Development Agreement between Norton Simon Art Foundation & City of Pasadena

Planning & Community Development Department

Development Agreement between Norton Simon Art

Foundation & City of PasadenaCity Council Meeting

December 16, 2013


2

• 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.

Importance of this Agreement


3

• 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.

Importance of this Agreement


Background

4

• 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

5

• 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.


6

Subject Site

PS134-FRW

OS

Colorado Blvd.

SP

PSCD-1

St. J

ohn

Ave

Pasa

dena

Ave

.

710-

FRW


77

Subject Site

PS134-FRW

OS

Colorado Blvd.

SP

PSCD-1

St. J

ohn

Ave

Pasa

dena

Ave

.

710-

FRW

Norton SimonArt Museum

Rusnak-PasadenaDealership

OldPasadena

FreewayROWs

Knights ofColumbus Ralphs

Union St.


Subject Site

134-ROW

Colorado Blvd.

St. J

ohn

Ave

710-

RO

W

Union St.


Subject Site

134-ROW

Colorado Blvd.

St. J

ohn

Ave

710-

RO

W

Union St.

West Colorado StreetHistoric Auto Row

Auto Service Buildings&

Outdoor Display Areas


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.

Length of existing lease:

Length of extended or new lease:

Number of additional

years of the agreement

(grace period)

Total length of

agreement

2 years None 0 years 2 years

2 years 1 to 2 years 0 years 3 to 4 years

2 years 3 to 18 years 3 years 8 to 23 years


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

Topic Area Development Standard

Permitted Uses: • Housing, business and community serving uses and automobile dealerships.

Residential Density:

• Urban housing standards• 48 units per acre; or 274 units for the

property• Minimum lot area per unit: 910 SF

Height: • 40 ft. for first 150 ft. along Colorado Blvd.

• 85 ft. for rest of property

Setbacks: • 20 ft. along Colorado Blvd.• No other setback requirements

Lot Coverage: • Does not apply

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

• 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.

Highly Unique Situation


23

Recommendation

1) 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;

2) Make the four findings necessary to approve a Development Agreement;

3) Approve the Development Agreement between the Norton Simon Art Foundation and the City of Pasadena; and

4) Direct the City Attorney to draft an ordinance within 60 days.


Development Agreement between Norton Simon Art

Foundation & City of PasadenaCity Council Meeting

December 16, 2013

Development Agreement between Norton Simon Art Foundation & City of Pasadena

Documents

Transcript of Development Agreement between Norton Simon Art Foundation & City of Pasadena