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HomeMy WebLinkAbout2020-11-12 Supplemental B SOUTHERN CALIFORNIA EDISONg Energy for What's Ahead'm November 11, 2020 Chairman Tony Guglielmo Planning Commission City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Re: Impact of Proposed Amendment to City General Plan on Southern California Edison's Rancho Vista Substation (12408-6th Street) and Associated Training Center Plans Dear Chairman Guglielmo and Members of the Rancho Cucamonga Planning Commission: On behalf of Southern California Edison (SCE), thank you and representatives of the City of Rancho Cucamonga (City) for considering our proposal for a SCE Training Center (project) in Rancho Cucamonga. We believe this project will bring an exciting and positive development to the Southeast Industrial Quadrant (SEIQ) of the City. We have received confirmation from the Planning Department that our Training Center is an approved accessory use to our existing Substation, and that Staff is supportive of our project. As outlined in the attached Letter submitted to the City Manager and Planning Department, SCE objects to the proposed street network presented in the General Plan Amendment. The proposed street network bifurcates our property and will render our project unworkable. We have demonstrated to Staff that our project can provide the required emergency access without the installation of public streets around our site. Staff has not provided us with any reasonable explanation as to why SCE would be required to dedicate land to a street network that would adversely affect our electrical infrastructure and our proposed project. Note that this electrical infrastructure is the network that provides electrical service to the City and beyond. We also would like to mention that we have an upcoming site meeting with the City Managers and City Engineer scheduled for November 17th to tour our property so that they can observe the extent of existing electrical infrastructure surrounding our substation.We feel that it is premature for City Staff to propose this street network and bring forth a General Plan Amendment without a full understanding of what the area looks like. Once they've had a chance to tour the area, they will understand why this proposed street network does not work and will most likely never be implemented during SCE's ownership of the land. Moreover, because the subject properties are viewed as a critical component of SCE's short and long-term (minimum of 25 year) planning efforts. Therefore, SCE has no intention of vacating the property. Once again,thank you for considering our position. Please feel free to contact me should you need any additional information in furtherance of your review. Sincerely, Mark Cloud, Government Relations Manager Southern California Edison CC John Gillison, City Manager Matt Burris, Assistant City Manager Janice Reynolds, City Clerk Attachment SOUTHERN CALIFORNIA EDISONg Energy for What's Ahead'm September 29, 2020 Mr. John R. Gillison, City Manager Mr. Matt Burris, Deputy City Manager Mr. Mike Smith, Principal Planner City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Re: Impact of Proposed Amendment to City General Plan on Southern California Edison's Rancho Vista Substation (12408-6th Street) and Associated Training Center Plans Dear Messrs. Gillison, Burris, and Smith: On behalf of Southern California Edison (SCE), thank you and representatives of the City of Rancho Cucamonga (City's) staff for meeting with our SCE project team on August 5th. As you know, the City's planning staff is in the process of developing amendments to the City's General Plan. In pertinent part, the proposed amendments require the eventual development of a series of new streets that would bifurcate SCE's property located northwest of the intersection of 61h Street and Etiwanda Avenue. During our meeting, the City's staff advised SCE that it does not have a complete inventory of the facilities SCE maintains on its property and expressed a willingness to revisit its proposal given SCE's assertion that the proposed streets will interfere with SCE substations and peaker plant. Due to the potential interference, SCE believes it is highly unlikely that the subject streets will ever be dedicated or built. The purpose of this letter is therefore to provide the City with information regarding SCE's ongoing use of its property that render development of the streets impractical and to request that the City either eliminate the streets from consideration or harmonize the proposed General Plan Amendment with SCE's long-term use of the property. SCE also respectfully requests that this letter be added to the record of any proceedings by the City on the proposed General Plan amendment. Overview of SCE's Property SCE owns several parcels of property in the immediate area. The proposed amendments largely impact two parcels housing SCE's Rancho Vista Substation, Etiwanda Substation, and Grapeland peaker plant. The parcels containing the substations and peaker plant are "L" shaped and are located just northwest of the intersection of Etiwanda Avenue and 61h Street. These substations are an integral component of SCE's transmission system and are utilized to receive, transmit, and distribute electricity to SCE's customers in the region(including the City itself). The associated peaker plant is designed to ensure the continuous supply of electricity by temporarily generating electricity at certain times of"peak" electrical demand. It is evident that SCE took the City's planning concerns into account when it originally acquired its property for these purposes as the site is situated within a corridor of industrial uses that is also