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SR-401-005 gA PCD: S F :JT :AS :f:\plan\share\cou ncil\strpt\2003\M iramar DA Discussion .doc Council Mtg: November 25,2003 Santa Monica, California NOV 2 Ii 2003 TO: Mayor and Council members FROM: City Staff SUBJECT: The Fairmont Miramar Hotel Development Agreement Concept Plan Applicant: Wolff, DiNapoli LLC INTRODUCTION This report recommends that the City Council discuss a proposal for a development agreement for the Fairmont Miramar Hotel and provide direction regarding the project's potential public benefits and the appropriateness of entering into a Development Agreement for the redevelopment of this site. BACKGROUND The current property owners of the Fairmont Miramar Hotel at 1133 Ocean Avenue (with an adjunct site at 1127 Second Street) are considering submittal of a Development Agreement application for these properties. Attachment A is a letter to the City Council summarizing the applicant's proposal. City staff acts as the negotiator for Development Agreements and, to avoid negotiating a project the City I cannot accept, staff scheduled this matter before the Planning Commission on December 4, 2002 for discussion. The Planning Commission discussed at length both the merits of the proposal in terms of affordable housing and additional parking, and concerns about the project, particularly the proposed 16-story ! 1 8A NOV 2 5 2003 residential tower on the northwest corner of Wilshire and Ocean Avenue. Ultimately, the Commission did not reach consensus on whether to support the commencement of Development Agreement negotiations for the concept proposed, due, in large part, to the urban design, and General Plan compatibility issues related to the height of the residential tower. SITE LOCATION AND DESCRIPTION The subject property includes two parcels. The larger is an 192,057 square-foot parcel located on the east side of Ocean Avenue between Wilshire Boulevard and California Avenue with a frontage of approximately 578 feet along Ocean Avenue. The smaller parcel is a 15,000 square foot parcel located on the east side of Second Street between Wilshire Boulevard and California Avenue with a Second Street frontage of approximately 300 I feet. Both parcels are zoned Recreational Visitor Commercial (RVC). Surrounding uses consist of multi-family residential (R3-NW) to the north, a predominantly retail commercial district (C3, BSC2, BSC4 and RVC) to the south, commercial and multi-family (C3, R3-NW) to the east, and Palisades Park (DP) to the west. The existing use consists of a 302-room hotel and its support facilities, including a ten-story building,lla six-story building, one and two-story bungalows, a large two-story office and restauralnt complex, one-story support building, landscaping and surface parking. The site's Ifocal point, a large Moreton Bay Fig tree, was designated a City Landmark in 1976. 2 PROJECT DESCRIPTION The developers hate proposed submitting a Development Agreement application that would redevelop the southern portion of the site which now bears the two-story officelrestaurant c9mplex, the surface parking lot and driveways, and the one-story support building that fronts on Ocean Avenue as well as the entire parking lot located on the Second Street parcel. Based on the Planning Commission comments, the applicants have modified the original proposal to change the focus from building new residential units on Ithe site to expanding the existing number of hotel rooms and to be less specific about the number of stories and design with the intent that these issues will be negotiated throlJlgh the Development Agreement process. Consequently, the only residential units that would be proposed now are 40 affordable units (2 more affordable units than in the pr<l>posal before the Planning Commission) on the Second Street site. The applicant is stil~i proposing to provide up to 150 additional public parking spaces as a public benefit. The new proposal would: ~ re-orient the entrance to Ocean Avenue, opening up the public view to the landmark M<I>reton Bay Fig Tree; ~ expand the ballroom and function rooms; ~ build a new hotel structure with approximately 200 hotel rooms (for a total of 502 rooms including the existing rooms), and above ground floor retail and restaurant uses at the corner of Ocean Avenue and Wilshire Boulevard; ~ build a residential structure of approximately 40 affordable or assisted living units on the ~econd Street parcel; 3 ~ build an urnderground parking garage with the intent to meet the parking requirements for the new structures, accommodate an approximately 90 space existing parking deficit for hotel employees, and provide 150 new parking spaces for public use; and >> pursue qualification as a LEED certified building. Conclusion Based on the feedback from the Planning Commission and the City Council, the applicant will determine how best, or whether, to pursue a Development Agreement. The City enjoys broad discretion in reviewing Development Agreement applications. This project is presented in concept only to allow the City Council to comment on its merits, identify concerns with the project, and discuss potential public benefits. This feedback will inform the applicant and provide direction to City staff in determining whether a Development Agreement is the best approach for development of this site. There are two essential questions for the Council to focus on