City Council Meeting: January 8, 2013

Agenda Item: 5-A

To: Mayor and City Council 

From: David Martin, Director of Planning and Community Development

Subject: Supplemental Information on Development Agreement Application Processing Procedures and Consideration of Policy Related to Average and Minimum Unit Sizes in Mixed-Use Residential Developments

Recommended Action

Staff recommends that the City Council:

1. Affirm shifting the responsibility for hosting the initial Development Agreement project community meeting from City staff to the project applicant and direct staff to provide applicant with guidelines to ensure meetings are consistent with City practice.

2. Affirm revising the float up process as follows:

a. Projects requiring an Environmental Impact Report (EIR): replace Planning Commission float up with a combined float up meeting of Planning Commission (PC) and four members of the Architectural Review Board (ARB); and

b. Projects exempt from the California Environmental Quality Act (CEQA): Add a float up float up with a combined meeting of Planning Commission (PC) and four members of the Architectural Review Board (ARB).

3. Direct staff to develop possible approaches to prioritizing projects that meet certain criteria and return to Council at a future date.

4. Direct staff to negotiate applications for mixed-use housing project with the goal of achieving the recommended average unit size of 900 square feet gross floor area and minimum unit sizes consistent with the City’s Affordable Housing Production Program (AHPP), as suggested in this report.

Executive Summary

Since the adoption of the LUCE in July of 2010, the number of Development Agreement applications that have been submitted has outpaced expectations, with a current total of 32 Development Agreement applications pending review as of December 21, 2012. There is limited capacity to process Development Agreement applications from the perspective of ARB, Planning Commission and City Council workload and agenda management, staff time needed to thoroughly evaluate a complex project and negotiate

Development Agreement terms, and the availability of evenings to calendar community meetings in light of the broad range of public meetings involving land use issues. Due to these limitations in staff and community resources, it is necessary to review current Development Agreement processing procedures and determine if modifications to the process are appropriate.

Background

This supplemental staff report contains updated charts and maps which include the seven Development Agreement applications received since the distribution of the December 11^th staff report (Attachment A), as well as deleting one project that has been withdrawn (AMC Theatre). It also includes additional suggestions for modifications to the Development Agreement review process and further discussion related to minimum and average unit sizes. Additionally, it requests Council feedback on whether or not certain types of projects should be prioritized for processing.

Discussion

Pending Development Agreements

There are currently 32 Development Agreement applications pending review. The charts below have been updated to reflect the amount of square footage proposed in the pending Development Agreement applications.

Land Use Type	Gross Square Footage	Percentage
Multi-family Residential	(3,403 units) 2,272,785	64.0%
Neighborhood Serving Retail	276,478	7.8%
Hotel	(544 rooms) 318,500	9.0%
Creative/Arts/Studio Space	550,600	15.5%
General Office	0	0.0%
Education	29,400	0.8%
Auto dealership	102,500	3.0%
Total	3,550,263	100%

Because Santa Monica is generally a built-out city, new projects typically result in the demolition of existing building square footage. The following chart represents the potential net increase in the land use type for the 32 pending Development Agreement applications.

Land Use Type	Net Square Footage	Percentage
Multi-family Residential	(3,395 units) 2,264,785	78.2%
Neighborhood Serving Retail	121,596	4.2%
Hotel	(248 rooms) 191,000	6.6%
Creative/Arts/Studio Space	230,400	8.0%
Education	24,600	0.9%
Auto dealership	61,000	2.1%
Subtotal	2,893,381	100%
General Office	-130,900
Total	2,762,481

The numbers in the two preceding charts are based on current applications and plans for pending Development Agreement projects. Project square footages and mix of uses often change through the Development Agreement negotiation process and the numbers represented in the charts are estimates based on current knowledge.

