laws for local agencies to instruct their negotiating team on the provisions of a development agreement.
78 See, for example, Getting to Yes by William Ury and Roger Fischer, and The Seven Habits of Highly Effective People by Stephen R. Covey.
ITEM 18.1.
ATTACHMENT 6
48 | D EVELOPMENT A GREEMENT M ANUAL
The following illustrates this approach toward negotiations.
SUMMARY
By preparing in advance, developing a negotiating framework in which to proceed, and adopting ground rules, including how negotiations should be conducted, the parties s hould be able to create a negotiating environment that will increase the likelihood of reaching consensus.
I LLUSTRATION— T HE U RBAN L IMIT L INE AND B EYOND
Serene Valley is a large unincorporated area with an agricultural past. Much of the area is now built out, and the outlying farmland is seriously threatened by ever -expanding suburban development. As a result, the board of supervisors has established an urban limit line to prevent further sprawl.
Henry House is a project proponent who wishes to construct homes in Serene Valley. He is accustomed to building typical subdivisions projects with little open space, noting the continually increasing need for additional housing.
Mr. House applies for a development agreement to allow him to construct high-density housing beyond the urban limit line. Planning staff advises him that his application is likely to be denied (some would say dead on arrival). Some of his equity partners have owned property beyond the urban limit line for decades, and resent the influence of no-growth advocates who have only recently moved to the area.
As negotiations begin, the (somewhat skeptical) parties adopt a dynamic approach to negotiations, in which they agree to discuss respective interests rather than relative positions. Planning staff explain, for example, that they are interested in preserving the scenic nature of Serene Valley for future generations, rather than taking the position that they will never recommend construction beyond the urban limit line.
In turn, Mr. House explains that he is interested in constructing a project that will pencil out financially, rather than taking the position that the project must be constructed in a certain manner.
The parties eventually reach the conclusion that it is impossible to construct a conventional residential project that will make business sense while also respecting the urban limit line.
Nonetheless, they begin the next step in the process, which is brainstorming to identify mutually acceptable solutions. The parties are careful not to criticize ideas during the process or to dismiss any ideas as unrealistic. Slowly, suggestions emerge, ranging from creative suggestions that homes should not be visible from public streets to building underground homes.
It occurs to planning staff that the county has infill property that could fill out a town center concept envisioned by the specific plan for this part of the county’s unincorporated area. Moreover, the county has access to state park bond funds to potentially purchase conservation easements over Mr. House’s existing parcel, thereby helping the project pencil out for Mr. House and his partners. The mixed-use development contemplated by the specific plan is also consistent with Mr. House’s familiarity with higher density projects.
Helping Mr. House acquire the land may even help the county meet its affordable housing goals .
Planning staff also are aware, from a number of workshops the county has held on smart growth issues, that the supervisors are interested in more sustainable forms of development. The negotiators go forward with this concept successfully, creating a win -win situation.
ITEM 18.1.
ATTACHMENT 6
THE SUBSTANCE OF A
DEVELOPMENT
AGREEMENT
A number of considerations should be taken into account when drafting a development agreement. For efficien cy, many jurisdictions start with a standard form agreement that has already been reviewed and approved by the agency’s attorney. It is also helpful for negotiators to have reviewed:
• Current version of the development agreement law;79
• Planning policies for the area in question, including fee and dedications requirements and environmental
analyses; and
• Agency procedures for processing development
agreements.80
These steps help those involved in the negotiations identify the issues that will need to be negotiated to protect the public’s interests when drafting the agreement. It is also important to think ahead about implementation issues.
This chapter discusses some of the drafting and drafting-process issues that typically arise with development agreements.
WHO WILL DO THE DRAFTING?
A threshold issue is: From whose draft will the parties work? As indicated above, for local agencies expecting to be involved in a number of development agreements, it can be helpful for the agency to begin with a standard development agreement form that covers key and standard issues of concern to the agency. Sample development agreements are available online at www.ilsg.org/devtagmt
.
79 See Cal. Gov’t Code § 65864 and following (also available online at http://www.leginfo.ca.gov by clicking on “California Law”).
80 See Chapter IV and the sample procedures available online at www.ilsg.org/devtagmt .
Who Will Do The
Drafting? ...................................... 49
When Should The
Drafting Begin? ........................... 50
Common Provisions in
Development
Agreements................................... 50
Summary ...................................... 67
6 C HAPTER
ITEM 18.1.
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50 | D EVELOPMENT A GREEMENT M ANUAL
Of course, the standard form agreement can take negotiators only so far.
The next question is which party’s attorney will take the first crack at filling in the project -specific elements of the form. Development agreement negotiation veterans typically advise that the public agency’s counsel retain this role. In either event, it is not desirable to have both attorneys generating drafts of their own.
WHEN SHOULD THE DRAFTING BEGIN?
It may be tempting to prepare drafts of the development agreement as negotiations proceed. Some participants may derive comfort from having concrete proof that they are actually making progress.
However, the practice of preparing a draft as each of the deal points emerges can be expensive and result in unnecessary rewrites of the agreement. This practice may also afford the opportunity for drafting gamesmanship, in which slight but important changes are attempted beyond the scope of what the negotiators agreed to. The attorneys for each negotiating team must thoroughly review every draft, elevating otherwise avoidable tension in the remaining negotiations. It is preferable to list agreed-upon deal points for the entire agreement, including dates of each proposal and the name of the person who made it. Then, the development agreement can be drafted in close-to-finished form and subj ected to final editing and review by all parties. Use of the redline/strikeout computer function simplifies the process.
COMMON PROVISIONS IN DEVELOPMENT
AGREEMENTS
THE PARTIES TO THE A GREEMENT
Local agencies may enter into development agreements only with persons who have a “legal or equitable interest” in the real property in question.81 There may be others who should be parties to the agreement (for example, lenders). The goal is to identify whether there is anyone whose participation is necessary for the local agency to receive the benefit of its bargain, who would not automatically be bound by the agreement by its provisions as a successor-in-interest when the agreement is recorded.82
81 See Cal. Gov’t Code § 65865(a). See also National Parks and Conservation Association v.
County of Riverside, 42 Cal. App. 4 th 1505 (1996).
82 See Cal. Gov’t Code § 65868.5.
A NOTE A BOUT
C LARITY
Sometimes it is tempting
to use ambiguous
language to describe
issues on which the
parties are having
difficulties agreeing. This
temptation should be
avoided, inasmuch as it
only postpones
problems.
Moreover, given that the
agency will be able to
terminate the agreement
only upon substantial
evidence of
noncompliance, see Cal.
Gov’t Code § 65865.1
(there must be substantial
evidence the project
proponent has not
complied in good faith
with the agreement), there
is a high degree of risk
that ambiguities will
ultimately be resolved
against the public
agency.
ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 51
USE OF RECITALS
It is common to include recitals, typically following the first paragraph of the agreement, that identify the parties to the agreement. Many development agreements begin with a recital explaining the advantages offered by this development agreement, and stating that the agreement is entered into pursuant to state development agreement law, Government Code section 65864 and following.
Recitals typically explain:
• Who the parties are;
• What the project is;
• That the project is consistent with the general plan and any applicable specific plan; and
• That the parti es have complied with the California
Environmental Quality Act.
Recitals may also identify other discretionary land use approvals that are required for the project (for example, approval of a subdivision map or discretionary land use permit), and whether those approvals have previously occurred, will occur simultaneously, or will occur only after the development agreement has been approved.83
On occasion, a recital may address contingencies that will delay the effective date of the agreement, such as the need for property annexation.84 TERM
The term must be stated in the body of the agreement. 85 Larger projects, especially those constructed in phases, may require longer terms. In other instances, planning staff may argue for a shorter term, perhaps five to t en years, to enable the local entity to revisit the property’s zoning and general plan designations sooner rather than later
There is some indication that the term of the agreement — or at least the time during which the agency agrees not to apply changes in land use
83 See Cal. Gov’t Code § 65865.2.
84 See generally Cal. Gov’t Code § 65865.3 (development agreements and newly incorporated or annexed areas).
85 See Cal.Gov’t Code § 65865.2
ITEM 18.1.
ATTACHMENT 6
52 | D EVELOPMENT A GREEMENT M ANUAL
regulations to the development—is one factor that the courts will evaluate if the development agreement is challenged.86
It is generally a good idea to allow the parties to terminate the agreement early in the event of a material breach. (See further discussion concerning default, remedies, and termination, below.)
Note that development agreements for unincorporated territory within cities’ sphere of influence must specify a timeframe within which the annexation must occur.87 The agreement does not become operative until the annexation occurs.88
REQUIRED CONTENTS
A development agreement must specify the:
• Permitted uses of the property;
• Density or intensity of use; and
• Maximum height and size of proposed buildings.89
These are also known as the developme nt plan. Because development agreements can and are being used in a variety of applications, the required content outlined above can be addressed more generically or more specifically, depending on the goals of the parties and the degree to which the absence of such specification in the agreement means that the agency’s regulations apply.90 As a matter of draftsmanship and avoiding a basis for challenge, however, it is useful to address each of the required content elements. 91
For example, the permitted uses can be generically established by reference to a zoning category, such as retail commercial, or specifically established
86 See generally Santa Margarita Area Residents Together v. San Luis Obispo County Board of Supervisors, 84 Cal. App. 4 th 221 (2000) (suggesting such freezes cannot be of unlimited duration and upholding a zoning freeze for five years)
87 See Cal. Gov’t Code § 65865(b).
88 See Cal. Gov’t Code § 65865(b).
89 Cal. Gov’t Code § 65865.2 (contents of development agreements). 90 See generally Santa Margarita Area Residents Together v. San Luis Obispo County Board of Supervisors, 84 Cal. App. 4 th 221 (2000) (finding the fact that the agreement did not mention maximum height and size of proposed buildings was not fatal because the agreement was subject to the county regulations of these variables).
91 See generally Santa Margarita Area Residents Together v. San Luis Obispo County Board of Supervisors, 84 Cal. App. 4 th 221 (2000) (adopting a “substantial compliance” approach to these required content elements).
P RACTICE P OINTER
A good rule of thumb for
the term of a development
agreement is five to ten
years. Any longer may
constr ain a local agency’s
ability to impose new
regulatory requirements to
respond to changing needs
and issues in the
community.
ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 53 by reference to a site plan detailing every aspect of a proposed project.
Likewise, the density and intensity can be generically designated by using a range of possibilities, (six to ten units per acre, for example), or specifically designated (two units per acre). Similarly, the requirement that the maximum size and height of proposed buildings be included does not mean that every development agreement must propose buildings.
PUBLIC BENEFITS
Another required element of a development agreement is the provision for reservation or dedication of land for a public purpose. 92 A “permissive element” refers to the terms and conditions relatin g to the project proponent’s financing of necessary public facilities and the subsequent reimbursement of the project proponent for its non-pro rata share over time. 93 In fact, it is a good idea to specify all of the public benefits that will result from the agreement, following a recital explaining that the project proponent recognizes that he or she is being afforded greater latitude in exchange for agreeing to contribute greater public benefits than could otherwise be required, and that the project proponent does so freely and with full knowledge and consent.
ADDRESSING A POTENTIAL POLICE POWER CHALLENGE
Early on, commentators speculated whether adopting a development agreement might constitute an illegal “contracting away” of an agency’s police powers, which, in this context, refers to a local agency’s governing powers. “Police” derives from the Greek word polis, which means city.
Cities and counties typically obtain their police powers through the state Constitution.94
The California Constitution says, for example: “A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” 95 These powers afford the local agency latitude in dealing with issues that are local in nature and have not been addressed by the state legislature.
92 Cal. Gov’t Code § 65865.2.
93 See generally Santa Margarita Area Residents Together v. San Luis Obispo County Board of Supervisors, 84 Cal. App. 4 th 221 (2000) (finding the fact that the agreement did not mention maximum height and size of proposed buildings was not fatal because the agreement was subject to county regulations of these variables).
94 See Cal. Const. Art. XI, §7.
95 Cal. Const. art. XI, § 7.
ITEM 18.1.
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54 | D EVELOPMENT A GREEMENT M ANUAL
One thing a public agency cannot do is to contract away its police powers by enabling a private body or individual to control the exercise of its governing powers.96 In the case of development agreements, the question is whether the “freezing” of applicable land use regulations, so that the public agency cannot change the rules in a way that will prevent the project proponent from constructing or operating the project as approved, constitutes an illegal contracting away of police powers.
There are two ways that freezing of rules and regulations could conceivably constitute an illegal contracting away of police powers.
First, development agreements lock in the right to construct the project as approved once the agreement is in effect. Without a development agreement, the law allows the agency to impose additional requirements on a project up to the point at which the project proponent acquires vested rights by obtaining a building permit and doing substantial construction work in reliance on that permit.97
Second, development agreements do not allow the imposition of new rules that conflict with those in existence when the agreement was approved. 98 Without a development agreement, the agency may c hange the applicable zoning in a manner that is inconsistent with the project proponent’s vested rights, in which case, the property may acquire what is known as a “nonconforming use status” because the development on the property no longer conforms with the applicable zoning. While vested rights allow the owner to continue building and operating the project as originally approved, there may nonetheless be limitations on how the property can be used, including a prohibition against expanding nonconforming uses.
Whether either of these two aspects of development agreements constitutes an illegal contracting away of police powers may turn on the extent to which an agency surrenders all of its control over land use functions, rather than reserving most of its police powers except to the limited extent otherwise provided by the agreement.99
96 See generally Santa Margarita Area Residents Together v. San Luis Obispo County Board of Supervisors, 84 Cal. App. 4 th 221 (2000) (finding government enti ty does not contract away its police power unless the contract amounts to a surrender or abnegation of a proper governmental function).
97 See Avco Community Project Proponents, Inc. v. South Coast Regional Commission, 17 Cal.3d 785 (1976).
98 Cal. Gov’t Cod e § 65865.4.
99 See Morrison Homes Corp. v. City of Pleasanton, 58 Cal. App. 3d 724 (1976) (holding that an annexation agreement did not constitute an illegal “contracting away” of its legislative authority because it did not contract away all of the agency’s authority).
ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 55 Accordingly, it is a good idea for the drafters to include a provision in the development agreement explaining the extent to which the property will continue to be subject to the enti ty’s zoning rules, regulations and policies, as well as a provision explicitly reserving the entity’s police powers unto itself, except as otherwise provided in the agreement.
RECOVERY OF COSTS
Depending on the nature of the project, negotiating a development agreement can involve significant costs for the public agency in the form of staff time and legal fees. The agency may want to provide for the recovery of some or all of those costs, either in its local procedures (as part of the cost of processing a development agreement) or as a term of the agreement itself. If provided for in the agency’s local procedures, the agency will want to ensure that it does not assess the project proponent more than its actual costs. One way is to establish an hourly rate a nd record the staff’s time spent working on the project.
WHICH REGULATIONS ARE FROZEN?
Three drafting considerations affect which local land use rules and regulations will apply under the terms and conditions of the development agreement.
First, state law says that unless the agreement provides otherwise (see sidebar at right), the rules and land use policies in effect when the development agreement is adopted will apply to the project. The project proponent will be inclined to want language to the effect that the local agency is not allowed to apply rules or land use policies that would effectively nullify its prior approval of the project. In turn, the agency’s attorney will want language that confirms the statute allows the agency to apply new rules in t he future, as long as they are not in conflict with the rules and regulations that were in place when the agreement was adopted.
Second, the attorneys need to decide what language to use in the event the parties agree to allow land uses that are inconsiste nt with the otherwise applicable zoning requirements in existence at the time the development agreement was negotiated. One approach is to include language saying the then-existing zoning ordinance governs, but only to the extent it is not inconsistent with any provisions of the agreement. Depending on the circumstances, the agency attorney may prefer to actually amend the zoning ordinance so that it is consistent with the development agreement, in order to allow other projects to request that zoning in the future.
P OSSIBLE
E XCLUSIONS FROM
THE F REEZE
Local agencies may wish to
discuss retaining their
discretion to apply changes to
the following components of a
development agreement:
• Impact fees;
• Uniform codes;
• Processing fees; and
• Procedural regulations.
ITEM 18.1.
ATTACHMENT 6
56 | D EVELOPMENT A GREEMENT M ANUAL
Third, the development agreement should state that the agency’s compliance is subject to later-enacted state and federal regulations.100 “MILESTONE” REQUIREMENTS
On larger, phased -in projects, it may be useful to include “milestone” requirements s o the agency can terminate the agreement if phases of construction have not been completed within a specified timeframe.
The project proponent may resist agreeing to absolute deadlines. In this case, the public agency may want to consider allowing the timeframe to begin with a specified event, such as issuance of building permits. Before doing so, however, the public agency should make sure there are adequate incentives for the project proponent to stay on schedule, and that the decision to begin the next phase is not left entirely to the project proponent’s discretion.
DEFAULT, REMEDIES AND TERMINATION
Drafters typically recite that upon the commission of a material breach, the other party may terminate the agreement and exercise other legal remedies that it may have.
Especially with respect to larger projects, parties may be motivated to enter into elaborate provisions concerning default, available remedies and termination, so that in the event of a material breach, the breaching party has a specified time to “cure” the breach, before the other party can terminate the agreement. These provisions may contain what are known as “force majeure” recitals that preclude terminating the agreement, or that extend the term of the agreement when performance is not possible due to war, insurrection, terrorism, strikes and other events that are beyond the control of the parties. Such provisions are generally advantageous to the project proponent, and create potentially lengthy periods in which the agency is unable to ap ply new land use rules and regulations that may affect the agency’s ability to do responsive land use planning.
NON-PERFORMANCE ISSUES
It is important to remember that a development agreement is indeed a contract, the breach of which may be subject to monetary damages. Some local agency attorneys include clauses limiting remedies against the agency to specific performance. Under some circumstances, liquidated damages
100 Cal. Gov’t Code § 65869.5.
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I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 57 clauses may protect the agency from the upside risks associated with damages awards.
The local agency will also find it helpful to consider what kinds of assurances it wants to have available in the event the project proponent defaults on certain obligations. Some of the options local agencies may want to consider include:
• Letters of credit;
• Performance bonds; and
• Withholding certain approvals (for example building
permits, until satisfactory performance occurs).
The agency may also want to think through timing issues associated with the project proponent’s performance. In some instances, it ma y be advisable to specify timeframes for performing aspects of the development agreements and the consequences of not meeting those timeframes.
STATE OR FEDERAL L AWS
The parties may want to include a provision addressing the fact that state and federal regulations are not suspended by a development agreement. If a state or federal regulation is amended in a way that would preclude further performance under the agreement, the affected provisions of the development agreement will be modified or suspended.101
ANNUAL REVIEW
The parties may want to recite their awareness of the requirement for an annual review of the development agreement by the local entity. Recognize, however, that to the extent the parties make it the agency’s contractual obligation to conduct such a review, they may be setting the agency up for a failure to perform. 102 It is preferable to specify the agency’s procedures for conducting its annual review in the agency’s procedures ordinance or by resolution.
101 See Cal. Gov’t Code § 65869.5.
102 A number of agencies admit to having neglected annual reviews, which is inadvisable. A “tickler” system developed in collaboration with the clerk’s office can be a helpful reminder to hold these hearings once a year.
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58 | D EVELOPMENT A GREEMENT M ANUAL
ENFORCEMENT
The parties may want to include an enforcement provision reciting that the agreement is enforceable notwithstanding any changes to the general plan, specific plan (if any), or the zoning, which alters or amends an ordinance, rule, regulation or policy governing the zoning of the property during the term of the agreement.
RECORDATION
The parties may want to recite their awareness of the requirement that the agreement be recorded within 10 days following execution. Recognize, however, that to the extent the parties make it a contractual obligation of the local agency to timely record the agreement, they may be setting the agency up for a failure to perform.
CERTIFICATE OF SATISFACTION
The project proponent may wish to obtain “certificates of satisfaction” from the agency as phases of co nstruction are completed, reciting that each phase is in full compliance with its obligations under the development agreement. This certificate may be important to potential lenders. To the extent there are ongoing obligations, or obligations that transcen d the physical boundaries of a particular phase, it may be difficult for the local agency to make such attestations until the term of the development agreement has fully expired.
INDEMNIFICATION AND H OLD HARMLESS PROVISION
It is not uncommon to have the p roject proponent hold the local agency harmless from any liability the agency may incur as a result of entering into the agreement. Also helpful is a provision requiring the project proponent to indemnify and defend the agency at the proponent’s cost against any legal action instituted by a third party to challenge the validity of the agreement, including a challenge based on an assertion that the California Environmental Quality Act has not been complied with.103
103 Such arrangements have received the blessing of the California Attorney General’s Office.
See 85 Cal. Op. Att’y Gen. ___ (2002), available online at http://caag.state.ca.us/opinions/index.htm.
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I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 59
AMENDMENT OR CANCELLATION
State law provide s that a development agreement can be amended or canceled, in whole or in part, by the mutual consent of the parties upon notice of intention to amend or cancel in the form required by Government Code sections 65090 and 65091, and adoption of an ordinance amending the agreement. The ordinance must also be found to be consistent with the general plan and any applicable specific plan, and is subject to referendum, just as the original ordinance adopting the development agreement was.
Drafters typically recite these statutory requirements in the agreement for the convenience of the parties.
ASSIGNMENT
Drafters typically include a provision that neither party shall assign or transfer any of its rights, interests or obligations under the agreement without the prior written consent of the other, which consent shall not be unreasonably withheld.
The project proponent may want to seek additional language, which states that subsequent purchasers automatically become parties to the agreement upon transfer of ownership.
SUCCESSORS
It is common to include a provision indicating that the obligations imposed by the agreement constitute “covenants running with the land” and that the burdens and benefits bind and inure to all estates and interests created in the subject pr operty and to all “successors-in -interest” of the original parties.
Public agencies have faced difficulties once a number of people become successors-in-interest by virtue of acquiring property governed by the agreement. In some cases, project proponents h ave gone bankrupt, making it difficult to justify enforcing the agreement against individual owners.
Depending on the circumstances, public agencies may want to require as a condition of approval that project proponents have homeowners (or property owners) associations governed by covenants, conditions, and restrictions (CC&Rs). The CC&Rs should include the development agreement obligations so that the association, as well as individual property owners, is responsible for ensuring performance of the development agreement.
To the extent the provisions of the CC&Rs supersede the development agreement, the association may have the flexibility to amend development ITEM 18.1.
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60 | D EVELOPMENT A GREEMENT M ANUAL
agreement obligations by a vote of less than 100 percent of the association membership. Also, the public agency may be granted enforcement rights under the CC&Rs.
VALIDITY OF PORTIONS OF THE A GREEMENT
SEVERABILITY
It is common to include a provision stating that if one aspect of the agreement is held by a court to be illegal, the validity of the remain ing provisions are not affected.
ATTORNEYS FEES
In lawsuits involving contracts, the law does not allow a party to recoup its attorneys fees as part of its damages unless the agreement so provides. As a result, many written agreements contain a provision s tating that if a lawsuit or other legal action is brought with respect to the agreement, the prevailing party is entitled to recoup reasonable attorneys fees and costs.
GOOD FAITH AND FAIR DEALING
Many agreements recite that the parties expressly acknowle dge that any actions they take pursuant to the development agreement will be measured by the “implied covenant of good faith and fair dealing.”
SIGNATURES AND SUBORDINATION
The drafter will want to decide who should sign the development agreement. In addit ion to the property owner and public agency, some practitioners require lenders, lessees and others with an interest in the property to sign the development agreement. Other attorneys require lenders, lessees and other interested parties to sign subordinat ion agreements, which make their interests in the property subject to the terms and conditions of the development agreement. In the event subordination agreements are balked at, local agencies may want to consider requiring other interested parties to at l east sign a written acknowledgment and consent, stating they are aware of the existence of the development agreement and that they understand its terms.
ITEM 18.1.
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I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 61
SUMMARY
A number of issues warrant consideration when drafting a development agreement. In the final a nalysis, a well-drafted development agreement should accurately capture the deal points negotiated by the parties, and anticipate and address potential problems that may arise during implementation of its terms.
The Institute offers a variety of sample dev elopment agreements online through its database. The database is accessible through www.ilsg.org\devtagmt
. The Institute also welcomes submittals from
public agencies of additional samples for this database.
ITEM 18.1.
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62 | D EVELOPMENT A GREEMENT M ANUAL
GLOSSARY OF K EY T ERMS
Actions By Third Parties Necessary To Implement The Agreement: describes permits or fees required by other agencies such as school mitigation fees, environmental mitigation measures, etc.
Agency Default: describes the instances in which the agency would be in default such as:
• If a material warranty, representation or statement made or furnished by agency to the developer is false or proves to have been false in any material respect
• The agency fails to comply in good faith with a material requirement • An express repudiation, refusal, or renunciation of the agreement Agency Default; Developer Remedies: describes the options the developer would have in the event the agency is in default such as:
• To waive the default as not material
• To p ursue legal remedies provided for elsewhere in agreement • To terminate the agreement
• To delay or suspend developer performance which is delayed or precluded by the default of the agency Agency Obligations: heart of development agreement; describes what the agency is obligated to do such as diligently process further discretionary approvals, provide capacity, construct some improvements, reimburse certain funds advanced by developer, etc.
