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HomeMy WebLinkAboutRDA 02 ULI AGREEMENT 05-15-06 AGENDA REPORT MEETING DATE: MAY 15, 2006 TO: WILLIAM A. HUSTON, CITY MANAGER FROM:CHRISTINE A. SHINGLETON, ASSISTANT CITY MANAGER SUBJECT: URBAN lAND INSTITUTE SERVICES AGREEMENT SUMMARY: Approval is requested of an advisory services agreement with the Urban land Institute. RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute the Advisory Services Agreement with the Urban land Institute (ULI). FISCAL IMPACT: The budget for the the proposed study is estimated at $115,000 and would include the payment of a total sum of $104,000 to ULI as well as the Agency incurring additional expenses for plan prduction, copying, reproductions, and other logistical support in the amount of approximately $11,000. A supplemental appropriation from the Town Center and South Center Redevelopment Project Areas would be necessary as foil lows: $11,500 to South Central fund 52-600-601; $46,500 to South Central Housing Set Aside fund 53-600-6010, $11,500 to Town Center fund 58-600-6010, and $46.000 to Town Center Housing Set Aside fund 59-600-6010. BACKGROUND: The City Council has expressed an interest in evaluating several larger geographic study areas of the City that may be appropriate to infill development opportunities for the expansion of residential housing coupled with commercial revitalization activities. Primary objectives would include empowering and energizing the private sector and stakeholders to find market-driven solutions; introducing new policy thinking in regards to land use and increased densities; and, streamlining planning and processing actions to instill a "can do" attitude and entrepreneurial spirt to make Tustin competitive in the market place. Additional objectives include avoiding the use of eminent domain, minimizing economic and residential dislocations, using overlay districts to initiate alternative densities and uses, and providing solutions to traffic and crime problems were evident in the study areas. Page 2 To expedite the initiation of the planning process, the utilization of an ULI Advisory 5 day Panel is proposed. The purpose of an ULI Advisory Panel is to bring the finest experts to bear on the key questions faced by the City in examining the subject study areas. The ULI Five Day Panel process will involve a diverse team of eight to ten ULI members who will work together to investigate the market potential, develop planning and design strategies, recommend phasing options and outline implementation steps for the City. The normal price for the panel is $115,000. ULI has provided a grant to Tustin of $11,000 to offset the ULI cost of the event reducing the City's required payment for ULI services to $104,000. ULI does require that a sponsor such as the City, enter into a short contract with them for services which is attached. Proposed expenditures in the Town Center and South Central Redevelopment Project Areas, including the use of Housing Set Aside funds in each project area is appropriate since the study will be examining housing issues, and the maintenance and creation of affordable housing opportunities. The Agency has previously adopted a finding of benefit for use of housing set aside outside of project areas to benefit each project area. Christine A. Shingleton Assistant City Manager ULI- The Urban Land Institute Advisory Services Agreement This Agreement constitutes a binding contract between the City of Tustin, California (Sponsor) and ULI-the Urban Land Institute (Institute). As part of its purpose, the Institute maintains an Advisory Services Department for the purpose of benefiting the general public through improved planning and ulilization of urban land. The Sponsor wishes to obtain advice and recommendations from the Institute regarding redevelopment of infill development sites. Pursuant to this Agreement, the Institute agrees: 1. To provide a panel of persons composed of members of the Institute and others who collectively have a varied and broad experience and knowledge applicable to the particular problems to be considered, including the planning, development and redevelopment of land and the ownership, management and financing of real property. In compliance with all terms and conditions of this Agreement, to undertake an advisory panel based on the City Overview, Background on Each Proposed Study Area and Questions and Issues for ULI Advisory Panel Consideration as specified in Exhibit "A" (the "work") and incorporated herein by this reference. 2. By executing this Agreement; (a) that it has investigated and considered the work to be performed, (b) has considered how the work would be performed, and (c) understands the work under this Agreement. 3. All work and services will be rendered in accordance with all laws, ordinances, resolutions, statutes, rules and regulations of the City of Tustin and of any federal, state or local governmental agency of competent jurisdiction. 4. To arrange for the panel members to visit the location upon which its recommendations are sought for a period of not less than five days, starting on or about June 11, 2006. During that time the panel, directly and through its staff, will study the designated area; consult wilh public and private officials, representatives of other relevant organizations, and other individuals familiar with the problems involved; and prepare its report, conclusions and recommendations which will be presented to the Sponsor and its invited guests in oral form at the close of the on-site assignment. 