Staff Report
PREPARED BY: ROBERT SCHULTZ
Town Attorney
Reviewed by: Town Manager, Assistant Town Manager, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 07/24/2017
ITEM NO: 1
DATE: JULY 20, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: ARCHITECTURE AND SITE APPLICATION S-13-090 AND VESTING
TENTATIVE MAP APPLICATION M-13-014. PROPERTY LOCATION:
SOUTHERLY PORTION OF THE NORTH 40 SPECIFIC PLAN AREA, LARK
AVENUE TO SOUTH OF NODDIN AVENUE. APPLICANT: GROSVENOR USA
LIMITED. PROPERTY OWNERS: YUKI FARMS, ETPH LP, GROSVENOR USA
LIMITED, SUMMERHILL N40 LLC, ELIZABETH K. DODSON, AND WILLIAM
HIRSCHMAN.
CONSIDER A REQUEST FOR THE CONSTRUCTION OF A NEW MULTI-USE,
MULTI-STORY DEVELOPMENT CONSISTING OF 320 RESIDENTIAL UNITS,
WHICH INCLUDES 50 AFFORDABLE SENIOR UNITS; APPROXIMATELY
66,800 SQUARE FEET OF COMMERCIAL FLOOR AREA, WHICH INCLUDES A
MARKET HALL; ON-SITE AND OFF-SITE IMPROVEMENTS; AND A VESTING
TENTATIVE MAP. APNS: 424-07-024 THROUGH 027, 031 THROUGH 037,
070, 083 THROUGH 086, 090, AND 100.
THE PUBLIC HEARING IS BEING HELD PURSUANT TO A COURT ORDER
DIRECTING THE TOWN COUNCIL TO SET ASIDE THE DENIAL OF THE
NORTH FORTY DEVELOPMENT APPLICATIONS AND RECONSIDER THE
APPLICATIONS UNDER THE PROVISIONS OF GOVERNMENT CODE
§65589.5(J) KNOWN AS THE HOUSING ACCOUNTABILITY ACT.
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RECOMMENDATION:
After opening and closing the public hearing, it is recommended that the Town Council:
1. Adopt a resolution (Attachment 1) to set aside Resolution 2016-046 denying the Vesting
Tentative Map and Architecture and Site applications; and
2. Continue the hearing to a date certain, August 1, 2017, to allow the full Council to be
present for deliberations and a decision on the Vesting Tentative Map and Architecture
and Site applications.
BACKGROUND:
North Forty Specific Plan and Environmental Impact Report
On June 17, 2015, following several public hearings, the Town Council adopted the North 40
Specific Plan, providing detailed land use and development guidance for the area bounded by
Highway 17 to the west, Los Gatos Boulevard to the east, Lark Avenue to the south, and
Highway 85 to the north.
The Specific Plan implements the General Plan through this detailed guidance for new
development. The approval of the North 40 Specific Plan also amended the zoning of the 44-
acre area to North 40 Specific Plan to allow a total of 270 housing units and 501,000 square feet
of non-residential uses. The Specific Plan can be found at the following link:
www.losgatosca.gov/DocumentCenter/View/15472.
As part of the Specific Plan preparation process, the Town also prepared and circulated an
Environmental Impact Report (EIR) that analyzed the potential environmental consequences of
the Specific Plan, in accordance with the California Environmental Quality Act (CEQA). The EIR
can be found at the following link: www.losgatosca.gov/DocumentCenter/Index/413. The
Town Council certified the Final EIR on June 17, 2015.
These documents are the regulatory framework for the consideration of the Phase 1
applications. The rescission or modification of the Specific Plan would have no bearing on the
Phase 1 applications.
Proposed Development Applications
While the Specific Plan was going through its extensive pub lic process, Grosvenor USA Limited,
Eden Housing Inc., and Summerhill Homes LLC (Applicants) submitted Architecture and Site
(A&S) and Vesting Tentative Map (VTM) applications for the portion of the Specific Plan area
south of Noddin Avenue. After the Specific Plan was approved, revised plans were submitted to
the Town for the previously submitted applications. The applications were deemed complete
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BACKGROUND (Cont’d):
on May 4, 2016 and the development plans for the applications can be found at the f ollowing
link: www.losgatosca.gov/DocumentCenter/View/16090.
