SR-407-000-07 (3)
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city Council Meeting 2-13-90
Santa Monica, callt~rki~ 1990
STAFF REPORT
TO:
Mayor and City Council
FROM:
City Attorney
SUBJECT:
Ordinance Implementing Policy 45 of the City's
Draft Local Coastal Program Establishing Mitigation
Fees for the Removal of Low Cost Lodging Accommoda-
tions in the Santa Monica Coastal Zone
At its December 12, 1989 meeting, the City Council directed
the City Attorney to prepare an ordinance establishing a fee to
mitigate the loss of affordable hotel and motel rooms within the
Coastal Zone, as required by the city's Draft Local Coastal
Program. The City Council directed that a hardship provision be
drafted which would allow for the exemption of certain properties
from the ordinance upon a Showing of uninhabitability and
irreparability of the accommodations sought to be demolished.
The city Council, however, asked for staff analysis regarding the
appropriateness and feasibility of such a provision. The
accompanying ordinance has been prepared pursuant to that
direction.
It is staff's opinion that a hardship provision should not
be included in the proposed Ordinance.
Its existence will
operate as a disincentive for maintenance
of low cost
accommodations until such time as it is opportune to redevelop or
sell such properties.
The hardship provision also serves, in
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effect, to reward past neglect of maintenance needs of low cost
lodging accommodations.
Should the city council determine that a hardship provision
is appropriate, the following language should be inserted as
Section 8 of the Ordinance and all subsequent sections of the
proposed Ordinance should be re-numbered:
SECTION 8. Hardship Exemption.
(a) Any person claiming a hardship exemption
from this Ordinance must substantiate the claims in
a proceeding under this Section. In such a
proceeding, the person seeking the hardship
exemption shall have the burden of proof.
(b) Claims of hardship shall be determined by
the city Council. Claims shall be filed on a form
approved by the ci ty Attorney. The Ci ty Council
shall, within sixty (60) days of the date of filing
of a claim, hear and determine whether to grant or
deny the claim. Decisions of the City council shall
be reviewable by writ of mandate, subject to the
ninety (90) day time limitation set forth in Santa
Monica Municipal Code section 1400.
(c) In order to obtain a hardship exemption,
the claimant must show each of the following:
(1) That a reasonable economic return
will be denied unless removal of the existing units
is accomplished.
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(2) That the proposed replacement
project will not generate a reasonable economic
return upon application of this Ordinance where such
project would otherwise generate such a return.
(d) The City shall retain the services of a
professional appraiser and cost analyst in order to
evaluate an applicant's claim of hardship. The
reasonable cost of such services shall be paid by
the applicant.
SECTION-BY-SECTION ANALYSIS
Section 1. This section sets forth the findings which
support the low cost accommodation mitigation fee established by
the ordinance.
section 2. This section sets forth definitions of certain
terms as they are used in the ordinance.
section 3. This section establishes that no low cost
lodging accommodations in the Coastal Zone shall be permitted to
be removed unless the person seeking to do so has complied with
the mitigation fee requirements of the ordinance.
section 4. This section establishes the applicability of
the ordinance to any development activity in the Coastal Zone
from which low cost lodging accommodations are to be removed.
section 5. This section establishes the mitigation fee at
eight thousand dollars ($8,000.00) per low cost lodging unit
removed. This section also requires that any fee payment be
adjusted for inflation.
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section 6. This section requires any person who is
required to pay a fee pursuant to this ordinance to enter into a
compliance agreement with the city. The agreement shall require
that at least fifty percent of the fee be paid prior to issuance
of a demolition or building permit and that the balance be paid
prior to issuance of a certificate of occupancy for the new
development. The compliance agreement will create a lien on the
property and shall be recorded.
section 7. This section requires that all fees collected
pursuant to this ordinance shall be deposited in a separate
account from the general fund account and shall be used solely
for development of low cost lodging accommodations.
Section 8. This section states that none of the provisions
in this ordinance are intended to supersede other City ordinances
or regulations.
Sections 9, 10, 11.
These sections are the standard
sections that are contained in all ordinances.
RECOMMENDATION
It is respectfully recommended that the accompanying
ordinance be introduced for first reading after deleting section
8 and re-numbering all subsequent Sections.
PREPARED BY:
Robert M. Myers, City Attorney
Laurie Lieberman, Deputy City Attorney
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City Council Meeting 2-13-90
Santa Monica, California
ORDINANCE NUMBER
(city council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA IMPLEMENTING POLICY 45 OF THE CITY
OF SANTA MONICA DRAFT LOCAL COASTAL PROGRAM ESTABLISHING
MITIGATION FEES FOR THE REMOVAL OF LOW COST LODGING
ACCOMMODATIONS IN THE SANTA MONICA COASTAL ZONE
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS
FOLLOWS:
SECTION 1. Findinqs and Purpose. The city Council finds
and declares:
(a) In recent years, there has been a significant shift in
the development of visitor accommodations within the Santa Monica
Coastal Zone from low cost lodging accommodations to luxury
lodging accommodations. Since 1984, six luxury hotels containing
1,109 rooms have received City approvals within the Coastal Zone
while no new low cost rooms have been proposed in this area.
