CASE NUMBER:                                                         PCN16037

REQUESTED ACTION:                                              Annexation

PROJECT DESCRIPTION                                          Voluntary Annexation 

PROPERTY OWNER:                                                 Bruce Investment Group, LLC

APPLICANT:                                                               American Recess, LLC

LOCATION:                                                                101 Highland Ranch Parkway

                                                                                    (Generally located on the southwest corner of the intersection     of Pyramid Lake Highway and Highland Ranch Parkway)

SITE SIZE:                                                                   67.40 acres 

COUNTY DESIGNATION:                                         General Rural

PROPOSED ZONING:                                                 Upon Annexation the parcel would convert from a Washoe County designation of General Rural to City of Sparks (A40) Agriculture zoning.

CITY OF SPARKS LAND USE DESIGNATION:        Open Space and General Commercia

WARD INFORMATION:                                              Ward 5 (Ron Schmitt)

APPLICABLE REGULATIONS:                                  Nevada Revised Statutes 278 and 268

    Sparks Municipal Code 20.05.05

BACKGROUND:

This request is from American Recess, LLC to annex two parcels totaling 67.40 acres in size into the City of Sparks. These parcels are generally located southwest of the intersection of Pyramid Lake Highway and Highland Ranch Parkway. A vicinity map has been attached to this report.  The respective parcels were brought into the Sparks Sphere of Influence in 2002 along with approximately 2,400 acres as a Cooperative Planning Area (Washoe County and Sparks).  In 2007 an additional 1,200 acres were added to the Sparks Sphere of Influence.  These 3,600 acres were ultimately planned in 2008 through a robust master planning effort entitled The West Pyramid Area Plan.  This planning effort included substantial analysis to identify land use designations that could, over time, be served with municipal level services.  A map of the area formerly known as the “West Pyramid area” has been included.  The two parcels being considered for annexation were addressed during the West Pyramid planning effort and were primarily designated Open Space.  A smaller portion was designated General Commercial.  Through this effort the City planned for the finite amount of sewer capacity left in the interceptor line to go to the Sonoma Highlands Planned Development.

The West Pyramid Plan was approved by the Sparks City Council in July of 2008 after three neighborhood meetings, a joint planning commission meeting with Washoe County and Sparks Planning Commission, a City Council workshop, a Citizens Advisory Board meeting, Washoe County Planning Commission (informational item required through Cooperative Planning process), Sparks Planning Commission for formal approval, Regional Planning Commission, and ultimately the City of Sparks City Council for certification.  In addition to these ten meetings and hearings, there were additional workshops held by staff to receive input regarding the allocation of City resources including but not limited to sewer capacity.

Just as the Regional Plan required the cooperative planning process for preparation of the West Pyramid Plan, it also requires the City have a Seven Year Annexation Program. The City of Sparks’ Annexation Program expired at the end of 2015. This site was not identified for potential annexation in that 7 Year Annexation Program. As the City is in the process of updating the master plan, and sewer analysis (to be discussed later) is yet to be completed, an annexation program would be premature.  Once the two studies have been adopted by City Council, staff can begin moving forward with a new Annexation Program. While the program is in an expired state, the property owner can still request annexation as the respective site is contiguous with the city limits of the City of Sparks and, pursuant to NRS 268.670, because 100% of the property owners have signed the petition for annexation and therefore is voluntary.  A map has been included that demonstrates contiguity.  The City lines are depicted by the blue border and all annexed parcels are colored.  

At the September Planning Commission meeting, the Sparks Planning Commission voted to forward a recommendation of denial to the Sparks City Council of the annexation request.  The Planning Commissions report of action has been attached to this report.

As stated in the “Background” section, NRS 268.670 provides Bruce Investment Group, LLC the ability to request annexation into the City of Sparks as it is the property owner and the property is contiguous to Sparks’ corporate boundary.

The request for annexation is an opportunity for the City Council to determine that everyone who benefits from services provided by the City is sharing the costs of those services but, at the same time, to assure the economic vitality of the City is not compromised.

At this point in time, there has been no development on the site and therefore there are no City services being provided to the site for which costs aren’t being shared.  To determine that Sparks’ economic vitality is not compromised at this site there are a number of considerations that shall be made before annexation is approved.

