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CC 2016-07-26_12a Pre-App Ag Land Conversion Mitigation MEMORANDUM TO: CITY COUNCIL FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR BY: KELLY HEFFERNON, ASSOCIATE PLANNER SUBJECT: CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) DATE: JULY 26, 2016 RECOMMENDATION: It is recommended the City Council provide the applicant with preliminary comments regarding whether specified uses on the subject property would satisfy agricultural conversion mitigation requirements given the historical use of the property. FINANCIAL IMPACT: No fiscal impact at this time. BACKGROUND: Project Location Item 12.a. - Page 1 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 2 On December 9, 2003, the City Council adopted Ordinance No. 550 (Development Code Amendment 03-005) to implement the second in a series of recommendations initiated by Resolution 3699, incorporating regulations and amending the Zoning Map to create an Agricultural Preservation Overlay District (buffers) of 100 feet around all agriculturally zoned property, requiring adequate findings for subdivision or rezoning of agricultural lands, and implementing mitigation requirements and revising land use regulations for all agricultural districts. In May 2010, the City Council adopted Ordinance No. 623 that amended Section 16.12.170 of the Municipal Code to clarity the definition of “Agricultural Land” and for the purposes of agricultural conversion and mitigation policies. ANALYSIS OF ISSUES: The Arroyo Grande Valley Japanese Welfare Association (AGVJWA) has owned the subject 1.51 acre property since the 1920’s. In accordance with Arroyo Grande Municipal Code (AGMC) Section 16.12.020, the applicant has requested pre-application review in order to get preliminary comments on the issue of whether the historical use of this property and their proposed Japanese American Agricultural Legacy project, included as Subarea 3 of the Draft East Cherry Avenue Specific Plan (the “Draft Specific Plan”), can be considered adequate for the purpose of agricultural mitigation (see Attachment 1 for letter from applicant to the City). According to AGVJWA, when AGVJWA purchased the property, it was developed with two (2) houses and accessory buildings. The site was surrounded on all sides by open fields and orchards. Historical aerial photos starting in the 1940’s provide evidence that this property was one of the few lots developed and not used for agricultural production. The use of this property is documented in the Draft Specific Plan, Appendix A (see Attachment 2). The property was originally purchased as a place for the Japanese American farming families to gather as a community, and was used as such until the 1960’s. According to AGVJWA, at no time was the property used for agricultural cultivation. From the late 1960’s to 2011 (when the last remaining building was burned by arson), the Boy Scouts and Judo Club rented the property from AGVJWA as a place to meet as a club and a place to hold martial arts practices and events. In the 2001 General Plan, the City implemented specific requirements for agricultural resource protection in order to “avoid and/or mitigate loss of prime farmland soils and conserve non-prime Agriculture use and natural resource lands.” During public review of the 2001 General Plan, the applicant asserts that AGVJWA community members spoke about their opposition of changing the AGVJWA property from Mixed-Use to Agriculture. The oppositions were based on the property’s historic uses, which include residential (detached house), cultural (assembly building, schoolhouse) and outdoor Item 12.a. - Page 2 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 3 recreational and cultural activities (baseball, weddings, judo, etc.). According to the applicant, the property was not utilized for farming or agricultural uses at any time under AGVJWA ownership. The current Agricultural land use designation restricts the potential for continuing the uses on the site as a cultural asset to the local Japanese American families. The goal of the AGVJWA is to return the property to its original intended use that can be enjoyed by generations to come. A review of General Plan policies, Municipal Code requirements and property components are included below regarding agricultural conversion mitigation. It should be kept in mind that at this stage the City Council is only providing preliminary comments as part of the applicant’s request for pre-application review (AGMC Section 16.12.020) on the issue of whether mitigation is required. The adequacy of mitigation under the California Environmental Quality Act (CEQA) for the Specific Plan project, or any other potential agricultural conversion, cannot be fully determined until all potential project related environmental impacts and mitigation measures are fully identified, analyzed, disclosed, circulated for comment and findings are ultimately made for certification by the City Council. The 2001 General Plan, including subsequent updates, specifies requirements for agricultural resource protection. Objective Ag1 states: “Avoid and or mitigate loss of prime farmland soils and conserve non-prime Agriculture use and natural resource lands.” Other policies include requirements for agricultural buffers and maintaining overall protection of lands through a mitigation program by obtaining agricultural easements. Pertinent policies are described below: • Ag1-4 Establish and apply a significance criterion (threshold of significance) for CEQA analysis, as provided by CEQA Guidelines Section 15064.7, that considers loss of prime farmland soils as a significant adverse environmental impact. o Ag1-4.1 Loss of prime farmland soils shall refer to their unavailability for agricultural use. Loss may occur through natural causes or development such as coverage (e.g., paving, construction of buildings, etc.), or conversion to urban/suburban use (including residential yards/gardens and recreational areas). Cessation of agricultural use shall not constitute loss so long as the parcel remains fallow or is allowed to revert to a natural undeveloped state. Site