CED AGENDA: 2/22/16 ITEM: D (3) CITY OF ST: S3 SAN JOSE CAPITAL OF SILICON 1 \ ALLEY Memorandum TO: COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE FROM: Harry Freitas SUBJECT: SEE BELOW DATE: Approved Date fsm- <f/ SUBJECT: STATUS REPORT ON DOWNTOWN STRATEGY UPDATE AND EIR RECOMMENDATION Accept the status report on project scope, project schedule, and work plan action items to complete an update to the Downtown Strategy and Environmental Impact Report. BACKGROUND On June 20, 2005, the City Council certified the San Jose Downtown Strategy 2000 Final Environmental Impact Report (FEIR) (Resolution No. 72767) and adopted the Downtown Strategy 2000, which provided strategic planning for housing, office, commercial, and hotel development within the Greater Downtown Core. The traffic analysis for the Downtown Strategy 2000 EIR evaluated the following development capacity within the Greater Downtown Core Area: 11.2 million sq. ft. of office development 8,500 residential units 1.4 million sq. ft. of retail development 3,600 hotel rooms.. City Council Policy 5-3 establishes that signalized intersections in the Core are exempt from the City's Level of Service standards. The FEIR analyzed the full build-out as four phases of development to coincide with transportation improvements to mitigate traffic impacts identified in the traffic analysis. The traffic mitigation measures were incorporated into the Downtown Strategy 2000 plan document. The mitigation monitoring and reporting program for the project identified the City as having Implementation Responsibility with the Directors of the Department of Planning, Building and Code Enforcement (PBCE) and the Department of Transportation (DOT) providing Oversight Responsibility. The transportation improvements were to be funded by the Redevelopment Agency. With the dissolution of the Redevelopment Agency by the State of California in 2010, the City is now responsible for implementation of the mitigation measures and identifying other sources of funding for these improvements.
Page 2 The FEIR Resolution further stated that the City shall ensure the development of the identified transportation improvements prior to build-out of each phase. Downtown is approaching the residential capacities identified in Phase 1, but the required traffic mitigation measures are not programmed within the five-year Traffic Capital Improvement Program. Without implementation of the traffic mitigation measures, development beyond Phase 1 could not proceed under the Downtown FEIR because the impacts identified in the FEIR will not be mitigated. Project applicants would need to prepare their own Traffic Impact Analysis and obtain individual project level environmental clearance prior to receiving development entitlements. The Envision San Jose 2040 General Plan increased the amount of planned housing and job capacity in Downtown to 10,360 residential units and 48,500 jobs. A portion of the Diridon Station Area Plan overlapped the Downtown Strategy Boundary and maintained the development assumptions. Currently, the interest in developing Downtown remains high, especially highdensity residential. However, without updating the Downtown traffic mitigation program in an updated EIR, the City would be unable to provide project level environmental clearance that would expedite development to keep up with the demand. Delay in development would impact the fiscal health of Downtown and the overall City. The full Council was provided with a project update on June 9, 2015. Council accepted the report with direction for 1) the incorporation of a nexus study to explore alternate methods of funding traffic impact mitigation, and 2) development of a policy to preserve commercial land near future BART and other transit stations. ANALYSIS The fundamental purpose of updating the Downtown Strategy is to update the land use plan and identify necessary traffic improvements to support anticipated levels of Downtown development. The answers to two key questions are essential for informing related policy decisions: 1. What transportation improvements are required (or desirable) to support planned new development? 2. How will those transportation improvements be funded? The following is a status report on the work plan items. Project Description Currently the critical path work for completion of the Draft EIR is finalizing the project description. The project description is generally the activity which the City Council will ultimately consider for approval. From a CEQA perspective, it is a description of the activity evaluated for potential environmental impacts. In this case, the project description is highly dependent on the results of the traffic impact analysis. The traffic impact analysis will provide critical information and data, such as required mitigation measures, for staff to formulate its recommendations for timing and funding options to complete transportation improvements. A
