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Home My WebLink About10 DOWNTOWN COMMERCIAL CORE ESTABLISHMENT OF PARK FEE FOR RENTAL UNIT CONSTRUCTIONDocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 MEETING DATE: TO: FROM: SUBJECT: 11 Ji I Ly, F_1:T4 AGENDA REPORT FEBRUARY 20, 2024 Agenda Item 10 Reviewed: Ds City Manager Finance Director N/A HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL COMMUNITY DEVELOPMENT DEPARTMENT DOWNTOWN COMMERCIAL CORE SPECIFIC PLAN (DCCSP) ESTABLISHMENT OF PARK FEE FOR RENTAL UNIT CONSTRUCTION This report is a follow-up to the December 5, 2023 City Council meeting where the City Council directed staff to prepare resolutions for applicable policy options identified in the Mayor's Economic Development Ad -Hoc Committee's recommendation list. This item is the implementation of the policy option to set the fee in -lieu of parkland dedication ("park fee") assessed for residential projects in the Downtown Commercial Core Specific Plan (DCCSP) to match the Red Hill Avenue Specific Plan (RHASP). Specifically, this includes setting the "market" value of land in the DCCSP area to $2.5 million per acre for the purposes of calculating park fees. As further explained below, staff is proposing to modify park fees only for non -subdivision (rental) projects in the DCCSP at this time. Staff requests that the City Council direct staff to seek a consultant to study the appropriate park fee structure for (for -sale) residential projects subject to the Tustin Subdivision Code, and to return with a recommendation at such a time that the analysis is complete. RECOMMENDATION: It is recommended that the City Council: • Adopt Resolution No. 24-13 setting the value of land in the DCCSP area to $2.5 million per acre for the purposes of park fee calculation for projects that do not include subdivision, and, • Direct staff to seek a consultant to study the appropriate park fee structure for residential projects subject to the Tustin Subdivision Code, and to return with a recommendation upon further study. ENVIRONMENTAL REVIEW: The Community Development Department has evaluated the project pursuant to the California Environmental Quality Act ("CEQA") and determined it to be exempt pursuant to Section 15061(b)(3) of the State CEQA Guidelines (Cal. Code of Regs., Title 14, Section 15061(b)(3)), DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 February 20, 2024 DCCSP Park In -Lieu Fee Page 2 as it can be seen with certainty that there is no possibility that the project will have a significant effect on the environment. FISCAL IMPACT: Staff anticipates that the recommended actions will result in a positive impact on the General Fund, as they implement policy recommendations intended to encourage residential development in the DCCSP and RHASP areas. Not implementing the recommended actions may potentially result in a loss of otherwise attainable development activity. CORRELATION TO THE STRATEGIC PLAN: The proposed project furthers the objectives of Strategic Plan Goal A — Economic and Neighborhood Development through implementing a strategic plan focused on encouraging development in the DCCSP and RHASP areas. DISCUSSION: An analysis of the DCCSP and RHASP was initiated in 2022 to identify potential plan revisions that align development regulations with the real estate market. On December 5, 2023, the City Council was presented with the findings and recommendations of this assessment and subsequently directed staff to prepare resolutions for applicable policy options identified by the Mayor's Economic Development Ad -Hoc Committee. As directed, staff has prepared one of the near -term policy recommendations for implementation: setting residential park fees in the DCCSP to match the current RHASP rate. Park fees are charges imposed on new development projects to fund the acquisition, development, and maintenance of parkland within the City in compliance with the Quimby Act. Most subdivision projects in the DCCSP must currently pay parkland impact fees based on market land value, which was identified as a potential barrier to development by the 2022 specific plan assessment. The DCCSP does not specify park fees to be assessed for non - subdivision residential projects. Therefore, staff recommends that "market" land value in the DCCSP area be set to $2.5 million per acre for the purposes of park fee calculation for non - subdivision residential projects. This change would provide more certainty of and likely a reduction in costs for developers. Presently, the proposed park fee modification would only apply to residential projects in the DCCSP area that are not subject to the Tustin Subdivision Code (TCC 9311), namely the development of rental units. Staff recommends that the City Council direct staff to seek a consultant who can assess and recommend appropriate park fee structures for residential projects involving subdivisions. DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 February 20, 2024 DCCSP Park In -Lieu Fee Page 3 Attachment: Resolution No. 24-13 DocuSigned by: d Prepared by: D0916B787BBC64A9 Jorge Maldonado Associate Planner DocuSigned by: C Approved by: ED45DA2623B54A5... Justina L. Willkom Community Development Director E pocuSignedby:ea l.�.alM bin, DASE41 E0391941C... Chad Clanton Director of Parks and Recreation DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 RESOLUTION NO. 24-13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, MODIFYING FEES IN -LIEU OF PARKLAND DEDICATION FOR CERTAIN RESIDENTIAL DEVELOPMENTS LOCATED WITHIN THE DOWNTOWN COMMERCIAL CORE SPECIFIC PLAN AREA The City Council of the City of Tustin does hereby resolve as follows: WHEREAS, the results of an assessment initiated in 2022 of the Downtown Commercial Core Specific Plan (DCCSP) and Red Hill Avenue Specific Plan (RHASP) intended to align development regulations with current real estate market conditions were presented to the City Council on December 5, 2023 and revealed that assessing fees in - lieu of parkland dedication ("park fees") using current land market value is a barrier to residential development; WHEREAS, to stimulate development and address its findings, the 2022 assessment recommends setting the "market" land value used to calculate park fees in the DCCSP to $2.5 million, matching the RHASP; WHEREAS, park fees are not specified for residential projects located in the DCCSP area that are not subject to Tustin City Code (TCC) 9331 ("Tustin Subdivision Code"); and WHEREAS, staff requested direction from the City Council to seek a consultant to study the appropriate park fee structure for residential projects subject to the Tustin Subdivision Code. NOW, THEREFORE, the City Council of the City of Tustin DOES HEREBY RESOLVE as follows: SECTION 1. This Resolution hereby sets the "market" land value to be used for the purposes of calculating park fees for non -subdivision residential projects in the DCCSP area to $2.5 million. SECTION 2. This action is not subject to the California Environmental Quality Act ("CEQA") and determined to be exempt pursuant to Section 15061(b)(3) of the State CEQA Guidelines (Cal. Code of Regs., title 14, Section 15061(b)(3)), as it can be seen with certainty that there is no possibility it will have a significant effect on the environment. SECTION 3. This Resolution shall go into effect immediately upon its adoption. Resolution 24-13 Page 1 of 3 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular meeting on this 20t" day of February, 2024. AUSTIN LUMBARD, Mayor ATTEST: ERICA N. YASUDA, City Clerk APPROVED AS TO FORM: DS DocuSigned by: DS E�� 3864F37FD22142C... DAVID E. KENDIG, City Attorney Resolution 24-13 Page 2 of 3 DocuSign Envelope ID: F5B9B721-6016-49F9-9B8B-4ED6E5B475C9 STATE OF CALIFORNIA ) COUNTY OF ORANGE 1 SS CITY OF TUSTIN CERTIFICATION FOR RESOLUTION NO. 24-13 I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 24-13 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 20t" day of February, 2024, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: COUNCILMEMBER RECUSED: ERICA N. YASUDA, City Clerk Resolution 24-13 Page 3 of 3