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Home My WebLink About04 PC REPORT DEVELOPMENT STANDARDS DCCSP RHASP AGENDA REPORT ITEM #4 k MEETING DATE: JULY 9, 2024 TO: PLANNING COMMISSION FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: DEVELOPMENT STANDARDS IN THE DOWNTOWN COMMERCIAL CORE & RED HILL AVENUE SPECIFIC PLANS FOR MULTI-FAMILY RESIDENTIAL PARKING & PRIVATE STORAGE SUMMARY: On December 5, 2023 the City Council was provided an assessment of the Downtown Commercial Core Specific Plan (DCCSP) and the Red Hill Avenue Specific Plan (RHASP). The assessment was prepared by Economic Planning Systems (EPS), Inc., and identified potential plan revisions that would remove barriers to development and better align the plans with the existing real estate market. The City Council received and filed the report, and directed staff to bring the recommended policy actions back to Council for individual consideration and action. Two considerations presented by EPS included (1) a reduction in the number of parking spaces required for multi-family residential development, and (2) changes to the amount of private storage required for dwelling units. This report provides an assessment of these two potential actions. Staff requests that the Planning Commission consider the potential for revising the development regulations within the specific plans, provide staff with feedback, and staff will then incorporate the Commissions feedback in Specific Plan Amendments (SPA), which will be brought back to the Commission and Council for final action. RECOMMENDATION: That the Planning Commission: 1 . Receive and file this staff report; 2. Discuss potential revisions to multi-family residential parking requirements in the DCCSP and RHASP; 3. Discuss potential revisions to multi-family residential private storage requirements in the DCCSP and RHASP; and PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 2 4. Provide feedback on changes to DCCSP and RHASP development standards. BACKGROUND: On December 5, 2023 the City's consultant, Economic Planning Systems (EPS), Inc., provided the City Council with an assessment of the Downtown Commercial Core Specific Plan (DCCSP) and the Red Hill Avenue Specific Plan (RHASP). The assessment identified potential specific plan revisions that would remove barriers to redevelopment, and better align the plans with the real estate market. The Council was provided a summary of findings and policy options, and a list of actions recommended by the Mayor's Economic Development Ad-Hoc Committee. At the December meeting, the City Council directed staff to return in 2024 with resolutions for applicable policy options, and to prepare an agenda report further describing and outlining the scope of amendments to the Specific Plans and/or Tustin City Code thereafter. On February 20, 2024 the City Council approved a policy option to reduce the parkland in-lieu of dedication fee (park fees) for non-subdivision residential projects, and directed staff to evaluate the park fees for residential subdivision projects. Additionally, on March 5, 2024 the City Council approved a policy action to suspend for 36 months the affordable housing in-lieu fees for residential projects, and directed staff to assess the City's Voluntary Workforce Housing ordinance. On April 16, 2024 the City Council was provided an outline and "roadmap" of five (5) remaining near- and mid-term implementation actions identified by EPS. This report provides an analysis regarding two (2) of the five (5) remaining implementation actions, including the potential reduction in residential parking standards, and potential revisions to the requirement that residential projects provide private storage for each dwelling unit. The following is a summary of these two (2) items, as characterized by the EPS assessment. Multi-Family Residential Parking Standards EPS recommended that the City consider reducing residential parking ratios from 2.25 parking spaces per unit to 1 .75 parking spaces per unit. According to EPS, requiring too much on-site parking is a significant barrier to development for two reasons. One, the cost to construct a single parking space can range from $5,000 to well over $40,000, depending on whether it is located on a surface lot or in a parking structure. The cost of parking spaces must be passed on to the residents of the dwelling units, which effects the economic viability of a project. Second, parking and associated vehicle circulation occupy physical space, which in turn reduces the area available for dwelling units. Therefore, providing more parking reduces the number of dwelling units, such that fewer rental units or homes for sale means decreased revenue. In its assessment, EPS also found that a high parking standard is at odds with the goals in the specific plans: PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 3 • The specific plans are intended to create synergistic, desirable, livable, walkable, and attractive areas and activate commercial areas with residential uses. • Having a high parking standard is at odds with the City's walkability goals. • A "sea of parking" discourages walking. • Downtowns with successful retail storefronts often require less parking. • Some nearby cities have lower residential requirements. Furthermore, the assessment highlighted that parking reforms are occurring throughout the State, including voluntary parking reductions by local jurisdictions, and mandated reductions through State Legislation. In fact, because of Assembly Bill 2097 (AB 2097), which became effective January 1 , 2023, much of Santa Ana and parts of Anaheim and Orange can no longer require parking. Such reforms, whether voluntary or mandated, have the effect of making development more economically feasible, which puts cities with high parking requirements at a disadvantage when competing for real estate investment. Private Storage Development Standards EPS also recommended that the City consider relaxing the requirement for private on- site storage for every dwelling unit. EPS suggested that the specific plan's existing standards could be removed in their entirety, set as a percentage of units, or changed to match neighboring cities. EPS's recommendation was based on feedback provided from developers interviewed as part of their stakeholder engagement and, as such, no alternative standards were recommended. Furthermore, because private on-site storage is often required for the purpose of storing large items out of sight, including bikes and electric scooters, EPS suggested that the City could consider expanding a requirement for bike and scooter parking, as an alternative to private storage. ANALYSIS: Overview The intent of EPS's assessment was to eliminate barriers to development and create a more competitive environment for real estate investment within the DCCSP and RHASP. To consider the City's competitiveness, staff reviewed the development standards of neighboring cities and created matrices for comparative purposes. The matrices for parking and private storage are provided in their relative sections below. However, it should be noted that the comparison of development standards among cities does not necessarily translate to development feasibility. In other words, reducing development standards to match neighboring cities would not eliminate barriers to development if the standards of the neighboring cities are still onerous or economically PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 4 infeasible under current market conditions. Similarly, the development standards of one city verses another are a moot point when State laws allow developers to sidestep local regulations (i.e., AB 2097, density bonus concessions, or mandated parking standards for low-income housing). The following provides an assessment of the City's multi-family residential parking standard and private storage requirements in the DCCSP and RHASP. Multi-Family Residential Parking Standards The assessment provided by EPS recommended that the parking requirement for multi- family residential be reduced from 2.25 spaces per dwelling unit to 1 .75 spaces. The recommendation was based on a list of projects obtained from CoStar, a commercial real estate information and analytics platform. The CoStar information compared eleven (11) projects constructed in Irvine, Orange and Santa Ana over a 20-year period, and determined that developers provide, on average, 1 .8 spaces per unit. EPS also stated in their assessment that residents use, on average, 1 .46 parking spaces per unit (1 .06 spaces per bedroom). EPS stated that the average use of parking is based on a utilization study conducted in Northern California, and relies specifically on usage data from the cities of San Jose and Sunnyvale, CA. City staff reviewed the eleven (11) projects identified in the CoStar data set and believes the type of development evaluated would be appropriate for the DCCSP and RHASP areas, as envisioned, and therefore provides worthwhile details on the quantity of parking and dwelling unit sizes. Table 1 below summarizes the unit composition of the eleven (11) projects. However, it is important to note that the dates these projects completed construction were between the years of 2006 and 2023, which means the land acquisition and construction costs for most of the projects occurred outside of the current climate of exceptionally high land values and high loan rates. Therefore, while these projects reflect the type of development desired, it should be noted that it is unknown if these projects would be feasible in today's economic climate, even if the City reduced parking requirements to a bare minimum. Staff also reviewed the projects listed in the "parking utilization" survey referenced by EPS, and found that many of the locations are located near quality public transit (BART/Caltrain stations), in highly urban areas (San Francisco/Oakland), or near a college campus (UC Berkley). Even the locations located in San Jose and Sunnyvale are near light rail stations, where residents could walk or bike to quality transit. As a result, staff cautions that the "resident usability data" of 1 .46 parking spaces per unit may not accurately reflect the parking habits of Tustin residents within the DCCSP and RHASP areas. PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 5 Table 1 Reference Projects from EPS Report Number Number of Parking Project Name Property Address Year Of Number Percent Percent Percent Percent Parking Spaces/ Built Of Units Studios 1-Bed 2-Bed 3-Bed Stories Spaces Unit Cameo 1055 W Town&Country 2020 5 262 21.76 33.97 36.64 7.63 345 1.32 (Market Rate) Rd.,Orange Kelvin Court 2552 Kelvin Ave.,Irvine 2008 3 132 9.09 52.27 34.09 4.55 180 1.36 Somerset 10 Marketview,Irvine 2006 3 378 44.97 55.03 550 1.46 (Market Rate) Orchard Hills 100 Whispering Trail, 2008 3 500 46.00 54.00 750 1.50 (Market Rate) Irvine The Marke 100 E MacArthur Blvd, 2014 5 300 52.67 42.67 4.67 450 1.50 (Market Rate) Santa Ana Residences on Jamboree 2801 Kelvin Ave,Irvine 2017 5 381 26.77 37.53 30.45 5.25 601 1.58 The Cartwright 17600 Cartwright Rd, 2021 5 272 11.03 48.90 40.07 453 1.67 Irvine Park on First 100 S Elk Ln,Santa Ana 2023 6 603 4.64 45.44 42.79 7.13 1157 1.92 (Market Rate) Eleven 10 1110 W Town&Country 