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2003-05-27 - AGENDA REPORTS - GATE KING INDUSTRIAL PARK (2)
CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager Approval: Item to be presented by: DATE: May 27, 2003 SUBJECT: GATE KING INDUSTRIAL PARK DEPARTMENT: Planning and Building Services RECOMMENDED ACTION Agenda Item: Vincent P. Bertom Conduct and close the public hearing; direct staff to return to the June 24, 2003 City Council meeting with the applicable resolutions and ordinances for the project incorporating the modifications that staff and the applicant has agreed to. BACKGROUND The City Council requested at the conclusion of the January 28, 2003 City Council meeting, that staff continue to work with the applicant to revise the project site to eliminate Lot 24 which would save more oak trees and provide a larger wildlife buffer. The City Council also requested staff to work with the applicant on the remaining project issues for the project. After four months staff and the applicant have agreed on a revised site plan and all of the remaining project issues which are broken down in the Project Analysis of this report. Lastly, Council directed staff at the January 28, 2003 City Council meeting to hire a consultant to perform an economic feasibility analysis to verify the developer's claims of economic feasibility constraints. At the regular City Council meeting of February 11, 2003, the City Council appropriated $20,000.00 from the Council Contingency Fund to hire the Conley Consulting Group. The Conley Consulting Group did complete the report which concluded that the applicant's return on investment would be 8.1%, which is lower than the industry standard of 15-20%. In addition, the applicant's return is based on the previous conditions, thus with the proposed amendments his investment return improves. I Al Hart School District Rory Livingston of the Hart School District has stated that the District is requesting to withdraw it's request for a school site from the Development Agreement. Mr. Livingston stated that the District is pursuing a separate agreement with the applicant. The letter withdrawing from the Development Agreement will be presented at the Council meeting. PROJECT ANALYSIS Lot 24 The applicant has submitted a revised site plan that reduces Lot 24 from 26.2 to 5 acres and moves the water tank northerly providing a larger wildlife buffer. As part of the revised site plan the applicant has removed 75.8 acres from the project that runs along Sierra Highway which brings the total acreage of the project to 508.2. By excluding the 75.8 acres from the project site, which saves more oak trees and provides more of a buffer for the wildlife corridor. The 75.8 acres was originally part of Lot 24 and the dedicated open space acreage the applicant was proposing to the City. The 75.8 acres currently has a general plan/zoning designation of Open Space (54.3 acres) and Industrial Commercial (21.5 acres). The revised site plan also increases the proposed industrial pads by seven acres, which is accomplished by cutting into the manufactured slopes adjacent to the proposed industrial pads. This increase would remove additional 17 oak trees and increase the earth movement by 100,000 cubic yards. However, by excluding the 75.8 acres from the project site and pulling the grading back and utilizing more encroachments (790 oak tree encroachments from 336), the applicant would reduce the total oak tree removals by 253 for a total of 1408. The revised site would also save the proposed two heritage removals, thus the project would not remove any heritage oak trees. Also by excluding the 75.8 acres from the project site, the total amount of earth movement for the project would be reduced by 1.6 million cubic yards for a total of 5.7 million cubic yards of earth movement. Paul Edelman from the Santa Monica Mountains Conservancy presented the revised site plan to his board on March 24, 2003. The Conservancy Board approved the exclusion of the 75.8 acres from the project and approved of the parcel to be gifted to the Conservancy in the future if the City of Santa Clarita chose not to accept the gift in the future. Revised Project Description The applicant is proposing to subdivide the 508.2 acre project site into 106 lots and is requesting General Plan and Zoning Amendments to change the land use designations in several areas of the site. The proposal involves amending the land use designation on about 277.8± acres, or about 45.7% of the site. The proposed changes would eliminate the residential (Residential Estate) and commercial (Community Commercial) designations from the site, and would increase the area designated (Industrial Commercial) from 187.8 acres to about 215.8 acres. The area designated (Open Space) would increase from 31.8 acres to about 188.6 acres. Sixty-eight lots, which encompass about 36.7% of the site, are proposed to be industria"usiness park lots (184.1 acres) or 161± acres pad; three lots, which comprise about 12.2 acres or 2.4%, would accommodate three water tanks to serve site development; 2.1 acres or 0.5% would accommodate the helipad site; 33.2 acres or 6.5% would consist of City dedicated trail and natural slope lots; 174.4 acres or 34.1% of the site would be dedicated to the City as a wilderness park; and permanent open space. The remainder of the site of 53.7 acres or 10.5% would consist of public streets (19.1 acres), the MTA (14 acres) and SCE (19.3 acres) rights of way and 49.8 acres or 9.8% to be owned and maintained by the POA. Full build out of the site under the applicant's modified proposal would involve the development of approximately 203.2 acres (40% of the site) with industrial/commercial uses. This acreage would accommodate up to 4.2 million square feet of industrial/commercial development. As part of this alternative the applicant will also be removing 1,408 oak trees of the 11,721 plus oak trees (no heritage removals) and 790 oak tree encroachments. Resolution of Project Issues The applicant believes that by excluding the 75.8 acres from the project site he has addressed the City Council's concerns of providing more of a wildlife buffer and reducing the total number of proposed oak tree removals for the project site. In addition to staff and the applicant agreeing on the revised site plan, staff and the applicant have also agreed on the remaining project issues which are listed below. 1. Provide two water guzzlers for wildlife at each water tank (Approximate cost of $25,000.00 ). 2. Provide a tree planting program of up to 500 trees over a five year period (Approximate cost of $37,500.00). 3. Provide a Class I bike trail along "A" Street (Class I1 was originally proposed) and providing a wider trail along `B" Street (Approximate cost of $117,000.00). 4. Industrial Park's Property Association will contribute $1,000.00 a year for ten consecutive years for a total of $10,000.00 to support the organization of sports leagues for young children in the town of Newhall. 5. Increase the cash contribution from $1,973,500.00 to $2,400,000.00 which will be paid on a pro rata square foot basis as building permits are issued for the 4.2 million square feet of industrial buildings. 6. Lots 41, 46A, 47, 52, 45 (natural slopes) will be owned by the City and maintained by the Property Owners Association. The trail in Lot 45 will also be incorporated into the project site. 7. Provide a 14 foot clear A/C trail on the project site (Lot 41, Lot 30, Lot 29A, Lot 28, Lot 28A, and Lot 2813) adjacent to Sierra Highway meandering around the oak trees rather than providing the curb adjacent sidewalk along Siena Highway. The applicant will not be required to install streetlights along Sierra Highway but will be required to annex into the Streetlight Maintenance District which will pay for streetlights along this area if they are needed in the future. 8. Lot 48A which is next to the Pioneer Oil Refinery will become an industrial lot. The applicant has agreed to a reciprocal parking agreement and access if it doesn't impact the industrial parking for the site. 9. Modify the condition that will require the applicant to re -stripe San Fernando Road to three lanes in each direction from Sierra Highway to Newhall Avenue to be within the existing right of way with the exception of where intersection and/or traffic signal improvements are required. 10. Modify the Open Space language in the Development Agreement to ensure that the project's dedicated open space remains open space in the future. 11. Modify the Large Lot language in the Development Agreement to ensure that the infrastructure of the project will be built concurrently with the project and its building square footage. 12. Remove the deal point in the Development Agreement that requires the applicant to construct off-site medians and median landscaping. 13. Remove the condition from the project that requires Lyon's Avenue to be re -striped to the three lanes in each direction. 14. All City development fees shall be fixed with the exception of B&T fees for the first 5 years at the February 2001 rates. At the end of the 5th year of the Development Agreement all fees will be adjusted to that year's current rate and shall be fixed until the 10th year. The remaining five years of the Development Agreement all fees will be adjusted annually to that year's current rate. Note: The applicant will be subject to the B&T fees in effect at the time of the Development Agreement signing. Gate King Project Benefits The first City Council meeting for the Gate King Industrial Park project was heard on November 12, 2002 which gave Council an overview of the project and the project's significant community benefits. Since that meeting there have been many outstanding issues, concerns, and requests which needed to be addressed and resolved at the following City Council meetings. Because of the time span, staff believed it was necessary to give the City Council an up to date list of the project's significant community benefits. The following is a list of the significant community benefits that the project/developer is proposing: 2.4 million dollar cash contribution for but not limited to San Fernando Road Pedestrian Bridge or other San Fernando Road Beautification improvements, Nehwall Community Center improvements, Newhall Community Entrance Sign, Off-site Park and Ride Facility, Pioneer Oil Refinery improvements 2. 1.5 acre Fire Station site 3. Wildfire Helipad site 4. Two on-site trailheads 5. 3.3 miles of on-site trails 6. 207.6 acres of City dedicated open space 7. 