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HomeMy WebLinkAbout02.06.2017 Joint SP & PCH Minutes @3:00 MINUTES JOINT SPECIAL MEETING 7,01. OF THE CITY COUNCIL AND PLANNING COMMISSION HOUSING 0.0 STANDING COMMITTEE OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting will be held at: CITY MANAGER CONFERENCE ROOM 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA MONDAY, FEBRUARY 6, 2017 3:00 p.m. 1. Call to Order. TIME: 3:01 p.m. 2. Roll Call. PRESENT: Councilmembers Addiego and Matsumoto, and Planning Commissioners Faria, Ruiz and Wong. ABSENT: None. 3. Public Comments. None. Matters for Consideration 1. Motion to approve the minutes of the meeting of January 4, 2017. Motion—Planning Commissioner Faria/Second—Council Member Matsumoto: to approve the Minutes of the meeting of January 4, 2017. Approved by roll call vote 3-0. Two members abstained. 2. Housing Standing Committee Study Session regarding proposed amendments to the Development Agreement for the Centennial Village project at 180 El Camino Real Avenue. (Billy Gross, Senior Planner) In response to Councilmember Addiego, Bill Mitchell discussed the confidential information and stated the aggregate information could be shared which was approximately$600,000 per door. Councilmember Matsumoto stated the residential prevailing wage was being cut to one third. Councilmember Addiego discussed the City's request to build residential on top of commercial. In response to Councilmember Matsumoto, Bill Mitchell stated he was the developer for the land owner. He explained project financing by the life insurance company, whose name could not be shared because it was subject to the proceedings. Director Greenwood compared the project to the Seras Regis project, which was over$500,000 per door with land and construction costs. He stated it was an untested area for mixed use development. Councilmember Addiego stated some of the highest rents were nearby in San Bruno. Manager Gerber explained that rents were a snapshot in time and different from the first quarter of 2017. Director Greenwood discussed the comparison between Seras Regis and stated the proposed project would require expensive construction in a weak, unproven market. Bill Mitchell discussed their request to remove the prevailing wage requirement and eliminate the second floor office. He stated they were confident with moving that the project forward if the City supported their requests. In response to Commissioner Faria, Bill Mitchell discussed project elevations and changes in architecture. He stated the changes would not affect the integrity of the building. In response to Commissioner Ruiz, Bill Mitchell discussed the proposed construction schedule. He stated changes to the structure of the apartments would require redrawing of plans and resubmittal to the City. He stated they would comply with any Building Code changes. In response to Commissioner Wong, Bill Mitchell stated the project was initially feasible but, with increased construction costs, the price had gone up. Commissioner Wong asked how much costs had increased over the past few years. Swinerton representative concluded that costs had increased more significantly than rents. Dennis Wong, Swinerton stated concrete had increased 18%, and steel work increased 10%. He stated bids had increased 10%. Commissioner Wong questioned why components were being pushed into Phase 2 if costs were increasing. Bill Mitchell stated it was based on leasing. Councilmember Addiego discussed the City's desire to include housing and asked if it was necessary to locate it on top of the Safeway. Bill Mitchell stated it had not been explored and would require a major redesign. He anticipated Phase 2 would be built very soon after Phase 1. Councilmember Addiego stated he was losing faith in the project. Councilmember Matsumoto expressed frustration with the continual amendments. She asked about the inclusion of vertical walls. Bill Mitchell stated the ordinance required a minimum of 25 feet and windows would be included. Councilmember Matsumoto stated she did not anticipate JOINT HOUSING STANDING COMMITTEE MEETING FEBRUARY 6,2017 MINUTES PAGE 2 health club visitors to be transit oriented development. Bill Mitchell explained the idea that the health club could be an amenity for the residents. He stated major tenant 1 was Safeway,major tenant 2 Ross, and major tenant 3 was formerly CVS. He listed the tenants of Building A and B were 100% leased to a coffee shop, Mexican restaurant,burger place,bakery, Chinese restaurant, Italian restaurant,pizza parlor and other space in negotiations. He anticipated being 90%leased at the start of construction. Councilmember Matsumoto stated she was not comfortable with not requiring construction dates for Phase 2. Director Greenwood stated a penalty payment was not included. Councilmember Matsumoto stated in order for her to recommend approval of the third amendment she would like to include explicit timelines for all major milestones and add the following language: "Failure to meet timelines is a material default that would result in termination of the development agreement and project approvals." Councilmember Addiego stated housing would never be developed there if the City walked away from the development agreement. Councilmember Matsumoto stated the adjacent developer was interested in major housing developments. Commissioner Wong expressed concern about the precedence of allowing amendments to the initially approved projects. He asked about possible alternatives. Bill Mitchell stated the anchor tenants could be put in the existing building. He stated the requested amendments were a factor of the market. Commissioner Ruiz asked if the exterior could be constructed. Bill Mitchell discussed the construction of the residential development. In response to Councilmember Addiego, Bill Mitchell stated the residential units were above Safeway. Councilmember Addiego suggested the possibility of sacrificing potential future commercial space and having a residential component with the retail, although