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_HEX 23-005 WinCo Foods UPV Staff ReportCITY OF Federal Way Land Use Process Recommendation and Staff Report September 29, 2023 Project Information CITY HALL 33325 Sth Avenue South Federal Way WA 98003-6325 (253) 835-700Q mM' cityoffederalway. com Permit Numbers : No. 21-103294-UP / 21-103298-SE Project Name: WINCO FOODS CZA AMENDMENT City Staff Contact: Chaney Skadsen, Senior Planner City of Federal Way 33325 8th Ave South Federal Way, WA 98003 Chaney. skadsen(a)cityoffederalway.com 253-835-2644 Applicant: Nathan Coombs Petersen-Staggs Architects, LLP 5200 West State St. Boise, ID 83703 Property Owner: WinCo Foods, LLC 650 N. Armstrong Place Boise, Idaho 83704 (208) 377-0110 Property Address: 160 SW Campus Drive, Federal Way, WA 98003 Parcel Number(s): 4159200710 Zoning District: Community Business (BC) with a Concomitant Zoning Agreement (CZA) containing specific conditions and limitations. Comprehensive Plan Designation: Community Business with a Concomitant Zoning Agreement (CZA) containing specific conditions and limitations. Adjacent Uses: North: Public Park (Panther Lake) South: Commercial/Medical Office (Starbucks & Dental Office) East: Institutional/ Residential (1st Ave S, Panther Lake Elementary School, Fox Run Apartments) West: SW Campus Dr, Campus Highlands Division No. 03 Subdivision (Single Family neighborhood) Project Description: Amend existing Concomitant Zoning Agreement to remove its applicability to the WinCo Foods property. a -.'� y t - Vicinity Map II. BACKGROUND Site photo facing North, Provided by applicant August 10, 2021 wljw:&tirM IQ r Ac i7- On August 10, 2021 the Community Development Department of the City of Federal Way received a Process V (Exhibit A) and Process III Land Use application (file #21-103295-UP) and Environmental Checklist (file #21-103298- UP) proposing an amendment to an existing Concomitant Zoning Agreement (CZA) for the property located at 160 SW Campus Drive, parcel number 415920-0710 (WinCo Foods property). The property is currently zoned Community Business (BC), with additional regulations and restrictions on top of the base zoning as a result of the CZA, and is used as a WinCo Foods grocery store. On August 10, 2022 the Community Development Department received a letter from the applicant withdrawing the Process III Land Use application (file #21-103295-UP) and requesting that the City proceed only with review of a Process V Land Use application to amend the CZA (file #21-103294-UP) (Exhibit Q). The purpose of the proposed amendment to the CZA is to remove the CZA's applicability as to the WinCo Foods property entirely, leaving the WinCo Foods property zoned BC without any additional regulations or restrictions. The UPV Land Use application and decision are only related to the CZA amendment and if approved, will not grant land use approval of any site development. Any subsequent development of the property associated with this request may only be approved if found to be consistent with codes in effect at the time of application, including development regulations, clearing and grading, tree/vegetation retention, storm drainage, and transportation. Pursuant to Section 3 of the CZA, the "agreement may be amended by the City or the Owner by filing an application therefore, which shall be considered and heard in the same manner as a City -initiated quasi-judicial rezone of the property. Such action shall not release the Owner or the City from any obligation assumed under the CZA, unless and until such amendment has been approved by the City." Pursuant to Federal Way Revised Code (FWRC) 19.75, city -initiated quasi-judicial rezones must be reviewed and decided upon under Process V. Under Process V, the hearing examiner holds a public hearing and based on the record of that hearing makes a recommendation to city council, who will ultimately make the final decision on the application. III. REASON FOR THE REQUEST The original CZA limits allowable uses, establishes specific development standards, and is binding upon all of the Owners of the property, their heirs, successors in interest and assigns, and shall run with the land described (Exhibit 8). The applicant intends to partially redevelop the WinCo Foods grocery store located at 160 SW Campus Drive, parcel number 415920-0710. Under the current limitations outlined in the CZA, a proposal to expand the existing WinCo Foods grocery store to achieve a total footprint of 81,591 square feet would be prohibited, as this proposal exceeds the maximum allowed square footage allowed in the CZA, which is 45,000 square feet of gross leasable area. The