RESOLUTION NO. FILE NO. SP17-031

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1 RESOLUTION NO. A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN JOSE APPROVING A SPECIAL USE AND SITE DEVELOPMENT PERMITS, SUBJECT TO CONDITIONS, TO ALLOW THE DEMOLITION OF PARKSIDE HALL, REMOVE 20 ORDINANCE-SIZED TREES, AND TO ALLOW THE CONSTRUCTION OF A 24-STORY MIXED-USE PROJECT WITH 19,000 SQUARE FEET OF GROUND FLOOR RETAIL, 214,000 SQUARE FEET OF OFFICE SPACE, 60,000 SQUARE FEET OF MUSEUM EXPANSION SPACE, 184 HOTEL ROOMS, AND 306 RESIDENTIAL CONDOMINIUM UNITS AND ALLOW THE CREATION OF UP TO 244 COMMERCIAL CONDOMINIUM UNITS ON PARCEL 1, ON A 2.47 GROSS ACRE SITE LOCATED AT THE NORTHWEST CORNER OF WEST SAN CARLOS STREET AND SOUTH MARKET STREET (180 PARK AVENUE) FILE NO. SP WHEREAS, pursuant to the provisions of Chapter of Title 20 of the San José Municipal Code, on June 30, 2016, an application (File No. SP17-031) was filed by the applicant, Dennis Randall for Insight King Wah, LLC, with the City of San José for a Special Use Permit and Site Development Permit to allow the demolition of the Parkside Hall, remove 20 ordinance-sized trees, and to allow the construction of a 24-story mixed-use project with 19,000 square feet of ground floor retail, 214,000 square feet of office space, 60,000 square feet of museum expansion space, 184 hotel rooms, and 306 residential condominium units, and allow the creation of up to 244 commercial condominium units on Parcel 1, on a 2.47 gross acre site, on that certain real property situated in the DC Downtown Primary Commercial Zoning District and located at the northwest corner of West San Carlos Street and South Market Street (180 Park Avenue, San José, California, which real property is sometimes herein referred to as the subject property ); and 1

2 WHEREAS, the subject property is all that real property more particularly described in Exhibit "A", entitled Legal Description, which is attached hereto and made a part hereof by this reference as if fully set forth herein; and WHEREAS, pursuant to and in accordance with Chapter of Title 20 of the San José Municipal Code, the Historic Landmarks Commission conducted a hearing on said application on October 5, 2016, notice of which was duly given; and WHEREAS, at said hearing, the Historic Landmarks Commission gave all persons full opportunity to be heard and to present evidence and testimony respecting said matter; and WHEREAS, at said hearing, the Historic Landmarks Commission concurred with the Historical Consultant s assessment that the project is compatible in design, scale, and character of the City Landmark, City National Civic, respecting said matter based on evidence and testimony; and WHEREAS, pursuant to and in accordance with Chapter of Title 20 of the San José Municipal Code, the Planning Commission conducted a hearing on said application on July 12, 2017, notice of which was duly given; and WHEREAS, at said hearing, the Planning Commission gave all persons full opportunity to be heard and to present evidence and testimony respecting said matter; and WHEREAS, at said hearing, the Planning Commission made a recommendation to the City Council respecting said matter based on evidence and testimony; and 2

3 WHEREAS, pursuant to and in accordance with Chapter of Title 20 of the San José Municipal Code, this City Council conducted a hearing on said application, notice of which was duly given; and WHEREAS, at said hearing, this City Council gave all persons full opportunity to be heard and to present evidence and testimony respecting said matter; and WHEREAS, at said hearing this City Council received and considered the reports and recommendations of the City s Historic Landmarks Commission, City s Planning Commission, and City s Director of Planning, Building and Code Enforcement; and WHEREAS, at said hearing this City Council received in evidence a development plan for the subject property entitled Museum Place, dated April 10, 2017, said development plan is on file in the Department of Planning, Building and Code Enforcement and is available for inspection by anyone interested herein, and said development plan is incorporated herein by this reference, the same as if it were fully set forth herein; and WHEREAS, said public hearing before the City Council was conducted in all respects as required by the San José Municipal Code and the rules of this City Council; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN JOSÉ THAT: After considering all of the evidence presented at the Public Hearing, the City Council finds that the following are the relevant facts regarding this proposed project: 1. Site Description and Surrounding Uses. The 2.47 acre project site is currently developed with the 42,550 square foot Parkside Hall. The project site is directly east of the Tech Museum, north of the City National Civic Center (which includes McCabe Hall), west of a vacant site and the Hyatt Hotel/parking garage, and south of several office towers. 3

