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Community Venture Partners files comment on Sausalito General Plan Update and DEIR

On Wednesday, August 5, 2020, Community Venture Partners, Inc. filed the following comment letter on the Draft Sausalito 2040 General Plan Update and its Draft Environmental Impact Report, in response to the solicitation for public comments by the City of Sausalito.


Ms. Lily Whalen, Director of Community Development

City of Sausalito, 324 Pine Street, Sausalito, CA 94965

Re: Comments on the Sausalito 2040 Draft General Plan Update and the Draft Environmental Impact Report with regard to housing in the Marinship

Dear Ms. Whalen,

This comment letter is focused on the Sausalito 2040 Draft General Plan Update (the “GP Update”) and the Draft Environmental Impact Report (the “DEIR”) as they relate to policies and programs that effect the Marinship. The challenges and issues involved in future development in the Marinship are as complex as you'll find anywhere in the country, particularly, as it would relate to high-density, multifamily housing development.

Let me preface my comments by disclosing that as an architect and real estate developer, I’ve participated in the development of almost 2,000 of units of very low income, Section 8 housing, across the West in places like Casper, Wyoming, Las Vegas, Nevada, Denver, Colorado, Aurora, Colorado, Tulsa, Oklahoma, Victoria, Texas, Kennewick, Washington, San Diego, California, and others. As a writer, I’ve published investigative pieces about the neglect by the Marin Housing Authority and the Marin Board of Supervisors that has subjected hundreds of Marin City families to live in substandard conditions, for decades, at the Golden Gate Village apartments. In addition, our nonprofit, Community Venture Partners, Inc., is currently working with the Lifehouse Agency and Eden Housing on developing affordable housing for very low income Marin residents with disabilities.

However, this comment is neither for nor against “housing," categorically. It is an analysis of land use, environmental impacts, economics, and real estate finance. It considers multifamily housing within the context of the overall circumstances in the Marinship, today, and over the next 20 years that the 2040 Plan is intended to serve.

PREFACE

It has come to our attention that the Sausalito City Council recently conducted a motion and vote to change the Sausalito 2040 General Plan Update policy on housing in the Marinship and voted 4-1 to eliminate all language that “barred land-based housing in the Marinship,” as reported by the SF Chronicle. This significant change in public policy was not reported out to the public in any reasonable way (there is no notice on the 2040 GP Update/DEIR city webpages), so that those who were preparing their comments on the GP Update or the DEIR could respond to it.

It is axiomatic (and, frankly, common sense) that when an agency publishes a “Draft” General Plan and DEIR, designate a “public comment period” (per CEQA), it cannot change the policies contained in that GP Update (and the DEIR assumptions as a consequence) during that public comment period, without notifying the public and extending the public comment period deadline.

It is our opinion that this action by the City was improper, in violation of CEQA Guidelines, and a violation of the City’s obligation to conduct its dealings with the public, in good faith. This motion and vote by the City Council has had a “material” effect on the “project description” and raises serious questions as to its completeness and adequacy, under CEQA 15124. Similarly, because the DEIR is wholly dependent upon a “clear” and “stable” project description, our ability and the public’s ability to comment intelligently on the GP Update and the DEIR are significantly impaired.

Specifically, at the time of the publication of the GP Update and the DEIR, for comment, there was no advocacy position taken in either document as to the City’s present or future policy position on “housing in the Marinship.” However, the City is now clearly advocating for housing as a matter of public policy, and this has materially changed the project description.

This comment letter was drafted prior to our knowledge of the actions by the Sausalito City Council, noted above, and so does not reflect our full analysis, opinion, or objections to this matter or the introduction of housing in the Marnship.

Housing in the Marinship

The State of California is currently pressuring on cities to meet their prescribed Regional Housing Needs Assessment housing quotas. Unfortunately, as reported by the Embarcadero Institute, in order to make new projects “pencil,” new development is disproportionately and increasingly creating more and more luxury housing units,[1] but very little affordable housing.