The proposed development in the A&S application includes: 260 residential
condominiums/rowhomes, 10 rental apartments (including two live-work units), 49 affordable
senior rental units, one additional unit to be reserved for a moderate-income manager of the
senior units, and 66,791 square feet of commercial floor area. The VTM proposes to subdivide
the 20.7-acre Phase 1 project area into 113 lots to provide for up to 320 residential units and
commercial space.
To enable the development of the 50 units that exceeded the 270-unit maximum allowed by
the Specific Plan, the Applicants requested approval of a density bonus pursuant to the State
Density Bonus Law due to its inclusion of the 49 very low income units. In addition, the
Applicants requested waivers or reductions of two standards relating to building heights. The
Applicants’ applications also requested modifications to the Town’s Below Market Price (BMP)
Program standards, including the requirements that the affordable units be dispersed
throughout the development and be sized and designed consistent with the rest of the units, in
order to allow Applicants to use the 49 senior units to satisfy the BMP ordinance.
The Specific Plan and certified EIR require off-site improvements within the Town and Caltrans
right-of-ways. The Applicants proposed to build the required improvements along Lark Avenue
for the full build out of the Specific Plan area, and interim improvements for Phase 1 along Los
Gatos Boulevard. Specific on-site and off-site improvements are discussed in the Report to the
Planning Commission for its March 30, 2016 meeting and can be found at the following link:
http://losgatos.granicus.com/GeneratedAgendaViewer.php?view_id=5&clip_id=1521 . If the
Applicants’ applications are approved, full implementation of the improvements in the right-of-
ways would require continued coordination between the Applicants, the Town, and Caltrans.
The Town Council considered the applications over the course of four public hearings, held
during August and September 2016. The transcripts can be found at the followi ng link:
http://www.losgatosca.gov/1729/North-40-Specific-Plan-Area. After carefully considering its
own General Plan, Housing Element, Specific Plan, the public’s comments and evi dence, and the
Applicants’ submittals, the Town Council voted to deny the Applications on September 1, 2016.
The Council based this decision on the Project’s inconsistencies with the Town’s General Plan,
Housing Element, and Specific Plan, as set forth in Resolution 2016-046 adopted on September
6, 2016 (Exhibit A to Attachment 1).
Litigation
On October 6, 2016, the Applicants filed a lawsuit against the Town asserting that: (1) the Town
of Los Gatos violated the Town’s Housing Element; (2) the Town violated the State’s Housing
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BACKGROUND (Cont’d):
Accountability Act; and (3) the Town violated the State Density Bonus Law. The lawsuit
requested the Court to direct “the Town to comply with its clear, mandatory, and ministerial
duty to approve the project in compliance with the Town’s Housing Element, the Housing
Accountability Act, and the Density Bonus Law.”
On June 9, 2017, the Santa Clara County Superior Court issued a Decision and Judgment against
the Town (Attachment 2). The Decision and Judgment d irects the Town of Los Gatos to set
aside Town Resolution 2016-046 denying the Vesting Tentative Map and Architecture and Site
applications and to reconsider the Project under the provisions of Government Code
§65589.5(j) known as the Housing Accountability Act (HAA) (Attachment 3).
The Decision and Judgment determined that the findings adopted by the Town Council were
discretionary determinations made under subjective policies in the Specific Plan, instead of
under objective policies as required by the HAA. The Decision and Judgment states that the
Town must reconsider the Applicants’ project under the HAA, and if during the course of
reconsideration, the Town determines to again deny the project, the Town shall specify the
applicable, objective General Plan, Specific Plan, and zoning standards which the project failed
to comply. If the Town determines that the Project does so comply and the Council still denies
the applications, then the Town shall make written findings, supported by substantial evide nce
in the record, that: (1) the project would have a specific, adverse impact upon the public health
or safety based on information available at the time the applications were deemed complete
unless the project is disapproved; and (2) there is no feasible method to satisfactorily mitigate
or avoid that specifically identified adverse impact other than the disapproval of Applicants'
applications. The Decision and Judgement acknowledged that, “Although the Town was
required by law to apply the criteria of the (Subdivision) Map Act, the Map Act does not relieve
or preclude the Town from the provisions of…the HAA…” which are discussed in more detail
below.