improvements that are intended to support agricultural operations - such as grading, irrigation or drainage facilities, unpaved roads, or farm buildings and structures -- shall not constitute loss so long as the improvements do not substantially diminish the capability of Item 12.a. - Page 3 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 4 agricultural operations on the parcel or within the area and the improvements are directly related to agricultural production on the site. o Ag1-4.2 Possible mitigation for loss of areas having prime farmland soils may include permanent protection of prime farmland soils at a ratio of at least 1:1 and up to 2:1 with regard to the acreage of land removed from the capability for agricultural use. Permanent protection may involve, but is not limited to, dedication of a perpetual agriculture or conservation easement or other effective mechanism to ensure that the area chosen as mitigation shall not be subject to loss of its prime farmland soils. Suitability of location shall be determined by the City Council. The aim shall be to protect and preserve prime farmland soils primarily within and contiguous to City boundaries, secondly within the Urban Land Use Element area, and thirdly within the larger Arroyo Grande Valley and La Cienega Valley within the Area of Environmental Concern. Other potential mitigation measures for loss of areas having prime farmland soils include payment of in-lieu fees or such other mitigation acceptable to the City Council. o Ag1-4.3 Since prime farmland soils occur naturally and are geographically specific, the only means for mitigation to less than significant is preservation. The City’s aim shall be to maintain contiguity of Ag and C/OS parcels and avoid fragmentation of areas having prime farmland soils. The City shall avoid development of prime farmland soil areas by directing growth potential to more suitable urban locations. Only after the imposition of available mitigation and consideration of alternatives to avoid the proposed action, may the City Council approve development on prime farmland soils subject to overriding considerations as permitted by California Government Code Section 15093. The original intent of General Plan policies, including Ag1-4, was to provide some flexibility on determining adequate mitigation to satisfy the goals and policies of the General Plan. General Plan Policy Ag1-4.2 specifically states that “other potential mitigation measures for loss of areas having prime farmland soils include payment of in- lieu fees or such other mitigation acceptable to the City Council.” The following Municipal Code sections are also pertinent to the issue: Section 16.04.070 Definitions – “agricultural land or farmland” means those land areas of the county and/or city specifically designated or zoned as agriculture, agriculture preserve or agricultural general. Item 12.a. - Page 4 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 5 “Agricultural mitigation land" means agricultural land encumbered by a farmland deed restriction, a farmland conservation easement or such other farmland conservation mechanism acceptable to the city. Subsection 16.12.170 F. Agricultural Land Conversion. 1. The city shall require agricultural mitigation by applicants for discretionary entitlements which will subdivide or change the use of land zoned agriculture or agriculture preserve to any non-agricultural use. 2. Agricultural mitigation shall be satisfied by: a. Granting an agricultural conservation easement, a farmland deed restriction or other agricultural conservation mechanism to or for the benefit of the city and/or a qualifying entity approved by the city. Mitigation shall be required for that portion of the land which no longer will be designated or zoned agricultural land, including any portion of the land used for park and recreation purposes, that will 1) permanently protect prime agricultural and prime soils from development; 2) or will benefit preservation of agricultural land and operations through other means as determined by the city council. At least as many acres of prime agricultural land shall be protected as was changed to a non-agricultural use within city limits, or up to two times as many acres of agricultural land shall be protected outside the city but within the city's area of environmental concern, as was changed to a nonagricultural use, in order to mitigate the loss of agricultural land; or b. In lieu of conserving agricultural land as provided above if the city council determines that the payment of in-lieu fees provide a superior opportunity to satisfy the goals and policies of the general plan, agricultural mitigation may be satisfied by the payment of a fee, established by the city council by resolution or through an enforceable agreement with the developer, based upon a farmland replacement factor of up to two-to-one (2:1) to be used for acquisition of a farmland conservation easement or farmland deed restriction. The in-lieu fee option must be approved by the city council. The fee shall be based upon current appraisal information for the acquisition of a conservation easement on replacement land plus all related city administrative and legal costs. The in-lieu fee, paid to the city, shall be used Item 12.a. - Page 5 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 6 for farmland mitigation purposes, with priority given to lands with prime agricultural soils located within the city; or c. Other mitigation measures may be determined acceptable by the city council. 3. It is the intent of this program to work in a coordinated fashion with San Luis Obispo County and state agencies, and, therefore, farmland conservation easement areas may overlap partially or completely with habitat easement areas approved by the state department of fish and game. Up to twenty percent (20%) of the farmland conservation easement area may be enhanced for wildlife habitat purposes as per the requirements of the state department of fish and game and/or San Luis Obispo County management programs; payment of appropriate maintenance, processing or other fees may also be required. 