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Development Agreement between Norton Simon Art Foundation & City of Pasadena

Development Agreement between Norton Simon Art Foundation & City of Pasadena. City Council Meeting December 16, 2013. Importance of this Agreement. Sales Tax accounts for 16% of total General Fund revenues. Auto dealers account for 10% of total Sales Tax revenues.

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Development Agreement between Norton Simon Art Foundation & City of Pasadena

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  1. Development Agreement between Norton Simon Art Foundation & City of Pasadena City Council Meeting December 16, 2013

  2. Importance of this Agreement • Sales Tax accounts for 16% of total General Fund revenues. • Auto dealers account for 10% of total Sales Tax revenues. • Between 2000 and 2012, Pasadena lost numerous automobile franchises: • Mercedes, Chevrolet, Ford, Chrysler, Dodge, Jeep, Hummer, Hyundai, Suzuki and Acura.

  3. Importance of this Agreement • Rusnak Auto Group is consistently in top 10% of sales tax generators: • Approximately 300 employees and annual payroll of $19.3 million. • Rolls Royce, Bentley, Porsche, Audi, Maserati & Volvo. • Current lease between Norton Simon and Rusnak Auto Group expires at the end of 2015. The loss of Rusnak would have a significant negative impact on the local economy. • The property requires reinvestment to remain viable as a dealership: • A long-term lease would incentivize investment • Norton Simon is reluctant to extend lease unless it can preserve options for the future.

  4. Background • State Government Code and the Pasadena Zoning Code regulate development agreements • They are contracts between local government entities and applicants (usually a property owner or developer). • Provide assurances for applicants to maintain the right to develop subject to the rules and regulations at that time in return for public amenities, negotiated fees and/or other benefits. • Cannot be used to allow a use that would not be permitted under the Zoning Code, constitute a rezoning or permit a Variance. • Noticed public hearings with findings before the Planning Commission and City Council.

  5. Background • On August 2012 – Development Agreement submitted between the Norton Simon Art Foundation & City of Pasadena. • 267-337 W. Colorado Blvd. & 55-77 N. St. John Ave. • 5.7 acres; Located in West Gateway Specific Plan. • Property developed with Rusnak-Pasadena dealership. • Under the proposed agreement: • The applicant would pursue a long-term lease extension. • Applicant would preserve its right to develop in the future under the current General Plan, Specific Plan & Zoning Code. • No project or property modifications proposed at this time. • Planning Commission meetings on April 10th & July 24th. 5

  6. Subject Site PS 134-FRW PS CD-1 Pasadena Ave. St. John Ave 710-FRW OS Colorado Blvd. SP

  7. Subject Site PS 134-FRW PS Freeway ROWs CD-1 Rusnak-Pasadena Dealership Norton Simon Art Museum Union St. OS Pasadena Ave. St. John Ave 710-FRW Colorado Blvd. Old Pasadena Knights of Columbus SP Ralphs 7

  8. Subject Site 134-ROW Union St. St. John Ave 710-ROW Colorado Blvd.

  9. Subject Site 134-ROW Auto Service Buildings & Outdoor Display Areas Union St. St. John Ave 710-ROW West Colorado Street Historic Auto Row Colorado Blvd.

  10. Subject Site Buildings along W. Colorado Blvd.

  11. Subject Site ABOVE – Buildings along St. John Ave. LEFT - Auto Display & Service Areas

  12. Original Proposed Agreement • Current lease for the dealership expires at end of 2015. • Applicant would use good faith efforts to maintain a luxury brand dealership for an additional 15 years. • Still subject to changes in laws, fees and building related codes. • Includes annual reviews. • Terms of agreement would end if: • The applicant is unable to secure a new lease or an extension of the existing lease or the use was no longer a luxury brand dealership. • Includes grace periods of up to 5 years. • In no event will the total length exceed 23 years. • Applications deemed complete would be vested.

