SR-410-003 (6)
~
.
'/10;-003
.
",-! c.O
f':-A
SEP 22 19B1
oJ
CjED:CPD:DKW:bz
COUNCIL MEETING: September 22, 1987
Santa Monica, California
TO: Mayor and City Council
FROM: City staff
SUBJECT: Amendment Number Four to Development Agreement Betwee~
the city of Santa Monica and Colorado Place Limited
INTRODUCTION
The proposed project is Amendment Number Four to the Develop~e~t
Agreement for Colorado Place Phase II.
This matter has
previously been considered by the Planning commission at meetings
held on April 6, August 10 and August 24, 1987. A number of
reports and documents relating to this matter were transmitted to
the Council as an information item several weeks ago.
This report recommends approval of the proposed &~endTIent No. ~
with modifications.
SITE LOCATION AND DESCRIPTION
The 15 acre parcel, including the existing three office buildings
and restaurants of Colorado Place Phase I, is located in tl:e
special Office District; current zoning in this area is for
manufacturing, M2. The existing Phase I and proposed Phase II
developments are bounded by Colorado Avenue,
Cloverfield
BOUlevard, Broadway and 26th street.
gr. A
SEP 2 2 1981
- 1 -
.
.
..
PROPOSED PROJECT
The proposed Colorado Place Phase II project, which is set forth
in Attachment A, is Amendment Number Four to the Development
Agreement between the city of Santa Monica and Colorado Place
Limited. If executed, the developer, Southmark Pacif ic Corp.
would be required to relocate the previously contemplated hotel
to Phase III, substitute a S-story office building for the
previously approved 392-room hotel and health club, and maintain
the park in Phase II. The amendment would also, at the request
of staff and the Planning Commission, change various sections of
the existing Development Agreement regarding height definition,
uses, floor area definition and parking requirements.
DEVELOPMENT AGREEMENTS
Section 9800 of the Santa Monica Municipal Code provides for the
execution of development agreements pursuant to Article 11,
Section 7 of the California Constitution and pursuant to
Government code Section 65864 et. seq. The expressed intent of
the State law is to provide "assurance to the applicant for a
development project that upon approval of the project, the
applicant may proceed with the project in accordance with
existing policies, rules and regulations, and subject to
conditions of approval. It In other words, the purpose is to
protect applicants from changes in policies and ordinances after
approval but before completion of the project. Development
agreements are most often utilized for large projects which will
take a number of years to build.
- 2 -
.
.
..
since the local jurisdiction is relinquishing its right to change
its policies and ordinances (in relation to the particular
project) for a specified period of years, it is not uncommon for
cities and counties to require developers to provide additional
amenities and facilities which would not be required for projects
without development agreements.
Development agreements may be amended or canceled, in whole or in
part, by mutual consent of the parties to the agreement or their
successors in interest. The project is a request to amend the
Development Agreement with Colorado Place Limited for the fourth
time. Since such an agreement must be adopted by Ordinance, the
city council's action will be to adopt, adopt with modifications
and/or conditions, or deny the proposed fourth amendment.
MUNICIPAL CODE AND GENERAL PLAN CONFOro'1ANCE
Municipal Code Chapter 8, Section 9800-9819 established the
City's procedures for adopting development agreements. In order
to recommend approval of a development agreement amendment, the
Ci ty Council must determine that the proposed amendment "is
consistent with the general plan and any applicable specific
plan. "(Santa Monica Municipal Code, Section 9814.)
Development standards (such as permitted uses, density o~
intensity of use, maximum height, etc.) provided for in a
development agreement may vary from those of the zone district
- 3 -
.
.
.
but the project must be in conformity with the General plan. The
proposed project is in conformity with the General Plan.
CEQA STATUS
An Initial study was certified for the original Development
Agreement. The proposed uses were allowed under the original
Development Agreement and they are, therefore, covered by the
original Initial Study.
Concern has been raised about the Colorado Place Phase II
property because it was formerly the site of a garbage dt:rr.p.
Engineers conducted tests on the site and discovered lead a:1d
hydrocarbons in the soil. The lead contaminated dirt was reroved
by Southmark in March, 1987. The hydrocarbon contaminated soil
was detoxified and has been removed to a landfill in full
co~pliance with state Department of Health standards ar.d
procedures. Southmark will test the soil again before lr.ore
excavation takes place on the site.
ANALYSIS
On October 27, 1981, the Santa Monica City council approved a
Development Agreement with Colorado Place Limited for a 15-acre,
two-phase development known as Colorado Place. Colorado Place
Phase I, located at 2401-2525 Colorado Avenue, was completed in
1983 and consists of three office buildings, a restaurant complex
and other ancillary uses with a combined building area of
approximately 450,000 square feet, all served by a subterranean
parking garage.
- 4 -
.
.
'\
The original Development Agreement has been amended three times
by adopted City ordinances on July 26, 1983, April 24, 1984, and
May 28, 1985, respectively.
Southmark Pacific Corp. purchased Welton Becket Associates'
interest in Colorado Place Limited in January 1985, with the
intention to proceed with the unconstructed Phase II component.
However, the developer has indicated that the original approved
concept for the hotel (designed by Welton Becket Associates and
approved by the City) was not economically feasible and that the
design was not aesthetically pleasing due to the lack of setbacks
and the building mass. Southmark proceeded with a hotel redesign
and had plans prepared by a land planner and architect.
Revised building plans were submitted to the City for the
redesigned hotel. In addition, an alternate plan was sub~itted
that included relocating the active portion of the park, re~~ired
for Phase II under the Colorado Place Development Agreement, to
Phase III and development of a third office building in Phase II,
with an overall increase in park acreage. city staff felt that
the plan was inconsistent with the approved Development Agreement
due to the hotel height and park relocation.
Southmark pursued litigation with the City regarding the
allowable height under the approved Development Agreement. From
discussions with the City and community, Southmark agreed with
the city to suspend the lawsuit and use a development agreement
for the Phase III project site to resolve the litigation.
- 5 -
.
.
