City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02137 1/10/2023 Consent Item 6.
Richards Boulevard Office Complex Fair Share Contribution File ID: 2022-02137
Location: District 3
Recommendation: Adopt a Resolution: 1) accepting $9,000,000 as the negotiated fair share obligation for the Richards Boulevard Office Complex; 2) authorizing the City Manager, or the City Manager’s designee, to execute a Memorandum of Agreement to fully and finally memorialize the State’s obligation; and 3) authorizing the City Manager or the City Manager’s designee to: (a) increase the fund balance for the I-5 Subregional Corridor Mitigation Fee Program (Fund 2033) by $3,575,416 of the fair share contribution; (b) increase the fund balance for the River District Finance Plan Fee (Fund 3212) by $4/585,837 of the fair share contribution; and (c) increase the fund balance for the Transportation Development Impact Fee (Fund 3215) by $838,747 of the fair share contribution.
Contact: Fedolia “Sparky” Harris, Principal Planner, (916) 808-2996, [email protected]; David Edrosolan, City Traffic Engineer, (916) 808-5974, [email protected], Department of Public Works
Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
3-Draft Memorandum of Agreement
Additional Description/Analysis
Issue Detail: The State of California is building a new large office complex on Richards Boulevard.
The State is not required to follow City development requirements. It prepared an Environmental Impact Report for the project. According to mitigation measure 3.11-1(g) of the Final Environmental Impact Report for the Richards Boulevard Office Complex, “The State shall pay its fair share of fees based on its proportional contribution to the identified significant environmental effects, and the extent to which the fee will contribute to mitigating those effects. The State will collaborate with the City of Sacramento with the expectation of entering into a Memorandum of Understanding (MOU)
File ID: 2022-02137 1/10/2023 Consent Item 6.
agreement to identify the State’s fair share of fees for the River District Specific Plan and Transportation Development Impact Fee, as applicable, that contribute to mitigating the project’s environmental effects, in conformance with State and federal laws.” Also, according to mitigation measure 3.11-2 of the Final Environmental Impact Report for the Richards Boulevard Office Complex, “Prior to building occupancy, the State shall pay its fair-share contribution towards the I-5/Richards Boulevard interchange through the I-5 Subregional Mitigation Program as outlined in the Nexus Study for the I-5 Subregional Corridor Mitigation Program published in 2016 by DKS on behalf of the cities of West Sacramento, Elk Grove, and Sacramento; and Caltrans.”
Policy Considerations: The City shall require all new development to dedicate right-of-way, construct facilities, or pay its fair share for needed transportation infrastructure improvements that support all travel modes, including pedestrian, bicycle, and transit facilities, roadway improvements, and transportation demand management (TDM) programs and services. (M 9.1.5) Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): The proposed action would accept a fair share contribution for impacts associated with a Richards Boulevard Office Complex project which was evaluated with an environmental impact report (EIR). The lead agency for the EIR was the California Department of General Services. The proposed action is an administrative action of the City that would not result in any physical changes and is not a project under CEQA. See CEQA Guidelines section 15378(b)(5).
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: The State prepared an analysis of the Richard Boulevard Office Complex project fair share obligations based on their assessment of the overall project impacts.
Based on this analysis, the Parties negotiated in good faith to a contribution of $9,000,000.
Financial Considerations: Based on the agreements proposed in the Memorandum of Agreement, the State will make the following contributions to address the traffic-related impacts of the facility.
Funding will be provided to the City and allocated in the fund balance for the following fee programs prior to June 30, 2023.
$3,575,416 I-5 Subregional Corridor Mitigation Fee Program (Fund 2033)
File ID: 2022-02137 1/10/2023 Consent Item 6.
$4,585,837 River District Finance Plan Fee (Fund 3212)
$ 838,747 Transportation Development Impact Fee (Fund 3215) $9,000,000
The Memorandum of Agreement also identifies the California Department of General Services (DGS) commitment to partner with Sacramento Regional Transit and the City in pursuing grant funding for the double tracking of the Green Line
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO.
