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Property Owner-Initiated Requests In addition, during the course of the DSP update, two separate property-owners (i.e., 4212 First Street and 475/493 St. John Street), expressed interest in residential development on their lots. The properties currently have commercial land use designations. Although originally included in the land use discrepancies discussion, it was ultimately concluded that these property owner-requested zoning changes are categorically different and should be discussed and treated separately from the broader set of "land use discrepancies." The Task Force's initial direction on the two property owner-initiated requests was that any re-designation/rezoning of these properties should be considered following, and outside of, any land use changes made as part of the DSP update. At the February 26 meeting, staff recognized the Task Force's prior direction, while suggesting an alternative approach that would reflect the interest and potential for residential uses at 4212 First Street and 475/493 St. John Street, by placing a residential "overlay" or annotation on the DSP land use map. The overlay would clearly allow for consideration of either standalone residential uses, commercial uses, or a combination of both. Staff suggested if residential or any type of mixed use with residential were to be proposed on these properties, a Planned Unit Development (PUD) be required, so the legislative change would have to be considered by both the Planning Commission and City Council. The rationale behind creating this option was two-fold: although the approach allows the City to consider the possibility of residential uses in the future, the suggested overlay would not diminish the City's ability review a future project proposal and negotiate with the property owners though the entitlement process; and both property owners would like to move forward at this time and could submit separate applications which may further complicate the DSP update process or result in changes shortly after the updated DSP is adopted. Task Force Discussion and Recommendation By an 8-1 vote, the Task Force supported staff's suggested approach. There was some concern about allowing an overlay on these two properties but not opening up the option to other property owners. Staff Recommendation/City Council Direction Staff recommends following the Task Force's direction, to assign or annotate the Specific Plan Land Use map to indicate that residential, in addition to commercial uses, may be considered for these two sites. Staff further recommends inclusion of policy language in the DSP that clearly specifies such consideration would be discretionary and would necessitate a legislative review and approval process, through a PUD application, and would be subject to site-specific California Environmental Quality Act review and analysis. Page 9 of 15