DISCUSSION:
The Court’s Decision and Judgment
The Court Decision and Judgment directs the Town to reconsider the Project under the
provisions of Government Code §65589.5(j) of the Housing Accountability Act (HAA). The HAA
was originally enacted in 1982 and is often referred to as California’s “Anti N IMBY law.”
Schellinger Brothers v. City of Sebastopol, 179 Cal.App.4th 1245, 1253 (2009).
The intent of the legislation was to address the “problems in some cases where local
governments adopt housing policies and then fail to comply with their own polici es when
specific projects are at stake. The obvious problem is that when developers of housing cannot
rely on housing policies in proposing projects, then substantial uncertainty is created.”
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DISCUSSION (Cont’d):
The HAA requires local governments to approve any “housing development project,” including
specified mixed use projects, if they comply with “applicable, objective general plan and zoning
standards and criteria, including design review standards, in effect at the time that the housing
development project’s application is determined to be complete…” The Court Decision and
Judgment determined that the Applicant’s “project is within the statutes definition of a housing
development project.” Subdivision (j) of Section 65589.5 reads:
(j) When a proposed housing development project complies with applicable,
objective general plan and zoning standards and criteria, including design review
standards, in effect at the time that the housing development project’s
application is determined to be complete, but the local agency proposes to
disapprove the project or to approve it upon the condition that the project be
developed at a lower density, the local agency shall base its decision regarding
the proposed housing development project upon written findings supported by
substantial evidence on the record that both of the following conditions exist:
(1) The housing development project would have a specific, adverse
impact upon the public health or safety unless the project is
disapproved or approved upon the condition that the project be
developed at a lower density. As used in this paragraph, a “specific,
adverse impact” means a significant, quantifiable, direct, and
unavoidable impact, based on objective, identified written public
health or safety standards, policies, or conditions as they existed on
the date the application was deemed complete.
(2) There is no feasible method to satisfactorily mitigate or avoid the
adverse impact identified pursuant to paragraph (1), other than the
disapproval of the housing development project or the approval of
the project upon the condition that it be developed at a lower
density.
Objective Standards
The HAA does not define the term “objective standard.” The following are definitions of that
term found within these two dictionaries:
1. Law Dictionary: A standard that is based on factual measurements, in the
absence of a biased judgement or analysis.
2. Business Dictionary: Benchmark, criteria, or model based on verifiable
measurements or bias free (neutral) analysis and judgment.
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DISCUSSION (Cont’d):
In other words, objective standards are typically quantifiable or numerical standards and
anyone evaluating a project against the standards would arrive at the same conclusion.
Examples within the North 40 Specific Plan include building heights, setbacks, open space
requirements, etc.
The Decision and Judgment now requires the Town to reconsider the project under the HAA
and requires the Town to make a very specific set of findings if it again wants to deny the
Project. In order to continue to deny this Project, the Town must cite to s pecific written
objective identified written Policies and cannot deny the project for subjective reasons like
neighborhood character, aesthetics, or other difficult-to measure criteria. As explained in
Honchariw v. County of Stanislaus (2011)200 Cal.App.4th 1066, 1074-7, the HAA was intended
to “take away an agency’s ability to use what might be called a ‘subjective’ development
‘policy’.”
Staff has consistently stated that the proposed project meets all the Town’s objective
standards. The proposed applications went through the Town’s development review process,
including review and evaluation by Planning, Building, Fire, and Engineering staff, referrals and
evaluations by outside agencies, and review by the Town’s Consulting Architect, Historic
Preservation Committee (HPC), and Conceptual Development Advisory Committees (CDAC).