4 2. Project Description. On June 30, 2016, an application for a Special Use Permit, Site Development Permit, and Vesting Tentative Map was filed for the property located at 180 Park Avenue to allow for the demolition of Parkside Hall to permit the construction of a 24 story mixed-use development with 19,000 square feet of ground floor retail, 214,000 square feet of office, 60,000 square feet of museum expansion space, 184 hotel rooms, and 306 residential units, and allow the creation of up to 244 commercial condominium units on Parcel 1, and allow the removal of 20 ordinance-sized trees on an approximately 2.47 gross acre site. The Special Use Permit and Vesting Tentative Map are to allow the consolidation of 25 parcels into three parcels and to resubdivide one parcel (Parcel 1) into a maximum of 550 units consisting of approximately 306 residential condominium units and up to 244 commercial condominium units. The block bounded by Park Avenue to the north, South Market Street to the east, West San Carlos Street to the south, and the pedestrian paseo to the west is a complicated arrangement of 25 different parcels. In preparation for the development of the project parcel, the project applicant agreed to do the necessary mapping work to consolidate the existing 25 parcels into three defined legal parcels. This consolidation creates three legal parcels with Parcel 1 being defined as the new legal parcel for the proposed mixed-use project; Parcel 2 is defined as the new legal parcel for the land currently occupied by the Tech Museum; and Parcel 3 is defined as the new legal parcel for the land occupied by the City National Civic. Only Parcel 1 is being resubdivided at this time to allow a maximum of 550 units consisting of approximately 306 residential condominium units and up to 244 commercial condominium units. The project site has a DC Downtown Primary Commercial Zoning District designation and a Public/Quasi- Public General Plan Land Use/Transportation Diagram land use designation. 3. Request for Qualifications. The City is currently the land owner of the subject property (proposed Parcels 1, 2, and 3). On February 9, 2015, the City issued a Request for Qualifications (RFQ) for a collaborative public/private partnership with the City. The RFQ requested the development of a high-quality, high-rise, urban mixed-use project, which included the demolition, redesign, and replacement of Parkside Hall, a City-owned building. Parkside Hall is currently used for exhibition and banquet space for the adjacent Tech Museum. As such, the RFQ requested that 60,000 square feet of Tech Museum expansion space be incorporated into any proposed project design. On October 5, 2015, the City Council adopted Resolution No selecting Insight Realty Investments, Inc., dba Insight Realty Company ( Insight ) as the developer for this proposed development in response to the RFQ. The City and Insight have since been negotiating a written agreement for the disposition of Parcel 1, development of the proposed mixed-use project, and the written agreement shall be brought before the City Council for consideration concurrently with the Planning entitlements. 4

5 4. Historic Landmark. The project site is immediately adjacent to the City Landmark site, the City National Civic Auditorium, which was built in 1934 and opened to the public in The Civic Auditorium site was donated in 1933 by T.S. Montgomery, one of San José s most memorable developers. The project was funded by a local bond measure along with help from the federal government under the New Deal. From its opening in 1936, the Municipal Theater and Montgomery Theater became known as the Civic Auditorium. Jay McCabe was the first manager of the Auditorium. Mr. McCabe was responsible for growing the Civic s popularity as a first class entertainment space. As a tribute to Mr. McCabe, the 1964 addition to the City National Civic, as it is referred to today, was named McCabe Hall. This addition to the Civic Auditorium was San José s first direct attempt to provide a designated facility to draw the emerging convention market to the Downtown area. The project began in December 1962 and was completed by February Today, McCabe Hall, which is part of the City National Civic Landmark, is used as exhibit and event space for various groups and activities. 5. General Plan Conformance. The subject site has a land use designation of Public/Quasi-Public on the General Plan Land Use/Transportation Diagram. This designation is used to designate public land uses, including schools, colleges, convention centers and auditorium, museums, governmental offices, and airports. Joint development projects which include public and private participation, such as a jointly administered public/private research institute or an integrated convention center/hotel/restaurant complex, are allowed. The proposed project is compatible with this land use designation in that it is a development project that will have joint public and private participation due to the integration of 60,000 square feet of Tech Museum expansion space and 100 dedicated museum parking spaces that will be integrated into the underground parking garage and 184-unit hotel. While the Public/Quasi-Public land use designation does not explicitly discuss residential development, the multiple uses associated with this project will allow this project to meet the General Plan land use designation conformance. Furthermore, this project is consistent with the following General Plan goals and policies: a. Land Use Policy LU-1.1: Foster development patterns that will achieve a complete community in San José, particularly with respect to increasing jobs and economic development and increasing the City s jobs-toemployed resident ratio while recognizing the importance of housing and a resident workforce. Analysis: The development of more mixed-use residential uses in the Downtown area will foster a complete community with respect to putting people and amenities in an area where job growth is anticipated. As an identified Growth Area, Downtown is intended to be a place for people to live, work, and visit. In order to accomplish this goal, there needs to be 5

