SunnyvaleRTC

December 14, 2004

SUBJECT: 2004-0869 Advanced Micro Devices: Request to initiate a General Plan Amendment Study to change the Land Use Designation for two parcels totaling approximately 13.75 acres at the corner of De Guigne Drive and Duane Avenue from Industrial to Medium Density Residential. (APN: 205-22-020, 205-22-005)

REPORT IN BRIEF

The City has received a letter from each of the respective property owners of the subject area requesting consideration of a General Plan Amendment Study (GPA) to allow a Land Use designation change from Industrial (IND) to Medium Density Residential (RMED). The subject area is comprised of two parcels. The corner parcel at De Guigne Drive and Duane Avenue is approximately 0.75 acres owned by Jim Walls and the larger approximate 13-acre parcel is an undeveloped portion of the Advanced Micro Devices (AMD) campus.

The subject site has a base zone of MS (Industrial and Service) and is currently occupied by a closed gas/service station with the remainder of the area an open field. The whole of the AMD campus in the area is approximately 100 acres including the undeveloped 13-acre area. Adjacent and nearby uses include single-family residential homes, a neighborhood commercial shopping center, and industrial R&D, office, and manufacturing uses. The applicant indicates that the potential for future investment in existing facilities has reduced the need to retain the undeveloped portion of their site for future use. The subject site is proposed to become residential due to the current real estate market and regional land use needs for additional housing units. The requested Medium Density Residential designation would allow from 193 to 371 housing units.

Staff recommendation is not to initiate a General Plan Amendment Study for the individual subject area. In the interest of long-term policy planning a study of an expanded area that considers a new east Sunnyvale Industrial to Residential (ITR) area may be appropriate.

BACKGROUND

The subject area includes a closed service station at the corner of Duane Avenue and De Guigne Drive with a large open field to the south and east of the service station. Both parcels are designated Industrial with the service station parcel zoned MS (Industrial and Service) and the AMD acreage zoned MS/PD (Industrial and Service/Planned Development Combining District) (Attachment C and D). The existing Industrial designation is primarily for industrial and office uses, but also allows a range of development options within the MS zoning district's allowable uses and conditionally allowable uses.

The AMD acreage has recently had a parcel map approved to divide the subject 13-acre section from the larger 45.6-acre parcel. The proposed parcel boundary is generally defined as the outside edge of the tree canopy along perimeter of the eastern parking lot and the existing fence line in the center of the site as the southern boundary.

The subject area has extensive frontage along Duane Avenue and secondary frontage along De Guigne Drive. Duane Avenue is classified as a commercial/industrial collector street by the Transportation Division. Other than the service station, the area is devoid of significant structures. The Duane Avenue frontage has very large mature trees along the street and surrounding the existing parking areas on the east side of the site. The AMD development adjacent to the east and south is Office and R&D uses is 2 and 3-story buildings. To the west of the site are large general industrial buildings for manufacturing and processing for a variety of technology-oriented businesses. The facilities in the area are considered a combination of Class A and Class B space developed primarily over the past 10-30 years.

To the north, directly across Duane Avenue, is existing single-family residential detached housing zoned R-0 (Attachment D). To the northeast of the site is an aged small neighborhood commercial center with a mixture of retail, restaurant, and service businesses zoned C-1. Both of the adjacent residential and commercial developments are approximately 50 years old.

The Planning Division continually receives inquiries concerning the viability of having sites planned and zoned for industrial use changed to residential use; several of these inquiries have been located in the east side of Sunnyvale within the general vicinity of the subject site. Staff has discouraged such inquiries on the core industrial sites relying upon the existing General Plan Land Use and Transportation Element policies of protecting industrial uses from non-compatible uses, Futures Study designation of appropriate areas for transition to residential, and the City's housing need and fair share established in the Housing and Community Revitalization Sub-Element. This request is the third formal initiation presented to the City Council in the past 12 months.