in considering this matter: 1 Does the Cit! Council believe a development agreement is appropriate for this site? 2 If so, what ar the general negotiating points that should be addressed? BUDGET/FINANCIAL IMPACT The recommendation presented in this report does not have any budget or fiscal impact 4 RECOMMENDA TIGN It is recommende~ that the Council discuss this proposal and provide direction regarding the proje1t's potential public benefits and the appropriateness of entering into a Development Agreement for the redevelopment of this site. Prepared by: Suzanne Frick, Director Amanda Schachter, Acting Planning Manager Kimberly Christensen, AICP, Senior Planner Sarah Lejeune, AICP, Associate Planner, City Planning Division Planning and Community DevelopmE~nt Department Attachments: A. October 7, 2103 letter to the City Council B. Staff report . nd site plan from the December 4, 2002 Planning Commission hearing C. December 4,12002, Planning Commission minutes 5 ATTACHMENT A October 7,2003 letter to the City Council 6 MARITZ, WOLFF & CO. HOTEL/RESORT INV STMENTS I l':.'C'~il"" -r I ,"Mill A MCNlf: t ell Y Pi /;'~UJNe /r '11828 La GrangeAvenue . .,,'.,. '/' Suite 200 'OJ Los Angeles, CA 90025 ocr -B p 2 :2 BTEI-- (3/0) 477-3593 FAX: (3/0) 477-2522 October 7, 2003 Santa Monica Ci~y Council City of Santa M~' ca 1685 Main Stree , Santa Monica, C . ifornia 90401 RE: Fairmont Miramar Santa Monica Proposed Development Agreement Dear City Council: The purpose of tli.is letter is to respond to issues raised during our December 4, 2002 Planning COmmi,sion hearing and to continue our efforts to negotiate a Development Agreement betw~n ourselves and the City of Santa Monica that would allow for the redevelopment of the Fairmont Miramar Hotel block. We believe the high profile location of the prbperty as well as the impact a development would have on the surrounding area becessitates a mutually balanced urban planning approach that involves both the City and[l,the developer. During our pres~' tation to the Planning Commission, we gleaned some useful information and onstructive feedback. We also got a sense of the type of public input that will be a p of developing this parcel. As active members of the Santa Monica business commu I'ty, we remain committed to providing community benefits to the City of Santa Monica ~d wish only to proceed with this development in a manner that is mutually respectfUl and participatory. I Desi2n Issues . The conc4>tual plan presented to the Planning Commission envisioned a developm~nt that was primarily residential with retail along the property's . Wilshire IJoulevard frontage. The decision to pursue residential development was based on ~ number of factors including (1) market acceptance, (2) City's stated desire for ~ffordable housing, and (3) cohesiveness of residential and hotel use. The approtch taken was to maximize the number of affordable housing units in the projec while still allowing for an economically feasible project. . The Plann~ng Commission did not object to the residential use but did not support the type ot multi-story tower that would need to be built in order to provide an adequate i~lVestment return to the developer based on the number of affordable H:\FMD_KHF\Miramar\Council Letter.doc )007 Santa Monica Citt. Council October 7, 2003 'I.' Page 2 I housing u~'., its being built. The concept of a high-rise tower was presented to the Commissi. n as a means of fitting into the surrounding urban landscape as well as not creati 'g excessive density at street level. We continue to believe that a , structure ,'ot limited by current height restrictions is appropriate for the site but believe th,t determining the appropriate height is best accomplished through interactivq dialogue between the City and developer. We are not fixed upon any specific n*mber of stories and are willing to discuss with the City this aspect of our prop=,al. We believe negotiations leading to a mutually endorsed Develop ., nt Agreement will provide all parties the necessary input to anive at the prope !height and density for the site. · The Plann ng Commission also noted that the current site does not fall within the area that i currently under a hotel development moratorium. Given the significan economic benefits to the City that a hotel creates through transient occupanc tax and retail sales generation (not to mention additional job creation through b th the construction and operations of a hotel), the added parking flexibility f hotel usage, and the additional public space of an expanded meeting area, we hive reconsidered the residential use and believe hotel development would pro' ide far greater benefits to the community than a residential complex. In additio , we as developers have significant experience in hotel development. Instead of ' eveloping approximately 100 apartment units on the Wilshire and Ocean site!we would propose building 200 (plus or minus) additional Pairmont Miramar tel rooms. The incremental value to the City of Santa Monica of additional otel rooms is hugely superior to rental or condominium apartment usage. . t to the 2nd Street parcel, we would propose either using the land to ordable or assisted living housing on the site. As a result of having a parking g age on the hotel site the 2nd Street parcel of land (which is currently utilized as parking) will no longer be integral to the hotel operations and therefore available~. r