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HomeMy WebLinkAbout1990-05-02 - AGENDA REPORTS - PALMER DEVELOPMENT AGMT (2)AGENDA REPORT City Manager Approval 4 Item to be presented by: UNFINISHED BUSINESS DATE: May 2, 1990 SUBJECT: PALMER DEVELOPMENT AGREEMENT DEPARTMENT: City Manager BACKGROUND George Caravalho The City Council in its meeting of April 17, 1990 appointed Councilpersons Heidt and McKeon to meet with representatives of the homeowners impacted by the Santa Catarina project, representatives from G.H. Palmer and Associates and staff to explore alternatives which would be satisfactory to the property owners. That meeting was held on April 23, 1990 and after a lengthy exchange of concepts, no conclusion was reached. On April 24, 1990 the City Council directed the City Manager to meet with G.H. Palmer to develop a "shopping" list of possible alternatives which address the concerns expressed by the City Council and property owners and still provide roads necessary to the projects. In each of the scenarios, however, the Westcreek project was still to be a condition of development. 1 Meetings have been held with G.H. Palmer and Associates and a very comprehensive list of potential alternatives were developed, many of which were determined to be unacceptable - from the -City's perspective relative to - -the negative impact on the community or not economically feasible from the perspective of the Developer. Attached is a chart (EXHIBIT #1, Page 1) summarizing the alternatives considered to be feasible for the Santa Catarina project and a summary chart (EXHIBIT #1, Page 2) of all the alternatives including Vista Terrace, The Colony and Westcreek. The criteria in each provided roads sufficient to satisfy traffic impact for the number of units in each proposal. The original alternative approved by the Planning Commission provides the most significant road benefit to the community. As will be noted, there is a decrease in general benefit as the number of units are reduced. ALTERNATIVE 11 (1,452 condominiums) - The original proposal which provides construction of Golden Valley Road to Soledad Canyon and Newhall Ranch Road to Bouquet Canyon Road as well as contributing $3 million to the Rio Vista bridge. ALTERNATIVE 12 (1,452 condominiums) - Is identical to Alternative #1 except that Golden Valley Road construction exclusive of right-of-way acquisition is substituted for Newhall Ranch Road. ALTERNATIVE 13 (140 detached single family condominium lots and 1,152 condominiums, total of 1,292) - Same as -Alternate #1 -except eliminates the $3 million Rio Vista contribution. Pn��- Tl�� / ALTERNATIVE 14 (140 detached single family condominium lots, 1,152 condominiums, total of 1,292) - Golden Valley Road to Soledad Canyon Road, Newhall Ranch Road is eliminated, however, the Golden Valley bridge over the Santa Clara river is increased to a 4 -lane bridge rather than a 2 -lane bridge. A 2 -lane bridge is constructed over Soledad Canyon and railroad tracks (will terminate and not proceed any further as part of this project). A 10 foot wide bike lane is constructed in ,the river bed from approximately the bridge west of Camp Plenty to Bouquet Canyon Road and Soledad Canyon is restriped to three lanes in each direction as well as roadway modification on the south side of Valencia Boulevard west of Bouquet Canyon Road to provide three thru lanes through the intersection. ALTERNATIVE 15 (140 detached single family condominium lots, 1,020 condominiums, total of 1,160 units) - Golden Valley Road to Soledad Canyon Road, eliminates Newhall Ranch Road, constructs a 2 -lane bridge over the Santa Clara river, constructs a 2 -lane bridge over Soledad Canyon Road and Southern Pacific Railroad tracks and also constructs a bikeway and ,Soledad Canyon Road restriping, Valencia Boulevard modification. ALTERNATIVE 16 (176 detached single family condominium lots, 816 condominiums, total of 992 units) - Golden Valley Road to Soledad Canyon Road, eliminates Newhall Ranch Road, provides for a 2 -lane Golden Valley bridge over the Santa Clara river, provides for engineering and assessment engineering for Golden Valley between Soledad Canyon to Sierra Highway as well as the bikeway, Soledad Canyon Road striping and Valencia Boulevard modification. ALTERNATIVE 17 (176 detached single family condominium lots, 550 condominiums, total of 726 units) - Golden Valley Road to Soledad Canyon Road, eliminates Newhall Ranch Road, constructs a 2 -lane Golden Valley bridge over the Santa Clara river, bikeway, Soledad Canyon Road striping and Valencia Boulevard modification. ALTERNATIVE 18 (385 detached single family lots) - Does not construct any of the previous improvements and takes it sole access off