EXISTING POLICY

Sunnyvale Municipal Code Section 19.92.020 authorizes only the City Council to initiate proceedings for the adoption of an amendment to the General Plan. City Code requires the City Council to first review a request to initiate a General Plan Amendment in order to determine if the request warrants further study. If the initiation of a study were approved, it would allow for a formal application to be submitted to the City for complete and detailed assessment by staff to assess the merits of the proposed General Plan Amendment. The actual proposal would then require review by the City Council; approval of this proposed initiation does not commit the City Council to approve a General Plan Amendment, nor any specific project proposal in the future.

The following Goals, Policies, and Action Statements most directly address the proposed General Plan Amendment study. They are drawn from the Land Use and Transportation Element and the Housing and Community Revitalization Sub-Element of the General Plan. The items below are listed in the order they appear in their respective Elements.

Land Use and Transportation Element

Policy C1.1 Recognize that the City is composed of residential, industrial and commercial neighborhoods, each with its own individual character; and allow change consistent with reinforcing positive neighborhood values.

Action Statement C1.1.3 Require appropriate buffers, edges and transition areas between dissimilar neighborhoods and land uses.

Goal C2 Ensure ownership and rental housing options in terms of style, size and density that are appropriate and contribute positively to the surrounding area.

Policy C2.1 Provide land use categories for and maintenance of a variety of residential densities to offer existing and future residents of all income levels, age groups and special needs sufficient opportunities and choices for locating in the community.

Action Statement C2.1.4 Support the transition of Industrial to Residential (ITR) areas as opportunities to increase housing variety and stock.

Policy C2.4 Determine appropriate density for housing based on site planning opportunities and proximity to services.

Action Statement C2.4.1 Locate higher density housing with easy access to transportation corridors, rail transit stations, bus corridor stops, commercial services, and jobs.

Goal C4 Sustain a strong local economy that contributes fiscal support for desired city services and provides a mix of jobs and commercial opportunities.

Policy C4.1 Maintain a diversity of commercial enterprises and industrial uses to sustain and bolster the local economy.

Goal N1 Preserve and enhance the quality character of Sunnyvale's industrial, commercial, and residential neighborhoods by promoting land opportunities that are supportive of the neighborhood concept.

Policy N1.1 Protect the integrity of the City’s neighborhoods; whether residential, industrial or commercial.

Action Statement N1.1.1 Limit the intrusion of incompatible uses and inappropriate development into city neighborhoods.

Action Statement N1.1.3 Use density to transition between land use, and to buffer between sensitive uses and less compatible uses.

Policy N1.2 Require new development to be compatible with the neighborhood, adjacent land uses and the transportation system.

Policy N1.6 Safeguard industry's ability to operate effectively, by limiting the establishment of incompatible uses in industrial areas.

Housing and Community Revitalization Sub-Element:

Goal A Foster the expansion of the housing supply to provide greater opportunities for current and future residents within limits imposed by environmental, social, fiscal and land use constraints.

Action Statement A.1.d Study increasing the density of residential areas near transit stops and along major transportation corridors in conjunction with regional transportation plans.

Policy A.2 All new residential developments should build at least 75 percent of permitted zoning density.

Goal C Ensure a high quality living and working environment

Environmental Review

The proposed request to initiate a study is not a project under the California Environmental Quality Act (CEQA) and exempt from review at this time. If the initiation for a study were approved, the subsequent proposal would be considered a project and require environmental review under CEQA. Considering the proposed land use change's disparate relationship to surrounding existing uses and the magnitude of the potential development's number of housing units and their potential for significant impacts to public facilities, transportation system, schools, utilities, land use conflicts, etc., staff anticipates that an Environmental Impact Report (EIR) will be required for the project. Preparation of the EIR is a cost burden to the applicant, not the City.