"
section by Section Description
Amendment Number Four would not permit any uses on Phase II not
already permitted by the original Development Agreement, would
not increase the height of any buildings permitted to be built on
Phase II, and would not allow the developer to increase the in-
tensity of development on the site, except as noted in Section 2
below. The effect of the Amendment would be as follows:
1. Section l(a). Project Uses. The existing Development
Agreement contains no specific limitation on movie theater
or medical office use on the site. Due to the use of a
shared parking approach, staff requested that Southmark
limit the hours of operation of the theaters to avoid
conflicts with peak hour parking demands from other uses.
(See the discussion in Developrent Agreement Issues, nUIT~er
1.) Section 8 has been amended to include such a linit. By
precluding the use of theaters prior to 2:00 P.M. on
weekdays, the peak hour theater use will not coincide with
peak hour office parking demand at 10:00 A. M. In addition,
Amendment Number Four would limit medical office use up to a
~aximum of 35,000 square feet.
During the consideration of this project by the Planning
Commission, the applicant agreed to reduce the number of
theater seats from 2600 to 200Q--a reduction which was made
response to community concerns and a staff recommendation to
reduce the intensity of proposed theater uses. Other
revisions made in response to Commission comments were to
- 6 -
.
.
,
change the weekday theater starting time from 1:00 P.M. to
2:00 P.M. to reduce potential conflict with office-related
lunch traffic and to close the Broadway and 26th street
exits at 6:30 P.M. (except for card-key holders) to reduce
the traffic impact on the adjoining neighborhood.
The proposed Development Agreement also includes provisions
restricting theater entrances and ticket booths to the
interior of the project site, and a requirement that all
theater advertising and signage direct traffic to access
points on Colorado Avenue and Cloverfield (away fron
Broadway and 26th street) and also specify that 3-hour free
parking is provided on-site. These provisions would
effectively mitigate potential impacts on nearby residential
areas.
2. Section l(h). Maximum Floor Area. As discussed below, the
developer has agreed to include a community room in the new
office building. Consistent with the treatment of the
day-care center built on Phase I, this Section has been
amended so that the square footage of this room will not be
included in determining the overall square footage permitte~
on the site.
3. Section l(c). Maximum Height. The original Development
Agreement utilized an average height concept for limiting
the building heights on the property. Because it was this
approach that triggered the dispute between the City and the
developer over the hotel height, staff requested that the
- 7 -
~
.
.
Amendment utilize a maximum height concept. The revised
section 13 (b) sets forth maximum heights to 50 feet for
Phase I (already built), 70 feet for the office building to
be constructed at the corner of Cloverfield Boulevard and
Broadway (already approved by the City and under construc-
tion), 80 feet for the middle building, and 65 feet for the
new building (not designed) to be located adjacent to the
park. These heights are consistent with the original
Development Agreement but give the City greater control over
the maximum height.
4.
section l(d). Community Room. At the request of the
adjoining residential area, Southmark has agreed to include
in the new office building a co~~unity room of between 1,000
and 2,000 square feet. This section sets forth procedures
for approving the design of this room and the method for
operation and maintenance. The community room would be
required to be located next to the park which is required by
existing provisions of the Development Agreement.
5.
section l(e). Energy Conservation. This is a minor change
in wording to the original Development Agreement.
6.
section l(g). Housing. This section subsitutes a
$2,000,000 payment to the City in-lieu of developer
provision of 49 housing units. The City would be required
to use these funds for provision of affordable housing.
- 8 -
.
.
..
7.
Section l(h}. Hotel Use. Consistent with the relocation of
the hotel to Phase III, this Section deletes the require-
ments that a hotel be built on the site.
8. Section 1 (i). Parking. See the discussion in Development
Agreement Issues, number 2.
9. Section l(j). Traffic Diversion. This is a section added
to address concerns raised by the Planning commission
regarding a construction period mitigation plan.
10. section 3. This section, recognizing the relationship
between Phase III and this Amendment NO.4, states that if
the proposed Development Agreement for Colorado Place Phase
III becomes unenforceable for any reason other than a
default by the developer, or is terminated by the developer
because of a default by the City, then the property owner
can rescind Amendment Number Four to the Development
Agreement for Colorado Place Phase II. The dispute between
the City and the developer regarding the proper
interpretation of the Development Agreement for Phase II,
including the permitted height of the hotel, may be resolved
through litigation.
- 9 -
.
.
Issues Raised by Planning Commission
On August 24, 1987 the Planning Commission made recommendations
to the Council regarding the proposed project. Other changes to
the Development Agreement had been made previously in response to
commission comments at prior meetings.
These changes are
summarized in the August 10, 1987 staff report which was
separately transmitted to the Council.
Following are the
Commission's August 24 recommendations, together with staff
responses.
1. The main motion to recommend approval of the Arnendrent
included a provision that soil testing be performed prior to
further excavation at the Phase II site, and that the
Planning Division, Planning Commission and City Council be
provided with the results of the soil testing information.
Response: In the course of excavation for the first two
buildings in Phase II, a pocket of lead contaminated soil and a
pocket of hydrocarbon material were located on the site. In
accordance with all applicable regulations, the lead-contaminated
soil was removed. The hydrocarbon soil was tested. Test results
indicated that the soil was neither toxic nor hazardous. Boring
and sample analysis for the remainder of the site show no
contamination. Southmark will, however, contract fer additional
borings prior to the start of excavation for the remainder of the
site, and the City will be provided with test results. Should
any contamination be found, it will be removed in accordance with
applicable procedures and with the full participation of the city
and other agencies.
2. The Commission recommended that the Agreement reflect the
definition of height contained in the proposed City-wide
Zoning Ordinance in particular regard to building elements
(such as mechanical equipment) which may under certain
circumstance be allowed to exceed building heights.
- 10 -
.
.
Response: The proposed Agreement contains language which
requires conformity with the height definitions/limitations of
the City's Zoning Ordinance which is in effect at the tine the
building design is submitted to the city.
3. The Commission asked that the requirement of the existing
Development Agreement that a park be built as part of Phase
II be reiterated in the Agreement.
Response: The applicant has added such a reference in the
proposed amendments to Section 27 of the Agreement. Amendment
Number Three to the original Development Agreement, Paragraph
10(b) states that project construction will be completed within
10 years after the construction of the first building on Phase I.
This assures the City that the park will be built by 1991.
