SANjOSE CAPITAL OF SILICON VALLEY

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1 COUNCIL AGENDA: 06/14/16 ITEM: 11.1(a) CITY OF ffr -3 SANjOSE CAPITAL OF SILICON VALLEY CITY COUNCIL STAFF REPORT File No. C Applicant: Owens Mortgage Investment Fund Location 455 Piercy Road Existing Zoning A(PD) Planned Development Council District 2 Historic Resource No Annexation Date: May 02,1985 CEQA: Determination of Consistency with the Envision San Jose 2040 General Plan Final Program Environmental Impact Report (Resolution No ) and Supplemental Environmental Impact Report (Resolution No ) APPLICATION SUMMARY: Conforming Rezoning from the A(PD) Planned Development Zoning District to the IP Industrial Park Zoning District on an approximately 8-acre site. RECOMMENDATION: Staff recommends that the City Council approve the proposed Conforming Rezoning subject to the findings made in this Staff Report. PROJECT DATA GENERAL PLAN CONSISTENCY General Plan Designation Industrial Park X Consistent 1 1 Inconsistent Consistent Policies IP-8.7; LU-19.1; LU19.4; LU-6 Inconsistent Policies None SURROUNDING USES General Plan Land Use Zoning Existing Use North Industrial Park IP Industrial Park Vacant South Industrial Park IP Industrial Park Industrial Office East Unincorporated Open Space Land West Industrial Park IP Industrial Park Industrial Office; Single-family detached residence

2 Page 2 Date Action 05/02/85 Site annexed into the City of San Jose (Riverside No. 41). 07/03/1984 Planned Development rezoning to rezone the subject property from County to A(PD) Planned Development to allow industrial uses on a gross acre site (File No. PDC84-058). 02/16/2000 Planned Development Permit for the construction of two industrial office buildings totaling 99,000 square feet on a gross acre site (File No. PD00-020). 04/03/2000 Planned Development Rezoning from the A(PD) Planned Development Zoning District to the A(PD) Planned Development Zoning District to allow up to 156,293 square feet of light industrial use and office space on a gross acre site (File No. PDC00-077). 01/29/2001 Planned Development Permit to allow a 36,292 square foot addition to an existing industrial building on a gross acre site (File No. PD01-015). PROJECT DESCRIPTION On March 17, 2016, a rezoning application was filed by Owens Mortgage Investment Fund to rezone the property located on the north side of Piercy Road, at 455 Piercy Road, from the A(PD) Planned Development Zoning District to the IP Industrial Park Zoning District. There has been no indication of the type of development project the applicant intends to pursue. There are no other development applications on file at this time. However, the applicant believes that if the site is rezoned to a traditional/conforming zoning district, it will be more attractive to potential buyers and tenants as the uses will not be restricted to the current Planned Development Standards. If the rezoning is approved by the City Council, the IP Industrial Zoning District will allow a broader range of industrial uses that are consistent with the site's General Plan land use designation of Industrial Park. Site History The City Council originally approved a rezoning of the larger gross acre site from County to the A(PD) Planned Development Zoning District on April 8, 1985 (File No. PDC84-058), for the purposes of allowing industrial uses in conformance with the 2020 General Plan. The maximum floor area established was 120,000 square feet of buildable area located in three twostory buildings. The project was required to locate all development below the 15% slope line that runs in a north-south direction along the east side. The 2020 General Plan required that any rezoning that involved property with a slope line of 15% or higher, be rezoned through the Planned Development process only. This requirement allowed staff to better protect the sloped areas and to restrict development to areas outside of the 15% slope line. Therefore, the original PD zone created a buildable area of approximately 8 acres, leaving 6.25 acres above the 15% slope line reserved as permanent open space. On December 1, 2000, a Planned Development Permit (File No. PD00-020) was approved to construct two of the three industrial buildings, totaling 99,000 square feet. These two buildings were never constructed, and the permit expired. On April 3, 2001, the City Council approved a PD rezoning of the larger gross acre site (File No. PDC00-077). This rezoning increased the allowable Industrial Park floor area by 36,292 square feet, resulting in a total of 156, 292 square feet of Industrial Park uses, and

3 Page 3 increased the height from 30 feet to 50 feet. The previously designated 6.25 acres of open space was preserved and no development was permitted on that part of the site. A Planned Development Permit (File No. PD00-015) was applied for but was never effectuated and expired. The current application seeks to rezone approximately 8 acres, designated as buildable area, to the IP Industrial Park Zoning District. The remaining 6.25 acres that were originally designated as open space will remain zoned as A(PD) Planned Development and will continue to be preserved as open. As a result, the larger gross acre site will be one parcel with two zoning districts. Site Description The site is currently vacant (see Figure 1). There is open space to the north and east, industrial office buildings to the south, and one industrial office building, a single-family detached house, and Hellyer Road to the west. The subject property and the surrounding properties are located in the Edenvale Area Development Policy Area. ANALYSIS Figure 1: Project Site The proposed Conforming Rezoning was analyzed for conformance with: 1) the Envision San Jose 2040 General Plan, 2) the Edenvale Area Development Policy, 3) the Zoning Ordinance, and 4) the California Environmental Quality Act (CEQA).