6 more opportunities for people to physically live in Downtown, as well as have access to services and amenities within close proximity to make daily life convenient and enjoyable. This unique project will have office, hotel, retail, and residential uses contained in one building, providing the ultimate opportunity for people to live, work, and entertain in the same location. The project site is also directly adjacent to the Convention Center light rail station, making it a convenient location for residents who want to live near transit and commute to work. The proposed project is the type of development that will create a complete community by providing housing options for residents in the area, and supporting those residents with ground floor amenities and services in one place. b. Land Use Goal LU-3: Strengthen Downtown as a regional job, entertainment, and cultural destination and as the symbolic heart of San José. c. Land Use Policy LU-3.4: Facilitate development of retail and service establishments in Downtown, and support regional- and local-serving businesses to further primary objectives of the General Plan. d. Land Use Policy LU-5.7: Encourage retail, restaurant, and other active uses as ground-floor occupants in identified growth areas and other locations with high concentrations of development. Analysis: In order to mature into the great place envisioned by the General Plan, Downtown projects need to facilitate the growth of Downtown as a regional job center, as well as a place for residents to live. High-rise development is anticipated as a way to create this synergy between residents, workers, and visitors. As larger residential projects are built in Downtown, more people will be in the area, which will foster pedestrian activity, transit ridership, and increased social activity in the Downtown. With more residents in the Downtown area, the success of retail will increase, encouraging new retail services and amenities to locate in the area, which not only provides a benefit to the residences, but also the commercial and office uses in the area. With more amenities available to their employees, more businesses will want to move into the area, creating an environment that is an attractive place to live as well as work. The proposed project s ground floor retail amenities will not only serve the residents in the tower, but also workers in the area. The office users in the tower will have the opportunity to take advantage of the hotel space for visiting employees and partners, and take advantage of the future retail amenities. e. Land Use Policy LU-3.1: Provide maximum flexibility in mixing uses throughout the Downtown Area. Support intensive employment, entertainment, cultural, public/quasi-public, and residential uses in 6

7 compact, intensive forms to maximize social interaction; to serve as a focal point for residents, businesses, and visitors; and to further the Vision of the Envision San José 2040 General Plan. Analysis: The proposed project would create 19,000 square feet of retail space, 214,000 square feet of office space, 306 residential units, 60,000 square feet of museum expansion space, and 184 hotel rooms. This building is the ultimate mixed-use structure that provides a variety of uses in one space. This will serve as a focal point in the Downtown area, providing amenities for residents, worker, and visitors to the area. f. Land Use Policy LU-16.1: Integrate historic preservation practices into development decision based upon fiscal, economic, and environmental sustainability. Analysis: The development of the proposed project took into consideration the project s impact on the adjacent historic resource. Many design decisions (site layout, materials, architectural quality) were made to ensure that there was no environmental impact on the adjacent City Landmark. As described below, there are several mitigation measures included in the Mitigation Monitoring and Reporting Program to ensure the compatibility of the project with the City s Historic Landmark. Additionally, the fiscal and economic viability of this project was taken into consideration as the project developed to ensure that the project would be successful. g. Transportation Policy TR-4.1: Support the development of amenities and land use and development types and intensities that increase daily ridership on the VTA, BART, Caltrain, ACE and Amtrak California systems and provide positive fiscal, economic, and environmental benefits to the community. Analysis: The project site is almost directly adjacent to the Convention Center Light Rail Station. This station is accessible via the pedestrian paseo that runs along the west façade of the project site. Pedestrians can cross at the mid-block cross walk on San Carlos to reach the station. There are also multiple Class II bicycle facilities along Park Avenue between Woz Way and Market Street, and west of Montgomery Street. There is ample bicycle and pedestrian connections to the site. By having residential and hotel units so close to a variety of transportation options, the proposed project encourages the use of transit and creates more opportunity for people to be car-free in the downtown area. h. Community Design Policy CD-1.26: Apply the Historic Preservation Goals and policies of the General Plan to proposals that modify historic resources or include development near historic resources. 7

8 Analysis: This Special Use and Site Development Permits were referred to the Historic Landmarks Commission on October 5, 2016 in accordance to San José Municipal Code Section Pursuant to that section, new structures exceeding 150 feet which are constructed within one hundred feet of a City Landmark must be reviewed by the Historic Landmarks Commission prior to consideration or approval of the development permit. The project site is located immediately north of the City National Civic Auditorium, which was adopted as a City Landmark by City Council Resolution No in 1986 (File No. HL86-40). After reviewing the proposed project, the Historic Landmarks Commission stated that the proposed Museum Place Project design is compatible with the surrounding historic properties and does not adversely impact the Civic Auditorium which includes McCabe Hall, either directly or indirectly, supporting the General Plan s goals and policies related to development near historic resources (See Historic Preservation Discussion below for a more detailed discussion). i. Community Design Policy CD-2.9: Encourage adaptable space that can be used for multiple employment or public/quasi-public purposes. Analysis: The proposed project is constructing 60,000 square feet of Tech Museum expansion space that will be built into the base of the project s tower. The use for this space is not determined yet, but it will likely be exhibit space to expand the ability for the Tech Museum to provide new and exciting exhibits to the public. The Tech will also have ground floor street frontage on Park Avenue, to be used for retail opportunities, a café, or more exhibit space which will further add to the pedestrian experience in Downtown. The remaining proposed commercial condominium units will comply with Section of the Zoning Ordinance, which requires the minimum unit size for nonresidential condominium units to be seven hundred fifty square feet. This minimum size provides the flexibility for a variety of employment uses to move into the commercial tenant spaces in the project building. j. Downtown Urban Design Policy CD-6.7: Recognize Downtown s unique character as the oldest part, the heart of the City, and leverage historic resources to create a unique urban environmental there. Respect and respond to on-site and surrounding historic character in proposals for development. Analysis: As discussed above, the proposed project is located less than 100 feet from the City National Civic City Landmark (which includes McCabe Hall). Due to the proposed project s proximity to the landmark, the project was referred to the Historic Landmarks Commission for review. The projects impact on the historic structure was assessed. The Historic 8

