PURPOSE:

This report responds to the City Council�s request for information about the process for amending development agreements. 

DISCUSSION:

At the City Council meeting of April 4, 2006, the Council requested that staff return with information about the process for amending development agreements (DAs).  DAs are contracts entered into between the City and a property owner for the purpose of establishing requirements for the development of property.  DAs are intended to increase the certainty and predictability of the planning and development process by granting vested rights to a property owner to build a specified project or to build pursuant to specified requirements.  DAs are authorized by California Government Code Section 65864 et seq. and are implemented locally through Chapter 31, Article 19, Division 9 of the Burbank Municipal Code (BMC).

Planned Developments and Development Agreements

In Burbank, DAs are typically applied for in conjunction with an application for a planned development (PD) zone.  PD zones are actual zones that are adopted by ordinance and appear on the City Zone Map and create unique development and use standards applicable only to a specified property.  The purpose of PDs is to provide flexibility to allow for mixed-use or other unique projects that would be difficult or impossible to build under otherwise applicable zoning regulations.  BMC Section 31-19128 requires that all PDs be accompanied by a DA.  The main purpose of a DA is to provide vested rights to a project applicant to build a particular project.  A PD zone in and of itself sets the standards for a particular project but does not provide vested rights to an applicant.  Just as with any other zone, the City Council would have the ability to use its police powers to change the zoning from a PD zone to another zone without an accompanying DA.

The DA �locks in� the PD zone by providing vested rights to a project applicant to build pursuant to the adopted PD zone.  The vested rights remain in place for the time period specified in the DA, typically from five to 20 years depending upon the project.  During this period of time where vested rights apply, the PD zone may not be altered or rezoned by the City unless the property owner agrees to the change through an amendment to the DA.  Once the DA expires at the end of the specified term, the vested rights are lost.  Although the PD zoning remains in place upon expiration of the DA, the property may be rezoned by the City in the same manner as any other parcel not subject to a DA.

Although it is possible to enter into a DA without an accompanying PD zone, the practice has not been widely used in Burbank.  A DA in absence of a PD may be used to provide vested rights to a developer of the zoning regulations in effect at the time the DA is adopted to provide the developer with certainty about their ability to build a particular project.  DAs may also be used for a developer to provide something of benefit to the City in exchange.  Since DAs are negotiated contracts, DAs are often used in other cities as a means of receiving certain concessions from a developer, such as the funding of public improvements, in exchange for certain development rights.  In Burbank, however, DAs are used mainly as a vehicle for providing vested rights in conjunction with PDs.  Therefore, any discussion about amending DAs must also include a discussion of amending the underlying PD zone that accompanies the DA.

Substantial Conformance

When the City Council approves a PD zone and DA, the Council also approves the actual plans for the project.  However, due to the nature of the development process and project design changes that are often required, it is common for developers to seek building permits for plans that have been modified from the plans originally approved by the City Council.  The conditions of approval for PDs and DAs include a requirement that the project that is ultimately built be substantially similar to the plans approved by the City Council.  When modified plans are submitted, the proposed changes to the project must be analyzed to determine whether the plans are substantially similar to those approved by the Council and fall within any parameters established in the conditions of approval.

BMC Section 31-19133 charges the Community Development Director with determining whether a proposed change to a project approved through the PD process �substantially deviates from, or substantially modifies, the terms, conditions and regulations of the approved planned development.�  If the Director determines that the change would substantially deviate from the PD, then a PD (and DA) amendment is required.  The provisions of Section 31-19133 have been commonly referred to over the years as a determination of �substantial conformance� by the Director.  In making such a determination, the Director must review the conditions of approval placed on the PD, any other applicable terms of the DA, and the environmental review conducted for the original PD and DA to determine whether the proposed modifications to a project would substantially conform to the original project approvals.

Some DAs include additional provisions that expand upon the requirements of BMC Section 31-19133 by establishing additional processes for substantial conformance review, including public noticing, consideration by the Planning Board and/or City Council, and the ability to appeal substantial conformance determinations.  These processes provide additional layers of review and scrutiny to ensure that the project that is ultimately built is consistent with the project approved by the City Council.  The conditions of approval for some PDs also include thresholds for substantial conformance.  For example, a condition may say that a building can be built taller than what is shown on the approved plans, but no taller than a certain height.  Such conditions provide guidance to the Community Development Director by saying that a change in height to the building would still be in substantial conformance with the approved plans, so long as the height does not exceed the specified limit.  A proposal to exceed that limit would be deemed not in substantial conformance, and would require a PD and DA amendment.

A good example of how the substantial conformance process works can be found with the Cusumano office building project at 250 E. Olive Avenue.  The City Council approved a PD and DA for the project in 2003.  Following the Council�s approval, the applicant�s engineers and architects worked to finalize the construction drawings for the project and realized that minor changes would be required.  In 2004, the applicant submitted plans to the City that included several changes from the plans approved by the City Council, including a reduction in the height and size of the building, changes in the parking and loading space layout, and changes to the setbacks of the semi-subterranean parking garage.