5. To provide the Sponsor with a written report of the study, its conclusions and recommendations. The Sponsor will be furnished 200 copies of the report, including such exhibits as may be necessary to augment the text. Additional copies of the report, if ordered before the termination of the panel assignment, will be provided at the cost of printing, mailing and handling. 6. To absorb the travel and living expenses of its panel and staff while undertaking the on- site Advisory panel. 7. The Institute's covenants that in performance of work and in their selection of advisory panel members that there shall be no discrimination or segregation in the performance of or in connection with this Agreement regarding any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry. 1 The Institute shall take affirmative action to insure that applicants and employees are treated without regard to their race, color, creed, religion, sex, marital status, national origin or ancestry. The Sponsor agrees, at its expense: To furnish each panel member, in not less than 15 days in advance of the panel meeting, such pertinent background data in the form of reports, plans, charts, etc., as may be presently available or readily developed for the preliminary study of the panel, prior to its inspection on site. Two copies are to be sent to the Vice President of Advisory Services at ULI. 1. To arrange, insofar as possible, to have appropriate persons, including public and private officials, representatives of the relevant organizations, and others, available for the purpose of consulting with and furnishing information to the panel on specific matters relevant to the assignment as may be necessary and advisable during the period of the panel's visit. 2. To provide transportation and guides to be used by the panel for any necessary inspection of the study area and its environs and to assist the Institute staff in making advance arrangements for hotel accommodations for the Institute panel and staff and supporting the panels activities while they are on site. 3. In return for the advice and recommendations of the Institute, to pay the Institute the total sum of $104,000. The first installation of $50,000 will be paid upon signing of this agreement. The second installment of $50,000 will be paid one week prior to the panel's arrival on site. The third and final payment of $4,000 will be paid when the Sponsor receives the final report. In the event the Sponsor cancels the panel assignment, the initial payment is non-refundable and expenses incurred by the Sponsor become the responsibility of that party. It is understood that the fee paid by the Sponsor to the Institute is to be used to cover the costs of the panel assignment and to support and encourage the Institute's scientific and educational programs. The Sponsor may make such use of the report as they may deem desirable. It is further understood that the Institute may make such use of the report prepared of the panel's findings and recommendations as it may deem desirable, and the Sponsor herewith specifically agrees that the Institute may publish and disseminate such report or any part thereof in conjunction with its research and educational programs. ULI shall not be responsible for damages of any kind arising from the performance of services under this agreement, unless such damages arise from gross neglect on the part of ULI. ULI's aggregate liability for damages of any nature shall be limited to the amount of the fee under this agreement. Persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated below. 2 Sponsor William Huston, City Manager Signature Services Date ULI - the Urban Land Institute Rachelle Levitt, Executive Vice President Policy and Practice Mary Beth Corrigan, Vice President, Advisory Date 3 EXHIBIT A 4 URBAN LAND INSTITUTE PROPOSED ADVISORY PANEL 1.0 GENERAL OVERVIEW The City of Tustin is seeking to evaluate larger geographic areas of the City that may be appropriate for infill development opportunities for the expansion of residential housing coupled with commercial revitalization activities. Primary objectives of the City include empowering and energizing private sector participants and stakeholders to find market- driven solutions; introducing new policy thinking in regards to land use and increased densities; and, streamlining planning and processing actions to instill a "can do" attitude and entrepreneurial spirit to make Tustin competitive in the market place. Additional objectives include avoiding the use of eminent domain; minimizing economic and residential dislocations, using overlay districts to initiate alternative densities and uses, and providing solutions to traffic and crime problems where evident in the study areas. 