Page 3 nexus study will be prepared if a Traffic Impact Fee is proposed to fund identified traffic impact mitigation measures. Notice of Preparation (NOP) A NOP of a Draft EIR was circulated on October 6, 2015, for a 30-day public review and comment. In accordance with CEQA, staff conducted two Public Scoping Meetings on October 26 and 28, 2016. A total of 10 people attended the scoping meetings. All of the comments received in writing or at the scoping meetings will be considered during preparation of the Draft EIR. A copy of the NOP is available on the City's web site at http://www.sanjoseca.gov/documentcenter/view/46911. Written comments were received from the following: C A Department of Transportation - PG&E * Preservation Action Council of San Jose * San Jose Downtown Association Santa Clara Valley Water District SPUR Valley Transportation Agency Copies of their respective letters are posted on the Planning web site next to the NOP. One significant NOP comment received requested consideration of a major expansion to the Downtown boundary. Staff acknowledges that such a geographic area expansion may be necessary at some time in the future. However, such an expansion is not critical at this time to adequately accommodate development in the near future. Additionally, an expansion has significant implications to the scope of work and schedule for this current effort, including requiring a more robust outreach and engagement strategy. Also, the level and type of environmental analysis required would greatly increase since the sites in the expanded boundary were not previously evaluated in the 2005 Final EIR. The project does include a minor Downtown boundary expansion along N. 4 th Street. The proposed adjustment would include the two blocks on the east side of N. 4 th Street between E. Julian Street and E. St. John Street. Traffic Analysis In preparation for an updated Traffic Impact Analysis, the following work was completed to create a new 2015 baseline condition: Land use data assumptions for future Downtown development were prepared to align with Envision 2040 and a proposed Employment Priority Area land use designation for sites proximate to future BART stations. The land use assumptions for the Diridon Station Area Plan area were not changed. New traffic counts were taken to determine existing traffic levels. The existing transportation network was updated in the traffic model.
Page 4 Staff and consultants developed the new transportation model and validated it with preliminary traffic model runs for the year 2025. A by-product of updating the land use assumptions was the discovery that there is capacity for transferring more jobs into Downtown. Adding jobs Downtown also provides a counter balance to the transfer of additional residential units. Based on the results of the preliminary traffic analysis, staff recommends a modification in the scope of work for the traffic analysis and EIR. This modification also provides a better alignment with the Envision 2040 General Plan Four- Year Review currently underway. This analytical approach provides a more appropriate and rational Council decision-making process with policy level decisions being made before project level decisions. The 'program' level CEQA analysis for the transfer of an additional 4,000 residential dwelling units and 10,000 jobs into Downtown will be included in the transportation analysis and environmental review for the General Plan Four-Year Review. The Downtown Strategy update will include 'project' level CEQA analysis for three primary scenarios as outlined in the table below. The table reflects the amount of development to be analyzed by horizon years. The phasing assumed for the additional development is shown in the last column. Project Level Horizon Year Additional Residential Units Additional No. of Jobs No. of Improvement Phases 2025 Current General Plan 10,360 24,250 1 Land Use 2035 Current General Plan 0 24,250 1 Land Use TOTAL Current GP 10,360 48,500 2 2035 Proposed General 4,000 10,000 No Phasing Four-Year Review TOTAL NEW GP 14,360 58,500 A NOP comment was received requesting a project level analysis for the full buildout of 14,360 residential units by 2025. The results of the preliminary traffic impact analysis completed for the 2025 scenario with 10,360 residential units and 24,500 jobs indicate that the street network cannot accommodate additional traffic from increased levels of development without triggering the need for the mitigation measures identified in the Downtown Strategy 2000. Therefore, there are no benefits from doing a traffic model run for 14,360 residential units by 2025. Any additional residential development above the 10,360 dwelling units for development by 2025 would require traffic mitigation measures identified in the current FEIR.
Page 5 Employment Priority Area Overlay In accordance with City Council direction, staff is working on an administrative draft version of a new General Plan land use designation to create an Employment Priority Area Overlay. This overlay is intended for designated sites near the future Downtown BART stations. The policy intention of this designation is to create a "jobs first" development standard for the intensification of sites near transit. The draft General Plan amendment language will be made publicly available as part of the Four-Year Review of the General Plan. Staff will develop a comprehensive public outreach program and schedule before the next status report. Project Schedule The Draft EIR is scheduled for public review and comment in October 2016, with public hearings in late 2016 or early 2017 depending on the extent of public comments received. Staff is working to ensure alignment of the Downtown Strategy Update assumptions with those of the Four-Year Review of the General Plan. COORDINATION Work as described in this memorandum has been coordinated with the Department of Transportation, Department of Public Works, Office of Economic Development, and the City Attorney's Office. NEXT STEPS Staff will continue with traffic modeling, refining the project description and preparing the Draft EIR based on discussion at the February 22, 2016, Community and Economic Development Committee meeting. /s/ HARRY FREITAS, DIRECTOR Planning, Building and Code Enforcement For questions please contact Jason Rogers, Division Manager, at (408) 793-5543.