HomeMy WebLinkAbout17 - NB-1 - Infrastructure Improvement Agreement - 12/17/20191
CITY COUNCIL AGENDA REPORT
MEETING DATE: DECEMBER 17, 2019 ITEM NUMBER: NB-1
SUBJECT: INFRASTRUCTURE IMPROVEMENT AGREEMENT BETWEEN EF
EDUCATION FIRST AND THE CITY OF COSTA MESA
DATE: November 27, 2019
FROM: Development Services Department / Planning
PRESENTATION BY: Daniel Inloes, Economic Development Administrator
FOR FURTHER INFORMATION
CONTACT:
Daniel Inloes, AICP,
714-754-5088
RECOMMENDATION:
Staff recommends that the City Council approve the Infrastructure Improvement
Agreement between the City of Costa Mesa and EF Education First.
Planning Commission Review
On November 25, 2019, the Planning Commission unanimously approved Planning
Application 19-15 and adopted the Initial Study/Mitigated Negative Declaration (IS/MND)
for the proposed project. The project, as approved, includes Condition of Approval (COA)
No. 9 which requires the approval of an agreement between the City and the applicant
prior to transfer of those entitlements approved by the Planning Commission. The
agreement as proposed requires that EF provide the City with $1.8 million over the next
15 years for the City to use to assist in and ensure the implementation of a crosswalk and
other measures, at the City’s discretion, to enhance the active transportation network and
other City infrastructure and services within the vicinity of the project site.
BACKGROUND:
On April 11, 2019, Alliance South Coast Properties LLC submitted applications (Planning
Application 19-15) for a proposed international language campus on behalf of EF Education
First (“EF”). The proposed project would include the following: 1) renovation of the existing
three-story building (approximately 44-feet tall) modified to 57,700 square feet in area,
including approximately 50 classrooms, a student services area, cafeteria, and
faculty/staff offices; 2) development of a three-story, 49,800-square-foot dormitory to the
north of the existing building; 3) development of two two-story, 23,000-square-foot
dormitories; 4) surface parking areas; 5) outdoor recreational facilities including a pool
with a pool house; and 6) landscaping.
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The project includes the addition of 87,000 square feet of new buildings on the project
site. Therefore, the total existing and proposed building square footage on the project site
would be 155,000 square feet. The proposed project could serve up to 1,374 students
and would have approximately 70 employees.
This proposed project requires several discretionary approvals as follows: 1) conditional
use permit to allow for a college/university/post-secondary school including new
classrooms and student dormitories; 2) minor conditional use permit to allow for outdoor
recreational uses, including basketball, swimming and volleyball; 3) minor conditional use
permit to deviate from parking requirements; 4) height variance to allow for a new three-
story student residential building along the I-405 Freeway; 5) front setback variance to
allow for the construction of structures for a generator and trash enclosure within the front
setback adjacent to Bear Street; 6) perimeter landscape setback variances to allow for a
drive aisle within landscape setback along the I-405 and parking spaces within the
landscape setback along Bear Street; and, 7) minor modification for the three-story
dormitory to encroach on the rear-yard setback.
ANALYSIS:
Infrastructure and Service Needs
Due to the unique nature of the proposed project (e.g. all students will access the site and
community via transit, shuttle, bicycle and walking), staff evaluated the potential
infrastructure and ongoing services needed to support the proposed project. The
educational nature of the project, and proposed project’s prohibition of students from
driving and the inclusion of resident students does not result in the usual impact fees for
parks and transportation that would be applied to new development of this scale.
Additionally, the nature of the immersive program EF proposes encourages students to
explore the environment around them. This includes shuttle trips to nearby destination
locations, encouraging communication with members of the public, and housing up to 720
students with host families within a 45-minute commute from the school. Finally, although
there would be students living onsite, substantial City development impact fees (park fees
and traffic impact fees, for example) do not apply to this project as schools and dormitories
are not considered a residential use and the project is considered a low traffic generating
use.
The school relies heavily on bus, bike and pedestrian modes of transportation. Bear
Street, fronting the project site, is classified as a Major Arterial in the Circulation Element
of the City’s General Plan and is therefore designed to address vehicular traffic rather
than pedestrian or bike traffic. While there are sidewalks on both sides of the street there
are segments directly in front of the school that do not have the necessary width to comply
with ADA accessibility and the two closest crosswalks are half a mile apart.
The City and the applicant agreed that a signalized pedestrian crossing of Bear Street to
Shiffer Park would be beneficial, in light of the large number of pedestrians and bicyclists
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that will be using the site. This improvement would allow for students, employees, and
other members of the public to cross Bear Street between South Coast Drive to the north
and Paularino Avenue to the south. The applicant is providing funds to the City with a
proviso that a portion of those funds pay for the design and installation of the signalized
pedestrian crosswalk as part of the project. Once installed, the crosswalk would assist all
active transportation users in navigating this segment of the road network.
Considering the school’s heavy reliance on public and active transportation systems, the
City identified potential projects that could enhance the network of active transportation
around the project site and ensure that any additional municipal demands can be met
over time. The applicant’s proposal to pay the City a total of $1.8 million is intended to
address this concern and other potential projects within the vicinity, at the discretion of
the City.
