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HomeMy Public PortalAbout15) 10A_Ordinance 20-1038U Moratorium in the Crossroads Specific Plan_Staff ReportAGENDA ITEM 10.A. COMMUNITY DEVELOPMENT DEPARTMENT MEMORANDUM DATE: October 20, 2020 TO: The Honorable City Council FROM: Bryan Cook, City Manager By: Scott Reimers, Interim Community Development Director SUBJECT: ORDINANCE 20-1038U – MORATORIUM IN THE CROSSROADS SPECIFIC PLAN, MU-C DISTRICT RECOMMENDATION: 1. City Council is requested to provide direction to staff on additional research staff should perform to assist the City Council in making future land use decisions related to the moratorium adopted by Ordinance 20-1038U; and 2. Provide direction to staff on whether staff should: A. Return with a formal recommendation on the enactment of the land use changes included in this report; or B. Return with a formal extension of the present moratorium to allow for additional analysis of options and more certainty in the retail economy before a permanent decision is made. BACKGROUND: 1. On December 5, 2017, the City Council adopted Ordinance 17-1029 adopting the Crossroads Specific Plan (“CSP”). 2. On January 7, 2020, the City Council adopted Urgency Ordinance 20-1038U which enacted a 45-day moratorium within the MU-C zone of the CSP on public market uses and the subdivision of parcels and tenant spaces. 3. On February 18, 2020, the City Council extended the moratorium for 10 months and 15 days. City Council October 20, 2020 Page 2 of 6 4. On March 4, 2020, Governor Newsom declared a State of Emergency in response to the COVID-19 pandemic. ANALYSIS: The current moratorium in the MU-C zone of the Crossroads Specific Plan temporarily prohibits public market uses and the subdivision of parcels and tenant spaces. Since the moratorium was established, a state of emergency has been declared due to the COVID- 19 pandemic. The pandemic has caused major disruptions to the economy and changes in society that will likely have future repercussions affecting the City Council’s direction on the Crossroads Specific Plan, the existing moratorium, and future actions related to the moratorium. Some of these changes include the following: • Economic Changes: The pandemic has resulted in the temporary closure of nearly all sectors of the economy. These closures were then loosened to strict regulations allowing for the limited reopening of select businesses outdoors or at a limited capacity indoors. This has affected restaurants and personal service uses (such as barbers, hair salons, nail salons, etc.) leaving many questions about the future demand for these uses. Similarly, retail stores (except for grocery markets) have faced limitations and now an even larger percentage of sales are occurring online rather than in brick and mortar stores. Meanwhile the demand for housing and residential property values have remained strong, though the demand for dense urban living has reportedly faced some weakening. Whether this weakening will subside when the pandemic is over remains to be seen. • Distancing and Outdoor Uses: The pandemic has negatively impacted businesses that traditionally operate indoors and require close face-to-face contact, while benefitting businesses that can operate outdoors and provide social distancing. As such, open-air markets, and cafes with outdoor dining, such as imagined in the CSP, would benefit from this change. However, consumers have stayed away from places that are typically crowded and limit social distancing. This may have negative consequences for the destination retail space imagined in the CSP. • Vacancies: The number of businesses that have closed and the number of vacant storefronts left behind is not yet known. In the current purple phase of the pandemic, many businesses cannot reopen leaving most businesses looking closed. However, as the County changes to other phases some of these businesses may reopen. It is expected that there will be some increase in vacant commercial storefronts from pre-pandemic conditions; how many is unknown. • City Finances: The City’s recent budget update on the fourth quarter of 2019-2020 demonstrated that the City is currently expecting a small surplus for the fiscal year. However, many unknowns exist. Will it take long for the economy to recover? Will City Council October 20, 2020 Page 3 of 6 the existing businesses recover, or will they be replaced with other businesses that bring in less sales tax? Will property taxes begin to fall? Given these changes and the many other ways the COVID-19 pandemic has affected the City, staff believes this is an appropriate time to begin further conversation related to the moratorium. Action does not need to be taken until late January or early February 2021 based on the initial adoption date for the moratorium, but preparing for action at that time should begin now so that the City Council may act on the best possible information and most thorough analysis. Regional Housing Needs Assessment: One related issue that the City Council may want to consider is the City’s upcoming Housing