Public Hearing, Consideration and Possible Adoption of Ordinance No. 2018- 13:  An ordinance of the City Council of the City of Flagstaff amending the Flagstaff Zoning Map to rezone approximately 18.11 acres of real property generally located at 1801 S Milton Road from the Rural Residential (RR) and Public Facility (PF) zones to the Highway Commercial (HC) zone for the development of a mixed-use project.  (Mill Town Direct to Ordinance Zoning Map Amendment)

Vintage Partners is requesting a Direct to Ordinance Zoning Map Amendment for approximately 18.11 acres located at 1801 S. Milton from the Rural Residential (RR) and Public Facility (PF) zones to the Highway Commercial (HC) zone with the Resource Protection Overlay (RPO) zone to allow a horizontal mixed-use development. Please see the attached vicinity map for location.

The Flagstaff Planning & Zoning Commission conducted two public hearings to consider the Direct to Ordinance Zoning Map Amendment request on February 14, 2018, and February 28, 2018.  The Planning & Zoning Commission voted unanimously  in favor of forwarding a recommendation of approval of the Direct to Ordinance Zoning Map Amendment subject to conditions to the City Council.  The Commission also voted unanimously to approve the preliminary plat.

This Zoning Map Amendment was presented for the first time to Council on March 6, 2018.  At that time Council represented concerns in regards to the official designation of the open space tract, public safety, diversity of housing options, affordable housing options and building footprint and height.  The first read of the Direct to Ordinance Zoning Map Amendment was continued by the Council until March 20, 2018. On March 20, 2018 the applicant presented revised plans, discussed later in this report, in response to comments received from Council on March 6, 2018. Council approved the first read of Ordinance No. 2018-13 by a vote of four to two with one abstention. 

No financial impacts are anticipated with this request.

There are no policy impacts affiliated with this Direct to Ordinance Zoning Map Amendment.

Council Goals:
Economic Development - Grow and strengthen a more equitable and resilient economy.

Team Flagstaff Goals:
Strategic Priority #3: Foster a resilient and economically prosperous city.

Regional Plan:
A complete analysis of the Regional Plan goals and policies can be found in the attached project narrative. An addendum to the Mill Town Regional Plan Conformance Findings has been attached to this report in response to the proposed changes to the project.

The Mill Town Direct to Ordinance Zoning Map Amendment request is one of the steps in moving the Public-Private-Partnership (P3) project to completion.  The P3 project was formalized through a Pre-Development Agreement (PDA) between Vintage, the City, and the Arizona Department of Transportation (ADOT) in March 2015.  This PDA grants Vintage Partners the authority to apply for the required entitlements necessary to pursue redevelopment of the subject site.  ADOT and the City agreed to cooperate in good faith with Vintage Partners in order to process these entitlements, recognizing that the Flagstaff City Council retains its full discretion to approve or deny the entitlement applications.  The PDA has been renewed twice by Council with the most recent set to expire at the end of March 2018.

The City Council may approve the ordinance as proposed, approve the ordinance with modified conditions, or deny the ordinance. Additional conditions have been added to the Ordinance since the first read of Ordinance No. 2018-13 in response to the development proposal modification presented to Council on March 20, 2018.  All proposed conditions are as follows:
 

1. The subject property must be developed in accordance with the approved site plan and conditions of approval dated February 6, 2018, unless modified to comply with the following conditions of approval. Modifications (other than minor modifications) to the approved site plan will require an amendment to this Direct to Ordinance Zoning Map Amendment request.
2. All other requirements of the Zoning Code and other City codes, ordinances and regulations, shall be met by the proposed development.
3. A materials management plan shall be prepared for the Mill Town project to be submitted in conjunction with building permits to enhance optimum waste management options including recycling. The mixed-use vertical building shall include chutes for both general waste and recycling materials.
4. Applicant must install, at their expense, the pedestrian underpass across Milton Road, with financial contributions from the City of Flagstaff as stated in the Development Agreement. Improvements must be designed to ADOT standards and installed in conjunction with the transportation improvements and prior to the occupancy of the mixed-use building.
5. All terms, conditions, and restrictions detailed within the “Mill Town Development Agreement” must be fully satisfied.
6. If the applicant fails to obtain final plat approval for Mill Town, or obtain an extension of zoning within five (5) years of the effective date of the rezoning ordinance, the City Council may take action to revert the zoning back to the former classification of Rural Residential (RR) and Public Facility (PF), per Section 10-20.50.060 of the Zoning Code.
7. The overall building height shall not exceed 65 feet so long as the building maintains a 6:12 roof pitch, except for the uninhabited roof projections that do not exceed 20% of the roof area or 20% of the building height.
8. The building shall incorporate vertical articulation in accordance with Section 10-50.20.030.B.2.
9. The commercial buildings shall incorporate the private frontage standards in accordance with Section 10-50.120.
10. All ground level residential units facing Milton Road shall incorporate the use of stoops into their design.  The finished floor of the units shall be a minimum of 18 inches above adjacent sidewalk.