4. The Commission suggested that the remaining unapproved
building on Phase II be subject to review by the Planning
Commission and that the Amendment Number Four to the
Development Agreement should incorporate the review language
recommended by the Commission for Phase III.
Response: The Agreement for Phase II provides for review of the
Phase II buildings by the Architectural Review Board, similar to
previously-approved buildings of Phases I and II. In view of
this provision as well as the other development design
restrictions of the Agreement, and since other co~ponents
(including buildings currently under construction and the park)
have been reviewed and approved by the city consistent with the
requirements of the Agreement, the review language from the
Commission's review of Phase III does not appear necessary for
the single remaining building to be designed.
5. The Commission recommended the addition of language which
explicitly stated that the maximum floor area for the
project included both Phase I and Phase II.
Response: The applicant has added such language in the section
of the Amendment pertaining to Maximum Floor Area.
6. The Commission recommended the addition of language stating
that the parking requirement for medical office would be
- 11 -
.
.
consistent with the parking standard adopted as part of the
new city-wide Zoning Ordinance.
Response: The applicant has added such language in Exhibit A to
the Agreement.
7. The Commission endorsed the staff recommendation for an
in-lieu housing payment higher than that proposed by the
applicant, and after several motions failed to reduce the
number of theater seats below the 2000 seats proposed by
the applicant, the Commission also endorsed that aspect of
the proposed project.
Response: Staff is continuing to make recommendations regarding
these issues which are consistent with the Commission's position.
S. In conjunction with the discussion of theater issues, the
Commission discussed the concept of additional specificity
regarding restrictions on access to the site to limit impact
of theater-related traffic on the adjacent residential
areas.
Response: The applicant has incorporated additional language
specifying that all auto entrances and exits on 26th street and
Broadway shall be closed at 6:30 PM. Staff supports the
additional provisions.
- 12 -
.
.
Development Agreement Issues
Three key items contained in Amendment
Development Agreement between the City
Colorado Place Limited are discussed below.
Number Four to
of Santa Monica
the
and
1. Theaters - paragraph 8, page 2 - Theaters are an approved
use guaranteed by the original Development Agreement;
Southmark has the right to develop movie theaters in Phase
II. Southmark indicates that they have "an agreement in
principle" with a major theater chain for a 2000-seat movie
theater complex. Concern has been expressed that a
multi-theater facility of this size may detract potential
business away from the Downtown. However f the si te does
have the advantages of ample parking and greater insulation
of the theater use from the surrounding neighborhood as
compared to other locations in the City such as Wilshire or
pico Boulevards. Further, the city Council recently
established strict limitations on movie theater development
in the City, limiting new theaters solely to the downtown,
with the objectives of protecting residential areas adjacent
to such streets as Wilshire and Santa Monica Boulevards and
revitalizing the downtown area, particularly the Third
street Mall. Because of the pre-existing Development
Agreement, the Council recognized that Phase II is not
affected by this change in City policy. However, the change
does have the effect of restricting sites available for
movie theater development, and reduces the potential that
- 13 -
.
.
theaters at Phase II would adversely affect movie theater
development in the downtown. Mann theaters are proposing
theaters at the Phase II site and also at a site on the
Third street Mall, as are several other developers.
2. Parking - paragraph 3(g), Exhibit A - Amendment Number Four
proposes the use of a shared parking formula to calculate
the number of required parking spaces in the revised
project. UShared parking" is defined as parking space that
can be used to serve two or more individual uses without
conflict or encroachment. The hourly parking der.and for
each land use is merged to estimate overall shared parking
demand for a proposed development. Amendment Number Four
establishes parking space formulas to be applied to the
actual mix of uses reSUlting in Phase II, to determine the
number of required parking spaces. Exhibit A to the
Agreement provides one likely scenario of mixed uses: the
required number of parking spaces would be 3,413. Under
Amendment Number One to the Development Agreement, which
called for 3,128 parking spaces, a fixed amount of parking
was required regardless of use; under the proposed Amendment
Number Four, parking is linked to usage. A more intensive
use, such as medical office, would require additional
parking spaces in the Phase II development.
Proposed Zoning Ordinance Section 9044.5(a) allows for the
use of shared parking for facilities that meet prescribed
conditions. Shared parking has been successfully utilized
in mixed use developments, such as Colorado Place Phase I,
- 14 -
.
.
because combining land uses reduces the demand for parking
space from that of separate, free-standing compatible devel-
opments. The shared parking calculation is appropriate for
the project because the hours of operation for the movie
theaters will not conflict with peak office hours.
3.
Housing - Paragraph 1 (g) .
Under the existing Developl'lent
Agreement, Southmark is required to provide 100 units of
affordable housing. To date Southmark has provide 51 units,
thereby fulfilling all of the requirements of Phase I and a
portion of Phase II requirements.
~~at remains to be
completed are 49 units distributed as follows:
12 low income units (51-80% of County median inco~e)
17 median income units (81-100%)
20 moderate income units (101-120%)
Forty-eight of these units must be one-bedroom units while
the remaining unit may be of any size.
The Developnent
Agreement requires that the rents on the units be set at 25%
of the median income adjusted by bedroom size and inco:ne
category. Assuming that average unit size is 650 sq. ft.,
development costs are $sa/sq. ft., land costs are $35/sq.
ft., and loan terms are 10.5% for 30 years, a per unit fee
of $54,141, or a total in-lieu fee of $2,652,909 would be
required to develop the 49 units required by the Developnent
Agreeement.
Therefore, the recommendations of this staff
report include changing the proposed $2,000,000 payment to
$2,652,909.
- 15 -
.
.
CITIZEN REVIEW
The proposed Colorado Place Phase II project was discussed at six
community meetings during the past year with members of both
Mid-City Neighbors and Pico Neighborhood Association present, as
well as other interested persons. The City and developer have
continued to encourage community comments during this public
review process. Southmark has conducted numerous meetings with
persons interested in the Colorado Place projects. On July 22,
1987 city staff conducted a co1tl1:\unity meeting on the Southmark
and Water Gardens projects attended by approximately 130 persons,
including representatives of the project developers. Notice
regarding this meeting and the August 10 Commission hearing were
distributed to over 2000 persons.