2018 5 260 16.54 45.00 38.46 502 1.93 (Market Rate) Rd,Orange Main Street Village 2555 Main St,Irvine 2009 4 481 55.09 41.58 3.33 1100 2.29 (Market Rate) Anacapa (Market Rate) 100 Anacapa,Irvine 2006 3 380 47.63 52.37 900 2.37 Regardless of the precision of the utilization data cited, EPS's recommendation to reduce the parking for multi-family residential projects is supported by parking standards staff compiled from neighboring cities. Data collected from the cities of Irvine, Orange, Santa Ana, Anaheim and Fullerton have been compiled in two (2) comparison matrices, which are provided below. Two (2) matrices are needed because the cities of Irvine and Orange have different parking rates based on development project characteristics, including whether residents are owners or renters, whether the parking is in garages or unenclosed, and whether a project contains more or less than 50 units. In effect, one (1) matrix principally reflects parking requirements for apartment units, whereas the other reflects required parking for units that are for sale. Staff also noted in the matrices that Tustin is the only trade area city that completely prohibits the use of tandem parking. All of Tustin's neighbors allow, or have a means to allow, tandem parking for resident parking. PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 6 Matrix 1 Multi-Family Parking Requirement RENTAL UNITS Size Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom Residents 2 2 2 2 2 2 Tustin Guests 0.25 0.25 0.25 0.25 0.25 0.25 TOTAL 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) Residents 1(PT) 1.4(PT) 1 6(PT) 2(PT) 2(PT) 2(PT) Irvine* Guests 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) TOTAL 1.25 1.65 1.85 2.25 2.25 2.25 Residents 2 2 2 2 2 2 Santa Ana Guests 0.25 0.25 0.25 0.25 0.25 0.25 TOTAL 2.25(NT-1) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) Residents 1.2 1.7 2 2.4 2.7 3 Orange** Guests 0.3 0.3 0.3 0.3 0.3 0.3 TOTAL 1.5(PT-R) 2(PT-R) 2.3(PT-R) 2.7(PT-R) 3(PT-R) 3.3(PT-R) Residents 1(PT) 1.75 PT) 2(PT) 2.75(PT) 3.5(PT) 4(PT) Anaheim Guests 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) TOTAL 1.25 2 2.5 3 3.75 4.25 Residents 1.25(PT) 1.5 PT) 1.75(PT) 2(PT) 2(PT) 2(PT) Fullerton Guests 0.5(NT) 0.5(NT) 0.75(NT) 1(NT) 1(NT) 1(NT) TOTAL 1 1.75 12 12.5 13 13 13 Yellow cells represent the lowest parking standard by dwelling size(bedroom count). Numbers are parking spaces required per unit * Irvine:Assumes rental and low/moderate income units and carports. The resident parking standard for ownership units are higher.Visitor parking standards are higher with resident garages. ** Orange:Assumes project has 50+ DU & unenclosed parking for residents. Parking numbers are higher for projects with less than 50 DU,or with resident parking in garages. NT:Tandem Parking not allowed NT-E:Tandem Parking not allowed unless minor exception granted PT:Tandem Parking permitted PT-R:Tandem Parking permitted with discretionary review PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 7 Matrix 2 Multi-Family Parking Requirement OWNERSHIP WITH ENCLOSED GARAGE PARKING Size Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom Residents 2 2 2 2 2 2 Tustin Guests 0.25 0.25 0.25 0.25 0.25 0.25 TOTAL 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) 2.25(NT) Residents 1 (PT) 1.5(PT) 2(PT) 2(PT) 2(PT) 2(PT) Irvine* Guests 0 7(NT) 0 7(NT) 0 7(NT) 0 7(NT) 0 7(NT) 0 7(NT) TOTAL 1.7 2.2 2.7 2.7 2.7 2.7 Residents 2 2 2 2 2 2 Santa Ana Guests 0.25 0.25 0.25 0.25 0.25 0.25 TOTAL 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) 2.25(NT-E) Residents 1.4 1.9 2.3 2.6 3.1 3,6 Orange** Guests 0.3 0.3 0.3 0.3 0.3 0.3 TOTAL 1.7(PT-R) 2.2(PT-R) 2.6(PT-R) 2.9(PT-R) 3.4(PT-R) 3.9(PT-R) Residents 1(PT) 1.75 PT) 2(PT) 2.75(PT) 3.5(PT) 4(PT) Anaheim Guests 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) 0.25(NT) TOTAL 1.25 2 2.5 3 3.75 4.25 Residents 1.25(PT) 1.5 PT) 1.75(PT) 2(PT) 2(PT) 2(PT) Fullerton Guests 0„5(NT) 0.5(NT) 0.75(NT) 1(NT) 1(NT) 1(NT) TOTAL 1.75 2 2.5 3 3 3 Yellow cells represent the lowest parking standard by dwelling size(bedroom count). Numbers are parking spaces per unit * Irvine:Assumes Ownership and resident garage parking. Resident parking numbers for rental and low/moderate income units are lower;visitor parking numbers are lower for carports. ** Orange:Assumes project has enclosed parking for residents,and private driveways less than 18 feet in length. Parking numbers would be lower for projects with resident parking in unenclosed spaces,or with private driveways of 18 feet in length. NT:Tandem Parking not allowed NT-E :Tandem Parking not allowed unless minor exception granted PT:Tandem Parking permitted PT-R :Tandem Parking permitted with discretionary review The comparison matrices illustrate that Tustin's requirement of 2.25 parking spaces per unit is not competitive for projects that include smaller units (studio and one-bedroom units), and is roughly on par with two-bedroom parking requirements. Since multi-family development projects in Orange County are predominately comprised of two-bedroom PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 8 units or less, it is clear that Tustin's multi-family residential parking requirements do not support development in the DCCSP or RHASP. The distinguishing difference between Tustin's standard and most of the other cities is that Tustin's requirement of 2.25 spaces per unit is a "flat rate", applied to each dwelling unit regardless of the number of bedrooms. Other cities in the trade area use a "scalable rate", which has a lower parking requirement for smaller dwelling units with less bedrooms, and a higher rate for dwellings with more bedrooms. This results in a situation where, comparatively speaking, Tustin discourages developments with smaller efficiency units, which are more likely to occur along Red Hill Avenue or in the Downtown; and encourages multi-family projects with larger dwelling units, which are less likely to occur in vertical construction. For the City to be more competitive in our trade area, staff recommends that the Commission consider changes to the specific plans to correlate the number of required parking spaces with the size of the dwellings (i.e., bedroom count). Staff also recommends that the Commission consider a revision to allow tandem parking for residents (tandem parking would continue to be prohibited for guest parking). Private Storage Development Standards It is not uncommon for cities to require multi-family residential projects to provide enclosed private storage areas for each dwelling unit. This requirement is intended to provide a location where residents can securely store larger items, particularly those items a resident may not want to keep inside. This includes bicycles, surf boards, barbeque equipment, etc. The reason cities started adopting private storage requirements for multi- family developments was to minimize the open storage of items on balconies and common open space areas, where it can become cluttered and an eyesore. Many apartments' owners also charge fees for residents to store personal items in common storage areas, thereby creating additional cost for residents. Additionally, private storage areas are often required to be secured, with the intent of reducing theft of items from porches, entries and other accessible areas. Multi-family residential projects, constructed in the DCCSP and RHASP, are currently required to provide each dwelling unit with a secure, enclosed private storage area. Within the RHASP the size of the private storage area is ninety (90) cubic feet, with a minimum footprint of twenty-four (24) square feet. In other words, a 4-foot-wide and 6- foot-deep space would need to have a minimum "ceiling" height of 3.75 feet. This amount of space would suffice for storing a few bicycles. Within the DCCSP the size of the area is fifty (50) square feet. The cubic size of this area is not specified, nor is a minimum height. If the fifty (50) square feet is a "walk in" closet, which would assume an 8-foot ceiling height, it would equate to 400 cubic feet. However, the cubic area could be significantly less if the storage is enclosed under a stairwell, under an outdoor countertop, or other space with a height less than eight (8) feet. It is important to note that both specific plans allow the private storage area to be counted towards the minimum amount of private open space; therefore, if the private storage space requirement is eliminated, without reducing the amount of private open space required, it has little impact on the feasibility of a development project since the same amount of area is otherwise required. PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 9 In addition to the private storage requirements in the DCCSP and RHASP, the Tustin City Code (TCC) requires that residential carports include a lockable storage space of at least ninety (90) cubic feet. This requirement is to accommodate storage that would otherwise have been assumed within an enclosed garage. The TCC allows for these storage areas to encroach into the front of the carport's parking space, provided there is a minimum vertical clearance of four (4) feet to accommodate the hood of the parked vehicle. Staff has reviewed the zoning ordinances for other trade area cities, and noted that at least all but two (2) require private storage space for individual dwelling units. Table 2 below provides a summary of the private storage requirements in the trade area: TABLE 2 Multi-Family Residential Private Storage Requirements Tustin- Tustin- Tustin- RHASP DCCSP TCC Irvine Santa Ana Anaheim Orange Fullerton MINIMUM 90 cubic 50 square 90 250 cubic 100 cubic 120 cubic SIZE: feet feet cubic feet feet feet feet MINIMUM M i n i m u m DIMENSION: 24 square Minimum dimension feet depth of 4 None of 4 feet by None None "footprint" feet 8 feet LOCATION: Storage to be Storage Storage to provided in located in Unified Storage Storage to be dwelling close storage provided in be unit's area or proximity provided in provided garage or proximity module. carp to dwelling. in private port/ adjacent elsewhere, to unit or Location Location open but not not covered Nothing to private Nothing not space parking Identified directly recreation identified. Identified identified. area area -leisure accessible Assumed in from unit. dwelling area. unit. SECURITY: Fully Fully Enclosed& enclosed& Enclosed enclosed lockable Cabinet Secured lockable &lockable OTHER: Counts May be Private Counts toward located storage is toward min. over hood in addition private to cabinets minimum open of car n/a n/a and closets open ace with min. typically p p yp space. space of clearance. found in 100 sf. unit. PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 10 Staff believes that the requirement of private storage areas for each individual unit serves a valid purpose. Furthermore, the requirement of private storage areas is not unique to the City of Tustin. Therefore, staff does not recommend the elimination of the private storage area requirement within the specific plans, especially since the specific plans allow the storage area to count toward the required private open space. However, staff believes that the private storage area requirements for the two (2) specific plans should be