The GP Update acknowledges that the Marinship is Sausalito’s “working waterfront” and, as such, it is unique in all of Marin County. Residential development is not presently permitted. Neither are hotels, large-scaled retail, or entertainment uses, and offices are grandfathered, non-conforming uses that can only be expanded under highly restricted circumstances.

In addition, the Sausalito 2040 General Plan Update talks about “preserving” and “supporting” the Marinship and its unique character. The Plan is filled with supportive statements, such as,

Objective LU-3. Promote and Enhance Industrial Economic Viability

Policy LU-3.1. Marinship Industrial. Encourage industrial use of the Marinship as described in Table 1-1, General Plan Land Use Categories, and shown on the General Plan Land Use Map, Figure 1-1

Policy LU-3.2. Marine Industrial Uses. Promote and encourage new marine industrial uses.

Policy LU-3.3. New General Industrial Uses. Promote new general industrial uses that are small scale, low traffic generating, non-polluting, and contribute to the economic sustainability of the Marinship.

Policy LU-3.4. Marinship Preservation. Preserve the heritage, history, and existing vibrant industrial community.

The Waterfront Element, Page W-8. “Noisy and industrial uses are common in the Marinship Waterfront, and new development should not crowd out these traditional uses in the neighborhood.

The subsections of the Plan’s Land Use section also contain a long list or reassuring statements about facilitating “the interrelated nature of the Marinship’s maritime, light industrial, and artist communities,” and accommodating ”the stipulations of Ordinance 1022, the Fair Traffic Limits Initiative,” and other such restrictions and conditions contained in the Marinship Specific Plan.

However, the City’s actions blatantly contradict all of these assurances.

The “One-Way Communication” Study

The Sausalito 2040 General Plan Update makes no mention of housing in the Marinship other than references to existing housing units, liveaboards, houseboats, and the occasional, industry-related live-work unit. Although the GP Update does say that zoning and land use will be re-examined during what it calls a “public process to revise the zoning ordinance to incorporate land use policies and development regulations contained in the 1989 Marinship Specific Plan” (See LU-4.2.1. Zoning Ordinance), there is no mention of actually changing major parcels in the Marinship into residential zoning or proposals for high-density, multifamily development.

In other words, a layperson reading the GP Update documents could not be faulted for coming away with the impression that adding residential, high-density zoning was off the table, and certainly not something that the city was actively working on. Yet, while the City has been holding public hearings to discuss and take comment on the Sausalito 2040 General Plan Update, at which they have attested to that layperson’s assumptions about preserving the Marinship’s status quo, it appears that they have been working behind closed doors and out of the public’s eye, to do the opposite.

CVP obtained a copy of the memo, entitled a “One-Way Communication,” from the Sausalito Community Development Department to the Sausalito City Council, dated June 11, 2020 (attached), which laid out a site-specific proposal (the “Housing Study”) for rezoning some of the largest parcels of land in the heart of the Marinship, for residential high-density, multifamily housing development.

Some of the potential development sites in this housing study, include Site 2: Sausalito Post Office at 150 Harbor Drive (owned by the US Postal Service), Site 6: Waterfront Private Property in Marinship at 2350 Marinship Way (the Sausalito Shipyard and Marina; zoned industrial and waterfront), and Site 7: RV Parking Area on Marinship Way at 2340 Marinship Overlay (zoned industrial).

In our opinion, the City has been intentionally misleading the public at public hearings when questions about residential projects in the Marinship come up, by failing to disclose the existence of this Housing Study and the City’s clearly stated intentions in it.

It is also obvious that this study is not just a casual effort. It states that it was undertaken

“In response to an inquiry from Senator McGuire regarding where such housing could potentially be located, assuming zoning and logistical issues could be resolved,”

And it is being done now

“in anticipation of financial support from the State of California in the form of competitive housing grants available as early as 2021.”