(b) The City of Santa Monica has experienced a significant
reduction in the number of low cost lodging accommodations due to
demolition and conversion of existing units and construction of
office development and luxury lodging accommodations.
Since
1984, approximately 355 low cost rooms in the Coastal Zone have
been demolished and not replaced, representing a loss of
forty-five percent (45%) of the low cost rooms existing in the
Coastal Zone as of 1984.
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(c) The vast majority of visitor accommodations in the
Coastal Zone removed from the market due to demolltion are low
cost lodging accommodations.
(d) The demolition of low cost lodging accommodations in
combination with the replacement by, and new construction of,
luxury lodging accommodations has altered the balance and has
contributed to the scarcity of affordable visitor accommodations
ln the City. Only fifteen percent (15%) of the total hotel-motel
accommodations which will exist in the Coastal Zone once the new
City-approved accommodations are completed, will be low cost
accommodations.
(e) Policy 45 of the Draft Local Coastal Program provides
for a mitigation fee where new development removes low cost
lodging accommodations.
(f) Pursuant to the police power, the City has the
authority to address both the imbalance created by the removal of
existing low cost lodging accommodations and the overall need for
affordable visitor accommodations in the city.
(g) The purpose of this Ordinance is to reduce the
negative impact on affordable visitor accommodations caused by
new commercial and new hotel and motel development which requires
demolition of existing visitor accommodations.
(h) New commercial and new hotel and motel development
which requires demolition of existing low cost lodging
accommodations is generating a reduction in the City's affordable
visitor accommodations, and increases the imbalance between
coastal activities and affordable visitor accommodations in the
city.
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(i) The City has a continuing need for low cost visitor
accommodations and such need is exacerbated by the demolition and
conversion of such units and construction of new commercial
developments.
(j) Any fees collected pursuant to this Ordinance shall be
used only to finance the construction of low cost lodging
accommodations.
(k) The fee requirements of this Ordinance will help
diminish the overall loss of low cost lodging accommodations ln
the city and to mitigate the adverse consequences of removal of
low cost lodging accommodations in the coastal Zone.
(1) The facts and evidence presented in the Draft Local
Coastal Program dated October, 1989, in the "Santa Monica Coastal
Zone Motel and Hotel Room Survey" prepared by Willdan Associates,
dated January 18, 1990, and in the California Coastal Act of
1976, establish that there is a reasonable relationship between
the need for the replacement of low cost visitor accommodatlons
which is removed by demolition and the fee established by this
Ordinance, and also that there is a reasonable relationship
between the use of the fee and the type of development for which
the fee is charged.
(m) The fees required by this ordinance do not exceed the
reasonable costs of constructing replacement units as
demonstrated by the "Evaluation of Financial Assistance
Requirements for the City of Santa Monica's overnight Affordable
Accommodations program," a studied prepared by Natelson Levander
Whitney, Inc., dated December 11, 1989.
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SECTION 2. Definitions. The following words or phrases as
used in this Ordinance shall have the following meanings:
(a) Fee. A fee paid to the city by a developer pursuant
to this Ordinance to mitigate the removal of low cost lodging
accommodations.
(b) Low Cost Lodqinq Accommodation. Any hotel or motel
unit designed, occupied, or intended for occupancy, as a
temporary lodging place for individuals for less than thirty (30)
consecutive calendar days for which the room rate was Eighty
Dollars ($80.00) or less as of December 12, 1989, or as of the
last day of operation if the hotel or motel was not in operation
as of that date.
(c) Remove or Removal. The demolition of low cost lodging
accommodations or the conversion of such units to other use.
(d) Santa Monica Coastal Zone. The approximately 1. 5
square miles bounded on the west by the Pacific ocean, on the
south by the Ci ty I s southern boundary, on the east by Lincoln
Boulevard south of pico Boulevard, and by 4th street north of
pica Boulevard as far north as San Vicente Boulevard. Along the
San Vicente Boulevard centerline, the boundary goes inland to 7th
street to the northern city boundary.
(e) Site. One or more contiguous parcels under common
ownership which have been used, developed, or built upon as a
unit.
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SECTION 3. Mitiqation Fee Requirement.
(a) No person shall remove low cost lodging accommodations
in the Santa Monica Coastal Zone unless the person has complied
with the provisions of this Ordinance.
