View Agenda Item

Item No. 1.

MEETING DATE: October 19, 2020
TO:	HONORABLE MAYOR AND COUNCILMEMBERS
FROM:	JIM SADRO, CITY MANAGER By: Roy N. Ramsland, Jr., Planning Manager
SUBJECT:	CONSIDERATION OF THE PROPOSED RANCHO LA HABRA RESIDENTIAL DEVELOPMENT PROJECT AT 1400 SOUTH LA HABRA HILLS DRIVE, TO INCLUDE: DRAFT ENVIRONMENTAL IMPACT REPORT; GENERAL PLAN AMENDMENT 18-01 TO CHANGE THE LAND USE DESIGNATION FROM OPEN SPACE TO RESIDENTIAL MULTI-FAMILY 1 FOR PLANNING AREA 1 (15-245 UNITS/ACRE), LOW DENSITY RESIDENTIAL (0-8 UNITS/ACRE) FOR PLANNING AREAS 2, 3 & 4, AND TO MIXED USE 1 FOR PLANNING AREA 5 OF THE RANCHO LA HABRA SPECIFIC PLAN; THE ADOPTION OF THE RANCHO LA HABRA SPECIFIC PLAN; AMENDMENT #3 TO THE LA HABRA HILLS SPECIFIC PLAN; ZONE CHANGE 18-01 FROM LA HABRA HILLS SPECIFIC PLAN TO RANCHO LA HABRA SPECIFIC PLAN FOR THE AREA OCCUPIED BY THE WESTRIDGE GOLF COURSE; DESIGN REVIEW 18-01 THROUGH 18-05 FOR RANCHO LA HABRA SPECIFIC PLAN AREAS 1, 2, 3, 4, 6, AND 7; DEVELOPMENT AGREEMENT 18-01 FOR THE RANCHO LA HABRA SPECIFIC PLAN; AND, AN APPEAL OF THE DENIAL OF VESTING TENTATIVE TRACT MAP 17845

RECOMMENDATION:

It is recommended that the City Council review the information provided in, and attached to, this report, along with public testimony provided at the hearing, and the Planning Commission's recommendation, and direct staff to prepare resolution(s) and ordinance(s) as appropriate regarding the approval or denial of:

Certification of the Draft Environmental Impact Report;
General Plan Amendment 18-01 to change the Land Use Designation from Open Space to Residential Multi-family 1 (15-24 Units/acre) for Planning Area 1, Low Density Residential (0-8 units/acre) for Planning Areas 2, 3 & 4, and to Mixed Use 1 for Planning Area 5 of the Rancho La Habra Specific Plan;
Amendment #3 to the La Habra Hills Specific Plan;
Change in land use designation for Zone 18-01 from La Habra Hills Specific Plan to Rancho La Habra Specific Plan for the area occupied by the Westridge Golf Course;
Adoption of the Rancho La Habra Specific Plan;
Design Review 18-01 through 18-05 for Rancho La Habra Specific Plan Areas 1, 2, 3, 4, 6, and 7;
Development Agreement 18-01 for the Rancho La Habra Specific Plan; and,
Appeal of the Planning Commission’s denial of Vesting Tentative Tract Map 17845 at 1400 South La Habra Hills Drive.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):
An Environmental Impact Report for this proposed project was prepared pursuant to CEQA (Pub. Resources Code § 21000, et seq.) and the CEQA Guidelines (14 CCR § 15000, et seq.). A Scoping Meeting was held on December 8, 2015 at the La Habra Community Center to solicit information and comments from interested parties on what information or areas of study should be included in the initial report.

The Draft Environmental Impact Report was circulated for public review and comment pursuant to CEQA Guidelines Section 15072 on February 26, 2018 for a 45-day review period, which was extended by the City Council to end on May 10, 2018. Potential impacts identified and analyzed in the Draft EIR included:

Land Use and Planning
Population and Housing
Aesthetic Resources
Biological Resources
Cultural Resources
Traffic and Circulation
Air Quality
Greenhouse Gas Emissions
Energy Resources
Noise and Vibration
Hazards and Hazardous Materials
Hydrology and Water Quality
Geology, Soils, and Seismicity
Public Services
Recreation
Utilities
Service Systems
Water Supply

Copies of the Draft EIR and supporting technical reports were made available at the Community Development Department's public counter at City Hall, on the City's website, and at the La Habra Branch of the Orange County Library system. The City received 141 comments on the Draft EIR from state and local agencies, tribal authorities, interest groups, and the public. The City subsequently determined that significant new information required revisions to portions of the Draft EIR.

The City circulated a subsequent "Partially Recirculated Draft EIR" for a 57-day review period beginning on November 22, 2019 and ending on January 17, 2020. Upon completion of the review period for the Partially Recirculated Draft EIR, the City of La Habra prepared responses to written comments that were received on the Draft EIR during the initial public review period, as well as written comments received during the recirculation period that related to the revised and recirculated portions of the Partially Recirculated Draft EIR. The Final Draft EIR including revised technical studies, and responses to comments were made available to the public for review on July 20, 2020 (see Attachment - Final EIR Volumes 1, 2, & 3).

DISCUSSION:

The project Applicant, Lennar Homes, is requesting to change the land use designation and zoning of the Westridge Golf Course in La Habra from “Open Space” to “Residential” for the purpose of developing up to 448 residential units (277 single-family homes and 171 multi-family dwelling units) through the adoption of a Specific Plan for the proposed development. The Westridge Golf Course is a 151-acre privately owned property that is currently operating as an active golf course business that is open to the public. The property is located in the southwest corner of the City near the City’s southern boundary.

As part of the project proposal, included in the Development Agreement, the Applicant is proposing to dedicate approximately 29 acres of land at the project site to the City, on which the Applicant will construct a public park and public trail. In addition, the Applicant is proposing to renovate the existing golf clubhouse building (which will be located on the dedicated park land) into a community center building that would also be dedicated to the City. The Applicant is also requesting that the City, at a later date, consider approving the formation of a Community Facilities District (CFD) to assist with the financing for portions of this project. A CFD is commonly referred to as a Mello-Roos District and is funded via a special tax that is attached to the tax bill of property owners within that CFD. If approved, and once started, the proposed residential housing project is anticipated to take approximately six years to complete. Site grading and preparation will last approximately two years and home building will take approximately four years to complete.

Project History
The project site was originally part of the 915-acre West Coyote Hills oil field, which straddled the cities of La Habra and Fullerton, and was operated by the Chevron Corporation. In 1992, Pacific Coast Homes (a division of Chevron) submitted applications for the creation of the La Habra Hills Specific Plan. The City of La Habra adopted the La Habra Hills Specific Plan to create a master-planned community on 380 acres of the former oil field located within the City limits.

The La Habra Hills Specific Plan provided a development plan consisting of four residential neighborhoods totaling 700 residential dwelling units, an 18-hole golf course, a 29.5 acre community park, and 2.6 acres of open space. The residential component of the La Habra Hills Specific Plan was ultimately built out with a total of 556 single family dwelling units, along with the Westridge Golf Course. The golf course has always been privately owned and operated and is open for use by the general public, along with its clubhouse, which has and can still be rented for private parties and events. The ownership group of the golf course contends that golf play is down and, because they believe golf is no longer profitable, they now desire to sell the property for residential development.

In 2015 Standard Pacific Homes submitted applications to the City for a proposed residential development at the Westridge Golf Course site. In 2016 Standard Pacific merged with Ryland Homes and become CalAtlantic. In 2017 Lennar, the current developer for this proposed project, acquired CalAtlantic. The environmental review process for this project started with scoping meetings in 2015, with the Draft EIR being released in 2018, followed by a partially recirculated Draft EIR released in 2019, and a Final Draft EIR released in July 2020.

A number of applications for discretionary actions have been filed by the Applicant for consideration as part of the approval process for this project. Each of the following applications for discretionary actions is listed below and discussed in greater detail in this report.

General Plan Amendment 18-01 to change the land use designation from Open Space to Residential Multi-Family 1 (15-24 units/acre) for Planning Area 1, Low Density Residential (0-8 units/acre) for Planning Areas 2, 3, and 4 and to Mixed Use 1 for Planning Area 5;
Amendment #3 to the La Habra Hills Specific Plan to remove the golf course area;
Adoption of the Rancho La Habra Specific Plan;
Zone Change 18-01 to change the land use designation from La Habra Hills Specific Plan to Rancho La Habra Specific Plan for the area occupied by the Westridge Golf Course;
Vesting Tentative Tract Map 17845;
Development Agreement 18-01; and
Design Review 18-01 through 18-05 for Rancho La Habra Specific Plan Areas 1, 2, 3, 4, 6, and 7.