Development Agreement Application Processing

The number of pending Development Agreements has increased from 26 to 32 since the distribution of the December 11^th staff report. The 32 pending Development Agreement applications fall into two categories in terms of application processing. Twelve of the applications, which are for larger mixed-use projects and visitor-serving uses such as hotels and auto dealerships, require the preparation of an analysis under the California Environmental Quality Act (CEQA), most likely an Environmental Impact Report (EIR). The other 20 applications appear to be exempt from CEQA. Nineteen are for mixed-use projects located within a one half mile radius of a major transit stop and one is for a new science building at Crossroads School for Arts and Sciences, which is exempt because it is considered a minor addition to an existing campus. In the future, after a Tier 2 approval process has been established, it is possible that some projects would be processed through a discretionary permit process rather than through a Development Agreement process.

Development Agreement Applications that Require an EIR

The map and chart below show the location and describe the status of the 12 pending Development Agreement projects that under CEQA require the preparation of an EIR.

NO	NAME	ADDRESS	STATUS	AREA
1	Miramar Hotel	1133 Ocean Ave / 101 Wilshire Blvd	EIR Underway	Downtown
2	AMC Theatre (application withdrawn)	1318 4th St	EIR Underway	Downtown
3*	Mini Cooper Dealership	1400 Santa Monica Blvd	Pending	Corridor
4	Toyota Dealership	1530 Santa Monica Blvd	Pending	Corridor
5	Courtyard Marriott	1554 5th St	EIR Underway	Downtown
6	Papermate	1681 26th St	EIR Released	Bergamot
7	1802 Santa Monica Boulevard Mixed Use Residential/Retail	1802 Santa Monica Blvd	EIR Underway	Corridor
8	2121 Cloverfied Boulevard Mixed Use Residential/Retail	2121 Cloverfield Blvd	In Float Up	Corridor
9	Roberts Center	2848-2912 Colorado Ave	EIR Released	Bergamot
10	2919 Wilshire Blvd Mixed Use Residential/Retail	2919 Wilshire Blvd	Pending	Corridor
11	Paseo Nebraska	3025 Olympic Blvd	In Float-Up	Bergamot
12	3402 Pico Boulevard Mixed Use Residential/Retail	3402 Pico Blvd	In Float-Up	Corridor
13	Hampton Inn	501 Colorado Ave	EIR Underway	Downtown

*New since December 11, 2012 staff report

Development Agreement Applications without an EIR

The map and chart below show the location and describe the status of the 20 pending Development Agreement projects that appear to be exempt from CEQA review.

NO	NAME	ADDRESS	STATUS	AREA
1	1122 Pico Boulevard Residential	1122 Pico Blvd	Pending	Corridor
2	1318 2nd Street Mixed Use Residential/Retail	1318 2nd St	Pending	Downtown
3	1325 6th Street Mixed Use Residential/Retail	1325 6th St	Pending	Downtown
4	1415 5th Street Mixed Use Residential/Retail	1415 5th St	Pending	Downtown
5	1425 5th Street Mixed Use Residential/Retail	1425 5th St	Pending	Downtown
6	1443 Lincoln Boulevard Mixed Use Residential/Retail	1443 Lincoln Blvd	Pending	Downtown
7	1560 Lincoln Boulevard Mixed Use Residential/Retail	1560 Lincoln Blvd	Pending	Downtown
8	1601 Lincoln Boulevard Mixed Use Residential/Retail	1601 Lincoln Blvd	Pending	Downtown
9*	1613 Lincoln Boulevard Mixed Use Residential/Retail	1613 Lincoln Blvd	Pending	Downtown
10*	1637 Lincoln Boulevard Mixed Use Residential/Retail	1637 Lincoln Blvd	Pending	Downtown
11*	1641 Lincoln Boulevard Mixed Use Residential/Retail	1641 Lincoln Blvd	Pending	Downtown
12	1650 Lincoln Boulevard Mixed Use Residential/Retail	1650 Lincoln Blvd	Pending	Downtown
13	1660 Lincoln Boulevard Mixed Use Residential/Retail	1660 Lincoln Blvd	Pending	Downtown
14	Crossroads School Science Learning Center	1731 20th St	Pending	Corridor
15*	234 Pico Boulevard Mixed Use Residential/Retail	234 Pico Blvd	Pending	Corridor
16	3008 Santa Monica Boulevard Mixed Use Residential/Retail	3008 Santa Monica Blvd	Pending	Corridor
17	3032 Wilshire Blvd Mixed Use Residential/Retail	3032 Wilshire Blvd	Pending	Corridor
18*	501 Broadway Mixed Use Residential/Retail	501 Broadway	Pending	Downtown
19	525 Colorado Avenue Mixed Use Residential/Retail	525 Colorado Ave	Pending	Downtown
20*	601 Colorado Avenue Mixed Use Residential/Retail	601 Colorado Ave	Pending	Downtown