2 wildlife guzzlers ($25,000.00) 8. Oak tree City planting program of up to 500 trees over a five year period ($37,500.00) 9. Planting of 500 oak trees on the project's graded slopes and an additional 700 oaks trees planted throughout the project 10. Industrial Association contribution of $1,000.00 a year for ten consecutive years for a total of $10,000.00 11. Off-site San Fernando Road improvements that will consist of fill ins of curbs, sidewalks, street trees, and street lights 12. Class I bike trail along "A" Street 12. Maintain and provide a significant open space buffer for the Wildlife Corridor 13. Provide approximately 7,800 new jobs with full build -out 14. Provide approximately $6.7 million dollars in new retail expenditures with full build -out (The Newhall Redevelopment Area is expected to capture as much as 50% or $3.3 million dollars of those retail expenditures) ALTERNATIVE ACTIONS Other action as determined by the Council FISCAL IMPACT Council directed staff at the January 28, 2003 City Council meeting to hire a consultant to perform an economic feasibility analysis to verify the developer's claims of economic feasibility constraints. At the regular City Council meeting of February 11, 2003, the City Council appropriated $20,000.00 from the Council Contingency Fund to hire the Conley Consulting Group. The Conley Consulting Group did complete the report which concluded that the applicant's return on investment would be 8.1%, which is lower than the industry standard of 15-20%. In addition, the applicant's return is based on the previous conditions, thus with the proposed amendments his investment return improves. ATTACHMENTS Revised Site Plan Conley Consultanting Group Memorandum dated May 9, 2003 available in the City Clerk's Reading file CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: r Sm FROM: ennetIt�and n , C' y Manager DATE: May 27, 2003 / SUBJECT: GATE -KING INDUSTRIAL PARK Staff requests that the City Council include into the record the two attached memorandums dated May 27, 2003. One memorandum compares the environmental effects of the current proposal that is before the Council tonight to the original project in the DEIR. The second memorandum is additional information regarding water availability for the project. If you have further questions regarding this issue, please contact me or Vince Bertoni, Planning Manager, at (661) 255-4365. ATTACHMENTS: Proposal comparison memo dated May 27, 2003 Water availability information dated May 27, 2003 KRP:JJL: VPB:JWH S/PBS/CURRENT/1999/99264/may27memo RECEIVED AND MADE A PART OF TfIE RECORD AT S�a�^ MEETING ITEM NO. t FROM: S r w F F RECEIVED AND MADE A PART OF THE RECORD AT 5 12MEETING Memorandum ITEM NO. ( 9 FROM: S—I F r - To: Jeff Hogan, Associate Planner, City of Santa Clarita From: Joe Power, AICP, Planning Manager, Rincon Consultants Date: May 27, 2003 Subject: New Gate -King Proposal This memorandum compares the environmental effects of the current application before the Santa Clarita City Council for the Gate -King Industrial Park to those of the original proposal that was the subject of the Draft EIR that was circulated for public review in 2002. Since the circulation of the Draft EIR, the project has undergone a number of changes as a result of input from the Santa Clarita Planning Commission and City Council. These changes are summarized in the table below. Comparison of Original Proposal and Current Proposal inns total reduction Includes an estimated 212 trees preserved by Alternative 5 and an additional 253 trees that would be preserved through the removal of Lot 24 as currently proposed. It should be noted that the larger pads currently proposed for Lots 13, 14,16B, 17,18 and 19A would remove 17 trees not affected by the original proposal, but the net result would be a reduction of 465 removals. °Acreage estimate does not include 75.8 acres deleted from the project and dedicated in fee simple to the City. Does not include 100 trees in the Oak Mitigation Bank and 64 oaks previously removed. The applicant's current proposal is essentially a derivative of Alternative 5 (the "Reconfigured'C' Street" alternative), which was studied in the Draft EIR. Similar to Alternative 5, the current proposal would reduce the overall buildout potential of the site to about 4.2 million square feet of industrial park development, or about 5% less building area than would have been accommodated under the original proposal. Original Proposal Current Proposal (as studied in (Alternative 5 and Net Change Draft EIR) no Lot 24) Site Size 584 acres 508.2 acres -75.8 acres Buildable Area 170.1 acres 161 acres -9.1 acres Development Potential 4.45 million square 4.2 million square -0.25 million feet feet square feet Total Earth Movement 7.24 million cubic 5.7 million cubic -1.54 million cubic (cut and fill) yards yards yards Direct Oak Tree Removals' 1,709 trees` (2 heritage trees) 1,244` trees (0 heritage trees) 465 trees' Dedicated Open Space 220.6 acres 207.6 acres" -13.Oacres° inns total reduction Includes an estimated 212 trees preserved by Alternative 5 and an additional 253 trees that would be preserved through the removal of Lot 24 as currently proposed. It should be noted that the larger pads currently proposed for Lots 13, 14,16B, 17,18 and 19A would remove 17 trees not affected by the original proposal, but the net result would be a reduction of 465 removals. °Acreage estimate does not include 75.8 acres deleted from the project and dedicated in fee simple to the City. Does not include 100 trees in the Oak Mitigation Bank and 64 oaks previously removed. The applicant's current proposal is essentially a derivative of Alternative 5 (the "Reconfigured'C' Street" alternative), which was studied in the Draft EIR. Similar to Alternative 5, the current proposal would reduce the overall buildout potential of the site to about 4.2 million square feet of industrial park development, or about 5% less building area than would have been accommodated under the original proposal. Memorandum Regarding New Gate -King Proposal Page 2 The change from Alternative 5 involves the reduction of Lot 24 in the southern portion of the site from 26.2 acres to 5 acres. In lieu of developing Lot 24, the applicant is proposing to increase the size of several industrial lot pads elsewhere on the site beyond that shown on the original proposal. A total of about seven acres would be added to the industrial pads, which would be accomplished by cutting into adjacent manufactured slopes. In conjunction with the elimination of most of Lot 24, the applicant has removed about 75.8 acres from the project site and has donated this land to the City (the 75.8 acres include portions of Lot 24 and the open space area included in the original proposal). For all environmental issues, the changes proposed would either have no effect upon the conclusions contained in the Draft EIR or would reduce impacts as compared to those identified for both the original proposal and Alternative 5. As noted above, the project would involve roughly the same amount of overall building area as Alternative 5. Consequently, its impact with respect to issues such as traffic, air quality, noise, utilities, and public services would be the same as those of Alternative 5 and incrementally less than the impact associated with the original proposal. For other issues (geology and aesthetics, for example), the impact associated with the current proposal would be less than that of the original proposal and less than that associated with Alternative 5. This reduction in impact is due to the overall reduction in buildable area and, more importantly, to the reduction in grading in the southern portion of the project site. By eliminating the largest portion of 'C' Street and most of Lot 24, the current proposal would reduce overall earth movement by more than 1.5 million cubic yards and largely avoid grading on an approximately 1,700 -foot section of the primary ridgeline that traverses the site (Section H on Figure 4.11-1 of the Final EIR). The reduction in overall area to be graded and proposed increase in open space in the southern portion of the site would also reduce overall impacts to biological resources. Specifically, the current proposal would reduce the overall number of direct oak tree removals (live and dead trees) as compared to the original proposal by 465 trees (a 27% reduction as compared to the original proposal).' In addition, the two heritage oaks proposed for removal under the original proposal would be preserved under the current proposal. Finally, the elimination of most of Lot 24 and associated reduction in grading and development in the southern portion of the site would further reduce impacts to wildlife movement through the proposed open space area. ' In addition to the direct oak tree removals, the current proposal would encroach into the 50-150 foot buffer around 790 oak trees. This is 239 more trees than the 551 encroachments associated with the original proposal. However, the overall number of trees potentially affected (direct removals + buffer area encroachments) would be 226 lower under the current proposal (2,034 trees for the current proposal versus 2,260 trees for the original proposal). Memorandum Regarding New Gate -King Proposal Page 3 Because of the changes to the project, the City has considered whether re -circulation of the Draft EIR is necessary. Section 15088.5 of the CEQA Guidelines states that a lead agency is required to re -circulate an EIR when "significant new information" is added to the EIR after public notice is given of the availability of the Draft EIR. Section 15088.5 provides that the following would constitute significant new information: (1) a new significant environmental impact; (2) a substantial increase in the severity of an environmental impact; (3) a feasible project alternative or mitigation measure that would lessen the project's environmental impact, but that the project proponent declines to adopt; (4) the Draft EIR was so inadequate and conclusory that meaningful public review and comment were concluded. As discussed above, the applicant's current proposal is a feasible alternative that would not create any new significant environmental impacts or increase the severity of any environmental impacts. To the contrary, the current proposal would reduce the severity of impacts as compared to the original proposal for a number of environmental issues. Consequently, the current proposal would not warrant re- circulation under criteria 1-3. As evidenced by the substantial public discourse concerning the proposed project and the EIR over the past two years, the Draft EIR has provided opportunities for meaningful public review and comment. Therefore, re -circulation is not warranted under criterion 4. Based on these facts, re -circulation of the Draft EIR does not appear to be necessary to comply with CEQA's public review requirements. On another matter, in response to the request of the Santa Clarita Valley Historical Society, Mitigation Measure CR -1(a) in Section 4.12, Cultural Resources, can be revised to read as follows (new text underlined): CR -1(a) Should unanticipated cultural resource remains be encountered during construction or land modification activities, the applicable procedures established by the Advisory Council on Historic Preservation concerning protection and preservation of Historic and Cultural Properties (36 CFR 8700) should be followed in consultation with the Santa Clarita Valley Historical Society. In this event, work shall cease until the nature, extent, and possible significance of any cultural remains can be assessed and, if necessary, remediated. If remediation is needed, possible techniques include removal, documentation, or avoidance