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Attachment 21Buchalter March 20, 2018 VIA E-MAIL & FEDEX Mayor Rennie and Members of Town Council Town of Los Gatos 110 E. Main Street Los Gatos , CA 95031 55 Second Street Suite 1700 San Francisco , CA 94105 415 .227 .0900 Phone 415.227.0770 Fa x File Number: L4342 -0002 415.227 .3508 Direct aguerra@buchalter.com Re: Appeal of Planning Commission Decision Denying a Request to Demolish Three Existing Office Buildings and Construct a New, Two-Story Office Building with Underground Parking for 401-409 Alberto Way Project Architecture and Site Application S-15-056 Conditional Use Permit Application U-15-009 APN 529-23-018 Honorable Mayor Rennie and Members of the Town Council, Thank you for considering the appeal we filed on February 23 , 2018 (the "Appeal ") on behalf of our client, LP Acquisitions , LLC (the "Appellant" or "Applicant"), regarding the above-referenced project located at 401-409 Alberto Way in Los Gatos (the "Property"). As you know, the existing zoning allows for 50% lot coverage or a 93 ,000 square foot building. The proposed Project is an office complex that was reduced from an initial 91,965 square feet to 83 ,000 square feet and now to 74,260 square feet in a new two-story office building with a two- story below-grade parking structure and 38 surface parking spaces ("Project" or ''Third Redesign "). The March 12, 2018 Town Council Staff Report (the "Staff Report") includes a letter dated March 9, 2018 submitted on behalf of the Boards of Directors of the HOAs from Pueblo de Los Gatos , Las Casitas, The Los Gatos Commons , and Bella Vista Villages (the "March 9th Letter") responding to the Appeal and attempting to justify the Planning Commission 's denial of the Third Redesign. The purpose of this letter is to address the comments raised in the March 9th Letter, and to supplement our Appeal to respond to some of the statements that the March 9th Letter referenced from the February 14, 2018 Planning Commission meeting transcript. The March 9th Letter purports to offer post hoc rationalizations to explain the Planning Commission 's Error! Unknown document property name. bucha lter.com Los Ange l es Napn Valley Or ange Co unty a cr a m e n to San Fr anci sco Sco ttsdale Seatt!e ATTACHMENT 21 Bu chalter Honorable Mayor Rennie and Members of the Town Council March 20, 2018 Page 2 decision on February 14th_ As we will explain below, it is legally impermissible for the neighbors to submit post-decision findings to attempt to remedy the Planning Commission 's failure to adopt any findings as required by the Town Code and State Law. The Town Council cannot now consider these ultra vires findings as the Planning Commission 's findings because the Commission had mandatory duty to adopt them, and that duty cannot be delegated to · members of the public. The remaining letters included in the March lih Staff Report and in the Addendum to the Staff Report received on March 19, 2018 raise the same comments regarding the Project as those comments submitted throughout the public review process, and they do not raise any new issues or concerns warranting further discussion in this letter. The Planning Commission erred and abused its discretion when it failed to consider prior Council deliberations and information in the administrative record because it claimed it could start from scratch in reviewing the Project on remand . As you know, after redesigning the Project to further reduce the square footage to 83 ,000 square feet , the Council ultimately decided on October 3 , 2017 to remand the Project back to the Planning Commission due to the receipt of new information requesting that the Applicant consider a further reduction in the size of the Project, along with the other suggested revisions we noted in the Appeal. While it is true that Councilmember Spector ' s motion did not include a specific Project size for the Planning Commission to evaluate, the motion directed the Planning Commission to "consider all [emphasis added] the information available" regarding the Project, including the Reduced Scale Alternative of 74,260 square feet, when it reviewed the revised Project presented to the Council. The Planning Commission did not do this. As we noted in our Appeal , Sec . 29.20.300(c) of the Los Gatos Municipal Code provides: ·'If the only or predominant reason for modifying or reversing the decision of the Planning Commiss ion is the availability of new information a s defined in subsection (b )(2) above~ it is the policy of the Town that the application will b e returned to the Commission.fiJr revieH · in light (f the new it?formutiun unless th e Jl CH' h?f<)nnation ha s minima/ c:frect 011 the appficotiOJl .'