Lloyd and Lois Piercy have submitted applications for conversion and annexation to the City of Hermiston for 36 acres of FU-10 land at the intersection of E Elm Ave and Diagonal Road.  Subsequent to the submission of the application, the City worked with the applicant and Umatilla Electric Cooperative to include the 4.5 acre parcel in the northwest corner of the site with the application.  It is the opinion of all parties that including the existing substation in the northwest corner in the application will avoid any future creation of a county island for this public utility site and this annexation provides an opportunity to include the land in the city limits that may not present itself again for many years.  Inclusion of the UEC substation parcel also creates an efficient provision of public services where the Hermiston Police Department will be able to respond to any activities at the substation in a timely manner thereby protecting adjacent development.

Both the Hermiston Code of Ordinances and Oregon Revised Statutes provide for the bundling of hearings and actions when one property is affected by multiple land use actions.  Therefore, it is permissible to hold simultaneous hearings on the comprehensive plan map amendment from urbanizable to urban status and annexation.  It is also permissible to adopt findings of fact addressing each action and through one motion process make one decision for all land use actions.

The land proposed for conversion and annexation lies within the urbanizable portion of the city's urban growth boundary.  The land is adjacent to the city limits on the south property frontage along Diagonal Road and at the southwest corner adjacent to the undeveloped land at the northwest corner of Diagonal Road and NE 10th Street.  The land currently has a Future Commercial comprehensive plan map designation and is considered urbanizable.  The proposal will amend the comprehensive plan map from the urbanizable Future Commercial designation to the urban Commercial and Medium Density Residential designations.  The proposal also changes the existing FU-10 county zoning designation upon annexation.  If the property is annexed by the city, the zoning will consist of approximately 7 acres of C-2 with an NCO overlay in the northwest corner of the property (4.5 acres of this acreage is already developed and committed with a utility substation), 31 acres of R-3 in the middle of the property along the Diagonal and Elm Ave frontages, and two acres of C-2 in the eastern edge of the property at the southeast corner of Diagonal and Elm Ave.

The overall development plan calls for the construction of approximately 25 acres of single-family, market rate housing.  Six additional R-3 acres are proposed for duplexes and tri-plexes targeting senior citizens.  The NCO area is intended to mix multi-family housing and commercial services targeting over-55 citizens.  The remaining two acres of C-2 land is intended to provide a convenience store or other small neighborhood oriented commercial development.  As noted elsewhere, the 4.5 acres of NCO land in the northwest corner is considered developed and committed with an existing electrical substation on the site.  Public utilities are considered a conditional use in the NCO zone.  Any future expansion of the substation will require review by the city subject to the conditional use permit provisions in the zoning ordinance.

The property is within a relatively sparsely developed neighborhood.  There is a 67 acre, R-1 zoned tract immediately to the south which is developed with Sandstone Middle School and the Field of Dreams baseball complex.  Further development of this tract is unlikely.  To the west the area is developed with a second utility substation and single-family housing on large tracts.  The western area is zoned for commercial development along the Diagonal Road frontage and for single-family development along the west side of NE 10th Street.  The areas to the north and east are both developed with single-family dwellings on large, multi-acre lots and zoned for future residential development when the areas annex into city limits.  It is important to note when considering future development potential and future neighborhood character that under the provisions of HB 2001 passed by the legislature in 2019, all areas zoned for single-family development must also allow duplex development effective July 1, 2021.

The applicant commissioned a study by Johnson Economics to analyze the city's overall supply of Goal 9 (Economic Development) and Goal 10 (Residential) land.  Amendments to the comprehensive plan map require the creation of findings of fact that any change to the plan map will not affect or hinder the city's ability to provide employment and housing land for a 20-year planning horizon.  Johnson Economics has worked as a contractor for the City of Hermiston in the past, providing the city's economic opportunity analysis and housing needs analysis in the comprehensive plan from 2011 as well as updates to these documents for the 2018 rezone of property on Diagonal Road and has a great deal of familiarity with Hermiston's land supply and need.  Staff has reviewed the Johnson Economics report and agrees with the conclusions of the document.  The report finds "In comparison to the 2011 analysis, the revised analysis found an increased need for employment land and a decreased need for housing units over the coming 20 years.  In each case, the buildable lands remain sufficient to accommodate the projected need." (Page 3)  The 20-year land need and supply analysis shows that the city can provide a 57-year supply of residential land prior to the change and a 118-year supply of commercial and industrial land.  (Page 3)  Following the proposed change from Future Commercial to a mixture of commercial and residential decreases the overall supply of commercial land to a 51-year supply of employment land, well in excess of a 20-year planning horizon.  (Page 11)  The study finds that the area is well-suited to a mixed use, residentially-oriented neighborhood.  (Page 17)  The land is proximate to a state highway (E Elm Ave) and a collector street (Diagonal Road), and within easy travel distance to downtown amenities.  The short distance to downtown encourages all modes of transportation, including walking, biking, and driving.  (Page 17) The nearby location of schools and the downtown makes this area appropriate for higher density multi-family development and attached housing allowable under the R-3 zoning.  (Page 17)  A copy of the Johnson Economics study is attached to this report for reference.  As a result of noticing, comments were received from the Fair Housing Coalition of Oregon raising Goal 10 procedural issues.  In response to the FHCO letter, the applicant's attorney drafted revised findings of fact to address FHCO's concerns.  The planning commission adopted the revised findings and these findings are presented now for the city council's consideration.