of Ermine Avenue (staff does not recommend the alternative). Council also directed staff to explore the feasibility of deleting Santa Catarina from the Development Agreement and deferring it to a later time, proceeding with an agreement that would include The Colony project as the basis for the acquisition of the right-of-way and construction of Rio Vista through the Westcreek project. The Developer has indicated that The Colony project does -not have funding incorporated in the "package" to provide for the Westcreek consideration and will not entertain that approach. Serious and considerable effort was placed on Council's express desire to construct Golden Valley between Soledad Canyon and Sierra -Highway in lieu of Newhall Ranch Road. The Developer has indicated that right-of-way acquisition of roadway easements between Soledad Canyon and Sierra Highway for Golden Valley Road may be problematical and require eminent domain. He has consequently, expressed he will not accept responsibility for acquisition of right-of-way in this portion of the roadway should proposal 12 be selected. The elimination of Newhall Ranch Road from Golden Valley to Bouquet Canyon for units above 700 requires other traffic considerations to address the impact on Soledad Canyon. The requirement should be imposed that a bikeway be paved in the river bed and Soledad Canyon Road be striped from the Santa Clara river to Bouquet Canyon for three lanes in each direction for proposals with 700 units or more. Modification of the south side of Valencia Boulevard west of Bouquet Canyon Road is also necessary to permit three thru lanes as an interim measure. Construction of Newhall Ranch Road by the Valencia Co. or construction of Golden Valley between Soledad Canyon Road and Sierra Highway should proceed as expeditiously as possible. These alternate constructions are necessary to mitigate the impact of the loss of Newhall Ranch Road or the construction of Golden Valley between Soledad Canyon Road and Sierra Highway. The Developer has indicated also that each of the alternatives indicated on EXHIBIT #1, Page 1 is based upon approval of The Colony project as presented and reviewed but not approved by the Planning Commission. The Planning Commission expressed concern relative to the most appropriate use for the property. Staff has had a report prepared by an independent consultant, Economics Research Associates Consulting Firm, to evaluate the best use of The Colony project site. That firm has indicated that the lack of freeway accessability diminishes this property in its value for industrial/commercial development. Attached as EXHIBIT #2 is a copy of that report. The GPAC in its meeting of April 25, 1990 considered and voted to place a preliminary designation on the General Plan map on the Santa Catarina project. The GPAC voted with abstentions from the representatives from the development sector that the entire Santa Catarina site be designated for moderate density residential use, detached and attached units ranging from 6.7 to 15 units per gross acre. This equates to 904 units on the low end and 2,025 units on the top end. The GPAC also specified that overall density should be in the lower end of the density range, higher density residential development south of Golden Valley Road north of the river, lower density uses graduated to the north. Attached as EXHIBIT #3 is a copy of the memorandum from the Principal Planner to the City Manager. It is hopeful that the matrix detailing the various elements of the alternatives is helpful to Council in determining which, if any, would be the better for the community. Effort has been made to address as many concerns as possible, and to assure that the City and residents will benefit from the adoption of a Development Agreement. RECOMMENDATION 1. Receive staff report on Santa Catarina project 2. Receive testimony from the applicant of the Santa Catarina project 3. Receive testimony from the public on the Santa Catarina project a. Certify Environmental impact Report for this project b. Select and approve an alternative to Vesting Tentative Tract Map 31236 C. Approve Conditional Use Permit 89-015 d. Direct staff to prepare for Council consideration an Ordinance for Zone Change 89-006 4. Receive staff report for The Colony project 5. Receive testimony from the applicant of The Colony project 6. Receive testimony from the public on The Colony project a. Certify Environmental Impact Report for this project b. Approve Vesting Tentative Tract Map 45026 C. Approve Conditional Use Permit 90-002 d. Approve Oak Tree Permit 90-006 e. Direct staff to submit for Council's consideration, Ordinance for Pre -zone 90.002 7. Direct staff to prepare the appropriate documents