BUDGET/FINANCIAL IMPACT
Amendment Number Four to the Development Agreement is exeITpt fro~
any additional fees including the Housing and Parks Mitigation
Program contained in the revised Land Use and Circulation
Elements (LUCE). Although the original Development Agreenent
predates the LUCE program, the developer is still required to
provide 49 uni ts of affordable housing and a park of
approximately 3.5 acres. The development has already provided an
onsite daycare center and 51 affordable housing units.
One of the elements of the proposed Amendment would substitute a
payment to the City of $2,000,000 in lieu of provision of 49
housing units by the developer. The City would be required to
use the $2,000,000 for development of affordable housing. city
- 16 -
.
.
staff is recommending a higher payment than that proposed by the
applicant.
RECOMMENDATION
staff respectfully recommends that the City council introduce for
first reading the ordinance approving Amendment Number Four to
the Development Agreement between the city of Santa Monica and
Colorado Place Limited with the changes and findings:
Changes to Amendment Number Four to Developrnenmt Agreerent
1. Modify Paragraph 8(g) to specify a housing payment of
$2,652,909 rather than $2,000,000.
Findings
1. The proposed movie theater and office use in Amendment
Number 4 are approved uses from the original Development
Agreement. Southmark has the right to develop movie theaters and
office buildings on the Colorado Place Phase II site.
2. The proposed Development Agreement Amendment is consistent
with the objectives, policies, general land uses and prograrr.s
specified in the General Plan. The project is consistent with
the City's adopted General Plan; no specific plans are applicable
to the project area.
A. LAND USE ELEMENT
With the exception of movie theater use, which was approved
prior to the current Land Use Element, the proposed Colorado
Place Phase II proj ect complies with the standards of the
present Land Use Element . Permitted uses in the Special
Office District include large scale office and related uses.
Specifically, the proposed Development Agreement is
consistent with Land Use Element Objective 1.8 to "provide
opportuni ty for office and advanced technology uses
requiring large floor areas."
Al though the original Development Agreement predates the
Land Use Element, the proposed project also conforms to Land
Use Element Objectives 3.1, 3.3 and 3.4, and policies 3.1.1,
3.3.15, 3.3.16 and 3.4.9 by providing a 3.5 acre park,
passive park areas and a central "village square II area.
- 17 -
.
.
B. CIRCULATION ELEMENT
Although the original Development Agreement predates the
Circulation Element, the proposed proj ect conforms to the
objectives and policies of the Circulation Element. For
example, the development is consistent with Obj ecti ve 4.2
and Policy 4.2.3 by providing ingress and egress points away
from residential neighborhoods in the evenings.
C. HOUSING ELEMENT
Although the proposed development is not a residential
project, it is consistent with the goals and policies of the
City's Housing Element to ttmaintain and increase the supply
of housing affordable to low- and moderate-income persons.1I
This will be accomplished through a requirement in the
original Development Agreement to provide 100 units of
affordable housing.
D. OPEN SPACE ELEMENT
The proposed Development Agreement Amendment Number 4 is
consistent with the City's 1973 Open Space Element. The
proposed Amendment Number 4 maintains the 3.5 acre park on
the Phase II site.
E. CONSERVATION ELEMENT
The proposed Colorado Place Phase II project is in
conformity with the policies of the 1975 Conservation
Element including the use of energy efficient insulation and
lighting and solar heating, specified in the original
Development Agreement and Amendment Nuw~er 4.
F. NOISE ELEMENT
The proposed project is consistent with the goals and
objectives of the Noise Element to identify and control
noise levels in the city. The property owner will insulate
Phase II buildings to protect patrons from street traffic
and construction activity noise and will abide by the City's
construction hour limitations.
G. SCENIC CORRIDORS ELEMENT
The proposed Colorado Place Phase II project is consistent
with the 1975 Scenic Corridors Element's goal to protect and
enhance the scenic resources of the City. Al though the
proposed development is not located on or near the seven
identified scenic corridors in the City, the proposed
Development Agreement does provide for a 3.5 acre park at
Broadway and 26th street which will be a visual improvement
for the site.
- 18 -
.
.
H. SEISMIC SAFETY ELEMENT
The proposed project is consistent with the principles of
the City's Seismic Safety Element. The mixed-use
development is not located along any known earthquake fault
lines, and it will incorporate seismic design standards in
accordance with the Uniform Building Code.
I . FUBLI C SAFETY ELEMENT
The proposed Colorado Place Phase II project is consistent
with the policies and programs of the city's Public Safety
Element to lower the risk factors of fire and geologic
hazard to a safe level. The proposed development will
comply with the city's fire and building codes in order to
provide for the community I s physical safety. Further, by
providing on-site, private security staff, the project will
reduce reliance on City emergency services.
3. The proposed Development Agreement Amendment is compatible
wi th the uses authorized in the M2 district in which the real
property is located and only includes uses permitted by the
original Development Agreement. The proposed project uses are
among those generally permitted in the M2 zone. The list of uses
permitted was designed to include those which were mutually
compatible in physical and use charac- teristics. With the
exception of movie theater use, the project proposal is also
compatible with uses authorized under the proposed Special Office
District development standards of the draft Zoning Ordinance.
4. The proposed Development Agreement Amendment is in
conformity with the pUblic necessity, public convenience, general
welfare and good land use practices. The proposed project will
create employment opportunities for Santa Monica residents and
would produce significant net revenues to the City benefiting the
general welfare. The proposed Development Agreement Amendment is
in conformance with good land use practices. The project concept
is consistent with the land use standards for the Special Office
District. The specific design features of the project also
conform to the Special Office District standards.
5. The proposed Development Agreement Amendment will not be
significantly detrimental to the health, safety and general
welfare. Like any development project, this proposal will
produce both adverse and positive effects on health, safety and
the general welfare. One benefit that Amendment Number 4
provides is a community room available for public use adjacent to
the 3.5 acre park. The project will result in an increase in
traffic volume and will have an adverse impact on local air
quality but mitigation measures will significantly improve that
situation. On balance, the beneficial aspects of the proj ect
outweigh any incrementally adverse effects.
6. The proposed Development Agreement Amendment will not
adversely affect the orderly development of the property.