of the resource, depending upon the nature of the find. This minor change to the above mitigation measure would not change the EIR findings with respect to archaeological resources or warrant re -circulation of the EIR. RECEIVED AND MADE A Memorandum PART OF THE RECORD AT 5 14 - ( o 3 MEETING To: Jeff Hogan, Associate Planner, City of Santa Clarita ITEM NO. 1 1) FROM: S -1-14i= �= From: Joe Power, AICP, Planning Manager, Rincon Consultants Date: May 27, 2003 Subject: Supplemental Information Regarding Water Availability for the Gate -King Industrial Park Environmental Impact Report In Santa Clarita Org. for Planning the Environment V. County of Los Angeles (2003) , 106 Cal.AppAth 715, decided in February 2003, the Court of Appeal was critical of a project EIR for failing to adequately discuss the difference between water availability and water entitlement. The court found the water availability discussion inadequate in part because it did not make clear that water entitlements from the State Water Project may not be fully available for local use. Although a full water assessment has been performed for the proposed Gate -King Project, the following additional information is provided to more directly address issues raised by the Court of Appeal in the SCOPE case. Water Supplier The project site is located within the NCWD service area and would be served with water by NCWD if approved. Water supply for the NCWD is obtained from local groundwater wells and the Castaic Lake Water Agency (CLWA). NCWD is therefore the public water system that must prepare and approve this water supply assessment. Water would be delivered to the project through an existing water main within the San Fernando Road right-of-way, north of and adjacent to the site. Smaller water lines would then branch off this main line to the proposed development areas. UWMP Applicability NCWD has determined that water demand associated with buildout of the Gate -King project site was included as part of the most recently adopted urban water management plan. The "2000 Urban Water Management Plan" for the Castaic Lake Water Agency service area (which includes Newhall County Water District, Santa Clarita Water Company, and Valencia Water Company) considered buildout of the City of Santa Clarita General Plan in its water demand projections. The Gate -King project requests General Plan amendments to change the land use designations in several areas of the site that would reduce overall site buildout as compared to the current designations. As indicated in the Draft EIR for the Gate -King Industrial Project (City of Santa Clarita, January 2001), the proposed project would involve about 4.2 square feet of industrial park development while buildout under the current General Plan designations would involve up to about 4.4 million square feet of industrial park development, over 500,000 square feet of commercial development, and 31 residences. Based on these land uses, buildout under the current General Plan land use designations would consume about 15% more water than would the current proposal. Since the proposed Gate -King project would consume less water than envisioned for the site under the City General Plan, and General Plan water demand has been anticipated in the 2000 UWMP, water demand generated by the proposed project has been accounted for in the 2000 UWMP water demand estimates. CLWA Service Area Water Supplies The NCWD is part of the CLWA service area. Major water sources for the service area include local groundwater wells and the State Water Project (S WP). Other planned sources include recycled water, water transfers, and desalination. Table 1 compares projected CLWA average/normal year water supplies and demand through the year 2020. Table 2 compares single dry -year and multi -dry -year supplies and demand. Supply and demand estimates are from the operational plan of the 2000 UWMP. According to the 2000 UWMP, no water supply shortages are expected within CLWA' s service area throughout the 20 -year UWMP period, if planned water resources are developed as indicated. Table 1 CLWA Operational Plan Average/Normal Water Year Water Supply and Demand Assessment (AFY) Water Su 1 Pro Year 2005 Year 2010 Year 2015RYear2020Existin ramsLocal Su lies Sau s Formation 110001,000Alluvial Basin 35000,5,000 Im orted Su lies SWT Entitlement 95,200 AF 56,800 56,800 56,800 56,800 Total Existin Su lies 102,800 102,800 102,800 102,800 Planned Water Sup, Pro rams Local Su lies Stormwater WaterRec clin 5,000 9,000 14,000 17,000 Im orted Supplies Water Transfers 5200 5,200 5,200 5,200 Water Banking/Conjunctive-use _ Kern Water Bank/Transfer Semitro is Water Bank/Transfer Kern Delta Water Bank North Las Posas Water Bank/Exchan e San s ASR Desalination 2,000 3,00 4,000 5,000 Total Su lies 115,00013 0'00U 126,000 130,000 Total Estimated Demand 75,100 82,400 91,600 1 102,500 Difference Surplus elicit 39 900 37 600 34,400 27 500 c vvv vrvan rrarer management Plan, December 2000. Pending Modification of current agreements. 2 Programs to be implemented in dry years Table 2 CLWA Operational Plan Dry -Year and Multi -Dry -Year Water Supply and Demand Assessment (AFY) c bvv Urban rrarer management Plan, December 1000. Assumes conservative build up of groundwater conjunctive use. Z Assumes acquisition of water from others already in storage and available for purchase. Single Multiple Dry Years D -Year Existin Water SupplyPro Year 2010 Year 2010 Year 2015 Year 2020 rams Local Su lies Sau s Formation 13,000 13,000 13,000 13,000 Alluvial Basin 32,500 32,500 32,500 32,500 Im orted Su lies SWP Entitlement 37,900 37 900 37,900 37,900 Total Eadstin Su lies 83,400 83,400 83,400 83,400 Planned Water SupplyPro rams Local Su lies Stormwater Water Rec clin 9,000 - 31000 3,000 Saugus(New Wells 20,000 - 10,000 15,000 Imported Supplies Water TEL 3,500 3,500 3,500 3,500 Water Barkin Conjunctive -use Kern Water Bank/I'ransf Semitro is Water Bank/Tranf Kern Delta Water Bank North Las Pa Water Bank/Exchan e Sau us ASR Desalination 3,000 Total Su lies 223,900 104,900 125,900 117,900 Total Estimated Demand 90,900 77,300 78,500 1 79,900 Difference Surplus eficit 133,000 27,600 47 40038,000 c bvv Urban rrarer management Plan, December 1000. Assumes conservative build up of groundwater conjunctive use. Z Assumes acquisition of water from others already in storage and available for purchase. The Monterey Agreement Contract among the Department of Water Resources and SWP contractors that was signed by multiple parties in December 1994 provides opportunities for the CLWA to increase its water supply reliability. The Agreement clarified SWP water allocation rules by specifying that, during drought yeas, project supplies aze to be allocated proportionately based on entitlements. Water is allocated to urban and agricultural purposes on an entitlement proportional basis, deleting a previous initial supply reduction to agricultural contractors. The Agreement also further defines and permits permanent sales of SWP entitlements and provides for the transfer of up to 130,000 AF of annual entitlement from agricultural use to municipal use. The Agreement also allows SWP contractors to store water in another agency's reservoir or groundwater basin, facilitates the implementation of water transfers, and provides a mechanism for using SWP facilities to transport non -project water for SWP water contractors. The Agreement provides greater flexibility for SWP contractors to use their share of storage in SWP reservoirs. The CLWA currently has access to about 4,700 AF storage in Castaic Lake. The CLWA's contract with the State Water Project (SWP) in 1966 was for a water entitlement of 41,500 acre-feet per year (AFY). In the 1980s, the CLWA purchased 12,700 AFY of SWP water entitlement from a Kern. County water district. The CLWA also recently purchased 41,000 AFY of water entitlement from the Kern County Water Agency and Wheeler Ridge-Maricopa Water Storage District in accordance with the terms of the Monterey Agreement. Therefore, CLWA's current total SWP water entitlement is 95,200 AFY. CLWA's SWP entitlement can be affected by a number of factors, including hydrologic conditions, the status of SWP facilities, construction, environmental requirements, and evolving policies for the Bay - Delta. In addition, the availability of the 41,000 AFY obtained from the Kern County Water Agency and Wheeler Ridge-Maricopa Water Storage District is not absolutely established because the EIR prepared for its transfer was recently invalidated and decertified by Friends of the Santa Clara River v. Castaic Lake Water Agency (2002) 95 Cal.App.4th 1373. In recognition of the fact that the entire 95,200 AFY entitlement may not be available in all years, the water supply projections contained in the 2000 UWMP (and shown in Tables 1 and 2) are based on a reduced delivery. The average -normal water year supply estimate assumes that 59.7% of the total entitlement (56,800 AF) would be available, while the dry -year and multi -dry year supply estimates assume that 39.8% of the entitlement (37,900 AF) would be available.' Groundwater. The groundwater basin underlying the CLWA service area is a two -aquifer system comprised of the shallow Alluvial Aquifer and the deeper underlying Saugus Formation. The Alluvial aquifer system, a shallow upper basin, generally underlies the Santa Clara River and its tributary creeks. Water seeps down into the sands and gravels beneath the river, where it is pumped from relatively shallow wells (to 200 feet in depth). This aquifer is estimated to store over 200,000 AF of water. According to the 2000 UWMP, the aquifer has historically been pumped in numerous years and for extended periods without any evidence of overdraft. This aquifer has been managed within its perennial yield while pumping in the broad range of nearly 20,000 AFY to more than 42,000 AFY. The Alluvial aquifer has historically produced up to 40,000 AFY without adverse effects such as long- term water level decline or degradation of groundwater quality. Water production from this aquifer ranged from 28,000 to 42,000 AFY in the years from 1950 to 1960; from 31,000 to 42,000 AFY in the years from 1961 to 1970; from 31,000 to 36,000 AFY in the years from 1971 to 1980; from 19,000 to ' Under drought conditions, the SWP has historically been able to deliver at least 40% of the water requested by the CLWA. 26,000 AFY in the years from 1981 to 1990; and from 26,000 to 42,000 AFY in the years from 1991 to 1999. Imported water has been available since 1981. The Saugus aquifer receives water from seepage of the Alluvial aquifer as well as from parts of the aquifer exposed to the surface. This aquifer has historically been pumped up to a maximum of nearly 15,000 AFY, with an average of slightly more than 7,000 AFY over the last 20 years. Water production from the Saugus aquifer ranged from 1,000 to 6,000 AFY in the years from 1950 to 1960; from 6,000 to 8,000 AFY in the years from 1961 to 1970; from 4,000 to 6,000 AFY in the years from 1971 to 1980; from 4,000 to 15,000 AFY in the years from 1981 to 1990; and from 6,000 to 12,000 AFY in the years from 1991 to 1999. The