and to schedule a Public Hearing on the Development Agreement on May 22, 1990 ATTACHMENTS EXHIBIT #1 - Chart of Alternatives EXHIBIT #2 - GPAC Action on Santa Catarina Site EXHIBIT 463 - Economics Research Associates Report Exhibit 1 Page 1 of 2 PALMER DEVELOPMENT AGREEMENT ALTERNATIVES SANTA CATARINA PROJECT (ONLY) ALTERNATIVE PROPOSALS #1 #2 #3 #4 #5 #6 #7 #8 (original) (residents) (Ermine) TOTAL UNITS 1452 1452 1292 1292 1160 992 726 385 Single Family detached on condo lot 0 0 140 140 140 176 176 385 Condominium 1452 1452 1152 1152 1020 816 550 0 AVERAGE DENSITY (Units/Acre) 10.73 10.73 9.55 9.55 8.57 7.33 5.37 2.85 NEWHALL RANCH ROAD (ROUTE 126): 2 mi. plus, grade 4, pave 2 lanes 14.00 -- 14.00 -- -- 0.6 mi. grade 4 lanes 3.60 -- 3.60 -- -- -- -- GOLDEN VALLEY ROAD: 0.7 mi full street improvements 5.30 5.30 5.30 5.30 5.30 5.30 5.30 -- (within Santa Catarina project site) 0.6 mi. grade 4, pave 2 lanes 4.30 4.30 4.30 4.30 4.30 4.30 4.30 -- Soledad Canyon Rd. to Via Pnncessa -- 9.50 -- -- -- -- -- 1.4 mi. grade 4, pave 2 lanes (excl. R/W) Via Princessa to Sierra Highway -- 7.70 -- -- -- -- -- -- 1.1 mi. grade 4, pave 2 lanes (excl. R/W) Engineering & assessment engineering -- -- -- -- -- 1.40 -- Soledad Canyon Rd. to Sierra Highway 2 lane Santa Clara River bridge 5.00 5.00 5.00 -- 5.00 5.00 5.00 -- 4 lane Santa Clara River bridge -- -- -- 12.00 -- -- -- 2 lane bridge over Soledad Canyon -- 2.10 -- 3.40 3.40 -- -- and Southern Pacific Railroad tracks Rio Vista Contribution 3.00 3.00 -- -- -- -- -- -- Restripe Soledad Canyon Road incl. mod. -- -- -- 0.20 0.20 0.20 0.20 -- s/s Valencia Blvd. w/o Bouquet Canyon 4.0 mi., 10 ft. wide bikeway/ped. surface -- -- -- 0.40 0.40 0.40 0.40 -- along north bank of the Santa Clara River TOTAL ROAD CONTRIBUTION ($M) 35.20 36.90 32.20 25.60 18.60 16.60 15.20 0.00 BRIDGE & THOROUGHFARE $30,303 $31,767 $30,332 $24,115 $19,456 $20,029 $24,675 $0 EQUIVALENT FEES / UNIT � R- 0 Lu a. � Z W 2 W W T- 0 Q � Z W � � 0 J W � W 0 Cc W � J Q CL 2 § § § CIA G I E » - q � C:_ E to 2 / ~cm I Z m_ e W2m �2 U. C4 2 § icm cqn 0 !iLO R w� 2 ° 2CM qh § % - © CM k A G 2 § i 2 !Zq q % { k \ o a f a G <�i n k cc 000 LO k § 2 ° ° / R 2 \ z o dcnR G 2§ Itn n M m 0S� E $ a. w # ccC4 m_ _ ° / 9 D 0 « D A 2 / }\� V)/ « _ CV) 70 § § ) ] § q - eD� X7 k 0 0 \to M / ~ E 2 2 § § - - N 2 § CO 2 R q e n � _cc - E t CY te)_ 2_ 2 2 q k } m =o z ® u \ rr o cc z w w ° Lu O . w A @cr w z \ 9 \ � CL > 3: 1 -- r ;EXHIBIT #2 Page 1 of 9 Economics Research Associates Affiliated with Drivers Jonas MEMORANDUM TO: Ms. Christine L. Trinklev Principal Planner - FROM: Da -.e Wilcox and Mike Wright Economics Research Associates DATE: April 11, 1990 SUBJECT: G.H. Palmer Property - Industrial Development Feasibility ERA Report No. 9850 Introduction At your request, Economics Research Associates (ERA) has conducted an industrial development feasibility assessment for the above referenced property, which consists of approximately 46.2 gross acres of industrially -zoned land in the southwest portion of the Lost Canyon area between Windfall Road and the Antelope Valley Freeway. This area is currently outside of the Santa Clarita city boundaries, but might be annexed to the City in the near future. We have been informed that the developer -- G.H. Palmer and Associates -- has tentative plans to establish a residential apartment -complex development named "The Colony", consisting of 800 dwelling units at 17.8 units to the acre. The City of Santa Clarita wishes to assess the feasibility of pursuing an alternative development strategy devoted to an industrial development scenario -- primarily to see if substantive new employment locations could be established in a part of the community now deficient in such opportunities. This report presents ERA's observations and conclusions regarding the suitability of the G.H. Palmer property to industrial rather than residential development. This brief review is -,based on data supplied to us by the City of Santa Clarita, as well as previous field research conducted in the Canyon County area. ERA has not contacted the property owner/developer during the coarse of this analysis. The work has been conducted during the week of 4/09/90 at the request of the Community Development Department and includes an afternoon of site review at and on the subject property and the surrounding lands and , potential access ways. Page 1. 