2.0 BACKGROUND ON EACH PROPOSED STUDY AREA Three critical areas of the City have been identified for evaluation during the ULI Advisory Panel based on physical and economic conditions and perceived opportunities. The proposed study areas are identified as the City Center, the West Village and the Southern Gateway areas which are delineated on the attached maps. A discussion of each study area follows: 2.1 Center Citv Studv Area- Description and Conditions The central area of the City is generally located between Sixth Street on the north west of Newport, San Juan to the north between Newport Avenue and Browning Avenue,Browning Avenue on the east, the Interstate Route (1-5)-Santa Ana Freeway on the south, and Pacific Street on the west. The proposed study area is approximately a 198 acre portion of the central area of the City. It possesses a mix of strip commercial retail, garden office, public institutional, and lower density residential uses, including an isolated small pocket of older single family homes an multi-family uses. I The portion of the proposed study area west of Newport Avenue includes an older motel property and large neighborhood retail center along with smaller light industrial uses. East of Newport includes commercial retail uses along the Newport Avenue and Redhill commercial frontages, a mix of single family and multi-family residential uses, large public institutional uses including Tustin High School and Lambert elementary School. The study area had a 2000 population of approximately 4,985 as recorded by the U.S. Census with 1,823 housing units and an average household size of 2.95. There are approximately 1,455 renter occupied housing units or 80% of the housing stock and 3070wner occupied housing units within the study area. While newer development has occurred particularly along the major commercial fronting streets within the study area, a large portion of the existing improvements in the proposed Center City Area are dated and reflect an economic underutilization of the rda~im\ULlpanei 5-09-06 properties in the context of current market trends. Property maintenance is the largest code enforcement issue in the area. Despite property maintenance issues, there is considerable interest by property owners and developers in redeveloping the area to a higher intensity of commercial and residential uses in order to mitigate the higher residual land costs associated with the existing improvements on the properties. The institutional uses, including the Tustin High School and Lambert School sites along with the quasi institutional Main Place Church property (located along Redhill Avenue, may also present opportunities for reuse and intensification of land use, which would serve to stimulate residential development and economic revitalization in the area. The City has entered into a Letter of Intent with the Tustin Unified School District that could result in construction of a replacement High School for the Tustin High School facility at the Tustin Legacy project (the former Marine Corps Air Station, Tustin facility) which would provide an excellent opportunity for maximization of land value at the Tustin High School site in order to generate adequate land sales to build the new high school. With a lack of open space in this portion of the City of Tustin, any sale of the high school site would potentially have the opportunity to also result in some retention of open space (Le., perhaps retention of a 3-5 acre neighborhood park with remaining portions of the site available for development). 2. 2 West Villaqe Proposed Study Area- Description and Conditions The West Village proposed study area of the City is approximately 167 acres in size and is located on the west side of the SR-55 Freeway between McFadden on the south and Main Street on the north with the western boundary of the City delineating the westerly boundary of the study area. The study area had a 2000 population of 9,104 as recorded by the U.S. Census with 2,782 housing units and an average household size of 1.84. There are approximately 2,048 renter occupied housing units or 74% of the housing stock and 648 owner occupied housing units within the study area. The proposed study area is characterized by a wide mix of residential uses including a large number of single family attached condominiums of which approximately eleven percent appear to be used as rental units, larger multifamily rental properties which appear reasonably well maintained, and smaller four-unit apartments buildings which reflect deferred maintenance and absentee landowner issues. There are also two mobile home parks in the area. In addition, there is a small amount of commercial use primarily along Mc Fadden at Tustin Village Way which has struggled economically over the years. The Heideman School site is also located in the westerly portion of the study area. Despite census information indicating a low average household size, there is substantial evidence of overcrowding conditions in the area and other code enforcement issues. Significant code enforcement activity related to property maintenance, buildings, and vehicular parking problems have been documented. The overcrowding conditions create significant parking and traffic impacts in the area and in part may serve to cause the highest incidence of police response calls found in any area of the City. Currently the Police Department's most problematic sub-areas within this study area are Alliance Street, the Tustin Village Town Homes, and Chatham Village and commercial uses in the proximity of McFadden and Tustin Village Way. The Village West study area coupled with the Southern Gateway study area comprise what is generally referred to rdaWm\ULIpanel 