applicant has requested to amend the CZA to entirely remove the WinCo Foods property from the requirements of the CZA, resulting in removal of the limitations on the allowed maximum square footage outlined in the CZA and returning the property to solely the regulations applicable in the underlining zoning district, Community Business (BC) (Exhibit C). The proposed CZA amendment does not amend, remove, or in any way alter the applicability of the CZA to the three other properties that are currently subject to the CZA, see Table 1 below for more information regarding the properties currently governed by the CZA. IV. DISCUSSION The City and Quadrant Corporation, a Washington corporation ("Quadrant") were parties to the original Concomitant Zoning Agreement dated July 24, 1990. The CZA applies to the following parcels outlined in Table 1 below. Table 1: Current Properties Governed by the CZA Parcel Existing Use 4159200710 Grocery (WinCo Foods) 4159200715 Medical Office Retail (Starbucks, Federal Way Modern Dentistry, Victoria Chang, DMD) 4159200720 Restaurant (IHOP) 4159200725 Surface Parking On June 4, 1991, the Federal Way City Council approved Ordinance No.91-99 (Exhibit D), rezoning an approximate 14-acre site located at the northwest corner of Southwest 348th Street and 1 st Avenue South from Single Family Residential (RS 9.6) to Community Business (BC) and adopting specific conditions as contained in the adopting ordinance. The rezone permitted development of the site consistent with the Community Business Land Use Classification of the City's Comprehensive Plan in effect at that time, as supplemented by the simultaneously adopted CZA. The CZA contains, among other things, limits to allowable uses on the property, specific development standards for maximum building size, fagade modulations, location of parking, buffers, open space, park development fees and surface water improvements. Pursuant to the CZA, all development of the property except with respect to the use and area of use provisions as set forth in Section 2B and the rear facade modulation provisions set forth in Section 2C, shall in all respects comply with the provisions and limitations of the Federal Way Zoning Code Chapter 45, Community Business District Regulations, as the same now exists or may hereafter be amended. The Federal Way Revised Code has been amended and restructured since the adoption of the CZA in 1991. The Community Business zone once outlined in Chapter 45 of the Federal Way Revised Code is currently outlined in Chapter 19.220 containing the applicable zoning and development regulations. The CZA further outlines that the allowable uses on the property shall be limited to those set forth in Chapter 40, Neighborhood Business District Regulations of the Federal Way Zoning b7 Code as the same now exists or may hereafter be amended with the exception of the following provisions per Section 2B: (i) Owner shall be permitted to develop on the property one grocery store of a size not to exceed 45,000 square feet gross leasable areas, and (ii) Owner shall be permitted to develop on the property one drug store of a size not to exceed 22,000 square feet of gross leasable area, and (iii) No vehicle service station use shall be permitted on the property. As discussed in Section II Background and Section III Reason for Request, the purpose of the proposed amendment to the CZA is to remove the applicability of the limitations on allowable size and maximum gross leasable area as to the WinCo Foods property to allow for a future potential expansion of the existing WinCo Foods grocery store. Under the current limitations set forth by the CZA, redeveloping a portion of the WinCo Foods property to expand the building and achieve a total footprint over 67,000 square feet is not allowed. The underlying zoning district of the WinCo Foods property is Community Business (BC). The BC zone allows a broad mix of uses, including general, specialty, and service retail; commercial; office; commercial/residential mixed -use; and supportive uses. Grocery stores are one of the permitted uses with in the BC zone and are not subject to a maximum square footage threshold per FWRC 19.220.010 Office/retail — Manufacturing and production, limited. Per Section 3 of the CZA the agreement may be amended by the City or the Owner by filing an application, which shall be considered and heard in the same manner as a City -initiated quasi-judicial rezone of the property. Such action shall not release the Owner or the City from any obligations assumed under the Concomitant Zoning Agreement, unless and until such amendment has been approved by the City. Seeking