10960 Wilshire Boulevard, Suite 2400, Los Angeles. California 90024 • (213) 477-9585 Telex 857661 (ECON RES LA) Fax. (213) 478-1950 Los Angeles • San Francisco • San Diego - Chicago • Boston • Washington, 0 C • Fort Lauderdale EXHIBIT #2 Page 2 of 9 Descriation of the Subiect Site and Surroundine Properties As mentioned above, the subject site is located in the southwest portion of the Lost Canyon area between Windfall Road and the Antelope Valley Freeway. (See Figure I) Approximately 46.2 gross acres in area, the site is bisected on the south end by the Southern Pacific Rail Road line and is bordered on the north side by the Santa Clara River. The subject site is located in a flat valley area surrounded on three sides by a hillside exhibiting a varying slope of between 30 and 50 percent grade. City Staff estimates the overall acreage of the valley area to be approximately 140 to 150 buildable acres net of the Santa Clara river channel and rail line rights of way. The Santa Clara River, which traverses through much of the valley in an east/west direction is unchannelized in this area and it varies from approximately 200 to over 500 feet in width at several points. There are no bridges spanning the channel in this area. Background reports for the City's General Plan indicate that the river channel is mostly dry throughout the year. According to conversations with City staff, City policy regarding development along the river bed is to leave this stretch of the flood way unchanneled and in a natural state. We presume the developer will need to provide some type of dike or levy to prevent flooding of the adjacient properties. Development could then proced on the flood fringe area. Market Overview for Industrial Development The Santa Clarita Valley area is an extremely active market for new industrial and business park development. The majority of new industrial development occurring in the Santa Clarita Valley is located along the Golden State Freeway (I-5) corridor. According to local brokers, approximately 1.0 to 1.5 million square feet of new industrial space has been absorbed annually for the last several years. The bulk of this development has occurred in several "park" developments located along the 1-5 freeway corridor. Current prices for finished land run from $12 to $14 per square foot and lease rates for finished structures are approximately $0.45 to $0.50 per square foot. Preliminary plans for future industrial development in the Santa Clarita Valley will continue to cluster along the 1-5 freeway from the Valencia area north to Hasley Canyon. ERA -is aware of the following planned industrial developments for the Santa Clarita Valley, which, depending upon the current market conditions, are scheduled to commence in late 1990 and early 1991. The Hewson Company plans to add 590,000 square feet of industrial space in the Valencia Commerce Center (Hasley Canyon area) starting in late 1990. Josephson Properties plans a 3 million square foot industrial park in an area known as The Golden State Park. Finally, Newhall Land and Fanning will open an additional 300 acres in the Commerce Center development. Combined with the Josephson land, almost 15 million square feet of new industrial floor space is possible, in addition to other smaller projects, over the next 10 to 12 Page 2. N I N LLJ a a a c LL o < o W Q � (%1 W L6 I 1 1 ! I EXHIBIT _#� S Road �,- Canto^ 06 cn o Samoa J FW - Q_ N O W20 +•':iii►�+:., W V ••G .rs. Q:ii W W V Q o J 00 U 1 U. C=i I uj � 1 � LL J h u �C �,- N10 o Ell, CL -r a�l 7. W W V Q o J 00 U 1 U. C=i I uj � 1 � LL J h u �C EXHIBIT #k? Page 4 of 9 years. All of this is located along the I-5 corridor. Given an estimated 6 million square feet of currently built space in the Santa Clarita Valley, the addition of an extra 15 million square feet equates to approximately 100 square feet of industrial space per capita using the projected year 2000 forecast of 210,000 persons. This is an exceptionally high per capita value for supportable industrial space in a community. It should be noted that, although the larger Santa Clarita area clearly demonstrates signs of strong industrial space demand and absorption, at the same time there are numerous .competitors for that demand who are definantly located in areas along the I- 5 corridor where the desirable clustering of sub -contractors and suppliers has occurred. Thus, the Palmer/Colony site, as a potential new stand-alone initiative is at a distinct disadvantage. Population Growth Within Primary Employment Area Based on a recent ERA analysis of pending residential building activity in the Canyon Country area, we believe that the area immediately surrounding the subject site contains an adequate population base and resultant labor pool needed to support the employment needs of businesses locating in an industrial park development. The "trade area" assessed for this population estimate extends approximately 4.5 miles west of the intersection of Soledad Canyon and Sand Canyon Roads, 3 miles to the north and south of Sand Canyon, and as far as 