(b) No permit, license, or other approval shall be issued
or granted by the city for the development or use of any property
from which any low cost lodging accommodations have been removed
until the person seeking the license, permit, or other approval
has complied with this Ordinance.
SECTION 4. Applicability. This Ordinance shall apply to:
(a) Any development, project, or other activity involving
the removal of any low cost lodging accommodations in the Santa
Monica Coastal Zone. For purposes of this Ordinance,
development, project, or other activity shall include the
creation of a parking lot, open space, or vacant land on a site
previously occupied by low cost lodging accommodations.
(b) Any site located in the Santa Monica Coastal Zone from
which the removal of low cost lodging accommodations has b~en
approved and as to which a condition requiring the payment of a
mitigation fee has been imposed by the California Coastal
Commission.
SECTION 5. Fee.
(a) The low cost lodging mitigation fee required by this
Ordinance shall be satisfied by payment of a fee to the city in
the amount required by this Section.
(b) The amount of fee required pursuant to this Section
shall be based on the number of units to be removed. For each
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low cost lodging unit removed, a fee of Eight Thousand Dollars
($8,000.00) shall be required.
(c) Any fee payment required pursuant to this section
shall be adjusted for inflation by the percentage change in the
Consumer Price Index ("CPI") multiplied by .65 plus the
percentage change in land cost multiplied by .35 between the date
of adoption of this Ordinance through the month in which payment
1S made.
(1) For purposes of this Section, cpr shall mean the
index for Urban Wage Earners and Clerical Workers for the Los
Angeles/Long Beach/Anaheim statistical area, as published by the
United states Department of Labor, Bureau of Labor statistics.
(2) For purposes of this Section, "land cost" shall
mean the average purchase price per square foot for commercially
zoned property, as determined through an independent survey
performed for the Community and Economic Development Department
by a qualified real estate consultant and adjusted on an annual
basis.
SECTION 6. payment of Fee.
(a) At the time of application for a demolition permit or
other approval necessary for the removal of low cost lodging
accommodations located in the Santa Monica Coastal Zone, the
developer shall enter into a compliance agreement for payment of
the fee in accordance with the provisions of this Section.
(b) The compliance agreement shall contain the following
requirements:
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(1) At least fifty percent (50%) of the fee shall be
paid prior to issuance of a demolition or building permit for a
project on the site.
(2) The balance of the fee shall be paid prior to
issuance of the certificate of occupancy for any development or
conversion on the subject site. If no certificate of occupancy
is required for the conversion or other new activity on the
sUbJect site, the balance of the fee shall be due upon
cOInmencement of the new activity or within one year, whichever
occurs sooner.
(3) The agreement shall create a lien on the
property which shall be binding on the developer and any
successor of the developer, including any person acquiring an
interest in the property by foreclosure, trust sale, or other
proceeding.
(4) Payments shall be adjusted annually for
inflation pursuant to Section 5.
(5) The compliance agreement shall be recorded.
(6) Such other provisions as are reasonably deemed
necessary by the City to ensure payment of the fees required by
this Ordinance.
(c) The fee required by this Ordinance shall not become
effective until sixty (60) days from its adoption, pursuant to
Government Code Section 65962(a).
SECTION 7.
pursuant to this
Account separate
Deposit and Use
Ordinance shall
from the General
of Fee. Any payment made
be deposited in a Reserve
Fund to be used only for
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development of low cost lodging accommodations in the Santa
Monica Coastal Zone. Any interest income earned by monies in
such account shall be expended only for development of low cost
lodging accommodations in the Santa Monica Coastal Zone.
SECTION 8. Applicabili ty of other City Ordinances and
Regulations. None of the provisions in this Ordinance are
intended to supersede any provisions of the City Charter,
ordinances, regulations, or resolutions concerning demolition of
residential housing, relocation of displaced tenants, rent
control removal within fifteen (15) days after its adoption.
SECTION 9. Any provision of the Santa Monica Municipal
Code or appendices thereto inconsistent with the provisions of
this Ordinance, to the extent of such inconsistencies and no
further, are hereby repealed or modified to that extent necessary
to affect the provisions of this Ordinance.
SECTION 10. If any section, subsection, sentence, clause,
or phrase of this Ordinance is for any reason held to be invalid
or unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby
declares that it would have passed this Ordinance, and each and
every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether
any portion of the Ordinance would be subsequently declared
invalid or unconstitutional.
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SECTION ll. The Mayor shall sign and the city Clerk shall
attest to the passage of this Ordinance.
The City Clerk shall
cause the same to be published once in the official newspaper
within 15 days after its adoption. This Ordinance shall become
effective 30 days from the date of its adoption.
APPROVED AS TO FORM:
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ROBERT M. MYERS U
City Attorney
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