TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Russell Bunim, Community Development Director
1. Subject
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Public Hearing to consider introduction and First Reading of Ordinance No. 19-24 amending Chapter 17.44 of the Orange Municipal Code providing a mechanism for the transfer of development rights, and finding that the ordinance has already been addressed in the scope of the City of Orange General Plan EIR and is also exempt from CEQA.
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2. Summary
The proposed ordinance establishes provisions in the Orange Municipal Code for the transfer of development rights to sites with Urban Mixed Use zoning for purposes of creating open space and increasing housing supply in certain areas to serve the growing residential population in these zones. Additionally, the ordinance provides a mechanism for the transfer of development rights to Urban Mixed Use sites from private residentially zoned abandoned railroad right-of-way property identified in the City’s General Plan Circulation Element as a future recreational trail.
3. Recommended Action
recommendation
1. Conduct and close Public Hearing.
2. Introduce and conduct First Reading of Ordinance No. 19-24. An ordinance of the City Council of the City of Orange amending Chapter 17.44 of the Orange Municipal Code adding a new Section 17.44.210 to establish a mechanism for the transfer of development rights for purposes of creating opportunities for housing, open space, and trails.
3. Find the ordinance is within the scope of the previously approved Final Program Environmental Impact Report (EIR) No. 1815-09 for the Comprehensive General Plan Update which was certified on March 9, 2010, and prepared in accordance with the California Environmental Quality Act (CEQA), and also exempt from CEQA pursuant to, but not limited to, State CEQA Guidelines Section 15308.
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4. Fiscal Impact
None.
5. Strategic Plan Goals
Goal 3: Enhance and promote quality of life in the community
a: Renovate, maintain, develop, and/or expand public use places and spaces.
Goal 3: Enhance and promote quality of life in the community
c: Support and enhance attractive, diverse living environments.
6. Discussion and Background
As a largely built-out community with constrained resources, Orange has limited opportunities to bring forward new parks, trails, and housing to address a long-standing community parkland deficiency, interest in recreational trails, and housing needs identified by the State of California. One of the actions identified in the General Plan Implementation Plan (Implementation Program I-5) as a creative option for pursuing these priorities is the development of a transfer of development rights (TDR) program. The City’s 2021-2029 Housing Element also identifies development of a TDR ordinance as Policy Action Item 2E. More detailed information is provided in Attachment 4 about the relationship between the proposed ordinance, the General Plan, and community needs.
TDR programs offer a mechanism by which the un-used development potential of one property, a “sending site” (as established by General Plan land use designation) can be transferred to a “receiver site” in another location in order to preserve the characteristics of the sending site in exchange for granting additional development potential to the receiver site that would otherwise be allowed under its General Plan land use designation. The future development potential of the sending site is limited in perpetuity by a recorded deed restriction or dedication. There are a number of California cities, and cities across the nation, that have established TDR programs in response to community-specific circumstances and priorities. In the case of Orange, a TDR program is envisioned to accommodate intensified housing development and parkland in areas of the City where land uses are planned to intensify over time, while relieve development pressure and expectations from undeveloped areas of the City that interface with wildlands and the Santiago Creek corridor. These areas often also interface with established neighborhoods and have both a sensitive environmental and development context.
Formalizing a TDR program provides the city with a tool in its policy and program toolkit to incentivize and realize new parks, open space, housing development, and recreational trails. A TDR program enables the City to establish a clear framework for when, where, and how the transferring of development rights should occur, as well as a means for leveraging community benefits.
Property owner participation in the program would be optional and the transferring of rights would be subject to approval by the City Council on a case-by-case basis in conjunction with a development agreement as a means of leveraging other public benefits.
The objectives of the ordinance are to:
• Incentivize residential development that complements commercial and employment hubs in Uptown Orange and along the West Katella corridor.
• Offer a pathway for the ultimate transition of privately held property that is the subject of community interest to becoming permanent public open space or a recreational trail.
• Provide a mechanism for the creation of meaningful and useable urban open space in areas of the City where future housing opportunities are concentrated.