he preferred the urban look. Councilmember Matsumoto expressed concern with starting the project and it not being completed. Councilmember Addiego asked if the City had imposed the most expensive form of residential above commercial. He stated the community wanted commercial development. He suggested the possibility of a traditional commercial look with ground up residential in a clustered group. Bill Mitchell stated the fastest way to complete the project was to make the minor changes to the structure and proceed with the project as currently designed. Commissioner Faria discussed the nearby residents' desire to see progress on the lot. He stated he did not want just a strip center and would like housing. Councilmember Matsumoto stated she wanted financial incentives to make the project happen. Councilmember Addiego stated he wanted the project to proceed with the inclusion of housing. JOINT HOUSING STANDING COMMITTEE MEETING FEBRUARY 6,2017 MINUTES PAGE 3 Commission Wong asked if there was a way to rework the project. Bill Mitchell stated the proposal was to build 168 residential units in Phase 1 and the other 126 units within 3 years. Councilmember Addiego suggested allowing development of the commercial space and leaving space for residential units. Bill Mitchell stated the adjacent developer had not wanted to include ground floor retail. Senior Planner Gross stated it would be necessary to go back through entitlements. Bill Mitchell stated the financial partner wanted all residential units completed as soon as possible. He stated the partner and tenants might be lost if they go back through the process. Dennis Wong provided a handout on affordable housing construction costs and agreed that construction costs had increased but not because of prevailing wages. He stated union wages and prevailing wages were the same in the County. He stated it was unfair to throw out prevailing wage. He stated sheet worker prevailing wages had increased an average of 3% annually and it was 22% of total hard costs. He explained that contractors were busy and making up for depression from 2008-2012. He questioned the profit margin and stated land value should not be a factor. He stated Seras Regis would be 100%union,meaning prevailing wage, apprentices, local hire, and local contractors. He stated housing and retail were necessary but requested the Subcommittee not recommend the Council remove prevailing wage. In response to Commissioner Ruiz, Bill Mitchell discussed the bid process and potential contractors. Councilmember Matsumoto stated she wanted to see the difference between union and non-union and prevailing wage rates. She stressed the need for timelines. Director Greenwood stated staff could return with a more specific project schedule and default process. Councilmember Addiego asked if failure to meet a milestone meant the development agreement was null and void even mid-project. Director Greenwood discussed the process for termination of the development agreement. City Attorney Rosenberg stated there were some items in phase 2 that did not have timelines. Councilmember Addiego stated the City would be left with half a project if the development agreement were revoked. Councilmember Matsumoto stated she was confident that the project would be completed even if by a different developer. Director Greenwood summarized the Committee's direction to forward the project to the Planning Commission and then the City Council with a sanitized version of the financial analysis, comparison of prevailing versus non-prevailing wage,project milestone schedule and tightened process for default. JOINT HOUSING STANDING COMMITTEE MEETING FEBRUARY 6,2017 MINUTES PAGE 4 3. Report seeking review and direction from the Housing Subcommittee regarding the Accessory Dwelling Unit Legislation/Land Use Update(Rozalynne Thompson, Associate Planner) Associate Planner Thompson presented the staff report outlining current regulations and State changes for accessory dwelling units. Councilmember Matsumoto and Council Addiego expressed concern about the removal of parking restrictions based on location to public transportation. Councilmember Matsumoto asked about allowance of tandem parking. Councilmember Addiego stated it was seldom utilized. Planning Manager Mehra discussed the Code provision allowing tandem parking. Planning Manager Mehra explained his understanding regarding tandem parking. Councilmember Matsumoto suggested neighborhood permit parking. She expressed concern with reducing setbacks. Associate Planner Thompson explained that the setback regulations were related to garage conversions. Planning Manager Mehra suggested garages and accessory dwelling unit setbacks be consistent. In response to Councilmember Addiego, Planning Manager Mehra explained the meaning of "incorporated in the main structure." In response to Commissioner Ruiz, Planning Manager Mehra stated lot size, lot coverage and floor area ratio would prevail and limit size of accessory dwelling units. Associate Planner Thompson stated the city could elect to allow up to 1,200 square feet. City Attorney Rosenberg explained that the existing lot size and current lot coverage would determine the allowable accessory dwelling unit size. Councilmember Addiego requested data on existing accessory dwelling units and what could be built. Commissioner Faria expressed concern with development of multiple units and difficulty in regulation. In response to Commissioner Wong, Planning Manager Mehra stated six permits were granted in 2016. Councilmember Addiego requested the addresses. In response to Councilmember Matsumoto, Planning Manager Mehra stated the matter would come before the Council. JOINT HOUSING STANDING COMMITTEE MEETING FEBRUARY 6,2017 MINUTES PAGE 5 Adjournment Being no further business the meeting was adjourned at 4:30 p.m. Submitted by: Approved by: Alawir Gabriel"'o•riguez, Deputy City Clerk / • �Councilmember City of South San Francisco City of South an Francisco JOINT HOUSING STANDING COMMITTEE MEETING FEBRUARY 6,2017 MINUTES PAGE 6