Planning Community Development Department Development Agreement between Norton

Planning & Community Development Department Development Agreement between Norton Simon Art Foundation & City of Pasadena City Council Meeting December 16, 2013

Importance of this Agreement Planning & Community Development Department • Sales Tax accounts for 16% of total General Fund revenues. • Auto dealers account for 10% of total Sales Tax revenues. • Between 2000 and 2012, Pasadena lost numerous automobile franchises: > Mercedes, Chevrolet, Ford, Chrysler, Dodge, Jeep, Hummer, Hyundai, Suzuki and Acura. 2

Importance of this Agreement Planning & Community Development Department • Rusnak Auto Group is consistently in top 10% of sales tax generators: > Approximately 300 employees and annual payroll of $19. 3 million. > Rolls Royce, Bentley, Porsche, Audi, Maserati & Volvo. • Current lease between Norton Simon and Rusnak Auto Group expires at the end of 2015. The loss of Rusnak would have a significant negative impact on the local economy. • The property requires reinvestment to remain viable as a dealership: > A long-term lease would incentivize investment > Norton Simon is reluctant to extend lease unless it can preserve options for the future. 3

Background Planning & Community Development Department • State Government Code and the Pasadena Zoning Code regulate development agreements • They are contracts between local government entities and applicants (usually a property owner or developer). • Provide assurances for applicants to maintain the right to develop subject to the rules and regulations at that time in return for public amenities, negotiated fees and/or other benefits. • Cannot be used to allow a use that would not be permitted under the Zoning Code, constitute a rezoning or permit a Variance. • Noticed public hearings with findings before the Planning Commission and City Council. 4

Background Planning & Community Development Department • On August 2012 – Development Agreement submitted between the Norton Simon Art Foundation & City of Pasadena. • 267 -337 W. Colorado Blvd. & 55 -77 N. St. John Ave. > 5. 7 acres; Located in West Gateway Specific Plan. > Property developed with Rusnak-Pasadena dealership. • Under the proposed agreement: > The applicant would pursue a long-term lease extension. > Applicant would preserve its right to develop in the future under the current General Plan, Specific Plan & Zoning Code. • No project or property modifications proposed at this time. • Planning Commission meetings on April 10 th & July 24 th. 5

Subject Site Planning & Community Development Department PS St. John Ave 4 13 OS Colorado Blvd. SP 6 CD-1 Pasadena Ave. RW F - 710 -FRW PS

Subject Site Planning & Community Development Department W Norton Simon Art Museum Rusnak-Pasadena Dealership OS Colorado Blvd. Knights of Columbus SP Ralphs 7 PS Union St. CD-1 Pasadena Ave. Freeway ROWs 1 710 -FRW R -F 4 3 St. John Ave PS Old Pasadena

Subject Site Planning & Community Development Department Colorado Blvd. Union St. 710 -ROW St. John Ave 134 -ROW

Subject Site Planning & Community Development Department West Colorado Street Historic Auto Row Colorado Blvd. Union St. 710 -ROW Auto Service Buildings & Outdoor Display Areas St. John Ave 134 -ROW

Subject Site Planning & Community Development Department 10 Buildings along W. Colorado Blvd.

Subject Site Planning & Community Development Department ABOVE – Buildings along St. John Ave. LEFT - Auto Display & Service Areas 11

Original Proposed Agreement Planning & Community Development Department • Current lease for the dealership expires at end of 2015. • Applicant would use good faith efforts to maintain a luxury brand dealership for an additional 15 years. • Still subject to changes in laws, fees and building related codes. • Includes annual reviews. • Terms of agreement would end if: > The applicant is unable to secure a new lease or an extension of the existing lease or the use was no longer a luxury brand dealership. § Includes grace periods of up to 5 years. § In no event will the total length exceed 23 years. § Applications deemed complete would be vested. 12

Planning Commission Meetings Planning & Community Development Department • On April 10 th Planning Commission unable to reach a decision and continued the item. • On July 24 th Commission recommended City Council deny the development agreement by a vote of 4 -3. The Commission identified the following significant issues: > There was no specific project associated with the agreement; > The use of “grace periods” was too broad and its maximum length was too long, overall agreement was too long; > Agreement would set precedence for other property owners to request similar agreements; and > Property owner would be able to vest existing development standards when the West Gateway Specific Plan may sunset. 13