The existence of this Housing Study combined with the City’s recent vote, as described in the Preface, above (the City’s commitment to remove all obstacles to developing housing in the Marinship), reinforces our position that the City is now in violation of CEQA. The City of Sausalito (the “lead agency”) has already made its “decision” (by a motion and vote) to pursue developing housing in the Marinship, without disclosure to the public, in contradiction to the policies and programs found in the published version of the Draft General Plan Update and DEIR, and without any study, assessment, or supporting facts to determine if the impacts of this policy change, regarding significant, unmitigated environmental impacts.

Impacts of Housing in the Marinship

The potential impacts of adding residential zoning in the Marinship would be significant. As former city official in Sausalito confided,

“Without a manufacturing and light industrial base, we have condemned our working middle class to anemic service industry dead-end part-time "jobs" and revolving-door pay. The minute housing is approved in the Marinship, its manufacturing, light industry, working waterfront is a goner, because no one wants to open their window to the sounds and smells of a true working waterfront.

“A shipyard welding bolts on an Alcatraz ferry is quaint until you live a half mile away. Those new residents will start complaining as soon as they turn the key. Sausalito will lose so much, not only its history, but its economic diversity and employment base.”

There is little question that this assessment is correct. Residential development, hotels, entertainment, consumer retailing, and restaurants, by necessity, cater to the higher end of the market and drive out gritty industry, manufacturing, maritime services that are dirty, messy, smelly, and noisy.

One need look no further than the decimation of manufacturing and industrial services in San Francisco’s Mission District, and the wholesale displacement of lower-income, local residents and small, family-owned businesses over the past decade, to prove that point. What were once cohesive and essential, blue collar, working-class neighborhoods have been completely replaced by what’s now marketed as “vibrant, walkable, and hip,” which means they are soulless and generic. The introduction of high-density, multifamily housing in the Marinship would inevitably be followed by a demand for hospitality, retail, entertainment, and dining, and will basically guarantee the same fate.

Economic Impacts

According to the data published in the GP Update, the Marinship is the workhorse of the City. It accounts for 1% of Sausalito’s overall commercial tax revenues…

9-2-Corrected.jpg

…and 53% of the entire City’s business property tax revenues.

Economic-Element-Table-9-5-property-taxes.JPG

In other words, the current mix of zoned uses in the Marinship is the City’s big moneymaker: something that should not be tampered with. In addition, the Marinship’s ability to expand and grow these existing industrial / manufacturing / artisan uses looks very promising in this age of hi-tech, rapid prototyping and micro-manufacturing.

It makes little sense, therefore, to take the City’s highest revenue-producing area and turn it into housing. The City has far better opportunities to do that elsewhere.

DEIR Comments

CEQA is an evidence-based statute. That said, the Draft EIR fails to adequately assess potentially significant unmitigated impacts on the basis of any reasonable assessment of readily available evidence. In fact, the DEIR actually is devoid of any assessment of any impacts, at all. The City’s consultant simply went down the CEQA “impacts” checklist, acknowledged the issues, and then offered unsubstantiated conclusions that impacts were all less than significant. These unsupported conclusions were reached without any specific studies, data, or other assessment of the facts.

Simply put, the DEIR does not provide any “evidence” for its conclusions, as it is defined under CEQA. Both the Sausalito 2040 Draft General Plan Update and the Draft EIR,

As such, the DEIR’s assessment of “reasonably foreseeable” impacts is inadequate. As just one example among many, in the CEQA Guidelines, in discussing whether or not an agency’s CEQA process was adequate,[2] it notes,

“This may be found when the agency has… reached conclusions that are unsupported by substantial evidence. …A court must examine whether the EIR contained sufficient analysis to support its significance conclusion, An EIR missing sufficient analysis to support its conclusions fails to meet CEQA’s “function of facilitating ‘informed agency decision making and informed public participation.’ (Citation omitted) An EIR must include “sufficient detail to enable those who did not participate in its preparation to understand and to consider meaningfully the issues the proposed project raises.”