Adopted by the Sacramento City Council
RICHARDS BOULEVARD OFFICE COMPLEX FAIR SHARE CONTRIBUTION
MEMORANDUM OF AGREEMENT AND FUND BALANCE ADJUSTMENTS
BACKGROUND
A. The State of California Department of General Services (DGS) is building the Richards Boulevard Office Complex (RBOC) and is not required to follow City development requirements including CEQA mitigations for significant impacts.
B. DGS prepared an Environmental Impact Report for the project to identify potential significant impacts and to develop appropriate mitigation measures.
C. According to mitigation measure 3.11-1(g) of the Final Environmental Impact Report for the Richards Boulevard Office Complex, “The State shall pay its fair share of fees based on its proportional contribution to the identified significant environmental effects, and the extent to which the fee will contribute to mitigating those effects. The State will collaborate with the City of Sacramento with the expectation of entering into a Memorandum of Understanding (MOU) agreement to identify the State’s fair share of fees for the River District Specific Plan and Transportation Development Impact Fee, as applicable, that contribute to mitigating the project’s environmental effects, in conformance with State and federal laws.”
D. According to mitigation measure 3.11-2 of the Final Environmental Impact Report for the Richards Boulevard Office Complex, “Prior to building occupancy, the State shall pay its fair-share contribution towards the I-5/Richards Boulevard interchange through the I-5 Subregional Mitigation Program as outlined in the Nexus Study for the I-5 Subregional Corridor Mitigation Program published in 2016 by DKS on behalf of the cities of West Sacramento, Elk Grove, and Sacramento; and Caltrans.”
E. The State prepared an analysis of the Richard Boulevard Office Complex project fair share obligations based on their assessment of the overall project impacts.
Based on this analysis, the Parties negotiated in good faith to a contribution of $9,000,000.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager or the City Manager’s designee is authorized to execute a memorandum of agreement to fully and finally memorialize the State’s obligation in substantially the same form as the attached.
Section 2. The City Manager or the City Manager’s designee is authorized to accept $9,000,000 from the California Department of General Services as a fair share contribution for impacts associated with the Richards Boulevard Office Complex.
Section 3. The City Manager or the City Manager’s designee is authorized to increase the fund balance for the I-5 Subregional Corridor Mitigation Fee Program (Fund 2033) by $3,575,416 of the fair share contribution.
Section 4. The City Manager or the City Manager’s designee is authorized to increase the fund balance for the River District Finance Plan Fee (Fund 3212) by $4,585,837 of the fair share contribution
Section 5. The City Manager or the City Manager’s designee is authorized to increase the fund balance for the Transportation Development Impact Fee (Fund 3215) by $838,747 of the fair share contribution.
Exhibits:
A. Draft Memorandum of Agreement
Memorandum of Agreement between California Department of General Services and City of Sacramento Related to the Richards Boulevard Office Complex Fair Share Contribution
This Agreement (“Agreement”) is entered into by and is made among the City of Sacramento (“City”) and The California Department of General Services (“DGS” or “State”), and shall be effective as of the date of the last signature below. Together, City and DGS are referred to herein as the “Parties.”
RECITALS
A. The project is a development located on a site in the River District of the City of Sacramento which formerly housed the State Printing Plant as described in the Final Environmental Impact Report for the Richards Boulevard Office Complex (“FEIR”). On June 10, 2019, DGS certified the FEIR and approved the Richards Boulevard Office Complex Project.
B. According to the Draft Environmental Impact Report for the Richards Boulevard Office Complex (“DEIR”), up to 6,000 staff occupying the new buildings would be relocated from 28 different locations throughout Sacramento, including staff from the California Business, Consumer Services, and Housing Agency and Government Operations Agency.
C. The Richards Boulevard Office Complex Fair Share Cost Obligation Analysis was prepared by Economics & Planning Systems Inc. (EPS) on July 5, 2019. The purpose of the analysis was to quantify the State’s fair share cost obligation for project impacts identified in the FEIR.
D. Within the EPS-prepared analysis, the State Project’s proportional obligation was quantified by determining the proportionate share of the following improvements and fee programs:
• Cost allocation for improvements in the Updated River District Finance Plan (River District Costs).