~ The Planning Commission erred and abused its discretion when it denied the Project after concluding the Project at 74,260 square feet was still "too big" because it did not meet the neighbors ' latest demands for a 50,000 to 60,000 square foot building with a one-level parking garage, even though our third design was consistent with the Town 's prior requests to reduce the project to the size of the EIR Reduced Scale Alternative. In fact, at its January 10, 2018 Planning Commission meeting , Commissioner Janoff acknowledged that "the developers are essentially following the guidance that was provided by the Town Council " with respect to the Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20, 2018 Page 3 building size (see Janoff at In 13-20, January 10 , 2018 Transcript at page 52). Rather than consider if the Third Redesign at 74,260 square feet complied with the Town 's General Plan policies and Zoning Code development regulations and design guidelines in light of the new information that the Council received about the Project, however, the Planning Commission outright rejected the Project. The Commission rejected the Project because my client did not revise the Project to accommodate the Commission's latest demands since they contradicted the prior Town direction and , in some cases, conflicted with the existing Property zoning. Further, the March 9th Letter claims that at the January 10, 2018 hearing, the Planning Commission requested that the Third Redesign preserve views by either constructing a single- story building or by increasing the setback from the north property line. The March 9th Letter claims that the Planning Commission did not instruct the Applicant to redesign the building to 74,260 square feet (see March 9th letter, p. 1). As the January 10, 2018 transcript demonstrates , however, both Commissioner O 'Donnell and Commissioner Janoff noted that they would support the 74,260 square foot design if the building size could be achieved with a combined one-and two-story design ( see January 10, 2018 Transcript at pages 64-69). In this regard, the Planning Commission's January 10th motion reflected the Council 's guidance concerning a 74,260 square foot building but noted additional revisions that, upon further review as indicated in our January 30, 2018 letter, could not be accomplished without conflicting with the prior guidance from the Council and the neighbors ' requests as discussed below. We explained in our January 30, 2018 letter to Ms. Armer that the Planning Commission 's latest requested revisions could not be accomplished without shifting the building closer to Alberto Way in conflict with prior direction from the Town Council and Planning Commission to set the building back from Alberto Way. The reason that the Neighbors ' request to pull back the building another 30 ' on the North side and add it to the front of the building also conflicts with the neighbors ' prior requests and Town direction to pull the front of the building away from the street in order to preserve views of the hills beyond the building and also to provide additional surface parking and amenity space in front of the building. The Commission never explained why they reversed course and rejected a design that responded to the Council and neighbors ' prior request. Then, they denied the Project. The March 9th Letter also claims that the 74,260 square foot design obstructs more than half of the view corridor on the north side of the site. As demonstrated by the story poles, the Third Redesign preserves 73% of the view corridor on the north side of the site (74'-10" current setback reduced to 55' -0 "; 27% reduction). The March 9th Letter claims that a citizen made a reasonable assumption based on facts that he would come home from work some day and would be unable to look at the mountains because of the Project, and that the view "'will be lost for all of us." The March 9th Letter erroneously suggests that the reduction in the Project size reflected in the Third Redesign would obstruct views from public vantage points, when the Project was designed to further reduce impacts to views -not increase them. Because one resident's view Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20 , 2018 Page4 may be partially impacted does not mean that all residents ' views will be impacted. Moreover, the existing site trees , buildings and freeway on-ramp trees on and behind the Project site obstruct views of the mountains today for many of the Alberto Way residents. The proposed Third Redesign will improve views for the neighbors from many vantage points compared with existing conditions. T he Planning Commission erred and abused its di scretion when it failed to adopt any findings to deny the CUP that were su pp o rted by substantial evidence. We raised the concern in our Appeal that the Planning Commission did not adopt the required findings to deny the CUP , specifically, or the Project, as a whole (see February 23 , 2018 Appeal). Moreover, we noted that even though Commissioner Janoff commented that the Project was inconsistent with various General Plan and Community Design policies, there was no explanation as to ho w or why the Planning Commission determined that the Third Redesign (which appeared to comply with these policies on January 10, 2018) no longer complied with the General Plan and Commercial Design Guidelines on February 14, 2018. Page 2 of the March 9th Letter claims that the Commission relied on comments from Larry Cannon and a photograph showing the building in comparison to existing commercial and residential structures on Alberto Way , but the Planning Commission did not refer to Mr. Cannon 's comments in its deliberations at either the January 10th or February 14th meetings. Importantly, the Third Redesign incorporates all of Larry Cannon 's February 22 , 2017 comments on the Second Redesign, including the following: Vary roof heights , introduce