General Plan Amendment

The Applicant is requesting to amend the La Habra General Plan 2035 Land Use Designation for the existing Westridge Golf Course from “Open Space” to “Residential Multi-Family 1 (15-24 units/acre)" for Planning Area 1, "Low Density (0-8 unit/acre) Residential” for Planning Areas 2, 3, and 4, and “Mixed Use 1” for Planning Area 5, of the Rancho La Habra Specific Plan (RLHSP). Planning Area 6, which encompasses the portions of the project that have been proposed to be dedicated as a new City park and trails, and Planning Area 7 which is the existing Westridge Residential Neighborhood Slope, would retain the “Open Space” designation which would be consistent with the land uses proposed in the RLHSP. Since this development proposal is not consistent with the La Habra Hills Specific Plan Zoning Designation, the Applicant has also requested a change in zoning to remove the site from the La Habra Hills Specific Plan and to create the new RLHSP.

Amendment to La Habra Hills Specific Plan
The development proposal includes a revision to the boundary of La Habra Hills Specific Plan (LHSP) by removing the 151-acre golf course from the Plan. The La Habra Hills Specific Plan was originally adopted by the La Habra City Council on March 23, 1992. The Plan was later amended by the La Habra City Council on November 14, 1994, and again on June 5, 1997. The 1994 amendment modified the circulation of the Plan’s Phase II development by eliminating a new intersection on Beach Boulevard (Ordinance 1483). The 1997 Amendment adopted the “alternate” development plan which eliminated Planning Area B that would have allowed for 100 multi-family residential units and reconfigured Planning Area C. The adopted Plan originally contemplated a relocation of the corporate boundary between the City of La Habra and the City of Fullerton (Ordinance 1510).

The proposed removal of the golf course also necessitates map and text amendments to the LHSP to adjust the land use numbers and other changes to make it internally consistent along with removing all references and conditions related to the golf course (see Attachment FEIR Appendix B - La Habra Hills Specific Plan Amendment #3). In addition, the Applicant is requesting that the California Department of Fish and Wildlife vacate its existing deed restrictions that were previously established on the Project site and to approve a new Streambed Alteration Agreement. These deed restrictions within the project site were established as mitigation for impacts related to previous construction of the existing golf course and adjacent residential areas to the south pursuant to the La Habra Hills Specific Plan.

Adoption of Rancho La Habra Specific Plan
The Rancho La Habra Specific Plan proposes a residential community with a mix land use that includes single-family residential, multi-family residential, a commercial option, public recreation areas, and open space. The Plan defines the density, design guidelines and development standards along with the circulation patterns and the infrastructure necessary to adequately serve the proposed land uses.

The Specific Plan is divided into seven planning areas with land uses described below in Table 1. The Plan is graphically depicted in Figure 6 of the Rancho La Habra Specific Plan (see Attachment Revised Appendix C - Rancho La Habra Specific Plan). The land use breakdown and sizes are described in Tables 1 and 2 below.

Table 1. Planning Area Land Use

Planning Area	Planning Area Use	Land Use Designation
PA 1	Multi-Family Residential	Multi-Family 1
PA 2	Single Family Residential	Low Density Residential
PA 3	Single Family Residential	Low Density Residential
PA 4	Single Family Residential	Low Density Residential
PA 5	Commercial or Multi-Family Residential	Mixed-Use Center 1
PA 6	Public Open Space/ Parkland Conservation District Overlay	Open Space
PA 7	Existing Westridge Residential Neighborhood Slope	Open Space

Planning Areas 1 through 4 provide a maximum of 402 dwelling units resulting in an overall gross density of 2.66 dwelling units per acre (du/ac). If PA 5 is developed as residential, a maximum of 448 dwelling units would be provided in total, resulting in an overall gross density of 2.97 dwelling units per acre (du/ac). This overall density is consistent with City’s Low Density (0 – 8 dwelling units per acre) Land Use Designation.

Table 2. Use by Planning Area

Use	Acres
Use	PA 1	PA 2	PA 3	PA 4	PA 5	PA 6	PA 7	Total	Percentage
Conservation Area	-	-	-	-	-	9.86	-	9.86	6%
Public Open Space and Parkland	-	-	-	-	-	28.86	-	28.86	19%
Private Open Space and Detention Basins1	1.66	14.5	5.86	5.91	.14	-	-	28.07	19%
Existing Westridge Slope	-	-	-	-	-	-	19.38	19.38	13%
Multi-Family Residential	8.6	-	-	-	-	-	-	8.6	6%
Single Family Residential	-	14.2	7.90	12.5	-	-	-	34.6	23%
Retail or Multi-Family Residential	-	-	-	-	2.50	-	-	2.50	2%
Roads	0.30	6.98	3.10	5.18	-	3.41	-	18.97	12%
Total	10.56	35.68	16.86	23.59	2.64	42.13	19.38	150.84	100%
Dwelling Units	125	118	77	82	NA / 46	NA	NA	402 / 448	-
1. Private open space consists of private park spaces available only to the Rancho La Habra residents, which includes pools and passive park spaces, privately maintained open space and slopes, and detention basins. 2. PA5 provides for either 46 multi-family dwelling units or 20,000 square feet of retail and/or restaurant uses. Assuming development of the 20,000 square feet of retail, the total number of dwelling units would be 402. Assuming no retail uses, the total number of dwelling units would be 448.

Planning Area 1
This area consists of 125 market rate multi-family dwellings (for sale) located in 26 buildings. There are five building types (A through E). Building A is a two-plex, Building B is a four-plex, Buildings C and D are five-plexes, and Building E is a six-plex. Each building contains a mix of three and four-bedroom units with four different unit configurations ranging from 1,601 square feet to 2,058 square feet.

The units are designed with living areas facing the common areas, such as paseos or sidewalks. Each unit includes an attached two-car garage. The massing and scale of the buildings have been articulated to provide individual elevation elements in a balanced and aesthetically pleasing way. Walkable courts and outdoor patios provide building separation and also soften massing. The structures also incorporate a mix of three architecture styles: Italian, Monterey, and Spanish to provide variety within the neighborhood and provide visual interest (see architectural, and site for Planning Area 1 through 4 and 6, attachment).

In addition to the garages, 252 uncovered parking spaces are provided; 58 in driveways and 194 for guests. Each unit has private open space ranging from 80 to 131 square feet located in patios, decks and yards. The recreation area is 8,493 square feet and consists of a building and a pool. Within the Planning Area there are 139,272 square feet of common open space and landscaping for a total of 168,962 square feet (3.9 acres) of open space, or 37% for the entire planning area.

Planning Areas 2-4 Overview
These areas incorporate the same basic design principles and guidelines as detailed in Chapter 5 of the Rancho La Habra Specific Plan (see Attachment Revised Appendix C - Rancho La Habra Specific Plan). Each planning area is gated, has private streets, private yards, common open space and landscaping, and a common recreational facility. The private streets include a sidewalk in front of each home and a street tree program that mandates the installation and ongoing maintenance of street trees placed behind the sidewalk in order to provide shaded sidewalks to encourage walking.

The homes have a combination of front-loaded and side-loaded garages. All garages maintain a minimum 18-foot driveway measured from the face of the garage to the back of the sidewalk. Side-entry garages extend up to ten feet from the property line, however; a minimum of 24-feet of backing distance is maintained, thereby providing two off-street parking spaces for each home.

The homes and lots are configured so that no plan is located side by side or directly across from each other with the same elevation. Additionally, the elevations and color schemes of the homes are mixed throughout the neighborhoods to make sure that no home of the same plan and elevation on a single street shall be the same.

The homes in each planning area incorporate a mix of architecture which includes Adobe Ranch, Andalusian, Monterey, Santa Barbara, Spanish and Tuscan. Where homes abut or are visible from the main road in the Specific Plan Area, they have been provided with enhanced elevation(s) on the side(s) or rear facing the road. Enhancement elements may include: window enhancements using shutters and pot shelves, balconies with decorative iron rail, window trim, and color and material enhancements where architectural style permits (see Attachment, Project Design Plans).

All front yard landscaping in PA 2, 3, and 4, will be installed by the developer and maintained by the homeowner. The community will have Covenants, Conditions & Restrictions (CC&R’s) in place with detailed guidelines for the homeowners pertaining to maintenance and changes to front yard landscape. Each lot will have a designated street tree, which will be installed by the developer, and maintained by the individual homeowner in accordance with guidelines specified in the CC&Rs.