The Report to the Planning Commission for its March 30, 2016 meeting (Link:
http://losgatos.granicus.com/GeneratedAgendaViewer.php?view_id=5&clip_id=1521)
discusses the technical issues of parking, open space, trees, demolition, General Plan
conformance, and results of discussions with the Town’s Consulting Architect, HPC, and CDAC.
Additional information regarding development intensity can be found in the Report to the
Planning Commission for its July 12, 2016 meeting (available at:
http://losgatos.granicus.com/GeneratedAgendaViewer.php?view_id=5&clip_id=1559).
Based on the analysis in earlier reports, the proposed applications meet the technical
requirements of the Specific Plan. These are: Development Capacity, Development Standards,
and Design Guidelines. From the March 30, 2016 Planning Commission Staff Report, staff
concludes:
Based on the analysis provided above, the proposed applications meet the
technical requirements of the North 40 Specific Plan, the goals and policies of
the General Plan, and the Town's Housing Element. The proposed traffic impacts
will be mitigated based on the required traffic mitigation fees and
implementation of the proposed right-of-way improvements. The Commission
should consider the recommended conditions of approval to ensure the proposal
meets the Specific Plan and other Town Codes, policies, and guidelines.
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DISCUSSION (Cont’d):
In addition, the Decision and Judgment states that “There is substantial evidence in the
record to support Applicants’ contention that the Project is consistent with objective
standards.” The Decision and Judgment made these additional determinations in regard
to the Town’s original findings for denial:
The Town’s findings has no findings of compliance or lack of compliance with objective
standards under the Town's Housing Element or the HAA, and recites only findings of
subjective criteria.
There is no specific allocation requirement in the Specific Plan.
The Town’s finding that the proposed project overly concentrates all of the
residential units on the southern portion of the North 40 Specific Plan area and
finds the allocation excessively disproportionate and inconsistent with the
Specific Plan is a discretionary determination of a subjective policy.
The Town’s finding that the proposed project is inconsistent with the North 40
Specific Plan Section requirements for lower intensity residential uses in the
Lark District is a discretionary determination of a subjective policy in the Specific
Plan.
The Town’s finding that buildings 18 through 27 are inconsistent with the Lark
District is a discretionary determination of inconsistency with a subjective
policy.
The Town’s finding that buildings 24 and 25 are inconsistent with the Specific
Plan as it eliminates a fourth access point off of Los Gatos Boulevard is not a
requirement and there is no objective factor or subjective goal or vision which a
fourth access is material.
The Town’s finding that the project is inconsistent with North 40 Specific Plan
as it does not address unmet housing needs for seniors and Gen Y is a
discretionary determination of a subjective policy.
The Town’s finding that the project is inconsistent with the Residential Unit Size
Mix and should have smaller units to come closer to the income distribution of
affordable housing identified in the Town's Housing Element is neither a
requirement nor objective standard, but rather, an example how the North 40
site could assist the Town to meet affordable housing needs of the community.
The Town’s finding that the project, specifically buildings 18 through 27, would
result in an anomaly of residential uses within an existing commercial land use
context is primarily a subjective policy.
The Town’s finding that the only promised Below Market Rate housing is 49
units above Market Hall and the remainder would have home values estimated
at $900,000 to $1,500,000 requiring a 20 percent down payment and income of
approximately $130,000 to $200,000 per year is not an objective requirement,
but a subjective goal.
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DISCUSSION (Cont’d):
Adverse Impact on Public Health or Safety
If the Town Council agrees with staff’s and the Court’s analysis that the proposed project meets
all of the Town’s objective standards, then it can only deny the project if it determines:
1. The project would have a specific, adverse impact upon the public health or
safety unless the project is disapproved or approved upon the condition that the
project be developed at a lower density. “Specific, adverse impact” means a
significant, quantifiable, direct, and unavoidable impact, based on objective,
identified written public health or safety standards, policies, or conditions as
they existed on the date the application was deemed complete.
2. There is no feasible method to satisfactorily mitigate or avoid the adverse impact
identified pursuant to paragraph (1), other than the disapproval of the housing
development project or the approval of the project upon the condition that it be
developed at a lower density. “Feasible” is defined as “capable of being
accomplished in a successful manner within a reasonable period of time, taking
into account economic, environmental, social, and technological factors.”