One reason for annexation is often to receive municipal services.  This property does not have development on it, but it did serve as a gravel pit at some time in the past and has not required provision of municipal services including but not limited to water and sewer.  Any intensification (development) of this site requires municipal sanitary sewer service. This is pursuant to master plan resolution 2941 adopted by the Sparks City Council in 2004.  This policy can be found under Goal SS1 of the Public Facilities and Services Element of the Sparks Master Plan.  A copy of City Council’s certification of this policy is attached.

There is a substantial amount of land in Sparks for which land use approvals have been granted but remains undeveloped, including but not limited to all or portions of the Kiley Ranch North, Stonebrook, Sonoma Highlands, and Pioneer Meadows planned developments that are allocated sewer capacity.  This is not to mention the sewer capacity that has been allocated for future development in the unincorporated area of Spanish Springs.  To ensure that there is available capacity to serve approved but unbuilt projects, the City Council approved a contract for a sewer study in March of 2015 in the amount of $407,604.

As of the date of this staff report, the City’s consultant has submitted a draft to City staff for review and analysis.  Staff’s anticipated review time of the model is two months.  Once this staff review is complete the information will be provided to the City Council.  There are ultimately three possible outcomes of the model:

1. There is not enough sewer capacity to serve existing approved and unbuilt projects.

This leads to a scenario where the City Council will need to identify how to fund capital improvements projects to fund upgrades to the existing sewer lines.

2. The remaining capacity is approximately equal to what is needed to serve existing approved but unbuilt projects.

This will likely not require any Council action.

3. There is excess capacity after serving approved and unbuilt projects.

This creates a need for the City Council to identify through policy actions where the additional sewer capacity shall be allocated.

Until this analysis is complete, staff is unable to determine if sewer capacity is available for development at this site if it were to be annexed.

Unlike sewer capacity, staff is currently able to determine that this site is outside of the adopted service level of six minute response time for Sparks Fire/First Response service.  A Fire Response map has been attached. The area highlighted in red is outside of all six minute response times of both City of Sparks’ stations and Washoe County station 17, which provides mutual aid. Staff does believe that the site would be within the likely response time for Sparks Fire Station 6, whenever it is established. Without station 6 being constructed and in turn, operated, staff cannot make the finding that this annexation would meet the Regional Plan requirement for concurrency in development.   This includes Policy 3.5.1 of the Regional Plan, “To be in conformance with the Regional Plan, master plans, facility plans, and other similar plans of local governments and affected entities must ensure that necessary public facilities and services to support new development are or will be available and adequate, based on adopted levels of services at the time the impacts of new development occur.”

Without the ability to identify whether sewer capacity is available, and having determined that the site is outside of the adopted level of service for Fire response, the City cannot annex this land and be in compliance with the Truckee Meadows Regional Plan.  Policy 3.5.3.2 of the Regional Plan further states: “Areas inside the TMSA that do not have development constraints shall not be given more intense designations or additional entitlements for development until the area is included in all applicable service and facilities plans that have been found in conformance with the Regional Plan, and the applicable services and facilities will be provided concurrent with the impact from any additional entitlements for development.”

City of Sparks Resolution 2941 also prohibits development beyond what is permitted by the translated zoning (A40) until the applicant annexes into the City. As the parcel has a Washoe County designation of General Rural, the Sparks A40 designation would permit mining/quarrying (as previously was conducted on a portion of the site), school, church, animal services, nursey, winery, ranch and single family residential without the requirement for annexation.  The City can approve certain development through extra territorial jurisdiction (if it were not annexed) as long as the development does not become intense enough to warrant sanitary sewer service.

The City cannot require, as a condition of annexation, additional public improvements to be installed or constructed. Pursuant to NRS 278.663, because primary access for the site is along a Washoe County road (Highland Ranch Parkway) the City will be required to annex ½ of the road up and to the point of access from Pyramid Lake Highway if this site were to be annexed.   If and when development is proposed, the City would then require improvements including but not limited to curb, gutter, sidewalk, streetlights, right of way, and sewer connection. If the City annexes the site, the City will be responsible for services including road maintenance, code enforcement, fire and police service.  If a wild fire were to begin on this site the City will be required to pay for the response.  If the land remains undeveloped for some time, the city will be providing services, including but not limited to the maintenance of Highland Ranch Parkway, without any substantial revenue from the undeveloped but annexed land. 

Nevada law and Sparks' code require a fiscal analysis be submitted with an annexation request.  This submittal requirement has been fulfilled by the applicant and the fiscal analysis projects a positive fiscal impact of $210,000 under Scenario 1 (14 acres of commercial development) and $339,000 under Scenario 2 (110,000 square feet of self-storage and 200 apartments) to the City of Sparks' general fund for the period through 2036.  The fiscal analysis is based on the assumption the City will provide police, fire and administrative services.  More detail regarding the fiscal analysis can be found in Finding A2.