The species of each street tree will be specified on the final landscape plans and the CC&R’s will contain specific guidelines on how to maintain and irrigate the street trees. Front yard landscaping will minimize or eliminate the use of turf and include a variety of shrub and patio tree species to create a layering effect with different sizes, textures, and colors of plant material. The proposed project has been conditioned so that the final landscape plans will be submitted to City planning staff for review prior to the recordation of the CC&R’s and issuance of any building permits.

Planning Area 2
This area consists of 118 market rate single family lots with minimum lots sizes of 48 feet by 80 feet. Planning Area 2 provides a private recreation area/facility located on “N” Street, south of lot 238. The facility provides a swimming pool and spa, restrooms and showers, barbeque and picnic facilities, and a shade structure. Further south of the facility, it is connected to the public trail system from “N” Street, east of lot 244, via lettered lot “PP.”

The homes in this PA utilize three plan types each with three architectural options: Tuscan, Spanish, and Monterey. Each plan type has three variations. The dwellings range in size from 2,651 square feet to 2,916 square feet. Each plan type has the different color palette options.

Table 3. Planning Area 2 Plan Types

Plan Type	Number of Units	Sq. Ft.	Garage Spaces	Description
1	35	2,651	2	4 Beds, 3 Baths, Loft
2	40	2,804	2	4 Beds, 4.5 Baths, Bonus room
3	43	2,916	3	4 Beds, 3.5 Baths, Bonus room/Opt. Bed 5
Total	118

Additionally, the model complex for both PA 2 and PA 3 is located in this planning area. The complex is located on lots 248 through 255. Lots 248-250 are the models for PA 2, lots 253, 254 & 255 are the models for PA 3, and Lots 251-252 contain a temporary sales office (modular trailer) and 16 parking spaces; these lots will ultimately be developed with homes of the PA 2 designs. A conditional use permit application for the model homes will be considered at a future date.

Planning Area 3

This area consists of 77 market rate single family lots with minimum lots sizes of 47 feet by 70 feet. Planning Area 3 provides a private recreation area/facility located on “C” Street, south of lot 83. This facility includes a swimming pool, wading pool and spa, restrooms and showers, barbeque and picnic facilities, and a shade structure. This facility, while located in PA 3, is shared by PA 4 which has access from “F” Street, south of lot 82. From this facility both PAs have access to the public trail system.

The homes in this PA utilize three plan types, each with three architectural options: Santa Barbara, Monterey and Adobe Ranch. Each plan type has three variations. The dwellings range in size from 2,370 square feet to 2,671 square feet.

Table 4. Planning Area 3 Plan Types

Plan Type	Number of Units	Sq. Ft.	Garage Spaces	Description
1	24	2,370	2	4 Beds, 3 Baths,
2	25	2,472	2	4 Beds, 3 Baths, Loft
3	28	2,671	2	4 Beds, 3 Baths, Bonus room
Total	77

Planning Area 4

This area consists of 82 market rate single family lots with minimum lot sizes of 55 feet by 90 feet. As noted above, it shares the private recreation area with are PA 3. The homes in this PA utilize three plan types, each with architectural options: Formal Spanish, Tuscan and Andalusian. Each Plan type has three variations. These units range in size from 3,023 square feet to 3,712 square feet.

Table 5. Planning Area 4 Plan Types

Plan Type	Number of Units	Sq. Ft.	Garage Spaces	Description
1	26	3,023	3	4 Beds, 3.5 Baths, Bonus room/Opt. Bed 5
2	27	3,385	3	4 Beds, 4.5 Baths, Den, Bonus room/Opt. Bed 5
3	29	3,712	3	5 Beds, 4.5 Baths, Bonus room
Total	82

Planning Area 5

As noted in Table 2 “Use by Planning Area”, Planning Area 5 allows for either a residential component with 46 market rate units (which is the Applicant’s preferred alternative), or development of a maximum of 20,000 square feet of commercial uses (i.e. commercial/retail stores, restaurants, grocery, etc.). The plan submitted as part of the project application shows both options. The design of the residential units matches those of PA 1.

Planning Area 6
This area retains the General Plan designation of Open Space and includes 42.13 acres of area. Planning Area 6 is subdivided into 28.86 acres of public Open Space, consisting of a public park and recreation facilities that will be built/renovated and then dedicated to the City, 9.86 acres of Conservation Area, and 3.41 acres of roads. The descriptions of each area and amenities are provided below and depicted in Figure 7 of the Rancho La Habra Specific Plan (see Attachment Revised Appendix C - Rancho La Habra Specific Plan).

Public Community Center and Parking Lot – 3.3 acres

In the event this project is approved, the existing Westridge Golf Course clubhouse would be renovated and deeded to the City, consisting of an approximately 22,500 square foot structure providing indoor banquet, dining, kitchen, meeting, recreational, and office facilities
Outdoor banquet, dining, gathering space
- Covered lounge with fire pit
- Media wall (T.V.)
- Soft seating on patios
Bike racks
Event lawn and amphitheater
Adventure play area and open turf
Public parking lot

Public Park and Picnic Area – 12.79 acres.

An extension of the renovated Community Center building and park to the south
Terraced multi-purpose turf play areas
Picnic areas with shade trees and views of the La Habra valley, hills and San Gabriel Mountains

Public Linear Park – 12.77 acres

2.6 miles of trails looping throughout the entire community with access to Idaho Street and Beach Boulevard, regional trails, and Westridge Plaza Shopping Center
Benches and shade trees
Viewing overlooks along and above the trail for views of the San Gabriel Mountains
Exercise equipment

Public Streets – 3.41 acres

Conservation Area – 9.86 acres

This area includes a mix of preserved and installed coastal sage scrub habitat

Planning Area 7
This area consists of 19.38 acres of existing landscaped slope along the north edge of the Westridge residential neighborhood. Planning Area 7 is graphically depicted on Figure 7 of the Rancho La Habra Specific Plan (see Figure 7 of Attachment Revised Appendix C - Rancho La Habra Specific Plan).

Zone Change

The proposed project would require a zone change for the golf course property from the La Habra Hills Specific Plan to the Rancho La Habra Specific Plan. Specific plans within La Habra are created as “zoning designations”. In this case it is proposed to remove the golf course site from the La Habra Hills Specific Plan and create a new Specific Plan (Zone) called “Rancho La Habra”. Pursuant to State law, the General Plan and zoning designation of a property must be consistent. Thus, this step is procedural and must occur if City Council approves the General Plan Amendment.

Vesting Tentative Tract Map
The Vesting Tentative Tract Map is the instrument that divides the project site into 358 parcels for the development of the proposed homes and other improvements. In addition to the lots for the homes described above, lots would be created for an underground detention basin, entry gates/roads, the clubhouse, open spaces, and streets. The approval of a vesting map confers a vested right to proceed with development in substantial compliance with the ordinances, policies, and standards in effect at the time the vesting map application is deemed complete. On September 17, 2020, the Planning Commission denied the application for the Vesting Tentative Tract Map. On September 23, 2020, the Applicant appealed that denial to the City Council.

Development Agreement
Lastly, as part of the proposed project, the Developer has proposed to enter into a Development Agreement with the City. A Development Agreement is a binding legal contract between a city and a developer that establishes a commitment whereby a city agrees to permit a project applicant or its successors to develop a proposed project under the agreed-upon terms, and commits the applicant to the provision of specified public benefits or improvements.

The main deal points of the proposed agreement are that, over the term of 15 years, the Applicant (Lennar) retains development rights and, in exchange, provides the following community benefits to the City:

The dedication of approximately 29 acres of land for public park, trails, and a renovated community center building, which the Applicant estimates has a total approximate value of $19.5 million;
The construction of a new park, trails, and renovation of the existing clubhouse into a community center, along with other street and off-site improvements, that will be deeded to the City once complete, which the Applicant estimates has an approximate value of $18 million;
A payment of $1,500,000 to the City as a public benefit contribution to be used as determined by the City Council; and
A payment of $1,000,000 to teh City as an affordable housing contribution to be used by the City to facilitate future affordable housing developments.

The Development Agreement also includes a request that the City consider forming a CFD. This proposal would be subject to a separate discretionary approval process. If approved, the CFD may be used to fund a portion of the construction of the infrastructure described in the Specific Plan such as public roads, sewers, and other infrastructure necessary for the project, renovations to the golf clubhouse in order to convert it into a new community center building, construction of the public park and trails, and to fund the continued annual maintenance of the public parks, community center facility, public parking lot, and medians on the project site.

