City of San Carlos - April 3, 2006

Item Title: Public Hearing to Receive Comments on the Draft Environmental Impact Report for the proposed Palo Alto Medical Foundation San Carlos Center

Conduct the public hearing on the Draft Environmental Impact Report (�DEIR�) for the proposed Palo Alto Medical Foundation San Carlos Center (the �Project�).

All expenses related to the preparation of the DEIR and the Final Environmental Impact Report (�FEIR�) and the review of the proposed Project are paid for by the Project applicant (the Palo Alto Medical Foundation). The fiscal implications of the proposed Project are not relevant to the DEIR review process. However, the fiscal implications of the proposed Project on the City have been and continue to be analyzed by the City Staff and will be discussed when the proposed Project comes before the City Council for consideration later in the review process.

The Project is comprised of the following three components: (1) the closure and demolition of the existing CPI/EIMAC industrial manufacturing facility located at 301 Industrial Road (�Project Site�); (2) remediation of hazardous materials at the site in accordance with an approved Remedial Action Plan so that the site would be rendered safe for proposed medical uses; ^[1] and (3) construction of an integrated medical facility/complex on the Project Site. The Project Site is located just northwest of the Holly Street/US 101 interchange in East San Carlos. The site is bounded by a PG&E property to the north, US 101 to the east, a self-storage facility and an undeveloped City-owned parcel to the south, and Industrial Road to the west. The site is within the �Harbor Industrial Area,� which was annexed to the City in 1997.

The applicant proposes to construct an approximately 478,500 square foot medical building (including a detached 12,500 square foot central plant) and two, four-story parking garages with approximately 1,245 parking spaces. ^[2] The maximum height of the building would be 91 feet, with a tower architectural feature extending up to 100 feet. The medical building would include four essential components: physician offices (referred to in the DEIR as the Medical Office Building (�MOB�); an Ambulatory Care Center that would contain registration, diagnostic, outpatient surgery, and urgent care functions; a 110-bed inpatient hospital with an emergency room; and ancillary hospital support functions (e. g. , laboratory, x-ray, etc. ). The proposed Project would employ approximately 1,320 persons (including 180 physicians and 1,140 support staff).

Closure and demolition of existing facilities and remediation of the site would occur over about a 12 month to 18 month period. Construction of the Project would occur over a period of approximately 32 months.

The DEIR was prepared to comply with the requirements of the California Environmental Quality Act (�CEQA�). CEQA requires that an environmental impact report be prepared to inform the decision-makers and the public of any adverse environmental impacts of a project prior to action being taken on the project. The DEIR was prepared by EIP Associates, an independent environmental consultant retained by the City. As stated in the CEQA Guidelines, an environmental impact report (�EIR�) is an �informational document� intended to inform public agency decision-makers and the public generally of the potentially significant environmental effects of a project, identify possible ways to minimize the potentially significant effects, and describe feasible alternatives to the project. The City will use the certified EIR, along with other information and public processes, to determine whether to approve, modify, or disapprove the proposed Project, and to specify any applicable environmental conditions as part of Project approvals.

This comprehensive DEIR assesses potentially significant impacts, including, but not limited to, those concerning visual quality, transportation, air quality, noise, cultural resources, biological resources, geology, hydrology, hazardous materials, population and housing, public services, and utilities. As defined in CEQA Guidelines section 15382, a �significant effect on the environment is:

. . . a substantial, or potentially substantial, adverse change in any of the physical conditions within the area affected by the project including land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance. An economic or social change by itself shall not be considered a significant effect on the environment. A social or economic change related to a physical change may be considered in determining whether the physical change is significant.

The EIR finds that several potentially significant impacts could be reduced to a less than significant level through the implementation of various mitigation measures. Those measures are detailed in Table S-3 (�Summary of Impacts and Mitigation and Improvement Measures�) and in the body of the DEIR itself. The impacts that are not capable of being reduced to a less than significant level through the implementation of feasible mitigation measures, and thus remain significant and unavoidable, are described in Section 3 below.

