The Planning Commission gave its support Wednesday to the city's proposal aimed at creating Pleasanton's newest commercial center on Johnson Drive, expected to be anchored by Costco, two hotels and new retail spots.
With their unanimous vote, the commissioners urged the City Council to approve the new Johnson Drive Economic Development Zone (JDEDZ), including certifying environmental analysis of the site, amending the General Plan and rezoning the site to allow new commercial uses there, and establishing strict design guidelines that could help expedite city review of future projects in the marquee area.
"We don't amend the General Plan very often. This, in my opinion, is a great example of a good reason to make the change," Commissioner Herb Ritter said.
"It does support the residents. It adds community benefit, and also it generates some great revenue to help support our parks and all the other things that we have," Ritter added during the meeting at the Pleasanton Civic Center on Wednesday night. "I think it is a good opportunity."
The JDEDZ, expected to head to the council next month, seeks to breathe new life into largely underutilized property near the I-580/I-680 interchange that includes a nearly 20-acre chunk left vacant -- except for leftover building rubble -- after Clorox closed its research center there.
The proposal details rules for how redevelopment could occur in the 40-acre area, consisting of 12 parcels at 7106 to 7315 Johnson Drive and 7035 and 7080 Commerce Circle currently with a mix of land-uses. Some of the land is vacant while other areas are in use now.
Through the JDEDZ framework, Pleasanton planners look to spur a thriving retail and commercial hub that capitalizes on the near-freeway location, creates opportunities for new businesses to broaden Pleasanton's economic base and tax revenue, and streamlines the development review process in that area, according to city associate planner Eric Luchini.
An economic development zone has been on city leaders' radar since Clorox vacated its Johnson Drive site for another property in Pleasanton.
The council endorsed the broad concept and initiated analysis of JDEDZ specifics in 2014, but efforts slowed last year after a citizens group successfully put an initiative measure on the ballot seeking to prohibit retail uses of 50,000 square feet or more from operating in the zone.
Measure MM, which came about soon after Costco became linked to the Johnson Drive site, failed at the polls last November with about 63% of Pleasanton voters opposing it -- clearing the way for JDEDZ consideration to proceed.
City leaders and many residents point to the strong defeat of Measure MM as a sign the Pleasanton community at large supports bringing Costco to town and the JDEDZ concept overall.
The lone pair of resident speakers at Wednesday's lightly attended commission meeting Wednesday echoed those sentiments.
"I just came tonight to tell you to please approve the EDZ and to move ahead with Costco," Stefani Katz told the commission. "This town has a really thoughtful and deliberate planning process, and we've been looking at this for a while and it's been studied since 2015, including a citywide election. So I'm urging you to move ahead with it."
"I've lived in town for about three decades, and I've never seen such a groundswell of support from the public, proven now through the election," John Sensiba said. "And I think the fact there's not 75 people here saying the same thing is an expression of trust in the staff's competency and in the commission's ability to discern the facts."
The JDEDZ project cleared a key hurdle last month when the council signed off on a financing agreement with Costco to pay for road improvements needed to accommodate new development in the area, a deal that includes a 60-40 sales tax sharing agreement with Costco to cover a portion of the costs.
That deal set the stage for city staff finalizing the JDEDZ package for consideration by the Planning Commission, and ultimately the City Council.
City officials hope the JDEDZ would spark new retail or broader commercial interest in not only the acreage currently vacant, but ultimately all parcels in the area.
The proposal does feature safeguards for those operating in the JDEDZ area now, including FedEx, AT&T, Black Tie Transportation and Valley Bible Church. Existing land-uses would be permitted to continue as is, protected by grandfathering provisions.
But for the vacant land, as well as redevelopment of occupied parcels, city officials propose changing the General Plan designations and zoning districts to allow for a wider range of new commercial uses in the JDEDZ.
The list includes almost 30 different types of possible commercial operations, broken down into businesses that could receive permit approval following only review by city staff and those that would require Planning Commission approval.
Costco, under the "membership warehouse club" category, and hotels are among the businesses that would need approval from the city's zoning administrator with an application that adheres to all JDEDZ design guidelines -- unless someone objects to that approval and appeals it to the Planning Commission.