Amendment Of Agreement: describes how agreement will be amended; standard is that it is amended in same manner in which it was initially adopted (public hearing process through agency) (but see “Operating Memorandum”) Annual Review: a reminder that there is a state law requirement that there be an annual review of the agreement by the agency
Assignment: sets forth that neither party shall assign or transfer any of its rights, interests or obligations, without the prior written consent of the other, which consent shall not be unreasonably withheld Attorneys’ Fees And Applicable Law: states that if a lawsuit or other legal action is brought with respect to the agreement, the prevailing party is entitled to reasonable attorney’s fees and costs and identifies that California law will be used to interpret agreement
Bankruptcy: describes what happens in the case of a bankruptcy Certificate Of Satisfaction: a writing from the agency, as phases of construction are completed, stating that each phase is in compliance with its obligations under the agreement, often important to potential lenders Consistency With General Plan: required provision which states that the agreement is consistent with agency’s general plan
Cost Recovery: describes the method by which the agency will recover costs of staff time including legal fees for negotiation of the agreement
Covenants Run With The Land: states that the agreement is specific to the property, binds future owners and is not transferable to another property
Default And Remedies: describes what constitutes a default, what notice is required if one party thinks there is a default (generally a material breach), what remedies can be purused (for ex. damages, injunction, termination) Delay, Extension Of Times Of Performance: identifies that performance by a party may not be a default if the delays are due to war, strikes, riots, acts of God, or governmental entities other than agency (“see Force Majeur”) ITEM 18.1.
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GLOSSARY OF K EY T ERMS (CONTINUED ),
ITEM 18.1.
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64 | D EVELOPMENT A GREEMENT M ANUAL
Developer Default: describes the instances in which the developer would be in default such as:
• If a material warranty, representation, or statement made by the developer to the agency is false or proves to have been false in any material respect
• A finding by the agency that the developer fails to comply in good faith with any other material requi agreement
• An express repudiation, refusal, or renunciation of the agreement Developer Default; Agency Remedies: describes the options the agency would have in the event developer is in default such as:
• To waive the default as not material
• Refuse processing of a permit, approval, or other entitlement for • To terminate the agreement
• To delay or suspend agency performance which is delayed or precluded by the default of developer • To cure and charge back costs to the developer in emergency situations posing an immediate danger to health or safety
Developers’ Interest: describes what legal interest the developer has in the property Developer Obligations: heart of development agreement; describes what property owner/developer is obligated to do such as what improvements to be constructed and when, property to be dedicated and when, money to be paid and when, etc.
Development Plan: a development agreement must specify the permitted uses of the property, the density or intensity of use, and the max imum height and size of proposed buildings; because development agreements can and are being used in a variety of applications, the required content can be addressed more generically or more specifically, depending on the goals of the parties and the degre e to which the absence of such specification in the agreement means that the agency’s regulations apply. For example, the permitted uses can be generically established by reference to a zoning category such as “retail commercial” or specifically establish ed by reference to a site plan detailing every aspect of a proposed project. Likewise, the “density and intensity” can be generically designated by using a range of possibilities, (“6 to 10 units per acre,” for example), or specifically designated at “2 units per acre”. Similarly, the requirement that the maximum size and height of proposed buildings be included does not mean that every agreement must propose buildings
Encumbrances On The Subject Property: identifies subordination and mortagee informat ion regarding protection and obligations including notice of default and right to cure Entire Agreement: provides that the agreement embodies all the terms of the agreement and no “outside” agreements are valid
Estoppel Certificate: a written notice tha t the agreement is in full force and effect, a binding obligation of the parties and there is not a default
Exhibits: outlines what exhibits are attached and made a part of the agreement Force Majeure: describes that performance may be excused due to w ar, terrorism, strikes, and other events beyond the control of the parties
Good Faith And Fair Dealing: sets forth that the parties expressly acknowledge that any actions they take will be measured by the “covenant of good faith and fair dealing” Hold Harmless And Indemnification: requires the developer to hold the local agency harmless from any liability the agency may incur as a result of entering into the agreement; states that the developer will to indemnify and defend the agency at the developer’s c ost against any legal action instituted by a third party to challenge the validity of the agreement, including a challenge based on CEQA compliance ITEM 18.1.
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I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 65
GLOSSARY OF K EY T ERMS (CONTINUED ),
Incorporation Of Recitals: generally states that the recitals which p recede the “now therefore” clause are incorporated into the agreement itself.
Insurance: sets forth types and amounts of insurance that the developer is to provide as security for the hold harmless and indenmnity requirements
Jurisdiction And Venue: identifies the county in which any litigation should be filed and that the interpretation, validity, and enforcement of the agreement shall be governed by California law Liquidated Damages: identifies circumstances which would limit remedies against the agency to specific performance (no ability to receive money damages); under some circumstances, liquidated damages clauses may protect the agency from upside risks associated with damages awards. There may be instances in which the agency desires liquidated damages if developer fails to perform (such as failure to dedicate property Milestones: see Phasing
Notices: describes where and how notices required in the agreement are to be sent Operating Memorandum: describes instances in which formal amendment to agreement is not needed to implement the agreement such as minor refinements and/or clarifications; should be up to agency’s sole discretion to determine whether amendment or “Operating Memorandum” is appropriate Parties To The Agreement: identifies the persons having “legal or equitable interest” in the property Phasing Of Development: describes the “triggers” or “milestones” of the project; may also be known as the “development plan”; on larger, phased projects, it may be useful to include “milestone” requirements so the agency can terminate the agreement if phases have not been completed within a specified time frame Private Undertaking: identifies that the project is a private development and there is no partnership, joint venture, or other association of any kind between the developer and the agency Project And Property Subject To This Agreement: describes the project name, street address and references a legal description of the property (generally an exhibit)
Protest Rights: provides for the developer to waive protest rights, and releases the agency from any claims arising out of the calculation, allocation, and use of development mitigation fees (AB 1600 fees) Public Benefits: this provision is a required element of a development agreement related to the reservation or dedication of land for a public purpose; a permissive element is the terms and conditions relating to the project financing of necessary public facilities and the subsequent reimbursement for the developer’s non-pro rata share over time, and generally includes a description of the public benefits that will result from the agreement, following a recital explaining that the developer recognizes that greater latitude is provided in exchange for agreeing to contribute greater public benefits than could otherwise be required.
Recitals: describes the parties to the agreement; also describes applications and hearing process as well as CEQA review (for example: development agreement application number, general plan amendment application number, type of CEQA review done (if EIR gives state clearinghouse number), also identifies dates of public hearings before planning commission and agency; many development agreements begin with a recital explaining the positive effects of entering into a development agreement, and that the agreement is entered into pursuant to the state development agreement law; a recital may address contingencies that will delay the effective date of the agreement, such as the need for annexation of the property
Recordation: implements state law requirement which requires the agreement to be recorded ITEM 18.1.
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66 | D EVELOPMENT A GREEMENT M ANUAL
ITEM 18.1.
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I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 67
GLOSSARY OF K EY T ERMS (CONTINUED )
Reserved Discretionary Approvals: describes, generally in some detail, the approvals which are subject to discretion even after the agreement locks in or freezes other regulations; some regulations which may be important to “reserve” are impact fees, uniform codes, processing fees, certain procedural regulations (method of submitting final map – number of copies, Mylar, GIS format, etc.)
Security: describes what the agency will require to assure performance such as letters of credit, performance bonds, or the ability to withhold certain approvals (for example building permits), until performance occurs Severability; also called Validity: sets forth that if one aspect of the agreement is held by a court to be illegal, the validity of the remaining provisions are not affected
Signatures: identifies who should s ign the development agreement; in addition to the property owner and agency, some agencies require lenders, lessees and others with an interest in the property, to sign the development agreement or to sign subordination agreements (see “subordination”).
Su bordination: an action by which another entity makes their interests in the property subject to the terms and conditions of the agreement and acknowledges the existence of the agreement Successors : identifies that the obligations imposed by the agreement constitute “covenants running with the land” and that the burdens and benefits bind all future purchasers Term: identifies the length of time the agreement (which must be stated in the agreement); larger projects, especially those constructed in phases, may require 10, 15 or 20 year terms Termination (upon completion of development): provides that upon sale of individual lots all obligations of developer are discharged with respect to lots upon final inspection and issuance of certificates of occupancy Vested Components: describes, generally in some detail, the existing development regulations, etc. that are “frozen” or “locked in” by the agreement
Waivers: states that a waiver of one breach is not a waiver of any other breach ITEM 18.1.
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68 | D EVELOPMENT A GREEMENT M ANUAL
ITEM 18.1.
ATTACHMENT 6
7 C HAPTER CONCLUSION
Development agreements can be a useful tool in land use planning, creating win-win opportunities for both project proponents and local agencies when dealing with uncertainties associated with the regulatory environment.
The goal of this manual is to help local agencies in understanding development agreements and to provide them with practical tools to assist them in using development agreements within their jurisdiction.
Did the manual succeed in achieving this goal? The Institute and its financial supporters are very interested in local agency feedback. Please fill out the form at the end of this publication to let the Institute know whether this material was useful and how it could be improved.
Feedback Form............................. 67
Additional Institute
Publications .................................. 69
ITEM 18.1.
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70 | D EVELOPMENT A GREEMENT M ANUAL
ITEM 18.1.
ATTACHMENT 6
DEVELOPMENT AGREEMENT MANUAL FEEDBACK FORM
We are interested to hear your comments. This is your chance to shape future Institute publications. You may either copy this page and mail or fax it to:
Institute for Local Self Government
Attn: Development Agreement
1400 K Street, Suite 400
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Fax: (916) 658-8240
Or comment by email to [email protected]. Please put “Development Agreement Manual” in the subject line.
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I USED THE MATERIAL IN THE DEVELOPMENT AGREEMENT M ANUAL TO:
Update/create our agency’s development agreement procedures Update/create our agency’s standard form development agreement Other (please specify)
ITEM 18.1.
ATTACHMENT 6
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ATTN: DEVELOPMENT AGREEMENT 2002
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SACRAMENTO, CA 95814
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ITEM 18.1.
ATTACHMENT 6
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ITEM 18.1.
ATTACHMENT 6
74 | D EVELOPMENT A GREEMENT M ANUAL
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ITEM 18.1.
ATTACHMENT 6
I NSTITUTE for LOCAL S ELF GOVERNMENT C OMMUNITY LAND U SE P ROJECT | 75
INDEX
A-B
AB 1600................................65
Affordable housing................28
Amendment.........16, 30, 59, 62
Annual review.......................22
Application .........18, 22, 30, 31
Application Process ........30, 31
Assignment .....................59, 62
Attorneys fees .......................60
Brown Act.................26, 37, 45
Building permit17, 19, 22, 41,
54, 56, 57, 67
C-E
California Environmental Quality
Act (CEQA)...... 20, 32, 51, 58
Cancellation........................... 59
Certificate of satisfaction...... 58
Challenge, statute of limitations
for.................. 17, 22, 23, 32, 54
Coastal zone.................... 17, 35
Conditional use permit ......9, 32
Confidentiality, see also Brown
Act .........................................26
Covenant of good faith and fair
dealing17, 19, 40, 50, 60, 62,
64 Covenants, conditions and
restrictions (CC&Rs).............59
Default, remedies and
termination.................56, 62, 64
Density ............................26, 52
ITEM 18.1.
ATTACHMENT 6
76 | D EVELOPMENT A GREEMENT M ANUAL
Development Agreement:
Act, .......................22 ,31, 51
Law, Legislative history..2,
4, 17, 21, 26, 27, 30, 31, 32, 34,
36, 40, 49, 51, 54, 65
Development Agreement
(continued)
Checklist of common
provisions .............................50
Defined ..................22, 31, 51
Maximum height and size of
proposed buildings....26, 52, 64
Permitted uses of property.4,
16, 17, 26, 35, 48, 50, 51, 52,
5458, 59, 60, 62, 64,65, 67
Purpose ..11, 15, 26, 30, 31,
53 ,65
Recitals........................51, 65
Required Contents .............52
Term....9, 10, 19, 26, 27, 34,
34, 40, 41, 45, 47, 52, 53, 55, 58,
60, 60, 64, 65, 67
Termination....30, 40, 41, 52,
56, 62, 67
Accountability ...................40
Compared to vesting tentative
map........................................22
Statute of limitations...17, 22,
23, 32, 54
Effect of annexation and
incorporation.......27, 51, 52, 65
Fees...14, 15, 17, 17, 18, 22,
32, 33, 34, 62, 67
Findings......27, 30, 31, 36, 37
Recordation......30, 39, 58, 65
Statutory authority for ..15,
22, 59
Subordination.........60, 64, 67
Successors....................59, 67
Development impact fees..........
...............................15, 55, 67
Development plan .52, 64, 65
Educational Revenue
Augmentation Fund (ERAF) 15
Enforcement.............. 58, 60, 65
Exactions................... 14, 44, 47
F-K
Findings......... 27, 30, 31, 36, 37
“Frozen” regulations ....... 55, 67
General plan 9, 11, 13, 13, 14,
26, 37, 51, 58, 59, 62, 65
Growth management............. 12
Indemnification............... 58, 64
L-N
Lenders......... 50, 58, 60, 62, 67
Letters of credit............... 57, 67
Liquidated damages....... 56, 65
“Milestone” requirements... 56,
65 Mitigation Fee Act... 15, 14, 32
Negotiating team37, 43, 44, 47,
50 Negotiations10, 12, 13, 14, 18,
26, 28, 31, 33, 33, 36, 40, 43, 44,
45, 46, 47, 48, 49, 50
Non-performance issues ....... 56
Notice issues......................... 35
O-R
Open meeting law..... 26, 38, 47
Open space ..................... 12, 48
Parties to the agreement9, 50,
51, 59, 65
Performance bonds.......... 57, 67
Planning Commission... 30, 33,
34 ,36, 37, 65
Police power ....... 22, 38, 53, 54
“police power” challenge ...... 53
Prevailing wage requirement.. 18
Proposition 98 ...................... 15
Public benefits........... 30, 53, 65
Public hearings.... 32, 34, 44, 65
Public input..................... 32, 34
Public Records Act................34
Recovery of costs ...........34, 55
Referendum......................32, 59
Regulatory takings.............2, 16
S-T
Sales tax...........................13, 33
SB 50.....................................16
School facility fees.................16
Specific plan9, 11, 14, 26, 37,
48, 51, 58, 59
Sphere of influence..........27, 52
Stakeholders...............33, 34, 34
U-Z
Unincorporated territory .27, 52
Urban limit line......................48
Vested right....17, 20, 20, 22, 54
Zoning9, 12, 13 ,35, 37, 51, 52,
54, 55, 58, 64
ITEM 18.1.
ATTACHMENT 6
ITEM 18.1.
ATTACHMENT 6
5 Key Aspects of the Development Agreement
Process
1. Evaluating the advantages and disadvantages of using development agreements;
2. Understanding the role development agreements can play in achieving local agency land use planning objectives;
3. Knowing the procedural issues related to development agreements;
4. Incorporating the necessary substantive provisions in development agreements; and
5. Mastering the art of negotiating development agreements.
All explained in one handy and easy-to-read manual.
Development Agreement Manual: Collaboration in Pursuit of Community Interests SKU: 1170 Price: $20.00
ITEM 18.1.
ATTACHMENT 6
H:\NRPortbl\iManage\TZB\Dermody Rancho Cordova Letter Regarding Scheduling of Hearing.docx 1331 N. California Blvd.
Suite 600
Walnut Creek, CA 94596
T 925 935 9400
F 925 933 4126
www.msrlegal.com
Arthur F. Coon
Direct Dial: 925 941 3233
[email protected]
Offices: Walnut Creek / San Francisco / Newport Beach
September 16, 2022
VIA E-MAIL
Mr. Cyrus Abhar
City Manager
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
[email protected]
Re: Dermody Industrial Properties – Scheduling of Hearing Regarding Mather Blvd. Project on November 7, 2022, City Council Meeting Agenda; DR PLND-1021-0015
Dear Mr. Abhar:
Miller Starr Regalia represents Dermody Properties (“Dermody”) in connection with its application to develop the Mather Boulevard modern logistics center located northwest of the intersection at North Mather Boulevard and Bear Hollow Drive in the city of Rancho Cordova (the “Project”). The Project requires City Council approval of a Major Design Review application and has vested rights to develop pursuant to the 2003 Villages of Zinfandel Development Agreement (“Development Agreement”) and approved Zinfandel Spec ial Planning Area (“ZSPA”). After eleven mont hs of processing and the incorporation of numerous Project modifications, the Project is ready for hearing. To ensure the city abides by its obligations in the Development Agreement to act on the application in a timely manner , Dermody requests the city schedule this Project for hearing on the Council’s November 7, 2022, agenda.
I. The Project Application is Complete and Ready for Hearing.
Dermody submitted its Project application on October 25, 2021 . Dermody then:
submitted multiple detailed responses to the City’s application incompleteness letters, and received a completeness determination on January 12, 2022; held two interactive community meetings on November 16, 2021 and September 7, 2022; engaged in numerous meetings and discussions with City staff; and presented the Project before the City Council at its April 18 and July 18, 2022, meetings.
In response to comments and input received from city staff, decisionmakers, and the community, Dermody incorporated the following modifications to the Project’s design:
ITEM 18.1.
ATTACHMENT 7
Cyrus Abhar, City Manager
September 16, 2022
H:\NRPortbl\iManage\TZB\Dermody Rancho Cordova Letter Regarding Scheduling of Hearing.docx • Added a twelve-foot-tall tilt up concrete wall along the section of Bear Hollow that borders the truck court for purposes of noise and view screening.
• Added a “pop out” feature on the building to further shield the truck court.
• Added articulation on the north and east elevations of the building, stepped the parapet tops, revised the west end of the north elevation to add more articulation including an additional recessed panel, and added horizontal canopies to add mo re horizontal projection.
• Revised proposed tree species and increased size s of tree plantings.
• Changed the driveway orientation for right-turn in and out by trucks and added medians to Mather Boulevard and Bear Hollow Drive to direct arriving automobile drivers to the driveway on Mather Boulevard rather than Bear Hollow Drive.
• Added vertical window elements.
• Reduced lighting in parking areas to ensure that photometrics read below four footcandles.
This Project will introduce a vibrant mo dern logistics center that compliments the California Automobile Association building and new Coast Guard building immediately adjacent to the site . The Project has been refined in a manner that is sensitive to community concerns and is compatible with surrounding uses.
II. The Development Agreement Requires the City to Act on the Application in a Timely Fashion.
The Development Agreement requires the city to cooperate in good faith by timely processing the Project application and a failure to do so is an actionable default.
Specifically, the Development Agreement requires the City to “cooperate with [Dermody] in securing all permits, licenses, approvals or other entitlements necessary to develop the Project.” (Development Agreement, at § 4.3.) The city must do so in a timely and reasonable manner:
4.4 Timely Processing. Subject to compliance with submittal of information required…to deem an application complete…the [ city] shall perform any environmental review and approval process for such application on a timely basis.
4.5 Good Faith. The [city] agrees that it shall, in good faith , accept for processing and review, and take action upon all complete applications for…entitlements for use of the
Property in accordance with the [ZSPA] and this Agreement.
ITEM 18.1.
ATTACHMENT 7
Cyrus Abhar, City Manager
September 16, 2022
H:\NRPortbl\iManage\TZB\Dermody Rancho Cordova Letter Regarding Scheduling of Hearing.docx The [city] also agrees to act upon such applications in a timely and reasonable manner.
(Development Agreement, at §§ 4.4-4.5, emph. added.) A failure by the city to timely process the Project application is a clear default under the Agreement:
6.1. Default, Breach; Notice; Opportunity to Cure; Remedies .
Failure or delay by either party to perform any term of th [e] Agreement shall constitute a default….In the event of alleged default or breach of any terms or conditions of this Agreement, the party alleging such default or breach shall give the other party not less than sixty (60) days’ notice in writing specifying the nature of the alleged default… .After notice of exp iration of the sixty (60) day period, the party alleging default, at its option, may institute legal proceedings pursuant to the Agreement….
6.3. Default by [City] . In the event [ city] does not accept, review, approve or issue necessary development permit s or entitlements for use in a timely fashion as defined by this Agreement….
(Development Agreement, at § 6.1, emph. added.)
Either party may bring legal action to cure, correct , or remedy a default of the Agreement and a prevailing party in such action is entitled to recover their attorneys’ fees, costs, and expenses. (Development Agreement, at §§ 6.4, 8.13.) In sum, t he Project application is complete and in a position to be considered and approved by the City Council pursuant to the Developer’s vested rights at the November 7th public hearing. Dermody has spent nearly a year modifying the Project to thoughtfully respond to and address staff and community input as appropriate and feasible. The Project is consistent with the ZSPA and the terms and conditions of the Development Agreement, which now obligates the city to act on the application in a timely manner.
***************************************************
We look forward to working with the city to bring the Project to hearing at the City Council’s November 7, 2022, meeting. Should you have any questions regarding the foregoing, please do not hesitate to contact me directly.
ITEM 18.1.
ATTACHMENT 7
Cyrus Abhar, City Manager
September 16, 2022
H:\NRPortbl\iManage\TZB\Dermody Rancho Cordova Letter Regarding Scheduling of Hearing.docx Very truly yours,
MILLER STARR REGALIA
Arthur F. Coon
Arthur F. Coon
AFC:tzb
cc: Adam Lindgren, Esq., City Attorney, [email protected] Elizabeth Sparkman, Community Development Director,
[email protected]
George Condon, Dermody, [email protected]
Nadia L. Costa, Esq., Miller Starr Regalia, [email protected] Travis A. Brooks, Esq., Miller Starr Regalia, [email protected]
ITEM 18.1.
ATTACHMENT 7
DPML-58478\2711037.1
1331 N. California Blvd.
Suite 600
Walnut Creek, CA 94596
T 925 935 9400
F 925 933 4126
www.msrlegal.com
Arthur F. Coon
Direct Dial: 925 941 3233
[email protected]
Offices: Walnut Creek / San Francisco / Newport Beach
November 29, 2022
VIA E-MAIL
Mayor Terry, Vice Mayor Budge, and
City Councilmembers
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Email:
[email protected]
Re: Dermody Properties – City’s Legal Obligations Under the Development Agreement Benefiting LogistiCenter at Rancho Cordova (Bear Hollow) Major Design Review Project No. PLND-1021-0015
Dear Mayor Terry, Vice Mayor Budge, and Honorable Members of the City Council:
This firm represents Dermody Properties (“Dermody”) in its application to develop a modern, approximately 155,077 square foot logistics center and related improvements (“Project”), located northwest of the intersection of North Mather Boulevard and Bear Hollow Drive in the City (“Project Site”). As discussed in more detail below, the Project proposes a light industrial use that is permitted by right, which has a development density and intensity that complies with the applicable objective development standards and is consistent with the applicable subjective design guidelines.
The Project, as an important job-generating use, will help to implement the overall land use vision for this area of the City, which has been planned for nearly two decades. Despite the fact this light industrial land use has been approved and in place for almost twenty years, opponents have sought to undermine or dismantle it during the Project’s design review process. The City, however, is contractually prohibited from changing course at this point. This is because the Project, as proposed, is protected against such vagaries pursuant to the 2003 “Villages of Zinfandel Development Agreement” (“Development Agreement”), which vests important contractual and property rights for Dermody’s benefit that are enforceable in court.
As explained more fully herein, in exchange for a developer commitment to make significant investments in infrastructure and other improvements in the vicinity and on the Project Site to facilitate implementation of the Villages at Zinfandel Special ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
Planning Area (“ZSPA”), the Development Agreement, inter alia, vests Dermody’s right to develop the Project Site in accordance with the rules and regulations that were in place in 2003.
It is true the Development Agreement allows the City to require that Dermody undertake subsequent discretionary approvals to implement the Project – here, this involves consideration and approval of a Major Design Review application.
However, in conducting this review, the Development Agreement expressly prohibits the City from denying the Project and also from imposing any design condition or restriction – based on a strained interpretation of a subjective design guideline, non- existent CEQA mandates,1 or otherwise – which would prevent or restrict development of permitted uses at the Project Site at the allowed density and intensity provided for in the ZSPA or that would otherwise be contrary to Dermody’s vested rights under the Development Agreement.
Dermody has worked diligently and in good faith with the City and the broader community for nearly a year, in an effort to address concerns raised. Dermody has voluntarily gone well above and beyond – at significant expense in terms of time and money – accommodating numerous requests to redesign Project elements and include additional off-site improvements.
It is now time for the City to adhere to its obligations under the Development Agreement and to approve the Project as proposed. To do otherwise would subject the City to litigation for violating Dermody’s vested rights, including City exposure to potential monetary damages and payment of attorneys’ fees and costs.
Accordingly, we respectfully request the City Council to approve the Project as proposed at its December 5th hearing.
I. The City is Bound by Its Obligations in the Development Agreement, and Legal Recourse is Available to Dermody if the City Fails to Honor Those Obligations.