*New since December 11, 2012 staff report

Processing Challenge

As described in the December 11^th staff report, the processing and review of the large number of pending Development Agreement applications in conjunction with the preparation of the Downtown Specific Plan, Bergamot Area Plan and the Zoning Ordinance present a challenge for staff as well as the various decision making bodies and the additional seven Development Agreement applications received since the distribution of the staff report have added to the challenge. Staff has continued to consider the Development Agreement review process and through this supplemental report has developed additional suggestions for modifying the process to provide sufficient opportunities for input and review, but in a way that is more efficient and minimizes impact on staff resources.

Community Meeting

One way to reduce the number of meetings required to be coordinated by staff is to shift the responsibility for the community meeting from staff to the applicant. The current practice is for staff to schedule and host a community meeting as the initial step in the processing of a Development Agreement application. This practice not only requires staff time for the coordination of the community meeting, it puts staff in a position of representing a project at a time when staff has not yet had an opportunity to formulate a position on the project. As an alternative to the current practice, staff is recommending that the responsibility for the community meeting be shifted to the applicant. If directed by Council, staff will prepare guidelines for community meetings that will be provided to the applicant to ensure that the meetings are conducted in a manner that is consistent with City practices. The guidelines would also require a report to be submitted by the applicant following the community meeting. This report would include details about the meeting including a sign-in sheet and meeting notes, and indicate if and how the project has been modified to address issues raised at the community meeting prior to the applicant submitting a development application to the City.

ARB and Planning Commission Float Ups

Staff had previously suggested the addition of Architectural Review Board and Planning Commission float ups to provide opportunities for early input. While staff maintains that there is value in obtaining preliminary and conceptual comments from the ARB and Planning Commission, staff is recommending combining the ARB and Planning Commission float ups into one joint meeting with the Planning Commission and four ARB members. As proposed, the meetings would occur once a month and would focus exclusively on Development Agreement applications. Given the large and growing number of pending projects, the reduction in the number of steps will not mean that Development Agreements are processed more quickly, but it would reduce the burden on staff in that the number of meetings required for each project will be reduced. Furthermore, it would provide the Planning Commission and a majority of the ARB an opportunity to have a joint discussion about the projects and provide the applicant with preliminary and conceptual comments about the project design and community benefits.

Proposed Development Agreement Process for Projects that Require an EIR

For projects that require the preparation of an EIR, staff had proposed maintaining the current review process, with the addition of an Architectural Review Board (ARB) float-up. Since the December Council meeting staff has considered another option that would combine the ARB float up with the Planning Commission float up at a joint meeting with the Planning Commission and four members of the ARB. The chart below indicates the current process, the proposal contained in the December staff report, and the current recommendation which would shift the responsibility for the community meeting to the applicant and combine the ARB and Planning Commission float ups.

City Process for Development Agreements Subject to CEQA
	Current Process	December Staff Report	January Proposal
Community Meeting	×	×	(by applicant)
ARB Float-up		×
PC Float-up	×	×
PC/ARB Float-up			×
CC Float-up	×	×	×
PC Hearing	×	×	×
CC Hearing	×	×	×
ARB Hearing	×	×	×

Proposed Development Agreement Process for Projects that do not Require an EIR

To date, projects exempt from CEQA have not been subject to float-up review. The float-up process was developed in part to provide an applicant with early feedback to ensure that they did not invest time and pay the costs for environmental review if the City decision makers were not interested in pursuing a Development Agreement on the project. Since an EIR is not required for these projects, there is less financial risk for the applicant to proceed without a float-up. Furthermore, when the interim zoning ordinance was adopted, Council recommended that Development Agreement processing be streamlined for smaller and/or less controversial projects, and these CEQA exempt projects appeared to be good candidates for the streamlined process.