abutted by several railroad tracks. As further evidence of the critical nature of the facilities, please note that the substations and peaker plant are integrated with each other and SCE's transmission and distribution grid through a series of electrical transmission and distribution towers, lines, cables, and above and below ground conduit. The substations send and receive power through a series of high-voltage transmission lines supported by towers virtually surrounding the site. For the City's convenience, an inventory and diagrams of these facilities are included as Attachment"1"to this letter. Proposed General Plan Amendment SCE understands that the City intends to amend its General Plan to (in pertinent part) require the development of five new streets partially situated on SCE's property. The City's draft diagram illustrating these streets is included as Attachment 112" to this letter. As discussed more fully below, the five proposed streets would bifurcate SCE's property in both a north-south and east-west direction. Need For The New Streets SCE initially understood that the City proposed the subject streets to ensure emergency access to the area. SCE subsequently resolved the City's emergency access concerns and demonstrated that there is sufficient emergency access both to SCE's parcel and adjacent parcels. SCE now understands that the City's primary planning rationale is to"open up"the area and create greater access in and through the site. Unfortunately, the subject proposal bifurcates SCE's property and places an undue burden on SCE's facilities. Moreover, SCE understands that there is sufficient traffic capacity on the existing road network such that the new roads would at best be superfluous. SCE has discussed this issue with other property owners and its own traffic engineer who has confirmed that the subject streets are not needed. SCE's Ongoing Cooperation With the City's Planning Efforts SCE has and will continue to partner with both the City and our customers in the City to ensure the connectivity of area streets. As a matter of course, SCE is amenable to reviewing reasonable requests for right of way dedications provided that doing so will not impact SCE's facilities or service. However, SCE must prioritize its ability to safely and reliably operate and maintain its system. Moreover, SCE must seek approval for such conveyances from the California Public Utilities Commission(CPUC)pursuant to Public Utilities Code Section 851. As part of that approval process, SCE must demonstrate that the conveyance does not interfere with SCE's operations. For example, CPUC General Order 173 requires that a utility demonstrate that an application for approval to convey rights of way made pursuant to Public Utilities Code Section 851 show that "[t]he transaction will not have an adverse effect on the public interest or on the ability of the utility to provide safe and reliable service to customers at reasonable rates." SCE has sought and obtained approval from the CPUC to convey right of way easements supportive of private developers who have been conditioned by local governments to build or enlarge City roads.For example, in 2018 SCE obtained approval from the CPUC to grant two right of way easements to a developer in the City. These easements facilitated an expansion of Santa Anita Avenue just north of SCE's substation and ultimately allowed for the development of industrial warehouses. Following completion of the Santa Anita Avenue expansion, SCE understood that the easements would be assigned to the City. SCE understood the warehouse development was urgently needed by area businesses and has provided a significant economic benefit to the City. A copy of the CPUC's Resolution approving these easements is included as Attachment"3". In addition, SCE is working cooperatively with the City to evaluate the dedication of portions of SCE's property to support a grade separation project just east of the subject properties on Etiwanda Avenue. Where feasible, SCE will do our best to support the City with its development plans. Unfortunately, implementation of the subject proposed General Plan amendment would adversely impact both existing and reasonably foreseeable upgrades and modifications to SCE's substations. Therefore, as explained more fully below, SCE must respectfully object to the General Plan's proposal for the subject five streets. Substation Conflicts SCE's engineers have begun evaluating the proposed streets and have already identified a number of conflicts that preclude SCE from agreeing to dedicate and/or construct the proposed streets. Examples of conflicts are summarized below: • SCE's 2045 Pathways White Paper is an analysis performed by SCE of the need for(in pertinent part)future transmission lines between SCE's Lugo Substation and the Rancho Vista Substation. Development of the new streets would preclude SCE from installing new towers or other infrastructure in their intended areas to provide the necessary power to support the City's projected growth. This analysis also identified the need for new transmission lines between SCE's Lugo Substation (in Hesperia) and Rancho Vista Substation. The proposed streets would interfere with tower or pole placements and other infrastructure that will be needed for those upgrades as well. • SCE has a number of connective systems onsite. The installation of the new streets will likely cause clearance issues both with regard to the clearance between structures (e.g., poles and towers being forced to locate too close to onsite or adjacent structures) and aerial clearance issues given potential changes in terrain and elevation. Impacted facilities include SCE's Mira Loma-Rancho Vista 