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SEDWAY - 1998-07-20
Council/Agency Meeting Held: Deferred/Continued to: Approved ❑ Conditionally Approved O Denied _ —o 2ep City Clerk's Signature Council Meeting Date: July 20, 1998 Department ID Number: ED 98-28 CITY OF HUNTINGTON BEACH REQUEST FOR ACTION SUBMITTED TO: HONORABLE CHAIRPERSON AND AGENCY MEMBERS SUBMITTED BY: RAY SILVER, CITY ADMINISTRATOR PREPARED BY: DAVID C. BIGGS, DIRECTOR OF ECONOMIC DEVELOPMENT SUBJECT: AMENDMENT TO CONTRACTS WITH FINANCIAL ADVISORS: .KEYSER MARSTON ASSOCIATES. AND THE SEDWAY GROUP Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: The current two-year contracts with the captioned firms have expired. To permit the continuation of the financial advisory services provided by these firms, it is necessary to extend the term and increase the not-to-exceed amount of each. The Sedway firm is also being asked to perform a special study: "Impediments to Development." Fundinq Source: Redevelopment Administration Account No. E-TW-ED-810-3-90-00. Recommended Action: Redevelopment Agency Motion: 1. To approve and authorize the Chairperson and Clerk to execute the attached amendments to the professional services agreements between THE REDEVELOPMENT AGENCY and KEYSER MARSTON ASSOCIATES and THE SEDWAY GROUP extending the term for an additional two years and increasing the maximum compensation by $75,000 for each firm for each year. 2. To approve the attached scope of work for the "Impediments to Development" study to be performed under the above-approved contract with the Sedway Group for a maximum compensation of $42,000 in addition to the amount approved above. Alternative Action(s): Do not approve the amendments or the Impediments Scope of Work. This will pre-empt provision of financial advisory services to the Agency and the conduct of the special study. • REQUEST FOR ACTION • MEETING DATE: July 20, 1998 DEPARTMENT ID NUMBER: ED 98-28 Analysis: In 1996, the Agency approved professional services agreements with both Keyser Marston Associates and The Sedway Group (formerly Sedway Kotin Mouchly Group). These two firms were selected after a Request for Qualifications process. The purpose of the agreements was to procure the professional services of these firms to assist the Agency in its review of the economic viability of real estate development projects and to determine if Agency financial assistance is warranted and the most advantageous form it should take. Projects that will benefit from these services include (but are not limited to): The Waterfront ExpansionPhase II, The development of the 31 acres at First Street and Pacific Coast Highway, the development of blocks 104 and 105 and the redevelopment of the Huntington Beach Mall. The amendments are attached as Attachment No. 1 and No. 2. Adequate unencumbered funds ($75,000) are available to fund the agreements for the balance of the 1997-98 Fiscal Year and in the Agency's adopted 1998-99 Fiscal Year budget. Therefore, no new appropriation is necessary at this time. The Sedway agreement will also authorize a special study to be undertaken by the firm: "The Impediments to Development Study." (Scope of Work Attachment No. 3). The study will investigate the conditional use permit (CUP) process in neighboring communities and review the city's current system. The product of the study will be specific recommendations on the CUP process and proposed amendments to the zoning ordinance. Although no work has been commenced on the $42,000 study, funds were encumbered for the purpose in the 96- 97 Fiscal Year budget and no new appropriation is necessary at this time. Further background on this effort is set forth in a memorandum from the Director of Community Development to the Director of Economic Development (Attachment No. 4). Both firms have submitted insurance certificates meeting the city's requirements and these have been approved by the City Attorney. Both firms have met the Agency's standards for professional services over the last two years and the extension of the agreements is therefore recommended. Environmental Status: Not Applicable Attachment(s): City Clerk's Page Number No.. Description .......................-..................... _.................... - ...... ................................................... ....._................. ..._............ . . ................................................... ................................................. ....................--.......................... .............. ._...._.......... . ... 1 Amendment to Keyser Marston Associates Agreement 2 Amendment to The Sedway Group Agreement 3 Impediments Study Scope of Work 4 Fallon memo to Biggs re: Impediments to development stud RCA Author: SVK KMSDYRCA -2- 07/02/98 9:25 AM Amendment to Keyser Marston Agreement and Insurance Certificate 0 Amendment to Keyser Marston Agreement and Insurance Certificate AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND KEYSER MARSTON ASSOCIATES TO PROVIDE ECONOMIC PROFESSIONAL SERVICES THIS AMENDMENT is made and entered into the 2othday of T„l 1z , 1998, by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "AGENCY", and KEYSER MARSTON ASSOCIATES, INC., a California corporation,hereinafter referred to as"CONTRACTOR." WHEREAS, AGENCY and CONTRACTOR are parties to that certain agreement, dated 7„n -1 , 1996, entitled"Professional Services Contract Between the Redevelopment Agency of the City of Huntington Beach and Keyser Marston Associates to Provide Economic Professional Services,"which agreement shall hereinafter be referred to as the "Original Agreement," and AGENCY and CONTRACTOR wish to amend the Original Agreement to extend the term thereof, and update the hourly fee schedule contained therein, NOW, THEREFORE, it is agreed by CITY and CONTRACTOR as follows: 1. AMENDMENT OF SECTION 3 OF THE ORIGINAL AGREEMENT ENTITLED "TIME OF PERFORMANCE" Section 3 of the Original Agreement, entitled Time of Performance, is hereby amended to read as follow: 3. TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of the CONTRACTOR are to commence as soon as practicable after the execution of this Agreement. The contract will not exceed a four-year two yea period, commencing with the date of the signing of this Agreement, without written authorization by the Agency's Executive Director. 2. AMENDMENT OF SECTION 4 OF THE ORIGINAL AGREEMENT ENTITLED "COMPENSATION" Section 4 of the Agreement, entitled Compensation, is hereby amended to read as follows: 4. COMPENSATION ` In consideration of the performance of the services described herin, AGENCY agrees to pay CONTRACTOR as described in Exhibit`B," a fee not to exceed Fifty Thousand Dollars ($50,000) in the first year, and a maximum.of five 1 g*98-Agree:amd 1 kma RLS 98-366 07/06/1958 11:23 21362252e4 KEYSER MARSTON'L PAGE. e3 I perc,.nt(5`io) incrcaw in the secu;:d -year. The total eompetrsation during the entire term of this Agreemealt shall not exceed Two Hundred Fifty Thousand Dollars (S250,000), i ;. INCORPORATION OF NIENV ROURLY FEE SCHEDULE 1Chibit"$" to the nal A 'eem--= containing CONTRACTOR'S hourly lee schedule. is hereby replaced M its entirety b}' CONTR..aCTOR`S current houurly fee schedule, which is at-acl;crl to this s'imendmem No. 1 is Attac'=nent 1. and is incorporated by this reference as taaugh fully set forth Heroin. I 4. REAFFIRMATION Except as spwcilieally .nodified herein, all other terms and conditions of the Ori in�l :1 teement �hL remain in full force end cffec;. TN WiTNESS Y14EREOF.. :he pa-Litz, hereto have caused this agreement to be executed by their eoihorized ufflcers on the date first above wriver. ItiEY'fiLR-NLAR.STON ASSOCIATES, INC. REDEVELOPMENT AGENCY Of THE I a Cal_fomia corporation CITY O: HUNTTNGTON BEACH a pLbhr,body of the S atc of California By: \-E411 y Xt�S� �,.hairmatt (-)rizt cr type rattle) ATTEST Its: (cu-cle one)Chaixm, dP'ssidcn Vice Fro-idea: =sercy Clerk i By: A--PROVED AS TO FORA: { er tyre nave) 021 I(S: (circle erne •$acrEcary hil'Fina-acia.)Ofl:c.vr' ��E P.cy'General Counsel :.ss*. Secre:ary-Tretuurer `�)'���� 7`-5_'Y 6c,,� REVIl,:WE-1) AND APPRO1'ED: DTITr TI<U AND APPROVED. Exeeutiv ircCtor Director of Economic Development g:<:'fig-Agrcc:arnd s:m:;, A.LS 98-35e i{ 1 lot, percent(5%) increase in the second year. The total compensation during the entire term of this Agreement shall not exceed Two Hundred Fifty Thousand Dollars ($250,000). 3. INCORPORATION OF NEW HOURLY FEE SCHEDULE Exhibit"B"to the Original Agreement containing CONTRACTOR's hourly fee schedule is hereby replaced in its entirety by CONTRACTOR'S current hourly fee schedule, which is attached to this Amendment No. 1 as Attachment 1, and is incorporated by this reference as though fully set forth herein. 4. REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their authorized officers on the date first above written. KEYSER MARSTON ASSOCIATES, INC. REDEVELOPMENT AGENCY OF THE a California corporation CITY OF HUNTINGTON BEACH a public body of the State of California By: Chairman (print or type name) ATTEST Its: (circle one)Chairman/President/Vice President Agency Clerk By: APPROVED AS TO FORM: (print or type name) Its: (circle one)Secretary/chief Financial Officer/ F. ��Agency General Counsel Asst. Secretary-Treasurer I L I 14I REVIEWED AND APPROVED: INIT ATED AND APPROVED: d C- & Executive Director Director of Economic Development 2 g*98-Agree:amd1kma RLS 98-366 SENT BY:SF OFFICE 5-19-98 ; 17:11 KEYSER MMSTON- 17143755087:K 21 4 ATTACIU-'LENT 1 KEYSER MARSTON ASSOCIATES,INC. HOURLY FEE SCHEDULE I9" A. JERRY KEYSER'' $180.00 SENIOR PRINCIPALS* $165.00 PRINCIPALS* $155.00 SENIOR ASSOCIATES $135.00 ASSOCIATES $120.00 SENIOR ANALYST - $105.00 ANALYST $ 95.00 TECHNICAL STAFF $ 67.50 ADMMSTRATIVE STAFF $ 52.50 Directly related job expenses not included in the above rates are: auto mileage,air fares, hotels and motels, meals, car rentals, taxies,telephone calls, delivery, electronic data processing, graphics and printing. Directly related job expenses will be billed at 11011/6 of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty(30)day.of invoice date. A charge of 1%per month will be added to all past due accounts. * Rates for individuals in these categories will be increased by 500/o for time spent in court testimony. SENT BY:SF OFFICE 5-19-08 17:11 KEYSER MRSTON- 17143755087;# 3/ 4 .&. M 0 ACORD,� mi ! sa. f �s �x� � $ % DATE, �. n.van�'a a exsaa s- ..�Y�i rat>:t. r �P1rft :c�..x:ir.Jt, .7s» ..r.r..S .ase. R w.. R r•` i Y33ty' » 11/12/1997 §• rRooucsR (415)957-0600 FAX (415)957-0577 Tlgs CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION aroevi ch O'Shea dI Coghl an ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE 4Z 5 Market Street HOLDER THIS CERTIFICATE DOES NOT AMEND,EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES RMOW. 10th Floor COMPANIES AFFORDING COVERAGE ..................................... . . . ..............................,._..._.._........._. San Francisco, CA 94105 COMPANY Federal Insurance Company Aft: Jessica Kass Ext 231 A ...... ............................... ..:................................. Keyser Marston Associates, Inc. co«wANY Republic Indemnity Company of California B 55 Pacific Avenue Mall Reliance Insurance Company of Ill i not s San Francisco, CA 94111 COMIPANY C .-.......................... i COMPANY �it•7 `3E3i�a xre�?i °vari>;..:,.'i�. ,. .�Y *�!• ......�...STIC.�.:..:vc �•- ii; .•'t {,{ii ter«-31�T>'"r�e- •,.» ♦♦ -r a ; •.rG--k S•.� •;,x<uea{r �lr� „3.d:re;'T. xrx!?�.r.. T►sS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED,NOTWITHSTANDING ANY REOUIREAENT,TERRA OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE rMRANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONOITION^v OF GVCH POLICIES.LIATS SHOWN MAY HAVE BEEN REOUCED BY PAID CLAAM5. t ; POLICY cc TYPE OF INWRANCe NUMBRR PomY eP►AI nn POLICY EwmTm a Lilt; CATE IMAI WYI DATE IMw=YY) LIMITS GENERAL LIABILITY GENRAL AOGREGATE s 2,GOO./.GOO X �COMMERCIALGENERALLNBILITY _weooiicrs.COMPIOPAGG = 1,.00Q,000 CLAAIAB MAoc X ?occuR PElt$ON&t AOV 1.00O,OOO A 35348041 11/11/1997 11/11/1998 ;.............................................:................. ....---- .......... owHEtrs A;coNrnACTOTrs PROT EACH OCCURRENCE s 1 000 .............................................._.... FIREDAMAGE(AAYemto) s-_.-......Included _..._..................................................... .. .... MED EXP W,y Ora v.Mw s 10,000 AUTONODU LNBIUTY COMBINED X ANY AUVO SAAOLE LOMR ;i 1 000,000 ...........................................<................e.......... - ALL OWNW AI TOS BODILY Boo INJURY SCHEDULED AUTOS A HIItEDAtmas 73237676 11/11/1997 s 11/11/1998 _..............._............... _........... ......... -.- BODILY INJURY S NON-OwNkO AUTOS tear accedes, -- .................... E......:.................................................... ': [ PROPERTYDAMAG9 S aARAOH IUleaIrY AUM ONLY-EA ACCIDENT f i `_ ,........................................ ANY AUTO ... I•f A OTHER THAN AUTO ONLY: [ �� EACH ACCIDENT;: AGGREOATE's S [EXC9W LIAWLITY EACH OCCURRENCE o00 : a 000 .............................................a.................�,.........:...... A X w�RELLAFORM 797S4408 : 11/11/1997 11/11/1998 'ACORNATE s 4_,_000,000 .......................... OTHER THANUMBR6ILAFORM ;Retained Limit fg �. Zero i WORKERSCOMPEJISATIONAmu ; .x-;w6 WIAF%J- a eMPlOYERa'INAOLITY EL EACH ACCIDENT S 1 QOO O B TFIEPROPRAETOW :03954602 11/11/1997 11/11/1998 .............................................a...........-. .�.......� 00 PARTNERSIEX6CVPVE `INCL ° DISEASE-PoucY uulr : 1.000.000 ..._, ................._...................•....... 011T4CAJL4 ARE: ExCt - EL DISEASE-EA EMPLOYEE S 1.000.000 I�iscQllaneous $1,000,000 Each Wrongful Act / CrofessiAulal LiabilityNPG0126254 11/11/199711/11/I998 ' $1,000,000 Aggregate Limit; S25,000 Deductible 0E3CAWTIO111 a.apsnATIONSILOCArw4wVEHICL 3%ftGAL ITEMS he City of Huntington Beach, its Agents, Officers and Employees are named as Additional Insured s their interest may appear with respect to General Liability only. orm No. 80-02-2305 (ed. 4-94) attached. yy����,�y Y n -- a "� �» EL t{,,,�,��!� t. - ..a w•i� , Ras a....r .• .. .-.... -f..64:.. ...«...:...."�. .t;.!:...._ •'aC: .. �37...:.'s.,. .. - w"°`-w,L: • T... rw�:1�4v;<a •?T:::%..a. uaAk. ��; .. •»A ri•fi•t�..t9t'. SHOULD ANY OF THE ABOVE OBSCRIBEO POLICteb W CANMLFD BEPOR!THE OIPIRATION DATE THEREOP,TlE=11110 COMPANY MALL NW@WQ MAR 30 DAYA WRIt N NOTICE TO THE CJMTIF"TE WXMM MOOD TO TW LEFT, City of Huntington Beacham �61iYiDiiBO( 2000 Main Street XXXXX Huntington Beach, CA 92649 �'�J�•y�r �,e•�r:+ .:.<-Lf.�>a`f"arl'..�Z'. j -+.-.�=:...._r:...:..,µ:�xi.:t.:.T,� .:...,,: ..i.lyta»w. ..�wR �5�. '^•J♦�� xlrt:iY,r:.-r«•.:.:�« ••�.:.._moo - - a," t •,a,�.,•. •.. t f;°'t :..`. , .�x .,,,a.w• 3 •I rr-w•. •:. �.r at *Y. ,e� irs > +,r.,'�. FF. i, CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DATE: TO: s 4-,-n A.s 5 C"C- e ATTENTION: Name DEPARTMENT: Street J--e-) REGARDING: — City,State,Zip s See Attached Action Agenda Item �E-— ! / Date of Approval Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item. Remarks: Connie Brockway City Clerk Attachments: Action Agenda Page y-' Agreement, Bonds Insurance RCA Deed Other Name —� Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Risk Management Dept. Insurance Received by Name- Company Name- Date G:Followup/coverltr (Telephone:714-536-5227) Amendment to The Sedway Group Agreement And Insurance Certificate AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND SEDWAY KOTIN MOUCHLY GROUP TO PROVIDE ECONOMIC PROFESSIONAL SERVICES THIS AMENDMENT is made and entered into the 9nrh day of .Tilly , 1998, by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as"AGENCY", and the SEDWAY GROUP, a California corporation, hereinafter referred to as "CONTRACTOR." WHEREAS, AGENCY and CONTRACTOR are parties to that certain agreement, dated ,Tune 3 , 1996, entitled"Professional Services Contract Between the Redevelopment Agency of the City of Huntington Beach and Sedway Kotin Mouchly Group to Provide Economic Professional Services,"which agreement shall hereinafter be referred to as the "Original Agreement," and AGENCY and CONTRACTOR wish to amend the Original Agreement to extend the term thereof, and to recognize the changed name of CONTRACTOR's firm, NOW, THEREFORE, it is agreed by CITY and CONTRACTOR as follows: 1. AMENDMENT OF SECTION 3 OF THE ORIGINAL AGREEMENT ENTITLED "TIME OF PERFORMANCE" Section 3 of the Original Agreement, entitled Time of Performance, is hereby amended to read as follow: 3. TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of the CONTRACTOR are to commence as soon as practicable after the execution of this Agreement. The contract will not exceed a four-year two yea.-period, commencing with the date of the signing of this Agreement, without written authorization by the Agency's Executive Director. 2. AMENDMENT OF SECTION 4 OF THE ORIGINAL AGREEMENT ENTITLED "COMPENSATION" Section 4 of the Agreement, entitled Compensation, is hereby amended to read as follows: 1 g:4:98-Agree:amd 1 sedw RLS 98-366 JUN-26-1998 10:42 P.03 s � _ 4. COMPENSATION In consideration of the performance of the services described herin, AGENCY agrees to pay CONTRACTOR as described in Exhibit`B," a fee not to exceed Fifty Thousand Dollars($50,000) in the first year, and a maximum of five percent (5%) increase in the second year. The total compensation during the entire term of this Agreement shall not exceed Two .Hundred Ninety-two Thousand Dollars ($292,000). 3. CHANGE OF NAME OF CONTRACTOR'S FIRM The parties acknowledge that the name of CONTRACTOR'S firm has been changed from the "Sedway Kotin Mouchly Group" to the"Sedway Group." 4, REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOF,the parties hereto have caused this agreement to be executed by their authorized officers on the date first above written. SEDWAY KOTIN MOUCHLY GROUP, REDEVELOPMENT AGENCY OF THE - _ - CITY OF HUNTINGTON BEACH A California Corporation a public body of the State of California By 0 Chairman (print or type narne5 ATTEST Its: (circle one)Chairman/President/Vice President or Agency Clerk •7�?z/9 g By: A APPROVED AS TO FORM: A lay, C (print or type name) Its: (circle one)Secretary/chief Financial officer/ Agency Gener�a+l C/o�nsel Asst. - 6/14f V /Ir 8`c1rGC'; REVIEWED AND APPR INITIATED AND APPROVED: Qlevoe` Execu ' Director Director of Eeo omic Development 2 g,4:98-Agree:a rnd1sedw RLS 98-366 TOTAL P.03 06/29/98 09:32 5EDWAY GROUP 17143755087 NO.901 002 SEDWAY GROUP PROFESSIONAL FEE SCHEDULE Effective through December 31,1998 Professional Fees' Per Hour Principals $165-$180 Managers $1154135 Senior Associates $93-$105 Associates $80490 Analysts $65475 Word Processors $55 Administrative $55 *These rates represent a 10 to 25 percent discount from our private- sector professional rates. Note:Litigation work is billed at apremium to theseprofessionalrates. 13IL ING POLICIES 1. Bills are due and payable in full within 30 days of invoice date.Past due invoices will accrue late charges at 18 percent. 2. Questions about billings must be addressed in writing to'Sedway Group within 30 days of date of invoice.The absence of any such inquiries shall be deemed acknowledgment of Sedway Group's services and agreement with Sedway Group's charges for such services.If a dispute arises under the agreement of which this schedule is part,the prevailing party in such dispute shall be entitled to reasonable attorney's fees and costs of suit. SEDWAY GROUP 1r1!x'71i�47y3i7550887 TA .905 9024C080. � 09lu--- TiM 06/ 90 PROUVCCR THIS C RTIFIGATE 15 IS511 A MATTER O i00KMATI01y ONLY AND CONFERS NU RIMM UPON THE CtATIFICATE Haaver Aes:aci.ates Ina. IIOLOER.THIS CERTIFICATC 00E8 NOT AMEND.EXTEND OR 1517 rair Oaks Avenue ALTER TKt COVERA©C AFFORDED 14Y THE POLICIES VELnw. South Pasadena CA 91030 _ COMPAMEa AFFORDING COVERAGE COMPANY Pna.eao.�lfi-x�9-87I7 FwHs.K?6-7 -jO1I _ A H*rtfoid Accidents Zndumnity 91SL1RED — C(1MPANr 6 Go1dRn Sagle Znauranae Company Bodvay i Aaaoeiates COMPANY —' — Shirley Roaciasko G National Union Prirs Inn. Co. Three Wm aroadoro Center 41150 San Francisco CA 94111 0 L'VVtRAGE I . THIS IS TO CERT11•Y THAT THC POLICIES OF IN.iWRANCE LISTED BELOW HAVE OZ;EN tSCUED TO THE►NSUktp NAMED ABOVE FOR TH&POLICY PCRIOD INDICATFq•NUTW"ZITANOING ANY RtuUIRIEMENT,TERM OR CONrATIUN Or ANY CONTWT OR I If HER DOCUMENT WITH KPSPEGT TO MICH THIS 4 CERTIPR)ATE MAY K 1691JED OR MAY PERTA)N,THE INSURANCE OFVRXV DY YHE POLICIES uESCRIBED HEREIN Is 9LIA.IECI TO ALL THC TERMS, LtXLX•U3I"AND CONCITIMNS OP SUCH POUCIE6.LIMITS SMLANN MAY I(AVE 96EN RE MED 6Y PNO CLAW 00 POLICY NuMOLR PONCY SOECME PNHY&xNvATI9N uR DATE(YYIMMY1 MMCRALUAMLITr s7,D00 000 A X CQL44RLw GdLERALL1A61ury 72S9if M9156 05/20/99 OR/28/99 n;k0wrTR.00MFIUrAu6 i Excluded ttAltAe rAAOE UL4urt PER6UnAL a AOV IP41URY T 1�n 00 j D00 Owme"A wHTRACTOICe MOT CACH OCCI IORFNCE I.11000 r00o` cIREOAMAVE(anT`nelro) I JUU,000 MCO CXr(A.V o-uonom 110,000 AVTpMOBtI[LWOILITY COMON60 L•INr)r 1.1mu 31,900,000 A ANYAVTO 12SRAEM9155 05/28/98 05/2V/:+V ALL MWNFU AVT05 $l1riQ.r mJURY y_�.—.