consistent. Staff therefore recommends that the DCCSP be revised to match the RHASP. Staff also recommends that the Commission consider the elimination of the TCC carport storage requirement for projects in these specific plan areas. Consideration of removing the carport storage requirement from the TCC citywide is at the discretion of the Commission (Note: for areas outside the DCCSP and RHASP, the TCC does not require private storage areas in addition to the carport storage requirement). Furthermore, staff believes there is opportunity to amend the specific plans to authorize the Community Development Director, or Zoning Administrator, to consider alternatives to private storage areas, such as consolidating private storage lockers or using bike storage cabinets in common recreation areas. CONCLUSION: Multi-Family Residential Parking Standards It is not possible to identify a development standard that quantifies the exact number of parking spaces needed to support residential development, as the "need" for on-site parking is dictated by many factors, including adjacency to transit, affordability, public policy, family size, availability of onsite or off-site overflow parking, crime rates, etc. Furthermore, public opinion on "adequate parking" varies significantly. Traditionally, the public opinion has been that more parking is better, as residents generally expect convenient on-site parking near their residence. More recently public policy advocates promote less parking, in order to reduce housing costs, support public transit, and reduce environmental impacts. Also, it is worth noting that cities that maintain parking minimums will continue to be at a real estate development disadvantage to the more urbanized areas that have high- capacity transit routes, such as Santa Ana, Orange and Anaheim, as AB 2097 dictates parking in high quality transit areas is wholly determined by the developer. Furthermore, it should be noted that completely eliminating parking requirements in Tustin would likely not "level" the economic factors, as the real estate market would likely require developers in Tustin to provide more parking than AB 2097 cities, because the RHASP and DCCSP lacks the transit system found in the more urbanized areas, which residents would need to support a car-free lifestyle. Also, other opportunities such as joint use parking, density bonus waivers and concessions, reduction of parking due to ADA requirements are also readily available to developers when proposed in conjunction with mixed use project and/or affordable housing projects. PC Report July 9, 2024 DCCSP & RHASP Multi-Family Residential Parking & Private Storage Page 11 Private Storage Development Standards For consistency purposes, the DCCSP could be revised to match the private storage area requirements in the RHASP, and that the specific plans clarify that the carport storage requirement in the TCC does not apply. There is also opportunity to consider flexibility on how the storage of resident's private items are stored, such that deviations in the minimum storage requirements can be authorized based on findings by the Community Development Director or Zoning Administrator. In summary, staff recommends that the RHASP and DCCSP be amended to: 1. Provide a scalable parking requirement that is based on unit size (bedroom count) and continue to allow joint/shared parking among various uses. 2. Authorize tandem parking for resident parking. 3. Revise private storage area requirements to match the requirements in RHASP (90 cubic feet). 4. Allows private storage area requirements be provided via common storage areas free of charge. Attachment: 1. EPS Final Report Prepared by: r� Jay{-E�stman, AICP, Assistant Director Approved by: /1&&�= Justi L. WWillkom, Director Report Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments The F"rr7vzomics gfLcnd 1%se i Prepared for: City of Tustin Prepared by: Economic & Planning Systems, Inc. Economic&Planning Systems,Inc. 800 Wilshire Boulevard Suite,410 November 16, 2023 Los Angeles,CA 90017 213 489 3838 tel Oakland Sacramento EPS #224029 Denver Los Angeles www.epsys.cons Table of Contents 1. Introduction............................................................................................. 1 2. Study Process and Methodology .................................................................2 3. Analysis Findings......................................................................................3 4. Policy Options and Implementation Timeline ................................................5 5. Policy Impact on Development Feasibility................................................... 10 APPENDIX A: Reassessment Project Overview.................................................... 12 List of Figures Figure 1: The Tustin Development Trade Area includes Orange, Santa Ana, and Irvine. 3 Figure 2: Summary of Policy Options and Recommended Implementation Timeline ......5 Figure 3: Feasibility Impacts of Proposed Near-Term Policy Options on Large and SmallSites...................................................................................... 11 Economic & Planning Systems, Inc. 1 . Introduction This report summarizes the findings and policy options developed as part of the Specific Plan Reassessments study conducted by Economic & Planning Systems (EPS) for the City of Tustin. The study's objective is to identify barriers and challenges to real estate investment and redevelopment in the Downtown Commercial Core Specific Plan (DCCSP) and Red Hill Avenue Specific Plan (RHASP) areas and propose planning and policy solutions to overcome them. The study and proposed policy options represent the next phase in refining the policies of the two Specific Plans, originally adopted in 2018, to better achieve the desired vision and goals. This work also implements one of the proposed housing programs under the City of Tustin's Housing Element for 2021-2029. EPS worked with City Staff to prepare an action plan and timeline for implementation of various policy options, which are tailored to the city's unique needs and goals. The proposed policy options build upon existing City efforts, address the most straightforward and attainable opportunities, and align with the visions embodied in each Specific Plan. They are designed to help catalyze development and stimulate investment in the Plan Area, thereby realizing the City Council's goal for commercial revitalization and increased housing opportunities in Downtown and the Red Hill Avenue corridor. This study and associated policy options focuses on the factors affecting development economics within the DCCSP and RHASP area. It is important to emphasize that economic outcomes are only one lens for evaluating land use policy decisions. Other key considerations outside the purview of this analysis include, without limitation: Urban design and architecture Affordable housing Traffic and parking availability Environmental impacts Impacts to City finances Tustin Reassessments Report- 11-16-23.docx 1 Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments 2 . Study Process and Methodology The findings and analysis presented herein represent the culmination of a detailed reassessment of the two Specific Plans that has included market analysis, local and state policy review, developer/ property owner interviews, stakeholder outreach (including a series of meetings with Planning Commissioners and the City Council's Economic Development Ad Hoc Committee), and related tasks. EPS also utilized Stakeholder input to identify a list of fourteen (14) potential "opportunity sites" within both Specific Plan areas that might be well suited for redevelopment. EPS then worked with City staff to identify five of these sites that would be representative of likely development scenarios that might occur within these areas, including both larger and smaller sites, as well as both occupied and vacant sites. To arrive at the proposed policy options, EPS tested the impact of various regulatory changes on development feasibility at the key opportunity sites. EPS created a generalized business case for a likely development project or building prototype at each of the opportunity sites selected through the study process and measured feasibility outcomes in terms of residual land value, or the amount that developers could afford to pay for land after all accounting for all development costs. The feasibility analyses reflect current market conditions, comparing values to costs for specific development scenarios. EPS also conducted sensitivity tests for various project parameters, which revealed that certain policy changes can significantly improve development feasibility. For example, relaxing requirements related to on-site parking, ground floor retail, inclusionary housing, and residential density are all expected to improve project economics. Reducing affordable housing and park fees are likely to have a similar effect. Taken together, these measures can have a transformative effect even on the opportunity sites with the most challenging constraints from an economic perspective. The next step in implementing any of these changes requires agreeing on what is appropriate and reasonable as well as drafting detailed and specific policy proposals. EPS prepared a separate Feasibility Analysis Technical Memorandum that details the methodology and findings of the feasibility analysis. It includes additional details on the scenarios, prototypes, and assumptions utilized to test changes in development policies. 2 Economic & Planning Systems, Inc. 3 . Analysis Findings EPS found that the fundamental economic characteristics within each Specific Plan area are strong and favorable given Tustin's location in a broader"Trade Area" that includes parts of northern and central Orange County. The Trade Area, shown Figure 1, is important because it incorporates the nearby locations that local developers and investors compare against Tustin and the Specific Plan Areas when considering investment opportunities. Key market findings included: • Tustin is strategically located and well connected to the regional economy • Tustin has favorable socio-economic indicators for housing and related real estate investment (e.g., income, education, age) • Tustin's retail market is sizable but has mixed market performance • Tustin's office market is not currently a major economic driver • Tustin's has a strong housing market but minimal new supply, which suggests pent-up demand • Redevelopment will be challenged by occupancy and revenue stream of existing properties Figure 1: The Tustin Development Trade Area includes Orange, Santa Ana, and Irvine. t,arutos 9=ullartni BuQi`��P.3rk Anaheim Garden Grove �NIeStFfSinstPf aw net inemeii Fwntaln Valley Hunbrig$an r ' 6earh Rancho e sa= NEWPOrk rarest M3rgririo Beat Laguna Hills 3 Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments Whether looking at socioeconomic indicators, rental data, or reputations for schools and public safety, Tustin seems well-positioned relative to the trade area for housing development, which has been the primary driver of trade area redevelopment activity in recent years. Additionally, the area around Old Town has several features that would be viewed favorably by real estate developers and