4 May 23,2016 Page 4 Envision San Jose 2040 General Plan Conformance The subject property is designated as Industrial Park on the General Plan Land Use/Transportation Diagram (see Figure 2). Figure 2: General Plan Land Use/Transportation Diagram This land use designation is intended for a wide variety of industrial uses, such as research and development, manufacturing, assembly, testing, and offices. The Industrial Park designation is different from the Light Industrial and Heavy Industrial designations in that Industrial Park uses are limited to those for which the functional or operational characteristics of a hazardous or nuisance use can be mitigated through design controls. Areas identified exclusively for Industrial Park uses may contain a very limited number of supportive and compatible commercial uses. The proposed rezoning supports the goals of this designation as it allows for similar uses and provides similar protections from uses that are not compatible with the General Plan. This conforming rezoning is also consistent with the following General Plan policies: 1. Implementation Policy IP-8.7: Use the City's conventional zoning districts, contained in its Zoning Ordinance, to implement the Envision General Plan Land Use/Transportation Diagram. These districts include a range of allowed land uses, development intensities, and standards within major land use categories (residential, commercial and industrial) together with zoning districts for other land uses, such as mixed-use and open space. The various ranges of allowed use and development intensity correspond generally to the respective Envision General Plan land

5 Page 5 use designations, while providing greater detail as to the appropriate land uses and form of development. Analysis: The proposed rezoning would utilize a conventional zoning district to implement the Industrial Park General Plan land use designation. This zoning district provides a variety of uses that are compatible with the goals and objectives of this land use designation. The existing Planned Development Zoning, while compatible in its uses, places very distinct Development Standards on the development of the site, which could hinder development on this site. Converting to a traditional zoning district allows the owner to follow the established Development Standards of the IP Industrial Park Zoning District. 2. Land Use Policy LU-19.1: Maintain the Greenline/Urban Growth Boundary to delineate the extent of existing and future urban capacity and to reinforce fundamental policies concerning the appropriate location of urban development. 3. Land Use Policy LU-19.4: Reserve areas outside the Greenline/Urban Growth Boundary (UGB) for rural, agricultural, open space, habitat, or other very low-intensity uses. Prohibit new urban development outside of the Greenline/Urban Growth Boundary (UGB). Appropriate land use designations for areas outside of the UGB include Agriculture; Open Hillside; Open Space, Parklands and Habitat; Urban Reserve; and Open Hillside Golf Course Site Overlay. Other designations may not be applied to lands outside of the UGB. Analysis: LU-19.1 and LU-19.4: The proposed rezoning will only be for the approximately 8 acres of the site which sits below the 15% slope line, preserving the remaining 6.25 acres above the 15% slope line as open space as required by the existing PD Zoning District. By only rezoning the portion of the site that sits below the 15% slope line, the project will allow development consistent with the Industrial Park land use designation and avoid encroaching into the Greenline/Urban Growth Boundary area. 4. Land Use Policy LU-6: Preserve and protect industrial uses to sustain and develop the City's economy and fiscal sustainability. Analysis: The proposed rezoning will continue to designate the project site for industrial uses, which preserves the site's fiscal viability. While the current Planned Development Zoning allows for industrial uses, a standard zoning district is more attractive to potential developers of the site, as it permits a broader range of uses and enhances the site's ability to be developed as the development regulations and allowable uses are less restrictive. Creating more desirable industrial land promotes the City's fiscal and economic goals. Edenvale Area Development Policy This Area Development Policy addresses development anticipated in Edenvale on both sides of U.S. Highway 101. The primary reasons for adoption of this Area Development Policy is to manage the traffic congestion associated with near term development in the Edenvale Redevelopment Area, promote General Plan goals for economic development, encourage a citywide reverse commute to jobs at southerly locations in San Jose, and provide for transitoriented, mixed-use residential and commercial development.

6 Page 6 The proposed rezoning of the site promotes the General Plan goal for economic development, as it maintains the use of the site for employment purposes and preserves land above the 15% slope line for open space. When a project is proposed for the site, it will be subject to the Policy's infrastructure fees and traffic impact fees. Zoning Ordinance Conformance The IP Industrial Park Zoning District is an exclusive zoning designation intended for a wide variety of industrial uses such as research and development, manufacturing, assembly, testing, and offices. Industrial uses are consistent with this designation as any functional or operational characteristics of a hazardous nuisance nature can be mitigated through design controls. Areas exclusively for industrial uses may contain a very limited amount of supportive commercial uses, when those uses are of a scale and design providing support only to the needs of businesses and their employees in the immediate industrial area. The proposed IP Industrial Park Zoning District will allow for uses that are directly compatible with the Industrial Park land use designation. A project that is constructed to conform to the development standards of the IP Zoning District will also be compatible with the General Plan goal related to form, scale, and setbacks. The remaining portion of the site that is still governed by the existing Planned Development Zoning district will remain as open space and will not be affected by this rezoning. Figure 4: Existing Zoning District Designation

7 Page 7 CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) Pursuant to Section 15168(c)(2) of the CEQA Guidelines, the City of San Jose has determined that the proposed rezoning is pursuant to, in furtherance of and within the scope of the Envision San Jose 2040 General Plan program, the impacts of which were analyzed and disclosed in the Final Program Environmental Impact Report (EIR) and Supplemental EIR for the Envision San Jose 2040 General Plan, for which findings were adopted by City Council Resolution No on November 1, 2011 and Resolution No on December 15, 2015, respectively. The 2011 Program EIR and a supplemental EIR were prepared for the comprehensive update and revision of all elements of the City of San Jose General Plan, including an extension of the planning timeframe to the year The proposed rezoning does not involve new significant effects beyond those analyzed in the Program EIR and supplemental EIR. A Determination of Consistency with these two documents was prepared for this rezoning. PUBLIC HEARING NOTIFICATION In order to inform the public of the proposed project, staff followed Council Policy 6-30: Public Outreach Policy. A notice of the public hearing was distributed to the owners and tenants of all properties located within 500 feet of the project site and posted on the City website. The Council Staff Report is also posted on the City's website. Staff has been available to respond to questions from the public. Approved by: /s/ Elarry Freitas, Director, Planning, Building and Code Enforcement For questions please contact Steve McHarris, Planning Official, at (408)