Staff first reviewed the conditions of approval for the project and the terms of the DA to determine whether any of the proposed changes violated the conditions of approval or any DA requirements.  Staff determined that the proposed changes were consistent with the conditions of approval and the terms of the DA, and were not contrary to any of the project approvals granted by the Council.  Next, staff compared the proposed plans to the original plans approved by the Council to determine whether the proposed building was substantially similar in size, shape, design, and appearance to the building approved by the Council, and whether the proposed building would result in any impacts or issues not considered by the Council for the approved building.  Staff found that the proposed building was substantially similar to the approved building and would interact with its surroundings in the same manner as the approved building, without causing any additional or different impacts or issues than the approved building.  Finally, staff reviewed the environmental review document (in this case, a Mitigated Negative Declaration) to determine whether the proposed building would result in any environmental impacts not analyzed in the environmental document or would necessitate any additional environmental analysis.  Staff determined that the proposed changes would not cause any additional environmental impacts and would not necessitate any additional environmental analysis beyond that already conducted for the approved building.

Based upon these conclusions, the Community Development Director issued a finding that the proposed changes to the project were in substantial conformance with the project approvals granted by the City Council.  The DA for the Cusumano project included a requirement that public notice be provided of any substantial conformance determinations to ensure that the public would be notified of any changes.  The DA further provided that a substantial conformance determination could be appealed to the Planning Board by any member of the public.  As required by the DA, a notice was published in the newspaper of the Director�s intent to make a substantial conformance determination for the project.  The notice included a description of the proposed changes to the project to make the public aware of the changes.  The Director�s substantial conformance determination was not appealed, and permits were issued for the modified project.

Amendment Process

Because a DA constitutes a contract between the City and another party, a DA (and its accompanying PD) may only be amended or canceled by mutual consent of both parties.  Unless the term of a DA has expired, the City cannot amend or cancel a DA unless the property owner agrees to the amendment or cancellation.  The City does not initiate PD or DA amendments.  If a project applicant seeks approval of a modified project that is deemed not to be in substantial conformance with the terms of the PD and DA (through the process specified in the DA when applicable), the applicant has the option of proceeding with the project as originally approved, or applying for an amendment to seek approval of the modified project.  An applicant typically also has the option of skipping the substantial conformance process and directly applying for a PD and DA amendment.

The process for amending a PD and DA is the same as the process for adopting the original PD and DA.  BMC Section 31-19133 provides that a PD amendment is to be processed using the same procedures as a new PD.  BMC Section 31-19112 and California Government Code Section 65868 both provide that the process for amending or canceling a DA in whole or in part is the same as the process for adopting the original DA.  It is important to note that the authority for the City to enter into a DA is provided under state law.  Similarly, the process required for adopting and amending a DA is dictated by state law.  Any process that the City uses for adopting and amending DAs must be consistent with the provisions of state law.  The City�s ability to alter the process for adopting and amending DAs is very limited.  The process for adopting a new PD and DA, or amending an existing PD and DA, includes noticed public hearings before the Planning Board and City Council, as required by state law.

When considering an amendment to a PD and DA, the City Council has the option to approve the requested amendment or deny the request.  If the request is denied, the property owner is required to comply with the requirements of the original PD and DA.  The City is not obligated to grant a request to amend or cancel a DA.

Planned Development and Development Agreement Ordinance

Staff is in the process of preparing amendments to both the PD and DA sections of the Zoning Ordinance.  The proposed amendments would make several modifications including the following:

• Separate the DA from the PD process such that a PD applicant would not be compelled to also apply for a DA

• Create requirements to specify the types of projects that are eligible and appropriate for the PD process

• Codify the procedures and possibly the criteria for making findings of substantial conformance

• Possibly change the zoning process through which a PD is adopted, including the use of an overlay zone or an automatic reversion to underlying zoning if a development project is not pursued (staff is still evaluating various options related to this issue)

• Modify the application submittal requirements as necessary to meet the current needs and expectations of the Planning Board and City Council

• Establish a community meeting requirement to require public outreach by PD project applicants prior to the public hearing process

Again, because the process for approving and amending DAs is dictated by state law, the proposed changes would involve only minor changes to the DA section of the Code and would focus largely on the PD process.  Staff will be bringing the proposed amendments to the Planning Board and City Council later this year.

CONCLUSION:

The process for amending a DA is largely dictated by state law.  Under current BMC requirements, the DA amendment process is also tied to the PD amendment process for most projects.  If the Council wishes to make changes to the manner in which DAs are amended, any such changes would have to be consistent with state law and would therefore be limited in scope.  It is also important to note that some existing DAs confer vested rights to the zoning laws in effect at the time the DA is adopted, including planning application processes.  Any changes to the DA amendment requirements would not apply to those DAs that provide vested rights to the DA amendment process in place at the time the DA was originally adopted.

RECOMMENDATION:

Staff recommends that the Council note and file this report.  If the Council wishes to provide input on the forthcoming amendments to the PD and DA sections of the Zoning Ordinance or amend any aspect of the PD or DA process in addition to the changes already proposed by staff, staff seeks direction from the Council.

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