A. Legislatively Approved Development Agreements Establish Enforceable Vested Rights.
Comprehensively planned developments like those contemplated by the ZSPA often take decades to complete and require significant early and ongoing investment by developers to come to fruition. To provide certainty to developers that a local agency will not “change the rules” mid-course, thereby wasting such investment and
1 Please see my letter dated October 3, 2022, which details the limited discretion, with the concomitant constraints on CEQA review, which are imposed on the City pursuant to applicable laws and regulations in connection with the Project’s design review process. As detailed therein, the City has no legal authority to request or mandate any additional mitigation measures on the Project in a purported attempt to address environmental concerns.
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
preventing implementation of the planned vision, state law expressly authorizes local agencies to enter into development agreements that:
[a]llow a developer who needs additional discretionary approvals to complete a long-term development project as approved, regardless of any intervening changes in local regulations.
(City of West Hollywood v. Beverly Towers, Inc. (1991) 52 Cal.3d 1184, 1194; Gov.
Code, § 65864(b).)
A project protected by a development agreement may be developed over a period of numerous years “in accordance with existing policies, rules and regulations, and subject to conditions of approval . . .” even if generally applicable rules and regulations change. (Gov. Code, § 65864(b).) In exchange for granting these vested rights, development agreements provide local agencies with the opportunity to help ensure long-term planning efforts can be implemented. Furthermore, development agreements enable local agencies to negotiate for significant benefits in the form of direct monetary contributions as well as the funding and construction of infrastructure and improvements for the benefit of the broader community, which the local agencies would otherwise not be permitted to mandate under the law.
In other words, a “legislatively approved development agreement gives both parties vested contractual rights.” (Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth (2010) 191 Cal.App.4th 435, 443-444 [court held “a legislatively approved development agreement gives both parties contractual rights” and upheld $30 million damages award in favor of developer against Town for anticipatory breach of contract]; North Murrieta Community v. City of Murrieta (2020) 50 Cal.App.5th 31, 43-44 [holding “[development] agreement is binding on both the City and the developer” (citing Gov. Code, § 65865.4), and observing: “The law says development agreements are contracts, enforceable like normal contracts.”]; Center for Community Action & Environmental Justice v. City of Moreno Valley (2018) 26 Cal.App.5th 689, 696-697 [“A development agreement ‘is an enforceable contract between the municipality and the developer.’”]; Oakland Bulk & Oversize Terminal, LLC v. City of Oakland (9th Cir. 2020) 960 F.3d 623 [holding development agreement entered into between city and commercial marine terminal developer pursuant to California law is enforceable under contract principles with no deference to city’s administrative hearing findings or interpretations of agreement’s provisions or what they require].)
A local agency that violates a development agreement is liable for breach of contract and, if it fails to appropriately process and approve applications for a protected project, can be held be liable for significant damages under specified circumstances. For example, in Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes, the Court of Appeal upheld a $30 million damages award against the Town of Mammoth for its failure to process in good faith a development application in contravention of its obligations under a development agreement. Like ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
the instant Development Agreement, the agreement in Mammoth Lakes required the Town to process, consider and take actions on subsequent discretionary project approvals “reasonably, in good faith, and in a timely manner.” (Id., at 446.) However, several years after execution of that development agreement, the Town changed its priorities and refused to cooperate in timely advancing necessary project approvals. This failure to cooperate with the developer amounted to an actionable repudiation and anticipatory breach of the agreement resulting in the significant award of monetary damages to the developer. (Id., at 462-70.) B. Dermody Has Enforceable Vested Rights to Develop the Project as Proposed Under the Development Agreement.
As evinced by the foregoing authorities, legislatively approved development agreements entered into pursuant to California’s statutory Development Agreement Law create solemn, legally binding vested rights and contractual obligations on the part of the parties thereto, which rights and obligations courts take quite seriously and do not hesitate to enforce in the event of breach or repudiation by a party.
Similar to the project in Mammoth Lakes, the Project here benefits from the protections of a legislatively approved development agreement that requires the City to timely process an entitlement application and to comply with its contractual terms.
On May 28, 2003, the original property owner and developer of the Villages of Zinfandel project entered into the Development Agreement with the County of Sacramento, which established contractual vested rights and obligations for the signatories and their respective successors in interest.
The Development Agreement relates to the entire approximately 671.39-acre ZSPA and has a term of twenty (20) years from its effective date of June 28, 2003.2 Its purpose is to facilitate the phased development of the comprehensively planned ZSPA, including a complementary mix of residential, light industrial, business professional (including industrial office parks), and commercial uses. Consistent with the broad legislative purpose, the Development Agreement seeks to provide certainty to, and to reduce the economic risks incurred by, the developer(s) within the ZSPA, and to provide contractual rights for the benefit of the County (now City) to help implement the ZSPA’s planned uses and establish the planned infrastructure and improvements necessary to support this land use vision, which was anticipated to take several decades. (See DA, Recitals A, C.)
2 The City formally incorporated on July 1, 2003. However, the time limits set forth in Government Code section 65865.3 on the effectiveness of development agreements (8 to 15 years) from the date of incorporation of affected land into a new city do not apply because the election on incorporation of the City in November 2002 occurred before the parties entered into the Development Agreement in June 2003. (See Gov. Code, § 65865.3 (c)(2).)
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
Among other things, the Development Agreement vests Dermody’s rights to develop the Project Site pursuant to the “Existing Land Use Regulations” in effect as of the effective date of the Development Agreement,3 which are primarily set out in the ZSPA document that provides a comprehensive development vision for the approximately 671.39 acres within the ZSPA boundaries, which includes the Project Site.
Specifically, the Development Agreement vests Dermody’s right to develop the Project Site with those uses allowed under the ZSPA, as well as its right to develop those permitted uses at the “density and intensity” of development contemplated therein:
The permitted uses of the Property, the density and intensity of use, maximum height and size of proposed buildings, timing or phasing of development, zoning, provisions for reservation or dedication of land for public purposes, and the location and size of major transportation, sewer, drainage and water facilities and improvements shall be those set forth in the [ZSPA], [Mitigation, Monitoring, and Reporting Program set forth in the EIR for the ZSPA], and the [Villages of Zinfandel Public Facilities Financing Plan] . . . .
(DA, § 2.1.)
The Development Agreement further provides that:
[b]y entering into this Agreement, [the City] hereby grants to Developer (and successors in interest) a vested right to proceed with the development of the Property in accordance with the terms and conditions of [the] Agreement. Developer’s vested right to proceed with the project shall be subject to any subsequent discretionary approvals required in order to complete the project, provided that any subsequent approvals shall not prevent, or impose further conditions, requirements or restrictions on development of the land for uses and to the density or intensity of development or rate of timing of development set forth in [the] Agreement and the [ZSPA], and provided Developer is not in default under this Agreement.
(DA, § 4.1, emph. added.)
3 Such “Existing Land Use Regulations” include the “ordinances, resolutions, codes, rules, regulations, official policies, the General Plan, the Cordova Community and the [ZSPA] governing the permitted uses of land, rate of development, density, design, improvements and construction standards and specifications adopted by the [County] and in effect on the effective date.” (DA, § 1.2(m).)
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
While the Development Agreement recognizes that subsequent discretionary approvals may be required to implement the Project, the City must exercise its discretion in accordance with Dermody’s vested rights and thus such discretionary approvals “shall not prevent, or impose further conditions, requirements or restrictions on, development of the land for the uses and to the density or intensity of development set forth in the [Development] Agreement and the [ZSPA].” (Id., § 2.2.)
The Development Agreement also requires the City to cooperate with Dermody in securing “all permits, licenses, approvals, or other entitlements necessary to develop the Project Site which the [City] may require.” (DA, §§ 4.2, 4.3.) Further, the City must process applications for any subsequent approvals on a “timely basis” and shall “take action upon all complete applications” for subsequent approvals in accordance with the Development Agreement. This includes an obligation to act upon such applications in a “timely and reasonable manner.” (DA, §§ 4.4-4.5.) The City is bound by the above enforceable obligations as it processes and considers Dermody’s design review application. In addition, the City is bound by the covenant of good faith and fair dealing, which is implied by California in all such contracts and also is expressly set forth in the Development Agreement. (Id. at § 8.5 [“Neither party shall do anything which shall have the effect of harming or injuring the right of the other party to receive the benefits of this Agreement; each party shall refrain from doing anything which would render its performance under this Agreement impossible; and each party shall do everything which this Agreement contemplates that such party shall do to accomplish the objectives and purposes of this Agreement.”].)
The Development Agreement contemplates a broad, cumulative, and non- exhaustive list of remedies for its breach, including the institution of legal action to remedy any default and enforce any covenant or agreement in it. Notably, it does not expressly or impliedly prohibit a monetary damages remedy for uncured defaults and breaches, and, in fact, expressly provides that the exercise of one or more of its expressly enumerated remedies does not waive or preclude “any other available remedy.” (DA, § 6.4.) Further, the prevailing party in any action brought to enforce rights and remedies under the Development Agreement will be entitled to its reasonable attorneys’ fees, expert fees, and costs and expenses of litigation in any judgment. (DA, § 8.13.)
C. In Exchange for Securing Its Vested Rights, Developer Has Been Required to Incur and Continues to Incur Significant Costs.
In exchange for the County’s (now the City’s) agreement to adhere to the obligations referenced above and detailed more fully in the Development Agreement in favor of Dermody, the Development Agreement imposes obligations with respect to significant developer investments. For example, the Development Agreement recognizes that it:
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
requires major investment by Developer in public facilities, substantial pre-development investment in onsite and offsite improvements, and substantial commitment of the resources of Developer to achieve the public purposes and benefits of the Project for the [City].
(DA, Recital M.)
These required investments in public improvements, facilities, and services are set forth in the Villages of Zinfandel Public Facilities and Financing Plan (“PFFP”), with which Dermody is mandated to comply, and which will benefit the entire ZSPA.
Among other requirements, Dermody is also mandated to adhere to all applicable conditions of approval set forth in the ZSPA, PFFP, and the applicable mitigation measures adopted in the corresponding EIR. (See DA, §§ 3.1-3.3.) The foregoing developer obligations reflect the benefit of the bargain contemplated by the Development Agreement that the City and the broader community receive with the Project; i.e., to help ensure the cohesive and comprehensive buildout of the ZSPA with the long-planned land use vision that reflects a mix of uses as well as thoughtful coordination of infrastructure and improvements.
Dermody has complied and will continue to comply with all of its obligations under the Development Agreement as it develops the Project to ensure the City receives the benefit of this contemplated investment.
In addition to adhering to its obligations with respect to future investment, Dermody has already expended significant monies in reliance on the City abiding by its contractual obligations including, without limitation, monies spent acquiring the Project Site (with the concomitant carrying costs) and more than $800,000 on architectural, engineering and other technical consultant services to design the Project in compliance with applicable objective development standards and subjective design guidelines and then to redesign Project elements in an effort to accommodate additional requests made by the City and members of the public.
Furthermore, Dermody has volunteered to fund and install several off-site improvements for the benefit of the broader community in its ongoing effort to work cooperatively with the City and neighbors.4
Dermody desires to continue to work collaboratively with the City and the community to proceed with the Project at this point. However, if forced to do so because of the City’s improper delay or denial of the Project as proposed or the City’s imposition of design conditions or restrictions that conflict with Dermody’s vested rights, Dermody would have no choice but to pursue all available legal avenues, including, if
4 It goes without saying that no such voluntary off-site improvements would continue to be offered and implemented if Dermody is required to enforce its vested rights in court.
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
successful, the right to recover monetary damages as well as its attorneys’ fees, costs, and expenses. (DA, §§ 6.4, 8.13.)
II. The Project Proposes a Use Permitted by Right under the ZSPA at the Allowed Density and Intensity Pursuant to the Objective Development Standards and is Consistent with the Subjective Design Guidelines.
The Project proposes a use that is permitted by right at the Project Site, and reflects a density and intensity that complies with the applicable provisions of the ZSPA as reflected in its objective development standards. The Project also is consistent with the applicable subjective design guidelines. Accordingly, the City has no legal authority to deny the Project as proposed.
The Project Site has a General Plan land use designation of Office Mixed Use, is within the jurisdictional boundaries of the ZSPA, and is zoned Business and Professional Office Zinfandel Special Planning Area (“BP ZSPA”). The ZSPA sets out the applicable land use controls and objective development standards for the Project Site and other areas within the ZSPA boundaries, as well as sets forth subjective design guidelines that may be considered.
A. The Project Proposes a Use that is Permitted By Right.
Within the Project Site’s BP ZSPA designation, permitted uses are the same as those in the 2003 CZO’s Business and Professional Office (BP), and Industrial – Office Park (MP) zones.5 (ZSPA, § 512-204 (D).) Within the referenced MP zone, the 2003 CZO permits by right a wide range of “research, service, and light industrial uses in an area containing visual and operational amenities.” (2003 CZO, § 230-040.) With relevance to the Project, the 2003 CZO expressly permits Wholesaling and Warehousing, Delivery Service, Messenger Service, and Warehousing and Storage Uses. (2003 CZO, § 230, Table IV; § 225, Table II.) Although the 2003 CZO does not expressly define these permitted uses, they have common and well-understood meanings and clearly align with the logistics center use proposed by the Project.
The Project’s proposed use is exactly the type of warehouse and/or delivery use that the ZSPA contemplates at the Project Site and is indisputably permitted by right. Thus, regardless of whether nearby neighbors or other members of the public disagree with the land use vision set forth in the ZSPA, this type of job-generating use has long been planned for this area and the City is prohibited under the Development Agreement from denying the proposed light industrial uses.
5 “Permitted uses within the BP Areas as shown in Section 512-215 are those permitted in the Business and Professional Office (BP), as listed in Zoning Code Section 225, and Industrial-Office Park (MP) Zone, as listed in Zoning Code Section 230. Public and institutional uses described above in Section 512-204 (B) (2) shall be permitted within the BP Area.” (ZSPA, § 512-204 (D).)
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
B. The Project Complies with the Applicable Objective
Development Standards.
Development proposals within the ZSPA must comply with the applicable objective development standards. The ZSPA’s development standards “supersede the standards of the Zoning Code.” However, “[i]f the [ZSPA] . . . Development Standards do not provide direction regarding specific standards, the Provisions of Title I, II, III, and IV of the [2003 CZO] shall apply as appropriate.” (ZSPA, at §§ 512-205.)
The ZSPA sets out the following objective development standards for the relevant BP ZSPA zone:
Setbacks: Front, min. 25 feet with 10 feet of landscaped area; Interior Side, min. 20 feet; Street Side, min. 25 feet; Rear, min. 25 feet. Height: 24-40 feet (Note: relevant 2003 County zoning standards incorporated by reference in the ZSPA provide that in the BP ZSPA zone, the maximum height “shall be . . . 40 feet” on property which is not “contiguous to parcels zoned for [agricultural, agricultural-residential or residential purposes].” This contrasts with the 24-foot maximum height (which may be increased in certain circumstances through approval of a conditional use permit) that applies to property located within 100 feet or contiguous to parcels zoned for agricultural and/or residential uses. (2003 CZO, § 325-04 (b).)
Lot Area: Min. 10,000 square feet.
Parking: Min. 1 parking space for every 2,000 square feet of gross floor area for warehouse uses.
Walls and Fencing: Min. 6-foot masonry wall required for areas adjacent to residential areas; Min. 2.5-foot masonry wall required for areas adjacent to street ROW.
(ZSPA, §§ 512-214.)
Particularly with respect to height, in the BP ZSPA zone, the maximum height for buildings on properties that are not contiguous to agricultural or residential zoned parcels – such as the Project Site – is 40 feet. (2003 CZO, § 325-04 (b).)6
6 Here, the Project Site is contiguous with: BP zoned parcels to the north, northwest, and northeast; a road and open space parcel to the east; and an airport use to the south.
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
The Project fully conforms to and complies with each of the above objective development standards. In fact, the Project has been designed (and redesigned) not only to be compliant with but to exceed applicable minimum setback, landscape, screening and buffer standards in an effort to accommodate neighbor concerns, as follows:
Minimum front setbacks of 110 feet, with at least 42 feet of landscaped area (well exceeds ZSPA minimum standards of 25 feet and 10 feet, respectively).
Minimum interior side setbacks of 72 feet, 6 inches (well exceeds ZSPA minimum standard of 10 feet).
Minimum street side setbacks of 35 feet (well exceeds ZSPA minimum standard of 25 feet) and includes a 25-foot pedestrian/landscape easement. Minimum rear setbacks of 138 feet (well exceeds ZSPA minimum standard of 25 feet).
Lot area is approximately 469,364 square foot lot (well exceeds ZSPA minimum standard of 10,000 square feet).
Includes a total of 93 parking spaces (well exceeds ZSPA minimum of 78 spaces).
Includes a 12-foot-high concrete wall in those areas adjacent to Bear Hollow Drive and Mather Boulevard (well exceeds ZSPA minimum standard of a
2.5-foot masonry wall).
Particularly with respect to height, we understand that some opponents are pressing the City to substantially reduce the height of the Project. Based on numerous statements reflected in the administrative record to date, these comments appear to be a thinly concealed attempt to pressure the City into denying the Project outright or through the imposition of improper development constraints that effectively prevent the Project from proceeding. However, even if these efforts are cloaked within the purported objective of trying to reduce the overall building mass, they remain impermissible since the City has no discretion in this regard because the Project complies with all objective development intensity standards, including the maximum height limit. At a maximum height of 39 feet, the Project fully complies with and is less than the 40-foot height maximum applicable to the Project Site.
Accordingly, the City has no legal authority to deny the Project as proposed or to condition approval on Dermody’s agreement to reduce the building height. Just as the City does not have the discretionary authority as part of the design review process to impose more stringent requirements with respect to, for example, objective parking, lot area, or setback standards, it has no discretion here to change ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
the height of the Project so long as it complies with the relevant objective development intensity standard.
In summary, the Project does not exceed the maximum height of 40 feet and proposes development at the density and intensity provided for in the ZSPA in accordance with its vested rights under the Development Agreement, and the City’s limited discretion under design review does not extend to changing objective development standards, such as height.
Accordingly, the Project proposes a development configuration, density, and intensity that complies fully with the applicable objective development standards set out in the ZSPA. The City has no legal authority to change the rules now and impose other development standards to appease neighbors and other opponents.
To do so would be unfair, illegal, and expose the City to substantial liability.
1. The Project Is Consistent with All Applicable Subjective ZSPA Design Guidelines.
The ZSPA’s Design Guidelines provide that they “shall be used to evaluate consistency of proposed projects to the objectives stated in the intent section of the SPA ordinance.” These are “intended to provide design guidance” for developers and City staff in the “planning, review and approval of individual development projects within the ZSPA.” (ZSPA Design Guidelines, at p. 1.) It is with these subjective design guidelines where the City has the opportunity to exercise its limited discretion. Nevertheless, this limited discretion may only be exercised in a manner that is in accordance with its broader obligations in the Development Agreement and Dermody’s vested rights thereunder. In other words, the City cannot apply or otherwise interpret any of its subjective design guidelines in a manner that would “prevent, or impose further conditions, requirements or restrictions on, development of the land for the uses and to the density or intensity of development set forth in the [Development] Agreement and the [ZSPA].” (DA, § 2.2.)
For illustrative purposes, we note for the administrative record that the Project is entirely consistent with the numerous flexible design guidelines for building orientation for non-residential uses. Examples include the following:
To the maximum extent feasible, entries to office and public space, whether in the Village Core or the outlying business parks, should orient to streets, parks, plazas, and pedestrian corridors/pathways. Secondary entrances may orient to parking lots or garages.
Where location of a parking area or lot directly adjacent to a public street cannot be avoided, cars will be screened from view by berms, walls, hedges, density of plant materials, or a combination of these.
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
Buildings should be sited such that they complement adjacent buildings and landscape. New structures should not clash with existing structures and sites.
Building orientation and architecture should protect the privacy of adjacent developments. Landscape buffers and walls are required between residential and non-residential uses where backyards and parking or loading areas abut. Pedestrian access through parking lots should be provided. If the development abuts a residential neighborhood street access should be provided to/from the street.
(ZSPA Design Guidelines, at pp. 16-17.)
The record is also clear that the Project is consistent with design guidelines that encourage the following considerations regarding building form and massing:
The bulk of building massing generally should be minimized especially where residential character predominates.
Buildings should maintain a scale compatible with residential neighborhoods.
Building masses should be mitigated by elements such as canopies or trellises designed to focus attention to smaller-scaled elements of the building. Indentations, or other means of articulation, should be used to avoid a monolithic effect.
Building form should avoid proportionally long, flat surfaces. Building elevations must be attractively designed on all four sides. Walls at interior property lines or project phase lines must be given specific design attention, with color, physical relief, and/or landscaping. Backs and sides of buildings visible from public streets should incorporate window and door openings.
Roofing materials should be architectural composition, shingle, clay tile, concrete tile, slate, or metal standing seam.
Variation in the shape, color and texture of roof structures should be used to create diversity and interest. Use of composition shingles shall be limited to architectural, thick dimension, or random-cut types that provide relief and texture. Flat, monotonous surfaces shall be avoided.
Non-residential uses adjacent to residential uses should consider the use of pitched roof elements.
(Id., at pp. 23-25.)
ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
As noted above, we acknowledge the City has some limited amount of discretion in its design review process to take into appropriate consideration the above guidelines and to work with Dermody to make feasible design modifications to the Project. This has occurred here in spades, with extensive design modifications being voluntarily made in an effort to be responsive to City and public input. For example, and as more fully detailed in our September 16, 2022, letter, Dermody has made substantial design changes – at great cost in terms of money and time – to accommodate City and community input. These changes involve, among others, the following:
Adding a twelve-foot-tall tilt up concrete wall along the section of Bear Hollow that borders the truck court for purposes of noise and view screening. Adding a “pop out” feature on the building to further shield the truck court. Adding articulation on the north and east elevations of the building, stepped the parapet tops, revised the west end of the north elevation to add more articulation including an additional recessed panel, and adding horizontal canopies to add more horizontal projection.
Revising the proposed tree species and increased sizes of tree plantings. Changing the driveway orientation for right-turn in and out by trucks and addition of medians to Mather Boulevard and Bear Hollow Drive to direct arriving automobile drivers to the driveway on Mather Boulevard rather than Bear Hollow Drive.
Adding vertical window elements.
Reducing lighting in parking areas to ensure that photometrics read below four footcandles.
The City, however, has no legal authority to interpret subjective design guidelines in a manner that conflicts with Dermody’s vested rights through the imposition of design conditions or restrictions that would limit or prohibit development of permitted uses that comply with the density and intensity of development contemplated in the ZSPA.
One such condition or restriction would be a requirement to reduce the maximum height of the Project to below the 40-foot height limit or to otherwise impose massing restrictions. As Dermody has communicated to the City on multiple occasions and as set forth in the administrative record, based on the nature of their operations, modern logistics and distribution tenants demand building heights in the range of those proposed by the Project and cannot feasibly operate in shorter ITEM 18.1.
ATTACHMENT 8
Mayor Terry, Vice Mayor Budge, and City Councilmembers
November 29, 2022
DPML-58478\2711037.1
buildings.7 Accordingly, any conditions that would change the height, FAR, massing, or site orientation beyond what is currently being proposed would render the building and site plan functionally obsolete and infeasible for the permitted and planned use. This would be an effective denial of the Project, thus violating the City’s obligations in the Development Agreement.
III. Conclusion.
Based on the foregoing, Dermody has the vested right to proceed with the Project as proposed, and in doing so will be developing a high-quality, thoughtfully designed, job-generating use, thereby helping to bring the long-planned ZSPA land use vision to fruition. For these reasons, and because the City Council is contractually obligated to timely consider and approve the Project as proposed, we respectfully request that the City Council do so at its December 5th hearing.
Very truly yours,
MILLER STARR REGALIA
Arthur F. Coon
AFC:tzb/klw
cc: Cyrus Abhar, City Manager ([email protected]) Micah Runner, Deputy City Manager ([email protected]) Elizabeth Sparkman, Community Development Director,
([email protected])
Adam Lindgren, City Attorney ([email protected]) George Condon, Dermody Properties ([email protected]) Lucy Crocker, Lucy & Company ([email protected])
Michelle Smira, MMS Strategies ([email protected]) Nadia L. Costa, Esq., Miller Starr Regalia ([email protected]) Travis A. Brooks, Esq., Miller Starr Regalia ([email protected])
7 For example, the Commercial Real Estate Development Association notes that to support modern logistics uses, buildings of 150,000 square feet and greater should provide 36-foot interior clearance, which requires an exterior height of approximately 40 feet. (See Rules of Thumb for Distribution/Warehouse Facilities Design, Commercial Real Estate Development Association, at 33.)
ITEM 18.1.
