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HomeMy WebLinkAboutStaff Report 2712 City of Palo Alto (ID # 2712) City Council Staff Report Report Type: Action ItemsMeeting Date: 4/23/2012 April 23, 2012 Page 1 of 6 (ID # 2712) Summary Title: CPI Amortization Study Title: Discussion of Zoning Amortization Study and Options Related to Communications and Power Industries (CPI) at 811 Hansen Way From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council consider input from staff, CPI and the Barron Park residents, and direct staff whether to prepare zoning amendments or develop additional materials, including consultation with a technical peer reviewer regarding the feasibility of potential improvements to further reduce hazardous materials quantities at CPI and the risk level of such materials in proximity to residential properties. Executive Summary Communications and Power Industries, Inc. (CPI), or its predecessor firm, Varian Associates, has occupied the property at 607 and 811 Hansen Way since 1953. In 2006, CPI moved its San Carlos operation to Palo Alto and upgraded its plating shop, which is located immediately adjacent to residences in the Barron Park neighborhood. Those neighbors have expressed significant concern about the operations at CPI, particularly in light of a few accidental discharges or releases at the site. The City has commissioned an “amortization” study to define a reasonable period of time for CPI to recoup its investment in the plating shop, but then to relocate it away from the residential area. The intent of the meeting item is to review and discuss the “amortization” study, to provide input from staff, CPI and Barron Park residents, and to allow the Council to provide direction for next steps. A few options are outlined, including a) initiating zoning amendments and amortization for the CPI plating shop, b) evaluating a broader scope of impacts of hazardous materials uses adjacent to residential areas, and/or c) working with CPI and neighbors to facilitate further meaningful reductions in the amount and/or changes in the use, transportation or storage of hazardous materials in this location to enhance health and safety of the adjacent neighborhood. Background April 23, 2012 Page 2 of 6 (ID # 2712) Communications and Power Industries, Inc. (CPI), or its predecessor firm, Varian Associates, has occupied the property at 607 and 811 Hansen Way since 1953. The Microwave Products Division of CPI manufactures klystron vacuum tubes, which are used to amplify microwave and radio-frequency signals for various applications, including defense systems, satellite communications and medical devices. As part of the manufacturing facility, CPI operates a metal plating shop, which is located in a building adjacent to residential property located on Chimalus Drive in the Barron Park neighborhood (Attachment A). Until recently, the plating shop was the only facility in Palo Alto that uses or stores hazardous materials (potassium cyanide and nitric acid) at or above the threshold limits for regulation under the California Accidental Release Prevention Program (“CalARP”), under Title 19 of the California Code of Regulations. In 2005-2006, CPI consolidated the operations of its San Carlos facility (formerly Eimac Products) in Palo Alto. As part of and subsequent to the consolidation, and in response to three hazardous materials incidents at the site, CPI has made substantial upgrades to the plating shop, including upgrades to storage, processing and safety equipment. Some of these upgrades included: February 2005: Partial seismic upgrade to plating shop building. April 2008: Installation of toxic gas alarms outside plating building (on Chimalus side) to detect nitric acid or hydrogen cyanide fumes or vapors. January 2009: Relocation of Potassium Cyanide from exterior storage building into plating building. March 2009: Installation of natural gas generator to provide emergency power to plating shop ventilation and treatment system. May 2009: Installation of filtered fume hood for handling and weighing potassium cyanide. 2006–2009: Reduction of Potassium Cyanide quantities from approximately 700 pounds to approximately 400 pounds and reduction of Nitric Acid from over 4000 pounds to less than 2000 pounds. In March of 2012, CPI reported to the County that it has reduced the storage or use of Potassium Cyanide to below 100 pounds and the storage or use of Nitric Acid to below 1,000 pounds, both below the threshold of the Title 19 regulations (Attachment C). CPI also notified the City’s Fire Department of that action and staff is awaiting confirmation from the County. Hazardous Materials Incidents In February of 2006, residents in the Chimalus neighborhood reported a noxious odor, which turned out to be caused by a gas (nitric acid) release from CPI. Following this incident, neighbors began expressing concerns about the proximity of the plating shop to the residential neighborhood, as well as “right-to-know” regulations. In March of 2008, approximately 10 gallons of 31% hydrochloric acid was released in the rear April 23, 2012 Page 3 of 6 (ID # 2712) driveway and about 60 gallons of a less than 31% mixture of hydrochloric acid and water were release inside the basement of Building 2 during a chemical delivery due to an improper overfill and disconnect procedure by the delivery driver. In May of 2008, approximately 50 gallons of diluted wastewater containing copper and nickel was released to Matadero Creek due to improper weekend shutdown of process equipment and improper opening of a containment