6 miles to the lesser populated areas located to the east and northeast of the subject property. This area presently includes 59 percent of the recorded and 42 percent of the approved housing units within the Santa Clarita Valley as a whole. We have thus estimated that this area will account for roughly 50 percent of the Santa Clarita Valley's growth over the next 10 years, or about 1,350 units a year. Using this methodology, we estimate current population in the "trade area" to be 58,700, reaching a level of 74,800 by 1995 and 91,500 by 2000. Roadway Access to the Subject Site Referring again to Figure I, there are several potential access routes to the subject property. Currently, the only access route is by way of Lost Canyon Road and Woodfall. This path is accessible only by way of Soledad Canyon Road, a route approximately 2.5 miles from the nearest freeway off -ramp. As a main access thoroughfare, this route is undesirable because of its distance from a freeway off -ramp and the necessity of crossing the unimproved Santa Clara river channelbed to gain access to the subject property. Figure I indicates the three freeway off -ramps with the closest proximity to the subject property (off -ramps are indicated by shaded circles). It should be noted that of the three feasible access routes, all would traverse through established or planned residential areas. The Antelope Valley Freeway (Hwy -14) off -ramp at Sand Canyon could access the Page 4. EXHIBIT #2' Page 5 of 9 subject site and the remaining acreage in the valley area by way of a connection at Lost Canyon Road. In order to avoid crossing the Santa Clara riverbed at two points, a new roadway extending southwest along the hillside area would need to be created. This would entail the construction of an above- or below -grade crossing system in order to traverse the Southern Pacific rail right of way. The major drawback to this route is that all industrial park traffic would travel past two existing elementary school sites and a residential neighborhood of single - family • houses located along Lost Canyon Road. A second access route located to the west of the subject site is the preferred routing of the developer of the property. This access is by way of a extension of Jakes Way, a local street just off Sierra Highway. The entrance to Jakes Way is located approximately one mile north of the Hwy -14 off -ramp at Sierra Highway. This road extension would travel under the Antelope Valley Freeway and be adjacent to the anticipated levy extending along the Santa Clara river channel. The major difficulty with this route is that it will pass through an already -developed apartment "neighborhood" consisting of approximately 200 to 300 units. Extension of this proposed roadway under the Hwy -14 freeway makes this route a less than desirable alternative for industrial or for residential traffic and will be constructed only at considerable cost. The third, and most feasible of the access routes, would make use of the planned extension of Via Princessa by the American Beauty commercial/residential development project located to the south of the subject site. Via Princessa will be extended from the freeway off - ramp, up through the hillside area and down into the Lost Canyon valley area where the subject site is located. Because roadway construction costs may be absorbed in the American Beauty development, the expense of a extension through the hillside area may be avoided. A crossing will need to be constructed to traverse the rail lines at the expected connection point at Woodfall Road. Although this route is clearly the most feasible and direct for business traffic to the subject site, it nevertheless, would pass by a future elementary school site as well as approximately 2,000 R-3 and R-1 dwelling units to be constructed along its path. Economic Impact of Industrial Park Development ERA has provided a rough estimate of the economic impact of an industrial park development on the subject site. The estimates are approximations due to the lack of detailed development data at this point in time. As can be seen in Table I, we have estimated building and employment impacts for the subject property and for the 150 acre valley area as a whole should it too be developed as part of a unified industrial park. We have assumed a typical development mixture of the following uses: • R & D/Light Manufacturing at 70 percent. • Warehouse uses at 20 percent. • Office uses at 10 percent. Page 5. EXHIBIT #2 Page 6 of 9 Table I Economic Impact of Development Alternatives G.H. Palmer and Associates Property Industrial Park Development Estimated Employment Impact Estm. Employees Per 1,000 sq. ft. of Bldg. Area R S D/Manufacturing 2,00 2.00 