Examples of public health and safety standards include, but are not limited to, geologic
instability, persistent hazardous materials in the soils, or remote location without adequate
infrastructure or access to municipal services.
The EIR, as required by State law, analyzed the potential consequences of development of the
North 40 Specific Plan. The Council adopted a resolution certifying the EIR and adopting its
Mitigation Monitoring and Reporting Program (available at:
http://losgatos.granicus.com/GeneratedAgendaViewer.php?view_id=5&clip_id=1422). As an
infill site within the Town, the EIR determined that the significant adverse impacts to
Transportation and Traffic, and Cultural Resources could not be mitigated to a less than
significant level. As a result, the Council identified specific policy objectives that would be
satisfied with the implementation of the Specific Plan that override these impacts (Statement of
Overriding Considerations). This Statement is included in the EIR resolution consistent with
State law. This means that these impacts cannot now be used as public health and safety
concerns for the denial of the applications.
Additional environmental analysis was conducted for the development applications in the form
of an Initial Study. The Initial Study concluded that the proposed development applications for
Phase 1 comply with the environmental analysis completed with the certified EIR, and therefore
no additional environmental analysis was required for the proposed applications. The
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DISCUSSION (Cont’d):
recommended conditions of approval (Attachment 4) include a condition requiring
implementation of the applicable mitigation measures from the adopted Mitigation Monitoring
and Reporting Program. No additional mitigation measures were required.
Housing Element
In addition to complying with the HAA, the Town must comply with Housing Element Law.
Housing Element Law requires the Town to demonstrate how the community plans to
accommodate its “fair share” of its regional housing needs. To do so, the Town must establish
an inventory of sites designated for new housing that is sufficient to accommodate its fair
share. The Town must also identify regulatory barriers to housing development and propose
strategies to reduce or eliminate those barriers.
On May 5, 2015, the Town Council adopted the current Housing Element (available at:
http://www.losgatosca.gov/1735/General-Plan---Housing-Element ) and on May 20, 2015, the
State certified the document as compliant with Housing Element law. The Town’s Housing
Element required adoption of the North 40 Specific Plan with certain development assumptions
in order to meet existing and projected housing needs in the Town and to ob tain certification of
the Housing Element from the State. The Town’s Housing Element (Action HOU 1.7) required
the Town to rezone 13.5 acres within the North 40 Specific Plan Area to comply with a
minimum density of 20 units per acre and establish “by-right” development for these units.
More specifically, the Town’s Housing Element states:
Additional opportunities for affordable housing are being facilitated through the
consideration of the North 40 Specific Plan and associated rezoning of 13.5 acres with a
minimum density of 20 units per acre to yield 270 units. The Specific Plan would provide
certainty regarding objective criteria in the form of development standards and design
guidelines that would be implemented through “by right development" in the
consideration of Architecture and Site applications. This process involves site and
architectural review and if a proposal meets the objective criteria in the Design
Guidelines, then the project is approved. Therefore, the Planning application process
and review is not an undue burden or constraint on the production of affordable
housing.
The Town will re-zone 13.5 acres within the North 40 Specific Plan area within three
years of Housing Element adoption at minimum a density of 20 dwelling units per acre
to facilitate affordable housing production. After rezoning, owner occupied or multiple
family development will be by-right as defined by not requiring a conditional use permit
or other discretionary approval; however,
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DISCUSSION (Cont’d):
design review according to the objective standards contained in the Specific Plan
can occur.
Based upon the Town’s Housing Element, the Town cannot require a Conditional Use Permit,
Planned Unit Development Permit, or other discretionary review or approval for the
applications. In addition, the applications are entitled to “by right” development. Th is means
that pursuant to our Housing Element, the Town must only apply the objective standards found
in the North 40 Specific Plan in its review, analysis, and determination whether to approve or
deny the applications. These same legal principles are set forth under the HAA and are adopted
in the Court’s Decision and Judgment. The Town cannot use subjective criteria and findings to
condition or deny the Applications under our Housing Element. As stated in the March 2016
Report, staff’s evaluation determined that the proposed project meets all of the objective
standards and policies of the Town.