9 Landmarks Commission agreed with the historical consultant s assessment related to the proposed project and found the proposed design and construction of this project would not create an environmental impact and would not impair the historical significance of the landmark as discussed in the Historic Report, Appendix C of the Draft Supplemental Environmental Impact Report. k. Downtown Urban Design Policy CD-6.1: Recognize Downtown as the most vibrant urban area of San José and maximize development potential and overall density within the Downtown. Downtown Urban Design Policy CD-6.2: Design new development with a scale, quality, and charter to strengthen Downtown s status as a major urban center. Downtown Urban Design Policy CD-6.6: Promote development that contributes to a dramatic urban skyline. Encourage variations in building massing and form, especially for buildings taller than 75 feet, to create distinctive silhouettes for the Downtown Skyline. Analysis: The proposed project has a Floor Area Ratio (FAR) of and a density of dwelling units per acre, making this a dense mixed-use project given the FAA restrictions on height for the parcel. This amount of density will contribute to Downtown s growth as a vibrant urban area, and help the City actualize its vision for the Downtown core. The proposed retail, office, and hotel square footage will contribute to the City s economic and fiscal priorities in the Downtown growth area. The project has undergone extensive design review so that its scale, quality, and character strengthen Downtown s status as an urban center, as discussed in the Design Guidelines conformance section below. 6. Zoning Ordinance Compliance. The Project is consistent with the regulations of the Zoning Ordinance in the following manner: a. Land Uses. Pursuant to Section of the Zoning Ordinance, the proposed residential mixed-use tower is a permitted use in the DC Downtown Primary Commercial Zoning District with a Site Development Permit. b. Concurrent Review. Pursuant to Section of the Zoning Ordinance, whenever development applications for the same site have been filed for one or more development permits, such development permits may be reviewed and acted on in a unified process. The unified process shall use the procedures required for the highest level permit or approval. The highest level of approval required for this proposed project is the Vesting Tentative Map and therefore, the process for the Vesting Tentative Map was followed. The Site Development Permit and Special 9

10 Use Permit findings are made in this Resolution and the Vesting Tentative Map findings are made in the separate Vesting Tentative Map Resolution. c. Setbacks and Height. The DC Downtown Primary Commercial Zoning District has no minimum setback requirements. Properties within this zoning district are not subject to height limits designated by the City, but are subject to the elevation restrictions prescribed under the FAA Regulations. The proposed project is consistent with the development standards in the DC Downtown Primary Commercial Zoning District as the project has zero setbacks. The FAA made a No Hazard Determination on July 25, 2017, limiting the height to 270 feet, as proposed for the project. d. Parking Requirements. Residential units require one parking space per unit, and retail and commercial uses have no minimum parking requirement. Hotels require 0.35 parking space per guest room, and office requires one space per 1,000 square feet of floor area. The project is required to provide 585 parking spaces under the Zoning Ordinance provided the site is also allowed a 20% reduction for being within 2,000 feet of a light rail station. With the 20% reduction, the project is required to provide 468 parking spaces. The project is providing 482 parking spaces, exceeding the minimum parking requirement. Bicycle parking is required at one space per four units, requiring 78 bike parking spaces. The project is providing the 78 required bicycle parking spaces. 7. Conformance with the Historic Preservation Ordinance (Chapter 13.48), and City Council Policy on the Preservation of Historic Landmarks. On October 5, 2016, the proposed project was referred to the Historic Landmarks Commission (HLC). The HLC is an advisory body to the Planning Director, Planning Commission, City Council and City Manager on the designation, acquisition, and preservation of historic landmarks and site, artifacts and other property of historic significance and value. Pursuant to San José Municipal Code Section , new structures exceeding one hundred fifty feet which are constructed within one hundred feet of a city landmark must be reviewed by the HLC prior to consideration or approval of a development permit. The project site is located immediately north of the City National Civic Auditorium, which was adopted as a City Landmark by City Council Resolution in 1986 (File No. HL86-40). The City National Civic Auditorium includes a 1964 addition at its western edge known as McCabe Hall. McCabe Hall is part of the structure that was designated as a City Landmark under City Council Resolution No The Civic Auditorium is joined to Parkside Hall at the Civic s northwest corner, and shares a loading and staging area with McCabe Hall. Even though there is a connection to the Civic Auditorium, Parkside Hall is not considered part of the historic resource due to changes in the setting and reconfiguring of the access to the exhibit hall in recent years. 10