Redevelopment of the site as proposed is a logical and orderly
- 19 -
.
.
use of the site and an improvement from the current use, which
consists of vacant land. The pasic project concept is consistent
with the overall direction of the City's land use policies and
would also meet objectives of the applicant.
7. The proposed Development Agreement Amendment will have a
positive fiscal impact on the City; staff calculation indicates
annual net revenues in excess of $90,000 for the office component
of Phase II. Retail usest including movie theaters and
restaurantst will generate additional net revenues for the City.
Attachments: A - Ordinance for First Reading approving proposed
Amendment Number Four to Development Agreement
B - Communications
Prepared By: D. Kenyon Webster, Senior Planner
DKW: :klc
copcc2
09/17/87
- 20 -
.
.
C/ED:CPD:DKW:se
COUNCIL MEETING: 9/22/87
Santa Monica, California
ORDINANCE NUMBER
(City council Series)
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
APPROVING AMENDMENT NUMBER 4 TO
DEVELOPMENT AGREEMENT BETWEEN
COLORADO PLACE LIMITED AND SOPAC
DEVELOPMENT CO., A CALIFORNIA CORPORATION
AND THE CITY OF SANTA MONICA
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN
AS FOLLOWS:
SECTION 1. Amendment Number 4 to Development Agreement
attached hereto and incorporated by reference between Colorado
Place Limited, a California limited partnership, and SOPAC
Development Co., a California corporationl and the City of Santa
Monica, a municipal corporation, is hereby approved.
SECTION 2. Each and every term and condition of Amendment
Number 4 to Development Agreement approved in Section 1 of this
ordinance shall be and is made a part of the Santa Monica
Municipal Code and any appendices thereto. The City Council of
the City of Santa Monica finds that the public necessity, public
convenience, and general welfare require that any provision of
the Santa Monica Municipal Code or appendices thereto inconsis-
tent with the provisions of this Amendment Number 4 to Develop-
ment Agreement, to the extent of such inconsistencies and no
further, is hereby repealed or modified to that extent necessary
.
.
to make fully effective the provisions of Amendment Nunber 4 to
Development Agreement.
SECTION 3. 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 4. 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 the 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.
SECTION 5. The Mayor shall sign and the City Clerk shall
attest to the passage of this ordinance. This City Clerk shall
cause the same to be published once in the official newspaper
wi thin 15 days after its adoption.
The ordinance shall become
effective after 30 days from its adoption.
APPROVED AS TO FORM:
~~.~
ROBERT M. MYERS 0 -
City Attorney
w/coplord
09/01/87
.
.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Robbie E. Monsma, Esq.
Southmark Pacific Corp.
2 No. Lake Avenue, Suite 800
Pasadena, California 91101
AMENDMENT NUMBER 4
TO DEVELOPMENT AGREEMENT
This Amendment Number 4 to Development Agreement
is entered into as of the day of ,
1987, by and among the CITY OF SANTA MONICA, a Charter City
organized and existing under the laws of the State of
California (the "City"), COLORADO PLACE LIMITED, a
California Limited partnership ("CPL"), and SOPAC DEVELOP-
MENT CO., a California corporation ("Property Owner"), with
reference to the following facts:
A. The City and CPL entered into that cert81n
Development Agreement dated October 27, 1981 and recorded in
the Official Records of the County of Los Angeles on
February 24, 1982 as Instrument No. 82-193147 (the "Original
Agreement"), as it affects Phase II. The Original Agreement
has been amended by (i) Amen~~ent Number I to Development
Agreement dated July 26, 1983 recorded October 5, 1983 as
Instrument No. 83-l1763l2 ("Amendment Number l"),
(il) Amendment Number 2 to Development Agreement dated
April 24, 1984 recorded May 18, 1984 as Instrument
No. 84-594528, and (iii) Amendment Number 3 to Development
Agreement dated May 28, 1985 recorded July 19, 1985 as
Instrument No. 85-831730 (collectively, the "Amendments").
(The Original Agreement, as amended by the Amendments, is
hereinafter referred to as the "Agreement").
B. The Agreement relates to that certain real
property located in the City of Santa Monica, State of
California, described in Exhibit A to the Original Agree-
ment, commonly known as Phase I and Phase II of Colorado
Place. Legal title to Phase II of Colorado Place is held by
Property Owner, as the successor in interest to CPL under
the Original Agreement, as it affects Phase II. Legal title
to Phase I of Colorado Place is held by CPL.
.
.
c. The parties hereto desire to amend the Agree-
ment in the manner set forth herein in order to (i) delete
any requirement that a hotel be constructed on Phase II of
Colorado Place, (ii) modify the parking requirements for
Phase II of Colorado Place, and (iii) modify the Agreement
in certain other respects as set forth herein.
D. The City has determined that the modifica-
tions to the Agreement set forth herein are consistent with
the City's General Plan.
NOW, THEREFORE, IN CONSIDERATION of the foregoing
facts and the mutual covenants set forth herein, the parties
hereto agree as follows:
l. The Agreement is hereby amended in the fol-
lowing respects:
(a) pro;ect Uses. Paragraph 8 is hereby
amended in its entirety to read as follows:
"8. City's Approval of Pro;ect.
(a) By the adoption hereof, the City approves
commercial office buildIng, retail, restaurant,
theaters and related commercial uses for the Real
Property. Specifically, the Project is approved
for all uses identified in Santa Monica Municipal
Code Section 9121 (as in effect on October 27,
1981 and whether such uses are permitted or
excluded under such Section) with the exceptions
that (i) all uses specified in Subparagraph 4a
through x of such section shall remain prohibited
uses, (ii) the operation of theaters on the Real
Property shall be limited by the provisions of
Section 8(b) below, and (iii) medical office use
shall not exceed 35,000 usable square feet.
(b) With respect to the operation of theaters
on the Real Property, the following limItations
shall be applicable:
(i) The total number of theater seats shall
not exceed 2,000;
- 2 -
.
.
(ii) No movie shall be permitted to begin
prior to 10:00 A.M. on any Saturday, Sunday, or
holiday or prior to 1:00 P.M. on any other day.
(iii) No movie shall be permitted to begin
after midnight on any Friday, Saturday or day
before a holiday and no movie shall be permitted
to begin after 11:00 P.M. on any other night.
