To: Honorable Mayor and Members of City Council
From: Molly Rattigan, Interim Community Development Director
Prepared By: Tiffany Carranza, City Clerk
TITLE:
Title
First Street Napa Phase II
LABEL
RECOMMENDED ACTION:
Recommendation
(1) Approve the second reading and final adoption of Ordinance O2025-008 approving, pursuant to a Section 15168 analysis and addendum to the Downtown Napa Specific Plan Programmatic Environmental Impact Report (SCH No. 2010042043), and alternatively, to the CEQA Guidelines Section 15332 categorical exemption, a Development Agreement pursuant to Government Code Section 65864 et seq. by and between the City of Napa and Coombs Street LLC, and authorizing the City Manager to execute and the City Clerk to record the Agreement; and
(2) Approve the second reading and final adoption of Ordinance O2025-009 approving, pursuant to a Section 15168 analysis and addendum to the Downtown Napa Specific Plan Programmatic Environmental Impact Report (SCH No. 2010042043), and alternatively, to the CEQA Guidelines Section 15332 categorical exemption, a Planned Development Overlay (PD-39) to establish use provisions, development standards, and design guidelines for First Street Napa Phase II Project located at 1106, 1116, 1118 First Street (APNs: 003-166-010, 003-166-013, 003-166-015, and 003-166-016) and 1151 and 1199 Pearl Street (APNs: 003-166-008, and 003-166-011) (PL20-0135), and Dwight Murray Plaza (APN: 003-166-017) (PL20-0135); and
(3) Approve the second reading and final adoption Ordinance O2025-010 extending, pursuant to a Section 15168 analysis and addendum to the Downtown Napa Specific Plan Programmatic Environmental Impact Report (SCH No. 2010042043), and alternatively, to the CEQA Guidelines Section 15332 categorical exemption, the Entertainment Overlay District described in Chapter 17.37 of the Napa Municipal Code and amending the Downtown Napa Specific Plan pertaining to the property located at 1106, 1116, 1118 First Street (APNs: 003-166-010, 003-166-013, 003-166-015, and 003-166-016) and 1151 and 1199 Pearl Street (APNs: 003-166-008, and 003-166-011) and Dwight Murray Plaza (APN: 003-166-017).
Body
DISCUSSION:
These are the second readings and final adoptions of ordinances approving:
1. a Development Agreement pursuant to Government Code Section 65864 et seq. by and between the City of Napa and Coombs Street LLC, and authorizing the City Manager to execute and the City Clerk to record the Agreement; and
2. a Planned Development Overlay (PD-39) to establish use provisions, development standards, and design guidelines for First Street Napa Phase II Project located at 1106, 1116, 1118 First Street (APNs: 003-166-010, 003-166-013, 003-166-015, and 003-166-016) and 1151 and 1199 Pearl Street (APNs: 003-166-008, and 003-166-011) (PL20-0135), and Dwight Murray Plaza (APN: 003-166-017) (PL20-0135); and
3. the Entertainment Overlay District described in Chapter 17.37 of the Napa Municipal Code and amending the Downtown Napa Specific Plan pertaining to the property located at 1106, 1116, 1118 First Street (APNs: 003-166-010, 003-166-013, 003-166-015, and 003-166-016) and 1151 and 1199 Pearl Street (APNs: 003-166-008, and 003-166-011) and Dwight Murray Plaza (APN: 003-166-017); and
The introduction and first readings of the Ordinances was held at the Special City Council meeting on June 24, 2025. If approved, the Ordinances will become effective thirty days following adoption.
Ordinance O2025-008 approving the Development Agreement was introduced with the following revisions that were made during the June 24, 2025 public hearing:
- Acceptance of revised Exhibit K as provided to Council via supplemental memo from staff prior to the meeting.
- Addition of sunset language to Exhibit J, of December 31, 2038 for the TOT share.
- Revision of Exhibit I to include bicycle racks and lockers for 39 bicycles.