valve that discharges to the creek. Corrective actions were taken for each of the events and no incidents have been identified or reported since 2008. As noted above, a number of upgrades followed some of the incidents and discussions with the City and neighbors. Zoning Ordinance Amendments In 2006, in response to concerns expressed by Barron Park residents about the proximity of highly toxic chemicals to the neighborhood, the City Council enacted zoning code amendments to address their concerns. The amendments are encompassed in Section 18.23.100 (Hazardous Materials) of the Municipal Code and were intended to prevent further intensifying such hazardous materials use and to provide more notification for residents anywhere throughout the City when adjacent facilities increased or modified hazardous materials use and storage. In particular, a conditional use permit (CUP) is required for any new facility that would be subject to CalARP (Title 19) regulation. In addition, no facility that is subject to CalARP regulation is allowed within 300 feet of a residential zone or property with existing residential uses. However, because CPI was in existence at the time of the new requirements, it is considered a legal nonconforming use. A legal nonconforming use may generally continue, provided that the level of nonconformity is not expanded and the use does not change. The ordinance did not include provisions for “amortization,” i.e., phasing out the nonconforming use. The zoning code section is included as Attachment D. Amortization Study In response to continuing neighborhood concerns, the City commissioned an amortization study to evaluate the time period required to allow the phase out of the plating shop operation within 300 feet of the residential area while permitting CPI a reasonable period of time to recoup its investments in that facility. The study was completed in July of 2011 and the results are discussed below. Discussion The purpose of the Council meeting is to present the amortization study results and to outline zoning or other options to reduce or eliminate potential hazardous materials impacts on neighboring residential properties. Amortization Study Amortization of a nonconforming use is intended to phase out a use that is either incompatible with adjacent uses or where a change in use is desired as an orderly planning transition to other uses (for instance, conversion of an area from light industrial uses to residential). The City of Palo Alto has provided in the past for amortization periods of anywhere from five years to 30 April 23, 2012 Page 4 of 6 (ID # 2712) years for changes in use. The California Supreme Court has held that “zoning legislation may validly provide for the eventual termination of nonconforming uses without compensation if [the legislation] provides a reasonable amortization period commensurate with the investment involved.” Metromedia, Inc. v. City of San Diego (1980) 453 Cal.3d. 848. The City would look to a number of factors in determining a reasonable amortization period. Where the elimination of the use would require the removal of physical improvements, “the reasonableness of the amortization period depends on the interplay of many factors, including the depreciated value of the structures to be removed, their remaining useful life, and the harm to the public if they are left standing.” City of Salinas v. Ryan Outdoor Advertising, Inc., (1987) 189 Cal.App. 3d 416. In response to the Barron Park neighborhood concerns, the City commissioned an amortization study (Attachment B) to determine a reasonable amortization period for CPI to come into compliance with the current Zoning Ordinance. The study, prepared by CB Richard Ellis (economic real estate consultants), concluded that a reasonable amortization period is 20 years from the date that the most significant improvements occurred on the CPI site. Specifically, the study would support an ordinance eliminating the nonconforming use in 2026, fourteen (14) years from now. Because CPI indicated at the time it could not achieve compliance with the zoning regulations (reduction of chemical use below Title 19 thresholds), the study assumes that CPI would be required to relocate its plating shop to a location more than 300 feet from residential property. CPI cooperated with the study and provided confidential financial information to the City’s consultants (note that the study is redacted to exclude some financial information). Staff expects CPI to take the position that amortization is unwarranted at this time. Staff also anticipates CPI to take a different perspective on appropriate amortization methodology and to contend that a longer period is appropriate should amortization occur. Zoning Options Staff notes that, if the County verifies CPI’s statement that it is now below Title 19 thresholds for hazardous materials, they are currently in compliance with zoning. Staff has identified a few potential approaches, however, to implement the intent of the amortization study or other methods to further minimize risk to surrounding neighbors. The potential feasibility or drawbacks to the options are outlined as well. 1. Initiate a Zoning Ordinance amendment to prohibit plating shops, or facilities using similar hazardous materials, within 300 feet of residential zones, and require amortization for CPI consistent with the amortization study. This will entail outreach to CPI and neighbors and an assessment of other plating shops in the community (three) and whether there would be any concerns (they are not proximate to residential). 