4. Comparable Soils and Water Supply. a. To the greatest extent possible, the agricultural mitigation land shall be comparable in soil quality with the agricultural land whose use is being changed to nonagricultural use. b. The agricultural mitigation land shall have an adequate water supply to support agricultural use and the water supply on the agricultural mitigation land shall be protected in the agricultural conservation easement, the farmland deed restriction or other document evidencing the agricultural mitigation. 5. Eligible Lands. The first priority for agricultural mitigation land shall be farmland located within city limits. The second priority for agricultural mitigation shall be farmland located adjacent to city limits, and the third priority, farmland located within the city's area of environmental concern, as shown in the 2001 General Plan. The criteria for preferred locations or zones for agricultural mitigation land shall be determined by the city council after receiving input from the planning commission and San Luis Obispo County Agricultural Commissioner. In making their determination, the following factors shall be considered: a. The preferred locations shall be compatible with the 2001 General Plan and the general plan of San Luis Obispo County. Item 12.a. - Page 6 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 7 b. The preferred locations shall include comparable soil types to that most likely to be lost due to proposed development. c. Agricultural mitigation land consisting of contiguous parcels shall be preferred. d. Land previously protected by a conservation easement of any nature or kind is not eligible to qualify as agricultural mitigation land. 6. Requirements of Instruments—Duration. a. To qualify as an instrument encumbering agricultural mitigation land, all owners of the agricultural mitigation land shall execute the instrument. b. The instrument shall be in recordable form and contain an accurate legal description setting forth the description of the agricultural mitigation land. c. The instrument shall prohibit any activity, which substantially impairs or diminishes the agricultural productivity of the land, as determined by the planning commission. d. The instrument shall protect the existing water rights and retain them with the agricultural mitigation land. e. The applicant shall pay an agricultural mitigation fee to pay the costs of administering, monitoring and enforcing the instrument in an amount determined by city council. f. Interests in agricultural mitigation land shall be held in trust by a qualifying entity and/or the city, in perpetuity. Except as provided in subsection (g) of this section, the qualifying entity or the city shall not sell, lease, or convey any interest in agricultural mitigation land which it shall acquire, except to continue agricultural uses in accordance with the encumbering instrument. Item 12.a. - Page 7 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 8 g. If judicial proceedings find that the public interests described in Chapter 16.28 of this title can no longer reasonably be fulfilled as to an interest acquired, the interest in the agricultural mitigation land may be extinguished through sale and the proceeds shall be used to acquire interests in other agricultural mitigation land in San Luis Obispo County, as approved by the city and provided in this chapter. h. If any qualifying entity owning an interest in agricultural mitigation land ceases to exist, the duty to hold, administer, monitor and enforce the interest shall pass to the city or its designee. i. Each qualifying entity shall monitor lands and easements it acquires under this chapter and shall review and monitor the implementation of the management and maintenance plans for these lands and easement areas. The AGMC Section 16.12.170(B) requires that changing the land use designation from Agriculture to Mixed Use and the zoning designation from Agriculture to Village Mixed Use would require mitigation. However, given the history of this property of being used for residential, public assembly and cultural uses and not agricultural cultivation, and in consideration of proposed uses on the site that recognize and realize the historical use of the property, preliminary comments are being sought regarding the mitigation requirement. ALTERNATIVES: The following alternatives are presented for City Council consideration: 1. Provide preliminary comments and suggestions to the applicant regarding not requiring mitigation to convert the subject property from an Agricultural to a Mixed Use land use designation; 2. Provide preliminary comments and suggestions to the applicant regarding requiring mitigation to convert the subject property from an Agricultural to a Mixed Use land use designation; or 3. Provide direction to staff. ADVANTAGES: The applicant is currently seeking preliminary comments and suggestions from the City Council on whether mitigation is necessary to change the land use and zoning designations from Agricultural to Mixed Use and develop the site as a Japanese American Agricultural Legacy project. Not requiring agricultural conversion mitigation Item 12.a. - Page 8 CITY COUNCIL CONSIDERATION OF PRE-APPLICATION NO. 16-003 REGARDING AGRICULTURE LAND CONVERSION MITIGATION; LOCATION - EAST CHERRY AVENUE; APPLICANT – ARROYO GRANDE VALLEY JAPANESE WELFARE ASSOCIATION (AGVJWA) JULY 26, 2016 PAGE 9 will assist AGVJWA in developing the site as envisioned given the anticipated large cost associated with obtaining a conservation easement or paying an in-lieu fee. DISADVANTAGES: Not requiring agricultural conversion mitigation could be setting a precedent with other properties within the City currently designated Agriculture but not cultivated. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION: The Agenda was posted at City Hall on Thursday, July 21, 2016. The Agenda and staff report were posted on the City’s website on Friday, July 22, 2016. ATTACHMENTS: 1. Letter from AGVJWA dated July 13, 2016 2. Appendix A of the Draft East Cherry Avenue Specific Plan Item 12.a. - Page 9 Item 12.a. - Page 10 Item 12.a. - Page 11 Item 12.a. - Page 12 Item 12.a. - Page 13 Item 12.a. - Page 14