much needed affordable or assisted living housing. The exact number of !Units would need to be negotiated as part of the Development Agreemenprocess. · All parties iinvolved view parking as a primary incentive for pursuing a developm I1t. The City would benefit from having additional public parking available ar the Third Street Promenade, the surrounding residents would benefit fro reducing the number of hotel employees that park on the street, and the hotel uld benefit from having more convenient access and control over its parking. ur concept still envisions building a large underground garage that could accorunodate approximately 600 cars. The change of use from residential to hotel will likely enhance the parking situation as stalls will not have to be dedicated tp residential users and thus, there will be more flexibility with the daily usage of thib garage. The size, ownership, and possible public participation of the L08 Santa Monica Cit[. ..... Council October 7, 2003 'I.. Page 3 garag~ ~oP. ld be addressed in the context of our Development Agreement negotlatiO~s. · The retail proposed along Wilshire Boulevard would remain as envisioned in our earlier pro~osal. This would entail approximately 20,000 square feet of retail at grade leve! The retail would be designed to maximize view corridors and create a pedestri -friendly connection between the Third Street Promenade and the Miramar otel. We view the retail connection between Ocean A venue and Third Street Pro enade as an important benefit to the City's long-range retail strategy. Public Benefits Our intent is to prpvide significant public benefits as part of our Development Agreement negotiations. Th$e benefits are envisioned to be both economic and social. The primary public benefits wquld be as follows: · Increasedi'.,T.. ax Revenue - The expanded hotel will create significant incremental transient cupancy tax for the City as well as increased retail spending from its guests. I. · Addition~ Union Jobs - It is believed that 200 additional hotel rooms in addition t '. the enlarged meeting. space proposed by our plan will create as many as 100 job. based on a 2 guest per employee ratio. In addition, during hotel constructi .n it is believed that a majority of trades will be union. · AtTordabl~ Housing - The developer is willing to discuss the appropriate use for the 2nd Str~,et parcel currently owned by the hotel as either affordable or assisted living houing. We believe that between 30 and 40 affordable or assisted living units coul be built on that site. Ownership of the affordable housing would be negotiatedlwithin the context of our Development Agreement. . Additiona. Parking - The project could produce as many as 150 new public parking sp~ces over and above the number of stalls required by code for the proposed 4evelopment. In addition to the new public parking spaces, the proposed qnderground parking structure will provide approximately 90 spaces for employee ~arking that currently must use street parking or alternate parking facilities \\jithin the area. Improved I Pedestrian Access and Circulation - The project will energize pedestrian ~ovement along Wilshire Boulevard and Ocean A venue and create connectivi~y to the shopping and restaurant areas on the Third Street Promenade. \.;09 Santa Monica City Council October 7, 2003 Page 4 · Increased Prominence of the Fig Tree - Opening the property to Ocean A venue will increase visual association of the historic Fig Tree, which has played such an important role in Santa Monica's history. . Green Environmental- The project will integrate a comprehensive environmental approach into the architectural design. Passive and active energy systems will be studied in order for this building to be officially listed as a L.E.E.D. certified building. Water conservation will be an important part of the certification. We believe this development will provide substantial economic and community benefits and that the process of working together on a Development Agreement will ensure that maximum public representation will be in evidence. We have no desire or interest in undertaking an adversarial (not to mention costly) activity even if such an opportunity existed. We seek to develop the property in a manner that has strong community leadership support and acceptance combined with economic viability. We have tried to the best of our ability to reflect the needs of the community within our discussions. It is our desire to continue to work with the City in formulating a Development Agreement that properly balances the needs of the community with the economic realities of development. We thank you for all the input and support you have provided us so far and sincerely hope you will approve our request to continue working toward a Development Agreement with you on this very exciting project. Sincerely, !