The wholesale retail giant and a hotel developer have already pledged their desire to come to Pleasanton in the JDEDZ, provided they come to terms to purchase property there from Nearon Enterprises, which owns 27 acres in the area, including the old Clorox site.
"We are committed to this community, and we're looking forward to continuing that partnership," Jenifer Murillo, director of real estate development for Costco, told the commission. "This is why ... we intend to buy the property and make ourselves a long-term member in Pleasanton."
Don Cape of Tharaldson Hospitality Hotels, which develops Marriott brand hotels, said his firm is "excited" the JDEDZ is close to approval. "And we anticipate wanting to move rapidly as soon as that could happen, provided we come to arrangements with (Nearon)."
Costco could not begin operating its Pleasanton store or gas station before the roadwork improvements are completed, but the hotels could open beforehand, under the current proposal.
Administratively, the proposal from city staff calls for a General Plan amendment to change the land-use designations in the JDEDZ to retail-highway-service commercial and business and professional offices, as well as rezoning the properties to planned unit development (PUD) commercial.
With the PUD-commercial zoning would come specific rules developers must follow for site design, covering topics such as vehicular, pedestrian and bicycle circulation, landscaping, architectural standards, lighting, signage, parking, drainage, and outdoor equipment and storage.
It is because the JDEDZ package details those design guidelines upfront that city officials support allowing many retail operations to need only staff-level permit approval, rather than consideration during a commission meeting.
Other possible uses in the "permitted," or staff-level approval, category include restaurant, food market, hardware store, garden center, car dealership, photo studio, and general retail without drive-thru or firearm sales.
Operations in the JDEDZ's "conditional," or commission-level, category include bar or brew pub, religious center, health club or gym, meeting hall, office building, school, and general retail with drive-thru or firearm sales.
The Planning Commission voted to make several adjustments to the list, including making all massage parlors, theaters or tutoring centers conditional rather than permitted; remove nursing homes, senior housing and laboratories from the list altogether; and adding personal services, like hair or nail salon, as a new permitted option.
"I want a fast track for the retail. For the things that are not retail, I want a slower track," Commissioner Justin Brown said.
City officials say conservative estimates for the JDEDZ would see $1.4 million to $1.7 million in new annual General Fund tax revenue from the first phase, including Costco and the hotels, and at full build-out, $2.1 million to $2.3 million per year, according to Luchini. That's on top of new property tax revenue that could be created for the Pleasanton Unified School District, he noted.
The JDEDZ package also includes certification of a final supplemental environmental impact report (EIR).
The document concludes that the JDEDZ project can establish mitigation measures to reduce the project's impacts on a range of environmental conditions to a less-than-significant level.
But unlike most EIRs set for certification, this one concludes there would be significant and unavoidable impacts on two areas: transportation and air quality. Still, city staff thinks the EIR can be approved and JDEDZ advanced with a "statement of overriding considerations" for those two impacts, Luchini said.
In the case of transportation, the only reason it is left unmitigated is because the traffic improvements include work on the I-680 ramp at Stoneridge Drive, which requires Caltrans approval and thus is technically outside of the city's control. Luchini said staff anticipates no problems obtaining clearance from Caltrans for the roadwork.
As for air quality, city staff contends the negative impacts are due primarily to the size of the project at 40 acres and the number of car trips expected to be generated, arguing any project of that size in the Bay Area's air basin would result in similar amounts of pollutants and the associated air pollutant emissions per capita are marginal.
"We are bundling a lot of things together. Had we partitioned and done a whole bunch of small projects, we wouldn't have the issues. But we also wouldn't be thoughtfully bringing this project to bear in a win-win way," Commissioner Nancy Allen said.
At the end of the 1-1/2-hour discussion, the commission voted 5-0 to recommend EIR certification and JDEDZ approval to the City Council.
Commission chair Jack Balch did not participate in the meeting, recusing himself because his company, Balch Enterprises, is paid to manage properties in other cities where Nearon pays for such services. So Brown, the commission's alternate member, stepped in to a full voting seat.
The JDEDZ package is scheduled to head to the City Council during its Nov. 7 regular meeting.