- Addition of language to Exhibit F & H ensuring the Affordable Housing Impact Fee for hotels ($6.00 per square foot) is applied to the branded residential units of the Project.
- Addition of language to Article VIII requiring City Staff and Applicant to provide City Council with an update on the Project’s progress within 6 months of the effective date of the agreement.
- Amendment to Section 8.2.4 of the DA authorizing City Manager to make all final determinations on all Design Review and Use Permit applications filed within 18 months of the effective date to within 12 months of the effective date.
Attachment 1 Exhibit A includes all revisions made during the introduction.
FINANCIAL IMPACTS:
An analysis of the project's economic impacts is contained in the Economic Forensics and Analytics, Inc. (EFA), Downtown Napa Hotel Analysis that was provided as Attachment 22 in the June 24, 2025 staff report. The Development Agreement obligates the applicant/operator to pay for certain public capital improvements under Gov’t Code § 65864(c) (the Development Agreement Statute), which the City would reimburse up to $33 million over a period of 10 years for public improvements constructed by the Developer at the same time as the Project. The first 5-year operational average revenue from property tax, sales tax and TOT generated by the project is estimated to be $6,190,505 per year, detailed below:
• Transient Occupancy Tax from lodging is estimated to be $5,266,800 annually over the first five-year period and increasing after that;
• Property Tax is estimated to be $598,465 annually over the first five-year period and increasing after that; and
• Sales Tax is estimated to be $325,240 annually over the first five-year period and increasing after that.
In addition, through the City’s special hotel tax the project will contribute 1% of transient occupancy revenue toward the City’s affordable housing trust for moderate income housing, which is estimated to be $438,900 annually over the first five-year period and increasing after that.
CEQA:
Pursuant to the California Environmental Quality Act (“CEQA”) and its implementing regulations (the “CEQA Guidelines”), the City prepared the First Street Napa II Project Addendum dated May 29, 2025 for the Project, to determine whether, under CEQA Guidelines section 15168, the Project’s potential environmental effects are within the scope of the development program evaluated by the City in the certified Downtown Napa Specific Plan Programmatic Environmental Impact Report (SCH No. 2010042043) (“DNSP EIR”), whether there are Project-specific significant effects peculiar to the proposed Project or the site, whether additional documentation is required and, in the alternative, whether the Project is an In-Fill Development Project that is exempt from any additional environmental review under Section 15332 of the CEQA Guidelines (“Section 15168 Analysis and Addendum” - Attachment 23 to the June 24, 2025 staff report).
Staff recommends that, based on the whole record before it, including the Section 15168 Analysis and Addendum, the administrative record, and all other written and oral evidence, that the Council find that the Project is within the scope of the DNSP and all environmental impacts of the Project are either less than significant or can be mitigated to a level of less than significant under the mitigation measures outlined in the Section 15168 Analysis and Addendum. Alternatively, Staff recommends that the Council find that the Project is exempt from CEQA under CEQA Guidelines section 15332 and none of the exceptions in CEQA Guidelines section 15300.2 have application. Staff further recommends that the Council adopt the Section 15168 Analysis and Addendum and adopt the MMRP previously adopted for the DNSP EIR as it pertains to the Project.
DOCUMENTS ATTACHED:
ATCH 1 - Ordinance (DA)
EX A - Development Agreement (with Exhibits A-L)
ATCH 2 - Ordinance (PD)
EX A - Development Standards
EX B - Design Guidelines
EX C - Planned Development Overlay District Boundary
ATCH 3 - Ordinance (Ent. Over.)
NOTIFICATION:
Notice of the scheduled June 24, 2025 public hearing was provided on June 11, 2025, by US Postal Service to all property owners within a 500-foot radius of the subject property.
Notice of the public hearing was also published in the Napa Valley Register on June 12, 2025, and provided to people previously requesting notice on the matter at the same time notice was provided to the newspaper for publication.