500kV transmission line; Padua-Rancho Vista No. 1 & No. 2 220kV transmission line; Etiwanda-Arbors-Forge-Reduction 66kV electrical line; Etiwanda-Archline- Cucamonga-Genamic 66kV; Fields 12kV underground). • Facilitating vehicular ingress and egress through SCE's site jeopardizes SCE's ability to secure its facilities and may necessitate SCE implementing additional security measures. In our experience, jurisdictions frequently express concern regarding the development of gates, walls, barbed wire, and other forms of access barriers and restrictions. • SCE notes there is an approximate grade separation of 10 feet between an adjacent property owned by IEUA and SCE's property which would add considerable difficulty to the construction of the proposed streets and would likely require an even greater dedication of property to accommodate their installation. • SCE's forecast plans call for 30 GW of utility scale energy storage. The proposed streets would also interfere with the siting of these facilities onsite. For the City's convenience, a map of SCE's existing above and underground systems and facilities is included as Attachment 4". The attachment overlays SCE's systems onto the map of the proposed streets provided by the City to further illustrate these conflicts.Because,development of the streets would necessitate a reconfiguration of SCE's substations and relocation of transmission towers and underground conduit, SCE cannot dedicate nor construct the streets. SCE's Onj!oinj!Use of the Substations/No Plans to Vacate or Install New Streets The use of General Plan amendments to facilitate the development of future streets requires the cooperation of property owners and/or the City's ultimate exercise of its powers of eminent domain. In the normal course, a developer subject to the General Plan would be required to align any proposed development with the General Plan requirements and otherwise dedicate and/or provide the subject streets to the City.' In contrast to other property owners, SCE is a public utility and its transmission and distribution systems coupled with both the substations and peaker plant are public uses that are exempt from discretionary review and application of the City's General Plan and Zoning Code. See, California Public Utilities Commission General Order 131-D, Section XIV(B)("This General Order clarifies that local jurisdictions acting pursuant to local authority are preempted from regulating electric power line projects, distribution lines, substations, or electric facilities constructed by public utilities subject to the Commission's jurisdiction."). SCE is only required to obtain ministerial permits from the City and to generally consult with the City regarding land use matters. The City's staff appeared to recognize that SCE's electrical systems (including the substations and peaker plant) are not subject to discretionary permitting—which would include application of the City's General Plan and Zoning Code. It therefore follows that the streets called for on the General Plan Amendment Map would either necessitate SCE's agreement to voluntarily dedicate right of way to the City or the City may attempt to condemn. The City's staff clarified ' Alternatively, a property owner may elect to challenge both the General Plan Amendment or conditions of development as being an unlawful taking. The requirement for the subject streets appears to constitute a taking because it is not calibrated to mitigate traffic impacts generated by SCE's historic development of the property or its planned future development of additional training facilities(see below). that there are no plans to condemn SCE's property. Therefore, development of the streets would require SCE's voluntary agreement to dedicate and/or develop the streets or SCE's sale of the site to a non-utility developer. SCE has previously and respectfully confirmed that it will not agree to dedicate rights of way for the subject streets because doing so would both undermine SCE's existing facilities and prevent SCE from expanding or enlarging its substations to accommodate future growth in the City.2 SCE's Proposed Training Center SCE will be submitting plans for the approval of an SCE training center to the City shortly. The training center will be utilized solely for SCE to train its planning,operations,and emergency- response staff to utilize and implement substation monitoring equipment. Although the training center will not be open to the public, SCE notes that the center will result in considerable jobs and tax revenue to the City without creating any significant or discernable impacts. SCE's project team was also encouraged that the City understands the distinction between SCE's proposed use of an employee training center as opposed to a for-profit technical trade school.3 Nevertheless, SCE understands that the City will require SCE to undergo site plan review (a discretionary approval). If the General Plan were to be amended, SCE understands that the City's staff would then recommend that the City Council deny site plan approval unless SCE agrees to dedicate and/or develop the streets. As discussed on our call,there may be disagreement as to whether SCE's employee training center is simply an accessory component to the substation and therefore exempt from discretionary review pursuant to General Order 131-D. Nevertheless, application of the requirement to dedicate or build the subject streets would render the training center unbuildable because it would significantly reduce the usable area for the parcel both limiting SCE's ability to build the training center itself, requires the relocation of existing substation facilities, and would further restrict SCE's