less restrictive limitations, the City received a request from the applicant for a City initiated quasi-judicial rezone. Pursuant to the Chapter 19.75 FWRC the request is treated as a non -project -related rezone and conducted pursuant to procedures of a non -project - related Process V "Quasi -Judicial Rezone." V. STATE ENVIRONMENTAL POLICY ACT The City of Federal Way issued a Determination of Nonsignificance (DNS) for the proposed action on May 27, 2022 (Exhibit F). This determination was based on review of information on file, including the environmental checklist and staff evaluation (Exhibit E) which resulted in the conclusion that the proposal would not result in probable significant adverse impacts on the environment. Pursuant to the requirements of FWRC 14.10.040(3) Notice of a threshold determination or environmental impact statement hearing on nonproject proposals shall be published in a newspaper of general circulation in the city, mailed to interested parties or agencies who have registered with the city, and posted in the City Hall and on the city web page. L The Notice of Determination of Nonsignificance was published in the Federal Way Mirror (Exhibit G); interested parties and agencies with jurisdiction (Exhibit H) were notified by e- mail; and property owners within 600 feet (Exhibit 1) were mailed notices. The site was also posted with two public notice boards (Exhibit J), and the notice was posted on the City's official notification boards per the Declaration of Distribution (Exhibit K). VI. PUBLIC COMMENT & NOTICE The City received one comment on June 6, 2022 during the 14-day comment period, which ended on June 10, 2022 (Exhibit L). The public comment concerned traffic impacts. The City considered the comment received. The appeal deadline concluded on July 1, 2022. There were no appeals of the environmental determination. In accordance with the requirements of FWRC 19.75.060 a Notice of Application was prepared was published in the Federal Way Mirror (Exhibit L) and a copy of the notice was mailed to persons receiving property tax statements for all property within 300 feet of each boundary of the subject property (Exhibit M), on September 15, 2023. See the Declaration of Distribution (Exhibit P). The on -site public notice boards and city's official notice boards were posted prominently on the site on September 28, 2023 (Exhibit N). 1. These findings are based on a review of city documents and items submitted by the applicant and received on August 10, 2021, and subsequent resubmittal date April 26, 2022. 2. The proposal is consistent with ensuring that the health, safety, and welfare of the citizens of the city is preserved. 3. The proposal meets all of the zoning standards as required by the CZA and the FWRC per analysis above. 4. The date of the notice of complete application included on the Notice of Application references the original Use Process III application. VII. PUBLIC HEARING In accordance with the requirements per FWRC 19.75.060, notice of the October 11, 2023 Hearing Examiner public hearing was included in the Notice of Application published in the Federal Way Mirror (Exhibit L) and included in the copy of the notice that was mailed to persons receiving property tax statements for all property within 300 feet of each boundary of the subject property (Exhibit M), on September 15, 2023. See the Declaration of Distribution (Exhibit P). The on -site public notice boards and city's official notice boards also included the notice of public hearing and were posted prominently on the site on September 28, 2023 (Exhibit N). VIII. ANALYSIS OF DECISIONAL CRITERIA Pursuant to the provisions agreed upon within the CZA, the agreement may be amended by the City, or the Owner by filling an application therefore, which shall be considered and heard in the same manner as a City -initiated quasi-judicial rezone of the property. The Federal Way Revised Code (FWRC) establishes review procedures and decisional criteria for deciding upon various types of land use applications. Pursuant to FWRC 19.75, application for a quasi-judicial rezone must be reviewed and decided upon under Process V. Under Process V, the Hearing Examiner will hold a public hearing and, based on the record of that hearing, make a recommendation to the city council, who will then decide upon the application. City -initiated quasi-judicial rezones of property are considered "non -project -related" under FWRC 19.75.020. As a result, the decisional criteria are as set forth in FWRC 19.75.130(3)(a). As stated in FWRC 19.75.130(3)(a), "Decisional Criteria." the Hearing Examiner shall use the following