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Item 5 Attachment 8Responses to Questions from Mr. John Shepardson (from emails received after June 3 with related questions combined) 1. My understanding is something like $900K was set aside by the developer for traffic intersection or roadway work. How much was the exact amount? How much work needs to be done? Do we have a breakdown of the cost to improve each intersec- tion? I'm concerned that the Town will end up paying much more for the work re- quired by the 485K build out by the developer. Did the developer provide any esti- mates? Does the Town plan to do any more budgeting? What if the cost to do the do work is say 2M, and only 900K has been received? Can we ask the developer to pick up the additional I.1M? As detailed in a wide variety of materials provided as part of the application and project review, the applicant is required, under the project approved by Council, to meet traffic impacts and concerns as specified in the project proposal and environmental review through multiple mechanisms. For example, the applicant will be constructing traffic im- provements as part of the project itself, such as the intersection of Winchester with Al- bright & Courtside, restriping of Winchester and Lark, and the added "keep clear" desig- nations at Charter Oaks and Lark. In addition, the applicant will pay Traffic Mitigation Fees as specified in the Town Code at the level previously established by the Town Council. All development projects generating traffic are required to pay this fee to partially fund street and traffic improvements throughout the Town. Last, there are some additional traffic improvements that cannot legally be required as part of the project or environmental mitigation, but would be advantageous to the Los Ga- tos community, so Community Benefit funds contributed by the applicant will be used by the Town to provide additional support for traffic improvement projects. All of the mechanisms above will provide sufficientfunding and support to meet the traffic improvements required for this project. The University & Lark improvements are already completed, the Knowles & Winchester improvements are underway, the Winchester & Lark improvements are now fully funded at the estimated level, the Boulevard and Blossom Hill improvements will be done with the Swanson Ford development, the applicant will directly provide other improvements as described above, and the remaining Boulevard improve- ments will be provided out of existing or new Traffic Mitigation Fee funds. 2. Underground parking. Under the approved plan, I gather the developer is not re- quired to do it, right? Is additional EIR work required by the parking structure or underground parking? UNDERGROUND PARKING. Are we sure the existing EIR covers underground parking? Future consideration of underground parking for the parking structure was specifically al- lowed per the Council approval, and whatever further environmental review will be re- quired will depend on what the applicant proposes, if anything. Underground parking for the office buildings was previously studied in the EIR for this project. ATTACHMENT 8 3. Has the Town considered whether the development size creates a private or public nuisance? California law describes a public or private nuisance in terms of an activity, omission, or use that may be harmful, dangerous or interferes with someone else's use of their property (such as illegal sale of drugs). The size of an approved development project by itself does not constitute a nuisance. 4. What is the status on the roads at Albright? Did we give them away, or do we still own them? What are they worth? EASEMENTS. What is the status on the Town's easements on the property site? What is the fair market value of them? Does the ap- proval merely transfer them, or is there another action that the Town must take? The Town's easements for Albright Way are for public access aver private land as provid- ed with the original development at no cost to the Town. As public streets will no longer be part of the project as approved by Council, the Town's obligation for maintenance of public streets will no longer exist as well. The abandonment of the easements for public access will be part of the Tentative and Final Maps required for implementing the project as approved by Council. The elimination of the public Albright Way loop was identified on page 4 of the original staff report for the March 20 Council meeting and in more detail on page 12 of the staff report for the Planning Commission consideration of this project. 5. There has been debate as to whether or not the project's land use approval was about Netflix. Council Member Jensen indicated it was not, and Member Pirzynski em- phatically responded that it was about Netflix. If we adopt his view, then it is quite important to know if Netflix would be willing to accept 2 -Story or 3 -Story buildings. Has anyone inquired as to whether it would accept less than 4- stories? If so, what is the answer? Perhaps normally this would be irrelevant to the discussion of land use. However, since Nctflix's desire to expand is publicly on the table (and Member Pir- zynski affirmed its relevance), I think these are important questions worthy of rais- ing, and getting answers to ASAP. Of course, if Netflix refuses to provide the those answers, that is their call. The Council's approval of the projectprovides development rights and opportunities to the applicant and property owner, not to any prospective tenants. Netflix representatives did speak to preferred height and stories at the May 20 Council Hearing, which can be viewed on the Town web site. 6. The 4 -1 decision agreed to four 3 -story buildings, and two 3 -story buildings. As I un- derstand it, one of the buildings is close to the freeway, and next to Netflix existing buildings. It seems to me that if they can work and "collaborate" in a 3 -story building near the freeway, that they can possibly do the same in the other buildings. If so, we could reduce the impacts by another approximately 70K, while giving Netflix what they will accept. To clarify, the Council approved two 3 -story buildings and two 4 -story buildings. Your questions are ones for the applicant and the applicant's tenants and are not required as part of the project approvals based on the Council's direction and action. In a sense, this development has become all about Netflix, and nothing about the de- veloper. We assume Netflix's presence will make everything right. Mr. Pau's experi- ence in Sunnyvale, and his failure to build out at the old Lincoln Mercury site was not raised by anyone as cause for concern. What is the status of Sand Hill's project at Gateway on LG Blvd.? I gather the schools could use the money from the develop- ment. When is the commercial to be built at Swanson, since there is money for the schools