Warehouse 0.36 0.36 Office 2,88 288 Estm. Employment 850-1,045 2,550 - 3,300 Estimated Fiscal Impact to Citv Construction Costs per Square Foot R & D/Manufacturing 540,00 Total Valley $37.00 Sublect Site Area Scale of Development $19,400,080 Estimated Site Acquisition Cost Gross Acres 46.2 140-150 Net Developable Acres 36.9 112-120 Estimated Building Mix Total Estimated Land Value: $7,385,750 R & D/Manufacturing 70% 70% Warehouse 2096 2096 Office 10% 10% Lot Coverage Ratio 0.30 0.30 Estimated Square Footage of Structures 480,200 1,450,000 - 1,550,000 Estimated Employment Impact Estm. Employees Per 1,000 sq. ft. of Bldg. Area R S D/Manufacturing 2,00 2.00 Warehouse 0.36 0.36 Office 2,88 288 Estm. Employment 850-1,045 2,550 - 3,300 Estimated Fiscal Impact to Citv Construction Costs per Square Foot R & D/Manufacturing 540,00 Warehouse $37.00 Office $50,00 Total Improvement Value $19,400,080 Estimated Site Acquisition Cost (@ $1.87/sq. ft.) $3,763,300 Estimated Site Improvement Cost (Q? 51.80/sq. ft.) $3,622,450 Total Estimated Land Value: $7,385,750 Total Estimated Property Value at completion of construction W,785,830 Estimated Property Tax Revenue (1) $160,715 Estimated Sales Tax Revenue (2) $21,609 Estimated Business License Fee Revenue (3) $1,700 - $2,090 Notes: (1) Tax Rate - 0.06%. (2) Sales Tax Revenue estimated at $0.045 per square foot for Industrial space. (3) Business License Fee estimated at $2.00 per employee. EXHIBIT #2" Page 7 of 9 As an alternative, scenario, R & D/Manufacturing was assumed at 80 percent and Office uses were assumed at 20 percent. This was done in order to provide ranges for development scale and employment impacts. As can be assessed from the information presented in Table I, ERA estimates that a gross building area of 480,200 square feet of structures for the subject property is feasible. Total feasible square footage of industrial structures for the entire valley area would be on the order of 1,450,000 to 1,550,000 square feet of gross area. Using the employment density factors presented in the table, we estimate that the subject property would employe between 850 and 1,045 employees at full build -out depending on the final product type mix. For the entire valley, full build -out employment could range from 2,550 to 3,300 depending upon final product mixture. Using estimations of property acquisition and improvement costs and industry average per square foot construction costs, we have estimated approximate property value at completion of construction to be on the order of $26.7 million for the subject property if developed as an industrial park. Assuming average debt service and other carrying costs for financing, the developer would need to seek an average per square foot rent of $0.45 - $0.48. While this is on par with the average cost of $0.45 to $0.55 per square foot for industrial space located along the I-5 corridor, it may not be enough of a margin to ensure profitable development at such an isolated location and remote location. An industrial park in this area will most likely command lower on average rents than similar properties along the 1-5 corridor due to its isolated nature and seperation from other industrial tenants. Finally, as part of ERA's economic analysis, city revenues stemming from an industrial development at the subject site were estimated to total approximately $184,300 annually.' This economic and fiscal analysis is contrasted with an assessment of impact of a residential development of 800 apartment units on the subject site. ERA has estimated total property value and fiscal impacts under the residential development scenario as follows: 800 dwelling units @ ave. of 1,100 sq.ft. per unit: 880,000 square feet. Construction Cost @ $57/sq. ft.: $50,160,000 total value. Site Acquisition: $3,763,300 Site Improvement @ $1.50/sq. ft.: $3,000,000 Estimated Property Value at Completion: $56,923,300 This amount is estimated using the City's current collection amount for the business license fee. ERA understands that the City is presently reviewing this fee and will increase its amount in July 1990. Page 7. EXHIBIT #� Page 8 of 9 Estimated Population Increase: 2,100 - 2,200 persons. Annual Property Tax Revenue to City: $ 341,500 Annual Value of State Subventions and Misc. Per Capita revenues, subventions': $ 118,250 Opportunities and Constraints for Industrial Development Whichever development plan is finally pursued, ERA believes that the final costs will be higher than average to bring the necessary infrastructure to the site and to provide adequate protection from the Santa Clara river channel and possible water run off from the surrounding hillside slopes. Because these problems must be overcome no matter which development scenario is pursued, they are not addressed in this memorandum. Rather, we now provide an outline and discussion of the apparent pro's and con's of the subject site as it relates to possible industrial development. Opportunities fur Success: 1. Development of the subject site as an industrial/office park would provide a expansion of employment opportunities in the eastern portion of the Santa Clarita Valley. Population projections for the area immediately surrounding the subject site appear to be substantial enough to support the employment needs of a typical industrial park development. 