2. Amend the Zoning Ordinance to better define the levels of hazardous materials use and storage for plating shops and similar industrial processes and appropriate separation from residential areas, and provide for amortization periods accordingly. This option would likely rely on technical hazmat experts to provide input for those criteria. The April 23, 2012 Page 5 of 6 (ID # 2712) resultant regulations may also affect businesses other than CPI, particularly in the Research Park, where many businesses abut residential sites. 3. Do not modify the zoning, but work with CPI and the neighbors to achieve further reductions in chemical use and storage, and possibly changes in the handling, transportation, storage and use of hazardous chemicals, to reduce risk and promote health and safety in the adjacent neighborhood. Seek technical consultant assistance to evaluate hazardous materials operations to suggest methods to achieve further meaningful reductions and improvements in safety practices. Negotiate voluntary compliance with identified improvements, or, in the absence of voluntary compliance, evaluate options for regulatory action and appropriate phase-in period. Staff recommends that Council discuss the input from staff, CPI, and the neighbors and provide direction regarding the above alternatives and a timeframe for response. At a minimum, it appears that it would be beneficial for the City to retain a technical consultant to provide a strong basis for subsequent City actions and/or to work with CPI to further reduce chemical usage and enhance safety measures. Resource Impacts Resource impacts will include staff time to research the issues further and work with the neighbors and CPI, as well as to amend the Zoning Ordinance (including hearings with the Planning and Transportation Commission and Council), if so directed by Council. Other costs may include retaining hazardous materials technical consultants to advise the City. Finally, there may be potential litigation costs of various actions. Policy Implications CPI is currently in compliance with the Zoning Code. However, further action may be appropriate to assure that health and safety is provided for neighboring residential areas. There are also policy implications regarding how or whether subsequent actions would affect other businesses in the Research Park or elsewhere in Palo Alto. Environmental Review Environmental review is not required at this stage of discussion. Enviornmental review will, however, be required at the time of any proposed zoning ordinance amendments. Staff anticipates, however, that no environmental impacts would accrue from amortization as the result would generally enhance health and safety for nearby residents. Attachments: Attachment A: Location Map (PDF) Attachment B: July 6, 2011 CPI Amortization Study (PDF) April 23, 2012 Page 6 of 6 (ID # 2712) Attachment C: March 28, 2012 Letter from CPI to Santa Clara County Re: CalARP DeRegistration (PDF) Attachment D: Section 18.23.100 (Hazardous Materials) of the Zoning Code (PDF) Attachment E: April xx, 2012 Letter from CPI (PDF) Prepared By: Curtis Williams, Director Department Head: Curtis Williams, Director City Manager Approval: ____________________________________ James Keene, City Manager 71.5' 102.7'120.0' 5.6' 25.0' 54.3' 33.5'5.6' 120.0' 15.1' 70.2' 155.1' 90.8' 113.2' 50.1' 113.2' 50.1'76.6' 35.0'25.0' 3.7' 43.3' 129.3' 86.3' 165.9' 74.1' 74.2'78.4' 49.7' 18.8' 10.0' 102.4' 10.1' 53.2' 150.1' 8.2'85.0' 50.3' 59.1'102.4' 10 85.0' 705.1' 1227.7' 325.5' 94.4' 381.8' 1133.4' 81.2' 75.5' 81.2' 67.0' 94.7' 11.1' 10.9' 74.2' 68.7' 38.7' 176.3' 108.6' 158.5' 18.0' 47.8' 3.7' 43.3' 129.3' 114.9' 51.2' 150 149.8' 49.9' 150.0'150.0' 49.9' 150.0 50.0' 50.0' 55.3' 20.8' 60.7' 93.6' 55.0' 113.0' 60.7' 21.0' 28.8' 75.0' 60.0'93.6' 52.0' 33.1' 59.8' 75.0'97.5' 63.6' 144 590.8' 182.6' 705.1' 50.0' 55.3' 26.4'58.7' 69.7' 87.8' 100.0' 50.0' 317.0' 375.4' 208.0' 196.8' 365.7' 157.4' 706.6' 526.6' 375.4' 186.5' 381.8' 94.4' 325.5' 14.4' 50.0' 88.5' 26.5' 13.5' 58.7' 69.7' 59.8' 13.5' 327.5' 366.1' 72.5' 80.0' 102.6' 102.6' 142.5'94.4'94.4' 103.2'55.5' 55.5' 55.0' 55.0'65.9' 65.9' 113.0'115.0' 115.0'115.0' 115.0'115.0' 115.0' 174.7' 156.5' 18.0' 47.6' 94.5'112.7' 112.7' 113.7' 113.7' 113.8' 47.4' 47.4' 47.4' 47.4' 113.8' 62.6'75.0' 28.8' 113.6'113.6' 113.6'113.6' 113.6'113.6' 113.6'113.6' 113.8' 47.4' 47.4' 47.4' 47.4' 47.4' 47.4' 47.4' 47.4' 62.6' 62.6'113.6'113.6' 113.6'113.6' 113.6'113.6' 62.2' 62.2'62.2' 62.2' 75.8' 75.8'113.6'113.6' 113.6'113.6' 113.6'113.6' 113.6'113.6' 76.4' 76.4'63.0' 63.0'56.0' 56.0'56.0' 56.0'56.0' 56.0'56.0' 56.0' 113.6'113.6' 113.6'113.6' 113.6'113.6' 80.0' 108.2' 54.0' 54.3' 8.4' 71.0'71.0' 36.8'87.0' 113.0'113.0' 41.7' 50.1'56.0' 56.0' 113.0'113.0' 113.0'113.0' 113.0'113.0' 56.0' 56.0' 56.0' 56.0' 56.0' 113.0' 113.0'113.0' 113.0'113.0' 56.0' 56.0' 56.0' 56.0'73.5' 55.6' 55.6'56.0'113.5'113.5' 811 611 722 718 714 710 706 704 678 668 650 632 695 3470 686 667 655 588 698 700 701 705 707 709 704 706 698 3440 3445 633 649 615 604 605 601 3475 3337 592 572 582 593 606 604 610 3300 607 602 550 911 850 700 600630 660 690690A 3327 3399 3333 630 330 CHIMALUS DRIVE A AV E N U E HANSEN WAY EL CAMINO REAL CHIMALUS DRIVE MATADERO AV HANSEN WAY HANSEN WAY T I PPAWI NGO STREET This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 0' 180' CPI 811 Hansen Wy CITY OF PALO ALTOINCORPORATED CALI FORNIA P a l o A l t oT h e C i t y o f APRIL 1 6 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2012 City of Palo Alto jnortz, 2012-04-16 08:29:52 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) CERE