Saugus aquifer has a ground water storage capacity of approximately 1.4 million AF and there is no evidence of overdraft of the aquifer. Recent studies by Richard Slade & Associates indicate that water supplies from the Saugus Formation can be withdrawn up to approximately 35,000-40,000 AFY by drilling of additional wells for multiple dry -years without any adverse effects. Increases in pumpage from the Saugus aquifer from the historic maximum of 15,000 AFY to 25,000-40,000 AFY, in a ramped manner, would be hydrologically feasible for periods of short duration. During an extended drought, the retail purveyors would consider drilling additional wells in theAlluvial aquifer on the north and west sides of the Santa Clarita Valley to increase production. Additionally, upgrade of the pumping capacity of the wells in the Saugus Formation would be considered, as would the possibility of drilling additional wells. Groundwater produced by local purveyors consistently meets drinking water standards set by the Environmental Protection Agency (EPA) and the California Department of Health Services (DHS). However, perchlorate has been a concern with respect to groundwater quality since it was detected in four wells in the eastern part of the Saugus Formation (near the Whittaker-Bermite facility) in 1997. Operation of the four wells has been suspended and purveyors are continuing to test for perchlorate in all active Alluvial and Saugus wells. To date, no other wells have shown detectable levels of perchlorate (all from Santa Clarita Valley Water Report 2001, April 2002). Several treatment technologies for the removal of perchlorate from water are currently available. The DHS has issued a domestic water supply permit to deliver treated drinking water from contaminated wells to customers in the San Gabriel Valley. The approved technology is also available for use in the Santa Clarita Valley. In 2000, local water purveyors filed a lawsuit against the Whittaker Corporation (the former owner of the contaminated property) and Santa Clarita LLA and Remediation Financial, Inc. (the current owners). The lawsuit seeks to have the defendants pay all necessary costs of response, removal of perchlorate, remedial action costs, and any liabilities associated with the contamination. Under federal and state law, the owners of the Whittaker-Bermite property are responsible for the groundwater cleanup. Additional Supplies. To the extent that projected water supplies may be insufficient to meet demand, the CLWA has developed a capital improvement program with funding that provides for the following activities to achieve water supply reliability: purchase of additional SWP supplies; implementation of recycled water programs; development of additional dry -year Saugus Formation Supplies (new wells); enhancement of groundwater banking programs; and a seawater desalination/water exchange. As part of the CLWA's long-term Capital Improvement Program (CIP), funding has been established to provide for the purchase of additional imported supplies, implementation of recycled water programs, and enhancement of groundwater, as well as groundwater banking/conjunctive-use programs both inside and outside the Agency's service area. Implemented over time, these measures are expected to assure that there will be sufficient supplies to meet projected water demands under the currently adopted General Plans of communities within the service area. Seawater and local brackish water desalination coupled with water exchanges can also provide the additional water supplies to meet anticipated community needs. However, the priority for implementation of some of these supply approaches will be driven in part by the relative cost. Current and Protected Water Demand In 2001, total water demand in the Santa Clarita Valley was 76,769 AF, which was essentially unchanged from year 2000 demand. Of that amount, 79% (60,678 AF) was for municipal and industrial uses and the remaining 21% (16,091 AF) was for agricultural and other uses. Year 2001 demand was met by a combination of 41,413 AF of local groundwater and 35,356 AF of SWP water (all from Santa Clarita Valley Water Report 2001, April 2002). According to the 2000 UWMP, average/normal year water demand is projected to increase to about 102,500 AF by 2020 (see Table 1). The NCWD service area lies within Newhall, Pinetree and Castaic. NCWD s service connections are spread over a 34 -square -mile area. At the end of 2001, NCWD served approximately 7,400 water connections. According to the "Masterplan for Newhall Division of Newhall County Water District" (Don Howard Engineers, Inc. October 5, 2001), the water demand within the NCWD was 5,168 AF in 1997, 4,579 AF in 1998, and 5,262 AF in 1999. NCWD Entitlements/Reeulatory_Apnrovals The proposed industrial park would require facility construction approvals from NCWD, and encroachment permits from the California Department of Transportation (Caltrans) for work within the right-of-way of San Fernando Road, which is a State highway. Grading permits will be required from the City of Santa Clarita to install the branch water lines to deliver water within the proposed development. No other federal, state, or local permits for construction of necessary infrastructure associated with delivering the water supply would be required. No regulatory approvals are required in order to be able to convey the water supply to the proposed project. Project Impacts Based on historical water usage in the area, commercial uses consume 2.27 AFY per acre of development. Therefore, the 170.1 buildable acres of proposed industrial commercial development would consume an estimated 386 AFY of water. This amount represents about 0.5% of the total current demand in the Santa Clarita Valley and about 7.3% of the current demand within the NCWD. As discussed under UWMP Applicability, water demand associated with the proposed Gate -King Industrial Park is less than that which could occur if the Gate -King project site were to build out to the maximum intensity allowed under the current Santa Clarita General Plan land use designations for the site. As such, water demand associated with the project is within the demand projections contained within the 2000 UWMP. The primary uncertainty with respect to local water supply is the availability of the CLWA's S WP entitlement. Assuming that the 41,000 AFY entitlement recently purchased by the CLWA will be available, water supplies appear to be ilisufficient to meet projected growth in demand through 2020. If the 41,000 AF entitlement is not available, water supplies maybe insufficient to meet the projected increase in demand through 2020. However, even without the additional 41,000 AFY, the CLWA retains an entitlement of 54,200. Because this amount exceeds 2001 CLWA demand for SWP water by 18,844 AF, the 386 AFY increase in water demand associated with the proposed project would be well within the current entitlement. In addition, the 2000 UWMP anticipates that current and projected production from the Alluvial Aquifer and Saugus Formation would not adversely affect either groundwater basin. Finally, the UWMP identifies several additional sources of water (water recycling, purchase of additional SWP supplies, desalination) that are expected to meet water demand projections over time. Since the proposed industrial park project's water demand is within that projected in the 2000 UWMP, would not exceed the current SWP entitlement, and would not significantly affect groundwater resources, water supplies appear to be adequate to serve the proposed development. References Castaic Lake Water Agency, et al., Santa Clarita Valley Water Report 2001, April 2002. Castaic Lake Water Agency, Resolution No. 1030, -January 10, 1996. Contract between Castaic Lake Water Agency and Newhall County Water District for a Water Supply, December 28, 1976. Newhall County Water District, Masterplan for Newhall Division of Newhall County Water District, October 5, 2001. S.A. Associates, et al., 2000 Urban Water Management Plan, prepared for Castaic Lake Water Agency, Newhall County Water District, Santa Clarita Water Company, Valencia Water Company, December 2000. Santa Clarita, City of, Gate -King Industrial Park Draft Environmental Impact Report, January 2002. Senate Bill No. 610, Approved by the Governor and filed with the Secretary of State October 9, 2001. 7 RECEIVED AND MADE A PART OF THE RECORD AT 5-12 MEETING ITEM NO. I i FROM: W A -11-0c 6A rc_5 MEMORANDUM Economics s; Planning Systems Public Finanee Real Estate Economics Regional Economics Land Use Policy To: Mark Gates, Gates King Properties, LLC From: Teifion Rice -Evans and Christine McMillan Subject: Needham Ranch Industrial Park: Economic Impacts under Different Alternatives; EPS #12107 Date: September 6, 2002 On December 7, 2001, Economic & Planning Systems (EPS) produced the Needham Ranch Industrial Park Economic Impact Analysis, Final Report. This Report estimated the range of economic and fiscal impacts of the project under the project description at that time. This project description included the development of 3.3 million square feet of industrial park space (including R&D Flex, light industrial, and warehouse space) on 184 acres of industrial building pads. Economic impacts considered included the following: (1) Employment Impacts - the numbers of jobs at site buildout and full occupancy, and associated salary payments. (2) Retail Expenditure Impacts - the new retail expenditures in the City of Santa Clarita and Newhall Redevelopment Area (RDA) associated with the new employees at the business park, and associated support for existing and new retail space in the Newhall RDA. (3) Fiscal and Tax Increment Impacts - the net fiscal impact of the project on the City's General Fund and the additional tax increment revenues accruing to the Redevelopment Agency. Since that time, the proposed project has been altered somewhat and an Environmental Impact Report (EIR) with a number of alternatives has been prepared. This memorandum presents the results of the application of the same economic impact methodology to the proposed project and EIR Alternatives 3, 4, and 5. It should be noted that, as with the original report, no market research has been conducted on likely project acceptance and absorption rates. Rather, economic impacts are considered for the proposed project and each of the Alternatives at buildout assuming full occupancy. It is also understood that the project alternatives do not adjust the quantity of development inside the Redevelopment Area. As a result, the tax increment impacts will be unchanged between the proposed project and all the alternatives, and are not analyzed in this memorandum. . . BEBR E L E Y 2501 Ninth Street, Suite 200phone: 510-841 5 A C R A M B N T O D E N V E R -9190 Berkeley, CA 94710-2515 fax: 510-841-9208 e%'^ phone: 916-649-8010 phone: 303-6233557 MnVxpsys.com Fax: . 