Pursuant to the current City of Sparks Master Plan the General Commercial (GC) land use designation is assigned to promote shopping, personal and professional service facilities and accessory uses in centers to meet the needs of the community.  The uses include food markets, comparison goods, medical clinics, child care and restaurants.  Boarding houses, single and multiple family residential structures, public facilities, churches, drive-throughs, outdoor sales and services and automobile service stations may be permitted by discretionary entitlement in these designated land use areas. Planned Development zoning may be applied to the area designated GC for entitlement and construction.

The General Commercial areas are located adjacent to major arterial street intersections in Sparks and the City's Sphere of Influence Area.  The City’s master plan calls for them to be distributed throughout the city at locations selected for convenience to clients and customers.  Apartment residents usually find these centers within easy walking distance while residents in single-family homes can conveniently drive to them.  General Commercial land use designated areas may include neighborhood, community or regional shopping centers.  The parcels upon which community or regional centers are located are of sufficient size to accommodate department stores, ancillary shops and offices, parking, separate delivery and trash removal areas and full landscaping.  General Commercial sites should accommodate sufficient pedestrian, bicycle, bus and vehicular circulation and parking.  General Commercial sites are centers of intensive human activity and should not be located where severe physical constraints exist such as floodways, steep slopes, and seismic hazards or where impacted by airport noise.  Offices or mixed residential uses usually surround General Commercial shopping land use designated areas.  These uses provide zones of intermediate urban activity which buffer shopping centers from more sensitive uses such as single family residential.  General Commercial areas also serve as places for community functions such as fairs, shows and special exhibits.  The GC areas are suitable near other community facilities such as convention centers, recreational facilities, theaters, and parks. While the zoning code may permit mini-warehouse and multiple family residential on land zoned C2, those two uses are not discussed in the General Commercial description in the master plan as seen above.

The property is within the City of Sparks' Sphere of Influence but was not identified in the 2007-2015 Annexation Program.  The Seven Year Annexation Program serves to identify certain parcels in the Sphere of Influence that are needed to accommodate growth in the City.  The finding that this land is needed to accommodate regional growth is difficult to make as there may not currently be demand for mini-warehouse or multi-family at this site.  The applicant concedes this in the fiscal analysis by providing two scenarios.  Scenario 1 simply lists “commercial” whereas Scenario 2 is based on 200 multi-family units and 110,000 square feet of mini-warehouse. At the time of this staff report there were three mini-warehouse facilities that had been approved and had yet to be built in Sparks.  Together these three unbuilt projects total nearly 284,000 square feet of unbuilt storage space.  Regarding multi-family units, there are 640 multi-family units currently under construction and 1,542 units that have been approved but are not yet under construction in Sparks.  

When this land was added to the City of Sparks’ Sphere of Influence the projection for growth for the Truckee Meadows was far higher than recent forecasts predict.  The 2008 Consensus Forecast projected Sparks’ population to be 133,340 by the year 2030.  Later that year, the City moved forward with development of the West Pyramid Plan. Through that process a portion of these two parcels received a master planned designation of General Commercial. The rationale for assigning a land use of General Commercial to this land was predicated on the population estimates that a significant increase in residential would provide demand for commercial.  The 2016 Consensus Forecast estimates Sparks to have a population of approximately 109,714 in 2030 (a drop of 23,600 people.)  This reduction in the growth rate correlates with less demand for additional commercial property in the City at a time when undeveloped commercial exists in Stonebrook, Tierra Del Sol, and Kiley Ranch.  There are also parcels yet to be developed in Sparks Town Center and Spanish Springs Galleria.

The deadline in the growth rate for the region occurred during the Great Recession.  While the case can be made the area has recovered, the City’s general fund has not been able to keep pace with the demand for services.  This demand for service includes but is not limited to previously outlined services such as fire and road maintenance but also includes police, storm drain maintenance, and other divisions such as code enforcement.  Any addition of land to the City will increase the strain on limited staff resources.