CONSULTING July 6, 2011 Mr. Don Larkin Assistant City Attorney City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 CBRE CB HICHARD ELLIS 101 California Street 44th floor San Francisco, CA 94111 T 415 772 0123 F 4157720459 www.cbre.com/consulting RE: Estimated Am@rti:z:ation Period for CPS FfOIci!ity fOIt 811 Hansen Way, Palo Alto, CA Dear Mr. Larkin: As requested, CBRE Consulting has estimated a reasonable amorlization period for a porlion of the Communications and Power Industries, Inc. (CPI) facility located in Stanford Research Park in Palo Alto, California. Specifically, the amorlization period relates to the storage and use of cerlain chemicals above Title 19 thresholds within 300 feet of a residential area. As such, this perlains to a porlion of CPl's Building 2 at 811 Hansen Way (the "plate shop"), as well as a secured outdoor storage area located between Buildings 1 and 2. The contents of this letter are subject to the attached assumptions and general limiting conditions. SUMMARY OF FINDINGS As discussed in the following sections, CBRE Consulting concludes that a reasonable amorlization period for the CPI plate shop facility is 15 years from the date of this letter. This period allows CPI to fully utilize its equipment while adequately preparing for a relocation of the plate shop either at the existing site or at a new location altogether. ASSIGNMENT BACKGROUND . Communications and Power Industries, Inc. (CPI), through its predecessor firm, has occupied the properly at 607 and 811 Hansen Way in Palo Alto since 1953. The company manufactures products that are used in communications, medical, military, and scientific applications. As parl of its manufacturing process, CPI operates a "plate shop" where the materials it uses in the assembly process are cleaned to a very high level. This cleaning process involves the use of chemicals, including CBRE CONSULTING Mr. Don larkin July6,2011 Page 2 CBRE CB RJCHARD EUIS potassium cyanide and nitric acid. Given the hazardous nature of these chemicals, there is concern about the proximity of CPl's plate shop facility to a residential neighborhood and an elementary schooL Although CPI had been operating the plate shop for decades, awareness of and concern about the CPI facility and its chemical use increased after the 2005-2006 relocation and integration of the company's former San Carlos "EIMAC" facility into the Palo Alto site. CBRE Consulting was engaged by the City of Palo Alto to estimate a reasonable period in which to amortize the zoning for the property. In amortization, the zoning of the property is reclassified to a different use, with the current occupant granted a certain period of time (the amortization period) in which to find and move to a new location. Upon the expiration of the amortization periodt the use becomes non-compliant. The City of Palo Alto has engaged in this type of process for other properties, including special districts, in the distant past. In this particular situation, the amortization . relates to Title 19 and the storage and use of chemicals above Title 19 thresholds within 300 feet of residential use. The amortization period allows the building owner/occupant to reap the benefit of using the building and/or fixtures and equipment over its estimated remaining economic or useful life. Economic life is defined as the period over which improvements to real property contribute to property value.I, 2 Useful life is defined as an estimate of how long an .item of property can be expected to be usable in trade or business or to produce income.3 In theory, by the end of the amortization period, the building and/or fixtures and equipment have no remaining utility to the owner/occupant. In this situation, the amortization period relates to CPl's plate shop facility. ASSIGNMENT SCOPE OF WORK CBRE Consulting's scope of work included the following tasks: o Meet with City of Palo Alto officials to discuss the property and to review available records pertaining to the site, such as assessment and tax data, building permit applications, fire department records, risk management plans filed with Santa Clara County, and other documents. (!) Tour the CPI facility to view the use of the buildings, the processes that take place within the buildings, the chemical storage areas, etc. Additionally, CPI responded to a request for information regarding the size and breakdown by use of its facility and periodic capital investment over time, particularly the investment related to the integration of the former San Carlos facility in 2005-2006; however, detailed capital investment information was not provided. 1 Appraisal Institute, The Dictionary of Real Estate Appraisal, Fifth Edition (Chicago: Appraisal Institute, 2010), 64. 2 By contrast, physical life is defined as the total period a building lasls or is expected to lost as opposed 10 its economic life. (See Footnote 1 for reference, 146). 