Planning & Community Development Department
Development Agreement between Norton Simon Art
Foundation & City of PasadenaCity Council Meeting
December 16, 2013
Planning & Community Development Department
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• 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
Planning & Community Development Department
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• 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
Planning & Community Development Department
Background
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• 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.
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Background
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• 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.
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Subject Site
PS134-FRW
OS
Colorado Blvd.
SP
PSCD-1
St. J
ohn
Ave
Pasa
dena
Ave
.
710-
FRW
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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.
Planning & Community Development Department
Subject Site
134-ROW
Colorado Blvd.
St. J
ohn
Ave
710-
RO
W
Union St.
Planning & Community Development Department
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
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Subject Site
ABOVE – Buildings along St. John Ave.LEFT - Auto Display & Service Areas
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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.
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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.
Planning & Community Development Department
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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
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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).
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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:
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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.
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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.
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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.
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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.
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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.
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• 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
Planning & Community Development Department
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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.