The annual special tax established by the proposed CFD would be assessed solely on the future property owners within the proposed Rancho La Habra Specific Plan as a component of their annual property tax bill. Based on a study prepared by the Applicant’s consultant, David Tausig and Associates, the special tax is estimated to generate $21,619,442 million for construction costs, and approximately $414,240 per year in recurring funding that would be eligible to pay for annual ongoing maintenance costs (based on the formula of $16,000 per acre). The formation of the CFD, if approved by Council, would result in new special taxes on the tax bills of property owners who purchase properties in the proposed project area, of approximately $2,220 to $3,444 per unit, per year which represents approximately a 1.6% base tax rate. Included in this tax rate is the property owners share of the CFD for annual park, trail and community center maintenance, which is estimated at approximately $935 per unit, per year.

The total estimated value of the land and assets that will be constructed and dedicated to the City, in addition to the cash payments for discretionary community benefit projects and affordable housing developments, is approximately $40 million.

Deed Restrictions (Conservation Areas) – California Department of Fish and Wildlife:
For this project to proceed as proposed, it will be necessary for the Applicant to receive approval from the California Department of Fish and Wildlife (formerly the Department of Fish and Game) to vacate the existing deed restrictions on site and approve a new Streambed Alteration Agreement. There currently exists approximately 9.86 acres of “Conservation Area” distributed in various locations within the current golf course. As part of the regulatory approval process for construction of the existing golf course, a deed restriction was recorded as mitigation for impacts to 4.55 acres of mulefat scrub as a result of the Phase II development of the La Habra Hills Specific Plan. The deed restriction was created to protect these mitigation areas in perpetuity.

The deed restriction is included as part of the Section 1603 Agreement (dated May 30, 1995) issued by the then California Department of Fish and Game (File No. 5-465-94). The Applicant for the proposed Rancho La Habra Specific Plan is requesting that the California Department of Fish and Wildlife vacate the existing deed restriction in return for onsite habitat protection as well as purchase and preservation of habitat at one or more offsite locations described in the Final EIR. The proposed Rancho La Habra Specific Plan includes 14.3 acres of conservation area. Should the City approve the proposed project, no permitting or construction could occur for the proposed project until the existing deed restriction has been vacated and a new Streambed Alteration Agreement is approved by the California Department of Fish and Wildlife and implemented. Additionally, the Final Vesting Tract Map could also not be approved until the Applicant has reached a new Streambed Alteration Agreement with the California Department of Fish and Wildlife. On August 19, 2020, the California Department of Fish and Wildlife provided the City with an email concurring with the biological resources mitigation requirements outlined in the Final EIR.

Project Implementation
If this proposed development project is approved, the Applicant will begin clearing and grading the project site, which will take approximately one year, and will include the removal of a large parking lot, golf cart paths, maintenance yard, and driving range. Infrastructure improvements, including storm drains, water and sewer mains, and streets, would be installed over an approximately 9 to 12 month period following grading. Construction of homes in each residential Planning Area would occur in increments based on market demand. Planning Areas 2, 3, and 4 would be constructed in increments of 6 to 10 homes at a time. For residential Planning Area 1, development increments would generally consist of two multi-family buildings (approximately 10 to 12 dwelling units) being constructed at a time. Build out of the entire project site is anticipated to occur over a six-year period.

Design Review
The proposed Rancho La Habra Specific Plan consists of 8 Sections (chapters). That cover the design and implementation of the project. Section 5, “Urban Design Guidelines,” provides the architectural and development standards for the construction of all of the improvements with the project. Requirements for implementation of the designs are provided in Section 7, “Implementation Plan”. Pursuant to this section the Applicant shall submit design plans to the Planning Commission and City Council review and approval. It specifically set Chapter 18.68 of the La Habra Municipal Code (LHMC) at the tool for the review of such plans. If the Rancho La Habra Specific plan is approved, then Design Review application must be considered.

ANALYSIS:

Environmental Impact Report (SCH No. 20151110945)
As noted above, pursuant to CEQA, an EIR was prepared for this project. The purpose of CEQA and the EIR is to inform decision makers about significant environmental effects, and identify ways to avoid or minimize those significant environmental effects.

The City prepared and circulated for public review a Draft EIR analyzing the project. The City received 141 comments on the Draft EIR from state and local agencies, tribal authorities, various interest groups, and the public. Subsequently, the City determined that significant new information existed which required revisions to portions of the Draft EIR. This information included:

Modifications to the Project Description proposed by the Applicant subsequent to the close of the public review period for the Draft EIR, which modified the design of the proposed community center and adjacent park, requiring revisions to the project’s biological resources impact analysis.
New biological resources surveys, updated mapping and impact analysis, and an updated mitigation program that were prepared to address CDFW’s comments on the Draft EIR, along with an updated impact analysis addressing the modified design of the proposed community center and adjacent park. The updated biological resources analysis also included updating the mapping of vegetation communities to characterize vegetation alliances in accordance with The Manual of California Vegetation, Second Edition (Sawyer et al. 2009).
An updated traffic impact analysis, which indicated that the project would generate a substantially greater net increase in daily traffic than was originally determined in the Draft EIR and that new significant unavoidable impacts would occur at intersections in addition to those disclosed in the Draft EIR. The updated traffic impact analysis was based on updated traffic counts and updated traffic generation based on the 10th Edition of Trip Generation, published by the Institute of Transportation Engineers (ITE) (Washington D.C. 2012).
Updated air quality, greenhouse gas (GHG), energy, and noise analyses prepared to reflect the increase in daily traffic generation indicated in the updated traffic impact analysis.
The updated air quality and GHG analyses used the most recent California Emissions Estimator ModelTM (CalEEMod) v2016.3.2 and the 2017 version of the Emission Factor model (EMFAC) developed by the California Air Resources Board (CARB), both of which became available subsequent to preparation of air quality and GHG studies for the Draft EIR. The updated air quality, GHG, energy, and noise analyses also reflect slight revisions to construction scheduling proposed by the Applicant subsequent to the close of the Draft EIR public review period.

The new information resulted in the “Partially Recirculated Draft EIR” which was circulated for a 57-day review period beginning on November 22, 2019 and ending on January 17, 2020. Upon completion of the review period for the Partially Recirculated Draft EIR, the City prepared responses to written comments that were received on the Draft EIR during the initial public review period, as well as to written comments received during the recirculation period that relate to the revised and recirculated portions of the Partially Recirculated Draft EIR (see Final EIR, Volume 3). The Final EIR including Draft EIR (Volume 1), Partially Recirculated Draft EIR (Volume 2), technical appendices, and responses to the comments (Final EIR, Volume 3) were made available to the public on the City’s website on July 20, 2020.

The Final EIR is composed of the following documents:

Volume 1

Draft EIR and Appendices (February 2018) for those portions of the Draft EIR not superseded by the Partially Recirculated Draft EIR and its Appendices (November 2019);
Additional revisions to the text and figures of the Draft EIR, generated either from responses to comments or independently by the City, have been incorporated into this volume of the Final EIR in an underline – strikeout format; and
Mitigation Monitoring and Reporting Program (MMRP) for those environmental issues not addressed in the Partially Recirculated Draft EIR.

Volume 2

Partially Recirculated Draft EIR and Appendices (November 2019);
Additional revisions to the text and figures of the Partially Recirculated Draft EIR, generated either from responses to comments or independently by the City, have been incorporated into this volume of the Final EIR in an underline – strikeout format; and
Mitigation Monitoring and Reporting Program (MMRP) for those issues addressed in the Partially Recirculated Draft EIR.

Volume 3

Responses to Comments
Complete Mitigation Monitoring and Reporting Program (MMRP)

The EIR identified the following significant and unavoidable impacts that would result from development permitted by the proposed Specific Plan.

Land Use and Planning

The proposed Specific Plan would be inconsistent with a goal and several policies of the Southern California Association of Governments (SCAG) 2016 Regional Transportation Plan/Sustainable Communities Strategy (RTP/SCS) related to reducing reliance on single occupant automobile travel and concentrating future development into higher density transit-oriented locations. Since these inconsistencies are reflected in significant unavoidable air quality, greenhouse gas (GHG), and traffic impacts, impacts related to inconsistencies with the 2016 RTP/SCS would be significant even with implementation of all feasible mitigation measures. Impacts would therefore be significant and unavoidable.

Population and Housing

Implementation of the proposed Rancho La Habra Specific Plan would generate population growth as the direct result of the housing proposed by the new Specific Plan. While the proposed project would not necessarily increase the City’s projected growth rate through 2040, it would substantially increase La Habra’s inventory of land for the development of housing, and therefore result in substantial population growth. The resulting impact would be significant and unavoidable.