The applicant has commissioned a traffic study in accordance with OAR 660-012 and 157.150(E) of the Hermiston Code of Ordinances.  The transportation impact analysis (TIA) considers the functional classification of the streets providing access to the development, the level of service at affected intersections, potential trip generation under the existing zoning, and potential trip generation under the full build-out of the proposed zoning.  Staff has reviewed the TIA and finds that it is prepared in accordance with standards for such reports.  The report makes specific findings relating to the impact of proposed amendments.  At full build-out the development will generate approximately 306 additional peak hour trips.  (Page 1)  All intersections will operate within the city's mobility standards (LOS E or better) in 2039 at full build-out (Page 1)  Crash rates at all study intersections are less than 90th percentile and not evaluated.  (Page 1)  Additional traffic impact studies may be required when a specific development application is made.  (Page 1)  As noted, all intersections will function at LOS E or better in 2039, however the intersection of Diagonal and 7th Street will fall to LOS D without additional improvements. (Page 11)  The Hermiston TSP calls for the construction of a roundabout at this intersection as a future capital construction project.  A copy of the TIA is attached to the report.  The appendices to the report are not attached here for brevity, but are available for review and included in the project file.

Public facilities are available to the project site.  Municipal sewer and water lines both extend to the southwest corner of the site at the intersection of NE 10th Street and Diagonal Road.  The City Engineer and development staff have reviewed the carrying capacity of the existing infrastructure and determined it is capable of accommodating the development.  There is a 12-inch water line at the southwest corner of the site.  There is a pressurized sewer line and lift station at the southwest corner of the site as well.  At this time, there is no plan for the extension of utilities into the site.  The developer will be responsible for the construction and extension of utilities in accordance with city standards when a development plan is submitted and approved by the city.  The City Engineer will be responsible for reviewing and approving infrastructure extensions.

It is important to note that the NE 10th Street frontage of the parcel is bounded by the Hermiston Drain and multiple above ground utilities.  The Hermiston Drain is unpiped through this area and has a 50-foot easement lying adjacent to the 66-foot NE 10th Street right-of-way.  At the time the electric substation was constructed, the property owner entered into negotiations with the City to dedicate a recreational easement along NE 10th Street paralleling the canal easement for future trail purposes.  NE 10th Street is considered a major collector in the city's TSP and will require substantial future upgrades.  The street is narrow, lacking in sidewalks, has an open ditch paralleling the northbound travel lane and numerous utility poles within the right-of-way.  The final design of the future NE 10th Street improvements is still being considered by the city.  However, development of this parcel will trigger a mixture of street widening, pedestrian improvements, utility relocation, and other work.  The ultimate design of the roadway will be determined by the city (including the planning commission and city council) at the time a development plan is developed and submitted for approval.

When considering conversion and annexation to the city, the applicant must demonstrate that the proposal complies with the statewide planning goals and the criteria contained within the comprehensive plan.  To facilitate the demonstration of compliance, the applicant has prepared findings of fact in support of the applications for conversion and annexation.  The findings of fact as prepared by the applicant have been modified to fit the city's format and provide additional procedural findings and attached as Exhibit E.

On November 13, 2019, the planning commission held a public hearing on the proposed conversion and annexation.  The meeting was well-attended and there was considerable testimony in support presented to the planning commission.  No testimony in opposition was received.  Following the closure of the public hearing, the planning commission made a unanimous recommendation that the city council approve both requests.

The city council may choose to:

• Approve conversion and annexation of the property as proposed by the applicant
• Deny conversion and annexation of the property at this time

The following motions are requested:

• Motion to approve the findings of fact on conversion, annexation, and zoning designation
• Motion to adopt Ordinance No. 2289 converting the property from urbanizable to urban
• Motion to adopt Ordinance No. 2290 annexing the property to the city.