To: HONORABLE MAYOR From: Stephen M. Haase

AND CITY COUNCIL

Subject: SEE BELOW Date: November 24, 2003

COUNCIL DISTRICT: 4

SNI: None

SUBJECT: EBAY NORTH DEVELOPMENT PROJECT AND GENERAL PLAN AMENDMENT ENVIRONMENTAL IMPACT REPORT, GENERAL PLAN TEXT AMENDMENT (GP03-T-08), AND DEVELOPMENT AGREEMENT.

RECOMMENDATION

The Planning Commission voted separately on the following, related, items:

1. Final Environmental Impact Report – For the eBay North Development Project and General Plan Amendment - Certified (7-0-0).

2. General Plan Text Amendment (GP03-T-08) – A motion to recommend approval of the General Plan Text Amendment to allow an increase in height from 120 feet to 150 feet on the subject site passed unanimously (7-0-0).

3. eBay Development Agreement – A motion to recommend approval of the subject Development Agreement between eBay and the City was approved unanimously (7-0-0).

BACKGROUND

On November 17, 2003, the Planning Commission held a public hearing to consider the following actions related to the 47.8-acre site located on the west side of North First Street, between Guadalupe Parkway and Karina Court;

(1) The certification of a Final Environmental Impact Report;

(2) A General Plan Text Amendment (GP03-T-08) requesting that the maximum allowable height for the subject site be increased from 120 feet to 150 feet; and

(3) A Development Agreement with eBay.

The subject development agreement would allow for the development of up to 2.0 million square feet of research and development/office uses on the subject site including the transfer 1.15 million square feet of floor area credits. The Director of Planning, Building and Code Enforcement recommended approval of the above referenced items.

Final Environmental Impact Report (EIR)

The Final EIR for the project analyzed the potential environmental impacts which would result from the development of the subject site. The current and future actions to be addressed in the EIR include: a Site Development Permit (H03-039), a Development Agreement (DA-eBay) to allow up to 2.0 million square feet of research and development/office buildings, a Vesting Tentative Map (T03-091) to subdivide three parcels into 13 lots, a Special Use Permit (SP03-045) to allow offsite parking, a partial Street Vacation of O’Nel Drive, and a General Plan Text Amendment (GP03-T-08) to modify the San Jose 2020 General Plan Urban Design Policy #10 to allow maximum building heights of up to 150 feet.

The Final EIR identified three Significant Unavoidable Impacts related to regional air quality, traffic and circulation, vegetation and wildlife, and cumulative impacts to traffic congestion, air quality and loss of Burrowing Owl habitat. “Significant Unavoidable Impact” means that impacts of the project would exceed the significance thresholds, even with changes or mitigation included in the project.

General Plan Text Amendment

As explained in the attached staff report, it is staff’s position that the proposed text amendment to allow increased height is consistent with the General Plan Major Strategies, goals and policies. The proposed change would facilitate intensification of development opportunities in the important North San Jose employment center located directly adjacent to the Guadalupe Corridor light rail line and assist the City in retaining and expanding the development of job generating uses.

Development Agreement

The applicant, eBay Inc., has requested a Development Agreement with the City of San José that would allow for the development of 2.0 million square-feet of Industrial Park uses on the subject site through the transfer of 1.15 million square feet of floor area credits to the subject property. The proposed Agreement sets forth terms for this future allocation, specifying as follows: the City would first allocate to eBay the 500,000 square-feet currently available in the pool; the next 150,000 square feet of pool square footage generated would be reserved for the City to be allocated at the City’s sole discretion; and 75% of all subsequent square footage accumulated into the pool (following the 150,000 square foot reservation) up to 650,000 square feet would be allocated to the eBay site. The Development Agreement as proposed has been prepared to conform with all applicable City policies, including the General Plan as proposed to be amended, economic, social and environmental goals of the City, and the regulations governing the issuance of Development Agreements.

ANALYSIS

The applicant’s representative, Peter Sandman, of eBay, spoke in support of the proposed project and all of the eBay items. Mr. Sandman discussed the company’s future growth projections and their need to accommodate approximately 4,500 future employees at the proposed new campus in addition to the existing 2,500 currently employed by eBay.

Paul Krutko, Director of the Office of Economic Development, spoke in favor of the proposed project and highlighted several of the important benefits to the City from approving the proposed project in North San Jose. These included:

• Implementing the vision of North San Jose Rincon de los Esteros Redevelopment Area;
• The project would fill some of the City’s 20 million square feet of vacant office and industrial space; and
• The project would generate sales tax revenue for the City by eBay’s employees.

Commission Discussion

The Commission’s discussion focused around clarifying questions to obtain a better understanding of the project.

Commissioner Zito questioned the methodology used to analyze traffic impacts for projects located within the boundaries of the North San Jose Area Development Policy. Hans Larson (Department of Transportation) and Harry Freitas (Department of Public Works) responded to Commissioner Zito’s questions by stating that the methodology used to analyze traffic impacts in North San Jose is consistent with the adopted Congestion Management Program (CMP) and therefore, serves as an appropriate means of traffic analysis for this specific area. Commissioner Zito expressed satisfaction with the methodology but disagreed with the conclusions of the traffic analysis.

Additional comments from Commissioner Zito related to water supply availability in order to irrigate the project landscaping and the proposed use of recycled water to do so. Harry Freitas responded by clarifying that the connection to the City’s recycled water main not is available to the site at this time. The recycled water main is currently located 2.0 miles north of the project site at Zanker Road. The development is not required/conditioned to extend the recycled water main to the project site. It is the City’s practice to require new development along North First Street to have separate irrigation systems to facilitate the future connection with the City’s recycled water main when it becomes available.

Commissioners Zito and Levy expressed concern that the City is “putting all its eggs in one basket” by providing eBay first rights to the North San Jose Area Development Policy pool credits and in turn limiting the ability for other significant job generating businesses to expand and/or locate in North San Jose.

Stephen Haase, Director of Planning, Building and Code Enforcement, stated that the Development Agreement was carefully crafted in conjunction with the City Attorney’s Office and the Office of Economic Development to ensure safeguards, which maintain a certain percentage of future pool credits under City control in order to accommodate other, smaller industrial developments. In addition, the Development Agreement is worded to ensure that the subject agreement would applied to any successor to the development/property should eBay relocate to another site or jurisdiction. He emphasized that these actions would further the City’s economic development objectives and that the City is exploring other future policy efforts to create additional development opportunities in North San Jose for other companies.

The Commission unanimously certified the EIR, and recommended approval of both the General Plan Text Amendment and the Development Agreement.

PUBLIC OUTREACH

A notice of the Planning Commission and City Council public hearings was distributed to the owners and tenants of all properties located within 1,000 feet of the project site. The applicant hosted a community meeting for the proposed project on October 16, 2003 which two local businesspersons attended. The attendees had questions regarding the design of the future facility; however, no significant project comments/concerns were made by the community at the meeting.

COORDINATION

Staff has coordinated the proposed project with the San Jose Office of Economic Development, the City Attorney’s Office, Department of Transportation, Department of Public Works, Redevelopment Agency and the Environmental Services Division.

CEQA

The Final Environmental Impact Report for the eBay North Development Project and General Plan Amendment was certified by the Planning Commission on November 18, 2003, Resolution No. 03-098.

Stephen M. Haase,

Secretary, Planning Commission