3 Deportment of Ihe Treasury, Inlernal Revenue Service, Publication 946: How to Depreciate Property. April 6, 2011, 113. CBRE CONSULTING Mr. Don Larkin Juiy6,2011 Page 3 CBRE CH 1~ICHARD ELJJS ~ Conduct research into estimates of "lives" for the building, fixtures, and equipment, through sources such as CPl's 1 O·K reports to the Securities arid Exchange Commission (SEq, Marshall Valuation Service (a third.party vender of data on building and equipment valuations and lives), CB Richard Ellis' own Cost Segregation Group, and other sources. c;, Analyze the dota collected and estimate overall and remaining lives for the buildings, fixtures, and/or equipment. Of these estimates; identify the most pertinent remaining life as the basis for the amortization period. PLATE SHOP OVERVIEW The CPI plate shop is located in Building 2 (811 Hansen Way) to the rear of the structure in an area with two stories. Building 2 shares a parcel with Building 1, the land under which is ground-leased from Stanford University. This is one of the first facilities constructed in Stanford Research Park, with Building 2 doting to about 1957 (per Santa Clara County Assessor's records). The facility has been continuously occupied by Varian Associates/CPI (which is a successor entity.to Varian's Electron Device Business). To the rear of Building 2 (at the southeasterly end of the property) are an access driveway and a tall sound wall, beyond which is a 50-foot drainage and sanitary sewer easement that is on the CPI parcel. After the easement is the property line, with the Barron Park neighborhood beyond. The chemicals used by CPI are stored near the southeasterly end of the property. The potassium cyanide is stored outside in a secure storage area. The nitric acid, along with sulfuric acid and hydrochloric acid, are stored in tanks located just inside Building 2, along the southeasterly perimeter of the building. In addition to interior access, the storage tanks can be accessed from the outside via exterior doors. The exterior access facilitates refilling of the chemical storage tanks from tanker trucks. CPI has indicated that the plate shop is integrated with its manufacturing processes, whereby the materials are cleaned often more than once during product assembly and testing. The plate shop itself is supported by a variety of other equipment that extends beyond the confines of its walls. These include boilers that heat the water, plumbing to and from the plate shop (for air, acids, and water), back-up generator, chemical storage tanks, air scrubbers and exhaust duels, waste storage tonks and treatment system, etc. Thus, relocating the plate shop requires the moving of all the support equipment that ensures its proper and safe operation. The plate shop has been in operation for decades. In fact, the entire CPI operation at the Palo Alto facility exhibits the adaptation of its business over a 55+·year period in buildings that are not as efficient as a new facility. However, with the 200.5-2006 relocation and integration of the former San Carlos JlEIMAC" facility into the Palo Alto site, the plate shop underwent a substantial upgrade that included new processing tanks, lighting, ducting, fire protection power supplies, plumbing, and new acid storage tanks, among other improvements. CBRE CONSULTING Mr. Don Larkin July 6, 2011 Page 4 LIFE ESTIMATES CBRE CI3 RlCHARD ELLIS Estimates of the appropriate "Iife" for the plate shop relate to the useful life of the equipment that supporls the facility. The !wo main sources of estimates for the life of the building and equipment are CPI's own 1 O-K filings to the SEC and Marshall Valuation Service, which in parl extracts its estimates from the U.S. Treasury Deparlment Internal Revenue Service Publication 946. According to the CPI 2010 1 O-K filed December 10, 2010 for the period ending October 1, 2010, "plant and equipment are depreciated over their estimated useful lives using the straight-line method" base.d on the following schedule: Asset Category CPI Property Plant and Equipmenf Lives for DepreciatioA Purposes Land Improvements Process Equipment Machinery and Equipment Office Furniture and Equipment Years 25 20 12 7 to 12 5 to 10 Source: CPllnternational, Inc. Form 1 O·K, Filed 12/10/10; CBRE Consulting. The "process equipment" above generally includes the equipment used in the plate shop. This time period also correlates to the life expectancy specified in a letter from CPI to the City of Palo Alto: "The life expectancy of a typical cleaning/plating facility (or "plate shop") is approximately 10 years. Due, in parl, to a diligent maintenance program, CPI has been successful in extending the life of our plate shop to approximately 15 years."4 Based on CBRE Consulting's tour of the (PI facility, the process equipment is only one component of the operation. There is a variety of other equipment integrated with the plate shop, as previously noted. To identify the lives of tliese components, CBRE Consulting used the life expectancy guidelines provided by Marshall Valuation Service, as follows: 4 Letter from Bob Fickett, President and Chief Operating Officer, CPt to the City Council of the City of Palo Alia, dated January 18, 2007. CBRE CONSULTING Mr. Don Larkin July 6,2011 Page 5 CBRE CI3 FlJCHARD (::LLlS Life Expectancy Guidelines Selected Equipment Categories Equipment Category Industrial Boilers Circulation Piping Generator Storage Tanks (Steel Pressure) Air ductsl variety of materials Aerospace Industry Equipment Fabricated Metal Products Equipment Source: Marshall Valuation Service; and CBRE Consulting. ABSORPTION PERIOD ESTIMATES Bose Amortization Period Life Years­ Average Quality 20 27 22 22 Life Years­ Good Quality 25 30 25 23 17 (min.) 25 (max.) 8 to 12 9.5to14.5 Note the above table does not present an exhaustive list of the equipment contained within the facility but is illustrative of the varied lives of such items. CBRE Consulting believes that a reasonable amortization time period should factor in the other equipment necessary for reliable and safe operation of the plate shop. The range of lives for these items is from 1 7 to 27 years for average quality items and 23 to 30 years for good quality items. Therefore, we considered the