11 8. Downtown Design Guidelines Conformance. Section of the Zoning Ordinance requires that any project in the DC Downtown Primary Commercial Zoning District be subject to the design guidelines adopted by the City Council. The proposed project was reviewed against the Downtown Design Guidelines for conformance related to urban form and massing, the project base/street wall, architecture and materials, and the building crown. The Downtown Design Guidelines state that a project s massing should correspond to the geographical conditions and patterns of the urban form of the immediate context of the project site. The project s tower shape reduces the project s mass by creating a sleek design that has numerous view angles, eliminating the boxy feel of the project. The proposed building is visually balanced with the Civic Auditorium complex and the remaining building masses on the block. The proposed building is not monolithic or flat in scale or massive in size. Specifically, the bottom floors of the proposed building are compatible in scale with the historic Civic Auditorium as the first floor cornice line is at the height of McCabe Hall, and the mezzanine level reflects the overall roof dimensions of the Civic, with the retail floor plans being of similar size to the Civic. The intent and design of the corner element is compatible with neighborhood patterns. The project s two frontages have achieved the intent of the Downtown Design Guidelines by providing large, glass street wall frontages with ample lighting and outdoor seating to create a constant feeling of activity, which translates to safety. The ground floor creates an inviting pedestrian feeling through transitional in and out space, allowing pedestrians to take advantage of the first floor amenities, as well as providing a pleasant outdoor walking experience along the paseo and Park Avenue area. The Downtown Design Guidelines also suggest that the ground level of buildings be occupied by retail, entertainment, service retail, cultural or other active, high intensity pedestrian uses. The ground level should be at least 18 feet in height, providing an inviting pedestrian experience along the street. The proposed project is providing 20 foot ground floor ceilings with awnings at a pedestrian scale. The hotel lobby is anticipated to be an active corner element of the ground floor, activating both the Park Avenue and paseo frontages. It is anticipated that the Tech Museum expansion space will include a café with outdoor eating space, further enlivening Part Avenue. The paseo frontage is also anticipated to have restaurant and outdoor seating space, facilitating an environment that is pedestrian-focused. The building is designed in a similar scale and proportion of the neighboring highrises, but offers a more refined mass. The facades of the building offer variation through glazing and curtain walls systems. The building s prow is a unique corner element that uses glass and shape to draw people to the project entrance 11

12 and the paseo entrance. The material is a modern take on the traditional glass tower buildings found in the Downtown area. The vertical stacking of balconies, along with the strong banding of horizontal lines on the facades create a layering effect that lengthens the mass and provides architectural interest through additional shadow lines. The only missing element to this structure is a clearly defined top to this building. A Permit Adjustment will need to be obtained by the permittee to further refine this element of the building to create a distinct silhouette prior to the issuance of any building permits. Based on the above analysis, the project complies with the Downtown Design Guidelines. 9. Environmental Review. The City of San José, the lead agency for the proposed project, prepared a Draft Supplemental Environmental Impact Report (Draft SEIR) to the Final Program Environmental Impact Report for the Downtown Strategy 2000 Plan. The Downtown Strategy 2000 Plan Final Program Environmental Impact Report was adopted by the City Council on June 21, 2005 by Resolution No (SCH# ). The project also relies upon the Envision San José 2040 General Plan Final Program Environmental Impact Report (FPEIR), adopted by City Council Resolution No on November 1, 2011; and Supplemental Environmental Impact Report to the Envision San José 2040 General Plan Final Program Environmental Impact Report, adopted by City Council Resolution No on December 15, 2015, and November 1, 2016 Addenda thereto, all as explained in detail in the Draft SEIR. A Supplemental EIR was required due to the project s identified impact resulting from shadows cast by the proposed building on Plaza de Cesar Chavez. This Draft SEIR analyzed the environmental impacts of the project and discussed alternatives to the proposed project, in compliance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines. The Draft SEIR was circulated for public review and comment for 60 days from February 14, 2017 to March 31, A total of six comments were received on the Draft SEIR during the public review period. Comments addressed the following topics in the Draft SEIR: Pedestrian circulation, bicycle circulation, bus stop improvements, proposed heights, the project s location outside of the Airport Land Use Commission (ALUC) safety zone, land use inconsistency, lack of affordable housing, improper project description and objectives, improper piecemealing of the project s Disposition and Development Agreement (DDA), historic resource analysis, recirculation, bird safety, and incompleteness of overriding considerations. The Final SEIR is comprised of the Draft Supplemental Environmental Impact Report for the Project (the Draft SEIR ), together with the First Amendment to the Draft SEIR and the FPEIR. 12