ATTACHMENT 8
DPML-58478\2714974.6
1331 N. California Blvd.
Suite 600
Walnut Creek, CA 94596
T 925 935 9400
F 925 933 4126
www.msrlegal.com
Arthur F. Coon
Direct Dial: 925 941 3233
[email protected]
Offices: Walnut Creek / San Francisco / Newport Beach December 14, 2022
VIA E-MAIL
Mayor Terry, Vice Mayor Budge, and City
Councilmembers
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Email: [email protected]
Re: Dermody Properties – LogistiCenter at Rancho Cordova (Bear Hollow) Major Design Review Project No. PLND-1021-0015
Dear Mayor Terry, Vice Mayor Budge, and Honorable Members of the City Council:
Miller Starr Regalia represents Dermody Properties in its application for design review approval of the LogistiCenter Project on Bear Hollow Drive (“Project”) in the City, an application that has been pending before the City for more than one year.
At our most recent December 5 hearing, Council Members and the City Attorney made several comments we found both confusing and concerning, which appeared to indicate a refusal to respect the City’s legal obligations under the Development Agreement. This is because these obligations, which, along with the legal limitations on the City’s approval authority in the design review process, strictly circumscribe the City’s discretion to deny or impose further conditions or restrictions on the Project. The basis for this position is explained in great detail in my letters to this Council dated October 3, 2022 and November 29, 2022, and raises significant questions as to whether the City intends to act in good faith and honor its obligations in this regard.
Please be advised that we intend to submit in advance of the January 17 Council hearing a subsequent letter that details the legal and factual issues at hand from our perspective. That said, we believe it would be beneficial for a positive resolution to highlight now just a few examples of statements made at the Council hearing that gave us great pause. For instance, it appeared the Council may believe it has the legal right to require further CEQA review of the Project to address alleged air quality and traffic impacts (including based on alleged new PM 2.5 emissions, which have been a well-known environmental issue since the 1990’s), and that it may seek to apply a supposed but nonexistent 1,000-foot statewide warehouse setback standard. We are hopeful the City Attorney will clarify for the Council before the January 17 hearing that it has no such legal authority under CEQA. To further clarify ITEM 18.1.
ATTACHMENT 9
Mayor Terry, Vice Mayor Budge, and City Councilmembers
December 14, 2022
DPML-58478\2714974.6
this point, we respectfully direct the Council to review our prior correspondence on this matter and we intend to submit further evidence to be included in the Project’s administrative record in this regard.
In addition, the Council requested that Dermody Properties return on January 17 with new visual simulations and significant “design” changes1 that would effectively kill the Project through a demand for modifications that are not allowed to be imposed under the express terms of the Development Agreement, and at the same time, rendering it infeasible. Whether it is by intention or fiat, this would violate the City’s obligations thereunder.
We understand the Council’s desire to be responsive to its constituents and thus perhaps the Council believes it can fashion an acceptable “compromise” as indicated at its December 5 hearing. Unfortunately, however, attempting to impose unlawful conditions and/or improper additional environmental review will only result in litigation against the City for its failure to adhere to its obligations under the Development Agreement. In so doing, the City would have substantial exposure for monetary damages as well as payment of attorneys’ fees and costs.
The Development Agreement substantially limits the City’s approval authority in the design review process, strictly limiting its discretion to deny or impose further conditions or restrictions on the Project. The Project already fully complies with all applicable use, density, intensity and design standards of the VOZSPA and 2003 County Code.
The Development Agreement now requires the Council to approve the Project without further delay. Dermody Properties has worked for more than a year incorporating extensive design modifications responsive to community and City comments, and further has conditionally committed to spend a significant sum of money on off-site improvements that are extremely beneficial to the City, but which are unrelated and have no nexus to any actual Project impacts.2 Dermody
1Among other things, the Council requested that Dermody Properties: incorporate significant reductions in building height – an objective intensity standard protected by the DA – that would make the Project unmarketable to tenants; plant decades old / fully grown trees at the site; make aesthetic changes to “all four sides” of the Project’s elevations, yet at the same time somehow add screening to make the Project fully “invisible” to all surrounding uses; and re-configure the Project to somehow match someone’s never codified or contractually expressed subjective conception of what a “warehouse” looked like twenty years ago, thereby entirely disregarding the clear and objective density and intensity standards of the VOZSPA and Code.
2 The Development Agreement does not require Dermody Properties to make these off-site improvements, the City has no legal authority to require them. Accordingly, our client reserves all its rights not to move forward with any of these voluntary off-site improvements if the City fails to meet its contractual obligations by approving the Project at the next January 17, 2023 Council hearing.
ITEM 18.1.
ATTACHMENT 9
Mayor Terry, Vice Mayor Budge, and City Councilmembers
December 14, 2022
DPML-58478\2714974.6
Properties has voluntarily offered such public amenities in good faith, based on the assumption that the City would comply with its obligations under the Development Agreement.
Because we are only months away from the end of the Development Agreement’s term, the Project’s design review application has been pending for well over a year, and the Council’s conduct is raising serious concerns about whether it is proceeding (and will proceed) in good faith with respect to its obligation to timely process and act on the Project, it is imperative that the matter promptly be brought to closure. By the date of the January 17 continued hearing, the Council will most certainly have all the information relevant to making whatever decision it ultimately chooses to make.
We therefore respectfully request that City staff prepare alternate resolutions, to be considered by the Council on January 17, 2023, approving, and denying the Project as currently proposed, and that the Council make a decision — one way or another — at this hearing.
Thank you for your prompt attention to those important issues.
Very truly yours,
MILLER STARR REGALIA
Arthur F. Coon
AFC:tzb/klw
cc: Cyrus Abhar, City Manager ([email protected]) Micah Runner, Deputy City Manager ([email protected]) Elizabeth Sparkman, Community Development Director,
([email protected])
Adam Lindgren, City Attorney ([email protected]) George Condon, Dermody Properties ([email protected]) Lucy Crocker, Lucy & Company ([email protected])
Michelle Smira, MMS Strategies ([email protected]) Nadia L. Costa, Esq., Miller Starr Regalia ([email protected]) Travis A. Brooks, Esq., Miller Starr Regalia ([email protected])
ITEM 18.1.
ATTACHMENT 9
DPML-58478\2720474.7
1331 N. California Blvd.
Suite 600
Walnut Creek, CA 94596
T 925 935 9400
F 925 933 4126
www.msrlegal.com
Arthur F. Coon
Direct Dial: 925 941 3233
[email protected]
Offices: Walnut Creek / San Francisco / Newport Beach
January 10, 2023
VIA EMAIL
Mayor Budge, Vice Mayor Sander, and City
Councilmembers
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Email: [email protected]
Re: Dermody Properties - LogistiCenter at Rancho Cordova (Bear Hollow) Major Design Review Project No. PLND-1021-0015
Dear Mayor Budge, Vice Mayor Sander, and Honorable Members of the City Council:
As you know, this firm represents Dermody Properties (“Dermody”) in its design review application for the LogistiCenter Project on Bear Hollow Drive (“Project”) in the City. As we expressed in my December 14, 2022 letter, we are concerned with the City’s ongoing misinterpretation of its legal obligations under the Development Agreement. As has repeatedly been made clear in our past correspondence to the City on this topic, these obligations strictly limit your ability to deny or impose further conditions on the Project during the design review process. The City has reviewed the Project application for more than a year, during which time Dermody has made several costly and thoughtful refinements to respond to City and community input.
Dermody did so in good faith and with the reasonable expectation that the City would honor its obligations under the Development Agreement.
As described in our prior letters to the City sent on October 3, November 29, and December 14, 2022, and also as reflected in my comments to the Council at the December 5, 2022 hearing, the Project’s design, configuration, proposed use, density, and intensity all comply with the applicable objective standards set out in the VOZSPA and 2003 County Code. The Development Agreement now mandates that the Council approve the Project with no further conditions, restrictions, or requirements. Unfortunately, based on its recent comments and actions made during the December 5, 2022 hearing, the Council appears to be poised to violate the Development Agreement by making new unreasonable and unwarranted requests for design changes that would contravene Dermody’s vested rights under it and, if ever implemented, also would result in an inferior, outdated, and likely failed project. At this point, with the expiration of the Development Agreement just a few ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
months away, it is imperative that the Council make a decision on the Project at the close of its January 17, 2023, hearing. We remain hopeful that the Council will adhere to its obligation under the Development Agreement to approve the Project as proposed and avoid the prospect of litigation with the risk of incurring significant monetary damages and attorneys’ fees as expressly provided for thereunder.
In the interest of further augmenting the administrative record, we provide additional comments to the Council below.
I. The City Cannot Impose Further Conditions or Restrictions on the Project without Violating the Development Agreement.
As detailed in our November 29, 2022 letter, the Project proposes a permitted use that complies with all objective development standards included in the VOZSPA.1 The Project proposes a use at the density and intensity of development set forth in the Development Agreement and the City cannot impose any further conditions, requirements, or restrictions on its development. (DA, § 4.1; see my November 29, 2022, letter at pages 4-6.) Unfortunately, the Council has apparently ignored our prior communications on this point.
Regarding building height, the Council has demanded that the Project be redesigned at a height significantly below the VOZSPA’s only applicable objective intensity standard – a 40-foot height limit on property that is not contiguous to agricultural or residentially zoned property. This appears to be a misguided attempt by the Council to mollify neighbor concerns but lacks any support under either the Development Agreement or any Existing Land Use Regulations it incorporates. As we already discussed in detail, such a reduction in height is not permitted under the law; just as the City would be prohibited from changing other objective development standards to impose more onerous requirements (e.g., the City could not demand that more parking spaces be installed than required under the applicable development standard), the City is prohibited from changing the objective development intensity standard as it relates to height. Moreover, such a height restriction would effectively render the Project infeasible since the building could not physically accommodate the type of use that Class A tenants require; this de facto denial of the proposed use also conflicts with Dermody’s vested rights. Both of the foregoing serve as separate, independent legal reasons that the Council is prohibited from imposing a more stringent height limitation on the Project.
Furthermore, doing so would have a tremendously damaging practical impact on the community. As Dermody has already explained at length, a shorter building cannot physically accommodate a high-quality light industrial tenant’s use because the additional height is necessary to conduct its operations. Therefore, even assuming that Dermody acquiesced – which, to be clear, Dermody will not do – the end result
1 As detailed in the November 29, 2022 letter, the Project complies with all applicable objective setback, height, lot area, parking, and fencing standards. (VOZSPA, § 512-214.)
ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
would be an inferior, functionally obsolete building that could not be leased in an economically viable manner. Realistically, this would then mean that this building would likely sit vacant for all or much of the time (or be periodically leased to lower quality tenants, at best). The end result: rather than a high-quality, aesthetically pleasing, substantially landscaped, well-maintained modern structure that could accommodate a Class A industrial tenant use that is consistent with the VOZPA’s long-held vision for the site, the City would be forcing the landowner to build an economically inviable project, which would inevitably turn to blight. Such a shortsighted approach to land use would only disserve the community, both in the short- and long-term.
As to the Council’s many other new or contemplated requests, these are entirely arbitrary and capricious, relating to no identifiable standards in the VOZPA, Development Agreement, or elsewhere. For example, at the December 5th hearing the Council requested or “suggested” that Dermody make the following major changes to the Project, among others:
Plant decades-old and fully grown trees at the Project site, giving the appearance that a “forest” surrounds the Project building. Make aesthetic changes to “all four sides” of the Project building. Some of these included a request to add several large faux windows to the side of an industrial building to give it an “office like” or “retail like” appearance. Somehow add screening to make the Project fully invisible to all surrounding uses.
Reconfigure the Project to somehow match an ambiguous, undefined, uncodified, and subjective understanding of what a generic “warehouse” looked like when the Development Agreement was executed in 2003.
Each of the above items departs from the Development Agreement’s concrete, express and objective terms and vested rights, and deviates into the realm of the Council’s unrealistic, shifting, and subjective preferences that are impermissible and unenforceable under the Development Agreement and applicable law. Despite this, and although it is not required to do so, Dermody has acted in good faith to address the City’s numerous prior design requests to the extent reasonable, with many of these efforts detailed in our November 29, 2022 letter to the Council. After the December 5th hearing, Dermody further updated the exterior paint colors (including a “Tuscan” color theme, based on Council direction) and added 64 more mature trees (28 in 36” boxes and 36 in 48” boxes, with 18 total new trees for a total of 205) to further screen the Project building from public vantage points.2 The Development
2 Dermody also previously voluntarily agreed to invest a significant sum of money on off-site improvements that have no nexus to anticipated Project impacts, and thus are not contractually or otherwise required. However, Dermody continues to reserve all its rights not to move forward with any of these voluntary off-site improvements if the City fails to meet its
ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
Agreement does not require Dermody to make any further design changes; any continued demands that Dermody do so or that it reduce the Project’s already fully- compliant intensity or density violate the Development Agreement in multiple ways.
II. The Project is Not Required to Match Someone’s Uncodified and Subjective Idea of What a Generic Warehouse Looked Like in 2003.
Regarding the final bullet point above, on December 5, the City Attorney made a troubling statement that Dermody’s vested rights under the plain language of the Development Agreement are somehow limited by a supposed (albeit sub silentio and unwritten) requirement that Dermody construct a warehouse that matches a never codified or contractually expressed idea of what a generic warehouse looked like in 2003. There is nothing in the Development Agreement, the VOZSPA, or any other law that remotely supports this highly subjective and legally baseless notion.
The Development Agreement clearly and expressly vests Dermody’s right to develop the Project site with those uses allowed under the VOZPA at the codified “density and intensity” of development. Nothing requires Dermody to build a project that is “downsized” from the expressly permitted objective density and intensity standards, or somehow constructed to meet obsolete market demands or other circumstances that may have existed and influenced warehouse designs two decades ago.
In fact, this would not only be illogical and violative of the Development Agreement’s express terms, but it would be entirely counterproductive and harmful for the City (as well as Dermody). Dermody is proposing an innovative modern use with high- quality design amenities and site improvements. The quality of these design components and improvements far exceeds those typically required or expected from warehouse development 20 years ago.
We note that even assuming arguendo the Project were required to look like someone’s subjective idea of what a typical or generic warehouse looked like in 2003, that would still not allow the City to circumvent its obligations under the Development Agreement because, in actual fact, there are many pre-2003 warehouses in Sacramento County with heights and size, i.e. density and intensity, quite similar in relevant respects to the Project. A non-exhaustive list of such buildings includes:
6003 88 th Street, constructed in 2002, 127,249 square feet, 32-foot interior clearance (i.e. same clearance height as proposed by the Project).
6350 Sky Creek Road, constructed in 2001, 108,956 square feet, 32- foot interior clearance.
contractual obligations by approving the Project as proposed at the January 17, 2023 Council hearing.
ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
6271 Florin Perkins, constructed in 2002, 57,000 square feet, 32-foot interior clearance.
Despite their construction in the circa 2003-timeframe, the City would surely not desire Dermody’s LogistiCenter Project to emulate any of these examples, none of which incorporate the same high-quality landscaping, screening, and design that Dermody’s LogistiCenter Project proposes. Attached as Exhibit A are photographs of each of the above examples, which demonstrate this point.
III. There is No Statewide 1,000-Foot Setback Requirement.
During the December 5th hearing, the Council also appeared to seriously entertain the completely false notion that a 1,000-foot statewide warehouse setback standard exists in some applicable law, and that such a “standard” should be imposed on the Project. It is unfortunate that the Council’s misapprehension was not remedied during the hearing. We therefore take the opportunity to do so now. To confirm in no uncertain terms, no such standard exists or has ever existed and the Council has no legal authority to impose such a nonexistent “standard” on the Project.
In support of the supposed standard, reference was made to a 2022 settlement agreement among the Sierra Club, the California Attorney General, and the City of Fontana in CEQA litigation that challenged Fontana’s approval of a warehouse project. Obviously, a litigation settlement agreement among such parties related to a local approval did not – and could not – result in any statewide 1,000-foot setback standard for warehouse uses. But even beyond that, the local standard agreed upon by the City in that settlement was far more limited. Indeed, the warehouse ordinance (Ordinance 1891) adopted by Fontana as result of this settlement includes the following minimum buffer and setback standards, all of which Dermody’s Project easily complies with and, in fact, far exceeds:
For any warehouse building larger than 50,000 square feet: a ten-foot wide landscaping buffer, measured from the property line of all adjacent sensitive receptors.
For any warehouse building larger than 400,000 square feet in size: a twenty-foot landscape buffer, measured from the property line of all adjacent sensitive receptors.
For any warehouse building larger than 400,000 square feet in size: the building’s loading docks shall be located a minimum of 300 feet away, measured from the property line of the sensitive receptor to the nearest dock door which does not exclusively serve electric trucks.
(See City of Fontana, Ordinance No. 1891, approved and adopted on April 12, 2022, at § 9-71. A copy of the Stipulation for Entry of Final Judgment on Consent resulting from this settlement, including the text of said Ordinance No. 1891, is attached hereto as Exhibit B.)
ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
Even if the above requirements formed the basis for a statewide standard – which, to reiterate, they do not – the instant Project would readily satisfy and far exceed them. Here, the Project proposes a warehouse of approximately 155,076 square feet and has no adjacent sensitive receptors. As verified by your own staff’s report, and as I personally pointed out to the Council at the December 5, 2022 hearing, the nearest property lines associated with sensitive residential uses lie 790 feet distant to the north and 930 feet distant to the east, as measured from the Project’s property line (not loading docks), thus far exceeding the 300-foot setback requirement from loading docks actually adopted by City of Fontana ordinance for much larger warehouse projects.
We note that in 2022, Attorney General Rob Bonta issued a guidance document entitled “Warehouse Projects: Best Practices and Mitigation Measures to Comply with the California Environmental Quality Act” (“Warehouse Guidance Document”).
This Warehouse Guidance Document does not establish any enforceable legal standards, but notably it does reference the setback standards from the Fontana Ordinance as “an example [for cities] to review and build upon.” (Warehouse Guidance Document, at p. 4, attached hereto as Exhibit C.) In summary and contrary to the false assertions being urged upon and entertained by the Council at the December 5th hearing, there is no enforceable statewide standard requiring a 1,000-foot setback between warehouse uses and nearby sensitive uses. Notwithstanding this, the Project’s proposed setback and landscaping buffers significantly exceed all applicable legal requirements and even the examples cited by the state Attorney General as “best practices” for warehouse projects. The fact that the Council spent considerable time discussing ways in which this nonexistent standard could be imposed on the Project is further evidence of a lack of good faith and fair dealing in the Council’s treatment of the Project and its view of the City’s obligations under the Development Agreement.
IV. There is No Justification for Requiring Further CEQA Review.
During the December 5th hearing, it also appeared the Council may believe it has the legal right to require further CEQA review of the Project to address alleged air quality and traffic impacts. It does not. As we detailed in our attached letter to the City Manager dated October 3, 2022, it is entirely proper to adopt a CEQA Guidelines section 15183 partial exemption and streamlined CEQA review of this Project as staff proposes. (See October 3, 2022, letter attached hereto as Exhibit D). A CEQA Guidelines section 15183 partial exemption is appropriate in situations such as this one where a proposed project is consistent with the densities and intensities established by existing and CEQA-reviewed zoning, community plan, or general plan. (See Exhibit D, pages 5-6.)
Here, there is simply no justification or legal basis for requiring any further CEQA review of the Project. The City already prepared and certified a comprehensive Environmental Impact Report (“EIR”) fully analyzing potential environmental impacts resulting from buildout of the VOZSPA. Following preparation and certification of an EIR, CEQA places strict limitations on conducting subsequent CEQA review of a ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
project and prescribes no “expiration date” for an EIR. None of the very limited circumstances that would permit subsequent environmental review under CEQA are present here. (See Exhibit D, pages 6-7.)
On a related note, discussions at the December 5th hearing regarding the possible need for subsequent review of air quality impacts associated with the allegedly “new issue” of PM 2.5 emissions were also woefully wrong and misguided, with no correction by the City Attorney or opportunity for correction provided to Dermody’s counsel. First, PM 2.5 emissions have been a well-known environmental issue since at least the 1990s and the proper time for the public or anyone to have raised objections regarding the VOZPA EIR’s air quality analysis regarding these impacts was prior to or at the time that the County certified the EIR in 2002. (See, e.g., 62 Fed. Reg. 38652 et seq. (July 18, 1997) (U.S. EPA adding two new PM 2.5 standards to 40 CFR Part 50, National Ambient Air Quality Standards for Particulate Matter).) Further, in this vein, it is well established that environmental issues known or knowable at the time the EIR was certified cannot constitute “significant new information” or “changed circumstances” justifying subsequent CEQA review. (See, e.g., Citizens Against Airport Pollution v. City of San Jose (2014) 227 Cal.App.4th 788, 806-808 [new regulatory requirement did not constitute significant new information, nor did “potential environmental impact of greenhouse gas emissions [which] has been known since the 1970’s.”]; Citizens for Responsible Equitable Environmental Development v. City of San Diego (2011) 196 Cal.App.4th 515, 531- 532 [“SEIR is not required absent new information, and . . . information on the effect of greenhouse gas emissions on climate was known long before the City approved the 1994 FEIR”].)
Second, as detailed in our October 3, 2022, letter to the City Manager, because the only discretionary approval required for the Project is design review, the City fundamentally lacks authority to address non-design related effects, such as alleged effects related to air quality. (See, e.g., McCorkle Eastside Neighborhood Group v.
City of St. Helena (2019) 31 Cal.App.5th 80 [city’s limited discretion under local design review ordinance did not extend to addressing environmental effects and thus did not implicate or trigger CEQA]; San Diego Navy Broadway Complex Coalition v. City of San Diego (2010) 185 Cal.App.4th 924 [limited scope of city’s discretion in reviewing construction plans for conformity to urban design guidelines’ aesthetic criteria did not give it ability to address GHG/climate change impacts so as to trigger CEQA].)
Appropriately, and consistent with the applicable legal authorities, use of the CEQA Guidelines section 15183 partial exemption and streamlined review has been the City’s CEQA approach for similar projects requiring design review in the VOZSPA. (See Exhibit D, pages 2-3; see also March 2, 2020, letter from City Attorney (Meyers Nave) to M. R. Lozeau regarding GLP Stores, LLC Warehouse, attached hereto as Exhibit E.)
ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
V. Conclusion.
Outright denial of the Project is a clearly untenable option that is foreclosed by the Development Agreement. As detailed herein and otherwise in the administrative record, a Council decision that seeks to impose illegal restrictions as a condition of Project approval is equally unlawful. The Council here must recognize that no matter what illegal conditions it may attempt to impose on the Project, it will never please or placate the Project’s dedicated opponents; the vehemence of this small group of citizens will not be assuaged regardless. Instead, such a decision will make no one happy and will instead simply expose the City to litigation and substantial risk of monetary damages and attorneys’ fees.
Again, we are only months away from the end of the Development Agreement’s term. At this juncture, the Council can no longer require Dermody to make design changes without violating the Agreement. It is therefore imperative that the matter promptly be brought to closure before this Council, one way or another. At the conclusion of the January 17, 2023, hearing, the Council will have all the information needed to decide on the Project. Again, to bring this matter to a final decision – one way or another – at the administrative level, we request that City staff prepare alternate resolutions, to be considered by the Council on January 17, 2023, approving and denying the Project as currently proposed.
In conclusion, city councils do what is best for their community; they keep their word, act within their legal authority, and fulfill their contractual obligations and commitments; they make financially reasonable and prudent decisions, and avoid unnecessary risk to the public fiscal health. While city councils represent their constituents’ best interests, they also make factually and legally informed decisions for their community as a whole and are not swayed by the “clamor of the mob.” They educate their constituents to the facts and governing law when there is a need to do so. We are hopeful the Council will demonstrate sound leadership here and approve the Project as proposed.
Thank you for your anticipated attention to the foregoing issues.
Very truly yours,
MILLER STARR REGALIA
Arthur F. Coon
AFC:tzb
encls.
cc: Micah Runner, City Manager ([email protected]) ITEM 18.1.
ATTACHMENT 10
Mayor Budge, Vice Mayor Sander, and City Councilmembers January 10, 2023
DPML-58478\2720474.7
Elizabeth Sparkman, Community Development Director,
([email protected])
Adam Lindgren, City Attorney ([email protected]) George Condon, Dermody Properties ([email protected]) Lucy Crocker, Lucy & Company ([email protected])
Michelle Smira, MMS Strategies ([email protected]) Nadia L. Costa, Esq., Miller Starr Regalia ([email protected]) Travis A. Brooks, Esq., Miller Starr Regalia ([email protected]) ITEM 18.1.
ATTACHMENT 10
EXHIBIT A
ITEM 18.1.
ATTACHMENT 10
6003 88th Street
6350 Sky Creek Road
6271 Florin Perkins Road 6271 Florin Perkins Road
ITEM 18.1.
ATTACHMENT 10
EXHIBIT B
ITEM 18.1.
ATTACHMENT 10
ROB BONTA
Attorney General of California
CHRISTIE VOSBURG
Supervising Deputy Attorney General
ROBERT D. SWANSON
Deputy Attorney General
State Bar No. 295159
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
Telephone: (916) 210-7808
Fax: (916) 327-2319
E-mail: [email protected]
Attorneys for People of the State of California
ex rel. Rob Bonta, Attorney General
ABIGAIL A. SMITH
Law Office of Abigail Smith, a
Professional Corporation
State Bar No. 228087
2305 Historic Decatur Road, Suite 100
San Diego, CA 92106
Telephone: (951) 808-8595
Facsimile: (951) 972-8488
Email: [email protected]
Attorney for Sierra Club
Exempt from Filing Fees pursuant to
Government Code section 6103
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
SIERRA CLUB,
Petitioner,
v.
