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HomeMy WebLinkAboutMin - PC - 2003.10.28 SSCITY OF BURLINGAME PLANNING COMMISSION MINUTES SPECIAL STUDY SESSION City Hall, Conference Room A 501 Primrose, Burlingame, CA Tuesday, October 28, 2003 I. CALL TO ORDER Chair Bojués called the October 28, 2003, special study session of the Planning Commission to order at 6:35 p.m. II. ROLL CALL Present: Commissioners Auran, Bojués, Brownrigg (left meeting at 8:30 p.m.), Keighran, Keele, Osterling and Vistica Absent: none Staff Present: City Planner, Margaret Monroe; Senior Planner, Maureen Brooks; City Attorney, Larry Anderson III. APPROVAL OF AGENDA There were no changes to the agenda. IV. CONTINUED STUDY SESSION ON THE BAYFRONT SPECIFIC AREA PLAN CP Monroe presented a brief overview of the Bayfront Specific Area Plan update process to date, noting that at the last meeting the Commission had reviewed the document and suggested changes to the policies and land use section, and directed that we revisit the land use issues at this session. The Commission had also directed that the economic consultant, Bay Area Economics, prepare a report comparing the proposed Draft Plan to an alternative with housing based on phases of build-out over a 20 year period. A. Review of Supplementary Fiscal Analysis dated October 21, 2003 prepared by Bay Area Economics Simon Alejandrino, Bay Area Economics, reviewed the material in his memorandum dated October 21, 2003, regarding the Fiscal Analysis for the Bayfront Plan. He went over the assumptions used for the timing of development of the different uses in the two scenarios studied, the Preliminary Draft Plan and Alternative A which includes 800 housing units. He noted that the life of the plan was assumed to be 20 years, although the plan is open ended regarding its ending. Phase I would consist of years 1 through 5 after the adoption of the plan, Phase II represents years 6 through 10, and Phase III would be years 11 through 20 (assuming build-out in 20 years). With the Preliminary Draft Plan, based on current market conditions, which shows little or no demand for offices and hotels, it is projected that no development would occur in Phase I. It is expected that 667 extended stay hotel rooms would come on board in Phase II, while the remaining 2100 hotel rooms and the planned 534,400 SF of office development would occur in Phase III. In contrast, Alternative A, which includes the potential for 800 multifamily units, would see 470 multifamily units built in Phase I, with the remaining 330 units and 500 hotel rooms built in Phase II. The remaining 1600 hotel rooms and the planned 74,100 SF of office development would occur in Phase III. With both Alternatives, it is projected that the movie theater projected within the retail activity node proposed in the Shoreline Area would come on board in Phase II, and the remaining regional serving retail would be split between Phase II and Phase III. Mr. Alejandro noted that in determining market demand for the theater, he had made calls to two theater developers; one of them felt there would be a potential market in this area for a small six-screen theater geared toward independent films, and it is expected that the supporting retail would come along with a theater or similar entertainment use. He also noted that there is current demand for multi-family residential, specifically for condominium (for-sale) units rather than rental units, in the $400,000 to $600,000 price range. City of Burlingame Planning Commission Special Study Session Minutes October 28, 2003 2 Commissioners asked what the assumptions were used regarding Gross Domestic Product (GDP) and interest rates; would it make a difference in the assumptions if interest rates were to appreciate. Mr. Alejandrino noted that all dollars were assumed to be current value. He did not look at potential changes to interest rates. If interest rates were to go up, the demand for housing would decrease but it wouldn't be completely washed away because of pent up demand. Commissioners noted that with extended stay hotels, it is assumed that 7% of the stays would be longer than 29 days and those longer stays would not generate transient occupancy tax (TOT), and asked if this was factored in to the projections; also will some clients from existing hotels go to extended stay hotels resulting in an overall loss. He noted that yes, the 7% of the rooms that would not generate TOT were factored in, but did not look at the impact on existing hotels, however, the demand analysis shows that there is a current demand for 600 hotel rooms in the area over and above the existing rooms. Commissioners asked why there was a different assumption regarding the nature of the hotel rooms, with extended stay in one and not in the other. SP Brooks noted that in the Draft Plan, the Anza Point area is the only area where extended stay hotels are proposed. With Alternative A, the extended stay hotel sites would be developed with multifamily housing. Commissioners asked what value is assumed for the multifamily development. Mr. Alejandrino noted that based on analysis of similar projects in this area, the value was set at about $450,000 per unit, and also noted that the market demand is for "entry" level homes in the $400,000 to $600,000 range. Simon Alejandrino summarized the key findings of the analysis, noting that both alternatives generate a net positive revenue impact on the City's general fund. At build out, the Draft Plan would generate a larger fiscal surplus, but the absorption occurs more slowly because of the current slow conditions in the hotel and office markets. Alternative A, with 800 multifamily housing units, would generate positive impacts sooner, and would generate a small net fiscal surplus in the near term. In the long term, both options would result in a positive impact on the City's General Fund with the Draft Plan leading to greater net revenues because of higher property taxes from new office space and the TOT from more lodging rooms. Commissioners asked how the costs to the City associated with new housing versus new office and hotel development was calculated. Mr. Alejandrino noted that in calculating costs to the city, a formula is used based on the average cost per resident to provide services. An employee is assumed to cost one-half as much