Aesthetics

Implementation of the proposed Rancho La Habra Specific Plan would result in the loss of a major open space resource and recreational golf amenity. While the proposed project is low density and well planned and designed, the substantial loss of open space that would result from project development would degrade the existing visual character of the site. Even with implementation of project design features, such as dedication of public open space (a park and trails), and compliance with existing regulations, housing rather than open space would constitute the predominant visual feature of the site. This impact would therefore be significant and unavoidable.

Traffic and Circulation

The EIR included several analyses, including but not limited to:

Existing Traffic Conditions
Existing Conditions + Proposed Project Traffic
Future Traffic + Traffic from Cumulative Projects
Future + Cumulative Projects + Proposed Project

The Applicant is required to fully pay for improvements at the project’s entry points. The Applicant is also required to pay City traffic impact mitigation fees, as well as fair share mitigation fees for intersections not covered by the City’s traffic impact mitigation fees. Should the traffic impact fees established by the City's Municipal Code not be sufficient to cover the project’s fair share for improvement of intersections within the City, the Applicant would be required to pay the difference between the City’s adopted traffic impact mitigation fee and the project’s fair share of the full cost for such improvements.

With respect to mitigation at intersections under the jurisdiction of the cities of Fullerton, Buena Park, and La Mirada, along with Caltrans owned intersections, under CEQA, a fair share monetary contribution is considered to be adequate mitigation only if the fee is tied to improvements that the relevant agency is committed to implementing. However, staff has confirmed that these cities and Caltrans do not currently have mitigation fund programs in place for improvements to which the proposed project can contribute. Therefore, although the Final EIR requires the Applicant to make fair share mitigation payments to the cities of Fullerton, Buena Park, La Mirada and Caltrans, the City of La Habra has no authority to require these agencies to accept the fair share fees or to permit the improvements identified in the Final EIR to actually be constructed. The City of La Habra will therefore work with the cities of Fullerton, Buena Park, La Mirada and Caltrans with the goal of having the project’s fair share mitigation payments to these agencies accepted so that the needed improvements can be made. CEQA requires that because the City of La Habra cannot guarantee physical construction of improvements at intersections not under La Habra’s jurisdiction, traffic impacts would be significant and unavoidable. See Table ES-3 below for a summary of traffic impacts at specific intersections.

Table ES-3
Summary of Significant Unavoidable Traffic Impacts

		Jurisdiction	Significant Impact?	Included in Fee Program?	Can La Habra Independently Implement Mitigation?	Included in Fair Share?	Level of Significance
Intersections
1.	Beach Boulevard at Rosecrans Avenue	La Mirada/Caltrans	Yes	No	No	Yes	SU
10.	Beach Boulevard at Imperial Highway	La Habra/Caltrans	Yes	No	No	Yes	SU
13.	Euclid Street at Imperial Highway	La Habra/Caltrans	Yes	No	No	Yes	SU
14.	Harbor Boulevard at Imperial Highway	La Habra/Caltrans	Yes	No	No	Yes	SU
15.	Beach Boulevard at Lambert Road	La Habra/ Caltrans	Yes	No	No	Yes	SU
20.	Beach Blvd at La Mirada Blvd/Malvern Ave	Buena Park/ Caltrans	Yes	No	No	Yes	SU
23.	Beach Boulevard at Artesia Boulevard	Buena Park/ Caltrans	Yes	No	No	Yes	SU
29.	Hacienda Road at Whittier Boulevard	La Habra/ Caltrans	Yes	No	No	Yes	SU
Roadway Segments
M.	Imperial Highway between Euclid Street and Harbor Boulevard	La Habra/Caltrans	Yes	No	No	No	SU
X.	Beach Boulevard between Rosecrans Ave and La Mirada Blvd	Buena Park/Caltrans	Yes	No	No	No	SU
Freeway Mainline Segments
	SR-57 southbound south of Imperial Hwy	Caltrans	Yes	No	No	No	SU
Freeway Merge-Diverge Movements
	SR-57 southbound on-ramp (EB) from Imperial Hwy	Caltrans	Yes	No	No	No	SU
Left Turn Queueing
10.	Beach Boulevard at Imperial Highway	La Habra/Caltrans	Yes	No	No	Yes	SU

Notes: LTS = Less than Significant; SM = Significant but Mitigable; SU = Significant and Unavoidable

The EIR indicates that the proposed project would generate approximately 4,347 additional daily trips more than the current golf course use, with a net increase of 330 additional trips in the morning and 419 trips in the evening. Generally, this represents an increase of approximately three to four percent at various road segments within the City.

Lastly, the Level of Service (LOS) methodology was utilized to study traffic impacts because the Notice of Preparation (NOP) for the project’s EIR was issued prior to December 2018. As of July 2020, new projects are required to conduct Vehicle Miles Traveled (VMT) analysis. In general, LOS analyzes traffic congestion (delay); whereas, VMT analysis looks at total miles traveled and is used to consider a project’s impact related to greenhouse gas and air quality. The proposed project did analyze VMT in the greenhouse gas and air quality technical reports.

Air Quality

Although the proposed project would not result in an increase in the frequency or severity of existing air quality violations or cause or contribute to new violations, the project’s increased housing and population growth would be inconsistent with the Air Quality Management Plan for the South Coast Air Basin since the project related traffic and air pollutant emissions are not accounted for in the regional air quality management plan. As a result, this impact would be significant and unavoidable.

Greenhouse Gas Emissions

The proposed Rancho La Habra Specific Plan would result in a net increase in GHG emissions of 7,554.69 million tons of carbon dioxide equivalent (MTCO2e) per year, which is the standard measurement for greenhouse gas emissions. This would exceed the SCAQMD’s screening threshold of 3,000 MTCO2e per year. In addition, because the project would introduce increased housing in an area without major public transit and would increase reliance on the use of automobile travel, it is inconsistent with three goals and one policy of the Regional Transportation Plan (RTP) and Sustainable Communities Strategy (SCS) required by state law to reduce greenhouse gas emissions. By constructing single family housing in an area that is without major transit, the project would be reliant on automobile travel.

Although Mitigation Measures GHG-1a, GHG-1b, GHG-1c, GHG-1d, GHG-1g, GHG-1h, and GHG-1i would achieve consistency with the City’s Climate Action Plan and the California Air Resources Board (CARB) 2017 Scoping Plan, the Project would introduce increased housing in an area without major public transit and would increase reliance on the use of automobile travel, and will be inconsistent with three goals and one policy of the regional RTP/SCS.

Noise
Project-related demolition and crushing, site grading, and infrastructure and building construction would temporarily expose persons to noise levels substantially in excess of existing conditions. Even with implementation of mitigation measures, construction noise levels would remain substantially above ambient conditions and would be clearly audible to area residents. Therefore, short term noise impacts during construction would be significant and unavoidable.

Concluding Note on Environmental Analysis:
Despite the existence of these significant unavoidable impacts, CEQA permits the City to approve a proposed project if it finds that specific economic, legal, social, technological, or other benefits of the project to the community outweigh the unavoidable adverse environmental effects. In the event the City Council approves any of the discretionary actions requested by the Applicant, it must consider and certify the Final EIR as meeting CEQA requirements and must adopt a “Statement of Overriding Considerations” outlining the specific economic, legal, social, technological, or other benefits of the project to the community that outweigh the unavoidable adverse environmental effects.

Should the City Council not approve the land use changes and discretionary approvals, no certification of the EIR would be required.

General Plan Amendment
The City’s General Plan 2035, which was adopted on January 21, 2014, did not contemplate this type of project for this site. The long-range vision for this property, as indicated in the General Plan, is open space. The Vision Statement in the General Plan discusses who the City of La Habra is as a community and how the community will grow and develop, how it views its residential neighborhoods, businesses, community facilities, infrastructure, and how it views the natural environment in the City, with the overall goal to retain the community's character while focusing on reinvestment and revitalization of the community. In the “how we will grow” discussion in the General Plan, the Plan envisions the encouragement of new homes and businesses that are compatible as the City strives to maintain the character of the existing community and provide a balance of places to live, work, shop and recreate. Many goals and policies were adopted by the City Council in the General Plan to achieve this vision.

The General Plan also provides guidance on how the City will implement and amend the Plan. The General Plan is intended to be a dynamic document that may be periodically updated to respond to changing community needs, goals and desires. By law, it may be amended up to four times annually and requests for amendments may be submitted by individuals or initiated by the City government itself. Policy and text amendments also may occur. A General Plan Amendment must be determined to be in the public interest and not detrimental to public health, safety, and welfare, and it should be consistent with the Zoning Designation.