- V_NRDVLC0 AUT%% y - L` ^+ AS TO F DRMV CO x IIR AUTOR -C. ``I _ r ROOKY Fl.tURY __ X NON•Ontawowo^r r =I )' (F«Aood.nV T ----- DROPERn UAMAOE S OARAGtLKDILITY AU I-U ul'AiILT•EA ACCIOGNT S my MO De- it" City A torne� oT1tLIITNANu.rtnoNLr tACH ACCIOCNT I EnCY99 LIMUry CACN eOCUAR�TLE� 5�000,0►li) A x LANeReLLA1.Onla 72XRVY24 40 05/211/98 05/28/99 A1XL0_t}RTE c1,A0D,ODQ OTN6R THAN UMBRELLA FORM WQAREK7{bOMP[N9ATWH MD X WCCgY U EMtLOYCRC LIAEILMY - EL�eacHAccIO6rIT 11,0(70,0Q0 D Tw_PtE arFx TIYe N1f, NKC421969-0.7 01/01/08 O1/O2/99 E>aseAsr.vtn�runvT t S,OOu,nOO LIrFIGCROItRG' tA4L (:L U"Aff•CA CmPLCYE6 i 1 06,000 01SER C &;(O 1.000,090 Ocn. ArJq 1,000,0U0 aCAWT10N nF ovCRA7;wZ CATm"FHI L1w*rE1'AAL 1TCR1L . Einanoial Ylanni})lq Consultant The ca tiZicate Yloldo-xr i lilted nP addiLionsl innTTed as to Ste to g��`drgtl liability only en (10) 3ay notice applies to non-PAY.. Jkici}tional aitagred in c�u ed City of Huntington Roach, Agei,ta, Officer and v eel. _,` bxg"My OF THE AROve VEbGRew.O PaUCIRM PF CANCELLCU lUORL TH6 ".devrlopawnt Agony Of The 6MRATumwTerneawF,TOR ItSIUNOCMPuirvnLLMAiI es ty vY nuntingtAn 8eawll :11 0 -_DAYC WRITTEN WnTICt TO THE OERTIFK`ATE wii.OER wftp To TNC Lrrr, s. Kohler 2(�7Q 7i1it�7b0I44D 741 44449�A1��1b il1Y • 200 Main Main 9t. Runtingtva beach CA 92640 M -. . AI iTYRiI{Q[p RE dJTATNF Actit�t� •q�l >i) L1R0:CQRParis�nr IA e'.`; Impediment Study Scope of Work & Sample Studies ............. ... . ...... .... ............. ... ........ .......... ............................... . . . ........ ........ .. . ..... ...... -...... ... ......... ................. ............ .......................... . ... . . ...... ................................................................. ........... .. ............. .. ... ..... . ... ............. .. .................. .... . .... ... M�M . ......... .......... SEDWAY GROUP Real Estate and Urban Economics San Francisco Los Angeles Principals: Elizabeth C. Allen Alan C. Billingsley, CRE Carol A. Fredholm Amy L. Herman, AICP Kathryn Welch Howe June 19, 1998 Terry R. Margerum Naomi E. Porat Roy J. Schneiderman Lynn M. Sedway, CRE Ms. Melanie Fallon Mr. David Biggs City of Huntington Beach P.O. Box 190 Huntington Beach, CA 92648 Re: Proposal to Conduct a Development Processing Impediment Study for the City of Huntington Beach Dear Melanie and David: Sedway Group is pleased to submit, on behalf of ourselves and Sedway Consulting,the enclosed proposal to review and analyze possible impediments to development in the conditional use permitting process of Huntington Beach. The enclosed proposal includes the scope of work, professional fee estimate,and r6sum6s of Sedway Group and Sedway Consulting professional staff. Thank you for providing us with the opportunity to submit this proposal, and we look forward to working with the City of Huntington Beach. Sincerely, 4nn M. Sedway,CRE Te . Margerum Principal Principal LMS/TRM:nam Enclosure C:\WPD0CS\XPAULViurNTBEAC.P02 Three Embarcadero Center, Suite 1150 I San Francisco, CA 94111 1415.781.8900 I Fax 415.781.8118 I sedway@sedway.com SEDWAY GROUP Real Estate and Urban Economics SCOPE OF SERVICES The objective of this study is to assist the City of Huntington Beach, in the context of economically competitive communities,to evaluate the effects of its current conditional use permitting process and draft actual needed changes in ordinances, guidelines, and procedures. The consulting team will consist of Sedway Group and Sedway Consulting. Sedway Group will manage the project,design and implement the survey,and compile the final report; Sedway Consulting will develop survey questions,analyze the City's conditional use permit process,formulate options,prepare a background and recommendations report, and draft necessary ordinance changes. The following describes the scope of services and indicates which firm will be involved in each task. STUDY DESIGN, SURVEY DESIGN AND SURVEY IMPLEMENTATION Initial Meeting with City Staff Sedway Group will meet with City staff to discuss any changes in the goals and objectives for the study, project coordination, schedule, refinements to the work program; and proposed method of obtaining information from other cities. (Sedway Consulting has already met with the city twice and has an understanding of city objectives for the study.)Sedway Group will work closely with City staff to identify the cities to be included in the survey of corresponding processes. Such cities may be selected from among: Costa Mesa,Irvine,Fountain Valley,Garden Grove,Santa Ana,Newport Beach,and/or others. Other Survey Preparation Unless other cities have recently analyzed their use of CUPS,they may not be able to provide comprehensive information that is readily useful to this study. Hence,the proposed approach is to identify a small number of exemplar impactive uses in Huntington Beach and elsewhere that are common candidates to be handled adequately through a different process. These uses will form the basis for some of the questions in the survey. Survey Implementation Sedway Group will coordinate the process of collecting and integrating appropriate conditional use permit (CUP)information from these other cities to be provided to Sedway Consulting. Sedway Group will contact these cities by sending an initial letter explaining the purpose of the survey,a copy of the questionnaire for review, and an offer to provide them with a copy of the final report. Sedway Consulting will develop the CUP-related questions to be used in the survey. Officials from the selected cities will be asked how they handle the selected uses identified and the "special situations" contained in the existing list of uses or situations requiring a CUP.They also will be asked to provide a matrix of uses/zones and/or a copy of their zoning ordinances. Subsequently, Sedway Group will schedule and conduct interviews with appropriate staff. Sedway Group will work closely with Sedway Consulting during the process of these interviews to further refine the questionnaire,if necessary,and to discuss initial survey responses. Sedway Group will prepare uses/zones matrices where they are not otherwise available. 1 SEDWAY GROUP Real Estate and Urban Economics CONDITIONAL USE PERMIT ANALYSIS Assessment DistrictlUse Matrix Concurrent with the ongoing survey, Sedway Consulting will prepare a complete Huntington Beach Uses/Zoning District Matrix based on the City's Zoning and Subdivision Ordinances. This matrix will have a dual purpose: 1)it will be used in the subsequent analysis of CUPS; and 2)it will be available immediately as a tool for the staff and public. Analysi& Sedway Consulting will analyze the results of the survey,including the written material provided by the select cities,and the Huntington Beach Use/District Matrix. Sedway Consulting will analyze which conditional uses should retain the existing CUP procedure,which should be changed to a CUP approved by the Zoning Administrator,which should be changed to a non-discretionary permit with approval standards (a type of"Additional Provisions"),and which should simply be changed to a permitted use. Consultants will present this analysis in Memorandum No. 1,Initial Analysis. Proposals for Changes to CUPS This phase will present preliminary information to the City staff on how the system of conditional uses might be changed. It will include the following tasks. Meeting with City Staff. Sedway Consulting will meet with the staff of the Department of Community Development to discuss the results of the initial analysis and consider options for change.As part of this discussion,the consultants and staff will review the work program,including the schedule. Consultants also will discuss standard conditions and other conditions imposed by the City upon different types of CUPS. Draft Recommendations. Based on the analysis and meeting, Sedway Consulting will prepare a set of recommendations on what to do with all current conditional uses. This effort will build upon the analysis by making the recommendations more specific and by describing the conditions or standards to be applied to different uses or in special situations. This work will culminate in Memorandum No. 2,Background and Recommendations(draft),that can be used later in the public review process. Meeting with City Staff. Sedway Consulting and Sedway Group will meet with staff to discuss Memorandum No. 2. Recommendations and Amendments The purpose of the final phase is to develop the final recommendations and amendments to be considered by the City for adoption. Refine Recommendations. If modifications are required to Memorandum No. 2,consultants will prepare Memorandum No. 3,Background and Recommendations (final). Because of the possibly controversial nature of some of the recommendations,we recommend that the Background and Recommendations report • accompany the proposed amendments,instead of being distributed in advance of the amendments,so that 2 I SEDWAY GROUP Real Estate and Urban Economics two separate reviews are not required and so that an easier understanding of the relationship between need and proposal may be made. Draft Proposed Amendment Language Sedway Consulting will draft the appropriate ordinance amendments,based on the final Background and Recommendations report,in a format consistent with the current Zoning and Subdivision Ordinances. Final Proposed Amendment Language After City review of the draft, including review by the City Attorney, Sedway Consulting will prepare the final proposed amendments. These will be compiled and submitted to the city in appropriate format and with the background and recommendations report prepared by Sedway Consulting. Additional Activities Because of the difficulty of predicting what further consultant services may be required,the consulting team will be available for any additional work or attendance at meetings or hearings on a time and expenses basis. TIMEFRAME AND PROFESSIONAL FEES The report will be completed within four months from our receipt of your written authorization to proceed. If pertinent ordinance provisions are changed by the city in the course of the work, this may result in additional duration and fees.We will advise you if this becomes the case. The budget required for Sedway Group and Sedway Consulting's professional services is a fixed fee of $41,234, plus reimbursable expenses for travel (mileage, parking and tolls), delivery services, facsimile machine use,photographs,production,and long-distance telephone calls. The fee includes three copies of the report.Additional copies will be charged at current reproduction rates. Two meetings for Sedway Group and two meetings for Sedway Consulting are included in the fixed fee. A professional fees cost breakdown for this project is attached for your review.Additional meetings or other work may be billed at our current hourly rates summarized as follows: Professional Fees Per Hour Lynn M. Sedway,CRE,and Paul Sedway AICP $180 Other Principals $165 Robert Odland AICP $120 Senior Associates $95 Associates $80 Analysts $75 Word Processors $55 Administrative $55 Invoices will be sent monthly based on percentage completion by task and are due within 30 days. Any unpaid balance is due upon delivery of the final work product. Sedway.Group reserves the right to charge late fees on invoices not paid within 30 days at the rate of 18 percent per annum. In the event of a legal dispute,attorneys' fees will be paid by the non-prevailing party. 3 SEDWAY GROUP Real Estate and Urban Economics Questions about billings must be addressed in writing to Sedway Group within 21 days of date of invoice. The absence of any such inquiries shall be deemed acknowledgment of Sedway Group's services and agreement with Sedway Group's charges for such services. If a dispute arises under this agreement, the prevailing party in such dispute shall be entitled to reasonable attorney's fees and costs of suit. This scope of services does not cover professional services necessary in the event of litigation.Any such services necessary,including but not limited to preparation and testimony,will be billed at Sedway Group's then-current professional rates for such services. During the course of this assignment,if progress is delayed due to reasons beyond our control,it will be necessary to charge for any excess work at our then-current hourly rates. Such excess work could result from inefficiencies such as assessing changes in market conditions,updating research,and other factors. You may terminate the services of Sedway Group at any time by giving written notice. Sedway Group may withdraw from this assignment at any time by giving written notice. In either such event,Sedway Group will be paid based upon time expended and our indicated professional rates, and you will reimburse Sedway Group for reimbursable expenses related to the assignment. All information and data received from Sedway Group,whether presented orally or in writing,shall be solely for your use and are not to be relied upon by any third party or parties without the prior written approval of Sedway Croup. Sedway Group disclaims any and all responsibility to third parties deriving from the use of said information or data. Sedway Group is pleased to submit this proposal for your review. We look forward to working with the City of Huntington Beach. 4 i SEDWAY GROUP Real Estate and Urban Economics CONSULTING TEAM PROFESSIONAL FEES ESTIMATE CITY OF HUNTINGTON BEACH CONDITIONAL USE PERMIT STUDY Task Cost Sedway Group Project Administration $1,500 Overall Study Design, Survey Design,and Survey Implementation $7,332 Final Report $1,200 Total Sedway Group Budget $10,032 Sedway Consulting Assessment $7,062 Input to Survey Design $2,200 Proposals for Change to CUPS $9,064 Recommendations and Amendments $12,936 Total Sedway Consulting Budget $31,262 Total Project Budget(excluding reimbursable expenses) $41,294 5 June 25, 1998 Memo Fallon — Biggs Impediment Study • CITY OF HUNTINGTON BEACH C Inter Office Communication Community Development Department TO: David Biggs, Economic Development Director FROM: Melanie Fallon, Community Development Director DATE: June 25, 1998 SUBJECT: Proposed Impediment to Development Study Pursuant to your request, I am pleased to provide information on the proposed impediment to development study. The project proposal is described as follows: Applicant: City of Huntington Beach, Economic Development Department and Community Development Department Location: Citywide The Study will analyze the development permitting process and in particular the list of land uses subject to a conditional use permit. The study will consist of two (2) primary parts as follows: 1) Survey The study will include a survey of six (6) cities (Costa Mesa, Irvine, Westminster, Fountain Valley, Long Beach and Cypress) that are similar to Huntington Beach in attracting businesses and industries. The survey will gather information relative to processing requirements and conditional use permits. In addition, the consultant will survey cities in California known to have good streamlined permitting systems. 2) Conditional Use Permit Anal An assessment of the City's numerous conditional use permit requirements will be performed. Other cities' lists of land uses requiring a conditional use permit will be analyzed. The consultant will recommend which conditional uses should retain the existing conditional use permit procedure, which should be changed to a conditional use permit approved by the Zoning Administrator, which should be changed to a non-discretionary permit with approval standards (additional provisions), and which should be changed to a permitted use. This study is expected to take approximately four to six (4 to 6) months to prepare. The report and the proposed changes to the Zoning Code will then be presented to the Planning Commission and City Council for deliberation and approval. CEQA Review At the City Council Study Session on June 15, Council also commented on the need to take a look at our CEQA guidelines to assure that they are not overly onerous. We are not proposing that this be included in this study at this time for the following reasons: 1. This additional work would add approximately $20,000 and additional time to this contract, and 2. Economic Development and Community Development staffs have been working very closely with our City Attorney's office and Murray Kane to ascertain the most appropriate legal and streamlined CEQA process for our major projects. Therefore, staff does not believe that this issue is as critical at this time as the review of our conditional use permit processes. B. ROLE OF THE CONSULTANT The proposed Study will be undertaken by-the Sedway Group with the assistance of Sedway Consulting (a land use and planning firm). The Sedway Group is a firm currently under contract to provide fiscal analysis and economic advisory services to the City and its Redevelopment Agency. The Sedway Group is well qualified to be the lead consultant on this effort, having undertaken similar studies in a number of communities. It is my understanding that the Sedway Group's existing contract was approved by Redevelopment Agency on June 17, 1996, for a two year term and a total not-to-exceed amount of$100,000. The cost to undertake this Study is $42,000. Since we anticipate continuing to utilize Sedway for individual redevelopment project analysis, a new contract has been prepared to increase the total maximum compensation from $100,000 to $290,000 over the next two years. C. ANALYSIS: The proposed Study will assist the City in maintaining a comprehensive yet economically competitive zoning and planning system. The study will evaluate the effects of the City's current permitting processes and draft actual needed changes in ordinances, guidelines, and procedures. It will further implement the City's Quality Service Mission Statement which is: "The mission of the City of Huntington Beach is to maintain a safe community, a high quality of life, and the most cost effective services, facilities and products in response to the changing needs of our community." I recommend that the City Council approve the contract with the Sedway Group for the preparation of a Study to analyze and draft appropriate changes to the City's development processing system. If you have any questions, please contact me. (698mfl6) (7) 07/20/98 - Council/Agency Agenda - Page 7 E-11. (Redevelopment Agency) Amendment No. 1 To Contracts With Financial Advisors For Economic Professional Services- Keyser Marston Associates And The Sedway Group—Approve Scope Of Work (600.30) — 1. Approve and authorize the Chairperson and Clerk to execute the attached amendments to the professional services agreements between the Redevelopment Agency and Keyser Marston Associates and the Sedway Group extending the term for an additional two years and increasing the maximum compensation by $75,000 for each firm for each year and 2. Approve the attached scope of work for the "Impediments to Development" study to be performed under the above approved contract with the Sedway Group for a maximum compensation of$42,000 in addition to the amount approved above. Submitted by the Economic Development Director. [Approved 7-01 [Report to be presented by Community Development Director and Economic Development Director at future meeting on the work that each consultant has done in past two years] E-12. (City Council) Approve Professional Services Contract Between The City And Urban Design Studio For Preparation Of Urban Design —Approve Modification To Hold Harmless Contract Provisions (600.10) — 1. Approve and authorize execution by the Mayor and City Clerk of the Professional Services Contract Between the City of Huntington Beach and Urban Design Studio for Preparation of Urban Design Guidelines for preparation of urban design guidelines for an amount not to exceed $92,000 and 2. Approve Section 8 hold harmless change in contract language to include the word "Negligent" to qualify the vendor's performance. Contract to read "CONSULTANT shall protect, defend, idemnify and hold harmless City, its officers, officials, employees, and agents from and against any and all liability, loss, damage, expenses, costs arising out of or in connection with negligent performance of the Agreement . . ." Submitted by the Community Development Director. [Approved 7-0] [Request that Pacific Coast Highway be included; entrance signs to city considered; also direction signs, e.g. TO BEACH; also feasibility of an ordinance as a tool] E-13. (City Council) Approve Agreement Between The City Of Huntington Beach And The County Of Orange For 1998/99 Animal Control/Shelter Services (600.25) — Approve and authorize execution by the Mayor and City Clerk of the 1998/99 Agreement for Animal Control and Shelter Services between the City of Huntington Beach and the County of Orange. Submitted by Administration. [Approved 7-01 (7) Council/Agency Meeting Held: q�5�97 6 00.3D Deferred/Continued to: laLb 117 ❑ Approved ❑ Conditionally Approved ❑ Denied City C rk's Signature Council Meeting Date: September 15, 19971 Department ID Number: ED 97-38 CITY OF HUNTINGTON BEACH _ REQUEST FOR REDEVELOPMENT AGENCY ACTION c-n r, -�m rV Cl) m SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGEN(2 �rn rn MEMBERS r. SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Director — PREPARED BY: RAY SILVER, Assistant City AdministratorRej DAVID C. BIGGS, Director of Economic Development MELANIE FALLON, Director of Community Development SUBJECT: SEDWAY GROUP CONTRACT IMPEDIMENTS TO DEVELOPMENT STUDY SCOPE OF WORK.APPROVAL Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: A new contract with the Sedway Group needs to be approved to permit for undertaking of an Impediments to Development Study, the scope of work for which is also presented for Agency Board approval. Fundina Source: Economic Development Operating Budget, Account E-TW-ED-810-3-47- 00 RecommendedAc 'o : Motion to 1. Approve and authorize the execution by the Chairperson and Clerk of a professional services contract between the Redevelopment Agency and the Sedway Group which increase the not-to-exceed limit to $115,000 for the. 1997-98 fiscal year. 2. Approve the attached scope of work for an Impediment to Development Study for the City of Huntington Beach. Alternative Action(s): Approve a modified scope of work based on Agency Board direction. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: September 15, 1997 DEPARTMENT ID NUMBER: ED 97-38 Analysis: California has the most sophisticated and complex planning and environmental regulations in the country. These regulations along with our own development regualtions positively benefit our community by requiring high quality development, but these regulations also have a negative side in that many of them overly delay development approvals so that as a city and state we cannot always adequately compete with other states in attracting and retaining development. Because of these concerns statewide and because of feedback we have received locally from some in our development community, we have identified a need to undertake an independent assessment of the possible impediments to development in the permitting processes in Huntington Beach. This review will include a comparison of our development fee structure and costs with a number of cities with which we compete as a business location. A second component of the study will be an examination with staff of the more than 100 types of planning approvals (Attachment 2) which require conditional use permits and propose possible revisions to the Zoning and Subdivision Ordinance. The third segment of the study will survey other cities on their environmental review process. The proposed scope of work and examples of other studies is attached for Agency's review (Attachment 3). The proposed Impediments to Development Study will be undertaken by the Sedway Group with the assistance of Sedway Consulting (a land use and planning firm). The Sedway Group is a firm currently under contract to provide fiscal analysis and economic advisory services to the City and its Redevelopment Agency. The Sedway Group is well qualified to be the lead consultant on this effort, having undertaken similar studies in a number of communities. The Sedway Group's existing contract and the RCA from when the contract was approved is included as Attachment 4. The Redevelopment Agency approved the contract on June 17, 1996, for a two year term and a total not-to-exceed amount of $100,000. To date approximately $36,000 has been expended. The cost to undertake the Impediments Study is $63,000, which would utilize the remainder of the contract not-to-exceed figure. Since we anticipate continuing to utilize Sedway for individual redevelopment project analysis, a new contract has been prepared to increase the not-to-exceed number to $115,000 for the 1997- 1998 fiscal year.. Environmental Status: Not Applicable ED97-38.DOC -2- 09/04/97 2:29 PM EXHIBIT A 1 EXHIBIT A J • • J I. INTRODUCTION Sedway Kotin Mouchly Group(SKMG),in conjunction with Katz Hollis,is pleased to submit ® -� our qualifications to provide economic advisory services to the Redevelopment Agency of the City of Huntington Beach in response to that Agency's Request for Qualifications (RFQ) dated February 1966. Specifically,the Agency has requested advisory services that include the following: 1 Advice in the negotiation (or renegotiation.) of DDAs; l 2. Determination of the level of financial assistance that is warranted for commercial J and residential projects; 3. Advice on the structure and financing techniques of Agency and developer obligations; _ 4. Review and verification of developer pro formas; 5. Determination of the reuse value of project sites and preparation of summary reports pursuant to Section 33433 of the California Health and Safety Code; 1 ] 6. Comparative analysis of proposed projects in relation to the regional and national markets; 7. Advice in the structure of development proposal solicitations and review of proposals submitted; and J8. Advice-on the market trends, product type, and pricing of proposed market rate housing and on the affordability of Agency subsidized housing for low and very low Jincome households. E Sedway Kotin Mouchly Group believes our background and experience,when combined with those of Katz Hollis,will provide the Agency with the expertise needed to provide the above services.SKMG's assistance will be provided in service areas 1,2,4,6,7,and 8,as listed above. J _' � 1 EXHIBIT B • • EXHIBIT B SEDWAY GROUP Real Estate and Urban Economics SEDWAY GROUP PROFESSIONAL FEE SCHEDULE Effective through December 31, 1997 Professional Fees Per Hour Lynn M. Sedway, CRE $160 Other Principals $1304150 Managers $1104125 Senior Associates $85-$95 Associates $70 Analysts $55 Word Processors $45 Administrative $45 *These rates represent a 10 to 25 percent discount from our private-sector professional rates. Note:Litigation work is billed at a premium to these professional rates. BILLING POLICIES 1. Bills are due and payable in full within 30 days of invoice date. Past due invoices will accrue interest at 18 percent. 2. . Questions about billings must be addressed in writing to Sedway Group within 21 days of date of invoice. The absence of any such inquiries shall be deemed acknowledgment of Sedway Group's services and agreement with Sedway Group's charges for such services. If a dispute arises under the agreement of which this schedule is part,the prevailing party in such dispute shall be entitled to reasonable attorney's fees and costs of suit. Agreed to and Authorized by: RE REDEVELOPMENT AGEISY ACTION MEETING DAT —June 17, 1996 DEPARTMENT ID NUMBER: ED 96-33 Analysis: Since the inception of the Redevelopment Agency's .programs, it has contracted with Keyser Marston Associates, Inc. (KMA) to provide economic advisory services. To confirm the skills available from firms in this field, staff recently solicited proposals from seven firms. Three firms responded and were interviewed by a panel consisting of the Mayor, Director of Economic Development and the Redevelopment Project Manager. - After deliberation, the panel recommended the preparation of contracts with the KMA firm (the current contract would expire in September 1996) and with the Sedway Kotin Mouchley Group (SKMG). Contracting with both firms will allow the flexibility to assign tasks according to the services required and distribute the work load to assure timely response while maintaining the continuity and -historical perspective important to the Agency's long-term . projects. The scope of work for each contract is identical and includes the type of services typically required by the Agency including analysis of developer pro formas, preparation of reuse appraisals, determination of warranted financial assistance to projects, advise on housing programs and funding and the preparation of the Summary Reports required by Sec. 33433 of the California Health and Safety Code. Each contract has a term of two years and a not to exceed authority of$50,00© annually($100,000 for the first year). These services.will allow the Agency to continue work on its ongoing projects like The Waterfront, Main-Pier Phase 11, Third Block West and the Huntington Beach Mall and initiate or respond to new development opportunities in the project areas. Environmental Status: NA - Attachments : City'ClerWs .. Page Numbee 1. Professional Services Contract with Keyser Marston Associates, Inc. ».>.n . 2. Professional Services Contract with Sedway Kotin Mouchley Group. RAA9633.DOC -2- 29.05.96 3:21 PM Mpanw CERTi IF AtE OF INSURANCE 'Gb '`r 0Q 05/21 96 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF ONLY AND CONFERS ND RIGHTS UPON THE CE"VMTE HOLDER.TM CERTIFICATE DOES NOT AMEND,EXTEND OR ALTER THE COVERAGE AFFORDFD BY THE Tames, Robison Insurance POMESSELOW. 520 Topanga Cyn Bl #101 COMPANIES AFFORDING COVERAGE hatsworth CA• 91311 ODWANY A ITT Hartford Ins. Co. LETTER COMPANY B M19URED LETTER Q edway & Associates; (o _7 19 b COMPANY C ` �" 1 edway Kot1.n MOuchly Grp Kotin Regan & Mouchly MANY p Embarcadero Ctr #1150 zlJ w a�a�n�-pF�rancisco, CA 94111 P • COMPANY E - 'Y.�IV_G.•wG�' .:.b.'..... .:.. tiS'X•' x�'.:,i5:(Y�'M' i�ia¢, •y'('•+ .'J���`... ...v n...a .. .. • ... .. ... ... ...i3�ri::Gi- fi3 'aJ•:::w..;�i:T'ti':....w'y.'.`t'..}n„,1'Jf �iAn^Y.4Aw:i4:-5..: i:.!� TOp C A+. 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LATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRISED POUMES 8E CANCELLED BEFORE THE - EXPIRATION DATE THEREOF.THE ISSUING COMPANY• - , Redevelopment Agency Of MAIL.3,Q _DAYS WRITTEN H07VETo THE CERT*=TEMWERNAMEDTOTHE City of Huntington Beach LEFT. Attn: Stephen V. Kohler_ 2000 Main Street . AVTMON=REPREMMTA ., �. Huntington Bch CA 92648 � V 91CI}RD2S3(7�gp� \ .r�::�yr w1h7117M1 APPROVED AS TO FORM: . GAIT,HUTTON,, City. Attorney TOTAL P.02 By:; Deputy City Attorney 0 IL 7 4 3 d .............. .......... DATE NY) 06- 6— RA A C 0" A PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATIO ONLY AND CONFI:MS NO RIGHTS UPON THE CEFITIFICAT HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND 0 NARVER ASSOCIATES ALTER THE COVERAGE AFFORDED BY THE POLICIES BELft 1517 FAIR OAKS AVE SUITE D COMPANIES AFFORDING COVERAGE SOUTH PASADENA, CA 91030 COMPANY (sl8) 799-8797 FAX.:.-799-2817 A ITT I-TIARTFORD wountO COMPANY. SEDWAY GROUP THREE EMBARCADERO CTR 41150 'O"'ANl/ SAN FRANCISCO, CA 94111 COMPANY D .......... THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE�-E'iN ISSUED TO THE INSURED NAMED ABOVE FOR THE POILICY PERIOD INDICATED, NC)TWITHCTANDiNG ANY REQUIREMENT, TERM OR CONDITION OF ANY UUN I RACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SVBJECT TO ALA THE 'PERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. I-OLICI kl+FQTIVE POLICY EXPIRATION co I I LIMITS LTR TYPE OF INSURANCE POLICY NUMBER DATE(MM/DD/YY) DATE IMM/00/YY) —7GENERAL—LIASILITV GENIg'IRAL AGGREGATE..._ _s2 0 0 0, 00 R7"'u"'tALKC;lAL GENERAL LIAB.LITY i I I PRODUCTS-COMPlOPA3G 3 FTI 0,,rt)p CLAINIS MADE �.PERSONAL&ADV INJ JRY 3 1 1 0 0 0 1 0 0 OVVNGA'S&CONTRACTOR'S PROY 7 2 SBAEM9 15 S 5-2 8-9 7 . 5-28-98 .1 , 000, 00 TEMPLOYEE BENEF : ti I FIRE DAMAGE(Any L,."Z)7T7'J 6 C." 0 0 0 1 WED EXP(Any one Pei ao 1.0 , C)C)0 AUTOMOBILL L1A2141TV ANY AUTO 7u)(1,811110 SINGLEUIV:T 8 1 000100( ALL OVINE:)AUTOS [R*flnll Y 11"JUPY SCviSOULjO AUTOS I (Per person) 4L-- AiX H;RCO ALJ'r0S 1: 72SBAEM9155 15-28-97 5-28-98 BODILY INJ!JkY NON-OWNED AUTOS accicand PROPERTN'DAMAGE 6 1 GARAGE LIABILITY I AUTO ONLY-EA ACCXEN- ANY AUTO I, IOT14ER THAN AUTO ONLY: nllT AGGReCA7E V 6)(CESS LIABILITY EACH OCCURRENCE 01=1 0 0.0 1 0 0 c X UMBRF-1 I A FnRm 72Xl4UY24440 1: 5-428 97 5-20-98 MjUREGATE 4 QTHPA THAN UMBRELLA FORM I OTH WORKERS COMPENSATION AND L. 1, 11, -A EMPLOYERS'LIA011]TV I EL EACH ACCIDENT b THE PFIDPAieTorw ;NCL I I I EL D,SEA$E-POLICY L,W;T 6 PARTNERSIEXECUTIVE OFFICERS ARE: -XCL E EL oicrAGG EA EMPLOYCC 4 —7—oymv OCSOFIIPTION OF OPERA-riONSiLOCATIONSIVERICLES/SPECIAL ITEMS FINANCIAL PLANNING CONSULTANTS. REDEVELOPMENT AGENCY OF TPIS CITY OF HUNTINGTOt BEACH, ITIS OFFICERS AND EMPLOYEES ARE ADDED AS ADDITIONAL INSURED BUT ONLY AS RESPECTS OPERATIONS OF NAMED INSURED, ........... . N't' SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE REDEVELOPMENT AGENCY OF CITY OF EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL 54V44/0 MAIL HUNTINGTON BEACH 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, 201DO MAIN ST. BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPnqF NA 0SUCATION OP UARILITV HUNTUNGTON BEACH, CA 92468 1 OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRE Lo-��-y r • • h'ARVER INSURAN'(CE (818) 799-8797 (PHONE) (818) 799-2817 (FAX) TO:CITY OF HUNTINGTON BEACH FAX #714-374 -1590 ATT. SCOTT R . FIELD DATE; 06/06/97 RE : SEDWAY GROUP 72 SBAEM97.55 DEAR:MR. FIELD ENCLOSED IS A COPY OF THE RENEWAL CERIiICATE FOR OUR CLIENT' S COMMERCIAL LIABILITY INSURANCE . THE ORIGINAL IS EN ROUTE VIA U. S. MAIL. PLEASE CALL ME IF ANY QUESTIONS . THANTK YOU FOR YOUR HELP 2 PAGEiP S�(INCL. COVER MEMO) A L A Nf MA*10 CC, SEDWAY GROUP Conditional Use Permit List CONDITIONAL USE PERMITS TO THE ZONING ADMINISTRATOR(ZA)OR PLANNING COMMISSION(PC)BY USE AND ZONE ARE AS INDICATED: Residential Commercial Commercial Commercial General/Light Open Open Open Open Public and Industrial Space- Space- Space- Space Semi-public Use (RL.RM. General Office Visitor Conser- Parks& Shoreline Water RMH.RH) vation Recreation Recreation . ............... ..... . . .. ............... ... ...................... .. . . .... . ................. ....... .. ................... .... .................. ... . ................ .. A ........ ............................... ..... ... . ... .. ................... ........................................................... .... .::. Additionso ;..::.::.::.::.::.::.:.::.:::....::.::...... nonconformingstructures .......:.: .:::. . ... ............................................. ...:................::.:..:..:.....: ........:...::.....:... .:................ . ....... ................:......... .......................::.: .:......:.. ......... .................... . ..... ...... ... ......::.::..... ..:.:::.............. ..: at existing nonconforming .::::.:::::::::. .:..::.:::::::.......:.::..:. ... ...::.. ........ ::.::.. .:. ::.:::. .: 9 2 6.06 and setbacks. 3 ............................. . .. .... . ......... ...................................................................... ............ . . ......... ... . .. .... ................................ i ZA ZA Ambulance Services P Animal Boardin ..:. . .::: P IL Animal Hospitals PC C Automobile Washin "' "' PC .:::::.:.::::..:::. ....:. .. t a tended Automobile Wash ing 9 ZA unattended .... ... . . .. . .... ... ... ... .. . . .... .. Banks Savings an ZA ZA ZA a sand Sa s d 9 'v - Service Loans w Dn e U Se ice .::..:>. . ........ Banks and Savings a dPC ..::.::.... ..:.::. :. ::: :.::::::::.::. .:::::::. Loans sub'.to site re s. ::..:.:::....::..:...:.... .: . k Inns P PC PC Bed&Breakfast I s C Carts an kiosks ZA ZA ZA Cem etery PC ........................................ ............. ...................................................................... .......... ...... ........... ... ..... Clubs&Lodges ZA ZA ZA ZA .::::.:...:::...::.:::::.:..:..: ...::::...:. .......::... .. . .... ...,.:.... not in RL or RM .::.:::::.:.:.:...::::::::....:.:: . ..:. .:.. facilities in ZA ZA ZA . ...... :...:.:::....:..... .................................... .................. ...............:.......:.........::..........:.::.:::....:.::....::: . . Commercial Pub c G recreation a d park an areas. ......................... ..... Filmin ZA ... .. .::::::..:.:: Commercial ..... ........ ....... ..:... . .:.......... ....... ... .::.:::.::.:.... ... . .:.::.:.:.:::....::::::. ...:....:.::::::::::::.::.:.:. . :.:...:. ..... ...: Parking PC PC .:::.::. :.:::..:.......:::.:. . Commercial a ...... ............. ..... ...........:..: ........... ...... .: ..................: . ........................ ............... ............................ Commercial Parkin " , .:.:::::.:.....::::::..::::::::.:.:.::::...:::::::.::. . .: : .:::; PC PC PC .. 9 Facility c ....... .. ... . ................... .............................. ............ ............... .. .................. ........................... .. P PC PC P Commercial RecreationC C and Entertainment ..:...................... ...... ....... ..... .: Community ryand Human Service Facilities Condo Conversions nine ZA units or less Condo Conversions ten PC ............. .... .... ......; . ...............:...:.. units or more ...:: .................. ........ .. ........ ...... ... ......... .................. .... ............... ...... ...... ::.:. ..:...;:.;::.. ............................ .:............ Facilities PC PC .......:..:::............::............ Convalescent .......... .................... ... ... ....... .......................................................... ...... »::>::>:::: : ... .......................: lnstitution PC PC PC .::.. P..... Cultural ..... . Da Care Large Family ZA ...;::.:::.;:.;..;;.. .:. Y 9 IY ...... ... notin RL .......... ... ... . .. . . ......... ......... ..................... .......... .:................... ...:.::....:.::...... . .......... ................ .....:::. . ...... Da Care General ZA .::: .::::::::.. ..:.:.:.... PC PC ..... ..... n(not i RL .. Da Care General Where »:<: »::: : ZA ZA . :: ... . ........ Y »::. ... .:;; the space is 2,500 square ..::..: ...:::..... ..... .. .::.::. ..:..::::::.:::.::::::.: ..::::::::. .:::.:....::. :.:...... P 4 feet r ee o less Residential Commercial Commercial Commercial General/Light Open Open Open Open Public and Industrial . Space- Space- Space- Space Semi-public Use (RL,RM, General Office Visitor Conser- Parks& Shoreline Water RMH,RH vation Recreation Recreation Da Cara General Where the ace sgreater itha n space 2 500 square feet: ... .......... . .... ....... ........ .. .... .... ..... ......... .. ... .......... .......... ......... .::.::::.::::............:............. Da Care Large-Family ...........:::::::::: ZA ZA Y . .... : ...... Where the space is 2 500 .:. ......:......: .. . .... P .:::::::::::.. square feet or less .:...... ......:..................... D rLarge-FamilyPC PC a Ca a ................ Y . .... Where the space is renter P 9 thanr 2 500 square a feet: . . .. . ... . . . . . . . ... : . . :......: .. :: .......:.:.:.:::::::::::.::.::::.::::: ::. .::::::.: . . . .. .Develo Development of vacant A ZA ZA : : . . . .::::.:.::..:::: ... . .:.. . . :. .. :. land or initial construction f it in o bud s ......................... ......:.:::::.:::. .:... ......::. .:::.... Drug Abuse Centers PC .. ::..: .............;.......... . ..... Eating Drinking .....;:.::.......;:.;:.;:.;:.;:.;:: PC PC PC ;:::::;::::: ..:':::.;:.;:.::::;': . a n & ..........::::.:::::: ..:. ::.:::.::.::...::.::.::.::.:::.::.::.::.::.::.::.::.:.:: .::.::......... .::.::.:::.::.......... ............... . 9 9 .. Establishments with liv e .;..::.::.::::::::::::.: ............... ........... ..::.::::.::::.::::::::.. entertainment dancin .......::. ........ .. ...:::: .:::.;:::.: . Eating&Drinkin .......:.;:.;:..::.;: ZA ZA ZA ..... 9 9 . ........ .... ......: Establishments with Take- .. ... .::...:.::. . ... .............::..... .......::::::..; .......... .::::.::::::::::..:::.;.... out Service or more than .:::::::::.::::::::: ...:. 12 seats or that sell alcoholic beverages and are located within 300 feet of a R or PS zone school or public use.church, ....................... ... ... . ......... . . Eating&Drinkin ::..: ::.::.: PC .. ".........>:::<:> ........ ZA .... Zq..... 9 Establishments with or without take-out Service Emergency Health Care ZA ZA ZA ...... .:. 9 Y Where P the space is 2,500 square feet or less: EmergencyHe ith are PC PC PC a C Where the igreater e e e s aces P than 2 500 square feet: . .. ... . ..... . . . . ..:::.::. . Emergency Zq ...... ..:........: 9 Y Kitchens/Sheltersf o 2 500 square feet or less .. ..... . Emergency ..... ::::.:.: PC .:..::.:::.;:: 9 Y .:::::::.:::.:.::::::::::::::::::: .:...: ....:.>::::........ .:::: .. .. ........ .................. Kitchens Shelters of more than 2,500 square feet. Equestrian Centers PC PC FoodF i;<Beverage Sales ... ....: .:::::.:... ;:..............::.... ....::....:... e a e .. ...:::::::::..::...:::::.;:;:.;:.:.;:.;:: .:::::.:::::::::.:::..:. PC ..... . ..... ..... .. . ...... ........... .... Food i3<Beverage Sales of PC 9 more than 2r squa re e q feet. ee . ..;........ ......................;.;..........;. .........:.;...:.;..... .;;....... ....... Food&Bevera a Sales of ZA 9 ......................:. ...... 2,500 square feet or less ...:.. ........:.>:.:.; Residential Commercial Commercial Commercial General/Light Open Open Open Open Public and Industrial Space- Space- Space- Space Semi-public Use (RL,RM, General Office Visitor Conser- Parks& Shoreline Water RMH,RH vation Recreation Recreation ................ ....... ......... ............ ....................... ...... ...... ... ... Food&Beverage Sales ZA ZA ....... .::.::.::.::.::.:.:..::.:::.:::.::.::.::.::.::.::.::.::.::.::.::.::.:::.::.::.::.::.::.::.::.::.::.::...:... .......::.:: :.. 9 with I falcoholic saeo beverages era es located within 300 feet of a R or PS zone school church or public ......... ....... .:. ...... . ... ...... ....:.:.....................::.:........: :.. .......................... ... ......... .. ...:....................................:..:.::::.:::::::.:.::::. ..............::..:.::.::.:::::.::.:...:.::.::.::.::.::.::.::.::.:::.::.::.::.....:.::.::.::.::.::.... .... ...:.:..:...................... »:::: use »»>::>:.;.:.:.;. .. .:. ................ ......... Funeral&Internment ZA .:.::.::.:::.:::::....::.......::.::.. ry Se ices .::.:::.::.:.:.....:.:::.::.:.::.:::.......::.::.::.::.::.::.::.::.::.:. ........................ ....:.:..::::.:: .:..: .....:. ............ Government Offices ;::::::.;.:.::. ..::::>.>:.... :::::::.::::::::::::.:::.::::::.:.::::.:..::::::::::::.::::::::::::::::::::::::::... PC .. .......................................:..... . ... ........... ................................................. ..... ... ...................... ..... ...... Group Residential PC PC PC PC PC Heliports PC PC PC Hospitals PC PC PC ....................... ...... ....... .. . .. ........ ........ ............... ..... ....... .. ... ................... .. . ..:::.::.::.::.::.::.::.:..::.::...::.::.::.:::.::.::.::........::.::.......:::.:.::.:.::.:::::.::.:...............::.::...... .:::.::...::.::.:..:.:::.:::.:..:.:.....::.....:::... ...:::.:::::..::.:.... ..... Hospitals and Medical PC IL ...................... .:::::::.. ....:.::.... ..:::::::::::::::.::::::..:::::::: ................. ...... .. ..: ..:::: :: .::.:..:.. P .::.: ...... . .:::::::::::::::....:::::..::::.::..:.:::::.:::::::::::..:::::.:.. .... ::::::::::::.::::::.:.::.::. i , CI rncs ........... ................. ...... ... . .... ....................... Hotels Motels Timeshares PC PC Industry,Custom PC PC attended Indust Custom ZA ZA Industry, nt u at ended .. ............... .......... ... .................. ................................................. . ............... ... .... Laboratories Where the ... ............ .. .. ZA ZA .::.....:..: ..:.:.:::.::.::. ......:.::.:::.::.:..::......:.::.:....::.::.... space is 2 500 square feet P ....... ................. ..::.::::::::.:.. .:.:.::::::.. ....:.:::::::.:::::..::.:.::::::.::::..:::::::::..::. .. or less ...:.::::::::... . .. ..... .... .... .. ............. .... Laboratories Where the PC PC .. 9 space is renter than 2,500 P square feet:u e . Major Utilities PC PC PC PC PC PC ...... . .. . ......... . ::.::..::::.:..: >:: Manufactured Home Parks ZA .:........:.... ..............:. . Marina .......::::.. ..:..::.; ........ . ............ ............. .:..:............::::::..:... :....:..::...:::... :...::. PC Minor Utilities ZA ZA ZA Multifamily Residential PC PC N 10 or more units Multifamily Residential ZA PC N .. . .... :.....:...... ........ . .... . .. 5 9 units ... ........... ............. ........ Non-City Government .:::.::...:::...::.::.; G :::: :::.....................:.::..::........:...... ..:..: :. .. ...:::......... ... .:. :::. P tY ..::::::::::::::::::. .:::::.::::::::::::::::.:....:.::::. ...:::..:.. C Offices ............................ .............. ..... .............................. .............. ............... ................................ ........... . ... ...... ..... Non-City Maintenance& ..; ................::...:.... .::...: .... .........:.. : . P Y .::-: C Service F ilitie c ac s ..... .... . ..... .... ... ... .. Non-City «:.:::«:>::>:::>::;::::<:>:::: ... ::.....:>:::<::::.............. :. PC Y Vehicle/Equipment Sale s and Service . . ....... .. ... .. ...............:....:.....:.:....... Nurseries Zq ............ ..... ...:::::... ..... . ...:...::.:.:.... .:::.:.. .... ...... ................ .......:. «:>... Office Business &Prof. '::>::>:<::::::;::>::>::::::::::>::::>::>::::>::::>:::::`: PC PC sub'.to site re s. ......................... ......... :.. .:.:,.:::. ....:. ::.: : . .. ......:::.:..:::.....:.:::.::.:.:::.;;.: Park&Recreation Facilities .................................... . .. .:::::..... ::::>::::<:::::;>:::: P . ..................... C PC PC PC . ..... ... . . Park&Recreation ZA ZA ZA ................. ............ Commercial Faciliti es .................. .. ...... ......... ...........::. Pawn Shops q Residential Commercial Commercial Commercial General/Light Open Open Open Open Public and Industrial Space- Space- Space- Space Semi-public Use (RL,RM, General Office Visitor Conser- Parks 8 Shoreline Water RMH,RH) vation Recreation Recreation ....................... ............................ .................. .. ...... Personal Enrichment PC PC PC Services more than 2,500 ( . s .ft. ......... .......... Personal Enrichment ;:'.'.'::;;:::`:';::: ZA ZA .:::........... .: .... ... .:..:.;:.::.:.... . . ...................... .................... ............... Services o f25 q OOs .ft.or e less . ... .......... ...:.:... ............... ..................................... . ....... ... Personal Services(subject PC ......:;:.........::. .. .... .. ( ...:.:::.::.::.:::::::.:::::.::::.::...:::..:::::::::::::::::::..:..::.:.::::.. ..... ... ......... ..:... tosite re s . .... ........ ...... .. ..................... ........................ . »:; .. ... ....... ... .... . Pet Cemetery PC ..:......:...::.;.....:::::.::..::.:::..:::..::::::.:::::.. .: .: .......................... ...... . .. .......... Prima Health Care Where ZA ZA .. . ... .... ...... ....... Primary the square space is 2 500 s P q feet r e o less P Prima Health Care Where PC C Primary ..................... ......... ........... ..:................. .: :::. ::.... ...:....: the space is renter than ..... P 9 2 500 square feet: .. ....... ...................... ......................... ........... . .. . . .. ... . ........... .. .... Public Safety Facilities PC PC PC PC PC PC Real Estate I ZA ZA Z A ea Saes (temporary use .... .. ......... .. . . . ...::.. .. .. .. : : .. . .. ... :::. ::: : Z . : Recurring Swap Meets A........ Recycling rims use C P . .... ... . ... ................ ................ ............................. ... ........................... .............. ...............................................:. Religious AssemblyPC PC PC ::... PC....... : :..:::::.... :, . . : . . , . " " : .:: : .... .. . .. .: Religious Assembly C. rims use . .. . .. ..... . Religious Assembly . . .. .. . ... .. .. .. .: .. ...... . .. :: .seconds use Research&Development ZA ZA c P Services exceeding 2,500 square feet in a CO Zone orn s¢ in a G Zone a e C ......................... ................. ........... ........ ....... ... .... .................................... ....... .. ............ ... ......... ........... ...... . ..................:.;::. ...................... ...... . ...... ....................... .. .... .. Residential Alcohol PC .::.:::::.::::....:..::.:.:...:..::::.::. Recovery,General G ... ... .. . ... Residential Care General PC PC PC »:::::> ::. .::.::.:::.:::::::.::.::.::.::.::........... PC ......................... .... ..... ........................ . .... ........... .... . ......... . ............................ ... ... ... ...... Residential H tel PC PC o ............. .......... .......................... . .......... ... ................. ...... .... ...... .. .. ..... . ....... .. Schools with higher PC ( 9 e c o a curriculums) du ati n I rri ulums Schools Public or Private PC PC PC PC .. .......... .... .. . .. ..... Service P PC PC Se ce C Businesses "::':": PC PC ... Sex-oriented u ..................... ...... ... ........ .. ..... ..... .. .... ........ . . . . ........................ .................. ... ................. .. ...... ...... .. ..... . .. . ........................ ..................... ...... ... ......... ......... ...... ...... Single Room Occupancy PC "''"': :'::::: PC .:.:. .:::::::::::.::.::::::::::.:. .:..::::.::::.:::::::.: ::.:::.::..:::::::::::::::::.:..::::.:..::::...::::.:...::::::. .......... ......... . Swap Meets Indoor Flea PC PC P ..... .:::. . :. :.:. Markets .... ,: .. .. ..: : . ... .. . . ... .... . ............:..:.:.........:... .......... ... ............... Tattoo Establishments .. . :PC .:.. ..: . :.. .. . .: : :: :.. : :. .: .. .:: ... .. .. .Vehicle Equip.Repair PC . Limited ....... .. ........... ............................................. ............ .............. ............. . ......................... . ........... . .. ............. ... ...... ... . ............................. Vehicle Equip.Sales& PC ...:.:.,..:. ......... :. .:::.:.:::.: .::.....:.:.:::...:.:. .......::....::.. .......... . .:.. ............................ ... Rentals .... ..... ........ Vehicle Equip.Sales& ","„""".'.. " :. ;:«>;;:;:. :: . PC ........ q P• ................ . ................. .. Service _t. . . . • Special Situations Requiring a Conditional Use Permit: . Coastal Commission Development on Sub- Exceptions to height Home Occupation Zone standard lots(section limits(section 230.72) Residential(section . section 216.08 230.64 230.12 ..................... ... ... ............................................ .. . ................................ ..... .. ....................... ... ..... ........... ......................................................... Certainprincipal uses and ZA structures requiring special mitigation measures Development on A o substandard lots. a Building height exceed ing 9 ZA the maximum permitted . ...... .... ............. .. ................ .... .::::::::::::.::::.:::: .:.... Home instruction or service ZA -occupations . Parking In-lieu Affordable Oil Overlay Electronic Flood Plain Flood Plain Interim Alterations to a Payments Housing District Reader-boards 2 Sub- 1 Sub- Study Nonconforming Structure (section 231.10) Incentives (section 220.14) (section 233.12) District District District or Use(section 236.06) (section 230.14) (section (section (section 222.12.E) 222.12.A 223.0E .......... ...... ......... ........................... . . ... ............... ... .................................................... .... ........... ............. .. ............... . .... ................................................. . .................................................... .................... .... ............................................................ ..... . Parkin requirements met b PC 9 q Y payment fan`in-lieu"fee 0 ..... ... .................... .............. .. Density Bonus: Five S or more PC dwellingunits ......................... . .:::::: : :.. . .. .: . ::..::.::::.:......:... .:: .Drilling and an oil operation . ::::.:::::::.::: PC .. .::::::: ::. ::::.:: .: . .. . :. . . . . . . . .... : :: .: Electronic readerboar s PC subject UP PSP 8 DRB.ub e C ... ............. Newstructures n »::::.>. ..::::::>:.. .;:: ><... .::.;:.:.::.;:.;:.::: .::.::.::::.:.:.:. .;:.::..::.::.::.:.:.::::::..:.::.;:.:..... .:::.:. ...: ... .: .. . :.:.:: e and .::::. ... . PC ... .::::.::::::...::::.:::: improvements permitted b P P Y thebase district. ........................................ ...... .... .. ............................ ..:: .::. .:. ..... ... ...::::....::..: . .:. :::::::.::::::::.::::... ...::.....:.::::::.:.:::...:....::..::. ...:::...:: . which . ....;:.::.;:.: PC Temporary structures c P rY .. ...... can be reads removed in the ............:.. mavailablet r ti e after flood warning. areas .:::: .:.:::.:.:.::::::::::...:::::.: :::::.:..:.:::::::::::. .:.:.:.. .... ... .:...::.;::.;::.:.:::::...............:::. ::::::.:::.::.::::: .::::::::.:: 9 . .::.....:.:.:.:.:::.::.::.:..::.::.::.::.::.::.::.::.::.::.:::.::.::.::.::::.::.::.:.::.::.::.:::.::.:::.::.::.::......... .. .... . ..:.::::::..:.:::::.:::......::::::::::..::. n parks that not have and a s ado 0 P subs permanent rmanent e structures. .:...:::::...:.:::::::::.::::.:::::::::::.:.:::::::.:::..::::........ ..:.. ..... .::. ...::::::. ...:: ... :::::::.:::....:.... ... New or expanded use in an »:::::.: PC .... . . .::.:::::::.:.. :.::.::. e .. P .:.........:....::::.::.::.:.:::::::::::.. .:::::::.::::.::::...:::::::::::::::....... .....: ..... interimt district.e study ....................................... . ... ... . ................................................. .. ... ....... ..... . .......... .. . Enlargement or alteration to PC 9 the exterior of a nonconforming use structure. f rmin t ture Joint use parkin section 231.0E . Joint Use Parking or a reduction in the total ZA or PC number of required spaces Residential Commercial Commercial Commercial General/Light Open Open Open Open Public and Industrial Space- Space- Space- Space Semi-public Use (RL,RM, General Office Visitor Conser- Parks L Shoreline Water. RMH,RH) vation —Recreation Recreation .................... . ................ ....... ........................... ........................ .. ............ ..... ......................... ..................... ........................... ............ ............... ...................................... . ............. .................................................... ... . ........ ................................... ....................................... .......... ................................ ................. .............. .. ........................ ................ ......................... ............................... .... ........... ................................. ....................... .................. .. ....................................... ........... ... ............................................................................ ......... .......... ... .... ............................... ..... .. ........ . ...................... ............ ....... ............. .......................... ..................... . ............................................................................. Vehicle Storage(IL Zone) ............... .......................... ZA ..... .......... ......... ............ . ..... ... ...................... ..... . . ................. .......... ..... .............. ........... .. . .... ........... ....... . .. ... .. .............. ....... . . . ............ .. ... ........... ......... .......... . . . . .................... ........... .. ......... ...... . .... ........... .. ..... .... .... ....... ....... ..... . .. ..... ............ .. ......... ... ........ .................. ......... .......... ........ .. ............. . . . ...... ..... ....... ..... .......... ........... ....... .............. .... ............... ................ Visitor Accommodations ..................... .......... . ... ....... ............... ................................ .... ..... ............... .... ............ ....... ......... ........... PC ............................................................. ........................... ..................... ..... ................ ....................... .................... . .......................... .................... ...... ................... ................ ....... . ...... . . ...... ......... ............ .... .... .. ...... .. ........ .......... ... ...... .. .... . ................................... .................... ................. .................... ......... . ... ........ ............... ............. .................................. ........ ............ 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Impediment Study Scope of Work & Sample Studies SEDWAY GROUP Real Estate and Urban Economics June 25, 1997 Ms. Melanie Fallon �Wr. avid-Biggs--- City of Huntington Beach P.O. Box 190 Huntington Beach, CA 92648 Re: Proposal to Conduct an Impediment Elimination Study for the City of Huntington Beach Dear Melanie and David: Sedway Group is pleased to submit, on behalf of ourselves and Sedway Consulting,the enclosed proposal to review and analyze possible impediments to development in the permitting processes of Huntington Beach. The enclosed proposal includes the scope of work and professional fee estimate for Sedway Group and Sedway Consulting.In addition,the work products for two similar assignments are enclosed for your review. Thank you for providing us with the opportunity to submit this proposal, and we look forward to working with the City of Huntington Beach. Sincerely, 4Ln M. Sedway, CRE Terr R. Margerum Principal Principal LMS:TRM/nam Enclosure C A W P D OC S\P RO P O S AL\2 73 96.P 02 SEDWAY GROUP Real Estate and Urban Economics SCOPE OF SERVICES The consulting team will consist of Sedway Group and Sedway Consulting. Sedway Group will manage the overall project, design and implement the survey, and conduct the analysis on development fees; Sedway Consulting will develop survey questions regarding the CEQA analysis and will analyze the City's conditional use permits process.The objectives of this study are to assist the City of Huntington Beach, in the context of economically competitive communities,to evaluate the effects of its current permitting processes and to draft actual needed changes in ordinances, guidelines, and procedures. The following describes the scope of services and indicates which firm will be involved in each task. OVERALL STUDY DESIGN, SURVEY DESIGN,AND SURVEY IMPLEMENTATION Discussion with City Staff and Study Design Sedway Group will discuss with City staff the goals and objectives for the study,project coordination, schedule, refinements to the work program,and proposed method of obtaining information from other cities. Sedway Group will work closely with City staff to identify the cities to be included in the survey. Select cities include Costa Mesa,Irvine,Fountain Valley,Newport Beach,Cypress,Westminster,Long Beach,and Lake Forest. Sedway Consulting will have similar issues to discuss with the City.Therefore, this initial conversation may include representatives from the entire consulting team and City staff to discuss all pertinent issues concerning the Impediment Study(ies). Survey Design Sedway Group will be responsible for developing survey questions regarding development fees. In addition,Sedway Group will coordinate the process of collecting and integrating appropriate conditional use permit (CUP) and CEQA questions to be provided by Sedway Consulting. Sedway Group will ensure that the three distinct topics covered in the questionnaire are consistent and comprehensive with respect to the goals of this assignment. Development fees, including school impact,traffic mitigation, street improvement,police and fire services,business license,utility hook-up,water hook-up,park and recreation, and cultural impact, will be included in the survey. For the purposes of the survey, other development costs such as ongoing assessment district payments, or relative cost of land, labor or housing will not be analyzed. Survey Implementation Sedway Group will conduct surveys of the selected cities and prominent developers that are active in Huntington Beach and similar communities. Sedway Group will contact these cities and developers through an initial letter explaining the purpose of the survey,a copy of the questionnaire for review,and an offer to provide them with a copy of the final report. Subsequently, Sedway Group will schedule and conduct telephone interviews with appropriate select city and developer staff. Sedway Group will work closely with Sedway Consulting during the process of these phone interviews to further refine the questionnaire, if necessary, and to discuss initial survey responses. Sedway Group is prepared to conduct in-person interviews, if this is the only way to secure responses. However, this would considerably increase the proposed budget for this study. Results of the survey will be discussed and distributed to the consulting team. 1 SEDWAY GROUP Real Estate and Urban Economics DEVELOPMENT FEE ANALYSIS Analysis Sedway Group will analyze the results of the survey pertaining to development fees. Sedway Group will analyze commercial,residential,and industrial development fees in comparable cities to determine the range of and typical one-time and ongoing fee structures. Sedway Group will provide a summary of the survey in matrix form for one-time and recurring fees, comparing Huntington Beach's fees to those identified in other similar communities.Further,we will attempt to ascertain what impact fees may have had on land values or commercial development trends. Literature and Case Study Research Regarding Development Fee Impacts In this task, Sedway Group will augment the findings of the survey by reviewing and analyzing similar planning studies conducted on development fees. This task will involve contacting organizations such as the State Trade and Commerce Agency's Department of Economic Research,the California Local Economic Development Organization(CALED),and other similar organizations as well as performing a literature search for articles that address the consequences and impacts faced by other cities with significant development fees. The goal of this task is to gain further insights regarding the likely impacts the existing fees have on economic development and business retention. Fiscal Impacts (Optional) As an optional task, Sedway Group could provide the City with an analysis of the fiscal and employment impacts associated with different types of commercial development in Huntington Beach. As part of this analysis, we would assess the general fiscal implications of commercial development based on average revenues currently collected for various categories of commercial development and compare that with the cost of providing public services.The purpose of this task.would be to determine if the City's fee structure currently results in a net fiscal benefit or deficit to the General Fund. To the extent that we determine that fees are insufficient to cover costs, this document might be useful in marketing the revised fees to the City Council,Chamber of Commerce, and development community. Report and Presentation of Findings on Development Fees Based on survey results and the literature search, Sedway Group will produce a concise report presenting our findings and recommendations regarding development fees. Sedway Group will be available for two meetings to present the findings of our analysis and discuss the report. Once the consulting team has completed the analysis of all three parts of the study — review of development fees(Sedway Group),conditional use permits(Sedway Consulting),and CEQA guidelines (to be determined)—Sedway Group will coordinate the production of a comprehensive report encom- passing all three sections. This report will include a summary of the survey findings, a discussion of these findings and their relevance to Huntington Beach's current permitting processes, and specific recommendations addressing each section of the study. 