13 The Draft SEIR identified significant impacts to Plaza de Cesar Chavez resulting from shade and shadow of the project and from project construction activities on historic resources. Mitigation measures for these impacts, except for shade and shadow on the park, have been included in the SEIR that would reduce the impacts to a less than significant level. Therefore, the City has determined that the project will result in a significant unmitigated or unavoidable impact, as set forth above, associated with shade and shadow on Plaza de Cesar Chavez. Implementation of the proposed project would result in a more than 10 percent increase in shading on Plaza de César Chávez during the winter months, resulting in a permanent increase in shading during the afternoon hours in the winter months. This increase in shading would also be cumulatively considerable when combined with any future development that may shade the park. Prior to taking any action on this Resolution, the City Council considered the SEIR, along with all of the other environmental documents discussed above and in the SEIR, and concluded the SEIR was completed in compliance with CEQA. The City Council adopted a separate resolution on August 22, 2017, (i) making the required findings under CEQA, (ii) adopting a related Mitigation Monitoring and Reporting program for the project, (iii) providing a statement of overriding consideration, and (iv) certifying the SEIR, all in compliance with CEQA. The separate City Council CEQA resolution is incorporated fully herein by this reference and the permittee shall be required to comply with all applicable mitigations for the project. FINDINGS Based on the above-stated facts and subject to any conditions set forth below, the City Council finds that: 1. Site Development Permit Findings. Pursuant to Section of the San José Municipal Code, the City Council finds that that: i. The Site Development Permit, as approved, is consistent with and will further the policies of the General plan and applicable specific plans and area development policies. ii. Analysis: As discussed in detail herein, the proposed project is consistent with the General Plan Land Use/Transportation Diagram designation of Public/Quasi-Public, as this land use designation supports public/private joint venture projects. The project is also consistent with the various General Plan policies listed above. The Site Development Permit, as approved, conforms with the Zoning Code and all other provisions of the San José Municipal Code applicable to the project. 13

14 iii. Analysis: As discussed in detail herein, the proposed project is consistent with the height, setbacks, and parking requirements of the DC Downtown Primary Commercial Zoning District. The DC Zoning District requires no minimum setbacks, and the project proposes a zero setback on Park Avenue. The project applicant has applied for received a Determination of No Hazard with the FAA, indicating that the tower shall not exceed 270 feet. Further, the conditions of approval require a Permit Adjustment to incorporate any conditions issued by the FAA as part of the No Hazard Determination for the project. The project provides vehicle and bicycle parking at the appropriate ratios defined in Chapter of the Municipal Code. Based on the code, all of the uses require 585 parking spaces. Residential units require one parking space per unit, and retail and the museum uses have no minimum parking requirement. Hotels require 0.35 space per room, and office requires one space per 1,000 square feet of floor area. The site is also allowed a 20% reduction for being within 2,000 feet of a light rail station. With the 20% reduction, the project only needs to provide 468 parking spaces. The project is providing 482 parking spaces. Table in the Chapter 20 of the San José Municipal Code requires that bicycle parking be provided at 1 space per four residential units for a total of 78 bicycle parking spaces. The project is providing the 78 bicycle parking spaces. The project applicant has correctly applied for a Site Development Permit, Special Use Permit and Vesting Tentative Map to accomplish the project objectives. The Site Development Permit, as approved, is consistent with applicable City Council Policies, or counterbalancing considerations justify the inconsistency. Analysis: The proposed project is consistent with the City s Preservation of Historic Landmarks Policy for the following reasons: 1) There was public notification of a proposed structure s distance to a landmark, as the project was presented at the Historic Landmarks Commission Meeting on October 5, 2016; 2) The historic consultant s recommendations were made available to the Commission, who were in agreement with the conclusion of the report; 3) A Planning Commission meeting was held July 12, 2017 and a City Council meeting is anticipated in August 2017 so that the public may provide input on the project; and 4) The SEIR discusses the project s impact to the historic structure. The project is also consistent with the City s Affordable Housing policies, as the applicant has an approved Affordable Housing Compliance Plan on file with the Housing Department. Affordable Housing fees shall be paid prior to a recordation of a Final Map. 14

15 iv. The interrelationship between the orientation, location, and elevation of proposed buildings and structures and other uses on-site are mutually compatible and aesthetically harmonious. Analysis: The proposed project will be the only structure on the new Parcel 1, but as mentioned above, it is linked to the Tech Museum via the two floors of expansion space that are within the proposed project tower. The proposed project is a unique tower with interesting visual vantage points. It is a modern take on an office building, with glass curtain walls and screen curtain walls that provide interest in a non-cluttered manner. The sleek lines allow it to be architecturally compatible with a variety of buildings. The project is also within 100 feet of a City Landmark (City National Civic Auditorium). The compatibility and aesthetic harmony of these two uses are discussed above and below. v. The orientation, location and elevation of the proposed buildings and structures and other uses on the site are compatible with and are aesthetically harmonious with adjacent development or the character of the neighborhood. vi. Analysis: The new project and the existing Tech Museum are both architecturally modern in style, and while there is a clear height difference, the stepping balconies on the east side of the project provide an appropriate interface with the Tech Museum so as to not overwhelm it. As noted in the HLC staff report, the façade on the south side of the project is visually massed to be compatible with the robust scale of materials and detailing of the adjacent City Landmark. The bottom floors of this façade has first floor cornice lines that are in line with the height of the City Landmark and a mezzanine level that reflects the overall roof dimension of the historic building. The proposed project is creating a new loading dock area that will be shared by the project, the Tech and the Civic. This area will not have significant circulation, as it will only be used for loading and unloading of materials for the various functions within the new building, and for exhibits and performances for the Tech and the Civic. For these reasons, the project is compatible with and aesthetically harmonious with adjacent development. The environmental impacts of the project, including, but not limited to noise, vibration, dust, drainage, erosion, storm water runoff, and odor which, even if insignificant for purposes of the California Environmental Quality Act (CEQA), will not have an unacceptable negative affect on adjacent property or properties. Analysis: A Supplemental Environmental Impact Report (SEIR) was prepared for the Museum Place Mixed-Use Project in compliance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines. 15