As part of the CEQA process, the City is required (for at least 45 days) to accept comments on the DEIR. In this case the City has elected a 60 day comment period which ends on April 29, 2006. Any member of the public or any public or private agency or entity may present comments on the adequacy of the DEIR. According to CEQA Guidelines � 15204, in reviewing draft EIRs, persons and public agencies should �focus on the sufficiency of the document in identifying and analyzing the possible impacts on the environment and ways in which the significant effects of the project might be avoided or mitigated. Comments are most helpful when they suggest additional specific alternatives or mitigation measures that would provide better ways to avoid or mitigate the significant environmental effects. �Those submitting comments should also explain the basis for their comments, and should submit data or references offering facts, reasonable assumptions based on facts, or expert opinion supported by facts, in support of the comments. A responsible or trustee agency must focus its comments on environmental information germane to that agency�s statutory responsibility. In addition, comments by such agencies must be supported by specific documentation.

Testimony at this hearing should be focused on the environmental impacts of the proposed Project and not the merits or de-merits of the Project itself. This latter discussion will occur in connection with the various City hearings on the discretionary entitlements needed for the Project, which are expected to begin this summer. Also, it is not necessary for the decision-makers, City staff, or the environmental consultants to respond to any of the comments received at the hearing. The EIR consultants, in consultation with City staff, will review and prepare responses to the comments received at the hearing, as well as to written comments received by the City during the comment period on the DEIR, as part of the preparation of the FEIR.

The City Council must ultimately certify that it has reviewed and considered the information in the FEIR and that the FEIR has been completed in conformity with the requirements of CEQA before any decision can be made regarding the Project. In making this determination, the City Council should focus on whether the FEIR is thorough and adequate and reflects its independent judgment and analysis. Pursuant to CEQA Guidelines � 15091, no public agency can approve or carry out a project for which an FEIR has been certified which identifies one or more significant effects unless the public agency makes one or more of the following findings, which must be supported by substantial evidence in the record:

As noted above, the DEIR discloses that the Project would have several significant and unavoidable environmental impacts. ^[3] These are in the areas of traffic, air quality, and construction vibration. As a result, the City may only approve the Project if it finds that specific economic, legal, social, technological, or other considerations outweigh the significant unavoidable environmental impacts.

The City retained Hexagon Transportation Consultants, an independent consultant, to analyze the Project�s potential traffic and transportation-related impacts. ^[4] Hexagon evaluated the Project�s traffic impacts against the City�s traffic standard, which is mid-level of service (�LOS�) D (volume/capacity ratio = 0. 85). Hexagon concluded that all of the study intersections would operate at an acceptable LOS C or better under existing plus Project conditions. However, the analysis also revealed that PAMF would utilize 68% of the available capacity at the intersection of Industrial Road and Holly Street. DEIR, p. 3. 4-22, note b. Once the capacity is fully utilized, the City could not approve additional projects in this vicinity without preparing an EIR and finding that specific economic, legal, social, technological, or other considerations outweigh the adverse environmental impacts. Public Resources Code � 21081; CEQA Guidelines � 15091.

Under cumulative conditions with foreseeable projects, the 2003 Draft East San Carlos Specific Plan (�ESCSP�) development, and the proposed Project, five of the study intersections would operate at unacceptable levels of service (i. e. , worse than the City�s mid-LOS D standard). ^[5] These intersections and LOS are:

The applicant has agreed to implement a Transportation Demand Management (�TDM�) program that the City�s consultant estimates will achieve a 20% reduction in trips. See, Mitigation Measure TR-2. 1 at DEIR pp. 3. 4-25 through 3. 4-28. (Proposed TDM measures consist of, among others, a shuttle service between the Caltrain Station/SamTrans transit center and the Project Site, a parking cash-out program to provide incentives for employees to use alternative transportation modes to get to work other than drive alone, a guaranteed rides home program, a commuter check program whereby employees receive pre-tax dollars to pay for transit passes, and annual monitoring of the effectiveness of the TDM measures. )The TDM program would only mitigate cumulative impacts at one of the five impacted intersections, i. e. , Alameda de las Pulgas and Brittan Avenue. See, Table 3. 4-20. Therefore, cumulative intersection impacts at the remaining four intersections (i. e. , El Camino/Holly, Old County Road/Holly, Industrial /Holly, and Industrial/Brittan) would remain significant and unavoidable. ^[6]

The above intersection impacts could also result in an associated inconsistency with Transportation Element 4, which requires maintenance of mid-LOS D at City intersections unless overriding findings are made by City decision-makers.

