Planning Commission backs interim circulation plan for 600 Tank Farm Road project after right‑of‑way delays

The San Luis Obispo Planning Commission on Feb. 26 unanimously recommended that the City Council approve modified off‑site circulation conditions for the previously approved 600 Tank Farm Road project and adopt an addendum to the project’s final environmental impact report. The vote followed staff presentations and questions about failed easement negotiations and interim engineering measures intended to preserve future construction of a roundabout.

The commission’s action forwards to council a resolution that would replace a planned roundabout at the Tank Farm Road–Santa Fe Road intersection with an interim unsignalized stop‑controlled intersection and other interim safety features because the applicant cannot obtain right of way from Union Oil Company required for the roundabout. John Rickenbach, contract planner, told the commission the applicant proposes interim improvements including a Tank Farm eastbound left‑turn lane into Santa Fe, buffered on‑street bike lanes, frontage landscaping and lighting, a two‑way shared‑use path segment, temporary sidewalks, and other traffic calming features intended to maintain multimodal safety while preserving the option to build the roundabout later.

Why it matters: The change preserves the project’s on‑site development — 280 residential units and 12,500 square feet of commercial space on an 11.7‑acre site — while acknowledging third‑party property and environmental constraints that prevent the city and developer from completing the originally required circulation work now.

Staff and technical response

Rickenbach said the 600 Tank Farm Road project was approved by council in February 2022 and that staff prepared an addendum to the certified final EIR because the modifications do not introduce new environmental impacts. He said many of the originally required safety elements remain in the modified proposal and that the project will be designed to allow future construction of the roundabout when right‑of‑way becomes available.

Luke Schwartz, the city’s transportation manager, explained how the city will secure the applicant’s fair share of future roundabout costs. “Our traffic impact fee program already contemplates this roundabout project,” Schwartz said, adding the city is asking the developer to pay its share of cost increases above the fee program’s baseline and to estimate escalation using a construction cost index to account for future inflation. He also said staff has a nearly complete (about 99%) design for the roundabout, which helps align frontage improvements now with the ultimate configuration and minimize throwaway work.

Easement and undergrounding issues

Commissioners pressed staff on why the roundabout cannot be built now. Rickenbach and other staff said two separate third‑party easement problems block full implementation: (1) Union Oil Company (operated by Chevron) is conducting environmental testing and potential remediation on property needed for one or more roundabout corners, and has not yet committed to granting the right of way; and (2) United Rentals, on the south side of Tank Farm Road, has not agreed to the multiple underground and overhead easements PG&E requires to complete the applicant’s proposed undergrounding and pole removals.

Staff described the Union Oil issue as unresolved because additional testing (including for PFAS) and related plans are still pending. The timeline for those studies, staff said, is uncertain and could range from about a year to many years. On the United Rentals side, staff said the applicant has pursued easements for over a year and has escalated negotiations but has “hit a brick wall.” As an alternative to forcing immediate full undergrounding, the applicant asked to leave one overhead PG&E pole in place on the site but to install a conduit under Acacia Creek to allow that pole to be undergrounded in the future.

Applicant comments and affordability context

Damien Mavis of Covellip, the project applicant, told commissioners the developer supports the interim plan and stressed the role of rising construction costs: “Our vision for this project was and continues to be to have the most affordable new market‑rate housing in SLO … We’re approved 280 units. Since then, housing prices have gone up 16%. That equates to our home buyers about a $100,000 increase per average unit.” Mavis said the developer intends to proceed once the last items are addressed and asked the commission to forward the modification to council.

Commissioners’ concerns and amendments

Several commissioners expressed reluctance that the roundabout would not be built now but supported the interim design as a pragmatic compromise to allow housing to…