Similarly, in Save Our Heritage Organisation v. City of San Diego (October 24, 2018) — Cal.App.5th the Court noted,

“If the agency's reasons are not supported by substantial evidence, a project opponent could challenge and a court could set aside the agency's determination.”

The City has a legal obligation, and moreover, it has a moral and ethical obligation to its residents, to transparently present and assess the reasonably foreseeable consequences of all aspects of their 20 years plan.

Since the City clearly intends to develop high-density, multifamily housing on specific sites in the Marinship, as evidenced by the One Way Communication study, it needs to clearly indicate that in the Sausalito 2040 General Plan Update and assess the potentially significant, unmitigated impacts of that housing, now, in the DIER, so that the public has the opportunity to comment.

The existence of the high-density, multifamily Housing Study and the recent vote by the Sausalito City Council to endorse housing in the Marinship, indicates that the DEIR’s “project description” is incomplete and, consequently, the DEIR’s assessment of impacts is inadequate.

Per CEQA Guidelines §15124

“An accurate, stable and finite project description is an essential element of an informative and legally sufficient EIR under CEQA.” ”(See CEQA Guidelines §15124, citing County of Inyo v. City of Los Angeles (1977) 71 Cal. App.3d 185, 199 [139 Cal. Rptr. 396].)

Several courts have invalidated EIRs for their failure to provide an adequate Project Description. For example, in Friends of the Eel River v. Sonoma County Water Agency (2003) 108 Cal. App. 4th 859, the California Supreme Court found that an EIR was invalid because it omitted a meaningful discussion of the conditions in the northern part of the proposed water supply system. (See also Laurel Heights Improvement Association v. Regents of the University of California (1988) 47 Cal. 3d 376.)

Other appellate court decisions on project description hold that where the project description makes public participation difficult, the EIR is not legally adequate. These curtailed and inadequate characterizations of the Project were enough to mislead the public and thwart the EIR process. As noted in County of Inyo v. City of Los Angeles, supra, 71 Cal.App.3d 185, when an EIR contains unstable or shifting descriptions of the project, meaningful public participation is stultified. “A curtailed, enigmatic or unstable project description draws a red herring across the path of public input.” (Id. at pp. 197–198 [holding that although the “ill-conceived, initial project description” did not carry over into impacts section of EIR, the shifting description did “vitiate the city's EIR process as a vehicle for intelligent public participation”].) (San Joaquin Raptor Rescue Center v. County of Merced) (2007) 149 Cal.App.4th 645, 656.

Per 15124. Project Description

“A clearly written statement of objectives will help the lead agency develop a reasonable range of alternatives to evaluate in the EIR and will aid the decision makers in preparing findings or a statement of overriding considerations, if necessary.”

Accordingly, the Housing Study to add high-density, multifamily housing to specific sites in the Marinship must be included in the Draft EIR so that the public can understand the project. To remedy this defect and in an effort to be fully transparent, the City should disclose its true intentions now, because with this plan in the works, it is “reasonably foreseeable” that it will result in direct physical changes in the environment.

With this addition of information, the DEIR needs to reconsider and expand its consideration of the resultant combined cumulative impacts of housing development, per 15355. CUMULATIVE IMPACTS.

Putting the public in harm’s way

The Marinship is uniquely different from almost anywhere else in Marin, in that it faces every conceivable hydrological, geological, environmental, life safety, and infrastructure challenge possible. The short-list of these challenges includes:

Consider page ES-1 of the Executive Summary of The Sausalito 2040 General Plan Update Draft EIR, which states

“Public agencies are charged with the duty to consider and minimize environmental impacts of proposed development where feasible and have the obligation to balance economic, environmental, and social factors.”

And under Project Description, 2.5 Objectives of the proposed 2040 General Plan, Page, 2-4,

“Safeguard the natural environment and ensure community health, safety, and resilience, including addressing the inherent risks of climate change, sea level rise, and subsidence.”

