February 24, 2004

SUBJECT: Status update on Retail Potential, Pedestrian Circulation and Transportation Oriented Development in the area bounded by SR 237, US-101 and Lawrence Expressway  (INFORMATION ONLY)

BACKGROUND

In June 2003, staff presented to City Council the results of a study issue to determine the potential for rezoning industrial sites north of US-101, south of SR237 and west of Lawrence Expressway to residential and commercial zones.  Council adopted a General Plan Amendment to accommodate High Density Residential and up to 140,000 square feet of commercial throughout the area, and rezoned a portion from R-3 to R-4 to encourage immediate conversion to High Density Residential use.

Concurrent with these actions, Council directed staff to "work with retailers to encourage commercial development in this area and to identify commercial sites and linkages to the residential area”.  Council also directed staff to prepare a pedestrian and bicycle circulation plan for the area to provide opportunities for the new residents to enjoy non-automotive access to transit stops and to retail services.

This report represents the work of staff to date on these two directives.  As described below, despite extensive efforts, staff has so far been unable to attract a major grocery store or drug store to the area; zoning and financial incentives may be required to achieve this objective.  Although work has begun on the pedestrian and bicycle circulation plan, the Bicycle and Pedestrian Advisory Committee recommends that a plan not be finalized and adopted until a retail site is identified.

DISCUSSION

Retail Alternatives

Over the past months, staff contacted numerous retail real estate professionals, (with an emphasis on grocery and drug stores), to fully explore the siting potential for such use within the study area. Staff toured the project area with representatives of a major grocery chain.  A real estate manager for a major drugstore chain visited the site by himself.  Real estate managers for another major grocery story and drugstore chain were shown maps and demographic information for the ITR area.  The general consensus among these major grocery and drugstore real estate managers was that the area does not have sufficient residential density in place to justify the construction of a grocery and/or drugstore in the project area at this time.  They also felt that the area lacked accessibility to get in and out of the area.  Another issue identified by the real estate managers was the cost of land.  They commented that the current cost of land in the area does not make a retail project economically feasible. 

Staff also contacted representatives of an ethnic grocery chain.  The president of the ethnic grocery chain stated that they would only locate in an area that has 40%-50% ethnic population.  The current demographics of the ITR area do not fit into their site selection model.

Staff believes that retail options within the study area may be enhanced through the application of more specific land use tools. Such tools may include a rezone of an appropriate site where commercial specific zoning may promote retail development. Due to the cost of land in the area, potential Transit Oriented Development (TOD) grants may be necessary to encourage retailers to build and locate in this area. Staff will analyze such options for future Council consideration.

The prime location for retail services in the project area (located at the southwest corner of the intersection of Tasman Drive and Fair Oaks Avenue) has already been approved for residential development and is under construction. Staff is currently examining alternative retail site options.  In the meantime, staff will continue to promote the concept of a food/drugstore market based shopping center in the area.

Pedestrian Circulation

Council action in July 2002 recognized the need for pedestrian linkages throughout the study area due to unique access to multi-modal options; specifically, the Fair Oaks Light Rail Station.

Over the last year, interest in the development of residential property in the study area has become quite intense. Two major residential developments were approved and are currently under construction: Sobrato Development Company for 272 apartments located 1150-1152 Morse Avenue and 1139 Karlstad Drive; and, Pulte Home Corporation for 168 condominiums located at 1141 North Fair Oaks Avenue. Enhanced pedestrian access/circulation has been incorporated into these projects including enlarged sidewalks, detailed street tree planting and enhanced street light fixtures. These improvements have been required along Morse Avenue, Karlstad Drive and Tasman Drive.

Currently, pedestrian issues related to land development proposed within the study area are being addressed by Public Works and Community Development Department staff utilizing existing City-wide Design Guidelines and related documents. Staff believes that long-term coordination of such issues within the study area would best be served by detailed guidelines unique to the opportunities and constraints of the study area.

Transit Oriented Development

Transit Oriented Development (TOD) is closely related to enhanced pedestrian access by designing development that maximize pedestrian access/circulation and optimize multi-modal options. TOD techniques have been employed in the design of recent developments in the study area as evidenced by the pedestrian plaza designed into the Pulte project at the southwest corner of the intersection of Tasman Drive and Fair Oaks Avenue. The Pulte design provides open space and enhanced pedestrian features at a significant street intersection that will encourage the use of multi-modal options by Pulte residents. 

Similar to pedestrian orientation, TOD techniques are currently based on available guidelines and related materials. Staff believes that long term coordination of TOD techniques could be optimized by specific guidelines unique to the study area.

Pedestrian Circulation and Enhancements Plan

As noted earlier is this memorandum, staff has initiated the preparation of a Pedestrian Plan and TOD Guidelines specific to the study area. The general goals of the PLAN are to:

1. Enhance quality of life for residents within the Fair Oaks ITR through improved pedestrian access to parks and open space, retail and grocery amenities and pubic transportation.
2. Encourage increased pedestrian and transit use through streetscape improvements, land use planning and architectural design.  

The guidelines will discuss circulation improvements throughout the study area, as well as improvements to access the study area from outside the site. The guidelines will also analyze project design, streetscape standards and potential grant funding that will apply to the study area.

The Pedestrian Circulation and Enhancements Plan was considered for endorsement by the Bicycle and Pedestrian Advisory Committee in January 2004. There were several technical proposals from Committee members and staff is following up on these recommendations. In addition, the Committee commented on the Plan’s lack of a designated retail area. Committee members are concerned that adoption of the Pedestrian Circulation and Enhancements Plan prior to the designation of a retail area may be premature, as retail amenities will play a role in the overall pedestrian circulation of the study area.

Schedule

Staff proposes to complete the study over the next four months.   Planning Commission and City Council action on the documents are anticipated to follow in June and July, respectively. 

FISCAL IMPACT

None

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report in the Library and the City Clerk's Office.

Prepared by:

Fred Bell
Principal Planner

Reviewed by:

Trudi Ryan
Planning Officer

Reviewed by:

Robert Paternoster
Director, Community Development Department

Approved by:

Amy Chan
Acting City Manager