2 SEDWAY GROUP Real Estate and Urban Economics CONDITIONAL USE PERMIT ANALYSIS Assessment The purpose of the assessment phase is to analyze the desirability of the numerous CUP requirements, both as compared to other cities and as applied to Huntington Beach. This will include the following tasks. Discussion with Staff and Survey Design. Sedway Consulting will study the Huntington Beach Zoning and Subdivision Ordinances and the existing list of uses or situations requiring a CUP. Sedway Consulting will then discuss with the staff of the Department of Community Development issues concerning project coordination, schedule, refinements to the work program, and proposed method of obtaining information from other cities.This initial conversation may include representatives from the entire consulting team and City staff to discuss all pertinent issues concerning the Impediment Elimination Study. Develop Survey Questions. Unless other cities have recently analyzed their use of CUPS,they may not be able to provide comprehensive information that is useful to this study. The proposed approach is to identify a small number of exemplar uses in Huntington Beach that are both common and candidates to be handled adequately through a different process.These uses will then form the basis for some of the questions in the survey. Sedway Consulting will develop the CUP-related questions to be used in the multipurpose survey. Officials from the selected cities will be asked how they handle the selected uses identified above and the"special situations" contained in the existing list;of uses or situations requiring a CUP. They also will be asked to provide a matrix of uses/regulations or a copy of their zoning ordinances. Survey. Sedway Group will conduct the survey of how other cities handle CUPs. District/Use Matrix Concurrent with the survey, Sedway Consulting will prepare a complete Huntington Beach District/Use Matrix based on the City's Zoning and Subdivision Ordinance. This matrix will have a dual purpose — it will be used in the subsequent analysis of CUPS and will be available immediately as a tool for the staff and public. Analysis. Sedway Consulting will analyze the results of the survey, including the written material provided by the select cities, and the Huntington Beach District/Use Matrix. Sedway Consulting will analyze which conditional uses should retain the existing CUP procedure,which should be changed to a CUP approved by the Zoning Administrator,which should be changed to a non-discretionary permit with approval standards (a type of "Additional Provisions"), and which should be changed to a permitted use. Consultants will present this analysis in Memorandum No. 1, Initial Analysis. Proposals for Changes to CUPS This phase is to present preliminary information to the City staff on how the system of conditional uses might be changed. It will include the following tasks. Meeting with City Staff. Sedway Consulting will meet with the staff of the Department of Community Development to discuss the results of the Assessment Phase's initial analysis.As part of this discussion, 3 SEDWAY GROUP Real Estate and Urban Economics the consultants and staff will review and refine the work program, including the schedule. As part of this meeting,consultants will review standard conditions and other conditions imposed by the City upon different types of CU-Ps.This latter effort will require assistance from City staff in obtaining the needed information. Draft Recommendations. Based on the meeting and analysis, Sedway Consulting will prepare a set of recommendations on what to do with all current conditional uses.This effort will build upon the Initial Analysis by making the recommendations more specific and by describing the conditions or standards to be applied to different uses or in special situations. This work will culminate in Memorandum No. 2, Background and Recommendations (draft), that can be used later in the public review process. Memorandum No.2 will be the basis for the conditional use permit section of the comprehensive report to be produced by Sedway Group. Meeting with Staff. Sedway Consulting will meet with staff to discuss Memorandum No. 2. Recommendations and Amendments The purpose of the final phase is to develop the final recommendations and amendments to be considered by the City for adoption. Refine Recommendations. If modifications are required, consultants will prepare Memorandum No. 3,Background and Recommendations(final). Because of the possibly controversial nature of some of the recommendations,we recommend that the Background and Recommendations report accompany the proposed amendments, instead of being distributed in advance of the amendments, so that two separate reviews are not required and so that an easier understanding of the relationship between need and proposal may be made. - Draft Proposed Amendment Language. Sedway Consulting will draft the appropriate amendments, based on the final Background and Recommendations report, in a format consistent with the current Zoning and Subdivision Ordinance. Final Proposed Amendment Language. After review of the draft, including review by the City Attorney, Sedway Consulting will prepare the final proposed amendments. Develop Survey Questions Regarding CEQA Guidelines In addition to conducting the analysis of conditional use permits, Sedway Consulting will develop CEQA-related questions to be included in the survey.Analysis and recommendations concerning CEQA guidelines are not included in this scope of work. Additional Activities Because of the difficulty of predicting what further consultant services will be required,the consulting team proposes that any additional work or attendance at meetings or hearings be done on a time and expenses basis for each of the consulting team members. 4 SEDWAY GROUP Real Estate and Urban Economics TIMEFRAME AND PROFESSIONAL FEES The report will be completed within ten weeks from our receipt of your written authorization to proceed, assuming that the information and data needed are readily available. If data provided by you change during the course of the project, these factors will be included in the analysis, but may result in extra professional fees, billed at our professional hourly rates, and could delay report completion. We will advise you if this becomes the case. The budget required for Sedway Group and Sedway Consulting's professional services is a fixed fee of $63,000, plus reimbursable expenses for travel (mileage, parking and tolls), delivery services, facsimile machine use,photographs, production, and long-distance telephone calls. The fee includes three copies of the report.Additional copies will be charged at current reproduction rates.Two meetings for both Sedway Group and Sedway Consulting are included in the estimated fees. A professional fees estimate for this project is attached for your review.Additional meetings will be billed at our current hourly rates summarized as follows: Professional Fees* Per Hour Lynn M. Sedway, CRE $160 Other Principals $130-$150 Managers $1104125 Senior Associates $85-$95 Associates $70 Analysts $55 Word Processors $45 Administrative $45 *These rates represent a 10 to 25 percent discount from our private- sector professional rates. Invoices will be sent monthly and are due within 30 days.Any unpaid balance is due upon delivery of the final work product. Sedway Group reserves the right to charge late fees on invoices not paid within 30 days at the rate of 18 percent per annum.In the event of a legal dispute, attorneys' fees will be paid by the non-prevailing party. Questions about billings must be addressed in writing to Sedway Group within 21 days of date of invoice. The absence of any such inquiries shall be deemed acknowledgment of Sedway Group's services and agreement with Sedway Group's charges for such services. If a dispute arises under this agreement,the prevailing party in such dispute shall be entitled to reasonable attorney's fees and costs of suit. This scope of services does not cover professional services necessary in the event of litigation.Any such services necessary, including but not limited to preparation and testimony, will be billed at Sedway Group's then-current professional rates for such services. During the course of this assignment, if progress is delayed due to reasons beyond our control, it will be necessary to charge for any excess work at our then-current hourly rates. Such excess work could result from inefficiencies such as assessing changes in market conditions,updating research, and other factors. SEDWAY GROUP Real Estate and Urban Economics You may terminate the services of Sedway Group at any time by giving written notice. Sedway Group may withdraw from this assignment at any time by giving written notice. In either such event, Sedway Group will be paid based upon time expended and our professional rates indicated above, and you will reimburse Sedway Group for reimbursable expenses related to the assignment. All information and data received from Sedway Group,whether presented orally or in writing, shall be solely for your use and are not to be relied upon by any third party or parties without the prior written approval of Sedway Group. Sedway Group disclaims any and all responsibility to third parties deriving from the use of said information or data. Sedway Group is pleased to submit this proposal for your review.We look forward to working with the City of Huntington Beach. C:\W PDOCS\PROPOSAL\27396.P02 6 CONSULTING TEAM PROFESSIONAL FEES ESTIMATE CITY OF HUNTINGTON BEACH IMPEDIMENT ELIMINATION STUDY .as k.:.: o; C st Sedway Group Overall Study Design, Survey Design, and Survey Implementation 12,120 Development Fee Analysis 11,620 Report and Presentation of Findings on Development Fees 7,240 • Limited Fiscal Impact Analysis(Optional) 5,000 Comprehensive Final Report 6,000 Total Sedway Group(does not include optional Fiscal Impact) $36,980 Sedway Consulting Assessment 6,420 Input to Survey Design 2,000 Proposals for Change to CUPs 7,840 Recommendations and Amendments 6,880 Presentations 2.880 Total Sedway Consulting $26,020 Total Project Budget(does not include reimbursable expenses) $63,000 Chapter VII of the Morgan Hill report is provided for your review. � i • ' (7�edway &Associates ' Real Estate Economics ' ASSESSMENT OF MORGAN HILL'S ECONOMIC BASE EXPANSION POTENTIAL ' Prepared for: THE CITY OF MORGAN HILL Prepared by: ' SEDWAY & ASSOCIATES ' Date of Report: MAY 8, 1992 _1 Three Embarcadero Center Tel(415)781-8900 Suite 1150 Fax(415)781-8118 San Francisco California 94111 � • i ' Sedway&Associates ' Real Estate Economics May 8, 1992 ' Mr. David C. Biggs Economic Development Director City of Morgan Hill ' 17555 Peak Avenue Morgan Hill, CA 95037 Dear Mr. Biggs: Sedway & Associates (S&A) is pleased to submit our final study assessing Morgan Hill's economic base expansion potential. For this assignment, S&A addressed three primary tasks. First, S&A assessed the potential for industrial expansion in the City. Our findings indicate that Morgan Hill should focus on attracting new businesses from San Jose and, secondarily, from other Silicon Valley locations and nearby communities to the south of Morgan Hill. Many ' smaller high-tech and low-tech businesses are thriving in Morgan Hill. On the other hand, the City is perceived to have limited ability to attract large high-tech industrial firms. Second, S&A assessed the potential for new retail development in Morgan Hill based on local retail support potential as well as support from nearby and regional markets. Findings in this report show that existing retail stores in Morgan Hill attract more than their share of convenience goods dollars, while experiencing a relative loss in comparison goods dollars. Assuming that Morgan Hill's residential growth control ordinance is maintained, S&A estimates that Morgan Hill can support an additional 549,000 gross square feet of retail space by 1995, with the greatest demand expected for general merchandise and other retail stores. Lastly, S&A assessed select City land use policies and made recommendations pertaining to Morgan Hill's light industrial, retail, and residential land use policies and provided an overview of development impact fees in Morgan Hill and compared these fees with those charged in other competitive cities such as San Jose, Gilroy, and Santa Clara. Our findings indicate that Morgan Hill's current fees levied on light industrial projects are already higher than fees in San Jose and Gilroy. Additional fee increases could result in projects choosing to locate in San Jose, Gilroy, or other locations. For retail development, Morgan Hill's development impact fees are more ' supportable for convenience goods that are more commonly located at neighborhood and smaller community centers, but may not be supportable for comparison goods located at power centers, regional malls, and destinational retail centers. 1 Three Embarcadero Center Tel(415)781-8900 Suite 1150 Fax(415)781-8118 San Francisco California 94111 Mr. David Biggs May 8, 1992 ' Page 2 ' We have enjoyed working with you on this important project. Please call if you have any questions or comments regarding this report. ' Sincerely, Lynn M. Sedway, CRE Amy L. Herman President Vice President LMS/ALH:nam Attachments c AmportAmo[gh i l 1.i02 TABLE OF CONTENTS 1 I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ' H. EXECUTIVE SUMMARY OF FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . .Regional Overview 4 Industrial Market Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1 Firm Relocation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Retail Market Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Assessment of Select City Land Use and Development Policies . . . . . . . . . . . 9 Light Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ' Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 III. REGIONAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ' Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Demographic and Employment Characteristics . . . . . . . . . . . . . . . . . . . . . 15 Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ' Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Housing Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Growth Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 IV. INDUSTRIAL MARKET ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . 20 ' Industrial Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Market Area 20 General Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Types of Industrial Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Morgan Hill's Industrial Composition 23 Light Industrial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ' Warehouse Overview : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 26 R&D Overview 27 Morgan Hill Industrial Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 ' Cochrane Road Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 South of Dunne Avenue . 32 Industrial Land Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Surrounding Development Potential 34 Edenvale 34 Coyote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . 35 ' Implications for Morgan Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Morgan Hill Industrial Users 36 Existing Users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 ' Planned Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 . . . . Potential to Attract New Users . . . . . . . . . . . . . . . . . . 39 iii .1 ' V. FIRM RELOCATION ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 National Survey of Firm Relocation Patterns . . . . . . . . . . . . . . . . . . . . . . 42 ' Firm Movement Patterns 42 Relocation Criteria 42 Survey Relevancy to Morgan Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 VI. RETAIL MARKET ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . . 48 Market Area Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Morgan Hill Market Area . . . . . . . . . . . . . . . . . . . 48 Market Area by Type of Good . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Overview of Retail Center Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Market Area Demographic Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Household Growth Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 ' Median Household Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Existing Retail Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Morgan Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Gilroy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 South San Jose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 ' Hollister . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Implications of Competitive Supply . . . . . . . . . . . . . . . . . . . . . . . . 60 Planned Retail Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 ' Taxable Retail Sales Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Retail Sales Leakage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 ' Retail Demand Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Supportable Retail Development: Maintain Growth Controls 68 Supportable Retail Development: No Growth Control . . . . . . . . . . . . 71 Retail Implications for Morgan Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Prospective Retailer Identification 72 Major Retailer Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 iConclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 VII. ASSESSMENT OF SELECT CITY LAND USE AND DEVELOPMENT POLICIES . . . . . . . . . . . . . . . . . . . . . . . 77 . . . . . . . . . . . . . . . . . . . Industrial and Commercial Land Use Designations 77 Industrial Land Use Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Commercial Land Use Controls . . . . . . . . . . . . . . . . . . . . . . . . . . 83 City Approvals and Related Processes . 85 Sewage Allocation Process . . . . . . . . . . . . . . . . . . . . . . . . .' . . . . . . . . 85 ' Residential Development Control System . . . . . . . . . . . . . . . . . . . . . . . . . 86 Recent Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 The RDcs Allotment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 ' Future Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 iv 1 • • 1 Impact and Utility Connection Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Light Industrial (50,000-Square-Foot Building) . . . . . . . . . . . . . . . . . 96 1 Retail (50,000-Square-Foot Discount Department Store) 96 Residential (50 Single-Family Homes, Each 2,000 Square Feet) . 97 Residential (100 Single-Family Homes, Each 1,500 Square Feet) . . . . . . 97 1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Retail Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 i 1 1 1 1 1 1 v . 1 LIST OF TABLES AND FIGURES ' Table III-1: Selected Commute Times to Morgan Hill . . . . . . . . . . . . . . . . . . . . . 14 Table III-2: Select Demographic Characteristics 15 Table III-3: Sectoral Distribution of Employment . . . . . . . . . . . . . . . . . . . . . . . . 16 Table IV-1: Distribution of Occupied Speculative Industrial Space . . . . . . . . . . . . . 23 Table IV-2: Industrial Vacancy Rates 24 Table IV-3: Speculative Light Industrial and Warehouse Markets . . . . . . . . . . . . . . 25 t Table IV-4: Speculative R&D Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Table IV-5: Industrial Areas, City of Morgan Hill . . . . . . . . . . . . . . . 31 Table IV-6: Largest Employers in Morgan Hill . . . . . . . . . . . . . . . . . . . . . . . . . 37 ' Table IV-7: Planned and Proposed Industrial Developments in Morgan Hill . . . . . . . . 38 Table V-1: Pull Factors . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . 43 Table VI-1: Demographic Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Table VI-2: Select Competitive Retail Projects 57 Table VI-3: Summary of Under Construction and Planned Retail Centers . . . . . . . . . 61 Table VI-4: Taxable Retail Sales Trends (1998-1990) . . . . . . . . . . . . . . . . . . . . . 64 Table VI-5: Summary of Taxable Retail Sales Trends . . . . . . . . . . . . . . . . . . . . . 65 Table VI-6: Summary Leakage Analysis (in millions) . . . . . . . . . . . . . . . . . . . . . 67 Table VI-7: Summary of Projected Supportable Retail Space . . . . . . . . . . . . . . . . . 69 Table VI-8: Projected Retail Demand versus Planned Supply . . . . . . . . . . . . . . . . . 70 Table VI-9: Projected Retail Demand versus Planned Supply . . . . . . . . . . . . . . . . . 71 Table VI-10: List of Potential Retail Tenants for Morgan Hill . . . . . . . . . . . . . . . . 73 ' Table VII-1: Inventory of Land Zoned for Industrial and Commercial/Office Uses . . . . 77 Table VII-2a: Industrial Development Parameters 78 ' Table VII-2b: Inventory of Industrial Land by Zoning Category . . . . . . . . . . . . . . . 79 Table VII-3: Analysis of General and Light Industrial Zoning District Guidelines . 81 Table VII-4: Estimated Housing Unit Growth . . . . . . . . . . . . . . . . . . . . . . . . . . 88 ' Table VII-5: Annual Average Home Prices, Single-Family Detached Units . 89 Table VII-6: Projected Residential Growth, 1990-2005 . . . . . . . . . ... . . . . . . . . 94 Table VII-7: Approximate Impact and Utility Connection Fees . . . . . . . . . . . . . . . 1 Table VII-8: Residential Development Fee Survey . . . . . . . . . . . . . . . . . . . . . . . 99 Figure III-1: Regional Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure III-2: Average Housing Unit Sales Price . . . . . . . . . . . . . . . . . . . . . . . . . 18 Figure V-1: Top Ten Pull Factors 44 Figure V-2: Top 10 Push Factors . