October 26, 2004

SUBJECT:   2004-0296 Four Points Sheraton: Request to initiate a General Plan Amendment Study to Change the Land Use Designation for 1250 Lakeside Drive from Industrial to Specific Plan (APN: 216-43-035 and 036)

REPORT IN BRIEF

The City has received a letter from David Van Atta, General Partner of Hanna and Van Atta, Attorneys at Law requesting consideration of a General Plan Amendment Study (GPA) to allow a Land Use designation change from Industrial (IND) to Specific Plan (SP). (See Attachment A for details)  The site is comprised of two parcels, totaling 8.63 acres, located at 1250 Lakeside Drive.

The subject site is Zoned MS (Industrial and Service) and is currently occupied by the Four Points Sheraton Hotel.  The Sheraton Hotel contains 378 rooms of varying sizes, which are situated in five separate buildings on site.  The applicant is proposing to reduce the hotel down to 200 hotel rooms and add up to 201 ownership condominium units at a density of 51 units per acre.  The proposed residential development falls into the General Plan category of Very High Density Residential (45 - 65du/acre).  A Specific Plan would allow consideration of a mix of uses including hotel, residential, and related services, as well as phasing programs for potential expansion of the hotel.  See Attachments C and D including General Plan Land Use Map and Zoning Map.

Staff recommends that the City Council initiate a General Plan Amendment Study from Industrial (IND) to Specific Plan (SP).

BACKGROUND

The subject site is currently occupied by the Four Points Sheraton Hotel, which was originally approved by the City Council in 1978.  The existing Industrial designation is primarily for industrial and office uses, but also allows a range of commercial development options, including the present hotel use.  In order to convert a portion of the site into ownership condominiums and create a Specific Plan designation, a General Plan Amendment, Rezoning and Special Development Permit are required.

The site fronts on Lakeside Drive and is surrounded on two sides (South and East) by Industrial zones, including another hotel use.  To the west of the property there is a Very High Density Residential development containing a 702-unit apartment complex (Avalon at Silicon Valley).  That site is Zoned 101/Lawrence Specific Plan and is one of only two properties in Sunnyvale which permits very high density residential (101/Lawrence and Downtown).  To the north of the site is U.S. Highway 101.

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.  The approval of this initiation would allow a formal application to be submitted and staff to further assess the merits of the proposed General Plan Amendment; approval of the initiation does not commit the City Council to approve a General Plan Amendment, nor any specific project proposal.  Submittal of a General Plan Amendment application requires payment of a fee of $4,250.00.  Other related applications, fees, and studies would also be required to develop the site.

The Following Goals, Policies, and Action Statements 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.

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.

Policy C2.2 Encourage the development of ownership housing to maintain a majority of housing in the city for ownership choice.

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.

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

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

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.

Action Statement  C4.1.3 Promote commercial uses that respond to the current and future retail service needs of the community.

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.

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.

DISCUSSION

The property owner is requesting that the City initiate a General Plan Amendment Study to consider changing the existing Land Use designation from Industrial to a site Specific Plan use that would allow residential, hotel, and related activities.  The only residential project in the immediate vicinity is the Avalon at Silicon Valley apartment development on Lakeside Drive, which is currently zoned 101/Lawrence Specific Plan (Very High Density Residential).  The other site specific plan site in Sunnyvale is the Arques Specific Plan for the Applied Materials Campus.  The Downtown and Moffett Park Specific Plans are area specific plans.

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

·        Appropriateness of a Very High Density Residential land use at this location.

·        The project proposes to retain a majority of the hotel rooms at a time when some hotels are proposing 100% conversions to residential.

·        The proposed 200 hotel rooms will all be upgraded to meet four-star standards.  Sunnyvale currently has no four star hotels.

·        The project is compatible with the adjacent land uses, both commercial and residential.

·        The plan would preserve the 14,000 square foot ballroom for public meeting space.

·        The project will be a signature development located in a key area of Sunnyvale.

If the General Plan Amendment Study is authorized, it would allow staff the opportunity to explore different alternatives or scopes of work with the applicant.  Specifically staff would evaluate the following:

·         Number or hotel rooms verses residential units,

·         Amount of community meeting space,

·        Commercial and residential amenities serving the area,

·        Compatibility issues between the hotel and residential uses on site,

·       Compatibility/impacts of proposed project with the surrounding residential, industrial, and commercial developments,

·        Challenges of City’s jobs/housing imbalance with additional housing units,

·        Impacts of additional residents on the City, school district, and other agencies services

Based on preliminary discussions with the property owner, staff finds that an Environmental Impact Report (EIR) would be required to review this proposal.  The applicant would bear the costs of the EIR preparation.  A site specific plan would provide a zoning tool to customize allowable uses as well as development criteria.  The Specific Plan would allow for densities above R-5 (45 du/acre), which is the maximum density allowed under standard zoning districts.  The plan could also address the phasing of the development. 

If the General Plan Amendment Study is not authorized, the General Plan Designation for this site would remain Industrial and would allow only uses that are allowed in the Industrial and Service Zoning district.  These allowed uses include the current hotel development.

FISCAL IMPACT

There is no fiscal impact to the City to initiate a General Plan Amendment study.  If the Council initiates the study, a formal application with appropriate fees would need to be submitted.  These fees off-set the costs of generating the study.

Generally taxes and fees associated with residential uses either just pay for residential services or need to be subsidized by other tax generating uses.  Hotels generate transient occupancy tax (TOT) and property tax, while the restaurant and other related commercial uses, generate some sales tax.  These revenues help provide services throughout the community and will be further evaluated in the study.

Conclusion

The applicant is requesting consideration of a General Plan Amendment Study (GPA) to allow a Land Use designation change from Industrial (IND) to Specific Plan (SP).  The site is currently occupied by the Four Points Sheraton Hotel, which contains 378 rooms.  The applicant is proposing to reduce the number of hotel rooms to 200 and add 201 residential condominium units.

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 (IND) to Lakeside Specific Plan (SP).

2.     Initiate a General Plan Amendment study for a range of densities.

3.      Do not authorize the initiation of further study on the subject site.

RECOMMENDATION

Alternative #1 - Authorize the initiation of the General Plan Amendment Study for the subject site from Industrial (IND) to Lakeside Specific Plan (SP).  Staff believes the proposed use of the site has merit.  The proposed project may be compatible with neighboring uses and the policies and goals of the General Plan.  Staff is recommending approval of the General Plan Initiation request.  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.  At a minimum, the study will examine the following:

·        The advantages and disadvantages of the conversion an existing hotel to a residential use, including fiscal implications.

·        The appropriateness of high density residential and commercial uses in this area of Sunnyvale.

·        Freeway noise and traffic impacts on the proposed development.

·        Opportunities to retain the existing number hotel rooms and support facilities.

Further, development of a site specific plan for the property could be advantageous for addressing and mitigating impacts associated with the project.

Reviewed by:

Robert Paternoster

Director of Community Development

Prepared by: Steve Lynch, Project Planner; Trudi Ryan, Planning Officer Approved by:   Amy Chan City Manager

Attachments

A.      Letter of Request from the Applicant (pdf format)

B.       Proposed Development Plans (pdf format)

C.      General Plan Land Use Map (jpg format)

D.      Zoning Map (jpg format)