On May 16, 2000, the voters of Flagstaff passed proposition 403 which established the local transportation tax 2000 to provide funding for a variety of transportation system improvements including the arterial and collector street system, and multi-modal elements.  The information pamphlet for this proposition specifically identified the Beulah Boulevard extension and the University Avenue realignment as “missing links” within the overall transportation network.   The exhibit for proposition 403 showed an alignment for these roadways similar to the current proposal. The transportation tax has been collected on a pay-as-you-go basis with a total of $7.375 million allocated for these transportation improvements.  These funds became 100% available as of July 1, 2017; however, many years of work have been spent on moving this project forward.
 
In 2005, the City of Flagstaff acquired APN 103-21-002, a 9.58-acre site known as the “Fresquez Parcel” for approximately $2.7 million.  This purchase was the first step in moving this transportation project to fruition and provides the majority of right-of-way necessary to accomplish the Beulah Boulevard extension.  In order to accomplish the University Avenue/Drive realignment the ADOT District Offices and Regional Laboratory need to be relocated. 
 
Following the acquisition of the Fresquez parcel, the City and ADOT began to explore options for partnerships in order to relocate the ADOT facilities.  In July of 2009, the Arizona P3 (Public-Private-Partnership) Legislation was passed, allowing for partnerships between a public agency (in this case two public agencies) and a private-sector entity to allow greater participation in the delivery of a transportation project.  Typically, the public agency assumes all the risks and responsibilities for a transportation project, but under the P3 the private partner takes on some of those risks and responsibilities.  The Flagstaff P3 is the first time this initiative has been used to acquire new facilities for ADOT, which will free up land for roadway improvements and redevelopment.  A Memorandum of Understanding was executed on March 28, 2012, and set out the parameters for how this P3 project would function.  The City and ADOT would combine the remainders of their parcels after right-of-way dedication to be used for redevelopment.  The redevelopment parcel would then be traded from ADOT to the developer for relocated ADOT facilities.  
 
ADOT issued a Request for Qualifications in March 2012 to solicit a private partner who could relocate the ADOT facilities allowing for the construction of the road improvement project.  The selected private sector partner was Vintage Partners, who proposed to relocate the ADOT facilities to the former Harkins Theater on Woodlands Village Boulevard.  The P3 project was formalized through a Pre-Development Agreement (PDA) between Vintage, the City, and ADOT in March 2015.  This PDA grants Vintage Partners the authority to apply for the required entitlements to pursue redevelopment of the remaining lands.  ADOT and the City agreed to cooperate in good faith with Vintage Partners in order to process these entitlements, recognizing that the Flagstaff City Council retains its full discretion to approve or deny the entitlement applications.  The PDA also commits a total of $7.375 million for the extension of Beulah Boulevard and the realignment of University Avenue, which would be completed by Vintage Partners in conjunction with their redevelopment project.
 
Site Plan Approval
On February 7, 2018, the Inter-Department Staff (IDS) approved a site plan, a copy of which is attached to the Direct to Ordinance Zoning Map Amendment report, for the proposed development subject to successfully obtaining a Direct to Ordinance Zoning Map Amendment and Preliminary Plat.  The approved Site Plan will need to revised in accordance with any new conditions of approval.  Should the Zoning Map Amendment be denied, the site plan as submitted will no longer be approved.

The applicant, Vintage Partners, is requesting rezoning approval to permit a mixed-use development referred to as “Mill Town”.  The proposed Preliminary Plat affiliated with this request will divide the two existing parcels described above into two lots, two tracts, and the right-of-way required for the extension of Beulah Boulevard and the re-alignment of University Avenue.  Lot 1 is the largest parcel at approximately 10.10 acres.  This lot is fronted on three sides by Milton Road to the east, University Avenue to the north, and Beulah Boulevard to the west.  Lot 2 is approximately 0.63 acres and is located northwest of the Beulah/ University/Yale intersection.  Tract A located west of Beulah and south of University is approximately 1.80-acres set aside as open space and resource protection area.  Tract B is approximately 0.15 acres located between Yale Street and the adjacent charter school to provide for detention and Low Impact Development (LID), and to preserve additional tree resources.  All lots and tracts are proposed to be rezoned to the Highway Commercial (HC) zone subject to conditions.
 