(iv) No pedestrian theater entrance or ticket
booth shall be permitted within 100 feet of any
point on the perimeter of the Real Property; all
such entrances to theaters and all queueing for
ticket booths shall be internal to the Project.
(v) Property Owner shall endeavor to obtain
a Colorado Avenue address for all theaters on the
Real Property.
(vi) All advertising and signage shall direct
traffic to enter one of the two vehicle access
points on Colorado Avenue or the vehicle access
point on Cloverfleld; provided, however, that the
access for handicapped persons shall be on
Broadway. All automobile entrances to, and exits
from, the Project located on 26th Street and on
Broadway shall be closed at 6:30 p.m. except for
(i) the access for handicapped persons on
Broadway, and (ii) exits usable only by those
holding card keys.
(vii) Property Owner shall either provide free
parking or shall require each theater operator to
provide a minimum of three (3) hours validated
parking. Property Owner shall require each the-
ater operator to include a reference to the avail-
ability of free parking in all advertislng
relating to the theaters and all signage shall
refer to the availability of free parking.
(b) Maximum Floor Area. Paragraph 13(a) is
hereby amended to read in its entirety as follows:
- 3 -
.
.
"(a) Maximum Floor Area. Maximum
floor area of the ProJect (Phases I and
II combined) shall not exceed 900,000
square feet of usable area above grade
as defined in paragraph lee) above
excluding (i) the parking structure, and
(ii) areas set aside for the community
room referred to in paragraph l4(b)(3),
public restrooms and other enclosed
areas related solely to the Park and the
day care center referred to in
paragraph l4(c)."
(c) Maximum Heiqht. Paragraph l3(b) is
hereby amended to read in its entirety as follows:
"(b) Maximum Heiqht.
(i) The term "Building
Height" shall mean the vertical
distance of a building measured
from the existing average natural
grade elevation of that portion of
the Real Property covered by the
building to the highest point of
the roof. In determining the Build-
ing Height of any building, any
element of such building permitted
by City zoning laws in effect at
the time of such determination to
exceed the height limit on build-
ings in the zone in WhlCh the Real
Property is located shall not be
included.
(ii) No building in Phase I
shall have a Building Height in
excess of fifty (50) feet.
(ili) Property Owner antici-
pates that there will be three
office buildings constructed on
Phase II. The building nearest to
Cloverfield Boulevard shall have a
Building Height not to exceed
seventy (70) feet. The building
- 4 -
.
.
adjacent to the Park shall have a
Building Height not to exceed
sixty-five (65) feet. The building
in between such two buildings shall
have a Building Height not to
exceed eighty (80) feet."
(d) Community Room. The following new para-
graph 14(b)(3) shall be added:
"(3) (i) As a part of the office
building to be constructed adjacent to
the Park, Property Owner shall, at its
own expense, include a meeting room or
rooms containing an aggregate of not
less than 1000 square feet and not more
than 2000 square feet of usable floor
space, which room or rooms shall be
available for use by the public.
(ii) Prior to the issuance of
a building permit for such building,
Property Owner shall submit to the City
Planning Director for approval a design
of the community room inclu~ing its
size, configuration and improvements.
Prior to giving such approval, the City
Planning Director shall consult with
neighborhood residents. The Planning
Director may approve, approve With con-
ditions or disapprove the design sub-
mitted by Property Owner within 60 days
after submission. Any failure on the
part of the Planning Director to render
a decision within such 60 day period
shall be deemed to constitute an
approval of such design. The Planning
Director shall notify Property Owner in
writing of his or her decision and the
Property Owner, any member of the public
or any member of the City Council shall
have a right to appeal such decision to
the City Council by notice in writing to
the Planning Director given within
10 days of the date of the notlfication
by the Planning Director of his or her
- 5 -
.
.
decision. Such appeal shall be heard at
the next regularly scheduled meeting of
the City Council. No other approval
shall be required from the City Council
or other City agency.
(iii) Following the issuance
by the City of a Certificate of Occu-
pancy for such office building:
(x) All normal and usual
expenses of operating and main-
taining the community room shall be
paid by Property Owner including,
without limitation, normal jani-
torial and utility expenses, which
shall be deemed to be costs of
operating and maintaIning open
space in the Project under
paragraph 14(j).
(y) Property Owner shall
identify to the public a repre-
sentative with whom reservations
can be made for use of the commu-
nity room; and
(z) The community room may be
used by the public to the same
extent as a meeting room in a pub-
lic park in the City, subject to
reasonable regulation including,
without limitation, fees for
extraordinary janitorial services
or other unusual expenses. To the
extent such regulations exceed
existing City regulations
including, without limitation, fees
for extraordinary janitorial ser-
vices or other unusual expenses.
concerning the use of such meeting
rooms, they shall be subject to
reasonable approval by the City's
Recreation and Parks Department."
(e) Enerqy Conservation. Paragraph 14(e)(3)
is hereby amended to read in its entirety as follows:
- 6 -
.
.
"3. Liqhtinq. High efficiency
fluorescent lamp/ballast systems will
minimize energy consumption. Maximum
provisions for local light switching
will be provided to permit use of
lighting only when space is occupied.
Photo cell control of lighting in areas
where natural illumination could suffice
will be provided. Exterior and certain
operational lighting will be controlled
from the energy management system to
optimize operation and minlmize energy
consumption. Where decor or function
dictate the use of incandescent or tung-
sten halide lighting, extensive control
equipment will be provided to optimize
operation and increase lamp life."
(f> Substitute TechnOlogy. The following
new Section 14(e)(7) shall be added:
"(7) Adiustments for Substitute Technology
(i) Property Owner shall be entitled to
substitute other energy management measures in the
Project for those described above upon submission
of an application to the City Building Department
demonstrating to the Department's reasonable sat-
isfaction that said substitution is at least as
energy efflcient as the measure it is proposed to
replace.
(ii) Property Owner's application shall
state the speCific substitutlon being proposed and
attach such plans, specifications and supporting
materials as may be reasonably required by the
Building Department to demonstrate the appropri-
ateness of the substitution."
(g) Housing. Pursuant to the provl-
sions of Section 14{a) of the Agreement, Property Owner
agreed to provide up to one hundred (100) rental housing
- 7 -
.
