Item 9-G

 

Planning Commission Mtg:  December 4, 2002                               Santa Monica, California.

 

TO:              The Honorable Planning Commission

 

FROM:        Planning Staff

 

SUBJECT: The Fairmont Miramar Hotel Development Agreement Concept Plan

 

Address:    1133 Ocean Avenue and 1127 Second Street

Applicant: Wolff, DiNapoli LLC  

 

INTRODUCTION

 

The current property owners of the Fairmont Miramar Hotel at 1133 Ocean Avenue (with an adjunct site at 1127 Second Street) are considering submittal of a Development Agreement Application for these properties. Attachment A provides a summary of the concept plan.

 

City staff acts as the negotiator for Development Agreements and so to avoid negotiating a project the city cannot accept, staff has scheduled this matter to enable a pro-active discussion by the Planning Commission.  The Commission’s discussion will help advise the City Council, provide initial direction to staff and inform the property owner.  This process is occurring only because the project may involve a development agreement.  As will be discussed later in this report, development agreements are negotiated contracts between the city and an applicant.  They are not quasi-judicial matters like Development Review Permits or Conditional Use Permits.     

 

SITE LOCATION AND DESCRIPTION

 

The subject property includes two parcels. The larger parcel is a 192,057 square-foot parcel located on the east side of Ocean Avenue between Wilshire Boulevard and California Avenue with a frontage of approximately 578 feet along Ocean Avenue. The smaller parcel is a 15,000 square foot parcel located on the east side of Second Street between Wilshire Boulevard and California Avenue with a Second Street frontage of approximately 300 feet. Both parcels are zoned Recreational Visitor Commercial (RVC). Surrounding uses consist of multi-family residential (R3-NW) to the north, a predominantly retail commercial district (C3, BSC2, BSC4 and RVC) to the south, commercial and multi-family (C3, R3-NW) to the east, and Palisades Park (DP) to the west. Attachments B and C include site plan sketches of the proposed project and a survey of the existing site. The existing use consists of the hotel and its support facilities, including a ten-story building, a six-story building, one and two-story bungalows, a large two-story office and restaurant complex, one-story support building, landscaping and surface parking. The site’s focal point, a large Moreton Bay Fig tree, was designated a City Landmark in 1976.

 

Zoning District:             “RVC” Residential Visitor Commercial District  (Both Parcels)

 

Land Use District:        Parcel A (Ocean Avenue) Oceanfront Special District

                                        Parcel B (Second Street) High Density Housing

 

Parcel Area:                 Parcel A (Ocean Avenue) 192,057 S.F.

                                        Parcel B (Second Street) 15,000 S.F.

 

PROJECT DESCRIPTION

 

The developers are considering submitting a Development Agreement application that would propose the redevelopment of the southern portion of the site that includes the two-story office/restaurant complex, the surface parking lot and driveways, and the one-story support building that fronts on Ocean Avenue as well as the entire parking lot located on the Second Street parcel. This proposal would:

 

Ø      re-orient the entrance to Ocean Avenue, opening up the public view to the landmark Moreton Bay Fig Tree;

Ø      build a new three story building to include the ballroom and function rooms;

Ø      build  a four story residential building with ground floor retail at the corner of Wilshire Boulevard and Second Street;

Ø      build a new 16 story residential tower above ground floor retail and restaurant uses at the corner of Ocean Avenue and Wilshire Boulevard;

Ø      build a new four-story residential structure of 38 affordable housing units on the Second Street parcel; and

Ø      build an underground parking garage for approximately 677 vehicles. The intent of the garage is to meet the parking requirements for the new structures, accommodate the approximately 91 space existing parking deficit for hotel employees, and provide 150 new parking spaces for public use.

 

An approximate square footage breakdown of the proposed new structures is as follows:

 

                                       

Wilshire and Ocean

Wilshire and 2nd St

2nd Street

Uses

Proposed

Proposed

Proposed

Ground floor pedestrian oriented uses such as retail, lobby etc.