investors relative to nearby areas, especially its historic and walkable character within a well-located suburban location. These attributes are well aligned with current trends that are driving real estate demand, especially for housing. Despite an overall favorable market context, EPS identified aspects of local policy that are likely barriers to development feasibility in the Specific Plan areas, including: • Ground floor retail requirements • Parking requirements • Heigh limits • Limitations of the Residential Allocation Reserve discretionary review process • Park impact fees • Inclusionary housing requirements • Open space & storage requirements in residential buildings These categories represent both standard drivers of development economics as well as policy barriers unique to the DCCSP and RHSP. EPS utilized this list in developing a set of Policy Options that were presented to City staff and the Economic Development Ad Hoc Committee, and which are included in Appendix A. EPS also noted that rapidly evolving changes in state planning laws, including rules around the State Density Bonus, reform of parking standards, and other laws intended to help housing developers bypass lengthy or difficult approvals will impact future development in Tustin. Even where these policies don't directly affect the Specific Plan Areas, they have and will likely continue to alter the competitive environment in surrounding parts of northern and central Orange County and thus indirectly impact the development economics of the Trade Area. 4 Economic &Planning Systems, Inc. 4. Policy Options and Implementation Timeline Based on findings from the feasibility analysis, EPS worked with City staff to propose a set of policy options and implementation timeline, which are summarized in Figure 2 and further described below. In addition, a detailed EPS presentation outlining the Specific Plan Area Policy Options to Consider is attached in Appendix A to this report. Figure 2: Summary of Policy Options and Recommended Implementation Timeline • Preliminary residential • Expand developer services • Increase residential capacity parking standards update and educational materials • Refine parking strategies and • Set all residential Park Fees • Revisit Voluntary Workforce pursue supply investments equal to RHASP rate Housing Program • Complete/ expand public • Temporarily suspend Pending ODS: realm improvements and affordable housing in-lieu fee . Modify retail requirements activation and branding • Expand fee deferment (incl. parking) initiatives • Commence public realm • Eliminate PAR Program • Explore economic improvements: development, site marketing • Modify Iheight restrictions efforts > Parklets on El Camino Real and vain Street • Relax residential private • Implement policies to > Gateway signage and Main storage requirements accelerate redevelopment of Street streetscaPe • Clarify residential denslty vacant sites bonus approach Short term (6-12 months): Within the next year, options include the following: ► Implement preliminary parking standards update. Reduce base residential parking ratios (from 2.25 spaces required per unit to 1.5-1.75 spaces per unit) to help stimulate multi-story infill and vertical mixed-use development. Detailed research on residential parking standards and local policy context is contained in the Parking Policy Context & Proposed Strategies section of Appendix A. ► Set all residential Park Fees in the Plan Areas at an equal level based on the current RHASP rate. Most projects in the Plan Areas must currently pay parkland impact fees based on market land value. Tustin could create an administrative rule to set "market" land value equal to $2.5 million per acre for the purposes of park fee calculation. This is already the value 5 Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments established for non-subdivision projects in RHASP. This straightforward change would provide more certainty and likely cost reduction for developers as well as create internal consistency within the City's policies, reducing confusion for staff and potential project applicants. ► Temporarily suspend affordable housing in-lieu fee. As a near-term strategy, waive the in-lieu fee for developers providing 5 percent Very-Low Income units onsite. The City Council could introduce a motion to temporarily suspend inclusionary housing in-lieu fees for all Specific Plan area projects for 18-36 months. This would incentivize investment in the Plan Areas by improving feasibility for all residential projects. However, it is anticipated that some developers may still pursue on-site affordable housing to utilize State density bonus and associated waivers, especially before the City updates its policies related to parking and design standards. If no development projects are initiated during the initial 18-36 months period, the City may utilize that information in updating its affordable housing policies (in the mid- and long-term). ► Expand fee deferment. Adjust administrative rules to allow developers to pay all impact fees at Certificate of Occupancy rather than at permit issuance, which can have an outsized benefit on project financing for developers with likely minimal impact on City finances. This could also be a temporary, expiring benefit intended to create urgency for developers before Mid-Term and Long-Term Policy Options can be implemented. ► Complete planned public realm improvements. This includes parklets on El Camino Real and Main Street, as well as gateway signage and streetscape improvements on Main Street. Mid-term (12-24 months). Over the next two years, the following policy options may be implemented in conjunction with adopting objective design standards: ► Expand developer services and educational materials. Continue efforts to streamline permitting and implement a "one-stop shop" on the City website for relevant information related to development (e.g., affordable housing requirements, objective design standards, fee schedules, density bonus). This can provide a resource for both developers and community members to better understand City incentives and planning and entitlement process for the Plan Areas. Revisit Voluntary Workforce Housing Program. Consider engaging a consultant to review the City's inclusionary program and conduct feasibility analysis to optimize rules and ensure consistency with the City's Housing Element, evolving State law, and economic considerations. Temporary or permanent waivers for small sites or vacant sites could be used as an additional incentive for redevelopment in key locations. 6 Economic & Planning Systems, Inc. Modify retail requirements and associated parking. The DCCSP requires 100 percent retail frontage on many streets, providing minimal flexibility. The City could require a lower percentage of retail and/or require retail along fewer number of street frontages to increase development feasibility and also avoid overbuilding of retail spaces that could lead to empty storefronts in lower demand locations. At the most important locations for retail, such as along the historic El Camino Real in Old Town, the City could establish retail nodes and incentivize retail building by making residential uses at these locations allowable only as a bonus for providing retail frontage or square footage. This strategy would discourage developers from trying to get around building ground floor retail (e.g., through State Density Bonus waivers) at these key locations. Determining the locations of these retail nodes could be completed in tandem with establishing objective design standards. The City may also want to conduct a retail market study to help determine the size of these nodes. Given that the feasibility analysis findings indicate additional challenges for small sites, the City could incentivize vertical mixed-use infill projects on small sites, especially in Old Town, by clarifying and promoting its parking in-lieu fee policy and/or further relaxing (retail) parking requirements for such sites or at retail nodes. More relevant information on parking is contained in the Parking Policy Context & Proposed Strategies section of Appendix A. Eliminate the RAR Program and allow residential in most Plan Area locations. The RAR was initially conceived to allow for housing development on previously commercially-zoned properties and to provide certainty and streamlining around environmental review. However, the program has had limited success in encouraging development, likely due to the extended, discretionary approval process that results in uncertainty around whether and how much housing will be allowed or"allocated" for a given project. Eliminating the RAR process and allowing residential uses in most Plan Area locations will provide more certainty to developers (up until EIR unit count limits are exceeded) and resolve potential inconsistency in the City's Housing Element by ensuring housing is permitted on all housing inventory sites within the Plan Areas. Forthcoming objective design standards and other Specific Plan requirements will still apply. Stakeholder interviews confirmed broad consensus and support within the City of Tustin around eliminating or replacing the RAR. Note that the City may choose to maintain some limits on residential uses at key retail nodes (see prior bullet) to incentivize desired development patterns. Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments Modify height restrictions. In some cases, providing additional height, even if stepped back on the upper stories, will likely improve project feasibility, especially for vertical mixed-use development on smaller sites in the DCCSP. Implementing modest height increases outside of freeway- adjacent parcels represents another policy option, especially where historic resource protection is not a concern. Relax residential private storage requirements. Current storage requirements were noted by a housing developer active in Tustin as unusual and contributing to an increased cost of housing development. Developers typically have approaches for determining an appropriate amount of storage to meet the needs of tenants even when none is required. The City could consider relaxing requirements for private on-site storage (e.g., remove entirely, set as percentage of units, or look to match neighboring cities). If deemed necessary, the City could conduct comparative research on surrounding jurisdictions to help determine what code changes might be appropriate. Revising these requirements could be done in conjunction with expanding bike parking requirements, which also align with reduced vehicle parking requirements. Clarify residential density bonus approach. Develop an official Schedule or Brief (posted on website) to specify how City staff determines State Density Bonus under the "form-based" code for the Specific Plan areas. This would provide greater clarity for developers given that "form-based" codes— where density is governed by height and design standards only, rather than units per acre or floor area ratio—are still less common within California. 