.
units in new or existing buildings in the City. City
acknowledges that fifty-one (51) of such units have been
provided. City and Property Owner hereby agree that in lieu
of the remaining forty-nine (49) units required by the
Agreement, Property Owner shall may, but shall not be
required to, pay to the City Two Million Dollars
($2,000,000) on the date of execution of this Amendment No.
4 to Development Agreement. Upon such payment, Property
Owner shall have no further obligation under Section 14(a)
of this the Agreement with respect to the remaining
forty-nine (49) units. If, however, Property Owner does not
make such payment at such time, all provisions of
Section l4(a) of the Agreement shall remain in full force
and effect. With respect to the other fifty-one (51) units
which have been provided and in connection with which Prop-
erty Owner has entered into various agreements with third
partles, City has reviewed these agreements and has agreed
that Property Owner will fully and finally satisfy lts obli-
gations under Section 14(a) hereof so long as Property Owner
performs its obligations under said agreements.
(h) Hotel Use. Paragraph 14(h} of the
Agreement is hereby deleted.
(i) parkinq. The provision of Section 1 of
- B -
.
.
Amendment Number I which requires a minimum of 3,128 on-site
parking spaces for Colorado Place (if Phase II is developed)
is hereby deleted. The required number of parking spaces to
be provided in connection with the Project shall be deter-
mined in accordance with Exhibit A attached hereto and
incorporated herein by reference. In the event less than
35,000 floor area square feet will be leased for medical
uses, the parking requirements shall be adJusted according
to the method set forth in Exhibit A so long as the Property
Owner gives written notice to the City of the total floor
area square footage to be leased for medical office use
prior to the issuance of the last bUIlding permit issued in
connection with this Agreement. The total floor area square
footage, not to exceed 35,000 usable square feet, set forth
in such written notice shall thereafter constitute the maXl-
mum usable square footage permitted under this Agreement for
medical office use in the Project. Upon the execution of
each lease of space for medical office use, Property Owner
agrees to advise City in writing of (il the total floor area
square footage leased for medical office use in such lease
and (ii) the aggregate floor area square footage, including
such newly leased space, of the Real Property under lease
for medical office use.
- 9 -
.
.
(j) Traffic Diversion. Property Owner shall
comply with all applicable City ordinances governing the
conduct of construction which are designed to minimize
inconvenience during construction and cooperate with the
City's Department of General Services to establish a mutu-
ally acceptable plan for minimizing such inconvenience.
(k) Amendments to 3ection 27. City agrees
to modify or add to the provisions of Section 27 of the
Agreement at the request of any institutional lender or pen-
sion trust providing financing so long as such requested
modifications or additions pertain to the rlghts of a Mort-
gage under such Section 27 and are not otherwise inconsis-
tent with the terms of the Agreement, as amended by this
Amendment Number 4.
2. All other provisions of the Agreement,
including, without limitation, the size and required comple-
tion date of the Park, shall remain in full force and
effect.
3. This Amendment No. 4 is beIng entered into in
conjunction with that certain Development Agreement of even
date herewith (the wPhase III Agreement") between City and
Sopac Properties, Inc., a Delaware corporation and an
- 10 -
.
.
affiliate of CPL and Property Owner, relating to the devel-
opment of certain real property in the City of Santa Monica
more particularly described therein ("Phase III"). This
Amendment No.4 and the Phase III Agreement, together, are,
among other things, intended to allow for the relocation of
the hotel previously contemplated for Phase II under the
Original Agreement. This relocation has been deemed by the
City to be in the best interests of the City and its resi-
dents and furthers the policies set forth in the Land Use
and Circulation Elements of the City's General Plan. City
acknowledges that a material consideration to CPL and Prop-
erty Owner in entering into this Amendment No. 4 is the fact
that the City has concurrently entered into the Phase III
Agreement granting the development rights set forth therein.
Therefore, if for any reason, either (a) the Phase III
Agreement becomes invalid or unenforceable by the Property
Owner, as defined therein (the "Phase III Owner"), for any
reason, whether in whole or in part, other than as a result
of an Event of Default by the Phase III Owner thereunder, or
(b) the Phase III Agreement is terminated by the Phase III
Owner as a result of an Event of Default by City thereunder,
in either case at any time prior to the commencement of con-
struction of the office building adjacent to the Park, then
CPL and Property Owner may, at their sole discretion, notlfy
- II -
.
.
City in writing of their election to rescind this Amendment
No. 4 in which case this Amendment No. 4 shall become null
and void as of the date of such notice. If CPL and Property
Owner exercise their right to rescind this Amendment No.4,
any dispute between City and CPL and Property Owner
regarding the proper interpretation of the Agreement
including, without limitation, the permitted height of the
hotel contemplated by the Agreement, may be resolved through
application by City, CPL or Property Owner to a court of
competent jurisdiction for a declaratory judgment irrespec-
tive of whether or not that certain declaratory judgment
action entitled ~91orado Place vs. The City of Santa Monica,
Los Angeles Superior Court Case No. WE C 100185 has been
dismissed with prejudice.
- 12 -
.
.
IN WITNESS WHEREOF, this Amendment Number 4 to
Development Agreement has been executed as of the date flrst
above written.
APPROVED AS TO FORM:
CITY OF SANTA MONICA,
a municipal corporation
By:
City Attorney
City Manager
Attest:
SOPAC DEVELOPMENT CO.,
a California corporation
By:
President
COLORADO PLACE LIMITED, a
California Limited Partnership
By: Southmark Paciflc Corp., a
California corporatlon,
general partner
By:
President
058:,AMEN4DA
- 13 -
.
.