In addition, both the Project alone and cumulative development (including the Project, approved and foreseeable development, and projects under the 2003 Draft ESCSP), would result in significant and unavoidable impacts along three directional segments of US 101, including the segment from Hillsdale to Ralston/Harbor in both directions and the segment from Ralston/Harbor to Holly Street in the northbound direction. Application of the aforementioned TDM program would not reduce the Project�s freeway-related impacts to a less than significant level. It should be noted, however, that these segments are already congested and any substantially-sized project would produce similar impacts.

The Project would have significant and unavoidable impacts at both project level and cumulatively with respect to emissions of reactive organic gases (�ROG�), nitrogen oxides (�NO_x�), and particulate matter less than 10 microns in size (�PM₁₀�). Most of the ROG and PM₁₀emissions would be generated by motor vehicles (i. e. , 83 and 123 pounds per day, respectively). Stationary sources, on the other hand, would contribute the largest fraction of NO_x emissions (i. e. , 181 pounds per day). Even with the likely emission reductions associated with the proposed TDM program described above, Project emissions would not be reduced below the Bay Area Air Quality Management District�s thresholds of significance. Thus, the proposed Project would have significant and unavoidable air quality impacts.

Pile driving will be needed to support the foundations for the proposed Project buildings and structures. The DEIR concludes that construction vibration associated with pile driving activities could exceed the standard annoyance level of 80 vibration decibels (�VdB�) for residents in the Laureola neighborhood. See, DEIR, pp. 3. 6-12 to 3. 16-13.

The DEIR requires that vibration abatement strategies be implemented to reduce vibration impacts to acceptable levels. See, Mitigation Measure NO-3. 1 (requires applicant to explore methods of reducing vibration impacts of pile driving on the adjacent residential neighborhood, including through measures such as pre-drilling pile holes, using a less vibration-intensive pile driving technique, limiting pile driving on the portion of the building closest to the Laureola neighborhood to mid-day weekday period, and/or using an alternative foundation support system).

Without specific details on the equipment attenuation rate and feasibility of alternative techniques, there is no assurance that the 80 VdB threshold will be attained. Therefore, the DEIR concludes that vibration impacts would remain significant and unavoidable.

In accordance with CEQA, an EIR is required to �describe a range of reasonable alternatives to the project, or to the location of the project, which would feasibly attain most of the basic objectives of the project, but would avoid or substantially lessen any of the significant effects of the project and evaluate the comparative merits of the alternatives. �CEQA Guidelines � 15126. 6(a). If a project alternative would substantially lessen the significant environmental effects of a proposed project, the agency should not approve the proposed project unless it determines that specific technological, economic, social, or other considerations make the project alternative infeasible. Public Resources Code � 21002; CEQA Guidelines � 15091(a)(3). An EIR must also identify alternatives that were considered by the lead agency but were rejected as infeasible during the scoping process for an EIR and should briefly explain the reasons underlying the agency�s determination. CEQA Guidelines � 15126(d)(2).

One of the alternatives analyzed must be the �no project� alternative. The �no project� alternative must examine the existing conditions, as well as what would be reasonably expected to occur in the foreseeable future, if the project were not approved and development continued to occur in accordance with existing plans and consistent with available infrastructure and community services.

In accordance with the above provisions, the DEIR examines the following alternatives to the proposed Project:

�No Project Alternative B: Replace Existing Buildings with Industrial Building Complex

�No Project Alternative D: Redevelopment of Site for Automobile Dealership Use[8]

�Reduced Medical Office Building Alternative 1 (Reduction of Medical Office Building by 90,500 square feet by relocating approximately 48 primary care physicians and 15 direct referral physicians off-site)

�Reduced Medical Office Building Alternative 2 (Reduction of Medical Office Building by 36,000 square feet by relocating 24 primary care physicians off-site) [9]

On the basis of comparing the extent to which the alternatives reduce or avoid the proposed Project�s significant impacts, No Project Alternative A would be the environmentally superior alternative. However, CEQA requires the selection of another alternative other than the no project alternative as the environmentally superior alternative. CEQA Guidelines � 15126. 6(e)(2). Reduced MOB Alternative 1 is considered the environmentally superior alternative as it would involve the largest reduction in significant impacts compared to the proposed Project.