1 Increase residential (unit-count) capacity. If changes to the Specific Plans are successful and result in multiple new development projects, there may be a shortage of available residential units that can utilize the Environmental Impact Report (EIR) conducted as part of the Specific Plans. The City could consider updating the EIR with higher unit counts and/or implementing an administrative waiver program for residential projects of less than five acres within the Specific Plan areas that otherwise comply with City policies and regulations (using CEQA Infill Exemption {Cal. Code Regs. Tit. 14, § 153321). Refine parking strategies and pursue supply investments. Implement strategies to manage parking demand and supply as well as refine or eliminate certain parking standards, plan/finance new facility investments, update fees, and refine parking management (e.g., time limits, metering). More relevant information is contained in the Parking Policy Context & Proposed Strategies section of Appendix A. 8 Economic & Planning Systems, Inc. Complete and expand public realm improvements and pursue additional activation and branding initiatives. Complete any planned capital projects to enhance the public realm and look to complement those improvements by exploring activation and branding programs that engage with businesses, property owners, public, etc. More relevant information and examples of activation and branding initiatives are contained in the Long- Term Action Options section of Appendix A. Expand economic development and site marketing efforts. Evaluate the potential for targeted economic development projects or partnerships that catalyze private investments. This could include, among other initiatives, the creation of marketing materials (e.g., maps, brochures, websites) to highlight investment opportunities and future projects within the Specific Plan areas. Implement policies to accelerate redevelopment of vacant sites. If no new development projects have been proposed on key vacant sites within the Plan Areas over the next 24-36 months (after other policy options have been implemented), consider implementing additional carrot/stick policy options (e.g., waivers, concessions, taxes, code enforcement) and exploring public-private partnerships at key vacant or under-utilized sites in the Plan Areas. More relevant information and examples are contained in the Long Term Action Options section of Appendix A. City of Tustin public officials interviewed as part of this project have thus far expressed a desire to openly contemplate a wide range of possible policy changes. It is important to note that each of these changes comes with tradeoffs, including potential impacts on neighborhood parking supply, city revenue, future continuity of retail frontages, and inclusion of income-restricted housing units on-site at new developments. In choosing the right set of policy changes, EPS recommends that city officials carefully consider all potential tradeoffs, not just the economic considerations analyzed as part of this analysis. 9 Downtown Commercial Core and Red Hill Avenue Specific Plan Reassessments 5 . Policy Impact on Development Feasibility As noted at the outset, the goal of this study and suggested policy changes is to decrease barriers to real estate investment and redevelopment and thereby spur desired economic investment within the Specific Plan Areas. Visible impacts of policy changes, such as construction of new buildings can take several years due to the length of the development process. Investment and development activity is also highly dependent on market conditions. In 2023, overall macro market conditions for new development have worsened significantly, primarily due to steadily escalating interest rates since mid 2022. Higher interest rates make debt financing for construction and land purchases much more expensive, and also reduce the amount that most individual home purchasers and investors can afford to pay for newly built homes and apartments. These decreases in price and valuation have happened at the same time as year- over-year construction cost inflation has moved above 10 percent and Orange Country apartment rents have cooled. These market changes mean that few developers are likely to start construction on new projects—both in Tustin and surrounding locations—until market conditions improve, which may be more than a year. However, established and sophisticated developers may begin the development process somewhat earlier, in anticipation of those market improvements. This could involve entering into land acquisition agreements and applying for project approvals in preparation for when interest rates improve. The proposed policy options are expected to increase feasibility and thereby increase the likelihood that developers will choose to focus their new development investments within the Specific Plan Areas instead of other nearby locations within northern and central Orange County. Figure 3 below provides a summary of the expected feasibility impacts from the set of proposed Near-Term Policy Options on two example sites within the DCCSP: one large and one small. As shown, the large site project becomes feasible under the Near-Term Policy Options.' On the other hand, the smaller site faces more challenging economics, and the set of Near-Term Policy Options are not sufficient to make a development project feasible. 1 A project is deemed feasible when the project results in sufficient proceeds, after construction costs and profit, to pay a "residual land value"that is greater than the market value of the site (which was estimated between $4.8 and $5.65 million for analyzed sites within the DCCSP) 10 Economic & Planning Systems, Inc. However, EPS notes that proposed Mid-Term and Long-Term Policy Changes such as further parking reductions, adjustments to on-site affordable housing requirements, or impact fee waivers could create a feasible project at this site. These additional changes may be necessary to make development feasible at smaller (e.g., less than one acre), constrained sites in and around the Old Town area. The feasibility results are based on more extensive analysis detailed separately in the Feasibility Analysis Technical Memorandum. Figure 3: Feasibility Impacts of Proposed Near-Term Policy Options on Large and Small Sites (Year Term Policy Current Policies Options Implemented Residential Parking 2.25 per unit 1.6 per unit (awg) Park Fees $32,256 per unit $16,800 per unit Aff Units 5% Very-Low + Fee 5% Very-Law + ($6,900 per unit) $0 in Fees Example Large Site Changes:Description 4-Story Horizontal Mixed- Chan g 4-story Horizontal Mixed- Use (Wrap &Retail Strip) Residential parking reduced to Use (Wrap &Retail Stri Size 8.9 acres, 449 units 1.59 spaces per units 8.9 acres, 449 units Residual Land $2,669,000 Park fee assumes land value $6,850,000 Value per acre at$2.5M per acre Feasibility Unlikely Affordable Housing Feasible @ Existing Use Value In-Lieu Fee Set to$0 Example Small Site Description 4-Story Vertical Mixed-Use 4-Story Vertical Mixed-Use Size 0.45 acres, 40 units Same as above+ 0.45 acres, 40 units • Residual Land ($5,092,000) in-lieu retail parking $2,897,000 Value per acre Feasibility @ Existing Use Value Unlikely 11 APPENDIX A: Reassessment Project Overview CITY OF DOWNTOWN / CORE(DCCSP) RED HILL A VENUE (RHSP) x Reassessment Project p Overview mac (® Economic&Planning Systems, Inc. 800 Wilshire Boulevard,Suite 410 • Los Angeles,CA90017 R The Economics of Land Use 213.489.3838• www.epsys.com AGENDA TODAY • Introduction and Background • Overview of Market Context and Opportunity • Stakeholder Input • City Policy Context • Development Feasibility Analysis ■ Policy Options and Implementation Workplan ■ Parking Policy Context and Strategies Economic&Planning Systems EPS PPT Presentation 1 I INTRODUCTION AND BACKGROUND WHO WE ARE ■ California-based firm established in 1983 ■ Specialists in urban economics and publics finance REAL ESTATE PUBLIC LAND USE& ECONOMIC ECONOMICS FINANCE TRANSPORTATION DEVELOPMENT& ■ Balance of public and REVITALIZATION private sector clients �o% ■ Strong practice in 1,g ' V —economics of i n f i l l FISCAL& HOUSING PUBLIC—PRIVATE PARKS& ECONOMIC POLICY PARTNERSHIP(P3) OPEN SPACE redevelopment IMPACT ANALYSIS ECONOMICS Economic&Planning Systems EPS PPT Presentation 3 STUDY OBJECTIVES AND CONTEXT Objective DOWNTOWN Identify barriers and challenges to real estate C • investment in DCCSP / RHASP Plan Areas. C • Provide planning and policy options to address them. PLAN Context ■ DCCSP / RHASP not leading to type, amount of investment sought by Council ■ Housing Element commits to market evaluation, recommended policy changes that remove constraints on housing -- , � ` EIS^ ■.�. ■ Study is focused on factors affecting real1 estate development economics only I' Economic&Planning Systems EPS PPT Presentation 4 OVERVIEW OF STUDY PROCESS AND DELIVERABLES ✓ Market Position & Evaluation - General understanding of demographic and market factors affecting development prospects ✓ Policy Context - Review of city and state programs, policies and requirements ✓ Stakeholder Outreach & Engagement - Spoke with Developers, Property Owners, City Councilmembers, and Planning Commissioners ✓ High-Level Policy Options and Considerations ✓ Opportunity Site Feasibility Analysis — Technical analysis of development economics at selected Opportunity Sites to test impact of incentives and policy changes and leading to final options to consider ✓ Optional Analysis Tasks — Analysis of parking strategies and policies — Research on infrastructure financing sources y Final Policy Options to Consider for the Specific Plan Areas Economic&Planning Systems EPS PPT Presentation 5 HIGH - LEVEL STUDY FINDINGS 1 . Market Context and Opportunity — For residential development, local market conditions do not appear to be a major barrier based on Trade Area growth and activity — For retail and office development, market conditions are less favorable, although limited mixed-use or owner- / tenant-driven projects may be viable 2. City Policy Context — City land-use policies and zoning appear to be at least a partial barrier to redevelopment in Specific Plan Areas — Range of possible solutions exist but will require political support and alignment with city / community goals around development. Financial feasibility testing of certain policy levers can provide clarity on potential impacts to project economics. 