STAFF REPORT SAUSALITO CITY COUNCIL

AGENDA TITLE Update: Marine Rails RECOMMENDED ACTIONS 1. Receive an update from Staff on the options for protection of the Marine Rails; and 2. Provide direction as appropriate. ISSUE SUMMARY AND BACKGROUND The Marinship Specific Plan Steering Committee (appointed by the City Council) held 13 meetings and a community forum from October 2013 through January 2015. The City Council was regularly updated on Steering Committee activities. On January 29, 2015 the Steering Committee unanimously recommended that the Strategic Assessment Analysis Report (Report) be presented to the City Council. Included in the Report was a recommendation to explore the creation of a zoning or historic protection overlay for the Marine Rails area (on the Sausalito Shipyard property—2360 Marinship Way). The City Council reviewed the Strategic Assessment Analysis Report on February 10, 2015 and directed staff, in part, to create a budget, a timeline and a process for creating a Marine Rails Protection Overlay. HISTORIC MARINE RAILS (SHIPWAYS) AT THE SAUSALITO SHIPYARD The former Marinship yard, an approximately 210-acre site, is located in northern Sausalito, on Richardson’s Bay. The U.S. Maritime Commission established the Marinship in 1942 as one of six “Emergency Shipyards” in the San Francisco Bay Area, built in response to the Japanese attacks on Pearl Harbor, as well as escalating losses of Allied shipping to German and Japanese submarines. Bechtel broke ground for the new Sausalito yard on March 28, 1942. Soil tests revealed that bedrock was located closest to the surface at the central portion of the site, so it was decided to place the marine rails, "ways" or “shipways,” in this area (Marinship Historic Context Statement, June 2011, available: www.ci.sausalito.ca.us/modules/showdocument.aspx?documentid=9344). The marine rails were used to stage and assemble the subassemblies (deck houses, stern and bow assemblies, bulkheads, etc.) of each new ship. High-capacity, self- propelled “whirley” cranes operating along tracks on the marine rails would then transport the completed subassemblies to their designated hull. Once the subassemblies were in their proper places, workers would then weld them into place. Once the subassemblies and hull had been joined, each ship was launched, and towed to the outfitting docks for completion. During its short run, 93 vessels (not counting barges and launches), including 15 Liberty Ships and 78 T-2 tankers and oilers, were built in the Marinship. The yard also repaired 23 vessels and was in the process of building barges for the invasion of the Japanese mainland when it ceased operation. The last tanker was launched on September 8, 1945 and the yard was closed in 1946.

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Figure 1: Site Plan of Marinship Yard, with Arrows Indicating Patterns of Workflow

Figure 2: Tankers on the Ways, 1944

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MARINE RAILS TODAY AT THE SAUSALITO SHIPYARD Many of the original marine rails survive and are being actively used in the east central part of the former yard (at the Sausalito Shipyard and Marina, the former “Arques Shipyard & Marina,” site). Business like Bayside Boatworks, Aquamasion, and Richardson Bay Boatworks and Ways use the marine rails to haul out boats for maintenance and repair, conduct maintenance on houseboats, and restore classic wooden boats. Some of the boats that are hauled out using the marine rails, like classic wooden boats, were referred to during the Marinship Steering Committee meetings as not being able to be hauled out any other way except for the marine rails. It was also presented during the Marinship Steering Committee meetings that the marine rails in the Marinship are a rarity across the United States in terms of the amount of tons that can be hauled out. The rails in Sausalito are capable of hauling vessels up to 250 tons, third to Petersburg and Ketchikan, Alaska (400 and 300 tons respectively). Newport Beach ranks fourth, which is capable of hauling out up to 80 tons. EXISTING REGULATIONS AT THE MARINE RAILS PARCEL The Marinship Specific Plan provides specific regulations with regards to the allowed uses at the parcels on which the marine rails sit. The marine rails are located in the Waterfront Zoning District, on what is identified as Parcel 5B (“Arques Gate 3”) in the Marinship Specific Plan (MSP).

Figure 3: MSP Diagram #2 showing Zone 2. Parcel 5B has been highlighted The “site specific” exceptions in the Waterfront (W) Zone of the MSP states for Parcel 5B:

“As mentioned in the “I” zone material above, this site represents the greatest opportunity to create a significant marine service center in the Marinship. The parcel is large, has good water access, and has been in this type of use since World War II. The objective for this parcel is that it should be developed into a full service marine center, complete with all necessary support uses and facilities. This parcel is also one of the Marinship’s largest, and should be capable of supporting a variety of mixed-uses including commercial services and

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food service. This parcel has been mentioned as a potential site for limited commercial fishing facilities this could include berthage, loading and unloading dockage, and associated support uses. If this use is determined to be feasible, it could be considered as an element of this site’s development program.”

The “site specific” exceptions in the Industrial (I) Zone of the MSP states for Parcel 5B:

“This parcel is large, has remained in a single ownership for many years, and with its water access, represents the greatest remaining opportunity in the Marinship to create a significant marine service center. The development objective for this parcel is that it be used for a mixed-use development concept focusing upon industrial and art uses, especially those oriented to, an complementary to, marine services. Its central Marinship location, as well as the potential for significant amounts of industrial and arts uses, justifies such additional uses as commercial service and food services.”