16 vii. viii. The proposed project s impacts are discussed in the CEQA section above. No unacceptable negative environmental effects other than those discussed in the CEQA document were identified as having an effect on adjacent properties. Landscaping, irrigation systems, walls, and fences, features to conceal outdoor activities, exterior heating, ventilating, plumbing, utility and trash facilities are sufficient to maintain or upgrade the appearance of the neighborhood. Analysis: As shown on the project development plan sets, the landscaping, irrigation systems, all walls and fences, exterior heating, ventilating, plumbing, utility, and trash facilities are sufficient to maintain and upgrade the appearance of the neighborhood. All mechanical equipment is screened on the roof and not visible from the street or surrounding buildings. The paseo area is attractively landscaped and creates an inviting pleasant experience. The active second story balcony area will also enhance the paseo by providing activity and adding a vibrant street feeling of this newly activated space. Traffic access, pedestrian access and parking are adequate. Analysis: The project is accessible by one driveway on Park Avenue. This driveway is adequate to distribute the traffic flow from the project. There is ample pedestrian access to the site on the Park Avenue frontage and along the paseo. The parking is sufficient for the residential, hotel, and office uses and no parking is required for retail or museum uses. Regional access to the project site is provided by State Route 87 and Interstate I There are four bus lines that drop off and pick up along Park Avenue, and an additional bus line that drops off and picks up along Market Street, east of the project site. The Mountain View-Winchester and Alum-Rock-Santa Teresa Light Rail line operates within walking distance of the project site, which a station located less than 400 feet from the project site. 2. Special Use Permit Findings. Pursuant to Section of the San José Municipal Code, the City Council must determine that: a. The special use permit, as approved, is consistent with and will further the policies of the General Plan and applicable specific plans and area development policies; and Analysis: In addition to the discussion above, the 244 commercial condominiums are consistent with the General Plan land use designation of Downtown as commercial uses are permitted in these districts. 16

17 b. The special use permit, as approved, conforms with the zoning code and all other provisions of the San José Municipal Code applicable to the project; and Analysis: In addition to the zoning discussion above, per Section of the Zoning Ordinance, the minimum unit size for nonresidential condominium units shall be 750 square feet, and these units must meet all of the requirements of Chapter of the Municipal Code. c. The special use permit, as approved, is consistent with applicable city council policies, or counterbalancing considerations justify the inconsistency; and Analysis: See discussion above. There are no applicable City Council policies other than those discussed above. d. The proposed use at the location requested will not: i. Adversely affect the peace, health, safety, morals or welfare of persons residing or working in the surrounding area; or ii. Impair the utility or value of property of other persons located in the vicinity of the site; or iii. Be detrimental to public health, safety, or general welfare; and Analysis: The proposed project including the commercial condominiums will not impact the peace, health, safety, morals or welfare of persons residing or working in the surrounding area as these units are wholly contained within the proposed development project, and all activity in these spaces will not impact the area outside of the building. The commercial condominium units will not impair the utility or value of property or persons in the immediate area as any use in these commercial units will be fully contained in the building. Any restaurant space may have a sidewalk café, but the café will be located in front of the project s frontage and will not impact any other property. The proposed condominiums will not impact the public health, safety or general welfare of the public as this is just a subdivision of airspace. e. The proposed site is adequate in size and shape to accommodate the yards, walls, fences, parking and loading facilities, landscaping and other development features prescribed in this title, or as is otherwise required in order to integrate the use with existing and planned uses in the surrounding area; and Analysis: As noted above, the 244 condominium units will be required to exceed the minimum square footage requirements for commercial condos 17