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Figure VI-1: Primary Market Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Figure VII-1: Historical Average Sales Price, Single-Family Detached Homes 90 ' Appendices Retail Appendix Project Team ' Assumptions and General Limiting Conditions vi ' VII. ASSESSMENT OF SELECT CITY LAND USE AND DEVELOPMENT POLICIES This section of the report provides an assessment of select City of Morgan Hill land use and development policies as they relate to the City's development potential and prospects for new ' development. This section further provides information regarding the following: residential home prices and how they may be affected by the City's residential growth control policies; and development fees in Morgan Hill compared to other, primarily Santa Clara County locations. The primary purpose of this section is to provide insight into Morgan Hill's land availability for new development and competitive advantages and disadvantages as a business location. ' Research for this section involved examination of the City of Morgan Hill's General Plan and Planning and Land Use Codes, information provided by City representatives, discussions with planning and building department officials in nearby cities, discussions with commercial brokers and area developers, and review of materials prepared by residential real estate brokers and consultants to other South Bay communities. ' INDUSTRIAL AND COMMERCIAL LAND USE DESIGNATIONS According to figures recently compiled by Morgan Hill City representatives, Morgan Hill has approximately 1,600 acres zoned for industrial and commercial/office development (see Table VII-1). This acreage is split almost equally between the two uses, with 803.5 acres zoned for industrial development and 804 acres zoned for commercial/office development. ' Of Morgan Hill's land zoned for industrial and commercial/office development, approximately g P � PP Y ' one-third is already developed. The pattern of development, however, is not parallel. Only approximately one-fourth of all industrial land is developed while more than one-third of all commercial/office land is developed. Table VII-1: Inventory of Land Zoned for Industrial and Commercial/Office Uses N ' City of Morgan Hill Total Developed Undeveloped ' Land Use (acres) (acres) Acres Percent ........:.:. ...:::... ........ Devetope ..... ....:..:: "M.:._...::....... a Industrial 199.3 604.2 803.5 25% Commercial/Office 287.0 517.0 804.0 36% Total 486.3 1,121.2 1,607.5 30% ' (*) Figures may not reflect the most recent zoning changes. Further, figures include only land within the City limits. ' Sources: City of Morgan Hill; Sedway & Associates. ' 77 The following section provides comments regarding Morgan Hill's existing distribution of undeveloped land by land use designation as well as select development criteria. The purpose ' of these comments is to relate the industrial and retail market assessments to Morgan Hill's prevailing land use policies and to aid Morgan Hill's development of future growth-oriented land use policy decisions. Industrial Land Use Controls ' Morgan Hill has four types of industrial zoning, as follows: general industrial; light industrial; office industrial; and campus industrial. As established by Morgan Hill's zoning code, the basic development parameters for these zoning districts are presented in Table VII-2a. ' Table VII-2a: Industrial Development Parameters* City of Morgan Hill MG ML MO 1VIC. ' Cr�tena General` Ught Office Campus IndustriaC Indusfrial Industrial Tndustria! Setbacks Front 30 40 40 50 Rear 30 20 20 50 ' Side 30 10 10 50 Minimum Lot Size ' Square Feet 40,000 40,000 40,000 20 acres Dimensions 150' x 200' 100' x 100' 100' x 100' 300' x 300' Maximum Coverage ' Coverage 60% 50 40% 20 Height Resn ictions Max. Height 50' 50-T 37/3 stories 35'/3 stories *An additional PUD zoning classification is available. Requirements for land in industrial areas with this zoning generally correspond to the requirements in ML and MO zones. Sources: City of Morgan Hill Planning and Zoning Codes. The current inventory of Morgan Hill's industrial land by zoning category is presented in Table VII-2b. These figures indicate that, relative to their representation in Morgan Hill's existing ' industrial market, there appears to be a disproportionate amount of vacant land zoned for campus 78 • industrial users and an insufficient amount of vacant land designated for general industrial type users. These findings also conform with S&A's expectations regarding the type of industrial ' users most likely to be attracted to Morgan Hill, especially in the short to mid term. ' Table VII-2b: Inventory of Industrial Land by Zoning Category City of Morgan Hill April 1992 ::::.:....:: avlG MI. MO MC PUD ;:. .: ..... General Light Office Campus Planned Total Industrial_ Tn.iustrial. Y.ndustrial Industrial Unit: Development Built 38.0 103.1 0 1.7 56.5 199.3 Vacant 21.3 143.3 38.7 76.6 324.3 604.2 Total 59.3 246.4 38.7 78.3 380.8 803.5 ' Percent of City 7.4% 30.7% 4.8% 9.7% 47.4% -- Industrial Land Sources: City of Morgan Hill, April 1992; Sedway & Associates. ' S&A's evaluation of Morgan Hill's industrial land use controls revealed three major areas that merit reconsideration and possible revision. Specifically, S&A recommends changes to minimum lot sizes, setback requirements and the amount of land with the Campus Industrial Zoning ' classification, as detailed below. Additional comments are provided regarding the City's MO zone. These issues were selected based upon their relationship to S&A's market findings and the impact of Morgan Hill's controls vis-a-vis its competitive locational advantage to surrounding ' cities. S&A further examined Morgan Hill's parking requirements in industrial zones. As currently formulated, these requirements were deemed to be reasonable given prevailing market demands. ' Minimum Lot Size. As presented in Table VII-2a, the minimum lot size for industrial development in Morgan Hill is 40,000 square feet (for general industrial [MG], light industrial ' [ML], and office industrial [MO] zoning). S&A believes this minimum lot size should be reduced in order to provide more flexibility for prospective industrial users. As stated in Section V, Morgan Hill's natural market is likely to be comprised of relatively small, entrepreneurial users whose proprietors live locally. A minimum lot size of 40,000 square feet would support more industrial space than typically required by small, start-up firms seeking to own the property they occupy. Therefore, such firms cannot readily be accommodated in Morgan Hill and must ' go elsewhere to find a favorable business location. S&A reviewed the prevailing zoning guidelines in select Santa Clara County communities to provide a comparison with Morgan Hill's guidelines for general and light industrial uses. These 79 ' findings are presented in Table VII-3 (office industrial uses were explicitly excluded from the presentation and, of the surveyed cities, only San Jose has a zoning category somewhat comparable to Morgan Hill's campus industrial zoning category). Of the other cities examined, ' only Mountain View has minimum lot sizes up to 40,000 square feet, with a range provided for general industrial users. Specifically, the minimum lot sizes for general industrial and light ' industrial uses are as follows: • Sunnyvale, 22,500 square feet for both general and light industrial uses; ' • Mountain View, 20,000 to 40,000 square feet for general industrial and 40,000 square feet for light industrial; • Santa Clara, 20,000 square feet for both general and light industrial uses; and ' • San Jose, 10,000 square feet for both general and light industrial uses. S&A queried each of these cities regarding the extent to which new development occurs at these ' minimum lot sizes to assess their practicality. The results vary by location. Sunnyvale and Mountain View indicated most development occurs on lots bigger than their respective minimums of 22,500 and 20,000 to 40,000 square feet. In Sunnyvale, land availability largely dictates the ' size of new development, where the few vacant parcels available are greater than 22,500 square feet. Yet, in Mountain View, where most new development occurs above the minimum lot size, the City Planning Department indicated that price-sensitive start-up firms frequently seek existing ' buildings on small lots, supporting the low range of allowable lot sizes. As in Sunnyvale and Mountain View, Santa Clara reports most new development exceeds the 20,000-square-foot minimum lot size. When parcels are subdivided, however, the minimum lot size is often ' realized. These smaller lots support development of industrial condominium-like and multi- tenant buildings for small, price-sensitive users. Finally, San Jose's minimum lot size is 10,000 square feet for both general and light industrial uses. Lots are rarely developed at this minimum, ' yet the City of San Jose reports that development of 20,000-square-foot parcels occurs often, and typifies most new industrial development in San Jose. These findings indicate that Morgan Hill's minimum lot sizes are much greater than in other industrial-oriented communities. S&A believes this places Morgan Hill at a relative disadvantage ' in appealing to price-sensitive start-up companies or small, yet thriving industrial operations. Accordingly, S&A recommends that Morgan Hill reduce its minimum lot size for general and light industrial uses. A minimum lot size of 20,000 square feet, for example, would still provide ' reasonable development controls yet would be more accessible to a wider range of industrial users, especially those most-likely to find Morgan Hill an attractive industrial location. The information provided by the Sunnyvale, Mountain View, Santa Clara, and San Jose Planning ' Departments supports to some extent lower minimum lot sizes in Morgan Hill to accommodate select tenant types. 1 1 80 1 1 Table VII-3 ANALYSIS OF GENERAL INDUSTRIAL AND LIGHT INDUSTRIAL ZONING DISTRICT GUIDELINES CITIES OF MORGAN HILL,MOUNTAIN VIEW,SAN JOSE,SANTA CLARA,AND SUNNYVALE FEBRUARY 1992 MORGAN HILL MOUNTAIN VIEW SAN JOSE(a) SANTA CLARA SUNNYVALE General Light General . Light General Light General Light General Light Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Setbacks Front 3a 4a 26 3a avg is 16 la—15 la —15 23 —33(c) 25 —36(c) Rear 317 2(Y a (b) a(b) a a la—16 la—15 a(c) a(c) Side 3a 1 a a(b). Of(b) a a la — 16 la—15 S—2a(c) S—20'(c) 00 Minimum Lot Size Square Feet 40,000 40,000 20,000/ 40,000 10,000 10,000 20,000 20,000 22,500 22,500 40,000 Dimensions 15a x 20a 10a x 10a No min. No min. No min. No min. 10a width 100f width 10a width/ 10a width/ W width for W width for cul—de—sacs cul—de—sacs Maximum Coverage 60% 50% None None None None None 75% 45% 45% Maximum FAR None None 35%General, 35%Indust Not Available Not Available None None 35%Indust; 35%Indust; 45%W/hse, and Office; 50%W/hse, 50%W/hse, 55%Personal 40%W/hse, Storage Notes: (a) Of the cities analyzed,only certain San Jose Industrial park and labor and research zoning districts are similar to Morgan Hill's campus industrial zoning district The minimum lot areas of these San Jose zoning districts range from 10,000 square feetto 25 acres. San Jose's industrial park and labor research zoning districts have maximum lot coverages as low as 15-35%. Morgan Hill's campus industrial zoning district has a minimum lot area of 20 acres and a maximum FAR of.20(however,no maximum coverage percentage is specified). (b) Setbacks must be reasonable. (c) A 10a setback is required for yards adjacentto residentially zoned property. Sources:Cities of Morgan Hill,Mountain View,San Jose,Sunnyvale,and Santa Clara;Sedway&Associates. I\mh\zone.wkItab1.emc.1206911 02/19/92 ' Setback. As review of Table VII-3 indicates, Morgan Hill's setback requirements are also greater than in other select County locations. The greatest constraint is Morgan Hill's 40-foot front setback for light industrial uses (as well as office industrial uses as identified in Table VII- 2a). S&A recommends the City consider revising the industrial setback requirement downward to 30 feet or less. ' Campus Industrial Zoning Classification. S&A's market findings indicated that limited short- term demand exists in Morgan Hill for campus-oriented high-tech users. This finding reflects ' consideration of a number of factors, including the following: Morgan Hill's distance from the heart of Silicon Valley, customers, suppliers and major airports; the extensive inventory of vacant industrial space throughout Silicon Valley, available at low rental rates; the large amount ' of vacant land in Edenvale and Coyote suitable for campus-type users; and the prevailing recession. Because of these considerations, S&A believes Morgan Hill is reserving more land for campus industrial users than necessary. S&A therefore recommends the City rezone some ' of the existing campus industrial land to alternative uses. Prospective alternative uses could include general commercial or general industrial. ' In addition, S&A believes that Morgan Hill's campus industrial zoning guidelines are constraining and may be not appeal to all potential users. Large industrial users often acquire land with an eye toward future growth needs. Therefore, small firms that anticipate long-term growth might not be able to develop facilities in Morgan Hill on campus industrial land if they initially require fewer than 20 acres. Yet those that do anticipate long-term growth will seek a location with expansion potential and a community supportive of business growth. Finally, some ' of Morgan Hill's land designated for campus industrial uses features freeway visibility. . This feature is not critical for campus industrial users. Therefore, the City could consider rezoning some of these parcels to alternative uses. Campus industrial users do, however, require easy ' vehicular access for the sake of employees and customers. This is especially important when employees are regionally rather than locally based. These considerations should be accommodated by any future City actions. ' Office Industrial (MO) Zone ' The City of Morgan Hill has 38.7 acres zoned for office industrial development, all of which is currently vacant. The intent of this zoning classification is to accommodate aesthetically pleasing office users along the highway, primarily featuring administrative offices for service firms such as insurance companies. Given this objective, S&A believes the development parameters and distribution of land are sufficient to meet the needs of these types of users. However, S&A believes Morgan Hill has limited ability to attract such users in the short term based upon the prevailing high office vacancy rate. However, demand will likely arise in the long term as the population base expands in Morgan Hill and throughout the local region. - The 38.7 acres of land with the office industrial designation in Morgan Hill comprise less than 5.0 percent of the City's industrial land (see Table VII-2b). This amount could accommodate ' over 2.0 million square feet of office space if built out to the maximum extent possible. This 82 ' amount of space should serve Morgan Hill's needs over an extended time period. As a result, S&A suggests that no additional land be converted to this use until warranted by development demands. Commercial Land Use Controls This section briefly reviews issues pertinent to the City's supply of commercial property, with particular emphasis on auto-related uses and the supply of land reserved for regional retail development. Auto-Related Uses. S&A's research indicated that the City of Morgan Hill has a paucity of conveniently-located auto-related uses, such as auto repair and auto part sales. As a result, people who live in Morgan Hill and work elsewhere often have their cars serviced near their work places rather than in Morgan Hill. No zoning district in the City explicitly allows both auto repair and auto part sales (a use permit is required for separate retail sales of automotive parts in a general industrial zone). The City might wish to consider designating a portion of the City as an auto service mall area specifically for auto-related uses. This consolidation would ' provide a one-stop auto area and could contribute to revitalization of the areas where these uses are currently located, as the land is freed up for alternative uses. A recommended location for an auto service mall area would be near downtown or a shopping area, so patrons could occupy ' themselves while having their car serviced. Such a use could also benefit from being located near Morgan Hill's future rail service station. In addition, encouraging the development of auto service stations near employment and commer- cial centers is recommended in order to service the City's industrial users and retail patrons. ' Regional Retail. Sedway&Associates' Retail Market Assessment presented short-and long-term projections for future retail development in Morgan Hill, through approximately the year 2005. Particular emphasis was placed on identifying Morgan Hill's prospects for regional retail development. These findings are juxtaposed below with the City's regional retail land use policies. ' In an effort to plan for future growth and ensure the availability of large sites for future development of major retail and other commercial uses, the City of Morgan Hill designated five ' areas as regional commercial reserves (RCR). Each of these areas is large enough to accommodate a minimum of 100 acres of development. Two of the commercial reserve sites lie within the Morgan Hill City boundaries, while the three southernmost sites lie outside the City ' limits on County property. Based on the characteristics of each site, including freeway visibility, accessibility, parcel size, and surrounding uses, some locations are more suitable for regional retail development than others. A brief description of each of these five sites and S&A's summary of findings follows. Site 1. This parcel lies outside Morgan Hill's City boundaries near the Tennant Avenue overpass ' just west of Highway 101. Orchards and a green house currently occupy a portion of the site 83 ' with a lumber yard and nursery located within close proximity. S&A believes this is a favorable site for major retail development. The parcel has at-grade highway visibility and is conveniently ' located near a major freeway interchange. Site 2. Site 2 is located south of the Tennant Avenue overpass on the east side of Highway 101. ' The parcel is located outside the City boundaries on County property. Its topography is flat with orchards and trees occupying a portion of the site. Very little existing development currently surrounds the site. S&A believes Site 2 is another favorable location for major future retail development, although the site currently encompasses 74 acres, which may not be enough to meet the needs of some regional retailers. The parcel has good highway visibility and convenient access to a freeway off-ramp, with the potential for increased highway accessibility. However, ' the local road pattern would require alteration (such as rerouting Murphy Avenue and closing part of Barrett Avenue) to achieve a total site size of 100 acres. Moreover, the overall site configuration could be problematic for a mall-type user. ' Site 3. This parcel is located on the east side of Condit Road, east of Highway 101 and just south P g Y J of San Pedro Avenue. This site is slightly recessed off Highway 101 with limited visibility from ' the highway. A thin strip of commercial-zoned property is situated between the highway and the site; surrounding uses include several hotels (Best Western Country Inn, Executive Inn Suites, and an additional inn under construction), and the Cooperage restaurant, winery and ' tasting room. Because of its somewhat isolated location in a less populated area outside the City limits, and its limited access and visibility from Highway 101, S&A does not consider this site to be a prime location for major retail development, especially regional-oriented development for ' which high visibility and easy access are crucial characteristics. Site 4. Parcel 4 is located near the northern City boundaries to the west of Highway 101 and north of Cochrane Road. The parcel is long and thin; although approximately 750 feet fronts along Highway 101, the parcel is located above freeway grade. Therefore, this site has limited visibility from the highway. In addition, the site is accessible only from Monterey Street. Accordingly, S&A does not believe this site is a prime location for major retail development. ' Site 5. The fifth parcel currently designated for major retail development is located off Mission View Drive, east of Highway 101 and north of Cochrane Road. This parcel is flat, slightly elevated, and conveniently located near a freeway interchange. The Cochrane Power Center and ' Auto Mall are currently being considered for development at this site with actual plans still in the conceptual stages. ' Conclusions. Considering the existing supply of Morgan Hill's retail and future development planned for the City, Morgan Hill is expected to be over-retailed through the beginning of the 1995 to 2000 period. By the late 1990s, however, demand for additional retail is expected. The City of Morgan Hill should plan for this future demand by continuing to designate preferred sites for retail development. S&A considers several of the