The Sparks Planning Commission is recommending the Sparks City Council deny the requested annexation.  Should the City Council uphold the Planning Commission’s recommendation, the City of Sparks will not be able to reconsider any annexation request for these two parcels for one year. NRS 268.650 identifies there shall not be subsequent notice of intent to annex filed within one year if a previous annexation was denied.   The applicant was made aware of this provision as well as staff’s recommendation to the Planning Commission would be for denial, at the Plan Review meeting for this application. The applicant nevertheless asked to move forward to this Planning Commission meeting.

If the Sparks City Council determines they are able to make the required findings to support approval of the request, the annexation does not need to wait until completion of the City Council election to take effect.  There is a statute that limits the timing of certain annexations of land with existing residents, “Annexations must not become effective within 90 days preceding an election at which officers are chosen for the City.”  In this case, NRS 268.666 would apply and permit the annexation.

ANNEXATION:

FINDING A1:

The request conforms to the requirements of NRS 268.

Per the Nevada Revised Statutes (NRS), annexations within counties whose population level is at 100,000 or more, but less than 700,000 (which includes the Washoe County) that has adopted a comprehensive regional plan pursuant to NRS 278.026-278.029, inclusive, also needs to adopt an annexation program per NRS 268.625.  The City’s Annexation Program expired December 31, 2015.

However, NRS 268.670 allows for the Governing Body (in this case the Sparks City Council) to consider annexations when the property is contiguous to the City limits and is requested by 100 percent of the property owners.  Because this site is contiguous and is being requested by the property owners (Bruce Investment Group, LLC), it can be considered for annexation even though Sparks’ Annexation Program has expired.

FINDING A2:

The request conforms to the findings established for annexation applications pursuant to the Sparks Municipal Code Chapter 20.05.05

Sparks Municipal Code 20.05.05 requires annexations to be reviewed subject to the following:

A) Location of the property to be considered for annexation:

The property being considered for annexation is generally located southwest of the intersection of the Pyramid Lake Highway and Highlands Ranch Parkway. The site is contiguous to the City of Sparks’ city line and is within the City of Sparks’ Sphere of Influence. The location of this site is outside of the adopted level of service area for Fire Department response and has not previously been allocated capacity for sewer service.  Because of the location of this property it is premature to annex at this time as it is outside of the City of Sparks’ adopted service levels and the City cannot provide services concurrently to the time of requested annexation.

B) The logical extension of City limits:

This proposal is contiguous to the City of Sparks city limits and is within the City’s Sphere of Influence and therefore can be considered for annexation.  However, the site was not included in the (now expired) Seven Year Annexation Program.  This is not to say that the site should never be annexed. Timing is the issue.  The property within the city limits the respective site shares a property line with is undeveloped and part of the Kiley Ranch Planned Development.

At the time of the staff report, the site being considered for annexation cannot be provided fire service within adopted City of Sparks’ service levels.  It is unknown whether or not municipal sewer capacity exists so that demand can be satisfied at the time of annexation as required by state statute NRS 286.646 (2).  As discussed in the “Analysis” and “Findings” sections, a finding cannot be made that this is a logical extension of the City limits (at this time) because basic municipal services cannot be provided at the time of Annexation.

To date, there has been land annexed into the City that is outside adopted service areas relating to Fire and Police due to the land being part of larger handbooks where a majority of the land can be served within the parameters of adopted public safety service levels. The City has not annexed any land for which sewer capacity has not been allocated.

As these questions are answered and direction from the City Council is provided over the next year the logical extension of the City may very well be into the West Pyramid Area.

C) The need for the expansion to accommodate planned regional growth:

The property is within the City of Sparks' Sphere of Influence but was not identified in the 2007-2015 Annexation Program.  The Seven Year Annexation Program serves to identify certain parcels in the Sphere of Influence that are needed to accommodate growth of the city.  As discussed in the “Analysis” section, there may not currently be demand for mini-warehouse or multi-family uses that cannot be satisfied within the current city limits. Two scenarios have been proposed in the Fiscal Analysis submitted by the applicant.  Scenario 1 simply assumes “commercial” whereas Scenario 2 is based on development of 200 multi-family units and 110,000 square feet of mini-warehouse. At the time of this staff report there were three mini-warehouse facilities that had been approved in Sparks and had yet to be built.  These three approved projects total nearly 284,000 square feet of storage space.  As for multi-family units, currently in the City of Sparks there are 1424 units approved and unbuilt (see previous notes).  As all of this approved (entitled) development has yet to be built, the finding that this annexation is needed to accommodate planned regional growth is difficult to make.