DISCUSSION

Types of Uses

The property owners are requesting that the City initiate a General Plan Amendment (GPA) Study to consider changing the existing land use designation from Industrial to Medium Density Residential; the corresponding zoning district is R-3. R-3 zoning permits a density of up to 24 units per acre and provides for a density bonus of up to 15% for Below Market Rate (BMR) units that increases the maximum density to 27 units per acre. Sunnyvale has seen a renaissance of R-3 development in the ITR (Industrial to Residential) areas over the past three years. These developments are typified by approximately 18 units per acre townhouse development style of 2.5 to 3-story buildings. Other options within R-3 would include condominium multi-unit building development that may provide a greater range in unit types and sizes as compared to townhouse/row house designs prevalent at this time. Apartments are also a permissible use within R-3 zoning.

Another residential option for the site may be High Density, corresponding to R-4 Zoning, that would permit up to 36 units per acre. The 15% BMR density bonus raises maximum density to a maximum of 42 units per acre. The prospective development pattern for R-4 is most recently typified in Sunnyvale as 3 or 4‑story condominium developments such as Compass Place on Fair Oaks Avenue (1994) Fair Crest off of Wolfe Road adjacent Sunken Gardens (1994) or Santa Elena off of Arques Avenue near Fair Oaks Avenue (1993). Apartments, such as the Sobrato project on Morse Avenue (2004), are also a permissible use within R-4 zoning.

The existing residential development in the area is located north of the site across Duane Avenue. The residential development is single-family detached homes. No multiple family or other residential uses exist to the south of Duane Avenue or in the immediate vicinity. To the east of this area, across Lawrence Expressway, is an R-5 density development of apartments currently named Avalon at Silicon Valley. City Council recently initiated a General Plan Amendment Study for a site east of Avalon at Silicon Valley for a Specific Plan that would integrate an approximate 300-room hotel with development of about 250 residential units.

Within the existing MS base zoning, the 13.75 acre site would permit a R&D or office type industrial use to develop by right up to 35% Floor Area Ratio (210,000 square feet of development). The existing industrial development surrounding the site is below 35% floor area ratio. If development were proposed that exceeds 35% floor area ratio, a Use Permit would be required.

Justifications

The applicant cites the following reasons why the proposal is beneficial:

· Residential uses are the highest and best use for the land providing the greatest economic benefit from its sale

· Proceeds from the sale of the land will allow for reinvestment in the existing AMD facilities in Sunnyvale

· The Bay Area has a systemic housing supply shortage that the proposed residential units would address

The City of Sunnyvale is required to provide a share of the regional housing need; the value is quantified in the Housing and Community Revitalization Sub-Element. The share is provided for by enabling the construction of the required units through General Plan Goals and Policies and zoning standards. Through July of 2006 the Sub-Element calls for permitting an average of 511 units per year. Since 1999, the city has an average actual construction of 352 units per year. It should be noted that although actual units to be constructed are at 68% of the goal, zoning is in place to accommodate full development of the required units. However, the timing of development is at the discretion of the property owner once the city has enabled development through the appropriate zoning. Therefore, the City is currently in conformance with State laws with regard to providing for a fair share of housing construction. In fact, with the amendments to the Downtown Specific Plan adopted in July 2004, the City has enabled an additional 600 plus units that were not included in the Community and Housing Revitalization Sub-Element.

The primary planning tools for attaining Sunnyvale's goal of providing housing are the Futures Plan adopted in 1993 and the Downtown Specific Plan adopted in 1993 and revised in 2003. The Futures Plan was a comprehensive study designed to appropriately site future residential development and industrial intensification in the City of Sunnyvale through conversion of existing industrial zoned land to residential and increased floor area ratios for industrial sites. The residential conversion areas are commonly known as ITR (Industrial to Residential) zoned districts. The subject site is not located within an ITR designated area or an industrial intensification area.

The Futures Study began in 1988 and analyzed seven industrial areas for conversion to housing, finally settling upon six areas designated ITR in 1993. As part of the study a Fiscal Analysis and EIR were prepared. The Woods industrial neighborhood was excluded in the final approval. The Housing and Community Revitalization Sub-Element identifies the 230 acres of ITR designated area as having the potential for 4,876 units as of April 2001. Although limited progress was made for development in the ITR areas until 2002, 781 units have been approved or built within the past three years. Now that major parcels have been converted from industrial to residential in the ITR areas, momentum for conversion is likely to continue realizing an accelerated fulfillment of the Futures Plan.