ability to upgrade its substations and peaker plant to serve growth in the City. If SCE is ultimately unsuccessful in pursuing relief against the imposition of conditions that it dedicate and/or construct the streets, it will be required to build the training center elsewhere. Put simply, the City does not have a "hook"upon which it may mandate development of the streets. While SCE has and will continue to partner with the City to ensure (among other things) improvements to vehicular and pedestrian access, SCE also has a duty to our ratepayers to protect our operational property. In addition to being unlawful, it is entirely inequitable both to SCE and our ratepayers to exact the dedication of right of way for 5 new streets in and around our properties. This is so because the cumulative traffic impacts associated with largely unmanned SCE substations, peaker plant, and irregularly staffed training center are nominal and do not justify the City's requirement for the dedication and/or construction of 5 new streets on its operational property- 2 The City's staff noted on our call that SCE may sell its parcel in the future and at that point,a future developer may then be required to add the proposed streets.SCE has no short or long-term plans to remove its expansive network of facilities that include the substations, peaker plant, and transmission lines serving our customers in the City. In fact,SCE's long-term plans(through 2045) require both the use and eventual expansion of the substations. 3 In sharp contrast to a for-profit trade school, the subject site would not be open to the public and we thank the City for its recognition that the training center is fundamentally an accessory use to the substation and peaker plant. SCE trusts that the inclusion of inventory maps, and explanation of the existing and future site conflicts between SCE's existing and future facilities will prompt the City's staff to eliminate the proposed streets from the General Plan Amendment. In addition,the SCE team will be in touch with your office to schedule a COVID friendly outdoor tour and inspection of the site to give the City's staff a clearer perspective on site challenges that make development of the streets entirely impractical. Once again, thank you for considering our position. We look forward to meeting with the City's staff onsite. In the interim, please feel free to contact me should you need any additional information in furtherance of your review. Sincerely, SOUTHERN CALIFORNIA EDISON V�f-q� Lct� Virginia Loufek SCE Corporate Real Estate Attachment 1 � Y � .l+Ltti � r�� �fl ti + •f r • 1 117 1 � ' �� `p.. � 4 1 -yam 4' •�^I,.n ..`•. Ip � �'' `l �;�',S' I i jr ' � •N � it All 14,4 " r, S AL , am AMC Edison fee/owned land Electrical towers/poles Overhead electrical line Proposed roads Attachment 2 pQ Q let , — IVIARGARI 6 H Q s _ 4L -WMEM f 5 I 1T- CIF Amendment Streets ,._ Streets 4J' MEMO • moor _� _ � • 4 H o oa �] oao oao oao t Attachment 3 Date of Issuance: March 26, 2018 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION RESOLUTION E-4923 March 22, 2018 R E S O L U T I O N Resolution E-4923. Southern California Edison Company Request for Two Easement Agreements with CRP Oakmont, LLC and the City of Rancho Cucamonga pursuant to Advice Letter 3698-E. PROPOSED OUTCOME: • This Resolution approves Southern California Edison Company's (SCE) Advice Letter (AL) 3698-E with an effective date of today. SCE proposes to grant two Easement Agreements (Agreements) to CRP Oakmont Santa Anita, LLC (Oakmont) and the City of Rancho Cucamonga (City). SAFETY CONSIDERATIONS: • There are no specific safety concerns with this transaction. ESTIMATED COST: • A request for authority to enter into transactions pursuant to General Order (GO) 173 requires the filing of cost information. SCE will receive $271,747.00 from Oakmont as payment for both of the easements subject to this transaction. By Advice Letter 3698-E, filed on November 17, 2017. SUMMARY This Resolution approves SCE's AL 3698-E, with an effective date of today. On November 17, 2017, SCE filed Advice Letter 3698-E requesting approval under GO 173 and Public Utilities Code Section 851 to enter into two Easement Agreements with CRP Oakmont Santa Anita, LLC and the City of Rancho Cucamonga. The Easement Agreements will allow Oakmont and the City to extend Santa Anita Avenue and to construct an emergency access road across SCE property. SCE has reviewed the City's plans and has determined that the encroaching facilities will neither impede SCE's ability to access, maintain, 212517655 1 Resolution E-4923 March 22, 2018 SCE AL 3698-E/BCA repair, and replace its facilities within SCE property; nor will they interfere with SCE's safe and reliable operations. BACKGROUND SCE filed Advice Letter 3698-E on November 17, 2017, requesting approval for two Easement Agreements with CRP Oakmont Santa Anita, LLC and the City of Rancho Cucamonga. The City and Oakmont are seeking two easements with SCE in order to extend Santa Anita Avenue and to construct an emergency access road across SCE property. There are four electric transmission tower lines and seventeen electric poles that traverse the property. This project is being undertaken by Oakmont as the developer. The extension of Santa Anita Avenue and the construction of an emergency access road are conditions of development imposed by the City for the Oakmont Warehouse project. The City of Rancho Cucamonga prepared an Initial Study Mitigated Negative Declaration (MND) for the project, and a Notice of Intent and a Draft MND were distributed for 30 days of comment on April 22, 2016, pursuant to CEQA Guidelines (SCH#2016041071). The City adopted the MND on June 28, 2017. A