 

11,685   SF

 

8,360  SF

 

Residential

120,000 SF

(15 floors)

33,120 SF

 (3 floors)

32,000 SF

(4 floors)

 

Number of residential units

     

75

     

27

   

38

 


The total floor area for the entire new development would be approximately 175,365 square feet.  The project, as proposed, could not be designed under the current RVC zoning regulations for height, density, and possibly lot coverage. Construction of the project as currently proposed would necessitate approval of a Development Agreement and a General Plan Amendment as to height.

 

The developer is proposing to build a total of 140 units of housing, of which 38 would be designated as affordable. The Affordable Housing Production Program would require 28 low-income units, or 14 very low-income units to satisfy the on-site construction requirements for a project that totals 140 units. In addition, the developer proposes to build 150 parking spaces in excess of their estimated parking requirement that would be open for public use. 

 

Background

 

Since development agreements are among the least common land use applications reviewed by the Planning Commission, staff thought it would be helpful to address three essential questions:

 

  1. What are development agreements?
  2. What do development agreements typically cover?
  3. What are some advantages and disadvantages of development agreements?

 

An excellent new publication by the Institute for Local Self Government in Sacramento – Development Agreement Manual: Collaboration in Pursuit of Community Interests (2002), addresses these issues. The entire manual is available on-line at http://www.ilsg.org/userfiles/godoc/5116.FinalDevAgreement4-5-02.PDF.  Staff encourages the Commission to review the entire manual, though in the interest of time provide the following important excerpts:

 

What Are Development Agreements? (p. 9)

 

Development agreements are contracts negotiated between project proponents and public agencies that govern the land uses that may be allowed in a particular project.1   Although subject to negotiation, allowable land uses must be consistent with the local planning policies formulated by the legislative body through its general plan, and consistent with any applicable specific plan.2

 

Neither the applicant nor the public agency is required to enter into a development agreement. When they do, the allowable land uses and other terms and conditions of approval are negotiated between the parties, subject to the public agencies’ ultimate approval. While a development agreement must advance the agencies’ local planning policies, it may also contain provisions that vary from otherwise applicable zoning standards and land use requirements.

 

The development agreement is essentially a planning tool that allows public agencies greater latitude to advance local planning policies, sometimes in new and creative ways. While a development agreement may be viewed as an alternative to the traditional development approval process, in practice it is commonly used in conjunction with it. It is not uncommon, for example, to see a project proponent apply for approval of a conditional use permit, zone change and development agreement for the same project.

 

1 See Cal. Gov’t Code §65864 and following

2 See Cal. Cov’t Code §65867.5

 

What Does a Development Agreement Cover? (p. 26)MENTGREEMENT COVER?

§         Permitted uses of the property;

§         Density or intensity of use;

§         Maximum height and size of proposed buildings;

§         Provisions for reservation or dedication of land for public purposes;

§         Terms and conditions relating to financing of necessary public improvements, as well as provisions for subsequent reimbursement for that financing, as appropriate;

§         Timeframes for commencement and completion of construction, or any phases of construction;

§         Subsequent discretionary approval provisions, as long as those approvals do not prevent development of the project as described in the agreement; and

§         The duration of the agreement

 

The Advantages And Disadvantages Of Development Agreements (p. 11)

Development agreements have three defining characteristics:

§         They allow greater latitude than other methods of approval to advance local land use policies in sometimes new and creative ways;

§         They allow public agencies greater flexibility in imposing conditions and requirements on proposed projects; and

§         They afford project proponents greater assurance that once approved, their projects can be built

Although these characteristics can be advantageous, they can also present challenges. The purpose of this chapter is to discuss potential advantages and disadvantages of development agreements, from the perspective of both the public agency and project proponent.

 

Advancing Land Use Policies (p. 11)

Because development agreements are themselves ordinances, they may supersede existing land use regulations as long as they are consistent with the general plan and any applicable specific plan. 5  As a result, they can afford the public agency and project proponent greater latitude concerning allowable land uses in a particular instance. However, there are potential advantages and disadvantages associated with having this flexibility.

5

See Cal. Gov’t Code § 65867.5.