916-649-2070 _ fax: 303.623-9049 Mark Gates September 6, 2002 Gate King Properites, LLC Page 2 SUMMARY OF DIFFERENCES The employment, retail, and fiscal impacts under each alternative vary significantly in line with the quantity of building space that could be accommodated. Table 1 shows a comparison of the economic impacts of the proposed project and selected ER alternatives. Subsequent sections provide a more detailed description of the economic impacts under each alternative. Table i Comparison of Alternatives Proposed Proj. Annual Annual Annual Development Jobs at New Retail Newhall RDA Fiscal Alternative (square feet) Buildout Expenditures Expenditures Surplus Proposed Proj. 4.45 mill. 8,000 $6.9 mill. $3.4 mill. $106,000 Alternative 5 4.36 mill. 7,900 $6.8 mill. $3.4 mill. $103,000 Alternative 4 2.26 mill. 4,100 $3.5 mill. $1.8 mill. $55,000 Alternative 3 2.04 mill. 3,700 $3.2 mill. $1.6 mill. $48,000 Sources: Gate -King Industrial Park EIIt; Economic & Planning Systems, Inc. Proposed Project. The proposed project includes the largest project, 4.45 million square feet, and has the largest economic impact, with 8,000 jobs at buildout. These employees are expected to spend a total of $6.9 million annually in retail expenditures, up to $3.4 million of which could be spent in the Newhall Redevelopment Area. The project is also expected to generate a net annual fiscal surplus (revenues over costs) of $106,000 annually to the City's General Fund. • Alternative 5: Reconfigured 'C' Street. Alternative 5 is very similar to the proposed project, with only a two percent reduction in the square feet of development. As a result, economic impacts are just marginally lower than under the proposed project. Alternative 4: Oak Tree Preservation. Under Alternative 4, building development is cut almost in half to 51 percent of the proposed project, 2.26 million SF. Economic impacts are similarly reduced, with 3,900 fewer jobs accommodated at the industrial park at buildout. Total new annual retail expenditures are reduced by $3.4 million at buildout, and $1.6 million fewer retail expenditures are expected to be captured in the Newhall RDA. The net fiscal surplus accruing to the City's General Fund is also expected to decrease by $51,000 annually. BERKELEY SACRAMENTO DENVER 2501 Ninth St., Suite 200 Phone: 510-841-9190 Phone: 916.649-8010 Phone: 303.623-3557 Berkeley, CA 94710.2515 Fax: 510-841-9208 Fax: 916-649-2070 Fax: 303-623-1294 www.epsys.com ' I i Mark Gates September 6, 2002 Gate King Properites, LLC page 3 Alternative 3: Ridgeline Preservation. Under Alternative 4, building development is reduced further to 45 percent of the proposed project, 2.04 million SF. Economic impacts are also reduced, with 4,300, fewer jobs accommodated at the industrial park at buildout. Total new annual retail expenditures are reduced by $3.7 millibn at buildout, and $1.8 million fewer retail expenditures are expected to be captured in the Newhall RDA. The net fiscal surplus accruing to the City's General Fund is also expected to decrease by $58,000 annually. PROPOSED PROJECT The estimated economic impacts associated with the proposed project are shown in attached Tables 1-5 (Proposed Project) and summarized below: • The proposed project would result in the development of about 4.45 million square feet of R&D flex, light industrial, and warehouse space, as shown in Table 1. • Development of the industrial park is expected to generate a total of 8,040 new jobs at the site, with a total of about $274 million in new salaries each year (see Table 2). The new workers are expected to spend as much as $6.9 million on retail goods and services each year, primarily at City retail establishments (see Table 3). The retail expenditures will be lower in the early years as development occurs and a more limited set of retail options are available. Over time, new retail may be developed close to the industrial park, increasing worker retail expenditures in the City. Downtown Newhall and the Newhall Redevelopment Area, in particular, represent the closest existing retail cluster to the industrial park and as a result will have the opportunity to capture a large proportion of new worker retail expenditures. Newhall Redevelopment Area capture of retail expenditures could be as high as 50 percent of new retail expenditures, or $3.4 million each year. The distribution of retail expenditures by area is shown in Table 4. • New annual taxes and other public revenues to the City from the project are expected to exceed service costs associated with the project by $105,682, as demonstrated in Table 5. BERKELEY SACRAMENTO DENVER 2501 Ninth St., Suite 200 Phone: 510-841-9190 It" Phone: 916.649.8010 Phone: 303-623-3557 Berkeley, CA 94710-2515 Fax: 510-841-9208 Fax: 916.649-2070 Fax: 303-623-1294 www.epsys.com Mark Gates Gate King Properites, LLC ALTERNATIVE 5 September 6, 2002 Page 4 The estimated economic impacts associated with the Alternative 5 are shown in attached Tables 1-5 (Alternative 5) and summarized below: • The proposed project would result_ in the development of about 4.36 million square feet of R&D flex, light industrial, and warehouse space, as shown in Table 1. This is a 2% reduction in developed square feet. • Development of the industrial park is expected to generate a total of 7,890 new jobs at the site, with a total of about $269 million in new salaries each year (see Tablet). • The new workers are expected to spend as much as $6.8 million on retail goods and services each year, primarily at City retail establishments (see Table 3). • Newhall Redevelopment Area capture of retail expenditures could be as high as 50 percent of new retail expenditures, or $3.4 million each year. The distribution of retail expenditures by area is shown in Table 4. • New annual taxes and other public revenues to the City from the project are expected to exceed service costs associated with the project by $103,384, as demonstrated in Table 5. ALTERNATIVE 4 The estimated economic impacts associated with Alternative 4 are shown in attached Tables 1-5 (Alternative 4) and summarized below: • The proposed project would result in the development of about 2.26 million square feet of R&D flex, light industrial, and warehouse space, as shown in Table 1. This alternative reduces the developed space by 49%, relative to the Proposed Project. • Development of the industrial park is expected to generate a total of 4,090 new jobs at the site, with a total of about $139 million in new salaries each year (see Table 2). • The new workers are expected to spend as much as $3.5 million on retail goods and services each year, primarily at City retail establishments (see Table 3). • Newhall Redevelopment Area capture of retail expenditures could be as high as 50 percent of new retail expenditures, or $1.8 million each year. The distribution of retail expenditures by area is shown in Table 4. BERKELEY SACRAMENTO DENVER 2501 Ninth St., Suite 200 Phone: 510--841-9190 WAkr Phone: 916-649-8010 Phone: 303.623-3557 Berkeley, CA 94710-2515 Fax: 510-841-9208 Fax: 916-649-2070 Fax: 303-623.1294 www.epsys.com Mark Gates Gate King Properites, LLC September 6, 2002 Page 5 • New annual taxes and other public revenues to the City from the project are expected to exceed service costs associated with the project by $54,581, as demonstrated in Table 5. ALTERNATIVE 3 The estimated economic impacts associated with the Alternative 3 are shown in attached Tables 1-5 (Alternative 3) and summarized below: • The proposed project would result in the development of about 2.04 million square feet of R&D flex, light industrial, and warehouse space, as shown in Table 1. This alternative develops 54% less space than the Proposed Project. • Development of the industrial park is expected to generate a total of 3,700 new jobs at the site, with a total of about $126 million in new salaries each year (see Table2). • The new workers are expected to spend as much as $3.2 million on retail goods and services each year, primarily at City retail establishments (see Table 3). + Newhall Redevelopment Area capture of retail expenditures could be as high as 50 percent of new retail expenditures, or $1.6 million each year. The distribution of retail expenditures by area is shown in Table 4. • New annual taxes and other public revenues to the City from the project are expected to exceed service costs associated with the project by $48,376, as demonstrated in Table 5. 1 BERKELEY SACRAMENTO DENVER 2501 Ninth St., Suite 200 Phone: 510-841-9190 Phone: 916-649-8010 Phone: 303.623-3557 Berkeley, CA 94710-2515 Fax: 510-841-9208- Fax: 916-649-2070 Fax: 303-623-1294 www.epsya.com WIN , ? ; Econoinice¢` Planning Systems Pn61ic Finance Real Estate Economics Regional Economics Land Use Policy PROPOSED PROJECT � \/\\/ V ) 8 © A I § �) \§§/§ § [ k E { E ■ ) co 0 CL $ * 2 ) )\� %n(/§ a 7 2 ) \ . k \rl CL © )§- ;a - \\10 �� ico f £ CL k •� ( § 0 i CD \ ° LU 2 )/{ 9 } 0 13- $®§ j $/ ] E .2§2 . £@ % # ) 0 / \\ \ 2 ` ` ® o ) _ ; 2 Q/k /\\C § E _i ))}\J / eaz a £GE( k \ \ Z 0 P a v O Z O 6 CL U O rm W a 2 W i W U) F 'G IL A N c a0 21 0 rn m U Z 0 CL 7 O O It tll h W tD O(Dr OIO iD O bi crLC2114 r vC�]NIm. aODp� IN. 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W \ \ 0 ! ! _ G \f!/3a e_ § a o 2 5'`-## § 5#� - ) S. $ 7 ) » 2 )) 5 3/, ca E 3 X) 3 CL - Table 5 Proposed Project Fiscal Impact Summary Needham Ranch Industrial Park Economic Impact Analysis: Alternatives Comparison Item Amount Revenues (1) Property Tax (2) $242,474 Property Transfer Tax $2,560 Sales and Use Tax $68,742 Business License Fees $23,999 Franchise Fees $96,473 Licences & Permits $60,861 Total $495,109 Expenditures (3) Administrative Services $44,989 Planning & Building $80,773 Transportation & Engineering $63,721 Feld Services $33,480 Police Services $112,442 Fire Services (4) $0 Parks & Recreation $54,023 Total $389,427 Net Fiscal Impact $105,682 (1) Detailed revenue assumptions are provided in Table A-2. (2) Detailed analysis of property value and tax revenue are presented in Table A-1 and Table 5. (3) Detailed revenue assumptions are provided in Table A-3. (4) Fire services are provided by LA County; costs for service are deducted from property tax prior to distribution to the City and therefore do not affect the City's General Fund balance. Economic & Planning Systems, Inc. 9/6/2002 H:1121071ProposedlPPFiscIPPFisc.xls EconomiC Planning Systems Public Finance Real Estate Economics Regional Economics Land Use Policy ALTERNATIVE 5 8 C) O M T ++ {Q GOD CO M a0 CCL E C F O 3 3 a " E tm Q m E C y � O 00 ' O c c y () `o Lo IL.°1 - 1Lo v oil Lo ,a CL C_ C a) a V) N d N p C aO p y p O N co M MI sPMTr O m 5T m O m n �4 a a a) M co T r C4 n ca U �` U G N N r �� CD 1= V v_ �tll MT T -T L 117 a Y rn w LO LO (U C r�� C Q O r O fn Y n mh od cc a m o x1 a'3 v `0 0 E a C G e C) m d 0) C) 0 WO .7+ mCL w y d CL U = 0 N M w N O N (7 N N p7 Y Co �, � 2 c E a) �! 