range of lives presented in the above tables, with the shorter lives for the process equipment (12 years per CPI/S 10· K) balanced by the longer lives for the plumbing, storage tanks, and generator (midpoints about 22 to 26 years). As CBRE Consulting was not provided with a. detailed breakdown of the acquisition date and cost for all the equipment within and supporting the plate shop, it used a range of weighting between the process equipment and the other equipment to arrive at an estimated period of 20 years. CBRE Consulting reserves the right to amend its amortization period estimate if detailed data regarding the acquisition date and cost for all of plate shop and supporting equipment are made available. Amortization Period Adjustment Although the plate shop was in operation prior to the relocation of the San Carlos facility to Palo Alto, a reasonable starting point for an amortization period would be 2006, when the majority of the upgrades to the Palo Alto plate shop were completed. Subsequent to this movel certain additional improvements have been model most notably the installation of a new emergency electrical generator CBRE CONSULTING Mr. Don Larkin July.6{ 2011 Page 6 CBRE CB I'lJCHARD Fl..US for one fume scrubber{ which cost approximately _in 2010. However, the generator's cost is less than _percent of the plate shop upgrades expended in 2006. Thus, the amortization period should be reduced by five years to reflect the time period since the installation of the majority of the improvements in 2006. This results in an adjusted time period from 20 years down to 15 years from the date of this leiter. CLOSING COMMENT Please do not hesitate to contact me with any questions regarding this letter report. Sincerely, Mary A Smitheram-Sheldon Senior Managing Director N:\T eom-StrategicConsulting\ Teom-Projects\2008\ 1008169 Polo Alto\Reporl\ 1008169 Cily of Polo Alto RO l.doc CBRE CONSULTING CBRE CB RICHAFi.D ELUS CBRE Consulting has made extensive efforts to confirm the accuracy and timeliness of the information .. contained in this study. Such information was compiled from a variety of sources, including interviews with government officials, review of City and County documents, and other third parties deemed to be reliable. Although CBRE Consulting believes all information in this study is correct, it does not wqrrant the accuracy of such information and assumes no responsibility for inaccuracies in the information by third parties. We have no responsibility to update this report for events and circumstances occurring after the date of this report;'Further, no guarantee is made as to the possible effect on development of present or future federal, state or local legislation,' including any regarding environmental or ecological matters. The accompanying projections and analyses are based on estimates and assumptions developed in connection with the study. In turn, these assumptions, and their relation to the proiections, were developed using currently available economic data and other relevant information. It is the nature of forecasting, however, that some assumptions may not materialize, and unanticipated events and circumstances may occur. Therefore, actual results achieved during the projection period will likely vary from the projections, and some of the variations may be material to the conclusions of the analysis. Contractual obligations do· not include access to or ownership transfer of any electronic data processing files, programs or models completed directly for or as by-products of this research effort, unless explicitly so agreed as part of the contract. This report may not be used for any purpose other than that for which it is prepared. Neither all nor any part of the contents of this study shall be disseminated to the public through publication advertising media, public relations, news media, sales media, or any other public means of communication without prior written consent and approval of CBRE Consulting. ----------------~----.... ,-"--­... ~~=­ac:ma ~ ~.lI!iIIIDliIC:I ~-#/fI"': ~ ::;::a Communir:arion.r &: Power Induslri!!S March 28,2012 Mr. Ruben D. Williams County of Santa Clara Environmental Resources Agency Department of Environmental Health Hazardous Materials Compliance Division 1555 Berger Drive, Suite 300 San Jose, CA 95112-2716 RE: CalARP De-Registration Dear Mr. Williams: CEIVED BY: _SJ-ARA COUNTY b-ENV. HEALTH lnl2 APR -2 PH 3: 07 This letter is to request de-registration of Communications & Power Irldustries' (CPI) Potassium Cyanide and Nitric Acid processes at 811 Hansen Way, Palo Alto, CA, 94304 from the California Accidental Release Program. Quantities of Potassium Cyanide and Nitric Acid have been reduced to below CalARP threshold quantities and the processes are no longer subject to the applicability requirements ofCCR19, Section 2735.5(a)(2). As we discussed during our March 22 phone conversation, I have enclosed tables she-wing the calculated quantities in pounds of Potassium Cyanide and Nitric Acid used at our facility. These calculations include quantities in both the processing tanks and storage containers. Also enclosed is a description of the engineering controls we discussed for the basement Nitric Acid storage tank. We have also enclosed a copy of the most recent CalARP Registration form that was submitted on 3/4111, and updated Business Owner/Operator Identification and Business Activities forms that reflect this change. We have submitted an updated Hazardous Materials Inventory Statement to the Palci Alto Fire Department that shows the quantities used and stored in the covered processes are now below CalARP threshold quantities. If you have any questions regarding this submittal, please contact me at· (650) 846-3141 or john.dale@cpii.com. Sincerely, ~~C~WERmDUS1RlliS . JohnM. Drue Envirorimental Engineer Enclosures(5) 611 Hansen Way RO. Box 50750 Palo Alto, CA 94S0S-D750. U.S.A. (550) 646-2BOO Fax (650) 845-3315 Nitric Acid Usage at CPI lotal Volume at weight at Nitnc In Weight at Nitnc In Process Tank or Process Tank or Process Tank or Description Container (gal) Container (%) Container (Ibs) Nitric acid bottles 1 6.6 70 54.2 Copper Bright Dip2 50 22.6 155.6 Descale2 51 2.2 6.0 SS, Ml-9 2 26.3 26.2 67.5 MolyClean2 27.6 5.9 19.3 Nickel Bright Dip3 5.6 28.0 15.2 Kovar Bright Dip2 26.9 15.5 52.3 HC4 Dip:! 