5-09-06 as the Southwest area of the City. The Southwest area is approximately 0.56 square miles in area or roughly 5.2% of the City's overall size. According to the 2000 U.S. Census Bureau, the combination of the Village West and Southern Gateway study areas housed approximately 16,261 persons, which constitutes 23 % of the City's 2005 population of 70,871 as certified by the California Department of Finance. The study areas comprise the City's Police Department's Beat 2 area, which accounts for over 25% of the department's Calls for Service and 30% of Officer Initiated Activity. Additional policing issues in the study areas include the largest population of documented gang members in the City coupled with the influence from Santa Ana gangs due to the cities' shared borders in this portion of the City creating an additional strain on policing resources. Rapidly increasing values of multifamily properties in Orange County have resulted in increasing rental rates, which in turn serve to exacerbate the conditions of overcrowding in the area. The large number of individual ownership units (118) will reflect a considerable price premium for assembling properties in the area in addition to the increasing costs associated with the rental units. The area lacks a close-by neighborhood shopping center to serve the residents. The area is also underserved in open space and park facilities. In addition, local school facilities (K-8 and/or a middle school) should be examined to determine whether from the Tustin Unified School District's perspective they meet the needs of the area and conveniently serve the high number of families in the area. The identified area shortcomings mayor may not be remedied by intensifying commercial and residential uses in the area in order to free up land for open space, schools and retail opportunities to serve the residential population. To adequately address the overcrowding conditions and minimize the potential for permanent residential displacements, intensification of densities in the area may need to provide a higher level of affordability. 2.3 Southern Gatewav Proposed Studv Area- Description of Studv Area and Conditions The Southern Gateway study area of the City is approximately 167acres in size and generally located east of the SR-55 Freeway, south of Mitchell Avenue, west of Red Hill Avenue, and north of Sycamore Avenue. The study area generally includes the multifamily rental properties located along Mitchell Avenue extending from Newport Avenue to Browning Avenue, and the multifamily rental properties located between Walnut Avenue and Sycamore Avenue extending from Newport Avenue and Red Hill Avenue, while also including the multifamily rental area bounded by McFadden Avenue, Newport Avenue and the SR-55 Freeway. The study area is characterized by larger multifamily rental properties constructed in the early 1970's, which are interspersed with smaller four- and five-unit rental properties under absentee ownership constructed around the early 1960's. In addition, there are also commercial uses located along Newport Avenue which are included in the study area for the purpose of exploring higher economic land uses which may occur from mixed retail/residential development opportunities. The study area had a 2000 population of 8.448 as recorded by the U.S. Census with 2,392 housing units and an average household size of 4.20. There are approximately 2,033 renter occupied housing units or 85% of the housing stock and 287 owner occupied housing units within the study area. rda~im\ULlpaneJ 5-09-06 The Southern Gateway study area is also located in the Southwest Area of the City and exhibits the same conditions and issues as discussed above for the West Village area in regards to overcrowding and police activity. Code enforcement issues in this study area include inoperative vehicles, property maintenance, and building/housing related issues. There is some evidence of reinvestment by commercial or residential income property owners in the southern gateway area but it is largely limited to the larger properties. Property values and rent levels in area have increased during the past five years but properties in the area, particularly the smaller units, continue to exhibit conditions of overcrowding and deferred maintenance. While individual ownership units are not a factor in potential land assemblage in this area, additional challenges are presented to land and property assemblage due to the higher number of smaller properties under different ownerships. 2.4 Problems and Issues Common To All Studv Areas Redevelopment Agency Tax Increment or Low and Moderate-Income Housing Set- Aside Funds may be used either inside or outside the Project Area boundaries for affordable housing purposes, but financial assistance using such funds would necessitate relocation payments to persons and families displaced by related development activities. Based on the Agency's experience with current market payment levels for permanent displacements, it is estimated that the result could be to increase land acquisition costs by over $25,000-$35,000 per unit potentially, or greater where significantly large households are located. 