The proposed request to change the land use from open space to residential would result in the elimination of the golf course, which would be replaced by a new residential community, public park, trails and a new community center. The General Plan Amendment would not create any disjointed land use patterns as the existing Westridge residential community would be located adjacent to the south of the proposed Rancho La Habra residential community. The proposed amendment and project would also result in achieving the City’s goal of providing 2.5 acres of public park per 1,000 residents. Currently, the City has 2.29 acres of park per 1,000 population. The proposed project would result in 2.71 acres of park per 1,000 population. However, the elimination of the golf course would also mean the loss of a privately held and operated recreational amenity available for use by the public that (most likely) would not be replaced in the foreseeable future. In addition, the General Plan Amendment would change the emphasis of the adjacent Westridge community from one focused on the golf course, as many of the streets were named after golf courses or golf players, and that the community was originally marketed with the golf course as its centerpiece.

Considerations for amending the General Plan
The General Plan Amendment that has been requested as a result of this proposed project is a policy decision that requires legislative action. Legislative acts are binding only when they are approved by the City Council. Pursuant to California law, legislative acts including General Plan Amendments, Specific Plans, and Zone Changes are subject to referendum.

In 2014 the City updated its General Plan. During the General Plan update process many land use designations in the City were changed from commercial/industrial to residential or mixed use since many of those properties were being underutilized and had limited potential to become quality, higher performing commercial sites in the future. The new mixed-use land use designation was created for various parts of the City to encourage new growth and economic development. The subject property where the golf course is currently located was not considered for change. The vision for that property, as expressed in the General Plan, was open space/golf course, which was carried over from the previous General Plan.

The subject property is privately owned and the property owner may seek approval to change the land use designation, as they have done for this particular proposed project. The City is, by law, obligated to process any land use entitlement request from any private property owner.

Zone Change 18-01
Overall, the proposed zone change is procedural and must occur if City Council approves the General Plan Amendment.

Specific plans within La Habra are created as “zoning designations”. Pursuant to State law the General Plan and zoning designation of a property must be consistent. Therefore, if the City Council approves the proposed amendments to the General Plan land use designations, it must be coupled with an associated zoning change. The proposed Zone Change would affect two different Specific Plans. The La Habra Hills Specific Plan would be amended by removing the approximately 151-acre golf course, and a new zone (Rancho La Habra Specific Plan) would be created for that area. The proposed residential land use would be compatible with the existing residential land use of the Westridge community to the south and would not create incompatible land uses.

If City Council approves the General Plan Amendment, it should approve the Zone Change. If the City Council does not approve the General Plan Amendment, no approval of the Zone Change would be necessary.

Amendment No. 3 to the La Habra Hills Specific Plan
Overall, the proposed amendment is procedural and must occur if the City Council approves the General Plan Amendment and Zone Change.

The original La Habra Specific Plan included a series of General Plan Policies and corresponding analysis of consistency. This consistency was based on the La Habra 2020 General Plan. Amendments #1 and #2 to the La Habra Hills Specific Plan also included an analysis of consistency with the General Plan 2020. Since that time the La Habra General Plan 2035 has been adopted. The proposed amendment #3 to the La Habra Hills Specific Plan was analyzed for consistency with the General Plan 2035 and would be consistent if the General Plan is amended as discussed above.

The Rancho La Habra Specific Plan (RLHSP)
The RLHSP would provide for the orderly growth and management of the proposed residential community. California Government Code Section 65450 et. seq. authorizes a city to prepare specific plans for the “systematic implementation of the general plan for all or part of the area covered by the general plan". Government Code Section 65451 requires specific plans to include the following:

The distribution, location and extent of the uses of land, including open space, within the area covered by the plan.
The proposed distribution, location, and extent and intensity of major components of public and private transportation, sewage, water, drainage, solid waste disposal, energy, and other essential facilities proposed to be located within the area covered by the plan and needed to support the land uses described in the plan.
Standards and criteria by which development will proceed, and standards for the conservation, development, and utilization of natural resources, where applicable.
A program of implementation measures including regulations, programs, public works projects, and financing measures necessary to carry out paragraphs (1), (2), and (3).

If approved in conjunction with the proposed General Plan Amendment, the RLHSP will comply with California Government Code in that the Specific Plan will be consistent with the City’s General Plan. The Specific Plan presents a comprehensive vision for the residential community and incorporates design guidelines and development standards that provide for aesthetic, cohesive, and quality development, circulation patterns, recreation and open space area concepts and the infrastructure necessary to adequately serve the land uses. Proposed architecture for the development includes themes for Italian, Monterey, and Spanish style.

The Specific Plan also allows for a portion of the development along Beach Boulevard to be developed as commercial. During the initial project visioning process, the Developer agreed to pursue commercial development opportunities, with the goal of attracting value added businesses to the community. The Applicant has indicated that they have been unsuccessful in their attempts to find quality retail tenants for the commercial component of the proposed project and has requested that this parcel be developed as multi-family residential units. While commercial development would have been, and still is, City staff’s preferred use for this site, the residential option will generate less traffic than a commercial development would have at that location should Council approve the project with this request.

Design Review
As noted above, the proposed design guidelines establish clear guidance on the architectural standards for the proposed new residential development project. The RLHSP consists of 8 Sections (chapters). Section 5, “Urban Design Guidelines,” provides the architectural and development standards. Pursuant to Section 7, “Implementation Plan”, Guidelines,” provides the architectural and development standards. Pursuant to Section 7, “Implementation Plan”, subsection 7.4, the Applicant shall submit design plans to the Planning Commission and City Council for all improvements being constructed. Chapter 18.68 of the La Habra Municipal Code governs the review of such plans. Chapter 18.68 requires the following findings for approval:

The proposed plan is consistent with the City’s General Plan.
The proposed plan is consistent with the City’s Zoning Ordinance.
The proposed plan is in the best interests of the public health, safety, and welfare of the community.
The nature of the proposed land uses and the design is appropriate for the proposed location and is compatible to the surrounding land uses and improvements.
The project complies with all requirements of the California Environmental Quality Act.

These findings must be made before the proposed designs can be approved. In this case, as noted in the project description above, the homes in each planning area incorporate a mix of architecture which includes Adobe Ranch, Andalusian, Monterey, Santa Barbara, Spanish and Tuscan. Where homes abut or are visible from the main road in the Specific Plan Area, they have been provided with enhanced elevation(s) on the side(s) or rear facing the road. Enhancement elements may include window enhancements using shutters and pot shelves, balconies with decorative iron rail, window trim, and color and material enhancements where architectural style permits. These styles and the overall layout of the project would be appropriate for this location if the site were designated for residential development.

Vesting Tentative Tract Map
As part of the project, a Vesting Tentative Tract Map (17845) is also proposed. Pursuant to Chapter 17.08 of the La Habra Municipal Code (LHMC), findings are required for Tract Maps. In order to approve the map, each of the following findings must be made:

The proposed subdivision and the provisions for its design and improvements are consistent with the provisions of the La Habra General Plan.
The Tentative Tract Map meets the requirements of the La Habra Subdivision Ordinance and Subdivision Map Act.
The site is physically suitable for the proposed density.
The design of the proposed subdivision is not likely to cause substantial damage or avoidable injury to wildlife and their habitat.
The design is not likely to cause substantial health problems.
The design will not conflict with any easements for access through or use of the property within the proposed subdivision.

As with the design review, these findings must be made before the proposed development can be approved. Overall, the tentative map incorporates comments from various City departments and incorporates a gated community concept to prevent cut through traffic and to limit access into and out of the community from a public safety perspective. The size of the lots would be consistent with the proposed Rancho La Habra Specific Plan. As discussed below, this is before the City Council on an appeal after the Planning Commission denied the Vesting Tentative Tract Map application.

Development Agreement
The proposed development agreement provides certain public benefits in exchange for providing the Applicant with certainty regarding the governing land use regulations applicable to the project. The proposed community benefits total approximately $40 million, of which approximately $1.5 million would be a payment as a public benefit contribution, and $1.0 million as a payment to be put towards affordable housing projects in the City. Approximately $18 million has been estimated for construction improvements to the park, trails and the renovated community center building, and $19.5 million is estimated as the value of the land and existing clubhouse the Applicant is proposing to dedicate to the City.