~V!:!1!A FMD:sk cc: Andy Cohen Suzanne Frick Howard Leist Susan McCarthy Nellie Reid Lew Wolff 10 ATTACHMENT B Staff report and site plan from the December 4,2002 Planning Commission hearing 0011 CP:JT:AS:KC:SDL:F:\PLAN\SHARE\PC\STRPT\02\Miramar Discussion Item.doc Planning Commission Mtg: December 4, 2002 Santa Monica, California. TO: The Honorable Planning Commission FROM: Planning Staff SUBJECT: The Fairmont Miramar Hotel Development Agreement Concept Plan Address: 1133 Ocean Avenue and 1127 Second Street Applicant: Wolff, DiNapoli LLC INTRODUCTION The current property owners of the Fairmont Miramar Hotel at 1133 Ocean Avenue (with an adjunct site at 1127 Second Street) are considering submittal of a Development Agreement Application for these properties. Attachment A provides a summary of the concept plan. City staff acts as the negotiator for Development Agreements and so to avoid negotiating a project the city cannot accept, staff has scheduled this matter to enable a pro-active discussion by the Planning Commission. The Commission's discussion will help advise the City Council, provide initial direction to staff and inform the property owner. This process is occurring only because the project may involve a development agreement. As will be discussed later in this report, development agreements are negotiated contracts between the city and an applicant. They are not quasi-judicial matters like Development Review Permits or Conditional Use Permits. SITE LOCATION AND DESCRIPTION The subject property includes two parcels. The larger parcel is a 192,057 square-foot parcel located on the east side of Ocean Avenue between Wilshire Boulevard and California Avenue with a frontage of approximately 578 feet along Ocean Avenue. The smaller parcel is a 15,000 square foot parcel located on the east side of Second Street between Wilshire Boulevard and California Avenue with a Second Street frontage of approximately 300 feet. Both parcels are zoned Recreational Visitor Commercial (RVC). Surrounding uses consist of multi-family residential (R3-NW) to the north, a predominantly retail commercial district (C3, BSC2, BSC4 and RVC) to the south, commercial and multi- family (C3, R3-NW) to the east, and Palisades Park (DP) to the west. Attachments Band C include site plan sketches of the proposed project and a survey of the existing site. The existing use consists of the hotel and its support facilities, including a ten-story building, a six-story building, one and two-story bungalows, a large two-story office and restaurant complex, one-story support building, landscaping and surface parking. The site's focal point, a large Moreton Bay Fig tree, was designated a City Landmark in 1976. 1 \) v 1 2 Zoning District: "RVC" Residential Visitor Commercial District (Both Parcels) Land Use District: Parcel A (Ocean Avenue) Oceanfront Special District Parcel B (Second Street) High Density Housing Parcel Area: Parcel A (Ocean Avenue) 192,057 S.F. Parcel B (Second Street) 15,000 S.F. PROJECT DESCRIPTION The developers are considering submitting a Development Agreement application that would propose the redevelopment of the southern portion of the site that includes the two- story office/restaurant complex, the surface parking lot and driveways, and the one-story support building that fronts on Ocean Avenue as well as the entire parking lot located on the Second Street parcel. This proposal would: ~ re-orient the entrance to Ocean Avenue, opening up the public view to the landmark Moreton Bay Fig Tree; ~ build a new three story building to include the ballroom and function rooms; ~ build a four story residential building with ground floor retail at the corner of Wilshire Boulevard and Second Street; ~ build a new 16 story residential tower above ground floor retail and restaurant uses at the corner of Ocean Avenue and Wilshire Boulevard; ~ build a new four-story residential structure of 38 affordable housing units on the Second Street parcel; and ~ build an underground parking garage for approximately 677 vehicles. The intent of the garage is to meet the parking requirements for the new structures, accommodate the approximately 91 space existing parking deficit for hotel employees, and provide 150 new parking spaces for public use. An approximate square footage breakdown of the proposed new structures is as follows: Wilshire and Ocean Wilshire and 2na St 2na Street Uses Proposed Proposed Proposed Ground floor pedestri~ oriented 11,685 SF 8,360 SF uses such as retail, loll>bv etc. Residential Ii 120,000 SF 33,120 SF 32,000 SF (15 floors) (3 floors) (4 floors) Ii Number of residentialilJnits 75 27 38 2 \.i ~ 13 The total floor area for the entire new development would be approximately 175,365 square feet. The project, as proposed, could not be designed under the current RVC zoning regulations for height, density, and possibly lot coverage. Construction of the project as currently proposed would necessitate approval of a Development Agreement and a General Plan Amendment as to height. The developer is proposing to build a total of 140 units of housing, of which 38 would be designated as affordable. The Affordable Housing Production Program would require 28 low-income units, or 14 very low-income units to satisfy the on-site construction requirements for a project that totals 140 units. In addition, the developer proposes to build 150 parking spaces in excess of their estimated parking requirement that would be open for public use. Backqround Since development agreements are among the least common land use applications reviewed by the Planning Commission, staff thought it would be helpful to address three essential questions: 1. What are development agreements? 2. What do development agreements typically cover? 