Element. Every eight years the City is required to update the Housing Element, or chapter, of its General Plan to reflect the State’s most recent housing goals or regional housing needs assessment (RHNA) allocation. The State requires each jurisdiction to demonstrate sufficiently zoned land to meet the RHNA allocation. An important decision was made early in the General Plan process to focus growth away from residential neighborhoods and toward the CSP. This approach would deliver the City multiple goals including economic development and the provision of housing units to meet future RHNA cycles. The CSP provided a buildout of 1,837 net-new dwelling units. The draft RHNA for Temple City in the upcoming cycle has ballooned to 2,182 total housing units. As part of the Housing Element, the City is required to prepare a sites inventory. This table and map will provide a realistic analysis of how the City expects to meet its RHNA. In compliance with the General Plan’s goal of focusing growth in the CSP, it is expected that the sites in the CSP will be a key means of meeting the City’s RHNA. If the sites in the CSP are listed in the sites inventory, then the City will face future complications arising from Government Code 65863. Namely, Government Code 65863 requires jurisdictions to continue to provide a sufficient inventory of sites to meet the jurisdiction’s remaining unmet share of the regional housing need for low- and moderate-income households as development occurs. If a jurisdiction allows development of any parcel with fewer units by income category than identified in the jurisdiction’s housing element for that parcel, the city must make a written finding as to whether or not remaining sites identified in the housing element are adequate to meet or accommodate the jurisdiction’s share of the regional housing. If the City lists sites in the MU-C in the sites inventory and ends up approving projects that do not meet the site inventory, the City will be required to modify the allocation of units within the site inventory or if sufficient sites do not exist, we will need to up-zone additional properties in the City accordingly. One way to ensure that the City does not need to up-zone residential neighborhoods is to require a minimum density. This is a practice highly recommended City Council October 20, 2020 Page 4 of 6 by the State of California Housing and Community Development Department and was a requirement in the City’s R-3 zone. Research on Subdivision of Commercial Spaces: As anticipated by the moratorium, Staff has used the time made available to contact numerous cities throughout the San Gabriel Valley about their regulations on minimum unit sizes. In general, the cities in the west and southern portions of San Gabriel Valley tend to have such requirements and require a minimum size of 800 to 1,000 square feet. El Monte had a requirement that if a shopping center was to be subdivided into smaller tenant spaces, the site must be at least one-half an acre and an anchor tenant had to be a minimum of 20 percent of the shopping center’s square footage. The reason for these requirements is that if a space is divided into units that are too small, the site will take on the appearance of low-quality retail such as an indoor flea market. Temple City’s recently adopted comprehensive zoning code update included a requirement for the Commercial and Mixed-Use zones (not including the CSP) that “the minimum size of a new non-residential tenant space is eight hundred (800) square feet.” For comparison purposes a typical Subway store is approximately 1,200 square feet. Besides a minimum size, staff is also researching minimum widths and depths. While there is no industry standard and there are good examples of quality retail spaces that do not meet these guidelines, there is a general rule of thumb that retail storefronts should be at least 25 feet wide and should be at least 40 feet deep. Research on Public Food Markets: The idea of a public market or public food market is not new. These public markets began as alley spaces lined with display tables and canopies. In many cultures these alley- based markets converged into open areas, roofs were constructed, and some were enclosed. In many cities these public markets have become tourists’ attractions such as the: • Antonio Gaudi designed Santa Caterina market in Barcelona, Spain; • Queen Victoria Market in Melbourne, Australia; • Covent Garden in London, United Kingdom; and the • Ferry Building in San Francisco, United States. The commonality of these markets is their quality architecture, their high-quality materials on the interior, and shop owners that display their food in a high-quality way. In some cases, these spaces also include restaurants, cafes, and limited retail. More recently, in the United States, the idea of these public markets has become re- popularized as the user/consumer experience has become one way of combatting online purchasing. The recent market entry Steelcraft in Long Beach is based on these public markets. That facility was created by bringing shipping