Rancho La Habra Project - Up to 448 Residential Homes Estimated City/Community Public Benefits Breakdown

Cash Benefits
Public Benefit Contribution	$1,500,000
Public Benefit Contribution - Affordable Housing	$1,000,000
Total Cash Contributions:	$2,500,000

Public Benefit - Cost of Improvements to be Dedicated to City
Cost of Park Improvements	$7,539,000
Cost of Trail Improvements	$4,425,350
Cost of Community Center Parking Lot	$1,961,051
Cost of Community Center Improvements - SVA	$2,685,520
Cost of La Habra Hills Drive Construction- Landscaping	$198,112
Cost of La Habra Hills Drive Construction - Engineering	$792,881
Beach Blvd Enhancements	$425,162
Total - Cost of Improvements to be Dedicated to City:	$18,027,076

Public Benefit - Value of Land, Park, Trails and Value of Clubhouse
Value of Park Land - 12.77 acres (@400,800/ac)	$5,118,216
Value of Land Dedicated for Trails - 12.79 acres (@400,800/ac)	$7,130,232
Value of Clubhouse Land and Parking lot area - 3.3 acres (@400,800/ac)	$1,322,640
Value of Existing 22,500 sf Clubhouse Structure (@$265/sq. ft.)	$5,962,500
Total - Value of Active Use Land:	$19,533,588

Total Estimated Rancho La Habra Public Benefits:	$40,060,664

Based on information obtained by the City, staff estimates that the golf course, in its current configuration and use, is valued at approximately $5.2 million based on the current open space zoning designation. If the City Council approves the proposed land use change from open space to residential, staff estimates that the value of the property will increase to approximately $63.2 million. This represents a net increase of approximately $58 million in land value. The Applicant has declined to provide staff with requested information regarding the original purchase price of the golf course, the subsequent sale price related to this proposed project, and the Applicant’s construction proforma, so that staff could review and validate financial estimates. Although not required, staff believes that this information would be helpful in analyzing the project.

On October 12, 2020, the Applicant submitted proposed revisions (attached) to the Development Agreement intended to create additional flexibility for Council's consideration. The revised language is intended to allow Council the option to shift community benefit improvements from the proposed public park (such as eliminating or modifying certain elements proposed to be built) to the affordable housing contribution. The revised language has been included as an attachment to this staff report for the Council’s consideration. Should the Council wish to consider the revisions, direction to staff would be needed in regard to what specific adjustments, if any, the Council would want to make to the Applicant’s public benefit contributions, including what design aspects should be modified or eliminated from the proposed public park in exchange for an increase in the amount of the Applicant's affordable housing contribution.

As noted in the Development Agreement, the Applicant is requesting the establishment of a CFD. The CFD, if approved as currently proposed, would fund approximately $21 million of the $40 million in community benefits that the Applicant has offered. As noted above, CFDs are funded based on special taxes levied on properties within the CFD area. Formation of a CFD would be the subject of a separate, discretionary approval process by the City Council. Community benefits to be funded from the CFD ultimately would be paid by the future homeowners within the proposed development. City staff understands that because a higher annual property tax bill would result from a CFD, the Applicant intends to establish a lower sales price for the homes. However, it is unclear if the lower sales price will be realized if; for example, multiple offers are placed the new homes during a competitive process that could ultimately increase the final price of the new homes.

Although the formation of a CFD is not before the Council at this time and would be subject to a separate discretionary approval process, the following information is included to aid the Council’s understanding of the project.

Community Facilities District Financing
Mello-Roos Act – Developers, on occasion, request that a city establish a CFD per the California Mello-Roos Act to levy a special tax upon properties within the CFD to finance public improvements or services, or to issue bonds secured by the special tax in order to finance the design and construction of allowable facilities. The CFD is a financing district formed by the City to levy special taxes that are collected through annual property tax bills on those properties within the boundaries of the CFD. The CFD special taxes may finance the construction or acquisition of authorized public improvements to serve the property within the CFD, or they may finance public services or maintenance services for certain public facilities.

Public Capital Projects – Generally, a CFD may be established and a special tax levied to finance the purchase, construction, expansion, improvement, or rehabilitation of real or other tangible public property, with an estimated useful life of five years, or longer. A CFD may also finance planning and design work that is related to the foregoing. Examples of authorized facilities include local public park facilities, libraries, and child care facilities. In this proposed project, the Applicant is intending to use a CFD to finance certain public roads, sewers, and other infrastructure necessary for the project, including renovations to the clubhouse building and the construction of the public park and trail system. A CFD also allows for the issuance of bonds to finance the design and construction of these types of improvements. The debt service on such bonds would be payable from a special tax assessed on the owners of properties within the CFD which, in this case, would be limited to the new residential properties being proposed in this project.
Services – A CFD may also be established, and a special tax levied, to finance on a cash basis certain services within the CFD; however, bonds may not be issued to fund services. A special tax approved by the landowners of the CFD may only finance services to the extent they are in addition to those provided in the territory or district before the district was created. Authorized services include police protection services; fire protection services; maintenance and lighting of public parks, parkways, streets, roads and open space; flood and storm protection services; services with respect to removal or remedial action for the cleanup of any hazardous substance; and maintenance and operation of any real property or other tangible property with a useful life of five years or more that is owned by the city or another public agency. In this case, the Applicant is proposing to establish a second CFD to fund the ongoing annual maintenance costs of the public park, trail system and community center that would be dedicated to the City should this project be approved.

Within the proposed Development Agreement, and in an effort to assist with project financing, the Applicant has requested that the City Council approve the establishment of a CFD as allowed in the Mello-Roos Act, and that the City would agree to use its best efforts to form the CFD, subject to the City Council’s discretion, for the various approvals required in connection with establishing the CFD. If, following approval of the Development Agreement, the City Council separately approves to establish the CFD, the Applicant is requesting that the CFD include a special tax levied for the annual maintenance of the new park, trail and community center improvement at the proposed project site that would be deeded to the City. The proposed CFD is estimated to generate approximately $21,619,442 ($2,220 to $3,444 per unit, per year for 30 years), and approximately $414,240 (ranging from $654-1,236 per unit, per year in perpetuity) to fund annual maintenance of the new public park, trail system and community center building.

Proceedings to form a CFD and levy a special tax include adopting a Mello-Roos policy for the City and holding a noticed public hearing. In the absence of a majority protest by the property owners within the jurisdiction of the CFD, a city may establish a CFD. The city must then submit the special tax, and the proposed bond issue, if bonds are to be issued, to the voters of the CFD. In this case, if the project and CFD were to be approved, the developer would be the sole voter in the CFD and could vote to approve the CFD structure and subsequent bond financing. Once the special tax levy is established, any subsequent property owners who purchase new residential units in the CFD would be obligated to pay the special tax to support the CFD.

The existence of the CFD, the maximum amount of the special taxes, and the term of the special taxes would be disclosed to property owners through a recorded Notice of Special Tax. The special tax can be levied each year by the city council, up to a maximum rate. As a general rule, many cities have adopted policies that provide that the total property tax rate, including any Mello-Roos special taxes and/or special assessments, not exceed two percent of the value of a residential parcel. In this instance, the Applicant is proposing an overlapping debt burden for both CFD’s combined, at a rate not to exceed 1.4 percent. It should be noted that a future City Council cannot reduce or end a special tax levy that has been obligated to fund debt service payments on a bond issue until that bond is fully repaid; however, a City Council could reduce or end a special tax levy that funds the annual cost of services. If that were to happen, the costs to fund those services would likely fall to the City’s General Fund to pay.

CFDs are not uncommon as a project financing tool used in growing and expanding communities, although this would be the first use of a CFD for a residential development project in the City of La Habra. The benefits to the City for having established a CFD would include a dedicated source of funding to support ongoing annual maintenance cost for the new proposed public park, trail system and community center, currently estimated to cost approximately $414,240 per year, if built. In the absence of a new source of funding, the cost to maintain these new public assets would be borne by the City’s General Fund. In addition, since these new community amenities would be located immediately adjacent to the new residential community, future property owners of that community would likely benefit the most from those amenities. Arguably, future residents in this proposed project will benefit from the CFD due to a lower cost on the price of their new home, since the property owners will be paying for public infrastructure improvements within the project over 30 years versus the Applicant having to fund the cost of those improvements and then passing those costs on in the form of higher home sale prices. However, there are no guarantees that there will be a lower initial home sale price paid by prospective home buyers once the homes are listed for sale due to the very competitive housing market in Southern California.