26.9 65.3 203.1 Mandrel Etch3 5.6 14.8 9.2 Nitric acid storage (basement)" 45 67 350.2 Total: 932.6 1Total of 10 bottles containing 2.5 L of 70% nitric acid per bottle. 2Process tanks or containers made up from 67% nitric acid. 3Process tanks made up from 70% nitric acid. Explanation of Calculations: Weight of nitric acid was determined based on volume of the process tank and % volume of nitric required to make up the tank. Specific gravity of 67"!~ or 70% nitric acid was used to convert volumes to weight. % Weight of nitric acid was based on the ratio of nitric acid weight vs. the sum the weights of all consitutents used 111 the bath. KCN Usage at CPI Description KCN storage' Technistrip 9030' Copper Strike Sliver plate Silvabrite II SE Replenisher Brightener' Copper Strike Copper Plate KCN Cleaner Cyanide lift station Waste treatment 4Solid 100% KCN. 5Solid Technislrip 9030 lotal vOlume aT Process Tank or Container (gal) 15 (Ibs) 1.5 (lbs) 46.4 40.3 40.3 51.9 51.9 5 900 1480 51ncJudes What is used In the bath and unused in stock. Explanation of Calculations: welgnt aT KLiN In welgnt 01 KLiN In Process Tank or Process Tank or Container ("/0) Container (Ibs) 100 15 70 1 2 7 13 45 2 0;097 2 8 2 10 6 2 0.005 1 0.005 1 Total. 90 Weight of KCN was determined based on volumeof the process tank and conc'entratlon of KCN required to make up the tank. % Weight of KCN in makeup was based on MSDS or conversion from concentration to % weight. cpr Utilities Nitric Acid Tank Level and Fill Controls 3/26/12 Nitric Tank Level Controls Tank level controls consist of two independent systems: 1) Electronic U1trasonic sensor system consisting of a tank mounted level sensor and local console mounted digital read out in gallons. III Alarm points monitored locally and at Security Control Panel III Fill· Set Point -maximum allowable fill level initiates Blue indicator light at local monitoring panel III High Level Alarm -set point at maximum allowable level initiates Red indicator light at local panel and alarm condition at Security Control Panel 2) Reverse Site Glass -tank mounted site glass mechanical indicator via float and clear PVC tube It Local visual indicator only Maximum Tank Level settings: 25 gals -Fill Set Pomt 30 gals -High Level Alarm Note: Maximum quantity -40 gallons Calibration and Maintenance: Level controls calibrated by comparison to manual measurement (dip stick) and volume calculation (volume chart) for specific tank. Ultrasonic sensor and Electronic meter calibrated accordingly Site Glass level indicator -Line on tank for site glass visual indicator Annual calibration/verification of level indicator is done as part of scheduled PM Fill Controls Tank filling is done using cpr Utilities documented procedure (Bulk Chemical Unloading) consisting of specific delivery instruction for cpr employees and Acid supplier which include: Acid Delivery Safety/Emergency procedures Setup instructions Communication Fill level instructions and indicators Maximum fill requirements Secure operation instructions Palo Alto Municipal Code 18.23.100 Hazardous Materials (A) Purpose In accordance with Titles 15 and 17 of the Palo Alto Municipal Code, minimize the potential hazards of any use on a development site that will entail the storage, use or handling of hazardous materials (including hazardous wastes) on-site in excess of the exempt quantities prescribed in Health and Safety Code Division 20, Chapter 6.95, and Title 15 of this code. (B) Requirements (i) The project shall be designed to comply with all safety, fire and building codes for the storage, use and handling of the hazardous materials involved. (ii) Any new structure that is designated an "H" occupancy (storage, use and handling of specified types and quantities of hazardous materials), or any existing structure that is converted to an "H" occupancy, as specified by the California Building Code, shall be designed in accordance with the currently adopted California Building Code and Fire Code. (iii) Where a building or area used for such storage, use and/or handling is located within 150 feet of a residential zoning district or of properties with existing residential uses located within nonresidential zones (residential properties), the business owner shall provide a report to the fire department addressing the adequacy of the emergency contingency plan, which addresses safety of the nearby residential area, including but not limited to, procedures for accidental releases or other emergencies, and other protective measures as required by Health and Safety Code Division 20, Chapter 6.95, upon: (a) A change in the types of hazardous materials stored, used or handled on the site in quantities above the reporting threshold established in California Health and Safety Code Division 20, Chapter 6.95; and/or (b) A 100% or greater increase