Currently, uses which are allowed on Parcel 5B include: General Industrial (e.g., light manufacturing, industrial R&D, warehousing, industrial,

trade and business services, packing and crating, repair shops, etc.) Marine Industrial (both land and water, e.g., boat building/repair/service/storage/

towing/restoration/measuring and surveying, houseboat construction, marine carpentry, marine electronic service/repair, marine salvage, rigging, sail construction and repair, etc.)

Industrial, Marine and Fine Arts (e.g., industrial: cabinet making, woodworking; marine: boat building, marine carpentry; fine: poet, potter, sculptor)

Applied Arts (with Minor Use Permit, e.g., architects, computer software designers, etc.) Existing Office (“grandfathered,” established prior to MSP) Business Commercial Services (e.g., art and business supplies, printing facilities, etc.) Marine Commercial Services (e.g., bait and tackle shops, boat charters, chandlery, etc.) Restaurant (for consumption on-premise, with Conditional Use Permit, limited to 20

seats in the “W” zone and 40 seats in the “I” zone; requires analysis of need for such facility to service employees of Marinship)

Food Service (for consumption off-premise, with Conditional Use Permit, limited to amount of square footage needed to serve needs of employees of Marinship)

Live-aboard boats Pleasure boat and Marine Service berths Dry boat Storage Open Space and Open Water

PROTECTING THE MARINE RAILS As a separate task from the Specific Plan and General Plan Update, the MSP Steering Committee recommended the immediate exploration of a zoning or historic protection overlay for the marine rails area. Due to the rarity of the marine rails as a working-waterfront resource, the MPS Steering Committee recommended that the area shown in Figure 4 (which is entirely on, but does not include the full water frontage for, the Shipyard property) should be designated exclusively for haul-out marine service uses to utilize the rail systems and the land between the rails and Road 3. The City Council reviewed the Strategic Assessment Analysis Report on February 10, 2015 and directed staff, in part, to create a budget, a timeline and a process for creating a Marine Rails Protection Overlay. With the goal being to recognize that the Marine Rails are a valuable, historic resource to Sausalito, to ensure that the working waterfront uses that currently utilize the rails are not lost, and that the rails themselves are not lost, Staff has identified four major options to explore the concept of a zoning or historic protection overlay for the marine rails area. The first option is a Marine Rails Overlay, the second is a Historic Preservation Designation, the third is a hybrid

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approach between the first two options, and the fourth is a development agreement option. See the Attachment for a matrix that identifies each option, describes the process, identifies pros/cons and assigns anticipated costs.

Figure 4: Area of Protection for Marine Rails Option A: Marine Rails Overlay Option The first option for consideration is Zoning Ordinance, Specific Plan and General Plan amendments which would create a Marine Rails Overlay to permit maritime uses at the exclusion of others in the Overlay. The Overlay would add stricter regulations for the portion of the parcel designed in Figure 4 as the area of protection; the remainder of the parcel would be allowed retain the existing entitlements allowed today (as described in the “Existing Regulations at the Marine Rails Parcel” Section above). The idea would be to only allow a subset of the uses currently allowed, i.e., those uses that use and need access to the marine rails, like Marine Industrial, Marine Commercial and Marine Arts uses. This option includes the following process steps: Develop a scope of work (staff, subcommittee of Council/Planning Commission, etc)

o Determine which uses benefit from and need access to the marine rails Retain a Consultant to prepare required text/map amendments/ staff reports and

conduct community outreach and take the amendment through the City’s process (estimated $35,000)

Environmental Review (potentially a Mitigated Negative Declaration, estimated at $15,000)

Community Outreach/Workshop Planning Commission Hearing(s) (a minimum of one hearing is required) City Council Hearings (a minimum of two hearings are required)

The above process would be processed in accordance with the City’s municipal code and any other applicable state government code for amendments to the Zoning Ordinance, Specific Plan and General Plan. Notification of pending amendments to property owners/residents within 300 feet is required. The benefits to selecting this option include the assurance that the only uses

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allowed at the overlay site would be the desired maritime uses and of the options presented in this staff report this option could be completely most quickly. To enforce the overlay, code enforcement could be utilized. The drawback to this approach is that it does not include assurances that the existing maritime uses in area could not be terminated and the marine rails not utilized and left in disrepair. This is a significant drawback considering that the goal of the effort would be to ensure that the working waterfront uses that currently utilize the rails are not lost, nor the rails themselves. Option B: Historic Preservation Designation Option This option is to go through the City’s local nomination process to list the marine rails as a local city historic resource on the local register. This process could include the establishment of conditions on how the rails can be used and can require a maintenance plan to ensure that the marine rails are maintained to extend their useful life. Additionally, the process could involve the development of special penalties for the demolition of local historic resource. These special penalties could involve monetary penalties in addition to limits on future development. This option includes the following process steps: Retain a Historic Consultant (estimated at $20,000)

o To describe marine rails’ significance o To identify if repairs are needed o To prepare required maps, statements and inventory forms if necessary o Develop Penalties for Demolition of Local Historic Resource