The majority of the development is located on Lot 1 which consists of 3 commercial pads along the Milton Road frontage, and a multi-story building setback approximately 200 feet from Milton Road but directly adjacent to Beulah Boulevard and University Avenue. The largest retail pad at 12,500 square feet is located in the northeastern corner of the lot at the intersection of Milton Road and University Avenue.  This building is intended to be a small grocery store that will serve the larger neighborhood as well as the residents on site.  The other two pads are 4,200 square feet each; located on either side of the main entrance from Milton Road.  The pad to the south of this entrance is proposed to be a drive-through retail/restaurant.   These two pads have the appearance of two-story buildings in terms of height but do not have secondary uses.  Surface parking areas are located to the sides of the pads and between the pads and the multi-story building creating an internal “main street”.  Parking areas are screened from street view either by natural berms or screen walls with landscaping. 

Staff received revised plans for the Mill Town project on March 20, 2018.  The design of Mill Town's largest building was altered at the request of Council from a mixed-use building that required a Conditional Use Permit for building height and rooming and boarding to a residential building that meets the Zoning Code's height limitations without a Conditional Use Permit.  This changed the project from a vertical to a horizontal mixed-use project.  The ground floor commercial has been converted to individual entry residential units.  The building unit count was revised from 340 units to 348 units and from 1,221 bedrooms to 1,164 bedrooms. Parking ratios remain as they were originally proposed with a total of .79 parking spaces per bedroom with a total of 917 spaces for the residential portion of the project which exceeds the requirements for multi-family residential by about 69 parking spaces.  The smaller commercial buildings along the frontage were not redesigned or altered. 

The revised plans were reviewed by staff in regards to traffic, stormwater, water services, regional plan and architectural design standards. Stormwater and Water Services indicated that the changes did not impact their original review, comments and conditions.  Traffic indicated the proposed changes were anticipated to reduce the trips generated from the site by 20%.  The Comprehensive Planning Manager provided an addendum to the original Mill Town Regional Plan Conformance Finds that assisted staff with drafting additional conditions for the project.  The remaining issues identified by staff have been discussed with the project architect and include the requirements for roof articulation and the design of the entry stoops into the new ground floor residential units.  Staff has included conditions of approval to ensure that these items will adequately be addressed in accordance with the Zoning Code.     

The applicant has added provisions to the Development Agreement to include their participation in the Crime Free Multi Housing Program and well as requiring the provision of a security plan prior to occupancy of the site.

Staff and the applicant will continue to work on the possible dedication of the open space tract included within the project boundaries.  Staff will need to identify a division of the city that will be able to take on the maintenance of the property prior to acceptance.

Lot 2 is designated for approximately 2,500 square feet of single-story commercial development.  The site is designed to have access from both Yale and University Avenue with parking set behind the building.  The proposed building is located at the intersection as is preferred by the Zoning Code.   Tract A, located on the western side of Beulah between the mixed-use site and the adjacent apartments, will serve as an open space area for the public with trails and benches.  The majority of resources required to be preserved are located on this tract.  Tract B provides for detention and LID as well as the preservation of additional resources.

Community benefits and considerations related to this request are addressed in more detail in the attached Planning & Zoning Commission Staff Report, dated February 5, 2018.

Public hearings before the Planning and Zoning Commission and City Council are conducted in conjunction with requests for Direct to Ordinance Zoning Map Amendments.  In accordance with State Statute, notice of the public hearing was provided by placing an ad in the Daily Sun, posting notices on the property, and mailing a notice to all property owners within 900 feet of the site excluding rights-of-way. 
 
The applicant held two neighborhood meetings in regards to this case on June 15, 2017, and June 26, 2017, at the ADOT training facility, located at 1901 S Milton Road.  Thirty-eight (38) individuals attended the first meeting and thirty-three (33) individuals attended the second meeting.  A Citizen Participation Report, attached, was prepared in response to the comments and concerns presented.  The meetings included introductory presentations from the applicant, a question and answer session, and a break-out session where attendees had the opportunity to ask questions of the development team and view project boards. Comments on the project included concerns on the road designs, scale/bulk/mass of the proposed building, focus on student housing rather than community housing needs, proposed uses, and affordability.
 
Six letters from the public have been received as of the writing of the report.  Two of these letters are included in the Citizen Participation Report.  The additional letters are attached to this staff report.

Four additional letters received from the public have been attached to this report.  Additionally staff attached the appeal submitted in regards to the Conditional Use Permit applications as well as the applicants withdrawl letter.