 

Potential Advantages: The Ability To Better Implement Planning Policies (p. 12)

From a planning perspective, development agreements have been instrumental in allowing creative and award-winning land use projects because the agreements can facilitate projects that would not have been allowed under otherwise applicable zoning regulations. The approval of creative land use concepts — and the construction of resulting projects — have advanced the state of urban planning, and allowed public agencies to better combat the visual and aesthetic impacts of “cookie-cutter” development. 

 

In a similar vein, there are instances in which literal compliance with zoning ordinance provisions can thwart promotion of general plan policies. For example, the general plan may encourage the existence of open space, whereas the applicable zoning district does not allow sufficient density to accommodate the clustering of residential units necessary to accommodate an open space component.

 

There may also be instances in which the legislative body wishes to promote unwritten policies, such as those involving growth management. As long as the project is consistent with the local planning policies formulated by the legislative body through its general plan, the development agreement can provide greater latitude to incorporate land use concepts and components that are tailored specifically to address particular community concerns. 

 

In each of these cases, the ability to vary from strict adherence to otherwise applicable zoning provisions can help ensure that the public agency’s land use policies are being advanced, in sometimes new and innovative ways.  These advantages are shared by the public agency and project proponent alike.

 

Potential Disadvantages: May Promote Bad Planning (p. 14)

The latitude afforded the parties through use of a development agreement may also have potential disadvantages. For example, the agency’s staff and legislative body may become convinced that, in exchange for the significant sales tax revenue the agency is likely to receive from a particular project, or in consideration of the fact that the project proponent is willing to construct a new city park or other significant public amenity, the agency should agree to compromise its planning standards in a manner that could reduce the quality of life in the community. The pressure to compromise may be especially great in the case of a “friendly developer” who has a popular presence in the community.

 

From the project proponent’s perspective, it is possible that the legislative body may decide to disallow uses that would otherwise be allowed, and which are appropriate from a conventional planning perspective.

 

The suggestions that appear in this manual are intended to help avoid misusing development agreements. They are based on the premise that from the outset, the planning policies and objectives that have been embraced by the community through adoption of the general plan, and those included in any applicable specific plan, should be an integral part of the discussions and negotiations between the parties to a development agreement.

 

By identifying applicable planning policies early on, and continuing to use them as yardsticks in determining what land uses are appropriate, the parties should be able to avoid unacceptable compromises when negotiating development agreements.

 

Imposing Conditions (p. 14)

Development agreements provide public agencies greater flexibility in imposing requirements on proposed development, such as development conditions, exactions and fees, because constraints and uncertainties that affect a local agency’s ability to unilaterally impose such requirements do not apply to mutually agreed upon development agreement provisions.6

 

 

6

See Cal. Gov’t Code § 66000(b) (excluding “fees collected under development agreements” from the

type of fee covered under the Mitigation Fee Act).

 

 

Conclusion

 

Based on feedback from the Planning Commission and the City Council, the applicant will determine how best or whether to pursue a Development Agreement.  As noted earlier, the city enjoys broad discretion in reviewing Development Agreement applications.  This project is presented in conceptual form to allow the Planning Commission to comment on its merits, identify concerns with the project itself or the Development Agreement, and discusses potential public benefits. This feedback will inform the applicant and provide direction to City staff in determining whether a Development Agreement is the best approach for redevelopment of this site. 

 

In summary, there are two essential questions staff suggests the Commission focus on in considering this matter:

 

  1. Is the Planning Commission potentially interested in a development agreement?
  2. If so, what are the general negotiating points that should be addressed?

 

RECOMMENDATION

 

Staff recommends that the Planning Commission discuss this proposal and provide direction regarding the project’s potential public benefits and the appropriateness of a Development Agreement application for the redevelopment of this site. 

 

Prepared by:  Sarah D. Lejeune, Associate Planner

 

Attachments:

 

A.      California Government Code Article 2.5: Development Agreements

B.      October 10, 2002 Letter from Wolff, DiNapoli outlining the proposal.

C.      Site plan sketches.

D.      Survey of existing site.