• Cost obligations to other feasible mitigation measures. • Fee obligations to various existing fee programs (e.g., the I-5 Subregional Corridor Mitigation Program Fee and Transportation Development Impact Fee Program).
E. The EPS analysis calculated the State Project’s proportional obligation to be $104,443,000.
F. According to FEIR mitigation measure 3.11-1(g) - “The State shall pay its fair share of fees based on its proportional contribution to the identified significant environmental effects, and the extent to which the fee will contribute to mitigating those effects. The State will collaborate with the City of Sacramento with the expectation of entering into a Memorandum of Understanding (MOU) agreement to identify the State’s fair share of fees for the River District Specific Plan and Transportation Development Impact Fee, as applicable, that contribute to mitigating the project’s environmental effects, in conformance with State and federal laws.”
G. According to FEIR mitigation measure 3.11-2 – “Prior to building occupancy, the State shall pay its fair-share contribution towards the I-5/Richards Boulevard interchange through the I-5 Subregional Mitigation Program as outlined in the Nexus Study for the I-5 Subregional Corridor Mitigation Program published in 2016 by DKS on behalf of the cities of West Sacramento, Elk Grove, and Sacramento; and Caltrans.”
H. As of July 2020, DGS had selected Hensel Phelps / ZGF Architects as the Design-Build partner for the RBOC project and undertook efforts to: review traffic modeling and Environmental Impact Report (EIR) assumptions; work with the future tenants on behavioral and program changes to reduce environmental impacts; and meet with area stakeholders, property owners, and transportation entities to investigate potential measures to help alleviate adverse traffic impacts to the area.
I. Based on these efforts, DGS reduced the overall project impacts considerably from the assumptions contained in the FEIR for the project but not to a level of less than significant.
J. DGS prepared an analysis of the project’s fair share obligations based on their assessment of the revised overall project impacts.
K. The resultant fair share costs, in addition to DGS’ commitment to partner with Regional Transit and the City in pursuing grant funding for the double tracking of the Green Line, amounted to $3,575,416 for the I-5 Subregional Corridor Mitigation Fee Program, $4,585,837 for the River District Finance Plan Fee, and $868,704 for the Transportation Development Impact Fee for a total contribution of $9,029,957.
L. The Parties negotiated in good faith to a contribution of $9,000,000.
M. The parties intend to enter into a Memorandum of Agreement to fully and finally memorialize the State’s obligation to contribute $9,000,000 as the fair share obligation for the Richards Boulevard Office Complex.
The parties therefore agree that in consideration for the City’s acknowledgement towards the satisfaction of FEIR mitigation measures 3.11-1(g) and 3.11-2, the Parties agree as follows:
1. Obligations of the California Department of General Services. a. Prior to June 30, 2023, the California Department of General Services will fund $3,575,416 to the I-5 Subregional Corridor Mitigation Fee Program by payment to the City of Sacramento.
b. Prior to June 30, 2023, the California Department of General Services will fund $4,585,837 to the River District Finance Plan Fee by payment to the City of Sacramento.
c. Prior to June 30, 2023, the California Department of General Services will fund $838,747 to the Transportation Development Impact Fee by payment to the City of Sacramento.
2. Amendments. This Agreement may be amended only by a written instrument executed by all parties hereto.
3. Authority to Execute. Each signatory hereto warrants to the other Party that they have the full power and authority to execute, deliver and perform under this Agreement and all documents referred to herein, and that any needed consent or approval from any other person has been obtained.
4. Enforceable Agreement and Attorney’s Fees. The Parties intend and agree that this Agreement, and each and every provision thereof, shall be binding and enforceable upon the Parties. The Parties’ obligations under this Agreement shall be specifically enforceable, and any non-defaulting Party may bring an action for specific performance or damages in the Superior Court. If either Party brings an action to enforce their rights under this contract, the prevailing party shall recover its expenses (including reasonable attorneys' fees) incurred in said action, including any appeals.
5. Interpretation. This Agreement shall be deemed to have been drafted equally by the Parties and shall not be interpreted for or against either party on the ground that any such Party drafted it.
6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.