COLORADO PLACE
PP~SES I & II
PARKING DEMAND FORMULAE
A. Parkinq Requirement Calculations
The actual number of parking spaces required for
the actual mix of uses on Phases 1 and II shall be the
largest of (l) parking demand at 10:00 A.M. weekdays,
(2) parking demand at 1:00 P.M. weekdays, (3) parking demand
at 2:00 p.m. weekdays, or (4) parking demand at 7:00 p.m.
weekdays, with those demands being computed In accordance
with the following formulae:
Parking demand at 10:00 A.M. weekdays = 08/322 +
R/l5 + FF/37.5 + RC/750
Parking demand at 1:00 P.M. weekdays = OB/350 +
R/3 + FF/7.5 + RC/500 + T/l5
parking demand at 2:00 P.M. weekdays = OB/335 +
R/9 + FF/18.75 + RC/500 + T/l5
Parking demand at 7:00 P.M. weekdays = OB/3220 +
R/3 + FF/7.5 + RC/500 + T/3
Where:
OB = Adjusted gross area of office buildlngs in
square feet
R = Number of restaurant seats
FF = Number of seats at fast food outlets
RC = Area of retail commercial space in square feet
T = Number of theater seats
B. Backqround
The formulae set forth above were developed
utilizing the demand criteria for different times of the day
established in the May 24, 1983 parking study performed for
Phases I and II entitled "A Parking Demand Study for
Colorado Place," as augmented and up-dated by the May 5,
1987 study, both prepared by International Parking Design,
Inc. (collectively, the "Study"):
EXHIBIT A
.
.
The formulae were developed for four time perlods:
(I) 10:00 a.m., when the office buildings are at peak
demand; (2) l:OO p.m., when the restaurants and retail
stores are at peak demand; (3) 2:00 p.m. when the retail
stores are at peak demand and the office buildings are close
to peak demand; and (4) 7:00 p.m. when the theaters, restau-
rants and retail stores are at peak demand.
Peak demand for office use in the Study was calcu-
lated at 2,067 spaces for employees and 277 spaces for ViSl-
tors for a total of 2,344 spaces for 755,199 square feet of
adjusted gross area of office use. This can be expressed as
a ratio of one space/322 square feet.
Restaurant demand is calculated on the assumption
that there Will be a l.S turnover of seats at the noon hour
with aD percent of the patrons parked at one time. If 50%
of the patrons drive in at an occupancy ratio of 1.8 persons
per car, the parking spaces per seat are calculated as:
1.5 x 0.8 x 0.50/1.8 = 0.333, or 1 space/3 seats.
Peak demand for fast food outlets is calculated on
the same basis as restaurants except that only 20% of the
patrons are expected to drive in. The resulting ratio is
1.5 x 0.8 x 0.20/l.8 = 0.133, or I space/7.S seats.
Peak demand for retail is estimated at one
space/SO a square feet including drive-in percentage factors.
Peak demand for theaters is estimated at one
space/3 seats.
Peak demand for medical office is estimated at one
space/2S0 square feet. However, if the ~arkin9 requirements
for medical office use imposed by the Clty pursuant to the
proposed Zoning Code currently under review by the City
Council require more parking than 1 space per 250 square
feet for medical office use, the Zoning Code requirement
shall be utilized so long as it does not exceed 1 space per
200 square feet. Once the Zoning Code currently under con-
sideration is adopted by the City, the basic requirement for
medical office use shall be established for purposes of this
Agreement and shall not be affected by later changes in the
Zoning Code to such parking requirements.
Utilizing these assumptions, the actual formulae
are developed as follows:
- 2 -
.
.
10 A.M. PEAK PERIOD
% of
Peak Peak Resulting
Use Demand Demand Ratio
Office 1 space/322 s.f. 100% 1/322 s.f.
Restaurants 1 space/3.0 seats 20% l/IS.O seats
Fast Food
Outlets I space/7.S seats 20% l/37.S seats
Retail 1 space/500 s.f. 67% l/750 s. f.
Theaters 1 space/3.0 seats 0% 0
Medical Office 1 space/250 s.f. lOO% 1/250 s.f.
I P.M. PEAK PERIOD
% of
Peak Peak Resulting
Use Demand Demand Ratio
Office 1 space/322 s. f. 92% 1/350 s. f.
Restaurants 1 space/3.n seats 10O% 1/3.0 seats
Fast Food
Outlets 1 space/7.S seats IOO% 1/7.S seats
Retail 1 space/500 s.f. 100% l/SOO s. f .
Theaters 1 space/3.0 seats 20% 1/15 seats
Medical Office 1 space 250 s. f. 100% 1/250 s.f.
:
- 3 -
.
.
2 P.M. PEAK PERIOD
% of
Peak Peak Resulting
Use Demand Demand Ratio
Office I space/322 s.f. 96% 1/335 s. f.
Restaurant 1 space/3.0 seats 33% 1/9.0 seats
Fast Food
Outlets 1 space/7.S seats 40% l/18.75 seats
Retail I space/SOO s.f. lOOt l/SOO s.f.
Theaters 1 space/3.0 seats 20% 1/15 seats
Medical Office 1 space/250 s.f. lOO% 1/250 s.f.
7 P.M. PEAK PERIOD
% of
Peak Peak Resulting
Use Demand Demand Ratio
Office 1 space/322 s.f. lOt 1/3220 s.f.
Restaurants 1 space/3.0 seats 100% 1/3.0 seats
Fast Food
Outlets 1 space/7.S seats 100% 1/7.5 seats
Retail 1 space/SOO s.f. 100% 1/500 s. f.
Theaters 1 space/3.0 seats 100% 1/3.0 seats
Medical Office 1 space/2S0 s.f. 0% 0
- 4 -
.
.
~
c. Example
Application of the formulae to one of the
reasonably anticipated mix of uses for Phases I and II of
Colorado Place are shown in the following table:
PARKING DEMAND
Use Area (Size) 10:00 A.M. 1:00 P.M. 2:00 P.M. 7:00 P.M.
Office 1,028,000 s.f. 3,193 2,937 3,069 319
Restaurants 747 seats 50 249 83 249
Fast Food
Outlets 125 seats 4 17 7 17
Retall 1,500 s.f. 2 3 3 3
Theater 1,000 or 2,000 seats. 0 l33 l33 667
Medical Office 35,000 s. f. 140 l40 l40 0
3,389 3,4l3 3,369 1,255
*Assumes for purposes of this example that normal weekday
matinees will be shown on three screens (1,000 seats) with all
screens (2,DOD seats) operating after 5:00 p.m.
Under this set of assumptions, the required number of spaces
could be 3,413. Of course, a different set of numbers would
result from a different mix of uses.
- 5 -