D) The location of existing and planned water service:

The site does not currently receive municipal water services. Water service is within proximity of the parcels being considered for annexation. Per the applicant’s application, a water main is located in Highland Ranch Parkway.  See page 16 for site plan depicting the location of the site and nearest water main.

E) Community goals that would be met by the proposed annexation:

The Sparks application for annexation asks the applicant to identify community goals that would be met by the proposed annexation. The applicant’s application did not identify any Sparks Master Plan goals that would be met by this annexation.          

As described in this report, staff cannot currently identify that certain services will be available at the site at the time of annexation, a primary reason it is difficult to conclude that community goals will be met.  Below are three policies contrary to the proposal for this site as identified in the fiscal analysis:

Goal H3: To encourage infill, conservation, redevelopment and rehabilitation through public and private development.

            Since services are provided in other areas of the city that would support infill those areas may be more appropriate for development at this time. Adding additional land for development potentially dilutes the attractiveness of redevelopment areas for multi-family development.

Policy H3f: Provide for high density residential development near the redevelopment core and elsewhere in the community where appropriate.

            -This policy identifies the city’s plan to concentrate higher density development near the Prater Way/Victorian Avenue corridors.  The Fiscal Analysis identifies the desire for multi-family residential at the site which does not advance adopted master plan policies.

Policy LU3b: “The City will implement an annexation policy which will identify the City’s geographic Sphere of Influence and measures for actively pursuing annexation of unincorporated areas where appropriate for urban development.”  This area was not identified in the 2007-2015 Program of Annexation.  With direction to create a new annexation program the City Council may want to consider adding areas such as this site for annexation consideration.   

F) The efficient and cost effective provision of service areas and capital facilities:

The property is within the City of Sparks' Sphere of Influence.   Annexation of this area does not, in and of itself, allow for any additional development to occur as an additional entitlement is required (i.e. conditional use permit or administrative review.) An approval for annexation is an identification by the City that cost effective service provision can be made and that capital facilities are available at the time of annexation.  As discussed in the Analysis section, this finding cannot be made.

G) Fiscal analysis regarding the proposed annexation:

Per the Fiscal Analysis submitted with the application, the estimated cost to the City of Sparks to provide police, fire/EMS, public works, and administrative overhead services under Scenario 1 (14 acres of commercial space) is $1,623,339 through 2036.  Per the fiscal analysis, the estimated revenue through 2036 for the City of Sparks is estimated at $1,833,001 producing a net surplus of $210,000.

The Fiscal Analysis included a scenario 2 as well.  This scenario included 110,000 square feet of self-storage space and a 200 unit apartment complex.  It estimates the cost to the City of Sparks to provide services under this scenario to be $3,970,140 through 2036.  The estimated revenue to the City is $4,309,236 for a net surplus of $339,000.

H) Whether Washoe County has adopted a Community Management Plan for the proposed annexation area:

The property is not within a Washoe County Community Management Plan Boundary. The application was forwarded to the Washoe County Community Services Department. City of Sparks’ staff did not receive any comment.

I) Whether the annexation creates any islands:

The annexation would not create a county island. The voluntary annexation is contiguous to land previously annexed into the City of Sparks.

J) Any other factors concerning the proposed annexation deemed appropriate for consideration by the City Council.

As an annexation is not an approval of development, conditional approval cannot be considered.  If this land were to be annexed the City is determining it can provide municipal services immediately to the vacant land and, in the case of development, can provide municipal services for intensification.  This staff report has outlined that the City cannot identify that all the City’s adopted service level of service standards can be met for at this time and therefore staff is recommending denial.

FINDING A3:

The property requested to be annexed conforms to the Master Plan as it is within the City's Sphere of Influence and Seven Year Annexation Program.

The City of Sparks initially exerted planning jurisdiction by including this area into its Sphere of Influence in 2002. While the site is contiguous to the City of it was not identified as a priority for annexation in the 2006-2015 City of Sparks’ Seven Year Annexation Program.

FINDING A4:

Public notice was given and a public hearing held per the requirements of the Sparks Municipal Code.

Public notice was given per the requirements of the Sparks Municipal Code and the Nevada Revised Statutes.  The Planning Commission and the City Council meetings function as the public hearings for this item.  This Annexations was noticed, at a minimum, to all property owners within 750 feet of the respective property.

The Council may choose to approve the request by making the required findings or the Council may choose to table the request.

I move to deny the annexation request associated with PCN16037 to annex approximately 67.4 acres into the City of Sparks based on findings A1 through A4 and the facts supporting these findings as set forth in the staff report.