additional 1st and 2nd floor building recesses, roof breaks and projections and add additional stucco colors in order to break up the mass of the building. Add additional trellis elements at the window openings on both floors to add visual interest to the front fa9ade. Improve the look of the main entry element. All these recommendations are incorporated into the Third Redesign. Commissioner Janoff s recommendation in the Planning Commission meeting of February 14, 2018 to redesign the project to consist of a larger first floor building plate and a smaller second floor building plate is infeasible for a number of reasons. The maximum ground floor plate that can be achieved at 50% lot coverage is 46,787 square feet. The resulting second floor plate would thus be reduced to 27 ,473 square feet. The resulting oversized ground floor plate and undersized second floor plate are inconsistent with floor plate sizes demanded by today 's Class ·A ' office tenants and will thus adversely impact the marketability and leasability of the development. Furthermore, this recommendation will result in a design that conflicts with previous neighbor requests and direction given by the Town. Previously, the neighbors and Planning Commission recommended that the building mass at the south end of the site be pulled back · from Alberto Way. In order to preserve view corridors on the north end of the site, the increased Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20, 2018 Page 5 sized ground floor plate will need to be located at the southeast comer of the site , pushing the building mass out to the original design 's location closely adjacent to Alberto Way; resulting in the following negative effects and reversal of previously recommended project attributes of the Third Redesign: • Views of hills will be impacted by the two-story building mass pushed right up against Alberto Way street frontage at the south end of the site. • Loss of 5,000 square foot public site amenity space at the southeast comer of the site. • Loss of 21 surface parking spaces which will need to be replaced in the underground parking garage, resulting in a larger and less efficiently designed underground parking garage and increased sized excavation. • Loss of roughly half of the on-site construction staging area at the southeast end of the site. • Potential loss of proposed dedication for street widening for the addition of dedicated left and right tum lanes at the intersection of Alberto Way and Highway 9 and the proposed bike lane on the west side of Alberto Way. All of the above project attributes were previously requested by the neighbors and Planning Commission at prior public hearings in which the first and second designs were reviewed. Thus, we did not modify the design further to undo the changes that the Town and neighbors previously requested. The Planning Commission abused its discretion when it disregarded its responsibilities under CEQA. At its meeting on January 10, 2018, various Planning Commissioners indicated that they were comfortable with the analysis contained in the Final EIR (see e.g., comments from Commissioners Burch and Kane, January 10, 2018 Transcript at pp. 9-11 ). Then, at its February 14th meeting, the Planning Commissioners changed their minds and decided that the EIR was inadequate even though nothing in the EIR changed between the January 1 oth and February 14th meetings. No analysis was ever provided by the Commission to justify their comments regarding the purported inadequacies in the EIR despite extensive evidence in the administrative record by the Town's own consultants and Staff to the contrary. This was the problem with the first denial and the Commission did it once again. Moreover, the Planning Commissioners came up with their own ideas for the alternatives analysis, and those ideas do not comply with CEQA. First, they decided to ignore the Applicant's project objectives, and then they decided they were not responsible for determining if an alternative to a project is feasible or not. CEQA requires that an EIR include in the Project description, the applicant 's project objectives; not the lead agency's (14 Cal. Code Regs. 15126.6). The applicant's project Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20, 2018 Page 6 objectives inform the evaluation of a reasonable range of "feasible" alternatives which CEQA requires that a public agency undertake in its analysis of a Project's environmental impacts. Public Resources Code Section 21061.1 defines "feasible" as ''capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social and technological factors." Among the factors that may be considered when addressing the feasibility of on-site alternatives are site suitability, economic viability, availability of infrastructure, general plan consistency, other plans or regulatory limitations, and jurisdictional boundaries. The EIR for the 401-409 Alberto Way project identifies the project objectives, which included "Redeveloping the site by removing the now obsolete, aging structures and replacing them with new, two-story Class A steel office buildings ... " and "Providing a building type that satisfies the needs, desires, and market demands for high-tech users in Class A office space ( e.g., larger floor plates, ... )." Additionally, the EIR evaluated the 74,260 square