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A F- %EE>; 2 �y o o r sus C d o d g U � d N �L O Y a 1°a O U N U E 5 Ld t0 0 U O`� U l0 c: '3 E m >N d C M r N d 'd &.9 o 0. o ) d 4n O O N w _ C � ca d 0 d � CL cCD S c o Y a � 0 070 5 ai E m �� o U O wCL C c yo �T U __d 3 d ° c� c O C Rf K CD 0 a) 0 W CL Z c v G NN a m a) � d N 7 O Q. v tl d ca vv v �E U .L a Y Y � N U 9 d C Y V d � W R ) A d �- M Z e O LO a FE co d Q G d E CLO CD 0) Q m 3 d z Fa O r U 3 0 tC •U c d U L w -0 O Y Al $1 O N o o r sus d o d g U � 0 O O N C O U N U y c 5 Ld t0 c U O`� U l0 c: '3 E m >N d C M r N C 'd &.9 o 0. o ) d 4n O O N w _ � � ca d 0 CD cc E x v m p e O LO a FE co d Q G d E CLO CD 0) Q m 3 d z Fa O r U 3 0 tC •U c d U L w -0 O Y Al $1 O N Lr r Co d o d U � 0 as E N C O U N U y c 5 Ld t0 c U O`� U l0 c: '3 E m >N d C O Y d C 'd &.9 o 0. o ) d i O O N - O 'O _ or ca d 0 CD cc E x v m p CL cCD S c o m y c CO m 0 070 5 ai E m �� o U O m E C c yo d m U 9 y __d 3 d ° c� c O C EL U o Oc "e CD 0 a) 0 7 L CL Z c C . G NN a m a) � d N 7 O v tl d ca vv c E t? U) G �G ca U E 0 O w ui L_ O U) e Table 5 Alternative 5 Fiscal Impact Summary Needham Ranch Industrial Park Economic Impact Analysis: Alternatives Comparison Item Amount Revenues (1) $44,149 Property Tax (2) $237,627 Property Transfer Tax $2,509 Sales and Use Tax $67,460 Business License Fees $23,551 Franchise Fees $94,673 Licences & Permits $59,725 Total $485,545 Expenditures (3) Administrative Services $44,149 Planning & Building $79,266 Transportation & Engineering $62,532 Field Services $32,855 Police Services $110,344 Fire Services (4) $0 Parks & Recreation $53,015 Total $382,162 Net Fiscal Impact $103,384 (1) Detailed revenue assumptions are provided in Table A-2. (2) Detailed analysis of property value and tax revenue are presented in Table A-1 and Table 5. (3) Detailed revenue assumptions are provided in Table A-3. (4) Fire services are provided by LA County; costs for service are deducted from property tax prior to distribution to the City and therefore do not affect the City's General Fund balance. H.1121071alt5latt5fisc W 15Fi50.Xls Economic &Planning Systems, Inc. 9/6/2002 i Economic Planning Systems Public Finance Real Estate Economics Regional Economics Land Use Policy ALTERNAUVE 4 CL E Ln /\%E E } i k $ c k . . 2 CL �$ \8§/§ Lo k 2 k / (\t/\ ,c ~� k co cc 00 cc co 0 % \B °® ig �r ( n \ § m `� w )\) - ° \ CL° ) �= )0 0 \ ` j §k k E k§k \ ) \ .%\ k� 77k �D CD * co 3■ ® {)E _ }\)a) A y \ \fig (a$- )CL )/0 J 0 Ea a) zi W w a m 0 0 G m N m s �n W �N.-�p rmmn C V OMNN r �CY 0 m d� N fpMpypp N q00NNN p� Lq C pl R(� M ld 1° M N �l9N %'A EE+7 N 49 69 N! 69 0 Z 0 o ��a m L6 M. co o I m 3 ryry _ cli s411Su H% � a w Q O c?�gnEprnL°n I H M 0 0 0 0 0 0 0 0 CL E V d E� O 0 a Ep `7 N O O O- NO)��N pp p� � d 6 N O V N M W N� iDM M n G a C> O ^r N .T 0 O Y m i5s Z Z V c••i W o°ppa C O o a°aoo ��o o app` O. 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O d .I. 0 0. a Uc° j a 3d 3 i rL N N CD •LL d t7 'ad �+�- O N N O OCL S o L 30E y o° L L CO d a w y o y `o y ° coN c U N .o co L a ° € d d E- 2 w m .� .CL Y o n U V E rn d E 3 a LoE N G Y N d aj C R Z U Q O o 45 v o UN d� ld O Y_ E C m _ EtL mgoomcyo c M += m ° E° m>> d L d Z 3 m d o o. r »° LU aoi F^ �'a n z u a 0 d cn t19 a° °= 0 o a o O L T 20 O w \I O 0 r m Vy! O O O 9 O O O C oO S E O H N UO �L fA Q. CL U m E U O = d 0 V U O U co Qccdr= N E a) 00-6 ca 7 O Oa a co l0 E N N 0 O n C 7 O C O O c C a" d E m CL c ami o 2 O co ca N � v o 0 ov � ai E (D mo_E o c C a) tl1 U > N CL 3 d c .D c .� = U V R ya o r 3 E Q. 0 m 0 0- Z r- c r E aa)i V N 7 7 E 7 N N co Q Q O C N co N o_ C dV W Y a14 a R O. U v d � r U d d' W ay a7 HCCZ o a o O L T 20 O w \I O 0 r m Vy! O O O O C O O N N N oO S � C � r N UO EH fA o a o O L T 20 O w \I O 0 r m Vy! _ T• N N y S2 a1 C � r UO c E CL U m `7 U co = d 0 C U O U co Qccdr= N E a) 00-6 ca 7 O Oa a co o n. O N N 0 O n C 7 O C O O c C c - d � co E m CL c ami o 2 O co ca m 0 v o 0 ov � ai E (D mo_E o c C a) tl1 U > N O 3 d c .D c .� = U Q r 3 E 0 ES 0 m 0 0- Z r- c r 2 o a d aa)i a) a) N 7 7 y 7 N N co Q Q ^ cd N C N co N o_ N c N E m rn c C m EL U O c U W U O U) LY Table 5 Alternative 4 Fiscal Impact Summary Needham Ranch Industrial Park Economic Impact Analysis: Alternatives Comparison Item Amount Revenues (1) Property Tax (2) $124,159 Property Transfer Tax $1,311 Sales and Use Tax $34,970 Business License Fees $12,208 Franchise Fees $49,076 Licences & Permits $30,960 Total $252,685 Expenditures (3) Administrative Services $22,886 Planning & Building $41,090 Transportation & Engineering $32,415 Field Services $17,031 Police Services $57,200 Fire Services (4) $0 Parks & Recreation $27,482 Total $198,104 Net Fiscal Impact $54,581 (1) Detailed revenue assumptions are provided In Table A-2. (2) Detailed analysis of property value and tax revenue are presented In Table A-1 and Table 5. (3) Detailed revenue assumptions are provided in Table A-3. (4) Fire services are provided by LA County; costs for service are deducted from property tax prior to distribution to the City and therefore do not affect the City's General Fund balance. Economic & Planning Systems, Inc. 9/6/2002 H.1121071alt4lait4fiscOlt4Ftsc.xls t Economic Planning Systems Public Finance Real Estate Economics Regional Economics' Land Use Policy ALTERNATIVE 3 2 k ) i ( e CO )f _ - §/ \ , j } § \§ / § ■ k ( SL c Z E 0 c - ) $ 2 ca 0. k 6°§d§ k E @�- «} CL 2 - \ ® \ ` k 7 k E cm rl K C . C §N - E LL (� \\$° \ \ % \ . j � / § 2\�- t. \ ) C � oa0 - ( ) C� 0 /Z 2 - a)k� ;!a r ®��COD • �� ] $ (` c 7 7 § te\(r ))( co � - \\\k \ 0 ' ) a 22( _ 3 eaz ; 3:2= H 3 ) i ( M 7 C m �e m0jIoojcq� m ��lNN f�f09�NNf9 I Ln Lf) agaulialia w O M N N M m p cO N IcO n O q Lq . r r O o 0 0 0 0 0 0 %CO0 Tm r nC N01I r r c°r�iogao° 00) °pj Nl r 0 d m c cc :3 U) E ° m m 075 ii d O '.°0 m m a°— m = ° m c mco 80- 0 m 11 = m O m O c v U 'N L y m n 8 g a `o c c F o 0 N � Fo- m o�m m PE oc CL c O 9 0 C 0 0 tpy O. « m ; m v v �N n1 co C m CL o ° m Q 0 U J y � m `m m ra 'v d w � U O m t� N m m . m � c C � m O m r N m � a a c � J .mC U 's a Q O J rn m�+ m � a o a m 9 CD c � N m a r c E a m E° a ro c a. o Z• a m � m c m O � o v "a' c E m c m a U E 0 WN U m 3 O m co m N c U co 7 U 0 U) k � | § o § � § / \ef> k \ . �5 69- 2 99 } 4& d k § � § 15- \ef> k . �5 k 99 § § �) k \ i \ \ ( k �) k . �5 &{ 99 0 \ \ 77 \7q 2q �2 /§ CD E \ EC 7 )\) ) \ kkk a _ e e \ i \ \ ( k �) k . �5 &{ 99 0 \\ \\o 77 \7q 2q �2 /§ CD E )\) § EE kkk _ E \\ §§2 k C, Cl) n ° ) CO f ]2 $ _ 2g 2 \ mm \� \�\ - \k 1. � Wo ili ) / Cc 'tog, }2 >); 5 a=� \§t) k COL 0 al -\d -k St7f \ a -,g 0 E § \ \ @ \\ S /) §2 §tm)e �$§�\/] ) \§i/7)0 k »a= - e}§))]D § 6 & a)C)L £&5E Cl) >» A \ i \ \ ( k n ■ \ Q Q \I \ §)§ f \f0 r7§CL 2 CL _(1-1 \ \ ) La 1w I / § 2 \ \ Lel ) f ( 2 f $ / A §)§ \f0 r7§CL CL § (n / rCL m 0 \�. } 2 ® ( CL $a- )7 � 0\ \ kie _ ) §_ _ § A CD C (D 'm0 \ )k 7\) ƒ )$4) 06 E0./]ie ) /#7\\\ @ ]$«e;; \ • :e!/2; - A 3coCL f ( 2 f $ / A ,I t Alternative 3 Table 5 Fiscal Impact Summary Needham Ranch Industrial Park Economic Impact Analysis: Alternatives Comparison Item Amount Revenues (1) Property Tax (2) $111,330 Property Transfer Tax $1,176 Sales and Use Tax $31,635 Business License Fees $11,044 Franchise Fees $44,397 Licences & Permits $28,008 Total $227,590 Expenditures (3) Administrative Services $20,704 Planning & Building $37,172 Transportation & Engineering $29,324 Field Services $15,407 Police Services $51,746 Fire Services (4) $0 Parks & Recreation $24,861 Total $179'214 Net Fiscal impact $48,376 (1) Detailed revenue assumptions are provided in Table A-2. (2) Detailed analysis of property value and tax revenue are presented in Table A-1 and Table 5. (3) Detailed revenue assumptions are provided In Table A-3. (4) Fire services are provided by LA County; costs for service are deducted from property tax prior to distribution to the City and therefore do not affect the City's General Fund balance. Source: Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 9/6/2002 H:I/ 1 109clarlfiscalOWFisc-As r INDEPENDENT ENVIRONMENTAL C Department of Biology, California State University, Los Angeles, 90032 (323-)343-2057; SUPPLEMENT TO SULTANT RECEIVED AND MADE A PART OF THE RECORD AT sla 1 /o3 MEETING ITEM NO. 19 FROM: W #Oje- ask TLV - 5 "EXAMINATION OF POTENTIAL ANIMAL CORRIDORS BETWEEN THE SAN GABRIEL MOUNTAINS AND THE SANTA SUSANA MOUNTAINS WITH EMPHASIS ON THE CROSSING THROUGH STATE HWY 14 AND INTERSTATE 5 AND LOS PINETOS ROAD" I7 James Henricksou, Ph. D. Independent Environmental Consultants Prepared for: Mark T. Gates, Jr. The Needham Ranch at Santa Clarita, California Supplemental Comments: April 10, 2002 Original Report: May 14, 1993 The purpose of a wildlife corridor is to provide a link between two large wildlife core areas for wildlife and thereby maintain a healthy genetic population diversity. Target Species When designing a wildlife corridor one should identify the target species and then design the corridor to meet their needs. The target species considered important in relation to wildlife corridors in Southern California are Mountain Lion, Bobcat, Gray Fox, Mule Deer, American Badger and sometimes Coyote. It is assumed that if corridors are established for these target species, other associated species will also use these corridors. The ranges and habitat requirements of the target species are set forth on pages 4-5 of my Examination of Potential Animal Corridors Between the San Gabriel Mountains and the Santa Susana Mountains With Emphasis on the Crossing Through State Hwy 14 and Interstate 5 NS Los Pinetos Road attached to the Draft Environmental Impact Report for the Gate King Industrial Park. Design of Wildlife Corridors While there is no consensus on the proper configurations of corridors, optimum corridors are not long slender pathways of uniform habitat. These exhibit strong edge effects and a lack of diversity. The better corridors are moderately broad to broad pathways that contain diverse habitats that are present in both of the core areas. The Proposed Corridor The Newhall Wedge is an approximately four (4) square mile area (which includes a portion of the Needham Ranch) of high topographic diversity which greatly increases the overall surface land available as habitat to wildlife and increases the plant and wildlife habitat diversity encountered. The flora ranges from areas of dense Chaparral (with some extensive stands of overmature California lilac (Ceanothus crassifolius and Chamise (Adenostoma fasciculatum), open and dense Coastal sage scrub, extensive stands of Coastal live oak (Quercus agrifolia), local pockets of Big -cone Douglas fir (Pseudotsuga macrocarpa), sandstone cliffs and bluffs, open grassy meadows, and a myriad of habitat interfaces that make for a rich and diverse habitat for wildlife. The Newhall Wedge contains the same diversity of habitats as is present in the adjacent San Gabriel Mountain source area and the Santa Susana Mountain receiver area, and thus serves as a corridor between these two habitat areas. The Needham Ranch Support of the Wildlife Corridor The Newhall Wedge's size is too small to continually support the largest predators among the target species. Nonetheless, the high diversity of portions of the habitat, and the potential for migration of animals into this area from the adjoining source and receiver areas are features that would be expected to help maintain a strong diversity of wildlife. While the Needham Ranch plans to develop 200 acres of its property into an industrial park, 85 acres of that total are currently or have been used for industrial purposes. With the Needham Ranch's proposed preservation of 220 acres of the most pristine portions