Related Issues

Housing Laws, Affordable Housing, Regional Housing Needs Assessment (RHNA)
Over the past several years, the Governor has signed numerous bills declaring a housing crisis and more legislation is currently being considered to further encourage or mandate housing construction, especially higher density, affordable housing units. In addition to State legislative mandates, the City of La Habra is also required to provide the capacity for future housing units as identified by the State Housing and Community Development (HCD) through population and growth projections. HCD’s most recent calculation has established that the Southern California region is obligated to provide capacity for the construction of over 1.3 million new housing units. The regional planning agency, Southern California Association of Governments (SCAG), is responsible for allocating this total number of housing units to each city through the Regional Housing Needs Assessment (RHNA) process. Every eight years local cities are legally required to update their General Plan Housing Elements to provide the zoning capacity to provide for the ability to construct the number of housing units assigned from HCD through SCAG. To be clear, the City of La Habra is not obligated to build these housing units or to force property owners to build the units, but rather, it’s the City’s responsibility to provide the land use and development capacity on private property to accommodate the building of these units by property owners and developers, should they decide to pursue such developments.

The State has been focused on increasing the capacity for new housing throughout California and has significantly changed the methodology for how many residential units cities are required to provide development capacity for. To put these changes in perspective, in 2014 under the 2014-2021 planning cycle, the City of La Habra had a RHNA number of 80 units (4 units for the current cycle and 76 units that were carried over from the 2008-2014 Housing Element planning period), for which the City had ample development capacity to construct. In comparison, for the 2021-2029 planning cycle, La Habra’s proposed RHNA number has now increased to 803 units, an increase of 723 units, or 903%. Of these 803 units, 365 are required to be above moderate-income levels, 130 are required to be at moderate income levels, 116 are required to be at low income levels and 192 are required to be at very-low income levels. Based on the market rate pricing indicated by the Applicant for the residential units being proposed in this project, if approved, the units built would satisfy all of the City's “above moderate-income” units for the next RHNA cycle.

Public Service and Facilities
The proposed project would not generate an increased demand for Police or Fire Services that would lead to the need for new or expanded facilities. The proposed project would be served by Lowell Joint School District, La Habra City School District and Fullerton Joint Union High School District. The proposed project is estimated to generate approximately 13 students for the Lowell Joint School District, 120 students for La Habra City School District, and 66 students for Fullerton Joint Union High School District at Sonora High School. A capacity analysis was conducted for the three school districts, which found that Lowell Joint School District has capacity to accommodate 451 more students, the La Habra City School District has the capacity to accommodate 795 more students, and Sonora High School in the Fullerton Joint Union High School District has the capacity to accommodate 249 more students.

The proposed project would pay required school fees and permit fees as is typical for any other development project. It is estimated that approximately $3.7 million in school fees would be paid by the Applicant if this project is approved which, by law, is full mitigation for an increase in students resulting from the project. In addition, the Applicant would pay approximately $8 million in fees to the City and other governmental agencies for various permits, fees and inspections related to the construction of the proposed project. These fees are based on formulas that would apply to any other development project and would also scale appropriately (i.e. smaller sized projects would pay less and larger projects would pay more). As these fees are offset by services that would be provided by the City to perform the work the fees are paying for, there is no net increase in revenue to the City’s General Fund.

Support for the Project
Communication and letters from the Applicant, housing advocates, and others who have written in support or testified at the Planning Commission hearing for the project argue that the project should be approved for the following reasons, among others:

Golf play is down nationwide and golf courses are struggling or closing as a result.
A housing crisis exists, especially in California, and the proposed project would help address this crisis, and also help the City try to meet its regional housing obligation.
If approved, this project would generate community benefits totaling over $40 million; would provide 29 acres of newly constructed and dedicated public park and trails; would result in the dedication of a renovated community center building for the public’s use; would provide $1.5 million in direct funding for the City Council to use for other community programs, projects and needs; and would provide $1 million to be used to help support future affordable housing developments in the community.
The project would generate approximately $354,000 in new net recurring annual revenue for the City’s General Fund from higher property tax revenues generated by the new homes, as well as from sales taxes paid by the new homeowners.
The project would conserve a significant amount of water since water usage for up to 448 homes would be far less than what it takes to maintain a golf course.

Opposition to the Project
Communication and letters from the Save La Habra group and others who have written in opposition or testified at the Planning Commission hearing in opposition to the project argue that the project should be denied for the following reasons, among others:

The project would cause an unacceptable increase in traffic to already congested streets.
There has been already too much housing built in the community and this would further change the community’s character.
Building this project would cause health concerns due to soil contamination and subsequent air quality issues.
The property values of nearby homes would go down as a result of the loss of the golf course views.
The golf course represents the last large remaining open space and recreation amenity that the community has and must be preserved for the benefit of the community.
Nearby property owners purchased their properties to be adjacent to the golf course and the golf course would be closed.

Decision Tree

While there are several components to the proposed project that need to be decided, the primary policy question that must be first considered by the City Council is whether the existing property should remain designated as open space, or should it be rezoned for residential development. The answer to this fundamental question will then impact the other land use entitlement requests. To aid in this process, a decision tree has been developed for the Council to use as a tool in the process. The following exhibit represents the suggested order in which actions by the Council should be considered.

CONCLUSION
Staff recommends that the Council consider the contents of this report, along with all the attachments and supporting documents, as well as all written and oral testimony, and the recommendation of the Planning Commission, and provide direction to staff to bring back resolution(s) and ordinance(s), as appropriate, to:

Certify/not certify the Final EIR (no action needed if decision is to deny project)
Approve/deny the General Plan Amendment 18-01
Approve/deny amendment #3 to the La Habra Hills Specific Plan
Adopt/not adopt Rancho La Habra Specific Plan
Approve/not approve Zone Change 18-01 to adopt/not adopt the Rancho La Habra Specific Plan
Approve/not approve Design Review 18-01 through 18-05
Approve/not approve Development Agreement 18-01
Grant/deny the appeal of the Planning Commission's denial of the Vesting Tentative Tract Map

PLANNING COMMISSION ACTION:

The Planning Commission held a public hearing on this project at its regularly scheduled meeting on September 14, 2020. Over the course of the hearing, which lasted multiple days, 76 individuals addressed the Commission. In addition to the Applicant, 15 persons spoke in favor of the proposed project. A total of 61 persons spoke in opposition to the project. In addition to the oral testimony, 10,012 written comments (281 which were duplicates) were received beginning on July 24, 2020, until the close of the public hearing. Questions were raised during the public hearing regarding a number of the letter/email that were submitted. Staff reviewed the documents and found that the breakdown is as follows:

Letters/Comments in Support
La Habra Residents	6,048
Non-La Habra Residents	525
Unreadable Signatures or addresses	899

Letters/Comments in Opposition
La Habra Residents	2,052
Non-La Habra Residents	177
Unreadable Signatures or addressees	30
TOTAL	9,731

Following multiple days of the public hearing, the Planning Commission deliberated and directed staff to return with resolutions recommending to the City Council the denial of all legislative entitlements and denying the Applicant’s request for a Vesting Tentative Tract Map. The Planning Commission subsequently adopted Resolution No. 20-30 by a 4-1 vote, recommending denial of the legislative entitlements. Commissioners recommending denial expressed concern about the change in land use, permanent loss of some open space acreage, and concern over additional traffic. Commissioner Manley dissented, as he supported the General Plan Amendment and believed the proposed land use could be appropriate on the site, with modifications to the plans and the development agreement to include affordable housing. The Planning Commission adopted Resolution No. 20-31, by a 5-0 vote, to deny the Vesting Tentative Tract Map application.

An audio of the Planning Commission hearing, including Commissioner comments, is available for review at www.lahabraca.gov in the Agendas and Meetings portion of the website.

Since the Planning Commission hearing, and at the time of the preparation of this report, approximately 8,482 correspondences have been received regarding this project (5,149 in support and 3,333 in opposition) (see Attachments Support Letters and Opposition Letters).

FISCAL IMPACT/SOURCE:

Based on a fiscal analysis performed by staff, the proposed project would be beneficial to the community. The fiscal analysis evaluated the project’s impact on City programs and services compared to the tax and fee revenues the project would generate. The proposed project offers 13 different types of housing units with estimated sales prices ranging from $609,000 to $1,183,000. Based on the estimated assessed value of the sales prices and new increase of new households, the net annual property and sales tax revenue generated as a result of the proposed project is approximately $1,171,832. If the project is approved, additional City expenditures for existing services (i.e. Police, Fire/Paramedic, Ambulance, etc.) are estimated at approximately $818,457 per year. This results in $353,375 in new net revenue to the City.

It should be noted that this analysis assumes that a CFD is approved and in place to fund the annual maintenance costs of the new park, community center building and trails. If a CFD is not approved, or if one is approved and subsequently dissolved in the future by Council action, the cost to maintain the dedicated public assets will essentially utilize any new net revenue generated by this proposed project, making the fiscal benefit neutral at best.

GENERAL PLAN RELEVANCE:

Refer to the General Plan Discussion Above