Notice of Determination was filed with the San Bernardino County Clerk on June 30, 2017. Pursuant to D.99-09-070 (affirmed in Resolution E-3639), the two easements are considered passive revenue: according to the adopted Gross Revenue Sharing Mechanism for certain Other Operating Revenue, the gross revenue is allocated 70 percent to shareholders and 30 percent to ratepayers. NOTICE Notice of AL 3698-E was made by publication in the Commissions Daily Calendar. SCE states that AL3698-E was filed in accordance with the noticing requirements of both General Order 173 and General Order 96-B. PROTESTS There were no protests to SCE Advice Letter 3698-E. 2 Resolution E-4923 March 22, 2018 SCE AL 3698-E/BCA DISCUSSION The Commission has reviewed SCE AL 3698-E and the attached materials relating to the CEQA process as prepared by the City of Rancho Cucamonga. The Commission has determined that the documents comply with the requirements of the California Environmental Quality Act. The Commission finds that SCE's AL 3698-E request for approval was made in accordance with the streamlined procedure adopted by the Commission in General Order 173 and Public Utilities Code Section 851. The Commission finds that the relief requested in AL 3698-E is not adverse to the public interest and should be granted. COMMENTS This is an uncontested matter in which the resolution grants the relief requested. Accordingly, pursuant to PU Code 311(g)(2), the otherwise applicable 30-day period for public review and comment is being waived. FINDINGS 1. On November 17, 2017, SCE filed Advice Letter 3698-E to enter into two Easement Agreements with CRP Oakmont Santa Anita, LLC and the City of Rancho Cucamonga under General Order 173 and Public Utilities Code Section 851. 2. The City of Rancho Cucamonga and Oakmont require the two Easement Agreements with SCE in order to extend Santa Anita Avenue and to construct an emergency access road across SCE property. 3. SCE states that it has reviewed the encroaching facilities and has determined that they will not interfere with SCE's operations or SCE's ability to provide safe and reliable utility services to its customers. Approval of this transaction will not impair SCE's provision of utility service. 4. There are no specific safety concerns with this transaction. 5. SCE will receive $271,747.00 from Oakmont as payment for both of the easements subject to this transaction. 3 Resolution E-4923 March 22, 2018 SCE AL 3698-E/BCA 6. The proceeds from the two easements are considered passive Other Operating Revenue: the gross revenue is therefore allocated 70 percent to shareholders and 30 percent to ratepayers. 7. The City of Rancho Cucamonga prepared an Initial Study Mitigated Negative Declaration (MND) for the project, and a Notice of Intent and a Draft MND were distributed for 30 days of comment on April 22, 2016, pursuant to CEQA Guidelines. 8. The City adopted the MND on June 28, 2017. A Notice of Determination was filed with the San Bernardino County Clerk on June 30, 2017. 9. The Commission has reviewed SCE AL 3698-E and the associated documentation filed with the AL and has determined that the documents comply with the requirements of the California Environmental Quality Act. 10.SCE Advice Letter 3698-E complies with the streamlined procedures adopted by the Commission in General Order 173. 11.The Commission finds that the relief requested in AL 3698-E is not adverse to the public interest and should be granted. THEREFORE IT IS ORDERED THAT: 1. The request of Southern California Edison Company in AL 3698-E for approval to enter into two Easement Agreements with CRP Oakmont Santa Anita, LLC and the City of Rancho Cucamonga is approved. 4 Resolution E-4923 March 22, 2018 SCE AL 3698-E/BCA This Resolution is effective today. I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held March 22, 2018; the following Commissioners voting favorably thereon: /s/ALICE STEBBINS ALICE STEBBINS Executive Director MICHAEL PICKER President CARLA J. PETERMAN LIANE M. RANDOLPH MARTHA GUZMAN ACEVES CLIFFORD RECHTSCHAFFEN Commissioners 5 G R E S H A M I SAVAGE Mark.Ostoich@GreshamSavage.com • San Bernardino Office r i-t Y 3 A 1 (909)890-4499 • fax(909)890-9877 November 12,2020 VIA E-MAIL-E1izabeth.Thornhi11c&cityofrc.us AND REGULAR MAIL Honorable Chairman and Members of the Planning Commission c/o Elizabeth Thornhill, Executive Assistant, Planning Department City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Re: Agenda Item D.1: General Plan Amendment DRC2020-00215 Honorable Chairman and Members of the Planning Commission: This firm represents Commercial Metals Company ("CMC") in connection with its ownership and proposed development of two logistics and distribution facilities totaling approximately 2,000,000 square feet (the "Project") on the 95-acre site commonly known as 12343-12345 Arrow Route (the "Property") in the City of Rancho Cucamonga ("City"). The Project, which includes a 1,378,720 square foot logistics and distribution facility, as well as a 670,270 square foot warehouse and distribution facility, is specifically designed to accommodate e-commerce users that would bring the benefits of substantial sales tax and other revenue to the City, as well as a significant number of new jobs for local residents. These types of facilities represent a modern industrial operation The purpose of this letter is to express our serious concern with and opposition to the street network expansion plan ("Plan") proposed to be adopted by the City as part of General Plan Amendment DRC 2020-00215 (the "Amendment"). We respectfully request that the Planning Commission include this letter in the administrative record for this matter. For the