Fiscal Impact of the Project
Due to the unique nature of the proposed project, staff evaluated its fiscal impact to
ensure that resources would be available to address the ongoing demand for
infrastructure and services. The applicant provided an Economic Benefit Analysis from
Kosmont Companies as part of its application materials (Attachment 2). The City’s
consultant, The Natelson Dale Group, conducted a Fiscal Impact Analysis for the project
on the City’s behalf (Attachment 6).
The applicant’s Economic Benefit Analysis identifies a net benefit for the City’s General
Fund of $52,000 per year. The Fiscal Impact Analysis prepared by the City’s consultant,
The Natelson Dale Group, used the City’s approved Fiscal Impact Model which was
developed and updated during the General Plan Update in 2015. The City’s analysis
found that the project would generate a net fiscal deficit of approximately $48,000 per
year. However, the site was vacant for the last two years due to the limited potential uses
that are allowed within the AP zone without placing a project on the ballot under Measure
Y. The proposed use would generate significantly less traffic and have fewer visual
impacts than the previous use. Moreover, the applicant has agreed to create a unique
public private partnership (P3) with the City and the Newport-Mesa Unified School District
to institute a ten–year scholarship program called Glocal Challenge Education Travel
Scholarship Program. This is an annual project-based learning competition and
scholarship program whose winners will receive a full scholarship to an international
destination that relates to the subject matter of the assessed project.Therefore, overall,
staff believes that the project is actually beneficial and provides a reasonable use for an
underutilized high-profile property within the City.
To address any potential infrastructure or services needs over time, the applicant and the
City have agreed to enter into an agreement whereby the applicant agrees to pay a total
of $1.8 million to the City over the next 15 years. Per the draft agreement (as required by
COA No. 9 of the Planning Commission resolution and included as an attachment to this
report), the applicant would provide the City $300,000 prior to issuance of a grading or
building permit, whichever comes first, and $100,000 annually for the next 15 years. In
turn, the City would build the signalized pedestrian crossing of Bear Street and could
thereafter use the remaining funds for infrastructure or services improvements that could
include, but are not limited to bike and pedestrian infrastructure enhancements and local
park enhancements.
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The proposed use would represent a destination location for thousands of students over
a given year. Therefore, the project would provide economic benefits through new jobs,
retail sales, host family revenue, and more. For this reason, this use would be a benefit
to the host families, businesses, and other community members within our community.
Per the Planning Commission’s action, the project is conditioned to require execution of
the agreement to activate the proposed entitlements.
GOALS AND PRIORITIES:
In 2019, the City Council adopted a list of goals and priorities. This project works toward
achieving the following City Council goals and objectives.
Goal 2: Improve our Neighborhoods and Quality of Life.
(g) Invest in infrastructure improvements including streets, sidewalks, bikeways,
alleyways, storm drains, parkways, medians, and trees to ensure all areas of town
(especially Districts 4 and 5) are raised to the same high standard for infrastructure. This
includes updating our Parkway and Median Standards and exploring the possibility of
becoming a Tree City USA.
Goal 5: Improve Mobility and Parking.
ALTERNATIVES CONSIDERED:
The City could decide not to approve the agreement. If so, the various discretionary
entitlements conditionally approved by the City Council on December 17, 2019 would be
null and void, such that the Project would not be able to proceed in its current format.
FISCAL REVIEW:
The agreement stipulates that the total contribution to be paid by EF would be $1.8 million.
Prior to issuance of the first grading or building permit (whichever comes first), EF would
make a payment to the City of $300,000, then within thirty days of the issuance of the first
Building Final or Certificate of Occupancy the applicant will pay the first annual payment of
$100,000. Then, for the next 14 years, EF would pay the City $100,000 on each anniversary
of the first Building Final or Certificate of Occupancy. The contribution from EF is to be used
for improvements designated by the City Council which would enhance livability within the
vicinity of the project. The only specified infrastructure improvement within the agreement
is a crosswalk, associated ADA ramps, and a pedestrian hybrid beacon (also known as
a HAWK signal) across Bear Street between the subject property and Shiffer Park. This
project is estimated to cost anywhere from $225,000 to $275,000, leaving an estimated
$1.525 million of the $1.8 million for other infrastructure and improvements projects as
determined by the City Council.
LEGAL REVIEW:
The City Attorney’s office has reviewed this report and the attached agreement and
approves them as to form.
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CONCLUSION:
Due to the fact that the agreement provides additional funding to address demand on
infrastructure and services and the overall benefit of the project to all members of the
community, as well as the “Glocal” Challenge Education Scholarship Program being
offered by EF, the project would be a net benefit to the City. It is recommended that the
City Council approve the Infrastructure Improvement Agreement between the City of
Costa Mesa and EF Education First.
DANIEL INLOES, AICP BARRY CURTIS, AICP
Economic Development Administrator Director of Economic and Development
Services
Kelly A. Telford, CPA Kimberly Hall Barlow
Director of Finance City Attorney
ATTACHMENTS: 1
2
3
Agreement
Fiscal Impact Analysis from TNDG
Applicant Letter which includes Economic Benefit
Analysis from Kosmont