This is the third formal request since adoption of the Futures Plan to initiate a General Plan Amendment Study for additional conversion. The first, received in 2003, for a site located at Elko and Lawrence Station Road, was not initiated. The second was the Four Points Sheraton site for which a study was initiated in 2004. No additional industrially designated land has had a General Plan Amendment to residential approved since adoption of the Futures Plan in 1993. As mentioned earlier the Planning Division fields inquiries regularly about potential site conversions of industrial land that do not result in initiation requests to the City Council.

If the City Council chooses to initiate the requested General Plan Amendment Study, consistency with the General Plan sub-elements such as Housing and Community Revitalization and Land Use and Transportation will be fully evaluated. A variety of alternatives would be explored for the site during the study. At a minimum, the study would examine the following:

· Advantages and disadvantages of the conversion of vacant industrial land to a residential use versus a 35% FAR industrial use, including fiscal implications

· Appropriateness of medium and high density residential uses in this area of Sunnyvale

· Compatibility/potential impacts to the operations of existing and future industrial users in the vicinity of the subject area

· Potential environmental impacts including traffic, groundwater contamination, noise, hazardous materials, school facilities, city utilities, etc.

· Challenges of the City's jobs/housing imbalance

An additional alternative for reviewing the request is General Plan Amendment study for a larger area focused on the merits of creating an additional ITR area in eastern Sunnyvale that would include the subject site. The scope of the study would allow for a comprehensive analysis of the City's needs relative to its economic base and housing supply, rather than analysis by site-by-site requests. The current request is for a 13.75-acre site and it would be within the logical boundaries of a potential ITR area defined as Stewart Drive to Duane Avenue consisting of approximately 130 acres.

Prospective East Sunnyvale ITR Study Area Map (.jpg)

The result of this alternative General Plan Amendment study could be creation of a new ITR area or maintaining the status quo as an industrial district. Council may want to require that all property owners in the study area agree to the study and cover the costs of required consultants (e.g. EIR, Fiscal Analysis).

FISCAL IMPACT

There is no fiscal impact to the City to initiate a site specific General Plan Amendment study. If the Council initiates the study, a formal application with applicable fees would need to be submitted, including the cost for preparation of an EIR plus a 10% fee to cover the additional staff expense to administer the preparation of the EIR. These fees off-set the costs of generating the study.

As an undeveloped site, there are no revenues generated to the City other than a minor amount of property tax. Generally taxes and fees associated with residential uses either just pay for public services or need to be subsidized by other tax generating uses. Revenues generated by the commercial and industrial areas of the City help provide services throughout the community. The study will further evaluate impacts of the loss of potential industrial development and its conversion to residential uses for the City.

A broader study of another ITR area would also be handled as a development application provided all of the property owners agree to the study. The appropriate General Plan Amendment application fee and EIR preparation fees would need to be shared by the applicants. The applicant may benefit from the expanded study, as it would from its proposed individual study.

Conclusion

The applicant is requesting consideration of a General Plan Amendment Study to allow a Land Use designation change from Industrial to Medium Density Residential. The site is currently the site of a closed service station and 13 acres of undeveloped property. The proposed density would accommodate 193 to 371 housing units. Single-family residential is the primary use to the north of the subject area across Duane Avenue and office and industrial uses are located to the south, east, and west of the subject area. An EIR would be required to develop the site with residential uses.

PUBLIC CONTACT

Notification of the City Council meeting for this item is part of the standard agenda publication. A copy of the report has been provided to the applicant.

Staff Report

Agenda

· Posted on the City of Sunnyvale's Website

· Provided at the Reference Section of the City of Sunnyvale's Public Library

· Posted on the City's official notice bulletin board

· Posted on the City of Sunnyvale's Website

· Publication of the Council agenda in the San Jose Mercury News

ALTERNATIVES

1. Authorize the initiation of the General Plan Amendment Study for the subject site from Industrial to Medium or High Density Residential.