reasons outlined below, the Planning Commission should recommend denial of the Amendment to the City Council or, alternatively, recommend substantial modifications to the proposed Plan and Amendment in order to address the significant and unjustifiable defects outlined below. First, as shown on Exhibit B to the Staff Report (a copy is attached), the proposed Plan will effectively convert the Property, which is uniquely situated to accommodate the SAN BERNARDINO 550 East Hospitality Lane, Suite 300 • San Bernardino, California 92408 /fffv TD�� SAN DIEGO 401 West A Street, Suite 925 • San Diego, California 92101 �J GreshamSavage.com C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12,2020 Page 2 two large-scale facilities contemplated by the Project, into four parcels most of which are completely surrounded by entirely new roadways. E-commerce companies specifically require large parcels that can accommodate 1,000,000+square foot logistics facilities with sufficient outdoor space for employee parking. The Property is ideally situated to attract such a user; however, the proposed Plan's forced division of the Property will prevent any modern industrial operation from coming to the Property or anywhere else in the City's Southeast Industrial Quadrant ("SEIQ") for that matter, effectually terminating the Project. Further, taking into account City roadway setback requirements and floor area ratios governing development within industrial zones, the actual developable space within these future parcels will be rendered logistically and operationally infeasible for a modern industrial operation, which ironically is the very operation it appears the City is trying to attract to the SEIQ. As outlined below, the developable footprint of the Property will shrink from the current footprint (which will accommodate approximately 2,000,000 square feet of development) to four smaller parcels containing insufficient space for a modern industrial operation to function.' The proposed Plan will not only render the Project proposed by CMC completely infeasible; but, it will also ensure that no other modern industrial operation will be able to occupy the Property (or any of the parcels that the proposed Plan will create within the SEIQ), thereby depriving CMC and the City of the substantial revenue and other benefits that flow from such an operation, including potential sales tax revenue and new jobs for local residents. This result makes no sense and benefits no one. Second, the City's stated purpose for the checkerboard of internal roadways proposed in the proposed Plan - (i) providing guidance to future developers; (ii) enhancing circulation and improving public safety; (iii) increasing land values; and (iv)improving aesthetics - is not supported by the facts. The proposed Plan will not improve access to or dilute traffic congestion from the Property. Moreover, the Property is near the Day Creek drainage channel to the west and railroad tracks to the south and the proposed internal network of roadways will all dead-end at the western and southern boundaries, with no practical opportunity for connectivity to the areas located west or south of the site. The proposed Plan will also not improve aesthetics, because it will leave the Property and surrounding area vacant or under-utilized due to the fact that modern industrial operations are too large to operate on the resulting parcels, rendering them unlikely to be developed with the very users the City seeks to ' Under these circumstances, the Plan will result in a taking of CMC's Property requiring the payment of just compensation. (Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1019, 1027 ["when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle,he has suffered a taking."].) C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12,2020 Page 3 attract. Finally, contrary to the Staff Report, the proposed Plan will not increase the value of the Property. If anything, the proposed Plari s forced division of the Property and surrounding area will significantly reduce the value and marketability of the Property. Again,the proposed Plan makes no sense. Third, the City's expectations for actual implementation of the proposed Plan and establishment of this new network of roadways cannot be reconciled with the facts and circumstances on the ground. It appears that the City does not intend to condemn the property necessary to create the network of streets (nor could it realistically afford to do so) and will likely condition future developers and users to dedicate the necessary right-of-way and then bear the cost of installing the roadways as part of their offsite project improvements. The problem, however, is that the proposed Plan will render the Property and surrounding area unattractive and infeasible for modern industrial operations - the only permitted uses in the area - so there will be no developers or users who are available to install those project improvements. In the end, the City will be left with a planned network of roadways that (i) serve no legitimate purpose and (ii) prevents the type of modern industrial operation that the City desires. The result will be a landscape of vacant or under-utilized industrially- zoned properties that includes smaller buildings that do not generate substantial revenue to the City or new jobs to the residents. Finally, the Staff Report fails to account for the significant impact that the proposed Plan and Amendment will have on industrial developers, such as CMC, that own property and/or have pending projects in the City and contractual commitments that were made based upon the existing circulation network and development regulations and standards. As noted above, the Project currently proposed by CMC will be effectively terminated by adoption of the Amendment and the potential for a reasonable four-parcel/four-facility alternative proposal will also be infeasible due to reduced developable space. The ultimate result will be to leave CMC (and others) owning properties that the City itself rendered infeasible to develop. For all of the above reasons, the Planning Commission should recommend denial of the Amendment or, alternatively, substantially modify the proposed Plan to address the issues above. 