3.0 QUESTIONS AND ISSUES FOR ULI ADVISORY PANEL CONSIDERATION There are a number of questions and issues for consideration which are related to the objectives identified above and applicable to each of the study areas. These questions and issues can be grouped within broad categories for consideration as follows: Market; Planning and Design; and Implementation Strategies. The questions and issues to be addressed in each of the study areas are identified below. While some of the questions or issues may be applicable in each area, others may be specific only to one or two areas. Additional issues for consideration which are specifically applicable to an individual study area are also identified. Market Considerations . Are there market driven opportunities within each study area in face of increasingly high land costs that would be feasible and which would significantly revitalize each study area? Will a market driven solution in each study area achieve City goals and objectives? . What would be the potential land uses/densities and any mixes of land uses within each study area with the greatest market potential for success in stimulating economic revitalization, based purely on market potential vs. cost/benefit analysis? In other words, are there land uses/densities and mixes of rda~im\ULfpanel 5-09-06 uses which would activate revitalization in each study area and which could reach a break point financially based on land costs/building cost ratios and rents? This includes specific identification of overall height and FAR parameters which support break points in enough detail to measure the financial pro forma impacts of such land uses/densities. In addition, how would you rank in order of importance each study area in terms of an economic benefit assessment of any proposals? . What would be the necessary considerations for selection of areas for intensification of densities? . What would be the key ingredients to successful intensification of residential densities? . Is there market viability for and what are the issues associated with providing family housing in higher density developments? . What community characteristics, additional attributes and/or amenities need to be considered or added to any program to sustain or add to values/rent levels and support any intensification or densification proposals? . What are the opportunities and constraints for providing a portion of affordability within the various density categories? Planning & Design Considerations . Where would specific land uses and relationships in each study area be most logically located? . Would the potential use of land use overlay districts vs. preparation of specific plan(s) to delineate master planning of areas designated for intensification of density allow for greater implementation flexibility and streamlining of entitlement processing? . What measures and design elements can be used to create a distinctive sense of place for each of the study areas, while integrating them into the greater Tustin community and creating connectivity in appearance and entrance features? Are there relationships that can be fostered between each study area that would create a more synergistic relationship and serve to stimulate greater economic revitalization in the community? . What reasonable and possible incentives or suggested modifications to the City's General Plan and zoning code can be identified which could establish a framework for any proposed changes to or intensification of land uses? Implementation Strategy Considerations . What are the key ingredients necessary for any successful land use/density restructuring or development strategy for each study area? rda~im\ULfpanei 5-09-06 . What would be the primary economic and community benefits attainable from any development strategy for each study area including intensification of residential densities? Are there any community economic or other impacts and potential downsides? . What are the priorities for pursuing development revitalization among the study areas to achieve the maximum results? Within each study area, are there priority considerations for implementing specific components of any development strategy by geographical locations that should be pursued? What about phasing options for each study area and phasing within each study area? In other words, where do you start developing a center of gravity or begin land use/density restructuring within each study area? How do you also build on any initial phasing of development in a study area, to create successful next phases? What are the proper or logical phasing scenarios? . What are the options and opportunities for assembling properties without the use of public assistance or eminent domain? . How can private developers accommodate potential residential displacements (temporary or permanent) without public assistance? . What kind of incentives and modifications to the City's general plan and zoning code should occur to set the framework for any proposed development strategy? What forms of incentives are financially required and would be the most effective to sustain any revitalization in the long term? Additiona/ Issues for Consideration . Center City: What would be the factors that would be a requisite for expanding the town center area of the City while not diminishing the viability and historical context of the existing Old Town commercial area? rda~im\ULJpanel 5-09-06 BtJ iit..t.,.~ ! > .~ TUSTIN CITY MAP ,.~~~- ...__.......o....g ."_._c,h,,,,,~""""