3. Property and Ownership Barriers/Considerations — Some owners of strategically located sites appear reluctant to (re-) develop — Revenue from existing uses represent a redevelopment hurdle Economic&Planning Systems EPS PPT Presentation 6 I MARKET CONTEXT AND OPPORTUNITY KEY TAKEAWAYS FROM THE DATA Tustin has favorable socio-economic indicators TRADE AREA (e.g., income, education, age) a vnrna coda Coron Cerri his Strong residential demand throughout Trade Buena Park Fullerton Area is positive indicator for Plan Areas: Anah— ■ Numerous higher—density residential Garden Grove projects in Trade Area (mostly townhomes Weshninster and mid—rise; some vertical mixed—use) a°.saea n F—h"n Valley ■ Successful townhome project and recent Hunhngton developer proposals in Plan Areas geanh Costa Mesa Rancho Santa New office and retail unlikely to drive "ge�rt OfeS` Mar9ar'� redevelopment due to poor/uncertain market LapeaH,lla conditions Housing is the most likely economic driver for new development Economic&Planning Systems EPS PPT Presentation 1 8 QUALITATIVE FINDINGS PROMISING FOR DEVELOPMENT ■ Tustin named on Fortune list of 25 Best Places to Live for Families r; r ■ Both Plan Areas are centrally-located, well-connected to transportation corridors ■ DCCSP has particular allure due to historic, walkable character ■ Property owners report new townhomes have already t brought energy, younger demographic to Old Town '� I neighborhood I, ■ Informants indicate retail tenants priced out of ` expensive OC markets (e.g., Newport Beach, Irvine) interested in bringing trendy uses to second- generation spaces in Tustin, Orange, etc. ■ Schools, safety rated better than some neighbors Economic&Planning Systems EPS PPT Presentation 9 BROADER REAL ESTATE TRENDS ALSO PROMISING Plan Areas (especially DCCSP) are poised to leverage broader market trends: Development Real Estate Trend DCCSP Area RHASP Area Type + Tustin and study areas are slightly cheaper than Pandemic led to continued Orange County on average interest in less-expensive, more suburban markets + Minimal new rental and for-sale product represents major unmet market opportunity Residential Younger cohort seeks active + Combination of high Walk More typical, suburban lifestyles, access to bike/ped Score (89 vs 51 city avg.) commercial corridor and recreation amenities and attractive walking with limited walk appeal environment (Walk Score —70) Shift to place-based, + Unique historic character of More limited sense of Retail experiential retail in post- Old Town lends an inherent place due to major pandemic age of online sense of place thoroughfare shopping Economic&Planning Systems EPS PPT Presentation 10 I STAKEHOLDER INPUT DEVELOPMENT POLICY CONCERNS OF STAKEHOLDERS ■■■■ Multiple rounds of review can create delays and ■■■■■ ■■■■■ Scheduleincrease entitlement costs, project timeframe Some policies and requirements Certainty are unclear and subjective "Approvable" outcome projects may not be financially feasible Economic&Planning Systems EPS PPT Presentation I 12 STAKEHOLDERS NOTED POSSIBLE OPPORTUNITY SITES 1. El Camino Plaza (7.81 ac) 2.Armstrong Site (4.1 ac) 3. Farmers' Market Site (1.01 ac) 4. Radan `L'Site (0.45 ac0 n.. S.Jamestown Village (1.76 ac) 6.City Hall Site (9.63 ac) 7. School District Site (1.98 ac) �y f _ S. 125 W Main Street Site (0.25 ac) _ 9. Larwin Square (15.18 ac) �Y 10. Stephen's Square (2.95 ac) i 11. Wienerschnitzel + War �y kya Memorial Site (0.85 ac) r Economic&Planning Systems EPS PPT Presentation 13 . . . IN EACH OF THE SPECIFIC PLAN AREAS 1. Red Hill Plaza (8.25 ac) flM"' 2. Frontier Park (5.8 ac) 3. Red Hill Shopping Village (5.89 ac) w1�ti i. nvg t.ti. C i e4rr"M Fi pe P .arc 5 F�`• �y ♦F r,a rcu Re .•4 �z it Economic&Planning Systems EPS PPT Presentation 14 I CITY POLICY CONTEXT CITY POLICIES AND DEVELOPMENT FEASIBILITY Both Plan Areas have unique policies and requirements that directly affect development economics. Standard policy drivers of project economics: — Ground floor retail requirements — Parking requirements — Height limits Development policy concerns noted by stakeholders: — RAR / discretionary review process (for residential) — Fees & inclusionary housing requirements — Open space & storage requirements Removing policy barriers / costs generally involves trade-offs. Economic&Planning Systems EPS PPT Presentation 16 EVOLVING STATE LEGAL CONTEXT Law / Statute Description DCCSP / RHSP Application State Density Bonus Law More units and / or concessions for Partially overlaps with NO inclusionary housing. Housing Accountability Act Timely processing and "objective" standards for Area Plans may be exempt as (HAA) + Amendments (SB 330, housing approval. Restricts moratoriums or housing is discretionary(if not in 8, 1 67; AB 1 51 5, 31 94) caps. conflict with Housing Element) Requires ministerial approval of housing on Housing on Commercial " Applies to sites with > 50 feet commercial corridors." Including Density frontage on streets 7 wide Corridors (AB 2011 Bonus, allows 38-72 units/ac. Projects must be where multi-family > "permitted" 1 5% aff. and use "prevailing wage" labor. SB 6 Allows housing on commercial sites by right, Requires "skilled & trained" labor. but not "ministerial." Elimination of Parking Minimums Eliminate parking minimums for projects < %z near Transit (AB 2097) mile from major transit (e.g., commuter rail, City evaluating applicability bus lines with 1 5-minute headways) CEQA Infill Exemption (Cal. Code "Infill" projects bypass public review periods City could prepare Class 2 Regs. Tit. 145 § 1 5332) and portions of CEQA if developers submit (and exemption report template for City accepts) "Class 2 exemption findings" use by developers. Economic&Planning Systems EPS PPT Presentation I 17 I POLICY OPTIONS CONSIDERED RECONSIDER RESIDENTIAL ALLOCATION RESERVE (RAR) Barriers to Overcome: ■ RAR created uncertainty for housing developers and additional discretionary approval step with "beauty contest" effect ■ Housing Element allocation of RAR bank to specific sites adds new uncertainty Options ■ Modify / eliminate RAR approval process T S1TE'16 EL CGMlN6 PEAZA f&SWC Oi Sllti STAFET REAL Key Considerations a1 [AM NO NowNTowN SITE IS {f ! 1■ thw¢w COMMERCIAL 14042 NEWPORT AVE&EL CAMINO REAL -- CORE VACANT 2.13 A es ,,, ,,, I .�' F �• +� SPECIFIC PLAN ■ Increasing unit counts could require E P )I" QI}±�', 1 �y AREA CEQA consideration or EIR update '� fii I 52'6Gh 'g- 6RE SITE Z6N housin ■ Other State housing law applicability unclear (HAA + AB201 1 ) ■ Reduction in administrative burden may be an additional benefit Economic&Planning Systems EPS PPT Presentation 19 REVISIT AFFORDABLE HOUSING REQUIREMENT Barriers to Overcome: ■ Added cost / complexity of inclusionary housing can be tipping point for some projects �� Y Bonus ■ Tustin developers have built few on-site affordable units Options r , ■ Copy State Density formulas ncluslonarY ■ Create incentive program that goes beyond State Key Considerations ■ City's affordable housing goals and obligation to achieve RHNA affordability targets ■ Developers will compare requirements with nearby jurisdictions (see next slide) Economic&Planning Systems EPS PPT Presentation 20 MORE "SURGICAL" MIXED-USE (RETAIL) REQUIREMENTS Barriers to Overcome: ■ Ground floor retail does not always add value for developers on mixed-use projects ■ Requiring too much ground floor retail can lead to vacant storefronts, reduce project feasibility Options ■ Develop more focused retail requirement in at key ►^� '"""""""* . nodes and less than 100% coverage along frontage ■ Create a retail "density bonus" or similar incentive 1♦ Considerations ■ Balance with City goals to protect / ensure retail preservation and vitality Economic&Planning Systems EPS PPT Presentation 21 ADDRESS VACANT & UNDERUTILIZED SITES Barrier to Overcome: Vacant & Underutilized Sites with Reluctant Owners Carrots ■ Expand flexible fee payment (e.g., upon completion vs permit issuance) to all housing types ■ Temporary / expiring benefits (e.g., fee waivers, RAR or IHO exemptions, fast-track approval) ■ Density allowances, financial concessions (including 1033 exchange) Sticks ■ New/increased code enforcement, "public nuisance" policies, or fa4ade/landscaping rules ■ Vacant land tax (requires voter approval) ■ Eminent domain for public facilities (e.g., park or parking) - a "high bar" Other ■ Public-Private Partnerships (e.g., Development Agreements, shared parking) ■ Expand/continue matchmaking efforts (link owners with experienced developers) ■ Public investment and land assembly assistance (e.g., street vacations) Economic&Planning Systems EPS PPT Presentation 22 PURSUE PARKING STRATEGIES AND INVESTMENT Barriers to Overcome ■ Sometimes limited parking availability in Old Town at a peak hours - new development will need more capacity ■ Neighbors near RHASP have concerns about parking Options • Revise requirements, plan for future public parking sites ■ Invest in better management practices ■ Consider short-term parking leases on vacant sites _�M_�_ Key Considerations ■ Parking is a major cost of development: public provision of parking can help redevelopment feasibility ■ Need to identify best practices and best locations for additional capacity Economic&Planning Systems EPS PPT Presentation 1 23 EXPAND DEVELOPER SERVICES & MARKETING Barriers to Overcome ■ Developers and property owners may not understand or be aware of City plans, policies and programs, especially if recently updated or changed ■ Developers value responsive, timely interactions with city, want to know what to expect with no surprises Options ■ Continue efforts towards a one-stop source of information on city website ■ Create marketing collateral summarizing what City is already doing: call out programs, incentives, plan details, available sites, etc. ■ Continue efforts at streamlining applications, reviews, inspections, etc. Key Considerations ■ Plain-language materials can be educational for both developers and residents ■ Simpler, more straightforward approval requirements save time for developers and staff Economic&Planning Systems EPS PPT Presentation 24 COMPLETE PUBLIC REALM INVESTMENTS Barriers to Overcome ■ Walking and biking environment within Plan Areas could be more pleasant, easier, safer, with more bike parking options Options ■ Implement pedestrian & bicycle improvements identified in Specific Plans Key Considerations �- ■ Need to identify funding sources %�` ■ Provides multiple benefits: aesthetic improvement, driving/parking --- - alternatives, environmental benefit, supports active lifestyles ■ Location considerations: — Largest impact may be to build on pedestrian-friendly Old Town with better connections — Along major roads (Red Hill Ave, Newport Ave, and First Street), focus on nodes/intersections Economic&Planning Systems EPS PPT Presentation 25 CREATIVE ECONOMIC DEVELOPMENT & PARTNERSHIPS Barriers to Overcome ■ More vibrancy desired at all times of day, especially in Old Town a More attractions, marketing could establish Plan Areas as destinations Options ■ Establish tenanting, branding themes and/or dedicated ED staff • Provide city sponsorship to grow Merchants Association and/or additional programming (food truck nights, street fair, etc.) ■ Partner with a vacant site developer to create temporary use such as park space or pop-up business installation Key Considerations ■ Negotiating a temporary use of vacant site may require entitlement guarantee Economic&Planning Systems EPS PPT Presentation 1 26 POLICY TRADE-OFFS / POTENTIAL IMPACTS Development feasibility isjust one lens for evaluating land use decisions. City must weigh other policy trade-offs, which may require more analysis. Type of Trade Off Reducing barriers may... Urban design and architecture Produce taller, denser buildings that Objective Design Standards can address may be unpopular most concerns Affordable/inclusionary Produce few/no affordable housing Minimal development also means housing units few/no affordable units Traffic and other environmental Increase traffic and other Additional CEQA analysis may be impacts infrastructure demands triggered after plans' EIR caps; may reduce VMT per capita Long review periods for project Limit City's ability to pick and choose Objective Design Standards can address approval among projects most concerns