State Density Bonus
The Town must also comply with the Density Bonus Law. The State Density Bonus Law is one of
several California statutes designed to implement an important State policy to promote the
construction of low-income housing and to remove impediments to the same. When the
Legislature adopted the State Density Bonus Law, it declared that the housing shortage crisis
must be addressed and that the State should rely on local governments to provide the
necessary increased housing stock and that local discretion and powers shall not be exercised in
a manner to frustrate the purposes of the State Density Bonus Law. The Density Bonus Law
applies to the Town and it requires the Town to adopt an ordinance that specifies how the
Town will comply with the statute.
The Density Bonus Law provides that requests for a density bonus and incentives must be
granted "when an applicant for a housing development seeks and agrees to construct a housing
development" that meets one or more of the statute's thresholds. Applicants for density
bonuses may also request specific incentives or concessions from cities. Thus, when an
applicant seeks a density bonus for a housing development that includes the required
percentage of affordable housing, Section 65915 requires that the city not only grant the
density bonus, but provide additional incentives or concessions where needed based on the
percentage of low income housing units. The applicant is not seeking any incentives under the
Density Bonus Law.
In addition to, and separate from, requests for incentives, a density bonus applicant may
request a waiver or reduction of development standards that would have the effect of
physically precluding the construction of the project at the densities permitted. "Development
standard" means a site or construction condition, including, without limitation, local height,
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DISCUSSION (Cont’d):
setback, floor area ratio, onsite open space, and parking area ratio requirements that would
otherwise apply to residential development under local ordinances, general plan elements,
specific plans, charters, or other local condition, law, policy, resolution, or regulation.
The proposed application includes 50 affordable senior rental units. 49 units are proposed to
be very low and extremely low income and one manager unit would be moderate income. The
proposed number of VLI units is in excess of 11 percent of the base number of units (237 u nits);
therefore the application qualifies for the requested Density Bonus of 35 percent (83 units).
During the public hearings on this project last year, issues were raised that the proposed
application does not meet the definition of senior housing. Pursuant to Civil Code 51.2 a
housing development for senior citizens constructed on or after January 1, 2001, shall be
presumed to be designed to meet the physical and social needs of senior citizens if it includes
all of the following elements:
(1) Entryways, walkways, and hallways in the common areas of the
development, and doorways and paths of access to and within the housing units,
shall be as wide as required by current laws applicable to new multifamily
housing construction for provision of access to persons using a standard-width
wheelchair.
(2) Walkways and hallways in the common areas of the development shall be
equipped with standard height railings or grab bars to assist persons who have
difficulty with walking.
(3) Walkways and hallways in the common areas shall have lighting conditions
which are of sufficient brightness to assist persons who have difficulty seeing.
(4) Access to all common areas and housing units within the development shall
be provided without use of stairs, either by means of an elevator or sloped
walking ramps.
(5) The development shall be designed to encourage social contact by providing
at least one common room and at least some common open space.
(6) Refuse collection shall be provided in a manner that requir es a minimum of
physical exertion by residents.
(7) The development shall comply with all other applicable requirements for access and
design imposed by law, including, but not limited to, the Fair Housing
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DISCUSSION (Cont’d):
Act (42 U.S.C. Sec. 3601 et seq.), the Americans with Disabilities Act (42 U.S.C.
Sec. 12101 et seq.), and the regulations promulgated at Title 24 of the California
Code of Regulations that relate to access for persons with disabilities or
handicaps. Nothing in this section shall be construed to limit or reduce any right
or obligation applicable under those laws.
If the project is approved, the senior housing will be required to meet all of the above senior
housing requirements.