in the quantities of a previously disclosed hazardous material stored, used or handled on the site above the reporting threshold established in California Health and Safety Code Division 20, Chapter 6.95; and/or (c) Release/threatened release incidents. (iv) For any such facility outlined in (iii) above, upon application for any building permit for improvements that would result in a change in the types of hazardous materials stored, used or handled on the site or an increase in the quantities of hazardous materials stored, used or handled on the site, the city shall provide written notice to the owners and residents of all residential property within 150 feet from the property line, not later than ten days after issuance of the building permit. The notice shall inform the property owners that an application has been received, the nature of the request (such as the type of materials), that the fire department and building department have determined the project to be in compliance with relevant hazardous materials regulations, and that the application and details are on file with the fire department and/or building department. (v) If an applicant proposes a new structure or a modification of an existing structure on a development site that will entail hazardous materials stored, used or handled in excess of the threshold limits of regulated substances listed in Tables 1 - 3 of Section 2770.5 of Title 19 of the California Code of Regulations - Chapter 4.5 Public Safety, or proposes to increase the amounts of hazardous materials on-site above Title 19 threshold limits (including hazardous wastes), notification shall be provided to "affected residents" (and property owners) advising them that the proposed risk management plan (RMP) is available for public review with the Santa Clara County department of environmental health. Notification from the city shall be mailed not later than 10 days after receipt of the information by the fire department (the county allows for a comment period of at least 45 days). Comments may be submitted to the SCCDEH, which shall review the RMP and any comments received. Any user or operator of hazardous materials above Title 19 threshold limits in Palo Alto shall submit a copy to the Palo Alto fire department of the RMP they are required to prepare under Title 19 and file with the Santa Clara County department of environmental health (SCCDEH). No building or fire department permit shall be issued prior to the submittal of the RMP to the SCCDEH and the fire department and the completion of the required public review period. The applicant is required to identify in the RMP the zone where potential serious offsite consequences would occur from an accidental release of the largest quantity of a regulated substance. This zone extends from the proposed place of usage or storage to a distance where a toxic vapor cloud, heat from a fire, or blast waves from an explosion resulting from an accident at the usage or storage point would travel before dissipating to the level at which serious injuries from short-term exposures will no longer occur. "Affected residents" are those who reside or own residential property within this zone. (vi) Notwithstanding the provisions above, no new "H" Occupancy portion of a facility (building or area) designated for storage, use or handling of hazardous materials above Title 19 threshold limits, and no conversion or reconstruction of an existing facility designated for storage, use or handling of hazardous materials above Title 19 threshold limits shall be allowed except upon approval by the city council of a conditional use permit, and in no event shall such facility be located closer than 300 feet to a residentially zoned property or a property with existing residential uses in a nonresidential zone. These provisions shall also apply to facilities that propose (a) to increase the quantity of allowable hazardous materials that previously were below Title 19 threshold limits to levels that exceed Title 19 threshold limits, or (b) to increase the quantity of hazardous materials that already exceed Title 19 threshold limits to a quantity in excess of ten percent (10%) above amounts allowed by an RMP in effect as of November 1, 2006. (vii) Any facility that is no longer subject to the applicability requirements of Title 19 as described above and for which de-registration of the RMP is submitted by the owner or operator shall not re-establish the use, storage, or handling of hazardous materials in excess of Title 19 threshold limits, except in compliance with the notice and setback requirements outlined above. (viii) No facility proposing the use of BioSafety Level 4 etiological agents shall be permitted in the city of Palo Alto. (Ord. 4933 § 4 (part), 2007) Disclaimer: This Code of Ordinances and/or any other documents that appear on this site may not reflect the most current legislation adopted by the Municipality. American Legal Publishing Corporation provides these documents for informational purposes only. These documents should not be relied upon as the definitive authority for local legislation. Additionally, the formatting and pagination of the posted documents varies from the formatting and pagination of the official copy. The official printed copy of a Code of Ordinances should be consulted prior to any action being taken. For further information regarding the official version of any of this Code of Ordinances or other documents posted on this site, please contact the Municipality directly or contact American Legal Publishing toll-free at 800-445-5588.