Development does not include Lead to residential-only buildings Already a risk; can incentivize by desired retail uses where mixed-use desired differentiating retail node policy New Burden on City Services Increase service expenditures but New infill development likely to provide also generates new tax revenue net positive revenue to City Economic&Planning Systems EPS PPT Presentation 27 I DEVELOPMENT FEASIBILITY ANALYSIS HOW DO WE DETERMINE FEASIBILITY? Residual land value (RLV) approach with static pro forma ■ Helps us answer the question: — Is net value of a proposed project (before cost of land) equal or greater than property / site value? Fr- Two ways to ■ e ' • estimate site value: - costs comparable sales or Value . existing income stream (excEconomic&Planning Systems EPS PPT Presentation 1 29 GOAL IS TO INCREASE FEASIBILITY OF REDEVELOPMENT INFEASIBLE FEASIBLE Meeting return thresholds are an additional "cost." CostsSoft Profit urnThis hidden "cost" increases with: Soft Costs ■ Project Risk ■ Project Timeline Market Direct Market Value Costs Value Direct Costs Preliminarily, per unit residentia/values in Land Tustin appear •ui Land sufficient to cover sition Acquis typical project costs. ition Feasibility analysis is Project Value Project Cost Project Value Project Cost forthcoming. Economic&Planning Systems EPS PPT Presentation 1 30 INFILL DEVELOPMENT ECONOMICS CAN BE TRICKY Infill redevelopment projects often hi_ghercost than g reenfield/vacant sites Often leads to higher costs Demolition and/or environmental Soft ,% "cleanup" related to prior use Costs Upgrading old infrastructure, access Meeting parking requirements on Market small / irregularly-shaped parcelsValue Direct Costs Preserving historic structures and /or mitigating construction impacts on neighboring properties Land Buying a property with Acquisi existing tenants / revenue tion stream Project Value Project Cost Economic&Planning Systems EPS PPT Presentation 31 CONTEXT FOR UNDERSTANDING RESULTS • Static pro forma feasibility analysis can show: — Generalized business case for development given market conditions — How policy changes will affect property development economics in general, including for similar sites within Specific Plan area — Economics (values vs costs) for a specific development project/scenario ■ Analysis does not show: — Willingness or motivation of property owners to pursue development or sell at a reasonable price — Time and expense necessary to obtain entitlement — Property specific factors that require due diligence (e.g., cost of environmental clean-up, cost of buying out existing lease terms) — Expertise or financial capacity of potential developers Economic&Planning Systems EPS PPT Presentation 32 BASELINE SCENARIOS USED TO TEST POLICIES ■ Baseline scenarios conform to existing Specific Plan guidelines: - Within Specific Plan height limits - Meet affordable housing requirements (Voluntary Workforce Housing Program) - Meet minimum retail frontage requirement - Assume park impact fees set at market land value estimate - Meet existing parking requirements • Test financial impact of certain policy options: — Increasing height limits - Waiving affordable housing in-lieu fee - Reducinground floor retail requirement 9 q - Site Incentives - Capping/reducing park impact fees - Reducing required parking ratios Economic&Planning Systems EPS PPT Presentation 33 CUSTOMIZED SCENARIOS FOR EACH OPPORTUNITY SITE ■ Analyzed capacity and a configuration of each opportunity site to determine appropriate/ efficient layouts X ^� Y ■ Utilizing development project experience, focused on constructing scenarios most likely to be feasible (highest and best use) ■ Applied prototypes that ° reflect real world projects from the Trade Area to create two baseline (2) scenarios , each e Economic&Planning Systems EPS PPT Presentation 34 NEAR TERM POLICY OPTIONS IMPROVE FEASIBILITY Near Term Policy Current Policies Options Implemented Residential Parking 2.25 per unit 1.6 per unit (avg) Park Fees $32,256 per unit $16,800 per unit Aff Units 5%Very-Low + Fee 5%Very-Low + ($6,900 per unit) $0 in Fees Example Large Site Changes:Description 4-Story Horizontal Mixed- Chang 4-Story Horizontal Mixed- Use (Wrap& Retail Strip) Residential parking reduced to Use (Wrap& Retail Strip) Size 8.9 acres, 449 units 1.59 spaces per units 8.9 acres, 449 units Residual Land $2,669,000 Park fee assumes land value $6,850,000 157% increase Value per acre at$2.5M per acre Feasibility Unlikely Affordable Housing Feasible @ Existing Use Value In-Lieu Fee Set to$0 Example Small Site Description 4-Story Vertical Mixed-Use 4-Story Vertical Mixed-Use Size 0.45 acres, 40 units 0.45 acres, 40 units Increased Residual Land Same as above+ ($5,092,000) in-lieu retail parking $2,897,000 'from negative Value per acre to positive Feasibility @ Existing Use Value Unlikely Economic&Planning Systems EPS PPT Presentation 1 35 I POLICY OPTIONS & IMPLEMENTATION WORKPLAN POLICY OPTIONS & LEVERS CONSIDERED .A. Process Affordable Housing Strategies Regulations ow Mixe Retail Other/Vacant RequirementSite Incentive Marketing Economic Development Initiatives I Economic&Planning Systems EPS PPT Presentation 37 IMPLEMENTATION TIME-FRAME OVERVIEW Long-TermNear-Term Mid-Term • • • • Straight-forward, Policies that further Policies and programs easy-to-implement improve feasibility for that may require longer administrative or residential mixed-use and term planning and policy changes to implemented in implementation efforts, incentivize near-term conjunction with approval including approval of (re-) development of objective design funding tools / resources feasibility. standards (ODS) and CEQA analysis Economic&Planning Systems EPS PPT Presentation 1 38 IMPLEMENTATION SCHEDULE FOR POLICY OPTIONS Long-TermNear-Term Mid-Term months) • Fj•• • Preliminary residential • Expand developer services • Increase residential capacity parking standards update and educational materials • Refine parking strategies and • Set all residential Park Fees • Revisit Voluntary Workforce pursue supply investments equal to RHASP rate Housing Program • Complete / expand public • Temporarily suspend Pending ODS: realm improvements and affordable housing in-lieu fee . Modify retail requirements activation and branding • Expand fee deferment (incl. parking) initiatives • Commence public realm • Eliminate RAR Program • Explore economic improvements: development, site marketing • Modify height restrictions efforts > Parklets on El Camino Real and Main Street • Relax residential private • Implement policies to > Gateway signage and Main storage requirements accelerate redevelopment of Street streetscape • Clarify residential density vacant sites bonus approach Fall 2023� Economic&Planning Systems EPS PPT Presentation 1 39 NEAR-TERM ACTIONS (6 - 12 MONTHS) Policy Option to Consider Description Implement preliminary residential Reduce Plan Area residential parking ratios (from 2.25 to 1.5-1.75 per unit) for parking standards update Specific Plan areas. Create administrative rule to use "market" land value equal to $2.5 million per Set all residential Park Fees at acre for park fee calculation based on already established land value for non- equal level based on RHASP rate subdivision projects in RHASP. Provides certainty and likely cost reduction for developers. Introduce City Council motion to temporarily suspend inclusionary housing in-lieu Temporarily suspend affordable fee all Specific Plan area projects for 18-36 months. On-site requirements still to housing in-lieu fee remain in effect. Would be effective after the Housing Element Rezone, expected October, 2024. Expand fee deferment Adjust administrative rules to allow developers to pay all impact fees at Certificate of Occupancy rather than at permit issuance. Commence planned public realm Commence construction of parklets on El Camino Real and Main Street, as well improvements as gateway signage and streetscape improvements on Main Street. Economic&Planning Systems EPS PPT Presentation I 40 MID-TERM ACTIONS ( 1 2 - 24 MONTHS) Policy Options to Consider Description Expand developer services and Continue efforts to streamline permitting and implement a 'one-stop shop" on educational materials City website for relevant information (e.g., affordable housing requirements, objective design standards, fee schedules, density bonus) Revisit Voluntary Workforce Housing Conduct program review and feasibility analysis to optimize rules consistent with Program Housing Element, evolving State law, economic considerations. Modify retail requirements Identify key retail nodes; allow residential only if sufficient ground floor retail is and associated parking provided. Consider relaxing retail parking rules for smaller, vertical mixed-use projects (e.g., reduction for Old Town) and refine/promote in-lieu fee policy. Eliminate RAR Program and allow Eliminate long, discretionary review/allocation process for residential to provide residential in most Plan Area developers more certainty (until E I R unit count limits are exceeded) and ensure locations housing is allowed in most Plan Area locations (including all RHNA sites). ODS and other Plan Area requirements will still apply. Modify height restrictions Increase allowable heights where historic resource protection is not a concern. Relax residential private storage Relax requirement for private on-site storage for every unit (e.g., remove requirements entirely, set as percentage of units, or look to match neighboring cities). Consider expanding bike/ scooter parking requirements. Clarify residential Density Bonus City should develop an official Schedule or Brief (posted on website) to specify Approach how State Density Bonus is determined under Plan Area "form-based" rules. Economic&Planning Systems EPS PPT Presentation I 41 LONG -TERM ACTIONS (24 + MONTHS) Policy Options to Consider Description1 � �1 Increase residential (unit-count) Update the E I R for the Specific Plan areas with higher unit counts or implement capacity administrative waiver program for compliant residential projects (using CEQA Infill Exemption {Cal. Code Regs. Tit. 14, § 15332}) Refine parking strategies and pursue Implement strategies to manage parking demand and supply. Refine or supply investments eliminate certain parking standards, plan/finance facility investments, update pp y fees, refine parking management (e.g., time limits, metering). Complete and expand public realm Complete City capital projects to enhance public realm; explore complementary improvements, explore activation activation and branding programs that engage with businesses, property and branding initiatives owners, public, etc. Explore economic development and Evaluate potential for targeted projects or partnerships that catalyze private site marketing efforts investments. Develop marketing materials to highlight investment opportunities and future projects within the Specific Plan areas. Implement policies to accelerate Implement carrot/stick options (e.g., waivers, concessions, taxes, code redevelopment of vacant sites enforcement) and explore public-private partnerships at key sites. Economic&Planning Systems EPS PPT Presentation I 42 I PARKING POLICY CONTEXT & PROPOSED STRATEGIES PARKING REQUIREMENTS SHOULD REFLECT GOALS HIGH PARKING MINIMUMS AND WALKABILITY GOALS ARE AT ODDS City Goals for DCCSP: II � � ■ Create a synergistic, desirable, livable, walkable, and attractive area ■ Develop into a pedestrian-oriented, mixed-use district ■ Activate commercial area with residential uses High parking minimums Lower,flexible parking standards Orange County(Source:Costar) Compatible with strip malls or low Compatible with compact development, density residential diversity of uses, shared parking More workable for large, Easier for small site / infill projects ;l.wnt.wn standalone sites Support good activity/energy: more"Sea of parking"discourages walking people out of cars, multipurpose trips,"browsing" and window shopping Self contained (no spillover effects) Requires management of spillover effects (district approach) San Luis Obispo(Source,Wkimedia user"hakkun) Economic&Planning Systems EPS PPT Presentation 1 44 TUSTIN ALREADY REQUIRES MORE RESIDENTIAL PARKING THAN NEEDED Tustin requires 2.25 parking spaces per unit for all apartments, but... �� !J ■ hill�t"!I �� Developers typically build less: ■ Approx. 