The alternatives considered but rejected as infeasible include: Reduced Hospital and MOB, Inpatient Hospital Only, and MOB Only (no inpatient hospital). The City�s consultant determined that a reduction in the size of the hospital would not correspondingly reduce the Project�s adverse environmental impacts. Eliminating the MOB or the Hospital would not meet one of the basic objectives of the applicant which is to develop an integrated medical facility. As such, these alternatives were eliminated from further consideration in the DEIR.

The DEIR also discusses the feasibility of alternative locations. Nine alternative sites were considered but rejected based on their failure to meet objectives or site constraints, as described in the DEIR. See pp. 5-10, 5-11, Appendix I.

2. Proposed Site Use at PAMF-SCC; Proposed Floor Area of PAMF-SCC (FlashPaper Flashpaper Icon

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[1] The Remedial Action Plan was approved by the San Francisco Regional Water Quality Control Board (i. e. , the agency with regulatory jurisdiction over clean-up of the site) on August 31, 2004 and includes excavation and off-site disposal of contaminated soils at a properly licensed facility, treatment of contaminated groundwater to the approved regulatory clean-up levels, and use of bioremediation technologies, if necessary, to stimulate naturally occurring microorganisms to break down some chemicals into non-toxic substances. DEIR, p. 2-8.

[2] The garages would collectively contain about 454,500 square feet of floor area, excluding the roof levels, and about 597,200 square feet of floor area, including the roof levels. DEIR, p. 2-23. An additional 132 surface parking spaces would be provided around the Project Site. DEIR, p. 2-30.

[3] A significant and unavoidable impact is one that cannot be reduced to a less than significant level through the implementation of feasible mitigation measures or project alternatives.

[4] A summary of Hexagon�s findings is included in Section 3. 4 of the DEIR. The entire Hexagon traffic study is attached as Appendix C to the DEIR.

[5] For informational purposes, the level of service under cumulative conditions based on the foreseeable projects and implementation of the proposed Project without the 2003 Draft ESCSP development was also analyzed. The results of the analysis (Table 3. 4-17) indicate that without the additional traffic generated by the 2003 Draft ESCSP development, all of the study intersections would operate at acceptable levels of service (mid-LOS D or better). Since the 2003 Draft ESCSP has been released, albeit now deferred, the DEIR conservatively assumes not only the cumulative impacts of the proposed Project and other reasonably foreseeable projects listed in Table 3. 1-1, but also the cumulative environmental impacts that would occur if the East San Carlos Specific Plan were to be amended by adopting the land uses and densities contemplated by the 2003 Draft ESCSP.

[6] If the cumulative projects (i. e. , foreseeable projects and development proposed under the 2003 Draft ESCSP) were to achieve at least a 10% reduction in trips as per Transportation Policy 9, cumulative intersection impacts would remain significant and unavoidable at only 2 of the 5 intersections, i. e. , Holly/Industrial and Industrial/Brittan.

[7] Because regional retail development has occurred elsewhere in east San Carlos and the Project Site offers excellent visibility and access from the freeway, which are desirable site characteristics for regional retailers, including big-box businesses, the DEIR concludes that potential use of this site for regional retail uses is a feasible land use option. This conclusion is further supported by the Keyser Marston Associates (�KMA�) Market Study commissioned by the City (see, Appendix G to the DEIR) which concludes that the City is underserved in apparel stores, general merchandise, stores, and restaurants. KMA estimates that there is a current demand in the City for an additional 400,000 square feet of retail space in these categories.

[8] Similar to regional retail, the DEIR concludes that automobile dealerships are a feasible alternative use of the Project Site. The feasibility of an auto mall is further supported by the KMA study, which reports that the City has a significant leakage of automobile sales, estimated at over $50 million per year. In addition, the City has been contacted by several brokers regarding the relocation of dealers to this or other freeway visible locations in the City.

[9] Reduced MOB Alternative 2, proposed by PAMF, is a variation of Reduced MOB Alternative 1 that is intended to reduce the proposed Project�s significant impacts related to traffic and air quality, as described above.

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