However, in processing these CEQA exempt projects, staff has determined that it would be beneficial to obtain early input from the ARB and Planning Commission and had recommended the inclusion of an ARB and Planning Commission float-up. However, as previously described for projects subject to CEQA, staff has considered another option that would combine the ARB float up with the Planning Commission float up at a joint meeting with the Planning Commission and four members of the ARB.

The chart below indicates the current process, the proposal contained in the December staff report, and the current recommendation which would shift the responsibility for the community meeting to the applicant and combine the ARB and Planning Commission float ups.

City Process for Development Agreements Exempt from CEQA
	Current Process	December Staff Report	January Proposal
Community Meeting	×	×	(by applicant)
ARB Float-up		×
PC Float-up		×
ARB/PC Float-up			×
CC Float-up
PC Hearing	×	×	×
CC Hearing	×	×	×
ARB Hearing	×	×	×

The recommended process is similar to the review process recommended for the projects that require an EIR, except that it does not include a City Council float-up. The deferral of City Council review for CEQA-exempt projects is in recognition of the fact that these projects are consistent with established City policy for locating higher density housing in close proximity to major transit stops. It is not intended to indicate that the projects will ultimately be approved by Council, but that from a policy perspective, qualifying transit oriented development should move forward into the ARB/PC float up review, Development Agreement negotiation and hearing stages.

Priority Projects

The current practice is for Development Agreement applications to be processed in the order in which they are received, regardless of the type of project. However, in the past the City has provided priority processing for certain types of projects, such as affordable housing. The Council may wish to establish a process where certain projects receive priority processing. For example, the City could establish criteria to encourage higher percentages of affordable housing units, to support educational institution projects, to encourage projects below a certain height, or to encourage projects that have demonstrated through a traffic study and committed through specific measures to reducing traffic impacts below that of a Tier 1 project on the same site. Moreover, the City could favor those projects that generate the highest ratio of new revenues per traffic generated, such as hotels and auto dealerships. If directed by Council, staff will return with criteria for priority processing of these ideas or others.

Residential Unit Size

The December 11^th report addresses community concerns regarding small unit sizes in recently built and currently proposed housing projects by proposing the establishment of an average unit size and minimum size for each type. Establishing minimums for projects containing market-rate residential units would provide a guide to staff in negotiating projects through the Development Agreement process. The two-part recommendation includes:

· Establish an average unit size for a development of 900 square feet measured in gross floor area (area of all parts of building with residential purpose, including hallways and other interior common area). This would allow for the continued production of some smaller units, balanced by some larger units resulting in a range of housing options within a single development, and

· Set minimum unit-size guidelines based on established AHPP standards. The sizes below reflect net square feet (i.e. livable space):

Studio: 500 sq. feet

1 bedroom: 600 sq. feet

2 bedrooms: 850 sq. feet

3 bedrooms 1,080 sq. feet

Council Direction

Staff seeks Council’s direction on modifications to the current Development Agreement processing procedures related to the following items:

1. Shifting of the responsibility for the hosting of the Community meeting from staff to the project applicant.

2. Combination of the ARB and Planning Commission float ups into a joint meeting comprised of the Planning Commission and four members of the ARB.

3. Council direction on the prioritization of projects that meet certain criteria, to be determined and returned to Council at a future date.

4. Negotiation of Development Agreements for mixed-use housing projects with a goal of achieving a minimum average unit size and minimum individual unit-size based on the established AHPP standards.

Financial Impacts & Budget Actions

The recommendations presented in this report do not have any budgetary or fiscal impact.

Prepared by: David Martin, Director of PCD

Approved:	Forwarded to Council:
David Martin, Director Planning and Community Development	Rod Gould City Manager

Attachment A: December 11, 2012 CC Meeting, Item 8B -

Development Agreement Application Processing Procedures and Consideration of Policy Related to Average and Minimum Unit Sizes in Mixed-Use Residential Developments