1. The Proposed Plan's Internal Roadway Network and Resulting Division of the CMC Property Will (i) Render the CMC Project Infeasible; and (ii) Preclude Any Kind of Modern Industrial Operation on the Property. As shown on Exhibit B to the Staff Report, the proposed Plan envisions a series of interconnected new roadways that will divide the Property into four separate small parcels bounded on the north by Arrow Route and on the south by a new connector C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12,2020 Page 4 road running parallel to the railroad and reaching a dead-end at the Day Creek drainage channel, but connecting to Etiwanda Avenue by way of a new road just below the existing Goodman facility. The proposed Plan is problematic for the Project and for future industrial development in the area, in several respects. Most significantly, the forced division of the Property into four small parcels that are completely surrounded by new roadways (with the exception of Arrow Route to the north) will render the Project proposed by CMC completely infeasible, as each of the four parcels will be too small to accommodate the planned 1,378,720 square foot e-commerce logistics and distribution facility, the planned 670,270 square foot warehouse and distribution facility and the required employee parking. This type of user is exactly the type of modern industrial operation that the City is seeking to attract to the SEIQ, because of the significant revenue and new jobs that it brings, as compared to a traditional industrial operation that generates no significant revenue and pays lower salaries. Yet, for some reason, the City is burdening the Property by preventing modern industrial operations from locating at the Property (or the SEIQ in general)by forcibly dividing the Property by way of the proposed Plan. The Property currently allows for development of approximately 2,000,000 square feet of total building area. However, after taking into account roadway setbacks and development standards within the City's industrial zones, the proposed Plan will create four individual parcels that will not be conducive to any modern industrial operation that will provide similar benefits to the City. The parcels shown on Exhibit B to the Staff Report do not account for space required for employee parking and internal site circulation. Whereas the Property was formerly suited to accommodate over 2,000,000 square feet of buildable space and sufficient outdoor area for employee parking and internal site circulation, the Property will only be developable to accommodate four separate, small industrial operations.2 As the City's Staff Report notes, modern industrial operations have shifted from the traditional closely held industrial/manufacturing and/or storage facilities to large-scale logistics and distribution facilities necessary to accommodate the new era of e-commerce. The proposed Plan will, in purpose and effect, discourage and prevent such modern industrial operations from locating at the Property and within the SEIQ. By adopting the Amendment and implementing the proposed Plan, the City will be precluding exactly the kind of modern industrial operation that the City is seeking to attract to the SEIQ. This is bad policy and benefits no one. 2 Moreover, as discussed more fully below, a small industrial project of the type that could realistically function on the smaller parcels created by the Plan would not have the financial capacity to construct new roadways on all four sides of the property along with the other offsite and onsite improvements and project construction costs. C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12,2020 Page 5 2. The City's Justification for the Proposed Plan Cannot Be Reconciled With the Facts. According to the Staff Report, the proposed Plan and the proposed network of internal roadways will benefit the City by: (i) providing guidance to future developers; (ii) enhancing circulation and improving public safety; (iii) increasing land values; and (iv)improving aesthetics in the area. None of this is correct. Contrary to the Staff Report, the proposed Plan will not improve access to or dilute traffic congestion from the Property. As noted above, the forced division of the Property and the internal roadway network will discourage any modern industrial operation from locating at any of the resulting four parcels, because the developable space will be too small to accommodate such an operation. In fact, the proposed Plan will result in the Property being rendered unattractive and infeasible to a modern industrial operation. Moreover, the proposed internal network of roadways will dead- end at the western and southern boundaries of the SEIQ with no connectivity to other areas. All traffic would continue to be funneled east to Etiwanda Avenue and then either south to Fourth Street or north to Foothill Boulevard, in order to access Interstate 15. These new proposed roadways serve no general circulation purposes and are literally roads to nowhere. The proposed Plan will also not improve aesthetics. If implemented, the Property and surrounding area will be passed over by modern industrial operations due to parcel sizes that are too small to support development that is permitted and therefore, the Property will either remain vacant or experience no change in the current uses. In addition, the proposed Plan will not increase property values (Staff Report, p. 6). Instead, the forced division of the Property and surrounding area will significantly reduce the marketability and overall value of the Property and potentially effect a taking requiring the payment of just compensation. (U.S. Const., 5th Amend.; Cal. Const.,Art. I, § 19.) 