retail reserve sites, already designated by the City, to be more suitable than others. Sites 1 and 5, which are already being considered for ' retail development, are believed to be appropriate for these uses. S&A also believes Site 2, ' 84 ' located on the southeast corner of Dunne Avenue and Highway 101, to be an ideal site for future retail development, as long as a prospective retail developer can work around the site's potential ' configuration obstacle. This site would be preferable to sites 3 and 4, which have limited access and limited visibility. ' CITY APPROVALS AND RELATED PROCESSES During the course of this research, S&A spoke to numerous representatives of the brokerage and ' development community regarding development prospects in Morgan Hill. The purpose of this section is to relay opinions expressed to S&A regarding the City's approvals process and other related factors that influence the City's business environment and the willingness of prospective ' users to locate in Morgan Hill. S&A neither independently verified the basis of the opinions nor evaluated the validity of the opinions. Instead, we are providing summary information to the City in the interest of helping the City affect the public's perception of how the City operates with respect to new development. The opinions shared with us indicate that some people do not perceive Morgan Hill as a friendly place to do business. This perception provides the City with the opportunity to correct possible misconceptions regarding the City's operations and educate the development community, especially real estate brokers. The perceptions shared with S&A generally indicate that select members of the development community and public have concerns regarding the City's willingness to do business, the ' availability of staff(especially late in the day), the coordination of staff, and the time investment required to get approvals for both new and existing buildings. Regardless of the veracity of these ' comments and concerns, they reflect negative perceptions of Morgan Hill as a place to do business, and may be inhibiting the City's growth potential. S&A recommends that the City investigate and evaluate these issues and launch a public relations and educational campaign to ' improve public opinion. SEWAGE ALLOCATION PROCESS ' The City of Morgan Hill currently has limited sewage capacity available, resulting in the need for the City to allocate its remaining sewage capacity to new residential, commercial, and ' industrial projects. Currently, the City issues sewer allocations at the time a building permit is issued to a project. This process was designed to discourage land speculation and provide sewer allocations to those projects with the best chance of being built. The first phase of a new sewage ' treatment facility is expected to be completed in 1994 or 1995. Two industrial parks currently have sewer allocations. The City has some additional capacity available through the auspices of the Economic Development Department. Moreover, as the completion date for the new sewer ' plant approaches, the City will become more amenable to borrowing against the City's reserve as a means of promoting new development. ' 85 Local real estate brokers perceive that the City's allocation process and the lack of sewer capacity are hindering development in the City. A summary of broker concerns and opinions is presented ' in the following paragraph. • Some area brokers believe that, while developers of new development projects may ' request sewage allocations at any time, the City's allocation process can involve delays and uncertainty. As a result, some brokers believe some prospective developers and users pursue projects in other communities, rather than seeking to develop properties in Morgan ' Hill. • City representatives indicate there are approximately 163.5 acres of developable industrial ' land in Morgan Hill with streets and curbing in place and allocated sewer rights. However, all of this acreage is within just two industrial areas—the Morgan Hill Business Park and the Cochrane Industrial Area. Because only two areas control all of the developable industrial land in the City with sewer rights, brokers believe competition among landowners to develop new projects may be limited, possibly resulting in less development and inferior new projects. • Brokers generallyregard the City's sewer allocation process as unnecessarily burdensome. Y Y This complaint is attributable to the City's policy that new proposed projects do not ' receive sewer allocations until a building permit is issued by the City. Hence, developments must go through the costly and time consuming processes of architectural review, plan check, and building permit application prior to assurance that sewer rights ' will be granted. As a result of this process, brokers believe many development projects may be less feasible in Morgan Hill than elsewhere due to financing considerations. ' Further, many proposed new projects require a construction loan in order to proceed through the development approvals stages necessary to receive a building permit. ' The above findings indicate it might be in the City's best interest to educate the brokerage community regarding the purpose of the existing sewer allocation process. S&A understands the process was modified to reflect real estate developer concerns. This message should be conveyed to the brokerage community. Some of the broker concerns, however, will become less pertinent as the completion date for the new sewer plant approaches. Because of the lag between project conception and completion, new, large planned projects will likely not be entering the market until the City's sewer capacity has increased. RESIDENTIAL DEVELOPMENT CONTROL SYSTEM ' In 1977, Morgan Hill voters approved Measure E, an initiative limiting residential growth in the City through the year 2000. Measure E resulted in creation of the City's Residential Development Control System (RDCS). In November 1990, voters approved Measure P, an initiative extending residential growth control for another 10 years (through 2010) and tightening its provisions. The RDCS caps the City's population at 38,800 in fiscal year 2009/2010. The 86 following excerpt from City Ordinance 1010 summarizes the methodology used by the City to determine the annual number of residential allotments: The number of residential development allotments for any fiscal year shall be limited to a number equal to the desired annual population increase for that fiscal year divided by the occupancy level per dwelling unit. For purposes of this detennination, the annual desired population increase shall be equal to the difference between 38,800 and the population of the City of Morgan Hill on January I of said previous fiscal year divided by the number of years remaining between said previous fiscal year and fiscal year 200912010. The population of the City of Morgan Hill on January 1 of said previous fiscal year shall be equal to the most recent population determination by the California State Department of ' Finance. Recent Trends ' Annual Residential Growth. Table VII-4 summarizes residential growth in Morgan Hill, San Jose, and Gilroy during the 1980 to 1991 period. As shown in the table, Morgan Hill added an ' average of 312 units annually during the 11-year period, indicating an average annual compound growth rate of 4.8 percent. This growth rate suggests there were both strong demand for housing and substantial new construction. The average number of units developed each year in the City was much greater during the 1986 to 1990 period (457 units) than during the 1981 to 1985 period (162 units). Residential growth in San Jose and Gilroy occurred at slower rates than in Morgan Hill during the 1980 to 1991 period. San Jose's and Gilroy's annual compound residential growth rates were 2.0 percent and 3.3 percent, respectively. However, San Jose added approximately 4,813 units annually, or more than 15 times the number of units added each year in Morgan Hill. Gilroy added approximately 269 units annually during the 1980 to 1991 period, with a similar number of units built during the second half of the 1980s compared to the earlier 1980s. Residential Prices. Recent trends in single-family detached home prices are shown in Table VII- ' S on page 89 and Figure VII-1 on page 90. In 1991, the average price of a single-family home was approximately $332,000 in Morgan Hill. Current average prices of single-family detached homes in Morgan Hill are approximately 35 percent higher than prices in San Jose, 11 percent ' higher than prices in Gilroy, and 29 percent higher than throughout the County. The relatively higher prices in Morgan Hill are primarily attributable to the City's residential unit mix, which emphasizes mid-market and higher-end homes with relatively few starter homes available. Local ' residential real estate professionals report that similar quality homes in Morgan Hill and desirable South San Jose locations have nearly the same prices, although San Jose prices tend to be slightly higher. Similar quality homes are reportedly priced approximately five to ten percent higher in ' Morgan Hill than in Gilroy, indicating the premium households are willing to pay to reside near employment centers. ' 87 Table VII-4 ESTIMATED HOUSING UNIT GROWTH MORGAN HILL, SAN JOSE, AND GILROY 1980 - 1991 MORGAN HILL SAN JOSE GILROY ANNUAL ANNUAL ANNUAL GROWTH GROWTH GROWT YEAR 1 NEW UNITS TOTAL UNITS RATE NEW UNITS TOTAL UNITS RATE NEW UNITS TOTAL UNITS RA 1980 N.A. 5,039 N.A. N.A. 208,564 N.A. N.A. 6,827 N.A. 1981 174 5,213 3.5% 5,269 213,833 2.5% 276 7,103 4.0% 1982 224 5,437 4.3% 6,090 219,923 2.8% 231 7,334 3.3% 1983 49 5,486 0.9% 1,566 221,489 0.7% 280 7,614 3.8% 1984 57 5,543 1.00/0 3,161 224,650 1.4% 301 7,915 4.0% co 1985 305 5,848 5.5% 6,542 231,192 2.9% 220 8,135 2.80/c 1986 446 6,294 7.6% 5,608 236,800 2.4% 252 .8,387 3.1% 1987 424 6,718 6.7% 6,994 243,794 3.00/1 303 8,690 3.6% 1988 464 7,182 6.90/9 4,273 248,067 1.8% 450 9,140 5.2'/o 1989 469 7,651 6.5% 026 252,093 1.6% 222 9,362 2.4% 1990 480 8,131 6.3% 3,165 255,258 1.3% 119 9,481 1.3% 1991 344 8,475 4.2% 5,189 260,447 2.0% 297 9,778 3.1% Avg, 1980 - 1991 312 4.8% 4,717 2.00% 268 3.3% Avg, 1981 - 1985 162 4,526 262 Avg, 1986 - 1990 457 4,813 269 Note: (1) Annual housing data based on State Department of Finance estimates. Housing data shown for each year are approximations. Data shown for 1980 match U.S.Census figures. Data shown for 1991 are based on 1990 U.S.Census and subsequent development Data shown for 1990 are estimates that do not precisely correspond with 1990 U.S.Census results. Sources:State Department of Finance; U.S. Bureau of the Census;Sedway&Associates. [Imhlh fin al.wk3.tab1.ern c.121291] 02/14/92 Table VII-5 ANNUAL AVERAGE HOME PRICES SINGLE—FAMILY DETACHED UNITS MORGAN HILL, SAN JOSE, GILROY,AND SANTA CLARA COUNTY 1988 — 1991 • % CHANGE % CHANGE % CHANGE %CHANGE % CHANGE 1988 1989 1990 1991 1988—1989 1989—1990 1990—1991 1988—199 1988—1991 Morgan Hill $287,000 $358,000 $362,000 $332,000 24.7% 1.1% —8.3% 26.1% 15.7% iO San Jose $198,000 $252,000 $258,000 $246,000 27.3% 2.4% —4.7% 30.3% 24.2% Gilroy $234,000 $292,000 $294,000 $300,000 24.8% 0.7% 2.0% 25.6% 28.2% Santa Clara County $208,000 $246,000 $254,000 $258,000 18.3% 3.3% 1.6% 22.1% 24.0% Sources: Santa Clara County Board of Realtors;Coldwell Banker(published in San Francisco Examiner); Sedway&Associates. • [mMsfdhome.tabLams/emc.11911 02/14/92 FIGURE VII-1 HISTORICAL AVERAGE SALES PRICE SINGLE-FAMILY DETACHED HOMES $400 $350 .......................... - .......................................................................... ...... ............------------ ................ ........... .. $300 .......................... ............... $250 ............... ................ .................... ..................... ....................... .......... ia co ..... .... .......... . ......$200 ....................... . ..................... 0 .... ............ ............ . ....................... $100 ..................... .......... . ........... ........... . ..... . ...................... ............ ...................... ...... . ........... ........... . ....................... $50- $0- f Molan Gilroy San Jose Santatiaran'a Hi Clara Countv 1988 = 1989 1990 1991 Sources:Santa Clara County Board of Realtors;Coldwell Banker(published in San Francisco Examiner);Sedway&Associates. 90 As shown in Table VII-5, Morgan Hill's average price for a single-family detached home climbed approximately 16 percent during the 1988 to 1991 period. This appreciation rate was ' less than that experienced during the same time period in San Jose (24 percent), Gilroy (28 percent), and the County overall (24 percent). However, the apparent difference in appreciation rates is somewhat misleading. During the current recession, which began in 1990, the market ' has been softest for mid-market and higher-end homes. This situation has a more severe impact for Morgan Hill than for San Jose and Gilroy, because mid-market and higher-end homes represent a greater portion of Morgan Hill's residential inventory.22 Because of the current ' recession, a better time-frame for measuring relative appreciation rates is the 1988 to 1990 period. During this time, single-family detached homes appreciated approximately 26 percent in Morgan Hill, 30 percent in San Jose, 26 percent in Gilroy, and 22 percent in Santa Clara ' County overall. These appreciation rates are generally comparable. However, southern areas of Santa Clara County outperformed more northern communities in the County. ' In summary, S&A's analysis of single-family detached home prices indicates that Morgan Hill's RDCs has not apparently had an impact on home prices within a particular market niche (e.g., mid-market or upper-end). However, because of Morgan Hill's emphasis on relative luxury homes with more amenities than starter units, the average home price in the City is much higher than in nearby communities such as San Jose and Gilroy. As discussed below, the RDCs is a primary reason explaining why residential projects in Morgan Hill emphasize relative luxury ' homes. ' A cursory analysis of the apartment market indicates that typical rents for two-bedroom units are approximately $900 in Morgan Hill, $905 in San Jose, and $850 in Gilroy. Regional data provided by the Bay Area Council indicates that apartment rents have climbed less than five ' percent during the past two years in Santa Clara County. Apartment rents are more similar between Morgan Hill and San Jose than are home prices. The different relationship is likely explained by the fact that the apartment units in each city are similar, whereas the average house ' in Morgan Hill is more upscale than the average house in San Jose. The relationship between apartment rents in Morgan Hill and Gilroy is similar to the relationship between the prices of similar single-family houses in these cities, indicating stronger demand for Morgan Hill units and ' perhaps a more limited supply of units in Morgan Hill. The RDCS Allotment Process ' Discussions with the local residential real estate community suggest that Morgan Hill's focus on mid-market and higher-end homes is largely the result of the City's RDCs. In order to receive r22Because of reduced demand for mid-market and higher-end homes, transactions within these residential categories are occurring on a relatively infrequent basis. Particularly in Morgan Hill, 1991 average home prices are unusually weighted toward lower-end homes (units generally more appropriate for a first-time home buyer). 91 1 i � 1 necessary approvals under the RDcs, projects compete for annual development allotments which are granted based on the number of points awarded by the City to each proposed project: 1 The point scale used shall take into account the impact of the proposed development on the following public facilities and services: schools, water supply system, sanitary sewer and treatment plant, drainage and runoff, fire and police protection, traffic and other municipal services. 1 Proposed developments shall be awarded points for provision of schools, and related facilities, open space, orderly and contiguous development, public facilities, parks and trails, low and moderate income housing and housing for the elderly, and diversity of 1 housing types; and for quality of architectural design and site design. (Ordinance 1010) Local residential developers indicate that the process of earning RDcs allotments results in extraordinary costs for their projects. To recoup these costs and maintain developer profit margins, developers indicate projects need to market to middle-market and upper-end households that have sufficient disposable income to absorb the extra costs borne initially by developers and passed on to home buyers. While certain RDcs provisions encourage the development of starter homes and other affordable housing, more affordable housing could possibly be built if the RDcs were eliminated or modified and market demand warranted. 1 The following are examples of development costs attributable to the RDcs: ' • Residential builders typically incur significant land carrying costs while preparing their development proposals for the RDcs allotment competition and then waiting to receive their allotments.' ' • The competitive RDcs allotment process also results in developers adding expensive on-site P P P g P and off-site amenities to their projects in order to receive as many points as possible. Developers report that off-site traffic, storm drainage, and sewer improvements are often included in project proposals which provide more benefits than necessary to mitigate project ' impacts. Sometimes other contributions are made to the community. For example, developers report that payments to the local school district may be provided which exceed typical school impact fees. 1 • The RDcs allotment process encourages developers to vary unit designs, which limits construction efficiencies. ' • In response to RDcs guidelines, public open space is provided on project sites. Some developers accommodate the open space requirement through the City's density bonus 1 Competitions are held once every two years, with half of the allotments awarded for the current year and the other half awarded for construction to begin in the following year. 92 1 1 ' provision. For those who don't use the density bonus, developers indicate this results in lower density projects and a need to organize homeowner associations to maintain the open space. Further, prospective homebuyers are sometimes concerned about the recurring cost of homeowner association dues. According to developers, this makes new Morgan Hill homes more difficult to market; a lengthier marketing period results in increased carrying costs for ' developers. Future Trends Based on U.S. census data, the 1990 population of Morgan Hill was 23,928. In accordance with Morgan Hill's RDCs policies, this implies that the compound annual residential growth rate for ' the City will be capped at 2.45 percent through the 2009/2010 fiscal year, when the RDCs allows the population to stabilize at 38,800. Based on this stabilized population goal, new residential development will likely be limited to approximately 237 units annually between 1990 and the ' 2009/2010 fiscal. year.24 In comparison, Morgan Hill's annual residential growth rate during the 1980 to 1991 period was 4.84 percent, with 312 units built each year. Hence, the RDCs is projected to lower the residential growth rate approximately 50 percent compared to the level of development that occurred in Morgan Hill during the 1980s. This indicates that demand will likely outpace the available supply of homes, possibly resulting in escalating home prices. ' Table VII-6 compares expected residential growth in Morgan Hill during the period of 1990 to 2005 with projected residential growth in San Jose, Gilroy, and Santa Clara County overall. Morgan Hill's growth rate, impacted by the RDCs, is projected to be only two-thirds of Gilroy's ' 3.56 percent residential growth rate. However, the residential growth rates in San Jose and Santa Clara County (both 0.84 percent) are anticipated to be much less than Morgan Hill's ' growth rate. While the growth rate in Morgan Hill will remain fairly high, the number of units allowed each year in the City (237 homes) will be much less than the number of new units projected for San Jose (2,516 homes per year) and Gilroy (524 homes per year). ' While the limited supply of new homes in Morgan Hill is expected to result in an easier marketing process for the City's new residential projects, the relatively small number of new ' homes that will be developed means that larger, more efficiently constructed residential projects will be located in other communities, limiting cost savings and price competition among the new Morgan Hill projects that are built. As previously discussed, the number of units expected to ' built each year in Morgan Hill will be much less than the number of new units that are expected in San Jose and Gilroy. This trend may encourage retailers and industrial users to locate new stores and operations in either San Jose or Gilroy, where the greater numbers of new homes will create more demand for retail stores and provide larger labor pools for local employers. 