This considered, it is simply common sense that the cumulative combined impacts of the hazards and conditions listed above be addressed, now. Furthermore, the intensity of many of these hazards is predicted to only get worse. For housing, in particular, this amounts to an existential threat to near-future habitability.

The comments and conclusions found in the GP Update/DEIR comment letter by our consulting expert, Laurel Collins of Watershed Sciences, submitted under separate cover, are hereby incorporated into this letter.

Significant environmental hazards are not adequately addressed

Significant tidal flooding in the Marinship is already the norm along the waterfront during the winter months. Residents regularly encounter up to a foot of standing water on Gate 5 Road. But there are many other immediate concerns.

For example, the Sausalito 2040 General Plan Update Draft, under Flooding, in the HEALTH, SAFETY, AND COMMUNITY RESILIENCE ELEMENT, page HS-18, states,

“Subsidence is an issue throughout the city, but it is of concern in the Marinship which is sinking at a rate of 0.5 to 0.75 inches per year according to the Waterfront and Marinship Committee’s 2010 Sausalito Waterfront and Marinship Vision. Subsidence can lead to groundwater intrusion and intensify flooding and the effects of sea level rise, making development and infrastructure in these areas more vulnerable.” [Emphasis added][3]

This means that a good portion of the Marinship that is already underwater in normal tidal flooding events, will be 10” to 15” lower than it is today, 20 years from now. That equates to almost 2 feet of flood water, on average, at high tides. How will utilities, emergency access, storm drains and old, broken, waste sewage lines function under those conditions? Will toxins in the soils back up into overflowing drains in nearby residential and commercial areas? These potential impacts don’t even take into consideration the effects of sea level rise. Where is the assessment of these reasonably foreseeable impacts in the DEIR?

According to The Sausalito 2040 General Plan Update’s Sustainability Element, Page S-5,

“BayWAVE projects that Marin County could experience 10 inches of sea level rise by 2030, 20 inches by 2050, and 60 inches by 2100. Sea level rise will exacerbate the impacts of other coastal hazards, such as storms, flooding, and erosion.”

The Sustainability Element goes on to say,

“BayWAVE’s estimates show Sausalito with as much as 149 acres, or 11 percent of the City’s land area, exposed by the end of the century. This would include most of the industrial land in Sausalito, which could lead to serious financial problems – particularly as many of those industrial sites may require expensive cleanup in order to prevent contaminants from entering Richardson Bay. Sea level rise could be understood as an existential issue for Sausalito.” [Emphasis added]

This is intended to be a 20-year plan. Yet, the evidence suggests that major parts of the Marinship will be under about 3 feet of water in 10 years and almost 4 feet of water in 20 years, during a normal, winter, king tide, when sea level rise is factored in.

More importantly, it’s readily acknowledged in the GP Update and elsewhere that the cost of mitigating combined development and existential threats facing the Marinship are staggering and more than any one project developer can possibly bear. Even the Kosmont Study, which is essentially pro-development, notes that

“…major infrastructure projects - such as sea level rise protection, subsidence stabilization, and utilities, roads, sidewalks, and lighting - cannot be completed by any individual parcel owner.”[Emphasis added]

The GP Update ignores the combination of these reasonably foreseeable consequences, makes no actual assessments or analysis of the potential impacts in the DEIR, and offers no tangible solutions other than to say future committees should "study" it and develop a plan.

Please note that all of the proposed, high-density, multifamily housing sites identified in the Community Development Department’s “one way communications” housing study are severely impacted.

Housing laws and development financing

The implications of the aforementioned challenges are more than just the costs and the threats to lives and property. In my opinion, it’s going to become much harder to finance real estate development of any kind in places like the Marinship.

Housing development is an increasingly complicated business and the myriad of new laws recently passed in Sacramento put significant pressure on cities to build high-density housing in any areas that are zoned for residential development. But, there are many other factors that determine development feasibility, other than zoning.