Modified Proposed Agreement Planning & Community Development Department • Staff and applicant continued to work together to address the Commission’s concerns. • “Grace periods” only apply if the use was extended for five years or more from the effective date of agreement; • “Grace periods” are reduced from five years to three years; complete applications would be vested. Length of existing lease: Length of Number of extended or new additional years lease: of the agreement (grace period) Total length of agreement 2 years None 0 years 2 years 1 to 2 years 0 years 3 to 4 years 2 years 3 to 18 years 3 years 8 to 23 years 14

Existing Standards Planning & Community Development Department • West Gateway Specific Plan adopted in 1998. • Remaining caps in the Specific Plan: > 407, 000 SF of commercial and no housing units. > SF can be converted to housing units (850 SF per unit). • All properties maintain their existing SF on site and receive an additional FAR of 0. 4 (for a total FAR of 0. 94). > Transfer of Development Rights (TDRs) allows transfer of the 0. 4 FAR from one property to another. > Existing SF can be demolished an reconstructed on-site. • Proposed General Plan does not call for significant changes for subject property (FAR of up to 1. 0). 15

Existing Standards Planning & Community Development Department • Other development standards for the subject property: Topic Area Permitted Uses: Development Standard • Housing, business and community serving uses and automobile dealerships. Residential Density: • Urban housing standards • 48 units per acre; or 274 units for the property • Minimum lot area per unit: 910 SF Height: Setbacks: Lot Coverage: • 40 ft. for first 150 ft. along Colorado Blvd. • 85 ft. for rest of property • 20 ft. along Colorado Blvd. • No other setback requirements • Does not apply 16

TDRs Planning & Community Development Department • Clarification on Transfer of Development Rights (TDRs): > Proposed agreement would maintain the list of permitted uses, maximum FAR and development standards as outlined in existing Specific Plan. > However, if TDRs were removed within the Specific Plan, the subject property would also not be able to utilize TDRs. > None of the other properties would be able to transfer SF from their property to the subject property. • Specific language included in the agreement to further clarify TDRs. 17

Findings of Support Planning & Community Development Department 1) The proposed agreement is in the best interest of the City • City and community would enjoy many benefits from maintaining the dealership: > Dealership generates significant revenues through sales taxes and other taxes and revenues. > As a luxury brand dealership, it attracts a large portion of its customers from outside Pasadena. > Eliminates uncertainty in the planning process and provides for the orderly future development of the property. 18

Findings of Support Planning & Community Development Department 2) The proposed agreement is in conformance with the goals, policies and objectives of the General Plan, West Gateway Specific Plan and Zoning Code. • Agreement would maintain all existing goals, objectives and standards of the General Plan and Specific Plan: > General Plan Guiding Principle highlights economic vitality. > General Plan Objectives include the need to encourage businesses that contribute to the City’s fiscal health. > Automobile Dealerships are permitted “by right” in the Specific Plan. • General Plan Update does not call for significant changes for the subject property. 19

Findings of Support Planning & Community Development Department 3) The proposed agreement would not be detrimental to the health, safety and general welfare of the immediate area or the City. • Agreement would maintain the existing luxury dealership or maintain present conditions: > Automobile sales have occurred since the 1920 s. > Existing business has not been a nuisance to the surrounding area or community. > Automobile sales are permitted “by right”. • A proposed new project would need to comply with all existing public hearing and noticing requirements and all provisions of CEQA. 20

Findings of Support Planning & Community Development Department 4) The proposed agreement is consistent with the California State Government Code (Sections 65864 through 65869. 5). • These sections outline requirements related to the contents of the agreement, the applicability of an agreement and on the public hearing and approval process: > City Staff and City Attorney have reviewed agreement and it meets or exceeds all provisions of the Code. > Public outreach includes newspaper notice, notices mailed to all property owners within 500 ft. and multiple on-site postings. > Does not constitute a Zone Change or Variance. 21

Highly Unique Situation Planning & Community Development Department • Terms of agreement are highly unique and do not set precedence. • Involves to long-standing community institutions. • Provides significant economic benefits to the City. • Any other agreement for another property would be reviewed separately on its merits by Planning Commission and City Council. 22

Recommendation Planning & Community Development Department 1) Find agreement is exempt from the California Environmental Quality Act (CEQA) and does not have the potential for causing a significant effect on the environment; 2) Make the four findings necessary to approve a Development Agreement; 3) Approve the Development Agreement between the Norton Simon Art Foundation and the City of Pasadena; and 4) Direct the City Attorney to draft an ordinance within days. 23 60

Planning & Community Development Department Development Agreement between Norton Simon Art Foundation & City of Pasadena City Council Meeting December 16, 2013