criteria for non -project quasi-judicial rezones: (a) The city may approve an application for a quasi-judicial non -project -related rezone only if it finds that: The proposed rezone is in the best interest of the residents of the city; and Staff response — The purpose of the proposed amendment to the CZA is to remove the applicability of the limitations on allowable size and maximum gross leasable area as to the WinCo Foods property. The proposed amendment would remove the long -outdated provisions of the 1991 CZA, and replace them with existing, modern, BC zoning. This modern zoning is more consistent with current best planning practices and will better reflect the more modern version of Federal Way that exists today, as opposed to over thirty years ago. As a result, the proposed amendment to the CZA and removal of the low square footage allowance for the existing grocery store is in the best interest of the residents of the city for the following reasons: Improved Access: A larger store may stock a greater variety of products, including fresher produce, a wider range of dietary options, and specialty items that were not previously available. This can lead to improved access to healthy and diverse food choices for the residents. Job Creation: Permitting the expansion of an existing grocery store could lead to the creation of more jobs, both during the construction phase and after the expansion is complete. This can have positive economic impacts on the local community by providing additional employment opportunities. Potential Tax Revenue: Permitting the expansion of an existing grocery store could generate increased tax revenue for the city through construction, increased property taxes, and increased sales taxes. This additional revenue can be used to fund public services, infrastructure improvements, and other community enhancing projects. ii. The proposed rezone is appropriate because either: A. Conditions in the immediate vicinity of the subject property have significantly changed since the property was given its present zoning and that, under those changed conditions, a rezone is within the public interest; or B. The rezone will correct a zone classification or zone boundary that was inappropriate when established; Staff response — The request will remove the applicability of restrictive limitations to the buildable capacity of the WinCo Foods property adopted under the CZA. The maximum square footage allowances for the defined uses are no longer appropriate as the retail market has changed in the over 30 years since the limitations were originally established, and the surrounding population in the City has increased dramatically. iii. It is consistent with the comprehensive plan; Staff response — The request is consistent with the Federal Way Comprehensive Plan (FWCP) as the existing zoning of Community Business complies with the FWCP Community Business designation. No change is being requested to the Community Business zoning designation. The amendment to the Concomitant Zoning Agreement to remove the applicability of the Concomitant Zoning Agreement to the WinCo Foods property is consistent with the following FWCP policies: LUP40 — Encourage a range of pedestrian -oriented retail, while continuing to accommodate auto -oriented retail uses, and provide supportive uses to meet the needs of residents and employees in the area. EC7 — Promote an economic climate that is supportive of business formation, expansion, and retention, and emphasizes the importance of small businesses in creating jobs. EDG2 — Help attract, expand, and retain businesses, jobs, and investments that provide employment and enhance income opportunities for Federal Way residents. EDP8 — Promote the redevelopment of existing underdeveloped areas as a means to sustain the economy and provide jobs. Allowing the increased floor area is also consistent with the Land Use Concept in Chapter 2 of the FWCP, which states: "The land use concept should result in the following: Accommodation of adopted growth targets for households and jobs and Puget Sound Regional Council (PSRC) growth projections within the proposed land use plan area." Allowing the increased floor area is also consistent with the Land Use Concept in Chapter 2 of the FWCP, which states "The land use concept should result in the following: Accommodation of adopted growth targets for households and jobs and Puget Sound Regional Council (PSRC) growth projections within the proposed land use plan area." iv. It is consistent with all applicable provisions of the chapter, including those adopted by reference from the comprehensive plan; Staff Response — The proposed