By and large, affordable housing projects will not "pencil" (show enough profits for investors) or be able obtain construction and permanent financing (show enough net operating revenues to lenders) unless the project can benefit from the variety of density bonuses, grants, tax credits, removal of local zoning restrictions (height, FAR, parking, setbacks, etc.), and most recently what is called “streamlining.” Streamlining means that a project gets “ministerial” review by the city’s zoning administrator—no public hearings, required.

The Department of Housing and Community Development (HCD), in Sacramento, recently determined that the City of Sausalito made sufficient progress toward its lower (very low and low) income housing goals but made insufficient progress toward its above-moderate income housing “goals” (in its state mandated quota). Therefore, as you know, HCD has determined that the City is subject to Senate Bill 35 streamlining for proposed developments with at least 10% affordability (rents from 30% to 120% of Sausalito’s median income, which is over $100,000).

There is also, currently, a major push in Sacramento to add even more layers of state laws to eliminate local control of planning and zoning and permitting. However, with regard to the Marinship, what is being overlooked in the Sausalito General Plan Update, is that all of the new laws before the State Legislature, and the other 18 housing laws that Newsom signed last year, which grant all types of development incentives, do not apply to development in flood zones or other hazard zones.

For example, in Senate Bill 35, SEC. 3. Section 65913.4. (a) (6), it notes that a proposal is eligible for “streamlining,” so long as it is not located in a “coastal zone,” considered “wetlands” (US waters), in a ”delineated earthquake fault zone,” or “within a flood plain as determined by maps promulgated by the Federal Emergency Management Agency.”

This exclusion of projects in flood zones also applies to SB 330, the Housing Crisis Act of 2019, which is much loved by organizations who sue cities for failing to build enough housing.

In SB 330, SEC. 8. Section 65941.1. (a) (8) it notes that a proposal is eligible for the ability to enforce private development rights so long as it is not located in “(B) Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660 FW 2 (June 21, 1993) or “(D) A special flood hazard area subject to inundation by the 1 percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency.”

More than two thirds of the Marinship currently sits in the 100-year flood zone and that area will probably increase significantly in the next FEMA map update.

Even Senate Bill 375 (Steinberg), passed in 2018--the law that launched the “Sustainable Communities Strategy” concept—states, under Section 65080.1 (a)(7), that its provisions do not apply in

“an area subject to flooding where a development project would not, at the time of development in the judgment of the agency, meet the requirements of the National Flood Insurance Program.”

At a time when the Inspector General is investigating FEMA for insuring lost causes, how long will most of the Marinship be able to even qualify for affordable flood insurance?

Without a developer being able to take advantage of the benefits of all this legislation, financial feasibility will essentially be impossible. And even if one could argue that a project were feasible, it is increasingly unlikely that a bank will finance it or that it would be able to obtain insurance against the other hazards on the list, above. It’s taken a long time but climate change is finally being taken seriously by those who can end up holding the bag: banks and insurance companies. And litigation, based on liabilities due to climate change, is also seeing more success.

Furthermore, it is looking increasingly unlikely that the federal government and HCD will approve Low Income Housing Tax Credits being issued to projects that could be impacted by flooding and sea level rise. The possibility of financial loss and loss of lives is mounting.

Finally, affordable housing development approvals typically require deed restrictions and covenants whereby the developers/owners have to affirm that they will provide and maintain the units they build, as affordable, for periods as long as 50 years.

How does a developer or the City do that in good faith, if they know a property will be inundated in less than 20 years?

So, under the circumstances and knowing all of this in advance, why would the City of Sausalito choose to risk promoting housing in the Marinship?

Thank you for your time and consideration.

Sincerely,

Bob Silvestri, President

Community Venture Partners, Inc.


[1] The Embarcadero Institute

[2] Summary of Key 2018 CEQA Court Cases, page XXV

[3] Corroborated in the Sausalito 2015 General Plan Housing Element.


Bob Silvestri is a Mill Valley resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded only by individuals in Marin and the San Francisco Bay Area. Please consider DONATING TO CVP to enable us to continue to work on behalf of Marin residents.