3. The City's Expectation That Developers Will Construct the Proposed Roadway Network as Future Project Conditions of Approval and Required Off-Site Improvements is Impractical and Inconsistent with the Modern Industrial Market. Central among issues that the Staff Report fails to address is the City's plan for actual implementation of the proposed Plan and proposed roadway network. Although the City possesses the power of eminent domain, there is no evidence presented that the City will actually exercise that power in order to acquire the property necessary to construct the proposed roadways (or that the City has the financial wherewithal to do so, if that were its intent). C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12,2020 Page 6 The absence of evidence to the contrary leads one to believe that the City will condition future developers like CMC to dedicate the necessary right-of-way and bear the cost of installing those roadways as offsite improvements related to their respective projects. The problem, as discussed above, is that the proposed Plan will render the Property and surrounding SEIQ unattractive and infeasible for modern industrial operations because the developable space on each of the newly divided parcels will be too small to accommodate meaningful warehousing and distribution operations. Further, the types of small-scale industrial and warehousing operations that can realistically function on the smaller parcels resulting from the proposed Plan will not have the financial capability to construct the roadways, in addition to the other required improvements. Thus, even the types of operations that could operate within the confines of the proposed Plan will be unable to bear the cost of implementing the planned roadways and also constructing their projects. The end result for the City will be a complex network of roadways that: (i) serve no legitimate purpose, as all traffic will still be funneled east to Etiwanda Avenue; and (ii)will never be fully-utilized, because no modern industrial operation will be able to operate on the small parcels resulting from the proposed Plan and the smaller industrial operations that can operate on the smaller parcels (which will bring with them none of the sales tax revenue or high-paying jobs of an e-commerce operation) will be financially unable to construct the proposed Plari s internal and external roadways, in addition to the other required improvements. The City will be left with a landscape of vacant and/or under-utilized industrially-zoned properties and abandoned heavy industrial uses. 4. The Proposed Plan Will Significantly Impact Industrial Developers and Property Owners and Inhibit Future Development in the SOO. Despite the obvious adverse consequences of the proposed Plan, the Staff Report fails to account for the significant impact that the proposed Plan and Amendment will have on industrial developers, such as CMC, that own property and/or have pending projects in the City and contractual commitments that were entered into based upon the City's existing circulation network and development regulations and standards. Many developers, including CMC, have expended significant funds investigating the feasibility of sites for development, and designing and refining plans for proposed projects in reliance upon the aforementioned due diligence and feasibility analyses. The City's adoption of the proposed Plan and Amendment will render many of these projects financially infeasible, leaving developers and property owners like CMC with properties that the City itself rendered infeasible to develop for their highest and best use. C1311-000--3969141.1 Honorable Chairman and Members of the Planning Commission City of Rancho Cucamonga November 12, 2020 Page 7 This scenario is not only fundamentally unfair but also irreconcilable with the City's stated position that the November 4 moratorium and proposed Plan and Amendment are not bad faith efforts to eliminate industrial uses from the very areas of the City that were specifically planned and zoned to accommodate them. 5. Conclusion. For all of the foregoing reasons, CMC respectfully requests that the Planning Commission (i) recommend denial of the Amendment to the City Council or, alternatively, (ii) recommend substantial modifications to the proposed Plan and Amendment in order to address the significant and unjustifiable defects outlined above. Please contact me if you have any questions or wish to discuss this matter further. Very truly yours, r Mark Ostoich, of GRESHAM SAVAGE NOLAN &TILDEN, A Professional Corporation MAO/pmj Attachment cc: City Manager,John Gillison* City Attorney,James L.Markman* City Planning Director,Anne McIntosh* City Senior Planner, Sean McPherson* Client* (*via e-mail only) C 1311-000--3969141.1 Lim i !II. I I if i I I , #IP t t cVpkccti�4i •. •�. �'�'�``+ r.'-_ � + �„�� - ^„ I�1 f I� U'`��:( ( I I li i f �'• it s}clA` a tPt Planned Future Street* *Additional public or private (with public access)roads will be required to implement internal block network circulation and access requirements. Locations to be determined at the time of development. Exhibit B 017