CITY OF FONTANA,
Respondent.
Case Nos.: CIVSB2121605, CIVSB2121829
Assigned to: Hon. Donald Alvarez
Dept.: S23
Actions Filed: July 23, 2021
STIPULATION FOR ENTRY OF
FINAL JUDGMENT ON CONSENT
[CEQA CLAIM]
(Code of Civ. Proc., § 664.6)
PEOPLE OF THE STATE OF
CALIFORNIA,
Petitioner,
v.
CITY OF FONTANA,
Respondent.
DUKE REALTY CORPORATION,
Real Party in Interest.
ITEM 18.1.
ATTACHMENT 10
Petitioners Sierra Club and People of the State of California (collectively, “Petitioners”), Respondent, City of Fontana (“Respondent”), and Real Party in Interest, Duke Realty Corporation (“Real Party”) (col lectively “the Parties”), stipulate as follows:
RECITALS
WHEREAS, on July 23, 2021, Petitioners each filed a Petition for Writ of Mandate (“Petition”) alleging that Respondent violated the California Environmental Quality Act (“CEQA”) in its approval of the Slover & Oleander Industrial/Duke Realty Project (“the Project”); and,
WHEREAS, the Parties have engaged in settlement discussions. In these discussions, Sierra Club was represented by Abigail Smith of the Law Office of Abigail Smith, the People of the State of California were represented by the Office of the Attorney Gene ral of the State of California, the City of Fontana was represented by Alisha Winterswyk and Sarah Owsowitz of Best Best & Krieger LLP and Duke Realty Corporation was represented by Jonathan Shardlow of Allen Matkins Leck Gamble Mallory & Natsis LLP.
WHER
EAS, the Parties have arrived at an agreement to resolve all of Petitioners’ claims.
STIPULATION
In light of the foregoing recitals, the Parties stipulate and agree that:
1. The Parties stipulate to the terms of the [Proposed] Final Judgment on Consent (“[Proposed] Final Judgment”). A copy of the [Proposed] Final Judgment is attached to this Stipulation as Exhibit 1. The Parties consent to the entry of the [Proposed] Final Judgment by this Court without hearing or adjudication of any fact or law herein. The Parties waive their rights to a hearing on the matters alleged in the Petitions. The Parties agree that the [Proposed] Final Judgment is a fair and reasonable resolution of the matters alleged in the Petitions and avoids the expense and uncertainty of litigation over the matters alleged in the Petitions.
2. T he Parties agree that if the Court does not enter the [Proposed] Final Judgment, this Stipulation and the [Proposed] Final Judgment shall have no legal force and effect, the Parties are not bound by the terms of this Stipulation or the [Proposed] Final Judgment, and each Party ITEM 18.1.
ATTACHMENT 10
reserves any and all rights as to any issue or cause of action raised in the Petitions filed in this matter.
3. The undersigned have the authority to enter into this Stipulation on behalf of each o f their respective clients.
4. The undersigned each acknowledge and represent that they have read this Stipulation and [Proposed] Final Judgment in their entirety, understand all of its terms and provisions, and sign this Stipulation voluntarily and of their own free will, knowing that it is a legally binding document and with the intent to be bound hereby.
5. The undersigned each acknowledge and represent that they are effecting this compromise and settlement and are executing this Stipulation (i) after they and their respective legal counsel had the opportunity to and did conduct an independent investigation of the relevant facts; and (ii) without relying on any representation made by the other Party or the other Party’s attorney(s).
6. This Stipulation may be executed in counterparts and all such counterparts, when executed, including via electronic signature, shall constitute a valid and binding agreement.
Dated: _______, 2022
LAW OFFICE OF ABIGAIL SMITH
By: ______________________________
A
bigail Smith
Attorney for Petitioner, Sierra Club
Dated: _______, 2022
ROB BONTA
Attorney General of California
CHRISTIE VOSBURG
Supervising Deputy Attorney General
_________________________________
ROBERT SWANSON
Deputy Attorney General
Attorney
s for Petitioner, People of the State of
California
April 14
April 14
ITEM 18.1.
ATTACHMENT 10
Dated:(0 ,2022 BEST BEST & KRIEGER LLP
2 By:
AlishaWinterswyk
Sarah E. Owsowitz
Tiffany M. Michou
Attorneys forRespondent,City of Fontana
4 6
7 8
9 10
11 12
13 14
1 Dated: April 14, 2022 ALLEN MATKINS LECK GAMBLE
MALLROY & NATSIS LLP
hondlarBy:
Jonatharshardlow
Attorneys for Real Party in Interest, Duke
Realty Corporation
l6
17 18
19 20
21 22
23 24
25 26
27 28
4 STIPULATION FOR ENTRY OF FINAL JUDGMENT ON CONSENT
ITEM 18.1.
ATTACHMENT 10
EXHIBIT 1
ITEM 18.1.
ATTACHMENT 10
ROB BONTA
Attorney General of California
CHRISTIE VOSBURG
Supervising Deputy Attorney General
ROBERT D. SWANSON
Deputy Attorney General
State Bar No. 295159
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
Telephone: (916) 210-7808
Fax: (916) 327-2319
E-mail: [email protected]
Attorneys for People of the State of California
ex rel. Rob Bonta, Attorney General
ABIGAIL A. SMITH
Law Office of Abigail Smith, a
Professional Corporation
State Bar No. 228087
2305 Historic Decatur Road, Suite 100
San Diego, CA 92106
Telephone: (951) 808-8595
Facsimile: (951) 972-8488
Email: [email protected]
Attorney for Sierra Club
Exempt from Filing Fees pursuant to
Government Code section 6103
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
SIERRA CLUB,
Petitioner,
v.
CITY OF FONTANA,
Respondent.
Case Nos.: CIVSB2121605, CIVSB2121829
Assigned to: Hon. Donald Alvarez
Dept.: S23
Actions Filed: July 23, 2021
[PROPOSED] FINAL JUDGMENT ON
CONSENT
[CEQA CLAIM]
(Code of Civ. Proc., § 664.6)
PEOPLE OF THE STATE OF
CALIFORNIA,
Petitioner,
v.
CITY OF FONTANA,
Respondent.
DUKE REALTY CORPORATION,
Real Party in Interest.
ITEM 18.1.
ATTACHMENT 10
Having reviewed the Parties’ Stipulation for Entry of Final Judgment on Consent (“Stipulation”), and good cause appearing, it is hereby ORDERED that:
1. DEFINITIONS.
a. “Sierra Club” refers to the Sierra Club and its related and or affiliated entities, respective past and present officers, directors, employees, agents, partners, members, managers, representatives, predecessors, successors, parents, subsidiaries, shareholders, executors, administrators, trustees, heirs, attorneys, insurers, and assigns.
b. The “People of the State of California,” “People of California,” or “People” refer to the People of the State of California, acting by and through the Attorney General of the State of California.
c. “City of Fontana” or “City” refers to the City of Fontana, California, and its related and or affiliated entities, respective past and present officers, directors, employees, agents, partners, members, managers, representatives, predecessors, successors, parents, subsidiaries, shareholders, executors, administrators, trustees, heirs, attorneys, insurers, and assigns.
d. “Duke” or “Developer” refers to Duke Realty Corporation, an Indiana corporation, and its related and affiliated entities, respective past and present officers, directors, employees, agents, partners, members, managers, representatives, predecessors, successors, parents, subsidiaries, shareholders, executors, administrators, trustees, heirs, attorneys, insurers, and assigns. e. “Parties” refers to Sierra Club, the People, the City, and Duke. “Party” refers to any one of Sierra Club, the People, the City, and Duke. f. “Petitions” refers to the Petitions for Writ of Mandate filed by Sierra Club and the People in the above-captioned matter on July 23, 2021.
g. The “Ordinance” refers to an Ordinance Of The City Council Of The City Of Fontana, California Amending Chapter 9 Of The Fontana Municipal Code To ITEM 18.1.
ATTACHMENT 10
Revise Article V For Modifications And Clarification To Buffering And Screening Requirements, Methods To Improve Traffic Circulation, Requirements For Alternative Energy, And Improvements To Construction Requirements As It Relates To Industrial Commerce Centers Throughout The City, which is attached hereto as Exhibit A and incorporated into this Final Judgment on Consent (“Final Judgment”).
h. The “Project” refers to the City of Fontana Master Case No. 20-072 for Tentative Parcel Map Number 20367 (TPM Number 20-018), and Design Review Number 20-027, the proposed development of an approximately 205,949 square-foot logistics and distribution facility at the southwest corner of Slover and Oleander Avenues in Fontana, California.
i. The “Development Approvals” refers to the City of Fontana Planning Commission’s approval on April 20, 2021, of the Project and adoption of an Initial Study/Mitigated Negative Declaration pursuant to the California Environmental Quality Act (CEQA) for the Project.
j. “Project-Specific Provisions/Measures” refers to the terms to which the Parties have agreed in Exhibit B, which is attached hereto and incorporated into this Final Judgment.
2. JURISDICTION AND VENUE. This Court has subject matter jurisdiction over the matters alleged in the Petitions and personal jurisdiction over the Parties, and venue in this Court is proper.
3. APPLICABILITY. The Stipulation and this Final Judgment shall apply to and be binding on Sierra Club, the People, the City of Fontana, and Duke.
4. MATTERS COVERED AND RESERVED CLAIMS.
a. “Claims” refers to all claims arising out of the Development Approvals that were brought or could have been brought in the Petitions or Answers to the Petitions. b. As to Sierra Club, the Stipulation and this Final Judgment is a final and binding resolution and settlement of all Claims. Sierra Club also agrees not to file any ITEM 18.1.
ATTACHMENT 10
litigation challenging the Development Approvals, any current or future approvals necessary to construct the Project, including building or other site development permits, or current or future approvals necessary to implement this Final Judgment. Sierra Club further agrees not to file litigation challenging approvals for future modifications or iterations of the Project that would not trigger environmental review pursuant to CEQA.
c. As to the People, the Stipulation and this Final Judgment is a final and binding resolution and settlement of all Claims. The People also agree not to file any litigation challenging the Development Approvals, any current or future approvals necessary to construct the Project, including building or other site development permits, or current or future approvals necessary to implement this Final Judgment. The People further agree not to file litigation challenging approvals for future modifications or iterations of the Project that would not trigger environmental review pursuant to CEQA.
d. As to the City, the City covenants not to sue the People or Sierra Club regarding any circumstance, thing or event alleged, related, or pertaining to the Project. The City also agrees to forever release any and all claims it may have against the People or the Sierra Club arising out of any circumstance, thing or event alleged, related, or pertaining to the Project.
e. As to Duke, Duke covenants not to sue the People or Sierra Club regarding any circumstance, thing or event alleged, related, or pertaining to the Project. Duke also agrees to forever release any and all claims it may have against the People or the Sierra Club arising out of any circumstance, thing or event alleged, related, or pertaining to the Project.
f. All claims other than those listed above are reserved. The Parties affirm that nothing in this Final Judgment in any way affects the People’s or Sierra Club’s rights, claims, or defenses in any past, present, or future lawsuit or dispute against the City related to any project other than the Project.
Additionally, except as
ITEM 18.1.
ATTACHMENT 10
1 2
3 4
5 expressly provided herein, nothing in this Final Judgment is intended nor shall be construed to limit the People from taking appropriate enforcement actions or otherwise exercising their authority under any law.
g. The Parties speci fically waive their rights under California Civil Code section 1542 only as they pertain to claims under the State Planning and Zoning Law and the California Environmental Quality Act. Section 1542 provides as follows: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." With this provision, the People do not waive or extinguish any criminal liability.
Siera Club
Initials:e
7 8
9 10
12 13
|4
5 16
17 18
19 20
21 22
23 24
25 26
27 28
People Duke City
PSInitials: Initials:
Paragraphs 4.b and 4.c are subject to the condition that the Project is implemented in accordance with all terms of this Final Judgment, including the Project-Specific Provisions/Measures identified in Exhibit B. If the Project is not implemented in accordance with the terms of this Final Judgment, Paragraphs 4.b and 4.c are null and void.
Nothing in this Final Judgment shall limit any party from enforcing the terms of this Final Judgment.
h.
i.
5. INJUNCTIVE TERMS.
City of Fontana:
a. In consideration of the terms of this Final Judgment, the City has enacted the Ordinance, Exhibit A to this Final Judgment.
b. The City shall defend all terms of the Ordinance against legal challenge, including appeal of any loss to any court at which appeal by right is avalable, unless written consent to non-defense is provided by Sierra Club and the People. The City may 5 [PROPOSED] FINAL JUDGMENT ON CONSENT
ITEM 18.1.
ATTACHMENT 10
settle any legal challenge to the Ordinance without written consent by Sierra Club and the People, subject to Paragraph 5.c.
c. The City shall enforce compliance with the Ordinance consistent with its general enforcement of other City laws and ordinances.
d. The City shall abide by all terms and obligations set forth in Exhibit B that expressly apply to the City and shall enforce the Project Mitigation Measures applicable to Duke identified therein.
Duke:
a. Duke shall comply with the terms of this Final Judgment, including the injunctive obligations set forth in Exhibit B to this Final Judgment.
6. COMPROMISE OF DISPUTED CLAIMS. This Final Judgment is a compromise of disputed claims and shall never at any time or for any purpose be considered an admission of any liability or responsibility on the part of any Party; nor shall the furnishing of any consideration for the execution of this Final Judgment constitute or be construed as an admission of any liability whatsoever by any Party.
7. COMPLIANCE WITH APPLICABLE LAW. Nothing in this Final Judgment shall excuse the City or Duke from meeting any requirements that may be imposed by applicable law or by changes in the applicable law.
8. NO LIABILITY OF THE PEOPLE. The People or any agency of the State of California shall not be liable for any injury or damage to persons or property resulting from acts or omissions by the City or Duke, or other persons acting in concert or participating with the City or Duke, in carrying out activities pursuant to this Final Judgment, nor shall the People be held as a party to or guarantor of any contract entered into by the City or Duke, or other persons acting in concert or participating with the City or Duke, in carrying out the requirements of this Final Judgment.
9. COSTS AND ATTORNEYS’ FEES. Except to the extent provided herein, in Exhibit B, or in any separate indemnification agreement, each Party shall bear their own costs and ITEM 18.1.
ATTACHMENT 10
attorneys’ fees, and no Party is a “prevailing party” for purposes of claiming either costs or attorneys’ fees.
10. CAPTIONS. Paragraph titles and captions contained in this Final Judgment are inserted as a matter of convenience and for reference, and are not a substantive part of this Final Judgment.
11. INTEGRATION. This Final Judgment constitutes the entire agreement between the Parties with respect to all Claims related to the Development Approvals and may not be amended or supplemented except as provided for herein. No oral representations have been made or relied on, and this Final Judgment supersedes any and all other agreements whether oral or written between the Parties.
12. JOINT PREPARATION. This Final Judgment has been jointly drafted. No presumptions or rules of interpretation based upon the identity of the party preparing or drafting the Final Judgment, or any part thereof, shall be applicable or invoked.
13. AMENDMENTS AND MODIFICATIONS. This Final Judgment may only be amended or modified on a noticed motion by one of the Parties with subsequent approval by the Court, or upon written consent by all of the Parties and the subsequent approval of the Court. No provision of this Final Judgment, or breach of any provision, can be waived except in writing.
Waiver of any provision or breach shall not be deemed to be a waiver of any other provision, or of any subsequent breach of the same or other provision.
14. TIME OF THE ESSENCE. Time is expressly declared to be of the essence in this Final Judgment, and of every provision in which time is an element, if any.
15. BENEFIT AND BURDEN. The Parties agree that this Final Judgment is freely assignable and that this Final Judgment shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, trustors, trustees, beneficiaries, predecessors, successors, assigns, partners, partnerships, parent companies, subsidiaries, affiliated and related entities, officers, directors, principals, agents, servants, employees, and representatives.
16. DUKE AS APPLICANT. The Parties understand and agree that although Duke was the applicant of the Project, an affiliate or successor-in-interest to Duke may develop and/or build ITEM 18.1.
ATTACHMENT 10
the actual Project. Duke shall notify and provide a copy of this Final Judgment in full to any affiliate or successor-in-interest, and the obligations set forth in Exhibit B will be carried out by whichever entity actually develops the Project, and, with the exception of item 25 (“Attorney’s Fees”), only if the Project is actually built.
17. NO ASSIGNMENT. Each Party represents and warrants that it has not assigned or transferred any claims released herein, and that it is the sole owner of that claim.
18. NO BROADER APPLICATION. The Parties agree that Exhibit B does not apply to any other development projects proposed by Duke or approved by the City, or that may be proposed or approved in the future by Duke or the City, respectively. This paragraph does not apply to any modifications or iterations of the Project.
19. SEVERABILITY. Even if a court holds one or more parts of this Final Judgment ineffective, invalid, or void, all remaining provisions shall remain valid.
20. RETENTION OF JURISDICTION. The Parties agree that this Court has continuing jurisdiction to interpret and enforce the provisions of this Final Judgment and to address any other matters arising out of or regarding this Final Judgment.
21. VALIDITY OF FINAL JUDGMENT. All Parties agree that this Final Judgment is valid and enforceable and waive any collateral attack on this Final Judgment or other assertion that this Final Judgment is contrary to law.
22. ENFORCEMENT OF FINAL JUDGMENT. No action for breach of this Final Judgment shall be brought or maintained until: (a) the non-breaching Party provides written notice to the breaching Party which explains with particularity the nature of the claimed breach, and (b) within thirty (30) calendar days after receipt of said notice, the breaching Party fails to cure the claimed breach or, in the case of a claimed breach which cannot be reasonably remedied within a thirty (30) day period, the breaching Party fails to commence to cure the claimed breach within such thirty (30) day period, and thereafter diligently complete the activities reasonably necessary to remedy the claimed breach.
23. NOTICES. Any notice, request, or communication required to be given to the Parties under this Final Judgment shall be given in writing and shall be personally delivered or ITEM 18.1.
ATTACHMENT 10
mailed by prepaid registered or certified mail to the addresses below. Notice shall also be delivered by e-mail at or before the time of personal or mail delivery. Notices shall be deemed received on the date of personal delivery or facsimile transmission; on the date shown on a signed return receipt or acknowledgment of delivery; or, if delivery is refused or notice is sent by regular mail, seventy-two (72) hours after deposit. Until a Party gives notice of a change, notices shall be sent to:
FOR SI
ERRA CLUB: Sierra Club
Sierra Club San Gorgonio Chapter Chair
P. O. Box 5425
Riverside, CA 92517
[email protected]
WITH A C
OPY TO: Abigail Smith, Esq.
Law Office of Abigail Smith
2305 Historic Decatur Road, Suite 100
San Diego, CA 92106
[email protected]
Attorney for Sierra Club
FOR DUKE: A
llen Matkins Leck Gamble Mallory & Natsis LLP
Jonathan E. Shardlow
1900 Main Street, 5th Floor
Irvine, CA 92614-7321
[email protected]
Attorney for Duke
AND A COPY TO: D
uke Realty
Attn: Joe Hawkins
8711 River Crossing Boulevard
Indianapolis, IN 46240
[email protected]
FOR TH
E PEOPLE: Robert Swanson
Deputy Attorney General
California Department of Justice
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
[email protected]
FOR THE
CITY OF FONTANA: City of Fontana
Attn: Phillip Burum, Deputy City Manager
8353 Sierra Ave
ITEM 18.1.
ATTACHMENT 10
Fontana, CA 92335
[email protected]
AND A COPY TO: Best Best & Krieger, LLP
Ruben Duran, City Attorney
2855 E. Guasti Rd.
Suite 400
Ontario, CA 91761
[email protected]
24. CHOICE OF LAW AND CHOICE OF FORUM. This Final Judgment shall be deemed to have been executed and delivered within the State of California; the rights and obligations of the Parties hereunder shall be governed, construed and enforced in accordance with the laws of the State of California. The venue for any dispute arising from or related to this Final Judgment, its performance, and its interpretation shall be the Superior Court of California, County of San Bernardino.
25. DAMAGES. The Parties agree that the sole and exclusive remedy for breach of this Final Judgment shall be an action for specific performance or injunction. In no event shall any Party be entitled to monetary damages for breach of this Final Judgment.
26. EFFECTIVE DATE. This Final Judgment is effective as of the date on which the Court enters this Final Judgment on the Court’s docket.
ITEM 18.1.
ATTACHMENT 10
IT IS ORDERED THAT THE FINAL JUDGMENT BE ENTERED.
Dated: __________________ ___________________________________
JUDGE OF THE SUPERIOR COURT
ITEM 18.1.
ATTACHMENT 10
EXHIBIT A
ITEM 18.1.
ATTACHMENT 10
ORDINANCE NO. 1891
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FONTANA, CALIFORNIA AMENDING CHAPTER 9 OF THE FONTANA MUNICIPAL
CODE TO REVISE ARTICLE V FOR MODIFICATIONS AND
CLARIFICATION TO BUFFERING AND SCREENING REQUIREMENTS,
METHODS TO IMPROVE TRAFFIC CIRCULATION, REQUIREMENTS
FOR ALTERNATIVE ENERGY, AND IMPROVEMENTS TO
CONSTRUCTION REQUIREMENTS AS IT RELATES TO INDUSTRIAL
COMMERCE CENTERS THROUGHOUT THE CITY.
WHEREAS, the City of Fontana (the “City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, on or about May 7, 2021, the governing board of the South Coast Air Quality Management District (“SCAQMD”) adopted Rule 2305, the Warehouse Indirect Source Rule (“Rule 2305”); and
WHEREAS, Rule 2305 requires warehouses greater than 100,000 square feet to directly reduce nitrogen oxide and diesel particulate matter emissions, or to otherwise facilitate emission and exposure reductions of these pollutants in nearby communities; and
WHEREAS, SCAQMD has also adopted Rule 402 prohibiting emissions that cause injury and/or annoyance to a substantial number of people, including odors; Rule 403 requiring dust control measures during construction; Rule 1113 requiring the use of low Volatile organic compounds (“VOC”) paints and coatings; Rule 1186 requiring use of SCAQMD certified street sweepers; and Rule 2202 requiring establishment of rideshare programs for facilities employing more than 250 employees; and WHEREAS, the California Air Resources Board (“CARB”) adopted Rule 2485 restricting diesel engine idling to five minutes or less; and WHEREAS, California Building Standards Commission adopted Part 11, Title 24 of the California Code of Regulations, known as CALGreen, which generally requires low energy use features, lo w water use features, all -electric vehicle (“EV”) parking spaces and charging facility accommodation, carpool/vanpool parking spaces, and short -term and long-term bicycle parking facilities; and
WHEREAS, the City of Fontana currently regulates industrial commerce centers in Specific Plans, Chapter 30 of the Zoning and Development Code, and in Chapter 9, and Article V (Industrial Commerce Centers Sustainability Standards) of the Municipal Code. Furthermore, Ordinance No. 1879 that established Article V in Chapter 9 of the Municipal Code was adopted by City Council on February 8, 2022; and DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
WHEREAS, the City initiated Municipal Code Amendment (AMD) No. 21 -001R1 amend Chapter 9 (Environmental Protec tion and Resource Extraction) of the Municipal Code to modify Article V to revise Industrial Commerce Centers Sustainability Standards, which includes modifications and clarification to buffering and screening requirements, methods to improve traffic circu lation, requirements for alternative energy, and improvements to construction as it relates to industrial commerce centers throughout the city; and
WHEREAS, December 21, 2021, the City Council held the second reading and adopted Ordinance No. 1879 for Municipal Code Amendment (AMD) No. 21 -001 to add Article V to establish sustainability standards for industrial commerce centers throughout the city; and
WHEREAS, On March 22 , 2022, th e City Council held a duly noticed public hearing on Municipal Code Amendment (AMD) No. 21 -001R1, and the supporting documents in evidence, the City Council found that the Municipal Code Amendment is in conformance with General Plan and does not change any of the Land Use Designation of any properties and it is consistent with the General Plan and furthers Action B of Goal 3 in Chapter 12 to promote renewable energy programs for government, Fontana businesses, and Fontana residences; and
WHEREAS, a notice of the public hearing was published in the local San Bernardino County Sun newspaper on Saturday, March 12, 2022 and posted at City.
THE CITY COUNCIL OF THE CITY OF FONTANA DOES ORDAIN AS FOLLOWS:
Section 1. The above recitals are true and correct and are fully incorporated herein.
Section 2. Article V of Chapter 9 of the Fontana Municipal Code is hereby amended and renumbered follows:
ARTICLE V. – Industrial Commerce Centers Sustainability Standards Sec. 9-70. – Applicability.
This Article is applicable to all Warehouse uses throughout the city, as defined in Section 30-12 of Chapter 30, Article 1, Division 4; and as listed as a type of “Warehousing Use” in Table No. 30 -530 and includes all warehouse uses in Speci fic Plans. The following sections shall supersede any existing requirements in the Municipal Code and Specific Plans.