amendment to the CZA is consistent with the applicable provisions of the chapter and those adopted by reference of the comprehensive plan. See analysis above. v. It is consistent with the public health, safety, and welfare. Staff Response — The proposed amendment to the CZA removing the applicability of the CZA as to the WinCo Foods property is consistent with the public health, safety and welfare because as a result the applicant will no longer be restricted by the size and use limitations within the CZA allowing for improved access, job creation and potential additional tax revenue. Any additional project impacts, including traffic, will be addressed at time of project application. IX. STATEMENT OF FINDINGS Based on an analysis of the proposed action, environmental record, and related decisional criteria, the Department of Community Development finds that: 1. The application is for a quasi-judicial non -project -related rezone to amend an existing Concomitant Zoning Agreement approved on June 4, 1991 (Ordinance No. 91-99) to remove the applicability of the Concomitant Zoning Agreement to the WinCo Foods property (parcel 4159200710). 2. City -initiated quasi-judicial non -project -related rezone requests are a Use Process V application heard by the Hearing Examiner who makes a recommendation to the Federal Way City Council. 10 3. The Federal Way Comprehensive Plan (FWCP) designation for the subject property is Community Business. The Community Business designation supports the proposal as it allows for a broad mix of uses, including general, specialty, and service retail; commercial; office; commercial/residential mixed -use; and supportive uses. 4. A Notice of Master Land Use Application and Optional Determination of Nonsignificance was mailed to all property owners within 600 feet of the subject property on May 27, 2022. 5. An Environmental Determination of Nonsignificance (DNS) was issued for the proposed action on May 27, 2022. The City received no appeals of the SEPA determination and the SEPA appeal period has expired. 6. A Notice of Application and notice for the Public Hearing were published in the Federal Way Mirror and mailed to persons receiving property tax statements for all property within 300 feet of each boundary of the subject property, on September 15, 2023. The on -site public notice boards and city's official notice boards were posted prominently on the site on September 28, 2023. 7. The proposal has been reviewed for compliance with the FWRC and FWCP. The proposal meets decisional criteria for quasi-judicial non -project rezone requests in FWRC 19.75, as discussed in Section VIII above. 8. Any subsequent development of the property associated with this request may only be approved if found to be consistent with codes in effect at the time of application, including development regulations, clearing and grading, tree/vegetation retention, storm drainage, and transportation. 9. Additional Permitting Additional permitting, such as engineering review and/or building permits, are required for site development. It is the applicant's responsibility to identify and obtain all required City, State, federal, and other agency permits as may be required. X. RECOMMENDATION Based upon the application materials, Exhibits A thru P and the information contained in this Recommendation and Staff Report dated September 29, 2023 the Community Development Department recommends approval of the request of the non -project -related rezone amendment to the Concomitant Zoning Agreement to remove the applicability of the Concomitant Zoning Agreement to the WinCo Foods property. XI. EXHIBITS 11 A. Process V Application B. Original Concomitant Zoning Agreement C. First Amendment to Concomitant Zoning Agreement D. Ordinance No. 91-99 Adopting WinCo Foods Concomitant Zoning Agreement E. SEPA Environmental Checklist F. Determination of Nonsignificance (DNS) G. SEPA Notice of DNS Federal Way Mirror Classified Proof H. SEPA Notice of DNS Interested Parties and Agencies with Jurisdiction List I. SEPA Notice of DNS Property Owners within 600 feet Map and Addresses J. SEPA Notice of DNS Public Notice Boards K. SEPA Notice of DNS Declaration of Distribution L. June 6, 2022 Public Comment M. Notice of Public Hearing Federal Way Mirror Classified Proof N. Notice of Public Hearing Property Owners within 300 feet Map and Addresses O. Notice of Public Hearing Public Notice Boards P. Notice of Public Hearing Declaration of Distribution Q. WinCo Foods Process III Withdrawal Letter Transmitted to the Parties Listed Hereafter Federal Way Hearing Examiner Nathan Coombs, Petersen-Staggs Architects WinCo Foods LLC 12