of its property, the preservation of an additional 67 acres of natural open space and the planting of 95 acres of graded area with native plant material and live oaks Needham Ranch(Wildlife Corridor April 10, 2002 Page 2 to restore oak woodland, the Industrial Park will be impacting 116 acres of previously undisturbed land. Therefore, it will not significantly alter the current ability of the Newhall Wedge to maintain sub -populations of the target species. Current Condition of the Corridors The wildlife corridors between the San Gabriel Mountains and the Santa Susana Mountains were largely disrupted and/or destroyed by the construction of I-5 and SR -14. Little or no consideration appears to have been given to the maintenance of corridors in the planning and construction of these highways. Potential Corridors Between the Santa Susana and San Gabriel Mountains During my studies of the potential corridors to cross SR -14 and Sierra Highway to provide access to and from the Newhall Wedge, it was clear that the Los Pinetos underpass beneath SR -14 and the creation of a corridor across the Hondo site and onto the Needham Ranch using the existing 3'x 4' culvert for all but the largest of the target species presented the most viable of the potential routes to cross SR -14 and Sierra Highway and into the Newhall Wedge. There is no scientific data regarding the utilization of underpasses by large mammals. What is known is, that if they intend to cross, they will merely cross the roadway. The Needham Ranch Wildlife Corridor Plan The Needham Ranch controls only a small portion of the property included within the proposed wildlife corridor between the San Gabriel and Santa Susana Mountains. It is limited in what it can do. The Needham Ranch Plan, attached hereto, calls for the (a) dedication of a separate canyon in a direct line with the Los Pinetos underpass and the previously approved corridor across the Newhall Refinery site (the approval has lapsed), (b) the creation of berms and the planting of native material as suggested by David W. Briley in a paper entitled "Santa Clarita Wildlife Corridor", dated July 1991, (c) the clearing of brush from around the ends of the existing 3'x4' culvert under the Sierra Highway for the smaller mammals, (d) the installation of water sources (e) the creation of trails leading from the canyon into the 220 acre parkland to be dedicated to the City of Santa Clarita and the remaining portions of the Newhall Wedge, (f) the provision of signs and reflectors notifying the motorists of the wildlife crossing, and (g) the installation of light shields on any lights that might intrude upon the corridor. Considering that (i) most of the wildlife using the corridor are nocturnal (ii) the industrial park will be largely used during the daylight hours (iii) an industrial park does not have the pets associated with a residential development which can disrupt wildlife, (iv) the brush is removed from around the culvert under Sierra Highway, (v) efforts are made to lessen the impact of noise, activity and light, (vi) the separate canyon and trails leading to the parkland, will be protected in perpetuity and provide isolation, and (vii) there is a highly diverse habitat similar to that found in the Santa Susana and San Gabriel Mountains, I believe that the Needham Ranch Plan is adequate to address its on the safe passage of wildlife across Sierra Highway. The dedication of open space areas is also adequate to provide temporary habitat for large mammals and to support local sub - population of smaller mammals that will help create a viable wildlife corridor and the Needham Ranch/Wildlife Corridor April 10, 2002 Page 3 passage of wildlife across Sierra Highway. The dedication of open space areas is also adequate to provide temporary habitat for large mammals and to support local sub - population of smaller mammals that will help create a viable wildlife corridor and the necessary diversity. With the dedication of the property and the improvements described above, the Needham Ranch will be the first property owner to improve a portion of the proposed wildlife corridor. James Henrickson, Ph.D. Needham Ranch/Wildlife Corridor April 10, 2002 Page 4 4 NOTICE OF CONTINUED PUBLIC HEARING CITY OF SANTA CLARITA CITY COUNCIL NOTICE IS HEREBY GIVEN that the City Council of the City of Santa Clarita, at its regular meeting held April 8, 2003, continued a public hearing on GATE KING INDUSTRIAL PARK PROJECT - Development of the Gate King Industrial Park project includes the subdivision of 584 acres into 88 lots. The City Council requested at the conclusion of the January 28, 2003 City Council meeting that staff continue to work with the applicant to revise the project site to exclude Lot 24 which would save more oak trees and provide a larger wildlife buffer. The City Council also requested staff to work with the applicant on the 10 remaining project issues for the project. Lastly, Council directed staff to hire a consultant to perform an economic feasibility analysis to verify the developer's claims of economic feasibility constraints. to May 27, 2003. The continued public hearing will be held at or after 6:00 p.m. in the Council Chamber at 23920 Valencia Blvd., Santa Clarita, California. Dated this 9th day of April, 2003. ZR SHARON L. DAWSON, CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS. AFFIDAVIT OF POSTING CITY OF SANTA CLARITA ) I, SHARON L. DAWSON, being first duly sworn, deposes and says that she is the duly appointed and qualified City Clerk of the City of Santa Clarita and that on April 9, 2003, she caused the above notice to be posted at the door of the Council Chamber located at 23920 Valencia Blvd., Santa Clarita, California. SHARON L. DAWSON, CITY CLERK Santa Clarita, California Public$eanaga/CONfPH.doc CONLEY CONSULTING GROUP MEMORANDUM To: Mr. Steven Stark Ms. Barbara Boswell From: Denise E. Conley Kathleen Diohep Conley Consulting Group Subject: Needham Ranch REAL ESTATE DEVELOPMENT STRATEGY ECONOMIC DEVELOPMENT 510 625.1448 1 5 1 0 6 2 5. 1 1 5 1 May 9, 2003 Conley Consulting Group (CCG) has been asked by the City of Santa Clarita to review the proposed development project at Needham Ranch in light of the development program changes and exactions requested of the developer by the City. Our assignment is to assess whether the City's requested conditions of approval impose a burden on the project that renders it economically infeasible. SUMMARY OF CONCLUSIONS CCG's analysis shows that given the current assumption of the costs to develop the land to the stage of finished lots suitable for sale for construction of industrial buildings, the project fails to meet typical investment feasibility standards. This means that the revenues generated (from the sale of finished lots) do not provide an adequate return to the costs and risks associated with the development, based on typical rates of return observable in the marketplace. Thus CCG concludes that given these return levels, the project is not feasible because it would be difficult to attract the required capital, both equity and debt, to implement the project. A February 2002 appraisal for the project was prepared by Valentine Appraisal and Associates, which estimated land development costs at $43.7 million, based on input from the developer. In March 2003, Sikand Engineering Associates prepared a $64.3 million estimate of site development costs for the reduced site area, or roughly $8/SF of industrial land. A comparison of these estimates shows that only $4.6 million of the $20.6 million in incremental costs is related to City -imposed conditions of approval (see Section IV -C below). If all of these conditions of approval costs were eliminated, the project would still not be economically feasible. 403 MARTIN LUTHER KING JR. WAY, OAKLAND, CALIFORNIA 94607 E-mail ccg@conley-group.com To: Mr. Steven Stark May 9, 2003 Subject: Needham Ranch Project Description Page 2 The project will be developed on a site which is 584 acres in size in the Southeastern portion of the City of Santa Clarita. The land will be subdivided so that 160.6 acres in 60 lots can be developed as industrial/commercial-zoned properties. It is anticipated that after the core subdivision and infrastructure of roads and grading are put in place, the existing developer will sell pads to users or builders who will construct the ultimate buildings on the site. Alternately, the developer may sell the unimproved sites to an industrial developer after securing entitlements. The project amenities include a fire station site, a school site, trails, bikeways, wildlife conservation area, and maintained open space. A property owners association will be established to assume operational responsibilities of the project as a whole. II. Steps Undertaken In the course of this assignment, CCG performed the following tasks and investigations: • Toured the site • Investigated industrial and business park market conditions in the area, surrounding industrial developments • Investigated industrial market conditions, consulted with local sources • Reviewed data on project including: ➢ Appraisal Report of the Needham Ranch Property, Prepared by Valentine Appraisal & Associates, Dated February 26, 2002 ➢ Market Analysis: Needham Ranch Business Park, Prepared by Craig Peters and Doug Sonderegger, CB Richard Ellis, February 14, 2002. ➢ Summary memorandum from City staff on the status of the development agreement for the project. ➢ Revised Project Maps dated March 13, 2003. ➢ Project Budget Prepared by Sikand Engineering Associates, Dated March 19, 2003. ➢ Relevant portions of the projects Environmental Impact Report. ➢ Economic Impacts of Development Alternatives, Economics and Planning Systems, December, 2001, September, 2002 update. Conley Consulting Group 37400.007 Needham Ranch Memo Report To: Mr. Steven Stark May 9, 2003 Subject: Needham Ranch Page 3 Ill. Analytical Approach Determining the feasibility of the project entails comparing the project costs and revenues, and testing to see if the expected gain on the transaction meets the market -established threshold of returns, given the risks inherent in the project. Raw land development is one of the more risky, therefore higher -return requiring, aspects of real estate development as it includes entitlement risks, cost overrun risk, marketing risks, and often requires holding property over extended periods of time which, in turn, increases the risk and complexity of achieving revenue estimates. This analysis projects project costs as we understand them, the additional costs imposed by City -requested items, expected revenues, and then determines whether the rate of return to the developer's investment is sufficient to undertake the project. IV. Project Costs A. Land Cost Analyzing the cost on this project is complicated by the land owner's lengthy tenure. As a simplifying assumption, this analysis looks at whether the return on the costs required to create the project is sufficient without assigning a value to the land. B. Development Costs In February 2002, a development cost estimate was prepared for the project (then defined as 42 lots on 203 acres of IC