The Applicants’ Memoranda and Letters (Attachment 5) provides supporting documentation
explaining why certain development standards, if applied, would preclude the applicant from
being able to provide the necessary density. The requested waivers and reductions in
development standards are:
Definition of height: The Specific Plan's definition of height aligns with that in
Town Code (29.10.020) and includes the measurement from existing or
proposed grade (whichever is lower) to the ridge directly above the grade. The
applicant is requesting an exception to the inclusion of existing grade due to the
topographical constraints in certain locations on the site. The proposed
application would utilize the 35-foot maximum height as established by the
proposed/finished grade. The proposed grade varies from the ex isting grade
between zero and five feet depending on the location.
Maximum permitted height for the senior/mixed use market hall building: The
Specific Plan permits the mixed use/market hall building to be up to 45 feet in
height, and does not permit the standard exceptions to height provided within
Town Code. The proposed mixed use/market hall building includes several
areas that exceed 45 feet in height. The requested exception would allow the
senior/mixed use market hall building to have a maximum height of 51 feet.
There are very limited circumstances where the Town may deny a waiver. Under State Law, a
waiver may only be denied if it would have a “specific, adverse impact upon health, safety, or
the physical environment,” or it would have an “adverse impact on any property listed in the
California Register of Historical Resources.” The Town does not have any other discretion or
rationale for denying a requested waiver if they are necessary to accommodate additional
density or concessions and incentives in the proposed project. In other words, if the project
meets the requirements of the Density Bonus Law, the Town must grant development standard
waiver requests to ensure the project as designed is not physically prevented from being
developed. In Wollmer v. City of Berkeley the Court quoting the prohibition contained in
section 65915(d)(l), warned, "Had the City failed to grant the waiver and variances, such action
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DISCUSSION (Cont’d):
would have had 'the effect of physically precluding the construction of a development' meeting
the criteria of the density bonus law."
During the public hearings on this project last year, issues were raised that the Applicants were
“ineligible for a density bonus or any other incentives or concessions" since the proposed
development is eliminating units" occupied by lower or very low income households unless the
proposed housing development replaces those units” with “at least the same number of units
of equivalent size or type, or both, to be made available at affordable rent or affordable
housing cost to, and occupied by, persons and families in the same or lower income category as
those households in occupancy.” This provision in the density bonus statute requires that a
project “replace” all rental housing that was occupied by very low and low income households
in the past five years. If the project does not replace the housing with new housing available at
the same income levels (very low or low), it is not eligible for a density bonus. The Initial Study
found that there were 16 existing units on the North 40 that were to be demoli shed in order for
Phase 1 to proceed. The applicants (Grosvenor and SummerHill) do not currently lease most of
the units and do not have income information for most of the tenants, especially over the last
five years. However, even if it is assumed that all of the existing units are or have been
occupied by very low income households, the project proposes to provide 49 very low income
units and therefore meets the statutory requirements to “replace” the units. More
importantly, the original project application was made in 2013. The statute specifically exempts
applications made before January 1, 2015 from the replacement housing provision.
As mentioned in the March 2016 Staff Report, staff concluded that there are no specific,
adverse impacts upon health, safety, or the physical environment from the granting of waivers
for the definition of height related to grading and the maximum height being over 45 feet for
the senior housing.
Town’s Below Market Price (BMP) Guidelines
The Town’s Below Market Price (BMP) Guidelines require that affordable units be comparable
in size, type, and finish (i.e., materials) to the market rate units and that the location of the
affordable units be dispersed throughout the development to the extent feasible. The
Characteristics of BMP Units on page 4 of the BMP Guidelines (available at:
https://www.losgatosca.gov/DocumentCenter/View/2773) discusses these requirements.
The Applicants are proposing the following deviations from the BMP guidelines: aggregating all
of the affordable housing into a single affordable senior housing component, providing smaller
units than the market rate units, and offering rental units when the market rate units are for
sale units. The applicant has provided a response and justification to the proposed deviations
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DISCUSSION (Cont’d):
from these Guidelines (Attachment 5). The BMP Guidelines are not objective standards and
these modifications cannot be grounds for the denial of the application.