Environmental Review (potentially a Negative Declaration, estimated at $15,000) Local nomination process (staff time estimated at $15,000)

o Council to Initiate Listing o Preparation of Application Materials (including maps, photographs, statement of

historical significance, description of features to be preserved, historic resources inventory forms if necessary)

o Historic Landmarks Board Hearing to Recommend Nomination (a minimum of one hearing is required)

o Planning Commission Hearing to Recommend Nomination (a minimum of one hearing is required)

o City Council Hearing to Designation

To enforce the local listing of the marine rails as a local city historic resource, both code enforcement as well as the development of penalties for demolition of a location historic resource could be used. The drawback to this approach is that it does not include assurances that the existing maritime uses in area could not be terminated. Additionally, if rails are designated as historic resource, staff would need to conduct research to determine if there would be a requirement to maintain them as a historic resource and an associated obligation to not use them to a point of wearing them out (in order to protect them as a historic resource). This would contribute to the goal of ensuring that that the rails themselves are not lost, however, it could be antithetical to the goal of ensuring that that the working waterfront uses that currently utilize the rails are not lost. It should be noted that the Marinship Historic Context Statement, prepared in June 2011, looked at the issue of if the entire Marinship could be eligible for listing as a National Register as a historic district. The Context Statement states that “Marinship does not appear eligible for listing in the National Register as a historic district. Almost half of its original resources have been demolished and most that remain have been altered. There is only one section of the former shipyard – the outfitting zone at the southern end of the yard – that retains a sufficient number of contiguous resources to possibly qualify as a California Register historic district, although here too the integrity of individual resources is generally low.”

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Option C: Hybrid: Overlay and Historic Preservation Designation Option This option is a hybrid approach that combines Options A and B to more wholly achieve the goal of recognizing that the Marine Rails are a valuable, historic resource to Sausalito, ensuring that the working waterfront uses that currently utilize the rails are not lost, and that the rails themselves are not lost, but also achieving economies of scale in terms of cost savings for the environmental document preparation. This approach includes both a Marine Rails Overlay Zoning Ordinance/Specific Plan/General Plan amendment to limit the uses in the marine rails area to the uses that use and need access to the marine rails and a Historic Preservation Designation to require stronger maintenance standards for the rails. There are economies of scale in combining these two approaches in that (1) hearings could occur in tandem and not sequentially, (2) if conducted in conjunction with each other only one environmental document would be required to be prepared and (3) the City could retain a single firm that could conduct both aspects of the work, possibly saving additional costs. Therefore, staff has estimated $35,000 for consultants (both planning and historic work) and $15,000 for environmental review. Option D: Development Agreement Option This option includes negotiation with the property owner of the Sausalito Shipyard parcel in order to seek to protect the working waterfront uses that currently utilize the rails and the rails themselves. This option is only relevant if there is an actual project proposed. This option would begin with negotiations between the property owner and the City in the

form of a development agreement that would be aimed at maintaining the maritime uses at the marine rails site, and the rails themselves in exchange for these protections the property owner would likely seek concessions from the City such as permitting development that is not currently allowed on another area of the property.

The assurance that that maritime uses at the marine rails site will be maintained and not terminated could come in the form of a deed restriction or covenant on the property that could require a monetary fine that the City could collect to enforce the restrictions

The development agreement could also require a maintenance plan to ensure marine rails are maintained to extend their useful life.

The is process includes public hearings in front of the Planning Commission and City Council, findings need to be made that project is consistent with the General Plan and Specific Plan and therefore plan amendments may be required as well. Because the costs associated with this option are dependent on the scope of the development proposal and can range greatly dependent on need consultant and legal assistance, they are undetermined at this point. The benefits to selecting this option include the assurance that the only uses allowed at the overlay site would be the desired maritime uses, that the existing maritime uses are protected from termination, and that the rails are maintained in working order. To enforce the agreement, a monetary penalty as part of the deed restriction/covenant could be utilized. The drawback to this approach is that it would require City to negotiate with the property owner to potentially allow development on Parcel 5B in order to protect the marine rails and maritime uses in the area.

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FISCAL ANALYSISBoth options A, B and C have preliminary anticipated costs of $50,000. Option A estimates$35,000 for the retention of a consultant and $15,000 for environmental review. Option Bestimates $20,000 for the retention of a historic consultant, $15,000 for environmental reviewand $15,000 in staff time. Option C estimates $20,000 for a planning consultant, $15,000 for ahistoric consultant and $15,000 for environmental review. Because the costs associated withOption D are dependent on the scope of the development proposal and can range greatlydependent on need consultant and legal assistance, they are undetermined at this point.

STAFF RECOMMENDATION1.Receive an update from Staff on the options for protection of the Marine Rails; and2.Provide direction as appropriate.

ATTACHMENT-Matrix of Options

PREPARED BY:REVIEWED BY:

Community Development Director

REVIEWED BY: REVIEWED BY:

Jonathon GoldmanPublic Works Director/City Engineer

i:\CDD\PROJECTS - NON-ADDRESS\ZOA\2015\!Vlarine Rails\ccsr4-21-15.doc

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