as a resident. Therefore, in Alternative A, where residents are added in Phase I and II, the costs are higher. In Phase III, since no new residents are added, just employees, the costs would remain the same for the two alternatives. It was noted that the opportunity cost for waiting for development to occur is the loss of property tax appreciation which comes with development. B. Review of the Land Use Section of the Preliminary Draft Bayfront Specific Area Plan CP Monroe reviewed the Land Use Chapter of the Draft Plan, noting it is divided into five sections, denoting five unique areas with different characteristics and different land uses and design guidelines for each. The Inner Bayshore Area is primarily seen as an industrial area with office uses, and this plan proposes to add a retail component to serve employees in this area. The Shoreline Area contains Waterfront Commercial uses, such as hotels, offices and restaurants, and would also contain a focal point retail node. The Anza Extension Area consists of the Bayside Park and the Upper Deck driving range and soccer fields, as well as the City's wastewater treatment plant. The change in the Anza Area from the existing plan is to increase the density of hotels to 85 rooms per acre to allow for some expansion and improvement to the existing hotels. Land uses in this area would also include office and restaurant uses. The Draft Plan proposes flexibility to allow interim uses in this area, such as long-term airport parking, as long as the interim use does not generate more traffic than the ultimate build out of the plan for a particular site. It was noted that the Anza Point area is a unique waterfront location and, with two vacant and/or underused site, has the greatest potential for development. The Draft Plan proposes offices, hotels including extended stay hotels, restaurants and commercial recreational uses in most of the area, with offices, industrial uses and recreation-related retail in the area along Beach and Lang Roads. City of Burlingame Planning Commission Special Study Session Minutes October 28, 2003 3 Commission discussion of the Land Use Chapter and Economic Analysis: Testimony from representatives of the hotel industry was given at earlier meetings, there was concern expressed that we may lose part of our hotel potential because South San Francisco and San Mateo have started to develop mini -centers of hotels. Mr. Alejandrino responded noting that the demand analysis shows that even with these trends, there would be a demand in Burlingame for 1200 to 1500 hotel rooms by 2017 and noted that the Draft Plan does not have a projected horizon. Commissioners noted that there may be certain product types that are missing, some of them may not see the added density as an incentive because of their specific size and product type, in some cases and areas of the bayfront it may be difficult to find a large enough site without combining parcels. Commissioners expressed surprise that housing doesn't cost the city money, asked if it is because of the location, would a comparable project also result in positive cash flow elsewhere in Burlingame, and would it make a difference if it were an age restricted project for Seniors. Simon Alejandrino noted that he had looked at the per capita cost to provide services city-wide and applied that to this area, so the revenue benefits would be the same in other parts of Burlingame. The positive cash flow is primarily the result of the higher property taxes based on the value of the more expensive units. Seniors tend to spend less, so there would be less sales tax generated by a senior oriented project; however, that type of project would also generate employees which would also generate sales tax revenue. Commission discussion: think it would be a mistake if we didn't allow ourselves to think about housing, the amenities are there, would like to see the Bayfront develop to its fullest potential and incorporate this area as a part of Burlingame as a neighborhood, don't see other uses that would accomplish that, there has been a lot of talk about the financial impact of housing, glad to see that it results in a positive cash flow, don't see the financial impact as the only factor; the Bayfront area is more valuable than it was 20 to 25 years ago when the original plan was written, if the plan stays the same we will get the same, would rather see a stronger link to the west side of town, in the current thinking on zoning there are hard boundaries, would like to see a mixed use approach, would like to see that carried through with housing as a part of it; concur with the inclusion of housing, we are looking at another 20 years, should have as many opportunities as possible out there for entrepreneurs to come in and make proposals, we can review each projects as it comes in, see how it fits in, need to be flexible and not be short-sighted; agree that we should leave the door open for housing. Commissioner discussion continued: disagree, the issue of updating the plan came up when a developer came in with a plan, developer thought he had a good idea, we invested all this time to see if his plan would work, don't think housing is a good idea here, we have a better area for housing in the North end of Burlingame, that area is close to public transportation and the hospital, the medical offices will be moved closer to the hospital and that land can be used for housing, it would be more effective and more affordable, condominiums on El Camino go for $500,000 to $700,000, some up to $900,000, on the Bayfront they will go for up to $1 million, may be a good site, but it is not the best use for the community needs, want to look at what hotels need and destination points for visitors, it would be an isolated stamp of residential and there would be no continuity with the west side of the freeway, housing won't bring people over, what we have has worked well, don't think housing is the answer, agree that it is a beautiful site, but housing would not meet our General Plan goals. Continued discussion: not a proponent of housing, would like to ask the proponents, if the economy were different and we were in an up cycle, would your position be the same; it's a classic dilemma, do we want the market to drive planning and land use or have planning policies shape the market; have to