Sec. 9-71. – Buffering and Screening / Adjacent uses.
(1) For any Warehouse building larger than 50,000 square feet in size, a ten-foot-wide landscaping buffer shall be required, measured from the property line of all adjacent sensitive receptors. For any Warehouse DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
building larger than 400,000 square feet in size, a twenty-foot-wide landscaping buffer shall be required, measured from the property line of all adjacent sensitive receptors. The buffer area (s) shall include, at a minimum, a solid decorative wall(s) of at least ten feet in height, natural ground landscaping, and solid screen buffering trees, as d escribed below, unless there is an existing solid block wall. For any Warehouse building equal to or less than 50,000 square feet in size, a solid decorative wall(s) of at least ten feet in height shall be required when adjacent to any sensitive receptors. Sensitive receptor shall be defined as any residence including private homes, condominiums, apartments, and living quarters, schools, preschools, daycare centers, in -home daycares, health facilities such as hospitals, long term care facilities, retirement and nursing homes, community centers, places of worship, parks (excluding trails), prisons, and dormitories.
(2) Trees shall be used as part of the solid screen buffering treatment. Trees used for this purpose shall be evergreen, drought tolerant, minimum 36- inch box, and shall be spaced at no greater than 40-feet on center. The property owner and any successors in interest shall maintain these trees for the duration of ownership, ensuring any unhealthy or dead trees are replaced timely as needed.
(3) All l andscaping shall be drought tolerant, and to the extent feasible, species with low biogenic emissions. Palm trees shall not be utilized. (4) All landscaping areas shall be properly irrigated for the life of the facility to allow for plants and trees to maintain growth.
(5) Trees shall be installed in automobile parking areas to provide at least 35% shade cover of parking areas within fifteen years. Trees shall be planted that are capable of meeting this requirement.
(6) Unless physically impossible, loading docks and truck entries shall be oriented away from abutting sensitive receptors. To the greatest extent feasible, loading docks, truck entries, and truck drive aisles shall be located away from nearby sensitive receptors. In making feasibility decisions, the City must comply with existing laws and regulations and balance public safety and the site development’s potential impacts to nearby sensitive receptors. Therefore, loading docks, truck entries, and drive aisles may be located nearby sensitive receptors at the discretion of the Planning Director, but any such site design shall include measures designed to minimize overall impacts to nearby sensitive receptors.” (7) For any Warehouse building larger than 400,000 square feet in size, the building’s loading docks shall be located a minimum of 300 feet away, measured from the property line of the sensitive receptor to the nearest DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
dock door which does not exclusively serve electric trucks using a direct straight-line method.
Sec. 9-72. – Signage and Traffic Patterns.
(1) Entry gates into the loading dock/truck court area shall be positioned after a minimum of 140 feet of total available stacking depth inside the property line. The stacking distance shall be increased by 70 feet for every 20 loading docks beyond 50 docks. Queuing, or circling of vehicles, on public streets immediately pre- or post-entry to an industrial commerce facility is strictly prohibited unless queuing occurs in a deceleration lane or right turn lane exclusively serving the facility.
(2) Applicants sh all submit to the Engineering Department, and obtain approval of, all turning templates to verify truck turning movements at entrance and exit driveways and street intersection adjacent to industrial buildings prior to entitlement approval. Unless not phys ically possible, truck entries shall be located on Collector Streets (or streets of a higher commercial classification), and vehicle entries shall be designed to prevent truck access on streets that are not Collector Streets (or streets of a higher commerc ial classification), including, but not limited to, by limiting the width of vehicle entries.
(3) Anti-idling signs indicating a 3 -minute diesel truck engine idling restriction shall be posted at industrial commerce facilities along entrances to the site and in the dock areas and shall be strictly enforced by the facility operator.
(4) Prior to issuance of certificate of occupancy facility operators shall establish and submit for approval to the Planning Director a Truck Routing Plan to and from the State Highway System based on the City’s latest Truck Route Map. The plan shall describe the operational characteristics of the use of the facility operator, including, but not limited to, hours of operations, types of items to be stored within the building, and proposed truck routing to and from the facility to designated truck routes that avoids passing sensitive receptors, to the greatest extent possible. The plan shall include measures, such as signage and pavement markings, queuing analysis and enforcement, for preventing truck queuing, circling, stopping, and parking on public streets. Facility operator shall be responsible for enforcement of the plan. A revised plan shall be submitted to by the Planning Director prior to a business license being issued by the City for any new tenant of the property. The Planning Director shall have discretion to determine if changes to the plan are necessary including any additional measures to alleviate truck routing and parking issues that may arise during the life of the facility.
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
(5) Signs and drive aisle pavement markings shall clearly identify the on - site circulation pattern to minimize unnecessary on-site vehicular travel.
(6) Facility operators shall post signs in prominent locations inside and outside of the building indicating that off-site parking for any employee, truck, or other operation related vehicle is strictly prohibited. City may require facility operator to post signs on surface or residential streets indicating that off -site truck parking is prohibited by City o rdinance and/or the Truck Routing Plan.
(7) Signs shall be installed at all truck exit driveways directing truck drivers to the truck route as indicated in the Truck Routing Plan and State Highway System.
(8) Signs shall be installed in public view with contact information for a local designated representative who works for the facility operator and who is designated to receive complaints about excessive dust, fumes, or odors, and truck and parking complaints f or the site, as well as contact information for the SCAQMD’s on -line complaint system and its complaint call-line: 1-800-288-7664. Any complaints made to the facility operator’s designee shall be answered within 72 hours of receipt.
(9) All signs under this Section shall be legible, durable, and weather-proof.
(10) Prior to issuance of a business license, City shall ensure for any facility with a building or buildings larger than 400,000 total square feet, that the facility shall include a truck operator l ounge equipped with clean and accessible amenities such as restrooms, vending machines, television, and air conditioning.”
Sec. 9-73. – Alternative Energy.
(1) On-site motorized operational equipment shall be ZE (zero emission).
(2) All building roofs shall be solar -ready, which includes designing and constructing buildings in a manner that facilitates and optimizes the installation of a rooftop solar photovoltaic (PV) system at some point after the building has been constructed.
(3) The office portion of a building’s rooftop that is not covered with solar panels or other utilities shall be constructed with light colored roofing material with a solar reflective index (“SRI”) of not less than 78. This material shall be the minimum solar reflective rating of the roof material for the life of the building.”
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
(4) On buildings over 400,000 square feet, prior to issuance of a business license, the City shall ensure rooftop solar panels are installed and operated in such a manner that they will supply 100% of the power needed to operate all non -refrigerated portions o f the facility including the parking areas.
(5) At least 10% of all passenger vehicle parking spaces shall be electric vehicle (EV) ready, with all necessary conduit and related appurtenances installed. At least 5% of all passenger vehicle parking spaces shall be equipped with working Level 2 Quick charge EV charging stations installed and operational, prior to building occupancy.
Signage shall be installed indicating EV charging stations and specifying that spaces are reserved for clean air/EV vehicle s. Unless superior technology is developed that would replace the EV charging units, facility operator and any successors in interest shall be responsible for maintaining the EV charging stations in working order for the life of the facility.
(6) Unless the owner of the facility records a covenant on the title of the underlying property ensuring that the property cannot be used to provide chilled, cooled, or freezer warehouse space, a conduit shall be installed during construction of the building shell from the electrical room to 100% of the loading dock doors that have potential to serve the refrigerated space. When tenant improvement building permits are issued for any refrigerated warehouse space, electric plug-in units shall be installed at every dock door servicing the refrigerated space to allow transport refrigeration units (TRUs) to plug in. Truck operators with TRUs shall be required to utilize electric plug-in units when at loading docks. (7) Bicycle racks are required per Section 30-714 and in the amount required for warehouse uses by Table 30 -714 of the Zoning and Development Code. The racks shall include locks as well as electric plugs to charge electric bikes. The racks shall be located as close as possible to employee entrance(s). Nothing in this section shall preclude the warehouse operator from satisfying this requirement by utilizing bicycle parking amenities considered to be superior such as locating bicycle parking facilities indoors or providing bicycle lockers.
Sec. 9-74. – Operation and Construction.
(1) Cool surface treatments shall be added to all drive aisles and parking areas or such areas shall be constructed with a solar -reflective cool pavement such as concrete.
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
(2) To ensure t hat warehouse electrical rooms are sufficiently sized to accommodate the potential need for additional electrical panels, either a secondary electrical room shall be provided in the building, or the primary electrical room shall be sized 25% larger than is required to satisfy the service requirements of the building or the electrical gear shall be installed with the initial construction with 25% excess demand capacity.
(3) Use of super -compliant VOC architectural and industrial maintenance coatings (e.g., paints) shall be required.
(4) The facility operator shall incorporate a recycling program. (5) The following environmentally responsible practices shall be required during construction:
a. The applicant shall use reasonable best efforts to deploy the highest rated CARB Tier technology that is available at the time of construction. Prior to permit issuance, the construction contractor shall submit an equipment list confirming equipment used is compliant with the highest CARB Tier at the time of construction. Equipment proposed for use that does not meet the highest CARB Tier in effect at the time of construction, shall only be approved for use at the discretion of the Planning Director and shall require proof from the construction contractor that, despit e reasonable best efforts to obtain the highest CARB Tier equipment, such equipment was unavailable.
b. Use of electric -powered hand tools, forklifts, and pressure washers.
c. Designation of an area in any construction site where electric - powered construction vehicles and equipment can charge. d. Identification in site plans of a location for future electric truck charging stations and installation of a conduit to that location. e. Diesel-powered generators shall be prohibited except in case of emergency or to establish temporary power during construction. (6) A Property Maintenance Program shall be submitted for review and approval by the Planning Director or his/her designee prior to the issuance of building permits. The program shall provide for the regular maintenance of building structures, landscaping, and paved surfaces in good physically condition, and appearance. The methods and maximum intervals for maintenance of each component shall be specified in the program.
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
(7) Property owner shall provide facility operator with information on incentive programs s uch as the Carl Moyer Program and Voucher Incentive Program and shall require all facility operators to enroll in the United States Environmental Protection Agency’s SmartWay Program.
Section 3. Based on the foregoing, the City Council determines that the project is categorically exempt from further review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(B)(3) (the common -sense exemption) and, alternatively, pursuant to CEQA Guidelines Secti on 15307 (Actions by Regulatory Agencies for Protection of Natural Resources) and 15308 (Actions by Regulatory Agencies for Protection of the Environment), and Section No. 3.22 of the 2019 Local Guidelines for Implementing CEQA , as implementation of this Ordinance is to improve the environment. The Council hereby directs staff to prepare, execute and file with the San Bernardino County Clerk a notice of exemption within five working days after the adoption of this Ordinance.
Section 4. If any section, sentence, clause or phrase of this Ordinance or the application thereof to any entity, person or circumstance is held for any reason to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable.
The people of the City of Fontana hereby declare that they would have adopted this Ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
Section 5. This Ordinance shall take effect thirty (30 ) days after the date of its adoption.
Section 6. The City Clerk shall certify to the adoption of this Ordinance. Not later than fifteen (15) days following the passage of this Ordinance, the Ordinance, or a summary thereof, along with the names of the Cit y Council members voting for and against the Ordinance, shall be published in a newspaper of general circulation in the City of Fontana. The City Clerk is the custodian of records for this Ordinance and the records are available at 8353 Sierra Avenue, Fontana CA 92335.
APPROVED AND ADOPTED 12th day of April, 2022.
READ AND APPROVED AS TO LEGAL FORM:
__________________________________________
City Attorney
I, Germaine McClellan Key, City Clerk of the City of Fontana, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Ordinance is the actual Ordinance DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Ordinance No. 1891
adopted by the City Council and was introduced at a regular meeting on the 22nd day of March, 2022, and was finally passed and adopted not less than five days thereafter on the 12th day of April, 2022, by the following vote to wit:
AYES: Mayor Warren, Mayor Pro Tem Garcia, Council Members, Cothran, Roberts and Sandoval
NOES: None
ABSENT: None
ABSTAIN: None
______________________________
City Clerk of the City of Fontana
_____________________________
Mayor of the City of Fontana
ATTEST:
______________________________
City Clerk
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
NOTICE OF EXEMPTION
PTO: Clerk of the Board of Supervisors
County of San Bernardino
385 N. Arrowhead Avenue, 2nd Floor
San Bernardino, CA 92415-0130
FROM: City of Fontana
Planning Department
8353 Sierra Avenue
Fontana, CA 92335
1. Project Title: Municipal Code Amendm ent ( MCA) No. 2 1-001R1 for an Amendment to Chapter 9 of the Municipal Code to Modify Article V to Revise Sustainability Standards for Industrial Commercial Centers throughout the City.
2. Project Location - Specific: Citywide
3. (a) Project Location - City: Fontana
(b) Project Location - County: San Bernardino
4. Description of nature, purpose, and beneficiaries of Project: The proposed Municipal Code Amendment (MCA) No. 21-001R1 is for the amendment of Chapter 9 of the Municipal Code to modify Article V to re vise industrial commerce centers sustainability standards. That includes modifications and clarification to buffering and screening requirements, clarification on building orientation, requirements for alternative energy, and improvements to construction as it relates to industrial commercial centers throughout the city.
5. Name of Public Agency approving project: City of Fontana
6. Name of Person or Agency carrying out project: City of Fontana
7. Exempt status: (Check one)
(a) _____ Ministerial project.
(b) _____ Not a project.
(c) _____ Emergency Project.
(d) __X__ Categorical Exemption. State type and class number Sections 15307 ( Actions by Regulatory Agencies for Pro tection of Natural Reso urces) and 15308 (Actions by Regulatory Agencies for Protection of the Environment) and Section No. 3.22 of the Local 2019 Guidelines for Implementing the CEQA.
(e) _____ Declared Emergency.
(f) _____ Statutory Exemption. State Code section number: _______________________ (g) __ X__ Other. Explanation: ___15061(B)(3) (the common-sense exemption)_________ Reason why project was e xempt: The Ordinance includes additional more restrictive standards and clarification of ex isting standar ds for industrial commerce centers to improve environmental quality and does not include the construction of any structures. All new projects involving construction of industrial commerce centers will continue to be subject to an Administrative Site Plan/Design Review, where a project -specific analysis based on location and project details wi ll be con ducted, subject to CEQA re view/documentation. Therefore, all industrial commerce center projects will be subject to CEQA, standard Conditions of Approval, and all other State/Federal/Local requirements.
8. Contact Person: Rina Leung, Senior Planner Telephone: (909) 350-6566
Date Received for Filing: __________________________________ DiTanyon Johnson
Principal Planner
(Clerk Stamp Here) ATTACHMENT NO. 2 DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
NOTICE OF PUBLIC HEARING
SI DESEA INFORMACION EN ESPAÑOL REFERENTE A ESTA NOTIFICACION O PROYECTO, FAVOR DE COMUNICARSE AL (909) 350-6728.
In compliance with Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the Agenda will be made available in appropriate alternative formats to persons with a disability. Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350 -7602 or email at [email protected]. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.
A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE CITY COUNCIL OF THE CITY OF FONTANA FOR THE FOLLOWING:
Municipal Code Amendment (MCA) No. 21-001R1 for an Amendment to Chapter 9 of the Municipal Code to Modify Article V to Revise Sustainability Standards for Industrial Commerce Centers throughout the City
Municipal Code Amendment (MCA) No. 21-001R1 to amend Chapter 9 of the Municipal Code to modify Article V revise sustainability standards that includes modifications and clarification to buffering and screening requirements, methods to improve traffic circulation, requirements for alternative energy, and improvements to construction as it relates to industrial commerce centers throughout the city.
Environmental
Determination: This project qualifies for a categorical exemption pursuant to the California Environmental Quality
Act (CEQA) Guidelines Section 15061(B)(3) (the
common-sense exemption) and, alternatively,
pursuant to CEQA Guidelines Section 15307
(Actions by Regulatory Agencies for Protection of
Natural Resources) and 15308 (Actions by
Regulatory Agencies for Protection of the
Environment), and Section No. 3.22 of the 2019
Local Guidelin es for Implementing CEQA, as
implementation of this Ordinance is to improve the
environment.
Location of
Property:
Citywide
Date of
Hearing:
March 22, 2022
Place of
Hearing:
City Hall Council Chambers
8353 Sierra Avenue
Fontana, CA 92335
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Time of
Hearing:
7:00 pm
Should you have any questions concerning this project, please contact , Rina Leung, at (909) 350 -6566 or [email protected]
ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE TO THE CITY COUNCIL. A COPY OF THE ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.
IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING ITEM, YOU
MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SO MEONE ELSE RAISED AT THE
PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.
Publish:
¼ Page
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21- 1256
Agenda #: B.
Agenda Date: 3/ 22/ 2022
Category: Public Hearing
FROM:
Planning Department
SUBJECT:
Municipal Code Amendment ( MCA) No. 21- 001R1 for an Amendment to Chapter 9 of the Municipal Code to Modify Article V to Revise Sustainability Standards for Industrial Commerce Centers throughout the City
RECOMMENDATION:
Read by title only and waive further reading of and introduce Ordinance No. , an Ordinance of the City Council of the City of Fontana, approving Municipal Code Amendment ( MCA) No. 21-001R1 for an amendment to Chapter 9 of the Municipal Code to modify Article V to revise sustainability standards for industrial commerce centers throughout the city, and the reading of the title constitutes the first thereof.
COUNCIL GOALS:
To promote economic development by pursuing business retention, expansion and attraction.
To promote economic development by establishing a quick, consistent development process.
DISCUSSION:
The City of Fontana currently regulates industrial commerce centers in Specific Plans, Chapter 30 of the Zoning and Development Code, and in Chapter 9, and Article V ( Industrial Commerce Centers Sustainability Standards) of the Municipal Code. Ordinance No. 1879 that established Article V in Chapter 9 of the Municipal Code was adopted by City Council on February 8, 2022.
The proposed Municipal Code Amendment ( MCA) No. 21-001R1 is for the amendment of Chapter 9 of the Municipal Code to modify Article V to revise industrial commerce centers sustainability standards. That includes modifications and clarification to buffering and screening requirements, methods to improve traffic circulation, requirements for alternative energy, and improvements to construction as it relates to industrial commerce centers throughout the city.
The following is a brief summary of the revised standards that shall apply to all industrial commerce centers in the City of Fontana ( a detailed comprehensive list of all the requirements is located in the Ordinance, Attachment No. 1):
1. Additional requirements for larger buildings over 400, 000 square feet:
a. A 20-foot wide landscaping buffer adjacent to sensitive receptors; b. A minimum of 300 feet separation of the building' s loading dock from a sensitive receptor; and
c. A requirement to include a truck operator lounge.
City of Fontana Page 1 of 2 Printed on 3/ 17/ 2022
pHavvr¢.ra.:.:h9 by L.!uy„,}flsta ,,,
107
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
File #: 21- 1256
Agenda #: B.
Agenda Date: 3/ 22/ 2022
Category: Public Hearing
2. An additional requirement for parking lot trees to provide at least 35% shade cover of parking areas within fifteen years.
3. Clarification on orientation of loading docks and truck entries.
4. Additional alternative energy improvements to require the office portion that is not covered with solar panels or utilities to include light colored roofing with a solar reflective index of not less than 78.
5. Revision of VOC paints to be super -compliant instead of low.
6. Clarification of documentation requirements in utilizing the available highest rated CARB Tier technology during construction.
ENVIRONMENTAL FINDING:
This project is exempt per the California Environmental Quality Act ( CEQA) pursuant to Guidelines Section 15061( B)( 3) ( the common- sense exemption) and, alternatively, pursuant to CEQA Guidelines Section 15307 ( Actions by Regulatory Agencies for Protection of Natural Resources) and 15308 Actions by Regulatory Agencies for Protection of the Environment), and Section No. 3. 22 of the 2019 Local Guidelines for Implementing CEQA, as implementation of this Ordinance is to reduce potential impacts to air and environmental quality.
FISCAL IMPACT:
None
MOTION:
Approve staff' s recommendation
ATTACHMENTS:
1. City Council Ordinance
2. Notice of Exemption
3. Public Hearing Notice
City of Fontana Page 2 of 2 Printed on 3/ 17/ 2022
by .uy.}flY.rf ,, 108
DocuSign Envelope ID: 440205DF-A281-45CB-BF15-211C45B14006 ITEM 18.1.
ATTACHMENT 10
Certificate Of Completion
Envelope Id: 440205DFA28145CBBF15211C45B14006 Status: Completed Subject: URGENT Please DocuSign: Ordinance 1891
Source Envelope:
Document Pages: 14 Signatures: 4 Envelope Originator:
Certificate Pages: 5 Initials: 0 City Clerk
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
8353 Sierra Avenue
Fontana, CA 92335
[email protected]
IP Address: 192.146.186.96
Record Tracking
Status: Original
4/13/2022 | 12:23 PM
Holder: City Clerk
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Ruben Duran
[email protected]
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Signed by link sent to [email protected]
Using IP Address: 174.195.132.203
Signed using mobile
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Electronic Record and Signature Disclosure:
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Acquanetta Warren
[email protected]
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ID: 502d94e8-da6b-4b13-86e8-e6617b288e64
Germaine McClellan Key
[email protected]
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Electronic Record and Signature Disclosure:
Accepted: 4/13/2022 | 04:58 PM
ID: 598fbdf8-f0a9-44c5-82ad-9d141b1f8c47
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
ITEM 18.1.
ATTACHMENT 10
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Evelyne Ssenkoloto
[email protected]
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Sent: 4/13/2022 | 04:59 PM
Electronic Record and Signature Disclosure:
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ID: e7145250-7347-428b-af51-3066469cc29f
Kathy Kasinger
[email protected]
Records Coordinator
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(None)
Sent: 4/13/2022 | 04:59 PM
Electronic Record and Signature Disclosure:
Accepted: 4/12/2022 | 07:28 AM
ID: 6bf6d243-6517-4841-a35f-dcf0ba649302
Susana Gallardo
[email protected]
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Not Offered via DocuSign
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[email protected]
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Not Offered via DocuSign
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Notary Events Signature Timestamp
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Certified Delivered Security Checked 4/13/2022 | 04:58 PM Signing Complete Security Checked 4/13/2022 | 04:59 PM
Completed Security Checked 4/13/2022 | 04:59 PM
Payment Events Status Timestamps
Electronic Record and Signature Disclosure
ITEM 18.1.
ATTACHMENT 10
ELECTRONIC RECORD AND SIGNATURE DISCLOSURE
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Electronic Record and Signature Disclosure created on: 2/2/2017 | 06:54 AM Parties agreed to: Ruben Duran, Acquanetta Warren, Germaine McClellan Key, Evelyne Ssenkoloto, Kathy Kasinger ITEM 18.1.
ATTACHMENT 10
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ITEM 18.1.
ATTACHMENT 10
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EXHIBIT B
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PRO
JECT-SPECIFIC PROVISIONS/MEASURES
(Duke Obligations)
1. Solar Power
a. Solar Capability. Developer shall construct all Project buildings to accommodate a solar array that accommodate the maximum coverage of PV panels in the future. b. Solar Power. Developer shall install Photo Voltaic (“PV”) system(s) on the roof(s) of the building(s) and/or in Project parking areas with a capacity of at least 100 kWdc electrical power.
c. The installation of the PV system shall be completed, fully operational, and have its permit to operate from the appropriate utility prior to the issuance of the certificate of occupancy permit. At either Petitioner’s request, Developer shall notify the requesting Petitioner of the completion of installation of the PV system and provide Petitioner with proof of completion by mail. Developer shall be responsible for maintaining the PV system(s) at not less than 80% of the rated power for 20 years.
2. Restrictions/Additions on Southern Boundary.
a. The drive aisle on the Project’s southern boundary shall be restricted to emergency vehicles only.
b. Project shall be constructed to include appropriate gate barrier to prohibit non- emergency vehicles from using southern drive aisle.
c. No shipping containers shall be stored on the Project’s southern boundary within the drive aisle.
d. No trash compactors or trash or recycling receptacles shall be located on the Project’s southern boundary.
e. The two truck trailer stalls on the southwest corner of the Project as indicated on current site plans shall be removed and replaced with landscaping.
3. Roof Material. Any building roof areas not covered by solar panels shall be constructed with materials with an initial installation Solar Reflective Index Value of not less than .29. This material shall meet the minimum solar reflective rating of the roof material for the life of the Project.
4. LEED Design. The building shall be certified to the LEED Silver standard under the most current version of LEED in place at the time of this Final Judgment. A copy of that the LEED certification letter shall be furnished to Petitioners’ counsel within three months of the issuance of the first certificate of occupancy.
5. Concrete Parking Areas. Developer shall use concrete instead of asphalt in all Project parking lots. Concrete shall have an initial solar reflectance value of at least .29 as determined in accordance with American Society for Testing and Materials (ASTM) Standards E1980 or E1918.
6. Skylights. Developer shall incorporate sky lights in worker areas interior to the Project buildings, and Developer shall use best efforts to design and construct the Project buildings in a manner to make optimal use of natural daylight in worker areas in interior spaces.