  13. Planning Commission Meetings • On April 10th Planning Commission unable to reach a decision and continued the item. • On July 24th Commission recommended City Council deny the development agreement by a vote of 4-3. The Commission identified the following significant issues: • There was no specific project associated with the agreement; • The use of “grace periods” was too broad and its maximum length was too long, overall agreement was too long; • Agreement would set precedence for other property owners to request similar agreements; and • Property owner would be able to vest existing development standards when the West Gateway Specific Plan may sunset.

  14. Modified Proposed Agreement • Staff and applicant continued to work together to address the Commission’s concerns. • “Grace periods” only apply if the use was extended for five years or more from the effective date of agreement; • “Grace periods” are reduced from five years to three years; complete applications would be vested.

  15. Existing Standards • West Gateway Specific Plan adopted in 1998. • Remaining caps in the Specific Plan: • 407,000 SF of commercial and no housing units. • SF can be converted to housing units (850 SF per unit). • All properties maintain their existing SF on site and receive an additional FAR of 0.4 (for a total FAR of 0.94). • Transfer of Development Rights (TDRs) allows transfer of the 0.4 FAR from one property to another. • Existing SF can be demolished an reconstructed on-site. • Proposed General Plan does not call for significant changes for subject property (FAR of up to 1.0).

  16. Existing Standards • Other development standards for the subject property:

  17. TDRs • Clarification on Transfer of Development Rights (TDRs): • Proposed agreement would maintain the list of permitted uses, maximum FAR and development standards as outlined in existing Specific Plan. • However, if TDRs were removed within the Specific Plan, the subject property would also not be able to utilize TDRs. • None of the other properties would be able to transfer SF from their property to the subject property. • Specific language included in the agreement to further clarify TDRs.

  18. Findings of Support 1) The proposed agreement is in the best interest of the City • City and community would enjoy many benefits from maintaining the dealership: • Dealership generates significant revenues through sales taxes and other taxes and revenues. • As a luxury brand dealership, it attracts a large portion of its customers from outside Pasadena. • Eliminates uncertainty in the planning process and provides for the orderly future development of the property.

  19. Findings of Support 2) The proposed agreement is in conformance with the goals, policies and objectives of the General Plan, West Gateway Specific Plan and Zoning Code. • Agreement would maintain all existing goals, objectives and standards of the General Plan and Specific Plan: • General Plan Guiding Principle highlights economic vitality. • General Plan Objectives include the need to encourage businesses that contribute to the City’s fiscal health. • Automobile Dealerships are permitted “by right” in the Specific Plan. • General Plan Update does not call for significant changes for the subject property.

  20. Findings of Support 3) The proposed agreement would not be detrimental to the health, safety and general welfare of the immediate area or the City. • Agreement would maintain the existing luxury dealership or maintain present conditions: • Automobile sales have occurred since the 1920s. • Existing business has not been a nuisance to the surrounding area or community. • Automobile sales are permitted “by right”. • A proposed new project would need to comply with all existing public hearing and noticing requirements and all provisions of CEQA.

  21. Findings of Support 4) The proposed agreement is consistent with the California State Government Code (Sections 65864 through 65869.5). • These sections outline requirements related to the contents of the agreement, the applicability of an agreement and on the public hearing and approval process: • City Staff and City Attorney have reviewed agreement and it meets or exceeds all provisions of the Code. • Public outreach includes newspaper notice, notices mailed to all property owners within 500 ft. and multiple on-site postings. • Does not constitute a Zone Change or Variance.

  22. Highly Unique Situation Terms of agreement are highly unique and do not set precedence. Involves to long-standing community institutions. Provides significant economic benefits to the City. Any other agreement for another property would be reviewed separately on its merits by Planning Commission and City Council.

  23. Recommendation • Find agreement is exempt from the California Environmental Quality Act (CEQA) and does not have the potential for causing a significant effect on the environment; • Make the four findings necessary to approve a Development Agreement; • Approve the Development Agreement between the Norton Simon Art Foundation and the City of Pasadena; and • Direct the City Attorney to draft an ordinance within 60 days.

  24. Development Agreement between Norton Simon Art Foundation & City of Pasadena City Council Meeting December 16, 2013

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