land), it totaled $43.7 million. The new development cost estimate provided on March 13, 2003 totals $64.3 million for a less intense development of 160.6 acres of IC land. This cost estimate reflects a new estimate of the project expenses and includes the requirements that the city is requesting. However, most of the changes in the cost estimate are not due to the city imposed requirements. Table 2 compares the project costs estimated in 2002 with those now presented. The significant cost differences are in the following items: • Clearing and grubbing costs have increased by $1.2 million. • Water distribution costs are up by $2.6 million. • Storm drain costs.have increased by $1.5 million. • Engineering costs have increased by $3.4 million. • A 15% contingency factor was added, increasing the total by almost $4.9 million. • A land cost of $2.3 million was added to the budget. Conley Consulting Group 37400.007 Needham Ranch Memo Report To: Mr. Steven Stark May 9, 2003 Subject: Needham Ranch Page 4 C. Conditions of Approval Based on our understanding of the cost estimate provided by the developer's engineers and the conditions that the City is requesting of the developer, we have summarized the additional cost items related to the conditions of approval in the table below. Note that these values total $4.6 million and are not the dominate cause of the increase in the project costs. Costs Due to Conditions of Approval Wetlands Mitigation $560,000 Bike Path Drainage 30,000 Trails and Trail Heads 150,000 Oak Tree Mitigation 300,000 Bike Path Retaining Wall 207,000 Environmental Mitigation 814,000 City Contributions 1,973,000 San Fernando Rd Landscaping 595,000 Subtotal $4,629,000 Source: Sikand Engineering Associates V. Project Revenues The lots developed in the project will be marketed over an extended horizon. The appraisal and market analysis both support that the project will take multiple years to fully sell out its parcels. We have reviewed the market analysis and the appraisal of the property. The appraisal, prepared in 2002, reviewed land sale comparables in the recent past and reviewed the characteristics of the lots planned in the project; the land values ranged from $9-11/SF based on the site characteristics. The weighted average value was $9.85/SF. The market study reviewed historic trends and projected future availability and pressures on land prices. It recommends an asking price of $12.50/SF, and anticipates that sales will be realized in the range of $10.50 to $11.50 per SF. As the sales will occur over multiple years, these two studies are more similar than not — the appraisal has the first sales occurring at $9.85/SF and the last at $12/SF, with an assumed 4% price appreciation during the sales period. As the project proposed lot configuration has changed since the appraisal valuation, CCG reviewed the parcel by parcel land values assigned by the appraiser and determined a new weighted average value per square foot. The adjustments in the mix of parcels result in value of $9.81 per SF, slightly lower than that for the earlier configuration. Conley Consulting Group 37400.007 Needham Ranch Memo Report To: Mr. Steven Stark May 9, 2003 Subject: Needham Ranch VI. Project Feasibility Assessment Page 5 Table 3 presents the annual cash flow assuming a two year development time frame and a six year marketing horizon. The revenues from lot sales are reduced for the real estate commissions associated with the sales. Additional costs associated with developer fee on the project costs and property taxes on the unsold properties are included to forecast the developers cash flow over time. Based on the project costs presented and the revenues levels projected in the appraisal, the return generated on the project is 8.1%. This return is below the level required for to attract sufficient capital, both debt and equity, to implement a raw land development. CCG estimates that the required return rate ranges from 15% to 20% depending on the determination of the risk level of the investment. Three scenarios were tested in this analysis: • The development cost as prepared by the developer's engineers and the revenue based on the appraisal's valuation by parcel adjusted for the new parcels. • An optimistic scenario with an increase in project revenue of 10% due to stronger than anticipated land sales values. • A reduced cost scenario that includes a 10% reduction in project costs— ora $6 million dollar reduction in costs. All of the scenarios result in a return that is below that typically required for industrial land development. VII. Caveats and Limitations Conley Consulting Group, (CCG) has made extensive efforts to confirm the accuracy and timeliness of the information contained in this document. Such information was compiled from a variety of sources deemed to be reliable, planning agencies, real estate brokers, and other third parties. No pro -forma was made available by the developer. Although CCG believes all information in this document is correct, it does not guarantee the accuracy of such and assumes no responsibility for inaccuracies in the information provided by third parties. Further, no guarantee is made as to the possible effect on development of current or future federal, state, or local legislation including environmental or ecological matters. The accompanying projections and analyses are based on estimates and assumptions that were developed using currently available economic data, project specific data and other relevant information. It is the nature of forecasting, however, that some assumptions may not materialize and unanticipated events and circumstances may occur. Such changes are likely to be material to the projections and conclusions herein and, if they occur, require review or revision of this document. Conley Consulting Group 37400.007 Needham Ranch Memo Report To: Mr. Steven Stark May 9, 2003 Subject: Needham Ranch Page 6 1. The analysis contained in this document is based, in part, on data from secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While CCG believes that these sources are reliable, we cannot guarantee their accuracy. 2. The analysis assumes that neither the local nor national economy will experience a recession or impact from a prolonged military conflict. If an unforeseen change occurs in the economy, the conclusions contained herein may no longer be valid. The development concept will not vary significantly from that identified in this analysis. 4. Any estimates of development costs, capitalization rates, income and/or expense projections are based on the best available project -specific data as well as the experiences of similar projects. They are not intended to be projections of the future for the specific project. No warranty or representation is made that any of the estimates or projections will actually materialize. 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N N OG Q J Q Q Q Q C C C C 000 000 3 C d y d x > W > > > > U a O' 00 N o 0 o o c 'C W co V Cl) N O C w 'W n NN E N m n `) d O d d U C: 0 o a w 6 N d � O N W C M Q d O O i E m N m c N G E _O W d O ► J T d N d E N C� C y V O j CITY OF SANTA CLARITA DEPARTMENT OF PLANNING AND BUILDING SERVICES NOTICE TO RE -OPEN THE CITY COUNCIL PUBLIC HEARING FOR THE GATE KING INDUSTRIAL PARK PROJECT APPLICATION: Master Case Number 99-264, Tentative Tract Map 50283, Zone Change 99-002, Hillside Review 99-004, Conditional Use Permit 99-013, Oak Tree Permit 99-029, General Plan Amendment 99-003 and Development Agreement 99- 002. PROJECT LOCATION: The proposed project site is located in the southern portion of the City of Santa Clarita in L.A. County. Specifically, the project site is situated west of the Antelope Valley Freeway (SR 14), and is bounded by Sierra Highway to the east and San Fernando Road to the north. Pine Street is located along the western boundary of the project site. Undeveloped mountainous terrain is located to the south. PROJECT DESCRIPTION: The Planning Commission recommended approval to the City Council of "C" Street Alternative #5. At the January 28, 2003 City Council meeting, the Council directed staff to work with the applicant in modifying Industrial Lot 24 from Alternative 5 to lessen the impacts further. The applicant is now proposing to gift a majority of Lot 24 (72.7 acres) to the City which would not be part of the project. Thus, the applicant is proposing a tentative tract map to subdivide the 511.3 acre project site into 107 lots and is requesting General Plan and Zoning amendments to change the land use designations in several areas of the site. The proposal involves amending the land use designation on 277.8± acres (45.7% of site). The proposed changes would eliminate the RE and CC designations from the site, and would increase the area designated IC from 187.8 acres to 215.8 acres. The area designated OS would increase from 31.8 acres to 188.6 acres. 67 lots, which encompass about 35.7% of the site, are industrial lots (182.3 acres) or 160± acres pad; 3 lots, which comprise about 7.7 acres or 1.5%, would accommodate 3 water tanks to serve site development; 2.1 acres or 0.5% would accommodate the helipad site; 20.8 acres or 4% would consist of City dedicated trail lots; 51.6 acres or 10% of the site will consist of natural and landscaped slopes and trails dedicated to the City; 174.4 acres (34.1% of site) would be dedicated to the City as a wilderness park; and 18.7 acres or 3.7% would be designated as permanent open space. The remainder of the site of 53.7 acres or 10.5% would consist of public streets (19.1 acres), the MTA (14 acres) and SCE (19.3 acres) rights of way, and the Pioneer Oil Refinery expansion lot dedicated to the City (1.3 acres). Full build out of the site under the applicant's modified proposal would involve the development of 201.4 acres (39% of site) with industrial/commercial uses. This acreage would accommodate up to 4.2 million square feet of industrial/commercial development. As part of this alternative the applicant will also be removing 1,408 oak trees of the 11,721 plus oak trees (no heritage removals) and 336 oak tree encroachments. A 15 - year Development Agreement with the associated deal points is also proposed. PROJECT PROPONENTS: Gate King Properties, LLC 4 x The Public Hearing to discuss the merits of this project will be conducted by the City of Santa Clarita City Council on: DATE: April 8, 2003 LOCATION: City Council Chambers TIME: At or after 6:00 p.m. 23920 Valencia Blvd., First Floor, Santa Clarita, CA 91355 An Environmental Impact Report has been prepared for the project to identify potential environmental impacts. The Draft Environmental Impact Report (DEIR) became available for public review beginning January 28, 2002. If you wish to challenge the action taken on this matter in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City of Santa Clarita at, or prior to, the public hearing. For further information regarding this proposal, you may contact the City of Santa Clarita, Department of Planning and Building Services, 23920 Valencia Boulevard, 302, Santa Clarita, CA 91355; Telephone: (661) 255-4330. Project Planner: Jeff Hogan and Kelvin Parker