Ordinance Framework
The proposed TDR ordinance is structured around the following concepts:
• Properties in areas of the City with the Urban Mixed Use (UMU) Zoning Districts are established “Receiving Areas” for development rights being transferred from “Sending Area” parcels.
• Properties established as “Sending Areas” are those that are:
o Zoned UMU.
o Zoned Commercial Recreation or un-zoned that are re-zoned to UMU to achieve General Plan consistency.
o Zoned Recreation Open Space (RO) but are under private ownership, and of interest to the community for transition to long-term public open space.
o Linear parcels zoned Single-Family Residential (R-1) between Fairhaven Avenue and Chapman Avenue under private ownership that are associated with the former railroad right-of-way, constrained by the Kinder Morgan pipeline, and envisioned in the Master Plan of Trails as the future Tustin Branch Trail alignment.
• UMU properties have dual status as both Sending and Receiving Areas.
• The transfer of development rights could achieve a maximum 25% increase in the base density established by the UMU General Plan land use designation (60 dwelling units/acre + 25% = 75 dwelling units/acre).
• For non-Open Space zoned sites, property owners enter into private negotiations with potential buyers to work out a mutually agreed upon sales price with the property rights transferring at a 1 to 1 ratio with the exception of the parcels involved with the Tustin Branch Trail alignment, which would be eligible for a 2 to 1 transfer ratio.
• For privately owned RO zoned sites, there is no building intensity identified in either the General Plan or Zoning Ordinance. In order to incentivize the transition of the property to permanent open space, the ordinance would provide a mechanism for the City to grant development rights only for purposes of a TDR to a Receiving Area, and only in exchange for the Sending Area site being dedicated by the property owner as open space.
In these instances, the abutting residential General Plan land use designation would be used as a reference point for a baseline density scenario for purposes of establishing a theoretical development potential. To further incentivize the transfer of development rights, a transfer ratio of 2 to 1 would be available. As with non-RO zoned sites, the seller and buyer would be responsible for arriving at a mutually agreed upon price for the development rights.
A figure depicting Sending and Receiving Areas is provided in Attachment 2 of this report.
Development Agreement and Deed Restriction Required
The proposed ordinance requires execution of a City Council approved Development Agreement for any TDR project. The City Council would have the ability to approve or deny any Development Agreement application for a TDR. A Development Agreement would enable the City to leverage other community benefits in exchange for the TDR. Additionally, in the case of dedicated RO properties the City could, for example, include provisions for the care and maintenance of the open space over time.
The Development Agreement for the TDR would require a deed restriction to be recorded on the “Sending Site” to document the development restriction. The City would maintain a record of the properties involved in these transactions.
Properties Designated Resource Area - Option
As drafted, the proposed ordinance identifies privately owned properties zoned UMU, RO, and R-1 as qualified Sending Areas. However, other undeveloped properties along Santiago Creek that may lend themselves to open space preservation are those zoned Sand and Gravel and designated as Resource Area in the General Plan. As an option, staff is seeking direction from the City Council on whether these properties should also be afforded Sending Area status in the proposed ordinance. The Planning Commission recommended that the City Council include them.
7. ADVISORY BOARD ACTION
Planning Commission
The Planning Commission conducted a public hearing for the ordinance on May 6, 2024 and recommend approval to the City Council by a 7-0 vote. In its action the Commission recommended that properties zoned Resource Area also be included the ordinance as “Sending Areas.” Meeting minutes are provided as Attachment 5.
8. ENVIRONMENTAL REVIEW
Final Program Environmental Impact Report (EIR) No. 1815-09 for the Comprehensive General Plan Update was certified on March 9, 2010, and prepared in accordance with CEQA. The proposed activity is within the scope of the previously approved General Plan and is adequately described in the previously certified General Plan Program EIR for purposes of CEQA, and is also exempt from CEQA pursuant to, but not limited to, State CEQA Guidelines Section 15308.
ATTACHMENTS
• Attachment 1 Ordinance No. 19-24
• Attachment 2 Sending and Receiving Area Maps
• Attachment 3 Planning Commission Resolution No. PC 11-24
• Attachment 4 Planning Commission Staff Report, May 6, 2024
• Attachment 5 Planning Commission Minutes, May 6, 2024