containers modified into small kitchens on to a previously vacant lot. Beside the kitchen area of the restaurants located City Council October 20, 2020 Page 5 of 6 in the modified containers, all seating and play areas are all outdoors with canopies for shade and café lights for nighttime dining. The play area, seating area, and kitchens combine for a square footage of 5,750 square feet. The 6,000 square foot Indiana Colony in Pasadena is a very different model. The space was a retail storefront in the City’s historic downtown. It includes five stores: a pie shop, an ice cream shop, a coffee shop, a juicer, and a tea and spices shop. These shops are owned by different businesses. The booths are spread out with ample room for customers to move around, sit, and enjoy the food they have purchased. Eataly in Century City is another high-quality example of a recent public market. It is completely focused on Italian foods and goods. The facility includes restaurants, food and beverage counters, bakeries, retail stores, and even a cooking school. The facility acts as an anchor to the Westfield Century City mall. The facility is more than 65,000 square feet on multiple floors and a rooftop restaurant. Some other examples that are closer to Temple City offer a supermarket anchor and smaller restaurants and retail, but these tend to focus on value over experience. The San Gabriel Superstore is a former Target (approximately 90,000 square feet) that was turned into a public market type use. It provides a central grocery store (Shun Fat) with other tenants that sell a variety of different products (including costume jewelry, bedding, clothes, luggage, stationary, cellphone accessories, etc.). The market is known for its size and value pricing. Another example is the Ranch 99 Market in Rowland Heights. This facility is a large commercial building with a Ranch 99 Market in the rear. As one enters the building a “T” shaped pedestrian corridor offers access to small retail stores. The central corridor leads to the opening of the Ranch 99 market. Like the San Gabriel Superstore the retailers offer a hodge-podge of goods mostly focused on value pricing (such as a Cricket Wireless store and a stationary store). The difference between the higher quality markets and the value-oriented markets is easily detected but hard to regulate. A quality market requires careful development, curation and management to ensure that quality materials are used, professional architects design the exterior and interior of the site, the products and services being sold are related and high quality, the facility is being maintained and is clean, and the overall experience is enjoyable. This is something that mall operators understand and excel at, but inexperienced businesspeople may not fully grasp or appreciate. These are also difficult things for a public agency to regulate or require of an applicant because of their inherently subjective nature. However, this might be the type of use that could be negotiated through a development agreement. Development agreements are a contract between a jurisdiction and a developer/property owner and set requirements for the use of a property. The benefit to the property owner is that it provides certainty that future zoning laws will not affect the property. The benefit to the City is that it receives public benefits such as public improvements, open space, additional revenue, and can include regulations not typically found in zoning codes such as a requirement to provide and maintain a national retailer. City Council October 20, 2020 Page 6 of 6 Given the societal and economic changes stemming from the COVID-19 pandemic and the effects of the upcoming Housing Element and RHNA allocation, staff is seeking direction from the City Council on additional research the City Council needs to make future land use decisions and direction on whether to return with an extension of the moratorium or an amendment to the CSP. STRATEGIC GOALS: The purpose of this report is to seek input from the City Council on land use issues that affect economic development and quality of life. This action furthers the City Strategic Goals of Good Governance and Economic Development. FISCAL IMPACT : Providing staff input on these land use decisions will not have any impact on the Fiscal Year 2020-21 City Budget. ATTACHMENT: A. Pictures of Public Market Sites ATTACHMENT A Pictures of Public Market Uses City Council Meeting October 20, 2020 1 Santa Caterina Market, Barcelona 2 Santa Caterina Market, Barcelona 3 Santa Caterina Market, Barcelona 4 Queen Victoria Market, Melbourne 5 Queen Victoria Market, Melbourne 6 Covent Garden, London 7 Covent Garden, London 8 Ferry Building, San Francisco 9 Ferry Building, San Francisco 10 Steelcraft, Long Beach 11 Steelcraft, Long Beach 12 Indiana Colony, Pasadena 13 Indiana Colony, Pasadena 14 Eataly, Century City 15 Eataly, Century City 16 Eataly, Century City 17 San Gabriel Superstore, San Gabriel 18 San Gabriel Superstore, San Gabriel 19 Ranch 99 Market, Rowland Heights 20 Ranch 99 Market, Rowland Heights 21