foot Reduced Scale Alternative and a No Project Alternative, but the Town was not required to analyze alternatives with further size reductions because (1) such a proposal would not meet the stated objectives of the project; and (2) the EIR studied a no project alternative in which the existing building would be demolished and replaced with a building of identical square footage (31,000 square feet). The EIR found that this "No Project -Existing Square Footage" alternative may not be feasible and would not meet all of the project objectives. The March 9th Letter acknowledges that our Appeal raised the concern that the Planning Commission did not consider the "economic infeasibility" of a project smaller than 74,260 square feet. The March 9th Letter then claims that the Commission found that it was not and could not be their job to decide how much profit a developer should make. The Planning Commission also commented that they thought the Applicant's project objectives should be to build Class B office space, rather than Class A. Contrary to the assertions in the March 9th Letter and the comments made by the Planning Commission, the Town, as the public agency that approves or denies the project is responsible for providing an adequate discussion of alternatives, and determining whether proposed alternatives are feasible. (See Preservation Action Council v. City of San Jose (2006) 141 Cal.App.4th 1336, 1351-52.) While the fact that an alternative may be more expensive or less profitable is not sufficient to show that an alternative is financially infeasible, evidence that additional costs or lost profitability would render it impractical to proceed with the project is sufficient. (Id. at p. 1352, quoting Citizens of Goleta Valley v. Board of Supervisors (1988) 197 Cal.App.3d 1167, 1181.) Further, CEQA provides that evidence that an alternative would not meet most of the basic objectives of the project is a reason to eliminate alternatives from consideration. (See CEQA Guidelines,§ 15126.6(c).) Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20 , 2018 Page 7 The Applicant presented evidence showing that a reduction in the footprint of the project below the Reduced Project Alternative would result in a development that is financially infeasible and does not meet the project objectives to provide Class A office space. T he Applicant presented evidence in a letter dated March 17, 2017 that construction of an office project of less than 83 ,000 square feet would compromise the applicant 's ability to secure a lender for the project because of the high development costs ($615 per square foot) and the low annual lease payment on total costs percentage. In a subsequent letter on November 7 , 201 7, the Applicant provided further information explaining how the reduced excavation associated with the Third Redesign would provide sufficient savings to maintain the feasibility of the project. Further size reductions, however, would make the project infeasible because the project would no longer be able to provide Class "A" office space as supported by the information in the January 3, 2018 letter from Buchalter, which includes letters from two brokers with extensive experience leasing Class "A" office buildings in Silicon Valley. This is consistent with applicab le ca se law findin g that w here substantial evidence shows that a reduced project is financially infeasible, the alternative need not be further studied (see e.g., Association of Irritated Residents v. County of Madera (2003) 107 Cal.App.4th 1383, 1399-1400; Sequoyah Hills Homeown ers Assn. v. City of Oakland (1993) 23 Cal.App.4th 704). Conclusion The Appeal identifies the reasons that we believe that the Planning Commission erred and abused its discretion in denying the Project. Based on the reasons described above and set forth in tlJe administrative record, we believe that the March 9th Letter and its references to the February 14th Transcript do not change the conclusion that the Planning Commission denial should be overturned. The March 9th Letter does not compensate for the Planning Commission 's failure to adopt findings, nor does it support its decision to deny the Project. It is legally impermissible for the neighbors to submit post-decision findings to buttress the Planning Commission 's failure to adopt them as required by the Town Code. The Town Council cannot now consider these ultra vires findings as the Planning Commission 's findings because it was the Commission 's mandatory duty to adopt them and that duty cannot be delegated to members of the public, particularly, in this case where the Commission already took action. Error! Unknown document property name. Buchalter Honorable Mayor Rennie and Members of the Town Council March 20, 2018 Page 8 We appreciate your consideration of our Appeal, and respectfully request that the Town Council overturn the Planning Commission's denial of the Project, certify the EIR and approve the demolition permit, CUP and ASA for the Third Redesign. By AG:sl Sincerely, BUCHALTER A Professional Corporation Alicia Guerra cc (via email): Shelley Neis, Town Clerk Rob Schultz, Town Attorney Laurel Prevetti, Town Manager Joel Paulson, Community Development Director Jennifer Armer, Senior Planner Randy Lamb Shane Arters Jolie Houston, Esq. Error! Unknown document property name.