7. Lighting. No outdoor light poles shall exceed 34-feet on the Project site. No outdoor light poles shall exceed 34-feet on the southern elevation. Only low-emitting sodium or LED light bulbs shall be permitted on outdoor light poles.
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8. O
utdoor Public Address System. The use of an outdoor PA system shall be prohibited between the hours of 7 p.m. and 7 a.m., unless necessary for emergency purposes.
9. Construction Fleet. Developer shall encourage construction contractors to apply for South Coast AQMD “SOON” funds. The “SOON” program provides funds to applicable fleets for the purchase of commercially available low-emission heavy-duty engines to achieve near-term reduction of NOx emissions from in-use off-road vehicles.
10. Construction Hours. Construction activities shall comply with the City of Fontana Municipal Code, Chapter 18, Art. II, Sec. 18-63 (7).
11. Construction Recycling. Developer shall recycle a minimum of 75% of the Project’s “construction waste materials” as that term is defined by CalGreen.
12. Truck Idling and Signage.
a. Truck idling shall be limited to no more than three minutes (total) at the Project site.
b. All truck and trailer parking areas shall provide permanent, large lettered, reflective signs that (i) truck idling is limited to a period of three minutes total while at the Project site; (ii) trucks must turn off headlights once docked; (iii) idling of Auxiliary Power Units (APUs) for more than three minutes total is prohibited while at the Project site; (iv) trucks with transport refrigeration units (TRUs) are required to plug-in. These signs shall be printed in both English and Spanish, be readily visible from truck cabs and posted at prominent locations in all parking areas. Signs shall not be blocked or obscured by trucks parked on site.
Signs shall be placed near truck docks and on all interior walls that are visible from truck docks including approximately every 40-feet along the boundary walls in truck parking areas, and signs shall be visible from truck cabs. All signs shall remain posted and be maintained for the life of the Project.
13. Truck Routes, Circulation, and Parking/Tenant Leases. a. Leases with tenants shall state that tenants shall not permit any parking by its employees, agents, subtenants, customers, invitees, concessionaires or visitors on the streets surrounding the Project site, including overnight truck parking, in violation of any ordinances or postings by any public authorities having jurisdiction. Leases with tenants shall also state that tenants agree to cooperate with Developer and the City with respect to enforcing truck route and parking restrictions, and shall answer and address complaints from the public regarding violations of these restrictions.
b. Developer shall make all reasonable efforts, including but not limited to installation of signage, to ensure that Project trucks shall not idle or park, including any overnight parking, on residential streets. c. At the time of Project construction, Developer shall seek City approval to install, and shall install signage on the Project boundary, if approved by the City, in prominent locations which are visible from truck cabs stating that truck parking including overnight parking, or idling on any residential street is prohibited. d. Developer shall post signs in prominent locations inside and outside of the building indicating that off-site parking for any employee, truck, or other operation-related vehicle is strictly prohibited.
14. APU Electricity
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a. Tr
ucks with diesel APUs shall not be permitted to idle its diesel APU for a period of longer than 3 minutes (total) while at the Project site. b. Developer shall install, at the time of building construction, appropriate infrastructure, in sufficient quantity, to allow for the charging of electric APUs.
15. Electrified and Non-diesel Equipment
a. Upon and following occupancy of the Project by any tenant, all on-site forklifts and yard trucks (a.k.a. yard goats or yard hostlers) shall be zero emission. For purposes of this agreement, “zero emission” does not include natural gas or propane powered equipment.
b. Developer shall encourage use of electric sweepers with high-efficiency particulate air (HEPA) filters during Project operation when commercially available in the southern California market.
c. Developer shall require that yard maintenance/landscaping crews shall utilize only electric equipment or equipment certified to the highest current California Air Resources Board (CARB) standards in all Project areas now and in the future for the life of the Project. Developer shall contract only with a yard maintenance crew which is capable of meeting this requirement, and yard maintenance contracts shall specify this requirement for the life of the Project. d. With the exception of any emergency equipment, there shall be no diesel-powered generators allowed on the site.
16. Cold Storage. Developer agrees that the Project will not be used for cold storage for a period of 20 years. If/when tenant improvement building permits are issued for any refrigerated warehouse space, electric plug-in units shall be installed at every dock door servicing the refrigerated space to allow TRUs to plug in. Truck operators with TRUs shall be required to utilize electric plug-in units when at loading docks.
17. Landscaping.
a. Trees shall be installed in automobile parking areas to provide 35% shade cover of parking areas within fifteen years. Trees shall be planted that are capable of meeting this requirement.
b. All landscaping shall be drought tolerant, and to the extent feasible, species with low biogenic emissions. Palm trees shall not be utilized. c. All landscaping areas shall be properly irrigated for the life of the facility to allow for plants and trees to maintain growth. All trees shall be allowed to grow to full height without undue pruning.
18. On-Site Circulation. Signs and drive aisle pavement markings shall clearly identify the on-site circulation pattern to minimize unnecessary on-site vehicular travel.
19. Bike Lockers. Bike lockers, carpool/vanpool parking stalls, and electric vehicle parking stalls shall be provided and be placed as close to entrance as possible. Bike lockers shall be provided with locking mechanisms.
20. Construction Practices. The following shall be required during Project construction. a. Developer shall deploy the highest rated CARB Tier technology that is available at the time of construction. Prior to permit issuance, the construction contractor shall submit an equipment list confirming equipment used is compliant with the highest CARB Tier at the time of construction. Equipment proposed for use that does not meet the highest CARB Tier in effect at the time of construction, shall only be approved for use at the discretion of the Planning Director and shall ITEM 18.1.
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re
quire proof from the construction contractor that, despite reasonable best efforts to obtain the highest CARB Tier equipment, such equipment was unavailable. b. Use of electric-powered hand tools, forklifts, and pressure washers. c. Designation of an area in any construction site where electric-powered construction vehicles and equipment can charge.
d. Diesel-powered generators shall be prohibited except in case of emergency or to establish temporary power during construction.
e. Use of super-compliant (as defined by the South Coast Air Quality Management District) VOC architectural and industrial maintenance coatings (e.g., paints) shall be required.
21. Information on Incentive Programs. Developer shall provide facility operator with information on incentive programs such as the Carl Moyer Program and Voucher Incentive Program.
22. Site Maintenance.
a. Developer agrees to perform maintenance at the Project site on a monthly or as needed basis, or more frequently as needed, to remove any graffiti from Project walls, on both sides, and to remove trash/litter from the Project site including in landscaped areas, or areas between walls/fences.
b. Developer shall remove graffiti and trash/litter within 72 hours upon being notified of the issue.
c. Developer shall provide a phone number with voicemail enabled for neighbors to report graffiti, trash/litter, idling, and off-site parking issues associated with the Project. The phone number shall be posted on a prominent sign near the main entrance(s) to the Project site. The sign shall be visible from the street and the sign’s text shall be readable from a distance of 20 feet. The permanent, weather- resistant sign shall remain posted for the life of the Project, and the sign shall be replaced as necessary. Developer shall designate an employee to answer complaints, and all complaints shall be answered in a reasonable time frame.
23. Tenant Lease Agreements. Developer is responsible for all ongoing obligations in this Exhibit unless Developer passes the obligation to a tenant or facility operator by including the corresponding provision in a current and binding tenant lease agreement. If a tenant or facility operator is in violation of a provision in this Exhibit that Developer has passed to a tenant of facility operator via a tenant lease agreement, Developer is responsible for enforcing the tenant lease agreement.
24. Community Benefit Fund. Developer shall provide $210,000.00 to benefit the immediate community, to be distributed and spent as follows:
a. $50,000 to the Fontana Unified School District, to be used to enhance landscaping along the northern boundary of the Jurupa Hills High School property. The enhanced landscaping shall include mature, evergreen trees that can reach a height of 45 feet, and that shall be staggered, if feasible.
b. $140,000 to the City of Fontana for the distribution of air filters to residents of southern Fontana. Specifically:
i. The funds shall be used only for the p urchase of air filters, and not for program administration;
ii. The City shall distribute the air filters free of charge; iii. The air filters shall be rated MERV 13 or higher;
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iv.
Air filters shall be made available to residents of southern Fontana, defined as Fontana residents with a household address located south of Interstate Highway 10;
v. Each household shall receive a maximum of 10 air filters; vi. Until all funds have been expended, the City shall promote the availability of free air filters on its website, including information stating how eligible residents can receive the benefit;
vii. Until all funds have been expended, the City shall report to Sierra Club and the People annually, by January 1 each year, the following: the amount spent on air filters, the number of air filters that have been distributed, the number of households that have received air filters, and the amount of funds remaining. The City shall maintain receipts, invoices, and/or any other proof of expenditures; applications received; and any proof of distribution of the air filters; until one year after the City provides its final annual report.
viii. If funds remain after a fifth annual report, households that had previously received air filters shall be eligible for up to 10 additional air filters. c. $20,000 to the City of Fontana as an administrative fee for the distribution of air filters as set forth above.
25. Attorney’s Fees. Developer shall pay Sierra Club’s attorney’s fees in the amount of $80,750 within 20 calendar days of submission by the parties of the Stipulation for Entry of Final Judgment on Consent to the Superior Court. Payment shall be made and sent to the Law Office of Abigail Smith, A Professional Corporation.
26. Certification of Compliance. Developer shall submit by mail and email a letter certifying compliance to Sierra Club and the People when all Project Mitigation Measures described herein are complete.
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PROOF OF SERVICE VIA U.S. MAIL AND E-MAIL
At the time of service, I was over 18 years of age and not a party to this action.
My business address is 1300 I Street, Suite 125, P.0. Box 944255, Sacramento, California 94244-2550.
On April 14, 2022, I served the following document(s):
STIPULATION FOR ENTRY OF FINAL JUDGMENT ON CONSENT; [PROPOSED] FINAL JUDGMENT ON CONSENT
By United States mail. I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses listed below, and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business's practice for collecting and processing correspondence for mailing.
On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I am a resident or employed in the county where the mailing occurred. The envelope or package was placed in the mail at Sacramento, CA.
AND
By email or electronic transmiss'ion. Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the documents to be sent to the persons.at the e-mail addresses listed below. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.
ALISHA WINTERSWYK
[email protected]
SARAH E. OWSOWITZ
[email protected]
TIFF ANY M. MICHOU
[email protected]
BEST BEST & KRIEGER LLP
3390 University Avenue, 5th Floor
p.o. Box 1028
Riverside, California 92502
Attorneys for Respondent City of Fontana
JONATHAN SHARDLOW
[email protected]
Alien Matkins Leek Gamble Mallory &
Natsis LLP
1900 Main Street, 5th Floor
Irvine, CA 92614-7321
Attorney for Real Party in Interest Duke
Realty Corporation
ABIGAIL SMITH
[email protected]
Law Office of Abigail Smith
2305 Historic Decatur Road, Suite 100
San Diego, CA 92106
Attorney for Petitioner Sierra Club
20 22
24 26
27 1
PROOF OF SERVICE VIA U.S. MAIL AND E-MAIL
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I declare under penalty of perjury under the laws of the State of California that the above is true and correct.
Executed on April 14, 2022, at Sacramento, CA.
RuthAnn Reshke
28 2
PROOF OF SERVICE VIA U.S. MAIL AND E-MAIL
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EXHIBIT C
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l
ROB BONTA State of California
Attorney General DEPARTMENT OF JUSTICE
Warehouse Projects: Best Practices and
Mitigation Measures to Comply with the
California Environmental Quality Act
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Table of Contents
I. Background .......................................................................................................................... 1 II. Proactive Planning: General Plans, Local Ordinances, and Good Neighbor Policies ......... 3 III. Community Engagement ..................................................................................................... 4 IV. Warehouse Siting and Design Considerations ..................................................................... 5 V. Air Quality and Greenhouse Gas Emissions Analysis and Mitigation ................................ 7 VI. Noise Impacts Analysis and Mitigation ............................................................................. 10 VII. Traffic Impacts Analysis and Mitigation ........................................................................... 11 VIII. Other Significant Environmental Impacts Analysis and Mitigation .................................. 12 IX. Conclusion ......................................................................................................................... 13
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In
carrying out its duty to enforce laws across California, the California Attorney General’s Bureau of Environmental Justice (Bureau)1 regularly reviews proposed warehouse projects for compliance with the California Environmental Quality Act (CEQA) and other laws.
When necessary, the Bureau submits comment letters to lead agencies regarding warehouse projects, and in rare cases the Bureau has filed litigation to enforce CEQA.2 This document builds upon the Bureau’s work on warehouse projects, collecting information gained from the Bureau’s review of hundreds of warehouse projects across the state.3 It is meant to help lead agencies pursue CEQA compliance and promote environmentally-just development as they confront warehouse project proposals.
4 While CEQA analysis is necessarily project-specific, this document provides information on feasible best practices and mitigation measures, nearly all of which have been adapted from actual warehouse projects in California.
I. Background
In recent years, the proliferation of e-commerce and rising consumer expectations of rapid shipping have contributed to a boom in warehouse development.5 California, with its ports, population centers, and transportation network, has found itself at the center of this trend.
In 2020, the Ports of Los Angeles, Long Beach, and Oakland collectively accounted for over 34% of all United States international container trade. 6 The Ports of Los Angeles and Long
Beach alone generate about 35,000 container truck trips every day.7 Accordingly, the South Coast Air Basin now contains approximately 3,000 warehouses of over 100,000 square feet each, with a total warehouse capacity of approximately 700 million square feet, an increase of 20 percent over the last five years.8 This trend has only accelerated, with e-commerce growing to 1 https://oag.ca.gov/environment/justice.
2 https://oag.ca.gov/environment/ceqa; People of the State of California v. City of Fontana (Super. Ct. San Bernardino County, No. CIVSB2121829); South Central Neighbors United et al. v. City of Fresno et al. (Super. Ct. Fresno County, No. 18CECG00690). 3 This September 2022 version revises and replaces the prior March 2021 version of this document.
4 Anyone reviewing this document to determine CEQA compliance responsibilities should consult their own attorney for legal advice.
5 As used in this document, “warehouse” or “logistics facility” is defined as a facility consisting of one or more buildings that stores cargo, goods, or products on a short- or long-term basis for later distribution to businesses and/or retail customers. 6 Data from the Bureau of Transportation Statistics, Container TEUs (Twenty-foot Equivalent Units) (2020), https://data.bts.gov/stories/s/Container-TEU/x3fb-aeda/ (Ports of Los Angeles, Long Beach, and Oakland combined for 14.157 million TEUs, 34% of 41.24 million TEUs total nationwide) (last accessed September 18, 2022).
7 U.S. Dept. of Transportation, Federal Highway Administration, FHWA Operations Support – Port Peak Pricing Program Evaluation (2020), available at https://ops.fhwa.dot.gov/publications/fhwahop09014/sect2.htm (last accessed September 18, 2022).
8 South Coast Air Qual. Mgmt. Dist., Final Socioeconomic Assessment for Proposed Rule 2305 – Warehouse Indirect Source Rule – Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program and Proposed Rule 316 – Fees for Rule 2305, at 7-8, 41 (May 2021).
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13 % of all retail sales and 2021 being a second consecutive record year for new warehouse space leased.9 The latest data and forecasts predict that the next wave of warehouse development will be in the Central Valley.10
When done properly, these activities can contribute to the economy and consumer welfare. However, imprudent warehouse development can harm local communities and the environment. Among other pollutants, diesel trucks visiting warehouses emit nitrogen oxide (NO
x)—a primary precursor to smog formation and a significant factor in the development of respiratory problems like asthma, bronchitis, and lung irritation—and diesel particulate matter (a subset of fine particular matter that is smaller than 2.5 micrometers)—a contributor to cancer, heart disease, respiratory illnesses, and premature death. 11 Trucks and on-site loading activities
can also be loud, bringing disruptive noise levels during 24/7 operation that can cause hearing damage after prolonged exposure.
12 The hundreds, and sometimes thousands, of daily truck and passenger car trips that warehouses generate contribute to traffic jams, deterioration of road surfaces, and traffic accidents.
These environmental impacts also tend to be concentrated in neighborhoods already suffering from disproportionate health impacts and systemic vulnerability. For example, a comprehensive study by the South Coast Air Quality Management District found that communities located near large warehouses scored far higher on California’s environmental justice screening tool, which measures overall pollution and demographic vulnerability. 13 That
9 U.S. Census Bureau News, Quarterly Retail E-Commerce Sales 4th Quarter 2021 (February 22, 2022), https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf (last accessed September 18, 2022); CBRE Research, 2022 North America Industrial Big Box Report: Review and Outlook, at 2-3 (March 2022), available at https://www.cbre.com/insights/reports/2022- north-america-industrial-big-box#download-report (last accessed September 18, 2022). 10 CBRE Research, supra note 9, at 4, 36; New York Times, Warehouses Are Headed to the Central Valley, Too (Jul. 22, 2020), available at
https://www.nytimes.com/2020/07/22/us/coronavirus-ca-warehouse-workers.html. 11 California Air Resources Board, Nitrogen Dioxide & Health, https://ww2.arb.ca.gov/resources/nitrogen-dioxide-and-health (last accessed September 18, 2022) (NOx); California Air Resources Board, Summary: Diesel Particular Matter Health Impacts, https://ww2.arb.ca.gov/resources/summary-diesel-p articulate-matter-health-impacts
(last accessed September 18, 2022); Office of Environmental Health Hazard Assessment and American Lung Association of California, Health Effects of Diesel Exhaust, https://oehha.ca.gov/media/downloads/calenviroscreen/indicators/diesel4-02.pdf ( last accessed
September 18, 2022) (DPM).
12 Noise Sources and Their Effects,
https://www.chem.purdue.edu/chemsafety/Training/PPETrain/dblevels.htm (last accessed September 18, 2022) (a diesel truck moving 40 miles per hour, 50 feet away, produces 84 decibels of sound).
13 South Coast Air Quality Management District, “Final Socioeconomic Assessment for Proposed Rule 2305 – Warehouse Indirect Source Rule – Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program and Proposed Rule 316 – Fees for Rule 2305” (May 2021), at 4-5.
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st
udy concluded that, compared to the South Coast Air Basin averages, communities in the South Coast Air Basin near large warehouses had a substantially higher proportion of people of color; were exposed to more diesel particulate matter; had higher rates of asthma, cardiovascular disease, and low birth weights; and had higher poverty and unemployment rates.14 Each area has its own unique history, but many of these impacts and vulnerabilities reflect historic redlining practices in these communities, which devalued land and concentrated poverty, racial outgroups, and pollution into designated areas.15
II. Proactive Planning: General Plans, Local Ordinances, and Good Neighbor Policies To systematically guide warehouse development, we encourage local governing bodies to proactively plan for logistics projects in their jurisdictions. Proactive planning allows jurisdictions to prevent land use conflicts before they materialize and direct sustainable development. Benefits also include providing a predictable business environment, protecting residents from environmental harm, and setting consistent expectations jurisdiction-wide.
Proactive planning can take many forms. Land use designation and zoning decisions should channel development into appropriate areas. For example, establishing industrial districts near major highway and rail corridors but away from sensitive receptors 16 can help attract
investment while avoiding conflicts between warehouse facilities and residential communities.
Transition zones with lighter industrial and commercial land uses may also help minimize conflicts between residential and industrial uses.
In addition, general plan policies, local ordinances, and good neighbor policies should set minimum standards for logistics projects. General plan policies can be incorporated into existing economic development, land use, circulation, or other related general plan elements. Many jurisdictions alternatively choose to consolidate policies in a separate environmental justice element. Adopting general plan policies to guide warehouse development may also help 14 Id. at 5-7.
15 Beginning in the 1930s, federal housing policy directed investment away from Black, immigrant, and working-class communities by color-coding neighborhoods according to the purported “riskiness” of loaning to their residents. In California cities where such “redlining” maps were drawn, nearly all of the communities where warehouses are now concentrated were formerly coded “red,” signifying the least desirable areas where investment was to be avoided.
See University of Richmond Digital Scholarship Lab, Mapping Inequality, https://dsl.richmond.edu/panorama/redlining/#loc=12/33.748/-118.272&city=los-angeles-ca (Los Angeles), https://dsl.richmond.edu/panorama/redli ning/#loc=13/32.685/-117.132&city=san- diego-ca (San Diego), https://dsl.richmond.edu/panorama/redlining/#loc=11/37.81/- 122.38&city=oakland-ca (Oakland),
https://dsl.richmond.edu/panorama/redlining/#loc=13/37.956/-121.326&city=stockton-ca (Stockton), https://dsl.richmond.edu/panorama/redlining/#loc=12/36.751/-119.86&cit y=fresno- ca (Fresno) (all last accessed September 18, 2022).
16 In this document, “sensitive receptors” refers to residences, schools, public recreation facilities, health care facilities, places of worship, daycare facilities, community centers, or incarceration facilities.
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jur
isdictions comply with their obligations under SB 1000, which requires local government general plans to identify objectives and policies to reduce health risks in disadvantaged communities, promote civil engagement in the public decision making process, and prioritize improvements and programs that address the needs of disadvantaged communities.17 Local ordinances and good neighbor policies that set development standards for all warehouses in the jurisdiction are a critical and increasingly common tool that serve several goals. When well-designed, these ordinances direct investment to local improvements, provide predictability for developers, conserve government resources by streamlining project review processes, and reduce the environmental impacts of industrial development. While many jurisdictions have adopted warehouse-specific development standards, an ordinance in the City of Fontana provides an example to review and build upon. 18 Good neighbor policies in
Riverside County and by the Western Riverside Council of Government include additional measures worth consideration.
19 The Bureau encourages jurisdictions to adopt their own local ordinances that combine the strongest policies from those models with measures discussed in the remainder of this document.
III. Community Engagement
Early and consistent community engagement is central to establishing good relationships between communities, lead agencies, and warehouse developers and tenants. Robust community engagement can give lead agencies access to community residents’ on-the-ground knowledge and information about their concerns, build community support for projects, and develop creative solutions to ensure new logistics facilities are mutually beneficial. Examples of best practices for community engagement include:
• Holding a series of community meetings at times and locations convenient to members of the affected community and incorporating suggestions into the project design.
• Posting information in hard copy in public gathering spaces and on a website about the project. The information should include a complete, accurate project description, maps and drawings of the project design, and information about how the public can provide input and be involved in the project approval process. The 17 For more information about SB 1000, see https://oag.ca.gov/environment/sb1000. 18 https://oag.ca.gov/system/files/attachments/press-
docs/Final%20Signed%20Fontana%20Ordinance.pdf (last accessed September 18, 2022). 19 For example, the Riverside County policy requires community benefits agreements and supplemental funding contributions toward additional pollution offsets, and the Western Riverside Council of Governments policy sets a minimum buffer zone of 300 meters between warehouses and sensitive receptors. https://www.rivcocob.org/wp- content/uploads/2020/01/Good-Neighbor-Policy-F-3-Final-Adopted.pdf (last accessed September 18, 2022) (Riverside County);
http://www.wrcog.cog.ca.us/DocumentCenter/View/318/Good-Neig hbor-Guidelines-for-Siting- Warehouse-Distribution-Facilities-PDF?bidId= (last accessed September 18, 2022) ( Western Riverside Council of Governments).
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inf
ormation should be in a format that is easy to navigate and understand for members of the affected community.
• Providing notice by mail to residents and schools within a certain radius of the project and along transportation corridors to be used by vehicles visiting the project, and by posting a prominent sign on the project site. The notice should include a brief project description and directions for accessing complete information about the project and for providing input on the project. • Providing translation or interpretation in residents’ native language, where appropriate.
• For public meetings broadcast online or otherwise held remotely, providing for access and public comment by telephone and supplying instructions for access and public comment with ample lead time prior to the meeting. • Partnering with local community-based organizations to solicit feedback, leverage local networks, co-host meetings, and build support.
• Considering adoption of a community benefits agreement, negotiated with input from affected residents and businesses, by which the developer provides benefits to the affected community.
• Creating a community advisory board made up of local residents to review and provide feedback on project proposals in early planning stages. • Identifying a person to act as a community liaison concerning on-site construction activity and operations, and providing contact information for the community liaison to the surrounding community.
• Requiring signage in public view at warehouse facilities with contact information for a local designated representative for the facility operator who can receive community complaints, and requiring any complaints to be answered by the facility operator within 48 hours of receipt.
IV. Warehouse Siting and Design Considerations
The most important consideration when planning a logistics facility is its location.
Warehouses located in residential neighborhoods or near sensitive receptors expose community residents and those using or visiting sensitive receptor sites to the air pollution, noise, traffic, and other environmental impacts they generate. Therefore, placing facilities away from sensitive receptors significantly reduces their environmental and quality of life harms on local communities. The suggested best practices for siting and design of warehouse facilities does not relieve lead agencies’ responsibility under CEQA to conduct a project-specific analysis of the project’s impacts and evaluation of feasible mitigation measures and alternatives; lead agencies’ incorporation of the best practices must be part of the impact, mitigation and alternatives analyses to meet the requirements of CEQA. Examples of best practices when siting and designing warehouse facilities include:
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• P
er California Air Resources Board (CARB) guidance, siting warehouse facilities so that their property lines are at least 1,000 feet from the property lines of the nearest sensitive receptors.20
• Providing adequate amounts of on-site parking to prevent trucks and other vehicles from parking or idling on public streets and to reduce demand for off-site truck yards.
