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HomeMy WebLinkAbout7.1 Kaiser Dublin Medical Center Project Update19- - 182 `O`�LIFOU�� DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL April 19, 2016 Honorable Mayor and City Councilmembers Christopher L. Foss, City Manager ✓/ Kaiser Dublin Medical Center Project Update Prepared by Kristi Bascom, Principal Planner EXECUTIVE SUMMARY: CITY CLERK File #420 -10 The City Council will receive a report on the status of the Kaiser Dublin Medical Center project, which is proposed to be developed on approximately 58 acres of property on the south side of Dublin Boulevard between Grafton Plaza /Dublin Ranch Water Quality Pond to the west and the Fallon Gateway Shopping Center to the east. FINANCIAL IMPACT: There are no financial impacts related to this informational item. All costs associated with processing the Application are borne by the Applicant. RECOMMENDATION: Staff recommends that the City Council receive the status report on the project. No action is recommended at this time, but feedback to both Staff and the Applicant on the project as proposed is welcome. Submitted By Community Development Director DESCRIPTION: 'Reviewed By Assistant City Manager Kaiser Foundation Health Plan, Inc. has submitted an application to build a medical campus and associated commercial center on approximately 58 acres of land south of Dublin Boulevard between Tassajara Road and Fallon Road. The property currently has a General Plan land use designation of Campus Office, which allows for the development of a "campus -like setting for office and other non - retail commercial uses." Typical uses include professional and administrative offices (including medical), research and development, business and commercial services, and limited light manufacturing. Page 1 of 6 ITEM NO. 7.1 The project site is shown in the Vicinity Map below: Figure 1 Project Vicinity Future Dublin Ranch RanrViltae The Subarea 3 Du blin BlvdFut Grafton Plaza Project Site Fallon Gateway F al to n R 0 a d Kaiser Permanente acquired the property several years ago with the intent of eventually constructing a medical campus to serve the greater Tri- Valley area. If approved, the project will be developed in three phases over the course of up to 25 years, consisting of approximately 1.2 million square feet of medical campus and commercial uses on the project site, as follows: Page 2 of 6 Size (in square Building Estimated Building /Use feet) Size Construction Phase 1A "The Hub" medical office building with 220,000 3 stories 2016 -2020 advanced facilities including an urgent < 60 feet tall care clinic, medical office space, and a radiation /oncology center Phase 1 B Commercial Center 250,000 Up to 4 2016 -2020 stories 60 feet tall Phase 2 High- Acuity Medical Services building 400,000 5 stories 2025 -2035 (possibly a hospital) 85 feet tall Phase 2 Energy Center 50,000 2 stories 2025 -2035 40 feet tall Phase 3 Medical Office Building 2 280,000 6 stories 2035 -2040 90 feet tall Phase 3 Parking Structure 6 stories 2035 -2040 < 70 feet tall Total Project 1,200,000 Page 2 of 6 The site plan (at full build -out) is included as Attachment 1 to this Staff Report. BACKGROUND: Kaiser has applied for the following land use entitlements: 1. General Plan and Eastern Dublin Specific Plan Amendment 2. Planned Development Rezoning (with approval of a related Stage 1 for the whole site and Stage 2 Development Plan for Phase 1A) 3. Certification of an Environmental Impact Report 4. Site Development Review for the Phase 1A Medical Office Building and related site improvements When the future phases of the project are ready to move forward, Planning applications will include: 1. Planned Development Rezoning (with a related Stage 2 Development Plan) and Site Development Review for each future development phase: a. Phase 1 B — Commercial Center b. Phase 2 — High Acuity Medical Center and Energy Center c. Phase 3 — Medical Office Building and parking garage 2. Conditional Use Permit(s) to establish any use that is required by the Planned Development Zoning District to have one. 3. Vesting Tentative Parcel Map to subdivide the property, dedicate right of way, and formalize easements PROPOSED PROJECT: The proposal for the Kaiser Dublin Medical Center can be described in more details, as follows: General Plan and Eastern Dublin Specific Plan Amendment Kaiser is proposing a new land use category for the project site: "Campus Medical ". The existing land use designation is Campus Office, which allows a variety of office uses (including medical), but which does not specifically identify the medical - related uses that are typically found at Kaiser Medical Campuses. The proposed description for this land use category will list the range of outpatient primary and specialty care services that Kaiser intends to provide at the future Medical Center. The land use category will also list the type of commercial uses that could be accommodated in the Phase 1B portion of the site, including uses related to the medical center such as skilled nursing, assisted living, or licensed care facilities. Other contemplated uses could be retail, office, hotel, and restaurants. Planned Development Rezoning The Planned Development Rezoning for the property will establish the detailed Development Plan (site plan) for the site, the specific uses that are permitted by right, conditionally permitted, and prohibited, the overall development density and intensity (e.g. FAR, building heights) for the site, and design guidelines for the future medical center and commercial buildings. Kaiser is proposing that the Planned Development Zoning District allow hospitals as a permitted use, whereas citywide, hospitals are allowed with a Conditional Use Permit. The Planned Page 3 of 6 Development Zoning District will contain development standards to address the particular issues