AGENDA REPORT Meeting Date:_____________ Agenda Item # ____________ City Manager Approval: TO: Honorable Mayor and Members of the City Council FROM: Scott Friend, Community Development Director Rick Crabtree, City Manager/Attorney SUBJECT: PJ Helicopters Hangar Expansion Project – Approval of Modified Land Lease Agreement and Parcel Merger Action RECOMMENDED COUNCIL ACTION: Approve the Initial Study /Mitigated Negative Declaration; proposed Airport Lease Agreement with PJ Helicopters, Inc. and Parcel Merger action thereby approving the actions necessary to approve the PJ Helicopters Hangar Expansion Project. THE CITY IS AN EQUAL OPPORTUNITY PROVIDER SUMMARY: PJ Helicopters, Inc. (PJ) currently leases approximately 5 acres of property from the City on Langley Way in the southeast portion of the City’s airport property. The requested actions (new proposed Lease agreement and parcel merger) would replace the existing approved lease, expand the area of ground that is leased to PJ to approximately 12 acres, and, re-align the land division boundaries in the project area. The proposed term of the new ground lease is 50 years. This would provide space and time for PJ’s planned expansion project as well allow for longer- term business planning for the existing facility. The modified (merged) parcel boundaries would adjust the various parcel boundaries in the area to accommodate the proposed project and would have the effect of re-integrating the existing parcel (existing PJ Helicopter project site) into the larger city-owned airport parcel. The City of Red Bluff is an Equal Opportunity Provider PREVIOUS COUNCIL ACTION: In May of 2001, the City Council approved the existing 50 year ground lease to allow PJ to operate to operate and construct the existing hanger and office facilities. No supplem DISCUSSION: Project Description: The proposed project site is located within the city limits of the City of Red Bluff in the southwest portion of the City. The project site is west of S. Jackson Street and approximately 0.5 mile east of the south- end of the Red Bluff Municipal Airport runway. Access to the site and the existing PJ Helicopters facility is taken off of Langley Way, an existing public road. Red Bank Creek is approximately 0.2 mile southwest of the site at its closest point. The nearest residential uses are located approximately 0.3 mile northeast of the site. All lands immediately adjacent to the project site are vacant and undeveloped and are owned by the City of Red Bluff as part of the City’s Municipal Airport facility. The City of Red Bluff is an Equal Opportunity Provider The only exception is the existing PJ Helicopters facility located directly west of the project site which is an existing private business located on City-owned property. The proposed project site is a vacant, undeveloped 2.66-acre site located directly east of and adjacent to the existing developed PJ Helicopters facility. The proposed project will consist of the construction of a new ± 31,900-square-foot steel building (hangar), which will provide additional aircraft storage, and maintenance space, office space, storage areas, restroom facilities, and employee exercise facilities. The project will also include the development of new parking facilities, landscaped areas, a storm water retention pond, fire hydrants, and the extension of city water infrastructure from existing facilities on S. Jackson Street to support the development of the building. As described by the applicant in their application, the project is for the provision of additional hangar space to accommodate existing helicopters and maintenance activities and will not result in any direct increase in flight operations or employees at the existing facility. The City of Red Bluff is an Equal Opportunity Provider Currently, PJ Helicopters operates on City-owned property at the Airport. In the past, the City considering selling the relevant property to PJ outright, but was discouraged from doing so by the FAA. Accordingly, a long-term ground lease was used to accommodate PJ’s need for space in 2001. PJ has now outgrown the existing facility and plans to build a new hanger and related facilities. The proposed Lease would expand the Ground Lease area to approximately 12 acres. 