• Establishing setbacks from the property line of the nearest sensitive receptor to warehouse dock doors, loading areas, and truck drive aisles, and locating warehouse dock doors, loading areas, and truck drive aisles on the opposite side of the building from the nearest sensitive receptors—e.g., placing dock doors on the north side of the facility if sensitive receptors are near the south side of the facility.
• Placing facility entry and exit points from the public street away from sensitive receptors—e.g., placing these points on the north side of the facility if sensitive receptors are adjacent to the south side of the facility. • Ensuring heavy duty trucks abide by the on-site circulation plans by constructing physical barriers to block those trucks from using areas of the project site restricted to light duty vehicles or emergency vehicles only. • Preventing truck queuing spillover onto surrounding streets by positioning entry gates after a minimum of 140 feet of space for queuing, and increasing the distance by 70 feet for every 20 loading docks beyond 50 docks. • Locating facility entry and exit points on streets of higher commercial classification that are designed to accommodate heavy duty truck usage. • Screening the warehouse site perimeter and onsite areas with significant truck traffic (e.g., dock doors and drive aisles) by creating physical, structural, and/or vegetative buffers that prevent or substantially reduce pollutant and noise dispersion from the facility to sensitive receptors.
• Planting exclusively 36-inch box evergreen trees to ensure faster maturity and four-season foliage.
• Requiring all property owners and successors in interest to maintain onsite trees and vegetation for the duration of ownership, including replacing any dead or unhealthy trees and vegetation.
• Posting signs clearly showing the designated entry and exit points from the public street for trucks and service vehicles.
• Including signs and drive aisle pavement markings that clearly identify onsite circulation patterns to minimize unnecessary onsite vehicle travel. • Posting signs indicating that all parking and maintenance of trucks must be conducted within designated on-site areas and not within the surrounding community or public streets.
20 CARB, Air Quality and Land Use Handbook: A Community Health Perspective (April 2005), at ES-1. CARB staff has released draft updates to this siting and design guidance which suggests a greater distance may be warranted in some scenarios. CARB, Concept Paper for the Freight Handbook (December 2019), available at https://ww2.arb.ca.gov/sites/default/files/2020- 03/2019.12.12%20-%20Concept%20Paper%20for%20the%20Freight%20Handbook_1.pdf (last accessed September 18, 2022).
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V. Air
Quality and Greenhouse Gas Emissions Analysis and Mitigation Emissions of air pollutants and greenhouse gases are often among the most substantial environmental impacts from new warehouse facilities. CEQA compliance demands a proper accounting of the full air quality and greenhouse gas impacts of logistics facilities and adoption of all feasible mitigation of significant impacts. Although efforts by CARB and other authorities to regulate the heavy-duty truck and off-road diesel fleets have made excellent progress in reducing the air quality impacts of logistics facilities, the opportunity remains for local jurisdictions to further mitigate these impacts at the project level. Lead agencies and developers should also consider designing projects with their long-term viability in mind. Constructing the necessary infrastructure to prepare for the zero-emission future of goods movement not only reduces a facility’s emissions and local impact now, but it can also save money as demand for zero-emission infrastructure grows. In planning new logistics facilities, the Bureau strongly encourages developers to consider the local, statewide, and global impacts of their projects’ emissions.
Examples of best practices when studying air quality and greenhouse gas impacts include:
• Fully analyzing all reasonably foreseeable project impacts, including cumulative impacts. In general, new warehouse developments are not ministerial under CEQA because they involve public officials’ personal judgment as to the wisdom or manner of carrying out the project, even when warehouses are permitted by a site’s applicable zoning and/or general plan land use designation. 21 • When analyzing cumulative impacts, thoroughly considering the project’s incremental impact in combination with past, present, and reasonably foreseeable future projects, even if the project’s individual impacts alone do not exceed the applicable significance thresholds.
• Preparing a quantitative air quality study in accordance with local air district guidelines.
• Preparing a quantitative health risk assessment in accordance with California Office of Environmental Health Hazard Assessment and local air district guidelines.
• Refraining from labeling compliance with CARB or air district regulations as a mitigation measure—compliance with applicable regulations is required regardless of CEQA.
• Disclosing air pollution from the entire expected length of truck trips. CEQA requires full public disclosure of a project’s anticipated truck trips, which entails calculating truck trip length based on likely truck trip destinations, rather than the distance from the facility to the edge of the air basin, local jurisdiction, or other truncated endpoint. All air pollution associated with the project must be considered, regardless of where those impacts occur.
21 CEQA Guidelines § 15369.
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ccounting for all reasonably foreseeable greenhouse gas emissions from the project, without discounting projected emissions based on participation in California’s Cap-and-Trade Program.
Examples of measures to mitigate air quality and greenhouse gas impacts from construction are below. To ensure mitigation measures are enforceable and effective, they should be imposed as permit conditions on the project where applicable. • Requiring off-road construction equipment to be hybrid electric-diesel or zero- emission, where available, and all diesel-fueled off-road construction equipment to be equipped with CARB Tier IV-compliant engines or better, and including this requirement in applicable bid documents, purchase orders, and contracts, with successful contractors demonstrating the ability to supply the compliant construction equipment for use prior to any ground-disturbing and construction activities.
• Prohibiting off-road diesel-powered equipment from being in the “on” position for more than 10 hours per day.
• Using electric-powered hand tools, forklifts, and pressure washers, and providing electrical hook ups to the power grid rather than use of diesel-fueled generators to supply their power.
• Designating an area in the construction site where electric-powered construction vehicles and equipment can charge.
• Limiting the amount of daily grading disturbance area. • Prohibiting grading on days with an Air Quality Index forecast of greater than 100 for particulates or ozone for the project area.
• Forbidding idling of heavy equipment for more than three minutes. • Keeping onsite and furnishing to the lead agency or other regulators upon request, all equipment maintenance records and data sheets, including design specifications and emission control tier classifications. • Conducting an on-site inspection to verify compliance with construction mitigation and to identify other opportunities to further reduce construction impacts.
• Using paints, architectural coatings, and industrial maintenance coatings that have volatile organic compound levels of less than 10 g/L.
• Providing information on transit and ridesharing programs and services to construction employees.
• Providing meal options onsite or shuttles between the facility and nearby meal destinations for construction employees.
Examples of measures to mitigate air quality and greenhouse gas impacts from operation include:
• Requiring all heavy-duty vehicles engaged in drayage
22 to or from the project site
to be zero-emission beginning in 2030.
22 “Drayage” refers generally to transport of cargo to or from a seaport or intermodal railyard.
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equiring all on-site motorized operational equipment, such as forklifts and yard trucks, to be zero-emission with the necessary charging or fueling stations provided.
• Requiring tenants to use zero-emission light- and medium-duty vehicles as part of business operations.
• Forbidding trucks from idling for more than three minutes and requiring operators to turn off engines when not in use.
• Posting both interior- and exterior-facing signs, including signs directed at all dock and delivery areas, identifying idling restrictions and contact information to report violations to CARB, the local air district, and the building manager. • Installing solar photovoltaic systems on the project site of a specified electrical generation capacity that is equal to or greater than the building’s projected energy needs, including all electrical chargers.
• Designing all project building roofs to accommodate the maximum future coverage of solar panels and installing the maximum solar power generation capacity feasible.
• Constructing zero-emission truck charging/fueling stations proportional to the number of dock doors at the project.
• Running conduit to designated locations for future electric truck charging stations. • Unless the owner of the facility records a covenant on the title of the underlying property ensuring that the property cannot be used to provide refrigerated warehouse space, constructing electric plugs for electric transport refrigeration units at every dock door and requiring truck operators with transport refrigeration units to use the electric plugs when at loading docks.
• Oversizing electrical rooms by 25 percent or providing a secondary electrical room to accommodate future expansion of electric vehicle charging capability. • Constructing and maintaining electric light-duty vehicle charging stations proportional to the number of employee parking spaces (for example, requiring at least 10% of all employee parking spaces to be equipped with electric vehicle charging stations of at least Level 2 charging performance) • Running conduit to an additional proportion of employee parking spaces for a future increase in the number of electric light-duty charging stations. • Installing and maintaining, at the manufacturer’s recommended maintenance intervals, air filtration systems at sensitive receptors within a certain radius of facility for the life of the project.
• Installing and maintaining, at the manufacturer’s recommended maintenance intervals, an air monitoring station proximate to sensitive receptors and the facility for the life of the project, and making the resulting data publicly available in real time. While air monitoring does not mitigate the air quality or greenhouse gas impacts of a facility, it nonetheless benefits the affected community by providing information that can be used to improve air quality or avoid exposure to unhealthy air.
• Requiring all stand-by emergency generators to be powered by a non-diesel fuel. • Requiring facility operators to train managers and employees on efficient scheduling and load management to eliminate unnecessary queuing and idling of ITEM 18.1.
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tr
ucks.
• Requiring operators to establish and promote a rideshare program that discourages single-occupancy vehicle trips and provides financial incentives for alternate modes of transportation, including carpooling, public transit, and biking. • Meeting CalGreen Tier 2 green building standards, including all provisions related to designated parking for clean air vehicles, electric vehicle charging, and bicycle parking.
• Designing to LEED green building certification standards. • Providing meal options onsite or shuttles between the facility and nearby meal destinations.
• Posting signs at every truck exit driveway providing directional information to the truck route.
• Improving and maintaining vegetation and tree canopy for residents in and around the project area.
• Requiring that every tenant train its staff in charge of keeping vehicle records in diesel technologies and compliance with CARB regulations, by attending CARB- approved courses. Also require facility operators to maintain records on-site demonstrating compliance and make records available for inspection by the local jurisdiction, air district, and state upon request.
• Requiring tenants to enroll in the United States Environmental Protection Agency’s SmartWay program, and requiring tenants who own, operate, or hire trucking carriers with more than 100 trucks to use carriers that are SmartWay carriers.
• Providing tenants with information on incentive programs, such as the Carl Moyer Program and Voucher Incentive Program, to upgrade their fleets.
VI. Noise Impacts Analysis and Mitigation
The noise associated with logistics facilities can be among their most intrusive impacts to nearby sensitive receptors. Various sources, such as unloading activity, diesel truck movement, and rooftop air conditioning units, can contribute substantial noise pollution. These impacts are exacerbated by logistics facilities’ typical 24-hour, seven-days-per-week operation. Construction noise is often even greater than operational noise, so if a project site is near sensitive receptors, developers and lead agencies should adopt measures to reduce the noise generated by both construction and operation activities.
Examples of best practices when studying noise impacts include:
• Preparing a noise impact analysis that considers all reasonably foreseeable project noise impacts, including to nearby sensitive receptors. All reasonably foreseeable project noise impacts encompasses noise from both construction and operations, including stationary, on-site, and off-site noise sources. • Adopting a lower significance threshold for incremental noise increases when baseline noise already exceeds total noise significance thresholds, to account for the cumulative impact of additional noise and the fact that, as noise moves up the decibel scale, each decibel increase is a progressively greater increase in sound ITEM 18.1.
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essure than the last. For example, 70 dBA is ten times more sound pressure than 60 dBA.
• Disclosing and considering the significance of short-term noise levels associated with all aspects of project operation (i.e. both on-site noise generation and off-site truck noise). Considering only average noise levels may mask noise impacts sensitive receptors would consider significant—for example, the repeated but short-lived passing of individual trucks or loading activities at night.
Examples of measures to mitigate noise impacts include:
• Constructing physical, structural, or vegetative noise barriers on and/or off the project site.
• Planning and enforcing truck routes that avoid passing sensitive receptors. • Locating or parking all stationary construction equipment as far from sensitive receptors as possible, and directing emitted noise away from sensitive receptors. • Verifying that construction equipment has properly operating and maintained mufflers.
• Requiring all combustion-powered construction equipment to be surrounded by a noise protection barrier
• Limiting operation hours to daytime hours on weekdays. • Paving roads where truck traffic is anticipated with low noise asphalt. • Orienting any public address systems onsite away from sensitive receptors and setting system volume at a level not readily audible past the property line.
VII. Traffic Impacts Analysis and Mitigation
Warehouse facilities inevitably bring truck and passenger car traffic. Truck traffic can present substantial safety issues. Collisions with heavy-duty trucks are especially dangerous for passenger cars, motorcycles, bicycles, and pedestrians. These concerns can be even greater if truck traffic passes through residential areas, school zones, or other places where pedestrians are common and extra caution is warranted.
Examples of measures to mitigate traffic impacts include:
• Designing, clearly marking, and enforcing truck routes that keep trucks out of residential neighborhoods and away from other sensitive receptors. • Installing signs in residential areas noting that truck and employee parking is prohibited.
• Requiring preparation and approval of a truck routing plan describing the facility’s hours of operation, types of items to be stored, and truck routing to and from the facility to designated truck routes that avoids passing sensitive receptors.
The plan should include measures for preventing truck queuing, circling, stopping, and parking on public streets, such as signage, pavement markings, and queuing analysis and enforcement. The plan should hold facility operators responsible for violations of the truck routing plan, and a revised plan should be required from any new tenant that occupies the property before a business license ITEM 18.1.
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is iss
ued. The approving agency should retain discretion to determine if changes to the plan are necessary, including any additional measures to alleviate truck routing and parking issues that may arise during the life of the facility. • Constructing new or improved transit stops, sidewalks, bicycle lanes, and crosswalks, with special attention to ensuring safe routes to schools. • Consulting with the local public transit agency and securing increased public transit service to the project area.
• Designating areas for employee pickup and drop-off.
• Implementing traffic control and safety measures, such as speed bumps, speed limits, or new traffic signs or signals.
• Placing facility entry and exit points on major streets that do not have adjacent sensitive receptors.
• Restricting the turns trucks can make entering and exiting the facility to route trucks away from sensitive receptors.
• Constructing roadway improvements to improve traffic flow. • Preparing a construction traffic control plan prior to grading, detailing the locations of equipment staging areas, material stockpiles, proposed road closures, and hours of construction operations, and designing the plan to minimize impacts to roads frequented by passenger cars, pedestrians, bicyclists, and other non-truck traffic.
VIII. Other Significant Environmental Impacts Analysis and Mitigation Warehouse projects may result in significant environmental impacts to other resources, such as to aesthetics, cultural resources, energy, geology, or hazardous materials. All significant adverse environmental impacts must be evaluated, disclosed and mitigated to the extent feasible under CEQA. Examples of best practices and mitigation measures to reduce environmental impacts that do not fall under any of the above categories include:
• Appointing a compliance officer who is responsible for implementing all mitigation measures, and providing contact information for the compliance officer to the lead agency, to be updated annually.
• Creating a fund to mitigate impacts on affected residents, schools, places of worship, and other community institutions by retrofitting their property. For example, retaining a contractor to retrofit/install HVAC and/or air filtration systems, doors, dual-paned windows, and sound- and vibration-deadening insulation and curtains.
• Sweeping surrounding streets on a daily basis during construction to remove any construction-related debris and dirt.
• Directing all lighting at the facility into the interior of the site. • Using full cut-off light shields and/or anti-glare lighting. • Requiring submission of a property maintenance program for agency review and approval providing for the regular maintenance of all building structures, landscaping, and paved surfaces.
• Using cool pavement to reduce heat island effects.
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lanting trees in parking areas to provide at least 35% shade cover of parking areas within fifteen years to reduce heat island impacts. • Using light colored roofing materials with a solar reflective index of 78 or greater. • Including on-site amenities, such as a truck operator lounge with restrooms, vending machines, and air conditioning, to reduce the need for truck operators to idle or travel offsite.
• Designing skylights to provide natural light to interior worker areas. • Installing climate control and air filtration in the warehouse facility to promote worker well-being.
IX. Conclusion
California’s world-class economy, ports, and transportation network position it at the center of the e-commerce and logistics industry boom. At the same time, California is a global leader in environmental protection and environmentally just development. The guidance in this document furthers these dual strengths, ensuring that all can access the benefits of economic development. The Bureau will continue to monitor proposed projects for compliance with CEQA and other laws. Lead agencies, developers, community advocates, and other interested parties should feel free to reach out to us as they consider how to guide warehouse development in their area.
Please do not hesitate to contact the Environmental Justice Bureau at [email protected] if you have any questions.
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EXHIBIT D
ITEM 18.1.
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DPML-58478\2688190.1
1331 N. California Blvd.
Suite 600
Walnut Creek, CA 94596
T 925 935 9400
F 925 933 4126
www.msrlegal.com
Arthur F. Coon
Direct Dial: 925 941 3233
[email protected]
Offices: Walnut Creek / San Francisco / Newport Beach
October 3, 2022
VIA E-MAIL
Mr. Cyrus Abhar
City Manager
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Email: [email protected]
Re: Dermody Industrial Properties – Appropriate Scope of CEQA Review for the Mather Blvd. Design Review Project
Dear Mr. Abhar:
As you know, this firm represents Dermody Properties in connection with its design review application for an approximately 155,077 square foot logistics center on a site located within the Zinfandel Special Planning Area (“ZSPA”), northwest of the intersection at North Mather Boulevard and Bear Hollow Drive (“Design Review Project”). As you are also well aware, the Design Review Project now before the City is fully consistent with the type, density and intensity of land use and development contemplated and authorized in the ZSPA planning document, and a Final Environmental Impact Report has been certified by the lead agency pursuant to CEQA that fully analyzed potential environmental impacts resulting from development within the ZSPA (“ZSPA FEIR”).
The Design Review Project requires the City’s approval of a “Major Design Review” application; therefore, given the limited scope and type of discretionary authority that the City is authorized to exercise at this stage of development under its local design review ordinance, we concur with the City’s determination that the Design Review Project qualifies for a streamlining exemption under CEQA Guidelines Section 15183.
We write to further augment the administrative record with respect to the appropriate scope of City’s environmental review of the Design Review Project under the California Environmental Quality Act (Pub. Res. Code § 21000 et seq.) and the CEQA Guidelines (CCR, Tit. 14, Div. 6, Chap. 3) (collectively, “CEQA”), which is strictly limited under the law to those design-related environmental effects that the City is authorized by its ordinance to address during its Major Design Review process. Here, the City’s Major Design Review process expressly limits the City’s ITEM 18.1.
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Cyrus Abhar, City Manager
October 3, 2022
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discretion to deny or condition approval of the Design Review Project based solely on the effects of its design components, not other effects of the previously authorized uses and density and intensity of those uses at the site. In other words, the City is not at liberty to use its limited design review authority to revisit environmental issues previously analyzed and laid to rest by the prior certified ZSPA EIR.
Accordingly, it is entirely appropriate – and, indeed, to the extent that the City conducts any further CEQA review, legally required – for the City to apply CEQA Guidelines section 15183, which provides for a partial exemption and streamlined CEQA review of the Design Review Project. As explained in more detail below, and just as it has done for other similar recent design review projects, the City’s determination to rely upon Section 15183 for the Design Review Project is proper under the law, and furthermore any analysis conducted thereunder must be limited to any potential design-related effects peculiar to the Design Review Project that were not studied or analyzed in the ZSPA EIR.
I. For CEQA Purposes, The City May Only Analyze Those Potential Impacts Which It Has Authority And Discretion Under Its Design Review Ordinance To Meaningfully Address.
CEQA review is only triggered for “discretionary” projects, which are those that require a local agency to exercise meaningful judgment or deliberation in deciding whether or how to approve a proposed activity. The “touchstone” in determining whether a project is discretionary for CEQA purposes is “whether the approval process involved allows the government to shape the project in any way” which could meaningfully respond to environmental concerns recognized by CEQA. (CEQA Guidelines, § 15357; McCorkle Eastside Neighborhood Group v. City of St.
Helena (2018) 31 Cal.App.5th 80; Friends of Juana Briones House v. City of Palo Alto (2010) 190 Cal.App.4th 286.) “CEQA does not apply to an agency decision simply because the agency may exercise some discretion in approving the project or undertaking. Instead [,] to trigger CEQA compliance the discretion must be of a certain kind; it must provide the agency with the ability and authority to mitigate… environmental damage to some degree.” (Sierra Club v. County of Sonoma (2017) 11 Cal.App.5th 11, 23, quoting San Diego Navy Broadway Complex Coalition v. City of San Diego (2010) 185 Cal.App.4th 924, 934.) As our state Supreme Court recently stated, a project only requires CEQA review if the:
relevant approval process…allows the government to shape the project in any way by requiring modifications which could respond to any of the concerns which might be identified by environmental review.
(Protecting Our Water and Environmental Resources v. County of Stanislaus (2020) 10 Cal.5th 479, 493 (“POWER”); see also Friends of Westwood, Inc. v. City of Los Angeles (1987) 191 Cal.App.3d 259, 270 [CEQA review would be wasteful and meaningless exercise if decision maker lacks relevant discretion under applicable ITEM 18.1.
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Cyrus Abhar, City Manager
October 3, 2022
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law to deny or shape project through conditions to address environmental concerns revealed by the review].)
Where CEQA-triggering discretion exists, the scope of environmental review is limited to analyzing those environmental impacts that a local agency may actually address in its approval process. (McCorkle, supra, 31 Cal.App.5th at 89-90.) As the court in McCorkle noted:
the [CEQA] Guidelines recognize that the application of CEQA to a local ordinance is dependent upon the scope and interpretation of the local ordinance, rather than vice versa.
(Id. at 92.)
With regard to design review approvals like the instant one, where a city’s design review ordinance prevents it from disapproving or conditioning approval of a project for “non-design related reasons,” it lacks discretion to address non-design related effects through CEQA. (Id.; see also Friends of Davis v. City of Davis (2000) 83 Cal.App.4th 1004, 1010-15.) Relatedly, it is fundamental that CEQA does not confer independent power or authority on an agency to impose mitigation requirements or conditions on a project approval. Rather, when acting to mitigate or avoid a project’s significant effects on the environment, an agency may only exercise those express or implied powers provided by law other than CEQA, subject to the express or implied constraints or limitations of the other law. (Pub. Res.
Code, § 21004; see, e.g., Tiburon Open Space Committee v. County of Marin (2022) 78 Cal.App.5th 700 [scope of agency’s discretion, and hence scope of required CEQA review, is limited by constraints and obligations of other law].)
II. The City’s Discretion Here Is Limited To Considering The Project’s Design Components.
As is apparent from review of the above-cited authorities, determining the existence and scope of an agency’s discretionary authority with respect to approval of a particular project requires careful analysis of the statute or ordinance authorizing and providing controls over the agency’s action. (Sierra Club v. Napa County Bd. of Sup’rs (2012) 205 Cal.App.4th 162; Sierra Club v. County of Sonoma, supra, 11 Cal.App.5th 11.) Here, the City’s review and approval of a Major Design Review application is governed by Chapter 23.141 of the City’s Municipal Code, which limits the City’s review of such applications to design-related issues.1 For projects requiring it, the purpose of the City’s design review process is to review “additional site and design considerations beyond conformance with minimum standards of the zoning code.” The intent of design review is “to promote orderly and harmonious
1 As will be discussed more fully in a letter sent by Miller Starr Regalia to the City under separate cover, the City’s ability to exercise discretion is also governed and further constrained by the vested rights granted to Dermody under the Development Agreement.
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Cyrus Abhar, City Manager
October 3, 2022
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growth within the City.” (RCMC, § 23.141.010.) The City Council “may approve or approve with conditions” an application for major design review upon making the following findings:
A. The proposed project is consistent with the objectives of the General Plan, complies with applicable zoning regulations, Specific Plan provisions, and special planning area provisions, and is consistent with the applicable Rancho Cordova design guidelines.
B. The proposed architecture, site design, and landscape are suitable for the purposes of the building and the site and will enhance the character of the neighborhood and community.
C. The architecture, including the character, scale, and quality of the design, relationship with the site and other buildings, building materials, screening of exterior appurtenances, exterior lighting and signing, and similar elements, establishes a clear design concept and is compatible with the character of existing or anticipated buildings on adjoining and nearby properties.
D. The proposed project will not create conflicts with vehicular, bicycle, or pedestrian transportation modes of circulation.
(RCMC, § 23.141.070.)
The City’s ability to require modifications to project plans, or to condition approval of a Major Design Review application, is expressly limited to addressing a project’s design features:
The council may require modifications to plans in whole or in part and may condition the major design review application to ensure specific design features, construction materials, and conformance with all applicable [design review provisions].
(RCMC, § 23.141.080, emph. added.)
Pursuant to the above provisions, the City’s Major Design Review approval provisions constrain the City’s discretion and authority, and preclude its ability to deny or condition the Design Review Project to address environmental effects that are not related to its design. The City therefore lacks discretion to consider or impose conditions addressing the Design Review Project’s potential non-design related impacts, such as, for example, those involving greenhouse gas emissions, transportation, biological resources, and/or air quality impacts. (See, e.g., San Diego Navy Broadway Complex Coalition v. City of San Diego, supra, 185 Cal.App.4th 924 [city’s approval of construction plans for waterfront development was ministerial where approval required only determination whether plans were ITEM 18.1.
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