related to hospitals such as noise and compatibility with surrounding uses. Phase 1A Site Development Review The first phase of the Kaiser Dublin Medical Center is the 220,000 square foot medical office building. This facility — referred to as "The Hub" — will contain advanced medical facilities, urgent care clinics, medical office spaces, and a connected radiation /oncology center, along with surface parking for over 1,000 vehicles and associated site improvements. Several conceptual exhibits depicting the architectural style and form of The Hub building are included as Attachment 2 to this staff report. The plans for this Site Development Review permit for The Hub building are currently under review by Staff. Environmental Impact Report A Draft Environmental Impact Report (EIR) was prepared for the Kaiser project and was circulated for a 45 -day public review period that closed on March 21, 2016. Comments were received from seven public agencies, in addition to one comment letter from the Project Applicant, and one comment letter from a Dublin resident that does not support the project. The EIR examined potential environmental impacts resulting from the project at full build out in the following topic areas: • Aesthetics, Light, and Glare • Air Quality /Greenhouse Gas Emissions • Biological Resources • Cultural Resources • Geology, Soils, and Seismicity • Hazards and Hazardous Materials • Hydrology and Water Quality • Land Use • Noise • Public Services and Utilities • Transportation In summary, the EIR concludes that the project will have significant impacts in several topic areas and mitigation measures have been written to reduce the impacts to a level that is less than significant. These impacts are primarily related to aesthetics, air quality, biology, cultural resources, geology, hydrology, noise, and transportation. As is typical for other projects of this size, several other impacts were identified where, even with the implementation of mitigation measures, the effects to the environment are still expected to be significant. There are impacts to vehicular traffic at certain street intersections in the future, notable greenhouse gas emissions, and air pollution impacts that cannot be mitigated. When the project is considered by the City Council in the future, a Statement of Overriding Considerations (SOC) will need to be adopted that identifies all environmental impacts that cannot be mitigated and explain why the project is being approved. The SOC is required in order to certify the EIR and, if desired by a majority of the City Council, ultimately approve the project. Page 4 of 6 Additional Consideration: Fiscal Impact Analysis and Cost to Serve Most requests for a General Plan and Eastern Dublin Specific Plan Amendment include the completion of a Fiscal Impact Analysis to determine the fiscal impact of changing the land use designation. The City initiated a fiscal impact study for the Kaiser project that examined the revenue and expenditures of the medical center as proposed. The cost for the City to serve the medical office buildings and high- acuity medical services building, and the corresponding lack of property tax revenue (due to the nature of the non - profit ownership of a Kaiser Medical Center) exceeds the revenue to the City that is generated by these uses. The commercial component is the only portion of the project that has the potential to create a fiscal benefit to the City. In short, the project will have a net impact/cost to the City on an annual basis unless the commercial portion of the project is built with uses that provide revenue in the amount of approximately $300,000 per year, in the form of sales tax and /or property tax that is attributed to the City. The type of commercial uses, such as large- format retail and automotive sales, able to generate this amount of revenue is fairly limited and unlikely to occur in this location. If the revenue produced from the commercial site is less than $300,000, the project is expected to have a negative fiscal impact to the City on an annual basis. By contrast, a non - medical campus office development of a similar size could have a net fiscal benefit to the City of approximately $540,000 annually. However, in weighing the fiscal impact to the City, the perceived value to the community of having regional medical center should also be considered. Additional Consideration: Potential Development Agreement Development Agreements are the means by which both the City and the Developer receive certainty for future development on a site as well as the means by which benefits are captured and formalized. In the case of this project, a Development Agreement would be the place where the Developer secures long -term approvals for a multi - phased project and where the City ensures that benefits are provided, whether they are financial contributions (including contributions to ensure fiscal neutrality), infrastructure improvements, or items meeting other community needs. Kaiser's initial application to the City included the request for a 25 -year Development Agreement in order to allow the Applicant to vest their entitlements for the long term. Kaiser's expected build -out of the Medical Campus and associated commercial center is anticipated to occur by 2040. The entitlements that are currently being sought for the whole site are a General Plan /Eastern Dublin Specific Plan Amendment and Planned Development Rezone (with a Stage 1 Development Plan). A Stage 2 Development Plan and Site Development Review will be considered for the Phase 1A portion of the project only. This means that Stage 2 Development Plans and Site Development Review for the remaining phases of the project (Phase 1 B, 2, and 3) will need be considered at a later date when each phase is ready to move forward. Kaiser has since decided that they do not wish to enter into a Development