School Impacts
As has been stated at many public hearings, the Leroy F. Greene School Facilities Act of 1998, or
Senate Bill 50 (SB 50), restricts the ability of local agencies, such as the Town of Los Gatos, to
deny land use approvals on the basis that public school facilities are inadequate. SB 50
authorizes school districts to levy developer fees to finance the construction or reconstruction
of school facilities to address local school facility needs resulting from new development. SB 50
established the base amount of allowable developer fees for school impacts. In January 2016,
the State Allocation Board (SAB) increased Level 1 Fees to $0.56 per square foot of enclosed
and covered space in any commercial or industrial development, and $3.48 per square foot for
residential development (SAB, 2010). Public school districts can, however, impose higher fees
than those established by the SAB, provided they meet the conditions outlined in the Act.
Therefore, school impacts cannot be considered adverse public health and safety
considerations.
The North 40 Specific Plan included both private and public schools as permitted uses within
the North 40 Specific Plan Area. Developers and School Boards can also voluntarily consider
additional arrangements. For the southern portion of the North 40 Area, the Los Gatos Union
School District Board has entered into an agreement with the prospective developers regarding
school issues (available at: http://lg-ca.com/wp/wp-content/uploads/2016/04/LGUSD-
Grosvenor-Agreement.pdf).
Traffic Impacts
The EIR for the North 40 Specific Plan included a full Traffic Impact Analysis (TIA). The TIA
studied the impact of the full build out of the North 40 Specifi c Plan on the existing roadways.
The analysis concluded that the full build out would result in significant traffic impacts at
several intersections, and identified mitigation measures to reduce those impacts to a less than
significant level.
As noted in the March 30, 2016 Planning Commission staff report (available at:
http://losgatos.granicus.com/GeneratedAgendaViewer.php?view_id=5&clip_id=1521 ) the
Phase 1 TIA included in the Initial Study for the Phase 1 applications (Appendix D of the Initial
Study in Exhibit 3 of the March 30, 2016 Planning Commission staff report) studied the
potential traffic impacts specific to the Phase 1 development applications, and found that the
Phase I development applications would generate a portion of the North 40 Specific Plan build
out traffic. As required by the North 40 Specific Plan EIR, the Phase 1 applications, if approved,
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DISCUSSION (Cont’d):
are required to pay traffic impact mitigation fees and construct on-site and off-site
improvements as part of the required mitigation. In other words, the Initial Study and the
additional traffic analysis did not find new significant impacts and therefore, no additional
mitigation measures are required.
CONCLUSION:
As directed by the Court, the Town Council must rescind Resolution 2016-046 and reconsider
the development applications consistent with State laws as discussed in this report. The
Council should open the public hearing; listen to the verbal staff report, applicant’s
presentation, public testimony, and applicant’s rebuttal; close the public testimony portion of
the public hearing; and continue the matter to August 1, 2017 to begin deliberations when the
full Council is present.
If the Council denies the applications, the Council needs to identify specific facts that support
findings that objective standards are not satisfied by the applications and/or that there are
specific public health and safety impacts that can only be addressed by denying the
applications.
If the Council decides to approve the applications, it must identify facts to support findings of
consistency with the General Plan, Specific Plan, Housing Element, and other applicable laws;
and adopt a resolution with conditions of approval. Modifications to conditions may be
considered as long as they do not reduce the number of housing units or render the project
infeasible to construct.
Staff will be available at the meetings to assist the Town Council in its deliberations and
decisions.
COORDINATION:
This report was coordinated with the Town Attorney’s Office, Town Manager’s Office,
Community Development Department, and Parks and Public Works Department.
Attachments
1. Draft Resolution to rescind Resolution 2016-046 (Exhibit A contains Resolution 2016-046)
2. Decision and Judgement
3. Housing Accountability Act
4. Recommended Conditions of Approval
5. Applicants’ rationale for Density Bonus and BMP modifications
6. Public Comment received before 11:00 a.m. July 20, 2017
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Distribution:
Grosvenor Americas, Steve Buster, 1 California Street, Suite 2500, San Francisco, CA 94111
Summerhill Homes, Katia Kamangar, 777 California Avenue, Palo Alto, CA 94304
Harmonie Park Development, 221 Bachman Avenue, Los Gatos, CA 95030