1 .8 spaces per unit - Number of spaces built in new multifamily rental developments' over the last 20 years in Irvine, Orange, Btoadstone Archive,Irvine and Santa Ana Source:Costar And residents also typically use fewer.- ■ 1 .46 parking spaces per unit (and 1 .06 per bedroom) - The maximum parking usage observed in Sunnyvale, CA during a large survey** conducted in 2013-201 5 Source:Flxkr user Art Prof' *Based on information obtained from Costar for eleven properties with available parking data,representing 6,988 total apartments. **Survey conducted in the San Francisco and San Jose region and included twenty-five market-rate apartment buildings,representing 6,700 total apartments. Highest parking usage was observed in the cities of San Jose and Sunnyvale,CA,which have similar car ownership rates to northern Orange County. Economic&Planning Systems EPS PPT Presentation I 45 NEARBY CITIES HAVE LOWER RESIDENTIAL REQUIREMENTS Project Type • Bonus [3] Townhomes 3-4 BR 2 per unit 2 per unit 2 per unit 3 per unit I=4 Studios 2 per unit 1.2 per unit 1 per unit 1 per unit 1 per unit 1 BR 2 per unit 1.7 per unit 1.5 per unit 1 per unit 1 per unit ' 213R 2 per unit 2 per unit 2 per unit 2 per unit 1.5 per unit 313R .' 2 per unit 2.4 per unit 2 per unit 3 per unit 1.5 per unit ' Wrap or 413R 2 per unit 2.7 per unit 2 per unit 4 per unit 2.5 per unit Podium -- Multifamily Additional Visitor 0.25 per unit 0.3 per unit 0.4 per unit 0.25 per unit 0 per unit Parking Typical 2.25 per 2.07 per 2.03 per 1.69 per 1.21 per Building unit unit unit unit unit [2] [1]Multifamily project requirements reflect a project size of 51 units or greater. [2]Based on average mix of unit sizes in new developments;includes additional visitor parking requirements. [3]Developers in Tustin have recently utilized the density bonus,in part to get lower parking requirements. Economic&Planning Systems EPS PPT Presentation I 46 SUCCESSFUL DOWNTOWNS REQUIRE EVEN LESS PARKING Downtown Downtown Downtown Near High QualityPro ect Type San Luis M= • . Obispo Transit Studios 2 per unit 1 per unit 0-1 per unit 0.5 per unit 1 BR 2 per unit 1.5 per unit 1.5 per unit 0.5 per unit 213R 2 per unit 1.8 per unit 1.5 per unit 0.75 per unit Townhome [31 313R 2 per unit 2 per unit 1.5 per unit 1.125 per unit and ELIMINATED 413R 2 per unit 2 per unit 1.5 per unit 1.5 per unit STATEWIDE Multifamily Additional AS OF (Wrap or JAN 1, Podium) Visitor 0.25 per unit 0 per unit 0 per unit 0.1 per unit Parking Typical 2.25 per 1.56 per 1.31 per 0.61 per 6mmJBuildin unit unit unit unit [4] [1]Downtown Plaza District includes properties within the eight-block area bounded by Maple Avenue, Grand Street,Almond Avenue and Lemon Street. [2]Central District of Pasadena has a parking maximum of 1 per unit for studios and 1.75 per unit for remaining types [3]Tustin does not require visitor parking for"single-family housing."Orange,Pasadena,and San Luis Obispo do not distinguish between different types of residential uses within their downtown areas. [3]Based on average mix of unit sizes in new developments;includes additional visitor parking requirements Economic&Planning Systems EPS PPT Presentation 47 REFORM IS WIDESPREAD IN STATE AND BEYOND ■ Recent policy trend has been to reduce and eliminate parking requirements — Driven by demand*, housing crisis, climate change; .l can also reduce cost of construction/housing — Some jurisdictions have instituted maximums to prioritize compact, walkable development ■ As of 2023, State eliminated all parking minimum 14 requirements near high-quality transit stops — Includes %2-mile area around Tustin Metrolink station �. — Does not currently affect the Specific Plan areas ' a C= *Per Urban Land Institute(2015),over 52%of people in U.S.and 63%of millennials would like to live where they do not need to use a car very often. Economic&Planning Systems EPS PPT Presentation 48 NEW EXEMPTIONS IN TRADE AREA IMPACT TUSTI N ■ Tustin is affected by reduced requirements in nearby locations competing for real s � r estate development investments ■ Much of Santa Ana, parts of ��, y €1^ Anaheim and Orange, can no longer require parking r- �,� C I Nor[%Tus['n f .v Developers active in the Trade Area may choose to build in these areas for favorable acc,i a project economics contain s°°nsa valley `\ /�� A, �� % :a'TA H'.3h Fequ=ncy RTes 24L -tington - Beach C 0.75 1.5 3 WET—] Not for public u.. City 7 T,,hn e/a2 ozs�r;a ti<.-'s A N Economic&Planning Systems EPS PPT Presentation 49 PRELIMINARY PARKING STANDARDS UPDATE SHORT-TERM ACTION (6-1 2 MONTHS) ■ EPS feasibility analysis confirmed that Example Updated Residential Standards parking requirements strongly impact project financials Townhomes 3+ BR 2 per unit — Not conducive to multi-story infill and studios 1 per unit vertical mixed-use 113R IL 1.25 per unit — Especially difficult on smaller sites 213R 1.5 per unit ■ EPS recommends reducing residential Wrap or 313R 2 per unit parking ratios to 1 .5 - 1 .75 per unit Podium 413R 2.5 per unit (blended) across Specific Plans MultifamilyAdditional Visitor I 0.25 per unit — Although a large change, expected to Parking have minimal spillover effects Typical 1.6 per unit Building Economic&Planning Systems EPS PPT Presentation 50 GROUND FLOOR RETAIL AND ASSOCIATED PARKING MID-TERM ACTION (1 2 - 24 MONTHS) ■ Identify key nodes (e.g., Old Town district and other important locations) for requiring ground floor retail, but relax elsewhere — Requirements currently too ubiquitous; more specifics about size, character, and location of desired walkable/retail district will aid development, avoid empty storefronts — At nodes, can make housing a conditional use only if desired retail is built ■ Consider making it easier to include retail within mixed-use projects by further reducing parking requirements — e.g., 50% less parking required in Old Town district (like downtown San Luis Obispo) ■ Clarify and market in-lieu fee policy; consider updating in-lieu fee amounts — Could limit policy to specific locations (e.g., Old Town district, small sites only) — Could use fee to help finance new parking supply (long-term) Economic&Planning Systems EPS PPT Presentation 51 REFINE PARKING STRATEGIES & PURSUE SUPPLY INVESTMENTS LONG TERM ACTION (24+ MONTHS) ■ Further refine or eliminate certain parking standards — Consider additional reductions, especially for specific subarea (e.g., Old Town district) ■ Monitor and manage spillover effects: — Implement time limits, metering at high volume locations to better manage existing supply, reduce perception of parking shortage - may require parking study ■ Consider additional programs to reduce parking demand: — Unbundled parking requirements (must charge rent for parking space) — Bicycle / scooter parking requirements and associated parking standard reductions — Invest in public parking for bicycles ■ Plan for additional supply Old Town supply as more development occurs — Identify sites and consider potential financing options for public facilities Economic&Planning Systems EPS PPT Presentation 52 PARKING FACILITY FINANCING OPTIONS (OLD TOWN) Parking structure or other capacity improvements should be justified by a detailed study. Financing options include: ■ Developer fees and/or user fees — In-lieu fees IT imV — Impact Fees — User fees (e.g., parking metering, permits) ■ Certificates of Participation (COP) bond ■ General Fund earmark ■ District Formation — Enhanced Infrastructure Financing District (EIFD) — Mello-Roos CFD or Business Improvement District — Parking District Source:Fliokr user'Umberto Bmyj" ■ Public-Private Partnerships (e.g., shared parking) Economic&Planning Systems EPS PPT Presentation 53 I LONG TERM ACTION OPTIONS POLICIES TO ACCELERATE REDEVELOPMENT OF VACANT SITES Incentives (Carrots) ■ Temporary / expiring benefits to create urgency (e.g., fee waivers, affordable housing ordinance � m } exemptions, fast-track approval) " aka ■ Additional density/zoning incentives, financial concessions (including 1033 exchange) — � Penalties (Sticks) ■ New or enhanced code enforcement, "public nuisance" policies, or fa4ade/landscaping rules ■ Vacant land tax (requires voter approval) ■ Eminent domain for public facilities (onerous process) Other ■ Public-Private Partnerships (e.g., development agreements, shared parking facility) ■ Public investment, land assembly assistance (e.g., street vacations) Economic&Planning Systems EPS PPT Presentation 55 ACTIVATION AND BRANDING INITIATIVES O BJ ECTIVE ■ Establish Old Town as a "destination" and enhance vibrancy at all times of day (target for Old Town) through a combination of attractions/events and marketing - OPTIONS fd � ■ Implement programming (food truck nights, street fair, outdoor movies, etc.) or temporary use (park space, beer garden, pop-up business installation) on a vacant site* ■ Continue to invest in signage, public art ■ Establish tenanting or branding goals and themes ■ Provide city sponsorship to grow Merchants Association ■ Dedicate staff resources *Negotiating a temporary use of vacant site may require entitlement guarantee Economic&Planning Systems EPS PPT Presentation 56 I REFERENCE DCCSP RETAIL REQUIREMENTS Definition from DCCSP: /W Irvine Boulevard ■ Mixed-use commercial space shall span the First StreeE building width of Principal Street frontages and be Second—r— a minimum of 45 feet deep. � O Third St.n � V 0 ■ In horizontal mixed-use, residences are allowed y ■a` Street to be on the ground floor, provided they do not 5iu or front on a Principal Street. lm Assumption: ■ Exemption for parking ingress/egress Principal Street-Where allowed within aDA-cl entitled as provided in Chapter(,Administration and Implementation Plan,mixed use shall be designed as vertical format with first Floor commercial ■ Exemption for multifamily residential lobby Non-Principal Street-Whereallowed within a OAand entitleda s provided in Chapter(,Administration and Implementation Plan,mi.d use may be designed as vertical format with first floor commercial or, horizontal format in conjunction with commercial use in a separate building.LI-Avork units,where allowed a nd entitled,shall be limked to Non-Principal Streets. Economic&Planning Systems EPS PPT Presentation I 58