2. The subject property's location along the Antelope Valley Freeway (Hwy 14) gives it greater accessibility to traffic from the Antelope Valley area. This may be an advantage for supply and subcontractor networks over the increasingly congested I-5 corridor. Constraints on Success: 1. At 46.2 acres, the subject site is too small to feasibly support a stand-alone industrial park. If the entire valley area where the subject site is located were constructed .as a _coherent and integrated development, it would still be on the small end of the scale for a typical industrial park. A typical park will average 350 - 400 acres at build -out in order to achieve economies of scale for infrastructure development. Moreover, a consolidated and unified development of the entire 150 acres will 2 Estimated at an average of $55 per capita. Page 8. EXHIBIT #2' Page 9 of 9 be necessary for a successful industrial park. The multiple ownership of land in the valley location of the subject site will make such consolidated development a difficult task. 2. The isolated nature of the subject site and the surrounding valley area will make it difficult to attract quality, high -rent tenants. Although highly visible from the Hwy -14 freeway, the valley area is not easily accessible by any of the access route alternatives. Moreover, an industrial park in this area of Santa Clarita is isolated from the intense clustering activity occurring along the I-5 corridor. Spatial clustering of independent, yet linked businesses is a common phenomenon among industrial users. Successful businesses need to be close to key suppliers and sub -contractors. A 150 acre industrial park development may work quite well if surrounded by a larger network of other industrial land users. However, this same park, isolated by a distance of 8 to 10 miles from the majority of the Santa Clarita Valley's other user is at a distinct disadvantage. 3. Because of the isolated and remote nature of the subject site, the feasible asking price on rent will most certainly be lower than the Valley's current going rates. ERA's cursory analysis of the economics of this project indicated that typical development costs for the subject site would make it difficult for a industrial - park development to achieve a reasonable rate of return on investment. 4. Finally, although the Via Princessa access route to the subject site appears to be the best of the roadway alternatives for business traffic, it, like the other alternatives, will pass directly by a future school site and future residential neighborhoods. Conclusions Because of the remote and isolated nature of the subject site and the unsatisfactory nature of all proposed access routes to the area, ERA believes that industrial development would be an unreasonably risky venture. From the information provided to us, it appears that a developer would find it difficult to compete economically with similar industrial parks under development in areas along the I-5 corridor. Due to the nature of the likely tenants for such a park and probable asking price on rents, an industrial park at this location does not appear to be feasible at this time. Page 9. EXHIBIT #3 CITY OF SANTA CLARITA I N T E R O F F I C E M E M O R A N D U M TO: George Caravalho, City Manager FROM: Christine Trinkley, Principal Planne DATE: April 27, 1990 SUBJECT: GPAC Action on Santa Catarina Site At the GPAC meeting of April 25, 1990, the General Plan Advisory Committee voted to place a preliminary designation on the General Plan map for the Santa Catarina site as follows: That the entire site be designated for moderate density residential use (detached and attached units ranging from 6.7 to 15 units per gross acre). The GPAC further specified that the overall density should be in the lower end of the density range and that the higher density residential development should be located south of the alignment of Golden Valley Road and north of the river with lower density uses graduated to the north. The motion passed on a 5-4 vote (three abstentions from the development sector) with the GPAC Chairman breaking the tie. CT: rd