50 years was selected as the term for the Lease to ensure that PJ has ample opportunity to recover its investment in the on-site facilities. Entitlement Actions and Requests: The proposed project consists of four primary elements as follows: 1. Compliance with California Environmental Quality Act (CEQA) review requirements via the approval of an Initial Study / Mitigated Negative Declaration (IS/MND); 2. Approval of a modified land lease with PJ Helicopters, LLC; 3. Approval of a Parcel Merger action to merger an existing parcel to facilitate the project; and, 4. Approval of Design Review application #2016-04. The City of Red Bluff is an Equal Opportunity Provider A formal design review application for the project was submitted to the City in March of 2016. A review of the submitted materials determined that the project was subject to further review under the CEQA and the preparation of the necessary environmental review document was initiated. The project applicant contracted privately for various technical studies that were provided to and peer reviewed by the City and utilized in support of the project analysis. Additionally, the City contracted for the preparation of the CEQA analysis document and various technical studies to include a noise analysis. During the time period that technical studies and environmental documents were being prepared, the City worked with the applicant to finalize the details of the project. Project Review and Consideration: The proposed project was reviewed by the City of Red Bluff Technical Advisory Committee (TAC) and the project has been recommended for approval subject to Conditions of Approval which have been prepared for the project. The project was reviewed by the City of Red Bluff Airport Land Use Commission at their meeting of April 12, 2017. At the conclusion of the presentation of the project, the Commission voted to recommend approval of the proposal by the City. The City of Red Bluff is an Equal Opportunity Provider The project was presented to and reviewed by the City of Red Bluff Planning Commission at their regular meeting of April 25, 2017. At the conclusion of the presentation of the project, the Planning Commission voted to recommend approval of the proposal by the City Council. This item is presented to the City Council for action as a noticed public hearing. A notice of the Council’s consideration of the matter was placed in the Red Bluff Daily News as required by State law. ENVIRONMENTAL REVIEW: As detailed above, the City of Red Bluff prepared an Initial Study / Mitigated Negative Declaration (IS/MND) for the project and package of required actions. The document included technical studies in the areas of biological resources, cultural resources and noise. The IS/MND document was circulated for a 30-day public review period (SCH#2017022075) beginning on February 28, 2017. At the close of the public review period two comments were received. Comments were received from the California Department of Fish and Wildlife and the California Water Resources Control Board. The City of Red Bluff is an Equal Opportunity Provider All pertinent agency comments have been addressed via the inclusion of mitigation measures or via modifications to the proposed project. Significant findings and determinations resulting from this effort include: Determination that the project will not exceed City of Red Bluff noise standards or result is significant noise increases in the area; Public safety (fire) to the site will be enhanced due to the construction of the proposed water line and fire hydrants; No impacts to sensitive biological, cultural or historic resources will result from the project; and, No impacts associated with airport operations, air quality, traffic or public facilities will result. CITY FISCAL IMPACT: No impact to the General Fund is anticipated as a result of the project. Costs associated with the processing of the project have been paid for by the applicant via project application and supplemental review costs (environmental analysis document). The City of Red Bluff is an Equal Opportunity Provider RECOMMENDED ACTIONS: Based upon the information provided above and the information submitted in support of the proposed project, staff recommends that the City Council take the following actions: 1. Approve the Initial Study / Mitigated Negative Declaration approved for the project pursuant to the California Environmental Quality Act (CEQA); 2. Approve the modified ground lease with PJ Helicopters to facilitate the project; and 3. Approve Parcel Merger #2017-01, and direct staff to cause the documents to be recorded. ATTACHMENTS: Attachment A: Project Application Attachment B: Site Location Map Attachment C: Project Site Plan Attachment D: Proposed/Modified Ground Lease Attachment E: Parcel Merger Documentation Attachment F: CEQA Initial Study / Mitigated Negative Declaration Attachment F.1: CEQA IS/MND Response to Comments The City of Red Bluff is an Equal Opportunity Provider APN: 035-020-005 PER 12 PM 31 PARCEL A LANGLEY ROAD LANGLEY ROAD S. JACKSON STREET NO. DATE REVISIONS APPROVED BY DATE PJ HELICOPTERS 04/07/16 C-1 1 04/07/16 ISSUED FOR REVIEW 15.294 SHEET NUMBER JOB NUMBER DATE ISSUED 2 11/02/16 DESIGN REVIEWSUBMITTAL (DR 2016-04) APN 035-021-005 8837 AIRPORT RD.