24The projected number of allowable new units in Morgan Hill is based on ABAG's estimate ' of 3.14 people per household in 1995. Source: ABAG Projections '90. ' 93 1 Table VII-6: Projected Residential Growth, 1990-2005 1 Morgan Hill, San Jose, and Gilroy (Assumes Morgan Hill's Current ROCS Policies Continue in Force) Annual Population Compound Annual New>' Total New City Growth Rate Residential .......0 Residential Units 1990 2005 1990 2005 1990 2005 Morgan Hill 2.45% 237 3,550 San Jose 0.84% 2,516 37,750 Gilroy 3.56% 524 7,860 Santa Clara County 0.84% 4,838 72,580 Note: Figures for San Jose and Gilroy include each city's sphere of influence as well as the area within 1 each city's boundaries. Figures for Morgan Hill include only the area within Morgan Hill's boundaries. Sources: ABAG Projections '90; City of Morgan Hill; Sedway & Associates. 1 IMPACT AND UTILITY CONNECTION FEES S&A surveyed impact and utility connection fees levied on new developments built in Morgan ' Hill and the nearby competitive cities of San Jose, Gilroy, Santa Clara, and Fremont. These cities were selected for several reasons. The findings from the national firm relocation study emphasized that Morgan Hill's market for new industrial users is largely local, driven by a desire 1 to both live and work in Morgan Hill. Hence, a user seeking a minimal commute would locate first in Morgan Hill and then, barring land availability, development approvals, etc. in Morgan Hill would then seek a location in a neighboring community with developable land. In addition ' to these locational considerations, retailers follow population. Accordingly, a retailer seeking to meet a regional need would also consider communities proximate to each other, in an effort to maximize the population base's "center of gravity." Finally, development fee information was ' relatively uniformly available from these surveyed communities. Fee data were collected for three "prototype" developments: (1) a light industrial building of 30,000 square feet; (2) a retail discount department store of 50,000 square feet; and (3) a single- family subdivision of 50 detached homes, with each home assumed to have four bedrooms and ' a size of 2,000 square feet. Approximate impact and utility connection fees for the three prototype projects in each surveyed city are presented in Table VII-7. Planning and building department fees for recouping expenses incurred by these departments during the development i 1 1 1 94 Table VII-7 APPROXIMATE IMPACT AND UTILITY CONNECTION FEES MORGAN HILL AND NEARBY COMMUNITIES JANUARY 1992 GENERAL PARKS, PUBLIC GROWTH TRAFFIC, RECREATION, FACILITIES FEES TOTAL IMPACT SCHOOL STREET s&.OPEN SPACE FEES (Includes AFFORDABLE TOTAL STORM AND UTILITY • IMPACT IMPACT IMPACT (Includes Fired[ Construction HOUSING IMPACT WATER SANITARY DRAINAGE CONNECTION FEES FEES FEES 1 Police Fees) Fees R Taws FEES 2 FEES FEES FEES 3 FEES FEES INDUSTRIAL PROTOTYPE:LIGHT INDUSTRIAL BUILDING - 30,000 SQUARE FEET Morgan Hill S7,800 %ofSignaliration $0 $15,300 $0 $0 $23,100 $5,100 $41,100 S9,900 S79,200 San Jose S7,500 Case-By-Case SO Case-By-Case S11,200 $0 S18,700 $3,600 - $23,600(4) S21,000 $2,700 $46,000- S66,000 Gilroy $7,800 SO S6,900 $9,000 $0 $0 S23,700 $2,100 - $3,100(4) S5,500 S3,8W S35,100- S36,100 Santa Clara S7,800 S12,000 $0 SO $0 $0 $1.9,800 SZ800 - $12,400(4) S7,200 S4,300 $34,100- $43,700 Fremont(5) S7,800 S46,200 $0 S9,500 SO $0 $63,500 $22,000 $29,100 Not Available(6) S114,600 RETAIL PROTOTYPE:RETAIL DISCOUNT DEPARTMENT STORE-50,000 SQUARE FEET Morgan Hill S13,000 %ofSignaliration $0 $25,500 $0 $0 $38,500 $5,100 S113,500 S16,500 S173,600 San Jose S12,500 Case-By-Case SO Case-By-Case $109,500 SO $122,000 $3,600 - S23,600(4) $17,500 $4,500 S147,600 - S167,600 Gilroy S13,000 SO S11,500 S15,000 SO SO $39,500 S2,100 - S3,400(4) S5,500 S6,3W $53,400- S54,700 Santa Clara S13,000 SO $0 $0 SO SO $13,000 SZ800 - S12,400(4) S7,200 S7,100 S30,100- $39,700 Fremont(5) S13,000 S285,000 SO S28,700 SO SO $326,700 $25,300 S47,500 Not Available(6) S399,500 RESIDENTIAL PROTOTYPE:SINGLE-FAMILY HOME SUBDIVISION - 50 DETACHED HOMES,EACH 2,000 SQUARE FEET(7) Morgan Hill $158,000 $15,000 $55,000 S47,000 $0 SO(8) $275,000 $61,700 $235,700 $26,400 $598,800 San Jose S150,000 S9,000(9) $115,000 Case-By-Case S129,700 SO(10) S403,700 S72,000 S61,400 S13,500 S550,600 Gilroy S158,000 $78,700 S290,700 $30,000 $0 $0(IO) S557,400 S65,800- $67,600(4) S65,400 S20,200 $708,800- S710,600 Santa Clara S158,000 $0 $1,500 $0 $0 $0 $159,500 S41,400 S20,900 $22,700 S244,500 Fremont(5) $158,000 S47,100 $289,500 $64,500 S60,600 $0 $619,700 $161,700 S96,500 Not Available(6) S877,900 Notes: (1) In some eases,part fees shown in this table are assessed on an in-lieu basis,in the event that a project does not provide part or open space areas. (2) Affordable housing fees are levied on an in-lieu bads,in the event that a project does not include a minimum portion of affordable[nits. In many eases,projects Include affordable units rather than pay affordable housing fees. (3) Sewer frontage charges are not included insanitary fees sin=sewer mains are assumed to be already in place.Sanitary fees for light industrial uses sometimes vary depending on a buildi ng's particular use. (4) Water fees depend on building ootnt vWon(Lem fire walls and sprinklers)and whether fire department requires anew fire hydrant on-site.The low end of the specified range assumes that the fire department requires no additional pipes assumes the fire department requires additional pipes and hydrants. (5) Amounts shown above for Fremont's trafrue,street,public facilities,and part Impact fees are effective 5/1/92.Prior to SIM,these Fremont fees are 50%less than the amounts shown in the table. (6) Fremont's storm drainage fees are assesed at three percent of the cost of$term drainage improvements. (7) Each home is assumed to include four bedrooms. (8) In the event that a reddend at project built in Morgan Hill does not include affordable units,in-lieu affordable housing fees would likely range from$173,900 to$278,200.Most projects built in Morgan Hill opt to include affordable units. (9) Additional fees may be levied on a case-by-case basis,depending on each project's public infrastructure requirements. (10)San Jose and Gilroy are currently considering adoption of an affordable housing requirement which may include an in-lieu fee option. Sources:Cities of Morgan Hill,San Jose,Gilroy,Santa Clara,and Fremont;Sedway&Associates. [\m h\feesOl.wlt3.t a b 1.enc.120491] 02/14/92 ' process are excluded from the analysis, as are parking in-lieu fees.2' Fees for each prototype development are discussed below. Light Industrial (50,000-Square-Foot Building) The approximate total impact and utility connection fees for the light industrial prototype project are $79,200 in Morgan Hill. Total fees are more in Fremont, $114,600, but less in the other surveyed cities, i.e., $46,000 to $66,000 in San Jose, $35,100 to $36,100 in Gilroy, and ' $34,100 to $43,700 in Santa Clara. The only Morgan Hill fees much higher than those charged by other cities are sanitary fees.26 Morgan Hill's sanitary fees are $41,100, while those in the other surveyed cities range from $5,500 to $29,100. ' The light industrial development market is fee sensitive, with San Jose and Gilroy being the cities most competitive with Morgan Hill. Morgan Hill's current fees levied on light industrial projects ' are already higher than fees in San Jose and Gilroy. Therefore, additional fee increases could result in significantly more projects choosing to locate in San Jose, Gilroy, or other locations. Retail (50,000-Square-Foot Discount Department Store) For the retail prototype project, Morgan Hill's approximate total impact and utility connection fees are$173,600. Fremont's fees of$399,500 are much higher, but fees are lower in the other surveyed cities. San Jose's fees are $147,600 to $167,600, Gilroy's fees are $53,400 to $54,700, and Santa Clara's fees are $30,100 to $39,700. Like light industrial development, the only fees levied by Morgan Hill for retail development that are much higher than those in the other surveyed cities are sanitary fees. Reported sanitary fees are$113,500 in Morgan Hill, but only $5,500 to $47,500 in the other cities. ' Retail development is not particularly fee sensitive for neighborhood shopping centers emphasizing convenience goods. On the other hand, retail development is typically very fee sensitive for power centers, regional malls, and destinational retailers, which emphasize comparison goods and, in many cases, volume merchandising with low per unit mark-ups. This suggests that Morgan Hill's retail fees are supportable for convenience goods, but may not be 25The City of Morgan Hill levies an in-lieu parking fee of$3,000 per parking space, in the event that a project does not include sufficient parking to meet the requirements of the City's Zoning Ordinance. In-lieu parking fee revenues are used by the City to finance public off-street parking. 26All sanitary fee amounts discussed in this report exclude sewer frontage charges, since sewer mains are assumed to be already in place. However, some cities levy sewer frontage charges even when sewer mains are already built, so that each project pays a "fair share" of sewer main costs. 96 ' supportable for comparison goods.'-' Further, Morgan Hill's high sanitary fees are particularly problematic for restaurants, which require considerable water for their operations and thus are levied high sanitary fees. Residential (50 Single-Family Homes, Each 2,000 Square Feet) Impact and connection fees levied by Morgan Hill for the prototype residential development are approximately $598,800. This amount is less than Fremont's $877,900 and Gilroy's $708,800 ' to $710,600, but more than San Jose's $550,600 and Santa Clara's $244,500. Again, the only fees that are substantially higher in Morgan Hill than in the other surveyed cities are sanitary fees, which are approximately $235,700 in Morgan Hill, but range from only $20,900 to ' $96,500 in the other cities. Homebuilders active in Morgan Hill indicate that the City's fees should be considered together with other unique costs borne by residential projects in Morgan Hill as a result of the City's Residential Development Control System (RDCS). Discussions with local homebuilders and realtors indicate the residential development fees have been supportable in Morgan Hill to date. ' However, the soft residential market has made homebuyers more price sensitive. Hence, increases in residential development fees may not be supportable, given the current regional weakness in the economy and the residential market. ' Residential (100 Single-Family Homes, Each 1,500 Square Feet) ' A housing nexus study recently prepared for the City of Cupertino in Santa Clara County included a residential development fee survey for the San Francisco Bay Region.28 The data includes current 1991 data as well as historic 1987 and 1981 data. Figures relating to Morgan ' Hill were included in this survey for only the 1991 period. In compiling the development fee data, the survey assumed a planned unit development with 100 single-family detached homes, ' with three bedrooms, two baths, 1,500-square-feet of living area, and a 6,000-square-foot lot. The following types of fees were included in the survey: planning fees; building fees; growth ' 27Neighborhood shoppingcenter developers are generally less concerned about development P g Y P fees because purchasers prefer to shop in their local communities for items such as groceries and ' drugs. In contrast, consumers are willing-to travel greater distances to shop for costlier comparison goods, which include items such as home furnishings, apparel, and automobiles. Hence, comparison goods projects are more likely to be concerned about fees, because consumers could balk if high development fees ultimately are incorporated into the pricing of goods. Local communities are often expected to offer special incentives such as fee discounts to attract power centers, regional malls, or destinational retailers (Walmart, Mervyn's, Costco, etc.). 28Fifty-six (56) cities in the following 14 counties were included in the survey: Alameda; ' Contra Costa; Marin; Monterey; Napa; San Benito; San Francisco; San Joaquin; San Mateo; Santa Clara; Santa Cruz; Solano; Sonoma; and Stanislaus. 97 ' impact fees (i.e., school impact, traffic impact, recreation and open space, fire and police, affordable housing, and general growth); and utility fees. ' In 1991, the average per unit residential development fee among the surveyed cities was $13,760 (see Table VII-8). This figure is 50 percent higher than 1987's average of $9,200, and more than300 percent higher than 198Ps average of$4,260. According to this survey, Morgan Hill's ' average 1991 development fee was $12,470, which was below the survey average. Morgan Hill's figure was also among the lowest in the surveyed Santa Clara County cities, which ' included Cupertino, Gilroy, Milpitas, Mountain View, San Jose, and Sunnyvale. Only Sunnyvale and Milpitas had average development fees lower than Morgan Hill's. Outside Santa Clara County, residential development fees range from a low of$4,540 in Oakland in Alameda ' County to a high of $22,760 in Fairfield in Sonoma County. In communities proximate to Morgan Hill, fees tend to be lower than the survey average. Specifically, residential development fees were $13,040 in Hollister, $10,460 in Watsonville, and $10,090 in Watsonville. These figures indicate that Morgan Hill's residential development fees are relatively competitive when viewed in the context of the greater Bay Area region. SUMMARY In summary, there are several policy actions that the City of Morgan Hill can undertake immediately to improve the City's business environment and enhance the viability of development. A first step could include an educational campaign focusing on explaining the purpose of City policies and procedures involved in the development process. In terms of industrial land use controls, S&A recommends reducing minimum lot sizes for light industrial use to 20,000 square feet, reducing minimum setbacks to 30 feet or less, and rezoning a portion of the vacant campus industrial land to alternative uses. No significant changes in commercial ' land use is required. Finally, although the Residential Development Control System does not present severe constraints on optimizing the City's development potential, both residential and retail, the system does significantly impact home prices. The development of more affordable units could be stimulated through significantly reworking the residential permit allocation rating system, although this can be achieved only through voter initiative. 98 Table VII-8 Residential Development Fee Survey(1) The San Francisco Bay Region, 1991 ....... ......................................... .................. ........... .. ................... ...... ........... ..... ..... .......... .............. ............................. ........ . .�..Na a ...... . ...... ... ............... M................. C ........... ........ 0sta'.G............. d1uh . .......................Alarrigda. ount C ...........y-.-..;......... . optrW ....... .......... ................. .. ............ ...... Alameda $8,280 Antioch $9,610 Novato $8,750 Salinas $10,090 Napa $12,160 Castro Valley $11,660 Brentwood $21,870 San Rafael $13,720 Dublin $9,390 Concord $13,600 Sausalito $8,020 Fremont $17,541 Danville $21,750 Tiburon $22,620 Livermore $13,850 Hercules $10,190 Oakland $4,540 Martinez $14,920 Pleasanton $14,860 Moraga $12,230 Union City $16,320 Oakley $22,090 Pittsburg $7,340 Richmond $7,180 San Ramon $23,630 ... ................................... ..... ... X:............ ........... ..... . ............. ............... ......... ........ ..................... ........ ............... ................... ...... ...... ..... .......... .................. . .... ....... an a:c'x an a a .... ........ :::S:::,: ' "'. : ...... :C0 a r' Co,an Benito: untv n: .T Msm. uW: 0 ............ t Hollister $13,040 San Francisco $7,030 Tracy $28,240 Belmont $13,010 Cupertino $20,116 Stockton $1 0'n20 Foster city $10,220 Gilroy $14,040 Half Moon Bay $22,070 Milpitas $11,180 Pacifica $11,200 Morgan Hill $12,470 San Carlos $8,130 Mountain View $14,430 San Mateo $10,230 San Jose $12,550 Sunnyvale $8,700 ...... ......... ........ .... .... .. . ..... S . ............. ......... .. ................ ................................... ..... ...... ... . ......... ........ ..............:.... ... ......................... .......... .. .................. :.;:.. ............................ ......... .........0..... . ... .... .. ...... .... a... ........... ........... ...... ...... . :Co ne on 6u 4 no MI olun u un an a: : ruz ... ...... ............... anis.1 14 Watsonville $10,460 Benicia $12,230 Cotatl $14,970 Modesto $9,720 56 Cities $13,760 Dixon $15,830 Petaluma $17,520 Fairfield $22,760 Rohnert Park $10,960 Rio Vista $12,950 Santa Rosa $11,770 Suisun City $17,270 Windsor $15,910 • Vacaville $16,570 Vallejo $19,180 (1) Per unit development fees were estimated assuming a planned development with 100 single-family detached houses with three bedrooms,two baths,1,500 square feet of living area,and a 6,000-square-foot lot. The fees include planning fees,building fees,growth impact fees(school Impact,traffic impact,recreation and open space,fire and police,affordable housing,and.general growth),and utility fees. EIR costs and engineering Inspection fees are not included Source: "A Study to Examine the Relationship of Land Use and the Creation of Additional Housing Needs,"Prepared for the City of Cupertino,California,Prepared by Planning Resource Associates. Table 3A, page 78. Existing Sedway Contract and Approved RCA Council/Agency Meeting Held: 6 117 f 9!0 Deferred/Continued to: 13Approved ❑ Conditionally Approved ❑ Denied City Clerk's Si a ure Council Meeting Date: June 17, 1996 Department ID Number. ED 96-33 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Director PREPARED'1Y: DAVID C. BIGGS, Director of,Economic Development SUBJECT: Contracts with.Economic Advisors Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Staff recently solicited proposals from firms that provide economic advisory services to redevelopment agencies. Three firms responded and staff recommends contracting with two of the firms. Funding Source: Redevelopment Agency Tax Increment Recommended Action: Motion to:. Approve and authorize execution of the attached contracts between the Redevelopment Agency and the firms of Keyser Marston Associates, Inc. and Sedway Kotin Mouchly Group to provide economic advisory and reuse analysis services to the Redevelopment Agency for a period of two years at a combined not to exceed cost of$100,000 annually. Alternative Action(s): Do not approve the attached contracts. REQUESAR REDEVELOPMENT AGEIISY ACTION MEETING DATE: June 17, 1996 DEPARTMENT ID NUMBER: ED 96-33 Analysis: Since the inception of the Redevelopment Agency's programs, it has contracted with Keyser Marston Associates, Inc. (KMA) to provide economic advisory services. To confirm the skills available from firms in this field, staff recently solicited proposals from seven firms. Three firms responded and were interviewed by a panel consisting of the Mayor, Director of Economic Development and the Redevelopment Project Manager. After deliberation, the panel recommended the preparation of contracts with the KMA firm (the current contract would expire in September 1996) and with the Sedway Kotin Mouchley Group (SKMG). Contracting with both firms will allow the flexibility to assign tasks according to the services required and distribute the work load to assure timely response while maintaining the continuity and historical perspective important to the Agency's long-term projects. The scope of work for each contract is identical and includes the type of services typically required by the Agency including analysis of developer pro formas, preparation of reuse appraisals, determination of warranted financial assistance to projects, advise on housing programs and funding and the preparation of the Summary Reports required by Sec. 33433 of the California Health and Safety Code. Each contract has a term of two years and a not to exceed authority of$50,000 annually ($100,000 for the first year). These services will allow the Agency to continue work on its ongoing projects like The Waterfront, Main-Pier Phase 11, Third Block West and the Huntington Beach Mall and initiate or respond to new development opportunities in the project areas. Environmental Status: NA - Attachment(s): City Clerk's Page Numbet Services Contract with Keyser Marston Associates 1. Professional S ry , Inc. ...:: ......<:h:>> <:::;:;:::::;. 2. Professional Services Contract with Sedway Kotin Mouchley Group. RAA96-33.DOC -2- 29.05.96 3:21 PM PROFESSIONAL SERVICES CONTRACT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND SEDWAY KOTIN MOUCHLY GROUP TO PROVIDE ECONOMIC PROFESSIONAL SERVICES Table of Contents Section Page 1 WORK STATEMENT. 1 2 AGENCY STAFF ASSISTANCE 2 3 TIME OF PERFORMANCE '. 2 4 COMPENSATION 2 5 EXTRA WORK 2 6 METHOD OF PAYMENT 2 7 DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS 4 8 INDEMNIFICATION, DEFENSE, HOLD HARMLESS 4 9 WORKERS' COMPENSATION 5 �. 10 INSURANCE 5 11 CERTIFICATES OF INSURANCE 6 12 INDEPENDENT CONTRACTOR 7 13 TERMINATION OF AGREEMENT 7 14 ASSIGNMENT AND SUBCONTRACTING 7 15 COPYRIGHTS/PATENTS .' 7 16 AGENCY EMPLOYEES AND OFFICIALS .. 7 17 ' NOTICES . 8 18 IMMIGRATION 8 19 LEGAL SERVICES SUBCONTRACTING PROHIBITED 8 20 ATTORNEY FEES _ 9 21 ENTIRETY 9 7/k/SEDWAY/5/3/96