Agreement for the site. Therefore, the entitlements granted will be valid only for the minimum time period as required by the Zoning Code. The Planned Development zoning and General Plan /Eastern Dublin Specific Plan land use designation for the site will be valid indefinitely or until such time that the City Council decides to consider a rezoning or amendment to either land use document. Page 5 of 6 Without a Development Agreement, these approvals are not vested and are open to reconsideration in the future. NOTICING REQUIREMENTS /PUBLIC OUTREACH: Public noticing is not required when providing a project update to the City Council. Although not required, the City mailed notices to all property owners and tenants within 300 feet of the Kaiser site and an expanded area beyond 300 feet, as shown below: i Figure 2: Public Noticing ­_0 -If] r 1- _ ---4- r r--1 r- -' -- ,! . - _I- Protect Site The total mailing list was over 2,000 addresses. A copy of this Staff Report was provided to the Project Applicant. ATTACHMENTS: 1. Proposed Site Plan (at project buildout) 2. Site and architectural exhibits for Phase 1A Page 6 of 6 I � I I II � �y,,,1111111 �- IIII I z I W W J F— ° U � c� I��III pc V o [two Q = y� 1 Il L wZa I ;III 1. 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( ` � {? � ■� �- r w . ° ( \_ \~ • ^ m / „\ _ - L ■ ± ) , _ . . § (/ <�k } � \\ - � . � • § (( S �o § >, E ..2 : \\ q y k })) _ ■ \rrrrrrr/ 0 2 - < ,: / « cm w Kaiser Dublin Medical Center Project Update City Council April 19, 2016 Project Site Fallon Gateway Future Grafton Plaza Grafton Station Dublin Ranch Villages The Groves Dublin Blvd. Interstate 580 Fa l l o n R o a d Dublin Ranch Subarea 3 Vicinity Map Project Summary •Project Site: Approx. 58 acres •Existing approvals: Stage 1 Development Plan approved with the initial Dublin Ranch Master Plan •Existing General Plan/Eastern Dublin Specific Plan land use: Campus Office •Current proposal plans for approximately 950,000 square feet of medical uses that include urgent care clinics, medical offices, radiation/oncology center, and a high-acuity medical facility (or full service hospital), 250,000 square feet of commercial uses, an energy center and a parking structure Building/Use Size (SF)Building Size Estimated Construction Phase 1A “The Hub” medical office building with advanced facilities including an urgent care clinic, medical office space, and a radiation/oncology center 220,000 3 stories < 60 feet tall 2016-2020 Phase 1B Commercial Center 250,000 Up to 4 stories 60 feet tall 2016-2020 Phase 2 High-Acuity Medical Services building (possibly a hospital) 400,000 5 stories 85 feet tall 2025-2035 Phase 2 Energy Center 50,000 2 stories 40 feet tall 2025-2035 Phase 3 Medical Office Building 2 280,000 6 stories 90 feet tall 2035-2040 Phase 3 Parking Structure 6 stories < 70 feet tall 2035-2040 Total Project Size 1,200,000 Project Applications •General Plan/Eastern Dublin Specific Plan Amendment “Campus Office” to “Medical Campus” (new land use category that specifically identifies medically-related uses and allows commercial uses) •Planned Development Rezoning Stage 1 Development Plan for the whole site Stage 2 Development Plan for Phase 1A only •Environmental Impact Report •Site Development Review Phase 1A medical office building and related site improvements only Site Plan – Full Buildout Site Plan - Phase 1A Phase 1A Building “The Hub” •220,000 square feet •Includes advanced medical facilities, urgent care, medical offices, and a radiation/oncology center •Surface parking for over 1,000 vehicles and bikes •Associated landscaping and site improvements View from South Parking Lot Aerial View from West Aerial View from East Main Medical Office Entry (North) Main Oncology Center Entry (North) Future Project Applications •Planned Development Rezoning/Stage 2 Development Plan and Site Development Review: Phase IB - Commercial Phase 2 - High-Acuity Medical Center/Hospital and Energy Center Phase 3 - Medical Office Building and Parking Garage •Conditional Use Permit to establish any use that is required by the Planned Development Zoning District to have one •Vesting Tentative Parcel Map to subdivide the property CEQA Review •Draft EIR prepared and released for public review for 45 days •Comment period closed on March 21st •Letters received from seven public agencies and one resident •Document examined a range of environmental issues and includes multiple technical studies •Impacts identified in the areas of transportation, greenhouse gas emissions, and air quality impacts •Response to Comments is currently being prepared and will be provided to the Planning Commission and City Council for review along with the project Project Fiscal Impacts •Analysis examines the expected revenue and expenditures of the proposed project. •Medical campus component of the project produces less revenue than is needed to provide services to the site. •Commercial component to the site has the potential to balance the cost of the Medical Campus and potentially create a small fiscal benefit, but will require annual revenue to the City of approximately $300,000 in the form of sales and/or property tax. •Eastern Dublin Specific Plan goal: “new development in the Specific Plan area should pay the full cost of infrastructure needed to serve the area, and should fund the costs of mitigating adverse impacts on the City’s infrastructure and services.” Development Agreement •Development Agreements provide certainty for future development on a project site and the means by which benefits to all parties are captured and formalized. •Particularly useful for multi-phased projects built over the course of many years. •Without a Development Agreement in place, the entitlements granted will be valid for the minimum periods allowed by the Zoning Ordinance. Recommendation Staff recommends that the City Council receive the status report.