18 noted in Section of the Zoning Ordinance. All necessary components of any future tenant will be contained within the individual unit spaces. f. The proposed site is adequately served: i. By highways or streets of sufficient width and improved as necessary to carry the kind and quantity of traffic such use would generate; or by other forms of transit adequate to carry the kind and quantity of individuals such use would generate; and ii. By other public or private service facilities as are required. Analysis: The overall project is adequately accessible by the downtown street network and said streets have the capacity to handle any traffic generated by the project, as was analyzed in the SEIR. The subdivision of the commercial spaces will not create any additional need for access. g. The environmental impacts of the project, including but not limited to noise, vibration, dust, drainage, erosion, storm water runoff, and odor which, even if insignificant for purposes of the California Environmental Quality Act (CEQA), will not have an unacceptable negative affect on adjacent property or properties, and Analysis: See CEQA discussion above. The subdivision of airspace will not create any additional unacceptable negative impacts outside the scope of review of the CEQA analysis completed for the project. h. The proposed common interest development will not adversely impact the economic viability of large-scale commercial and industrial uses in the vicinity of the development or in the city as a whole. Analysis: As discussed above, the proposed common interest development will not adversely impact the economic viability of large-scale commercial and industrial uses in the vicinity in that the size of the proposed commercial units will be conditioned to meet the minimum size requirement so as to adequately accommodate a variety of potential uses, and the anticipated uses such as restaurant, office and retail uses will add to the economic viability of the area. i. The proposed common interest development includes sufficient provisions for governance, funding and capitalization, and enforcement mechanisms to ensure that the common area continues to be adequately and safely maintained and repaired for the life of the common interest development; and Analysis: A Declaration of Covenants, Codes, and Restrictions will include sufficient provisions for governance, funding and capitalization, and enforcement mechanisms to ensure that the common area continues to be 18

19 adequately and safely maintained and repaired for the life of the common interest development. City staff will review the proposed covenants prior to final map approval for compliance with this requirement. j. The proposed common interest development includes sufficient provisions of the retention of such common areas for the use of all owners of separate interest therein. Analysis: The Declaration of Covenants, Codes and Restriction will state that each owner shall have, as appurtenant to his unit, an undivided interest in the common area. This will ensure that each common interest development has sufficient retention of common areas for use by all owners as noted in the conditions of approval. City staff will review the proposed covenants prior to final map approval for compliance with this requirement. 3. Evaluation Criteria for Demolition. Prior to the issuance of the development permit, the City Council shall determine whether the benefits of permitting the demolition outweigh the impacts of the demolition. In making such a determination, the following shall be considered: i. The failure to approve the permit would result in the creation or continued existence of a nuisance, blight or dangerous condition; ii. iii. iv. The failure to approve the permit would jeopardize public health, safety or welfare; The approval of the permit should facilitate a project which is compatible with the surrounding neighborhood; The approval of the permit should maintain the supply of existing housing stock in the City of San José; v. Both inventoried and non-inventoried buildings, sites and districts of historical significance should be preserved to the maximum extent feasible; vi. vii. Rehabilitation or reuse of the existing building would not be feasible; and The demolition, removal or relocation of the building without an approved replacement building should not have an adverse impact on the surrounding neighborhood. Analysis: The demolition of Parkside Hall would facilitate the construction of the overall project that is compatible with the surrounding neighborhood and the reason for demolition as stated above is allowed under Criteria 3. Criteria 1, 2, 4, 5, 6 and 7 are not applicable for demolition of the existing structure. 19

20 Tree Removal Permit Findings. There are 20 ordinance-sized trees located on the property. Per Section (A)(2) a permit for the removal of an ordinance sized tree can be approved if the following finding can be made: 1. That the location of the tree with respect to a proposed improvement unreasonably restricts the economic development of the parcel in question. Analysis: The 20 ordinance-sized trees are being removed to facilitate the development of the Museum Place Mixed-Use Project. All trees are located within the proposed building footprint, within the loading dock area, or within the required sidewalk improvement area for the paseo. These trees will be replaced with inch box trees on site as noted in the landscape plans. As explained in detail in this memorandum, the public and community benefit of the proposed mixed-use project significantly outweighs the benefit of keeping the 20 ordinance sized trees. Further, the trees will be replaced on-site. In accordance with the findings set forth above, a Site Development Permit and Special Use Permit for said purpose specified above and subject to each and all of the conditions hereinafter set forth are hereby approved. This City Council expressly declares that it would not have granted this permit and determination except upon and subject to each and all of said conditions, each and all of which conditions shall run with the land and be binding upon the owner and all subsequent owners of the subject property, and all persons who use the subject property for the use permitted hereby. CONDITIONS 1. Acceptance of Permit. Per Section (B) of Title 20 of the San José Municipal Code, should the permittee fail to file a timely and valid appeal of this Site Development Permit and Special Use Permit within the applicable appeal period, such inaction by the permittee shall be deemed to constitute all of the following on behalf of the permittee: a. Acceptance of the Special Use and Site Development Permit by the permittee; and b. Agreement by the permittee to be bound by, to comply with, and to do all things required of or by the permittee pursuant to all of the terms, provisions, and conditions of this Permits or other approval and the provisions of Title 20 of the San José Municipal Code applicable to such Permits. 2. Permit Expiration. This Special Use Permit and Site Development Permit shall automatically expire two years from and after the date of issuance hereof by the City Council, if within such time period, the proposed use of this site or construction has not commenced, pursuant to and in accordance with the provisions of the Special Use Permit and Site Development Permit. The date of issuance is the date these Permits are approved by the City Council. However, the Director of Planning may approve a 20