re alize that if we allow the possibility of housing, housing will go in, it will be set in stone, need to think if that's what is best for the City long term; there is nothing compelling in the financial numbers to cause the City to deviate from the current policy; while housing shows a positive fiscal result, it is not measurable or material enough to deviate from current policy which has been positive in the past and will be in the future; it is a false assumption that a neighborhood can be created, want the area to be connected, have faith that the market will come up with City of Burlingame Planning Commission Special Study Session Minutes October 28, 2003 4 creative uses for that area that will generate revenue; housing is a band-aid, not how to heal long-term financial need for the City. Commissioners continued: not convinced that the current plan will continue to generate revenue, even with incentives, will not see more when we have reached capacity, hotel assumption is 1200 to 1500 rooms over 15 years; remain concerned with housing in this area, so decided to call on the property owner of the vacant Anza Point site, he stated that in his view if housing were created, 20% would be affordable in perpetuity which is more than would be created with our current policy; that would be 150 units in perpetuity, don't know how it would be administered, may not be feasible, but if it is feasible, it would have an impact on the City's housing need and would serve the entire community; it's all about trade-offs, housing would be available for teachers, public servants; concerned that if we don't change the plan we will have fallow land for a very long time; but don't know if affordable housing is feasible, don't want to decide until that question is answered. Would like to respond, think inherent in the comments is that the tail is wagging the dog, am a big proponent of affordable housing but to take a specific parcel and for that reason change its use is a mistake, think the City can compel the land use. The carrying costs of land are significant, as a result the owner would be working hard to find an appropriate use if housing were not allowed. Discussion continued: On a larger scale, what is driving the decision, because of the carrying costs, the developer will come up with a creative solution consistent with City policy; question the hotel assumptions as well, when market returns, they may go to adjacent communities, to achieve 2200 rooms is optimistic; want flexibility in choice when a proposal comes forward, should be able to say let's take a look at it; need to realize that if we allow housing, we will get housing proposal the next day; if it is not allowed we can be open to what comes next; see housing as a good use in the area regardless of this site, think it will vitalize the area. CA Anderson and CP Monroe explained that in order to move the Draft Plan forward to public hearing and action, staff needs direction on what to include in the land use plan so that the environmental document can be prepared. One option is to prepare an EIR with an alternative that includes housing; however, any significant impacts identified so far can be mitigated by the community standards and design guidelines, so a Mitigated Negative Declaration may be the appropriate document. Instead of choosing one or the other alternatives, could add housing as an option on specific sites in addition to the other uses proposed, and prepare the Mitigated Negative Declaration on that basis; and if housing is later excluded, the document would still have covered the impacts of other uses. Commissioners gave direction to staff to include housing in the Anza and Anza Point areas for analysis purposes, with an assumption that up to 800 units could be built, the identified sites with potential for housing are the two vacant or underused sites in the Anza Point Area and the long-term airport parking lot in the Anza Area, density would be assumed at 30 units per acre. Staff was directed to prepare the environmental document and make the necessary modifications to the plan text. V. FROM THE FLOOR Chair Bojués asked if anyone wanted to speak from the floor. Mike Spinelli, 1301 Mills Avenue, Mark Hudak, 216 Park Road, John Root, 1407 Montero Avenue, Skip Green, 800 Airport Boulevard, Russ Cohen, 605 Lexington Way, Ken Housley, 330 Primrose Road, Suite 614, commented on the plan, noting that the proposed airport expansion project will probably come back at some point, and one of the runways will be near the Bayfront Area, be sure to include that in the plan impact studies; appreciate the efforts made by the working group and Planning Commission in developing the plan and sticking with the process; hotel occupancy rate is now less than 70 percent, if we are making assumptions need to realize that what we're talking about would be as much as a couple of new Hyatt hotels, need to do an analysis; nobody has mentioned a convention center which would change hotel room City of Burlingame Planning Commission Special Study Session Minutes October 28, 2003 5 demand in this area, spent 3 years on a task force regarding housing in San Mateo, housing should be by transit, not on the Bayfront where there is no transit service; there was a restaurant site in the Bayfront area that nobody figured out how to develop, someone may come along with an idea to put a hotel with residential condos on top, it would be short-sighted not to leave the door open for such a proposal and the Planning Commission and Council can decide what fits; thought the discussion should be on the broader issues, as the focus gets narrower it gets hard to determine what is right or not right, would like to see a policy which promotes a destination location in the Bay front area, could have retail that serves that destination and promotes a visitor shopping experience; like to compliment the participants for making the transition from the discussions at the first meetings to where we are today, if you look favorably on housing in the Anza and Anza Point Areas, it would not preclude it from happening in the North Burlingame area. There were no further comments from the floor. VI. ADJOURNMENT Chair Bojués adjourned the meeting at 8:50 p.m. Respectfully submitted, Tim Auran, Secretary S:\MINUTES\PROTECTE\2003\minutes10.28-SPECIAL MTG.doc