2. Initiate a General Plan Amendment for a larger study area for creating a new ITR area for east Sunnyvale.

3. Do not authorize the initiation of further study for the subject area.

RECOMMENDATION

With regard to Alternative #1, staff concludes that a study to re-designation this site alone from industrial to residential would constitute poor land use planning, based upon the following existing policies from the Land Use and Transportation Element:

Policy N1.1- Protect the integrity of the City's neighborhoods; whether residential, industrial or commercial.

Policy N1.6- Safeguard industry's ability to operate effectively, by limiting the establishment of incompatible uses in industrial areas.

Action Statement C1.1.3- Require appropriate buffers, edges, and transition areas between dissimilar neighborhoods and land uses.

Residential use of this site would represent an intrusion of a non-compatible use into a very viable core industrial area of the City of Sunnyvale. A residential use is not compatible with primary uses within the abutting MS zoning district, including the AMD fab to the west, and would likely result in ongoing concerns and complaints from both the residents and the adjoining businesses. Although the market may currently place the highest value on residential use of this site, one must reflect on the economy as recently as three years ago, when industrial use would have commanded the highest land value. Industrial demand is likely to increase in the future, and even if AMD has no use for the site, another industrial user would.

Duane Avenue is a collector street and provides a distinct boundary between existing single-family homes to the north and the industrial park to the south. As noted in the above-stated General Plan Action Statement, distinct edges such as this are appropriate between dissimilar land uses.

Staff finds that the nearby General Plan Amendment study for a Specific Plan initiated for the Four Points Sheraton site differs markedly from this request. The Sheraton site is served by local streets, abuts R-5 density development, includes retention of a compatible hotel use, contains a unique picturesque lake amenity, and is located adjacent to restaurants and low intensity office uses within its block. This is in contrast to the proposed request which does not integrate with any of the existing residential low-density housing or high intensity office and R&D uses, alters a defined zoning boundary of Duane Avenue, and utilizes viable vacant industrial land limiting future economic growth. The only land use merits for the requested change is providing for needed regional housing.

Staff recognizes the need for housing in the region, but does not judge that this site meets the goals and objectives of the General Plan in terms of balancing the need for housing with appropriate siting in terms of proximity to services and development of high quality neighborhoods of compatible and integrated uses. Staff supports the continued City focus on its efforts on providing housing in the ITR areas identified in the Futures Study rather than creating additional piece-meal residential developments in other areas of the City that may detract from the fulfillment of the Futures Plan's vision for complete neighborhoods.

Therefore, if consideration is to be given only to the subject site, staff cannot support alternative #1.

If the City Council wishes to consider the larger question of whether or not a larger portion of this industrial area should be designated as an ITR area, staff would look favorably upon an expanded study area (Alternative #3). Staff believes that a study for industrial land conversion to residential, reviewing a variety of similarly situated sites, would be the most appropriate option rather than reviewing sites on a case-by-case basis for east Sunnyvale. Staff believes that re-designation of a single site would likely encourage additional requests for sites in the area as long as the real estate market provides the highest economic return from residential development. Reviewing an expanded study area would more capably address long term policy impacts of changes. Although Sunnyvale has committed to providing opportunities for housing throughout the community, study of additional ITR areas may be another way to demonstrate Sunnyvale's commitment to providing for needed housing and allow for the clear examination of the benefits and drawbacks of the particular area. The costs of the study would be supported by application fees and special study fees (a.g. EIR, fiscal analysis) from the property owners/ applicants in the study area.

Reviewed by:

Trudi Ryan

Planning Officer

Prepared by Kelly Diekmann, Project Planner

Reviewed by:

Robert Paternoster

Director of Community Development

Approved by:

Amy Chan

City Manager

Attachments

A. Letter of Request from Applicants (.pdf)