from that as well. The residential appears to have started first, and linking commercial and residential development together may have been better for the Town's coffers. Developer profit and Town goals appear to vary on this issue. Sand Hill Properties is proceeding with both of its Gateway (old Lincoln Mercury site) and Blossom Hill (old Swanson Ford site) developments. The Gateway project has been sub- mitted for plan review, while the plan review for the Blossom Hill project is nearly com- plete. The approval of the Blossom Hill project included conditions setting specific linked milestones for simultaneous residential and commercial development of the site. 8. "In the fourth quarter of 2012, the Company entered into a facilities lease agreement to expand its Los Gatos headquarters to a nearby site. The ten year lease term will commence after the construction of the buildings is complete. Future minimum lease payments associated with this lease are $63.4 million as of December 31, 2012 and are included below." (emphasis added) From Netflix's 2012 Annual Report. My question is: Is the lease on the first building only obligate Netflix if all the buildings are simul- taneously built out, as the Annual Report seems to indicate? Isn't this important in- formation particularly if we assume the project is all about Netflix? Can we get a copy of the leases and options? CLARITY ON ROI. Can we obtain a copy of the ac- tual Netflix lease with the developer so we can better calculate the ROI? Since the project is about Netflix according to Council Member Pirzynski, it seems to make sense to get it. The developers represented 350K was not feasible because of a 6.3% ROI. If the ROI was actually higher, and actually above 7 %, then it appears the staff was misled in malting its recommendation that 350K was not feasible, and the devel- opers were incorrect when they so asserted. With a proper staff recommendation, naturally there would a stronger position before the Council and in the public for the environmentally superior alternative of 350K. I would hope none of us would want the environmentally best use of the land to be denied because of a ROI error by the developers. Any current or future leases for the Albright project are private party agreements not sub- ject to Town submission, review or approval. 9. I remain concerned about Netflix's commitment to the interests of Los Gatos, and the environment. Since the EIR clearly stated the environmentally superior option was 350K square feet of office space, why didn't it publicly support this option? No doubt its talented staff new of this fact, and yet never mentioned in the press or at the TC council meetings. In fact, to the contrary they supported a much less desirable build out of 550K. It appears than gave priority to its profits than the environment. Is this what we want? The claim that the project was not "feasible" was not credible and disrespectful to the Town. Of course if we tolerate and reward misleading infor- mation, then we encourage it, and have only ourselves to blame. Opinion and speculation; no response appropriate from staff. 10. Why weren't private views considered in the EIR? Isn't there clear case law that it is required? The environmental review considered aesthetics from multiple perspectives, as required. Private views, air space, and light are typically not protected rights in California. 11. Was there a requirement that the developer post a sign on the property stating the correct date and time of the Town Council Meeting? What are the consequences if the developer failed to correctly post the date and time? DEFECTIVE NO- TICE. Were the developers required to post on the property site the continued hear- ing date? What is the effect of not posting it? The Council's approval of alternatives to story poles and signage did not specify or re- quire updated public hearing information if and when the hearing was continued. If out - of -date information remained posted, the Town's recourse would have been to request the updating of the information in a timely fashion. The initial public hearing was legally no- ticed through multiple means, including mailings to nearby property owners and residents, newspaper advertising and signage, which met the State requirements for public notice. No additional public notice is required when a hearing is continued to a date certain as was done in this matter. 12. NEW REGULATIONS. Do the additional traffic impacts meet the new Greenhouse regulations? The EIR fully considered the traffic impacts and current CEQA requirements to analyze greenhouse gas emissions.. 13. MONEY TO SCHOOLS. How much additional monies to schools will take place go- ing forward? The property was purchased for 55M. The build out totals to some- thing like 325M. As those improvements are made, how much additional property tax will be generated? Is the taxed capped at an annual basis of something like 2 %? Here is the information provided to Council prior to its action in response to similar Council questions (from Deskltem B, page 2): "The applicant has provided a fiscal Im- pact Analysis (prior Attachment 12) which included estimates ofpotential tax revenues for the Town of Los Gatos and Los Gatos schools. Per the applicant, the estimates of in- creased tax revenue for both the Town and the school districts are net of the prior property tax increase resulting from the most recent sale of the property. Note that property tax valuations typically consist of three components: land, buildings and personal property. Land and buildings cannot increase more than 2% per year unless the property is sold or new construction occurs. The applicant's fiscal Impact Analysis assumes the growth in property tax to be based on new construction and a 20% factor for personal property (e.g., computers, servers, etc. in commercial buildings). " 14. CHANGE LOS STANDARD. Is it possible to change the acceptable traffic level of service standards for the Town? Any prospective changes to Level of Service standards would require study and analysis crnd subsequent public discussion and action by the Council. Changes to the level of ser- vice standards could not be applied retroactively to previously approved projects. 15. LEGAL OPINION. Can the Town provide me with a legal opinion on the validity of PDs not requiring an amendment to the General Plan? As indicated in Desk Item C, page 2, in response to Council inquiry, the Town has previ- ously approved over 75 PD's with the vast mcjority of them including exceptions to the underlying zoning and or General Plan specifications. These exceptions are allowed as referenced in Desk Item D from Page LU -16 of General Plan 2020 and from Town Code Sections 29.80.080 crnd 29.80.085. The Town is unaware of any laws or prior court deci- sions invalidating any or all of those prior PD approvals. THIS PAGE INTENTIONALLY LEFT BLANK