3. What are some advantages and disadvantages of development agreements? An excellent new publication by the Institute for Local Self Government in Sacramento - Development Agreement Manual: Collaboration in Pursuit of Community Interests (2002), addresses these issues. The entire manual is available on-line at http://www. ilsq. orq/userfileslqodoc/5116. Fi nal DevAqreement4-5-02. P DF. Staff encourages the Commission to review the entire manual, though in the interest of time provide the following important excerpts: What Are Development Agreements? (p. 9) Development agreements are contracts negotiated between project proponents and public agencies that govern the land uses that may be allowed in a particular project.1 Although subject to negotiation, allowable land uses must be consistent with the local planning policies formulated by the legislative body through its general plan, and consistent with any applicable specific plan.2 Neither the applicant nor the public agency is required to enter into a development agreement. When they do, the allowable land uses and other terms and conditions of approval are negotiated between the parties, subject to the public agencies' ultimate approval. While a development agreement must advance the agencies' local planning policies, it may also contain provisions that vary from otherwise applicable zoning standards and land use requirements. The development agreement is essentially a planning tool that allows public agencies greater latitude to advance local planning policies, sometimes in new and creative ways. While a development agreement may be viewed as an alternative to the traditional development approval process, in practice it is commonly used in conjunction with it. It is not uncommon, for example, to see a project proponent apply 3 l~ v 1 4 for approval of a conditional use permit, zone change and development agreement for the same project. I See CaI. GOy't Code ~65864 and following 2 See CaI. COy't Code ~65867.5 What Does a Development Agreement Cover? (p. 26) · Permitted uses of the property; · Density or intensity of use; · Maximum height and size of proposed buildings; · Provisions for reservation or dedication of land for public purposes; · Terms and conditions relating to financing of necessary public improvements, as well as provisions for subsequent reimbursement for that financing, as appropriate; · Timeframes for commencement and completion of construction, or any phases of construction; · Subsequent discretionary approval provisions, as long as those approvals do not prevent development of the project as described in the agreement; and · The duration of the agreement The Advantages And Disadvantages Of Development Agreements (p. 11) Development agreements have three defining characteristics: · They allow greater latitude than other methods of approval to advance local land use policies in sometimes new and creative ways; · They allow public agencies greater flexibility in imposing conditions and requirements on proposed projects; and · They afford project proponents greater assurance that once approved, their projects can be built Although these characteristics can be advantageous, they can also present challenges. The purpose of this chapter is to discuss potential advantages and disadvantages of development agreements, from the perspective of both the public agency and project proponent. Advancing Land Use Policies (p. 11) Because development agreements are themselves ordinances, they may supersede existing land use regulations as long as they are consistent with the general plan and any applicable specific plan. 5 As a result, they can afford the public agency and project proponent greater latitude concerning allowable land uses in a particular instance. However, there are potential advantages and disadvantages associated with having this flexibility. 5 See Cal. Gov't Code 9 65867.5. Potential Advantages: The Ability To Better Implement Planning Policies (p. 12) From a planning perspective, development agreements have been instrumental in allowing creative and award-winning land use projects because the agreements can facilitate projects that would not have been allowed under otherwise applicable zoning regulations. The approval of creative land use concepts - and the construction of resulting projects - have advanced the state of urban planning, and allowed public agencies to better combat the visual and aesthetic impacts of "cookie- cutter" development. 4 Uu15 In a similar vein, there are instances in which literal compliance with zoning ordinance provisions can thwart promotion of general plan policies. For example, the general plan may encourage the existence of open space, whereas the applicable zoning district does not allow sufficient density to accommodate the clustering of residential units necessary to accommodate an open space component. There may also be instances in which the legislative body wishes to promote unwritten policies, such as those involving growth management. As long as the project is consistent with the local planning policies formulated by the legislative body through its general plan, the development agreement can provide greater latitude to incorporate land use concepts and components that are tailored specifically to address particular community concerns. In each of these cases, the ability to vary from strict adherence to otherwise applicable zoning provisions can help ensure that the public agency's land use policies are being advanced, in sometimes new and innovative ways. These advantages are shared by the public agency and project proponent alike. Potential Disadvantages: May Promote Bad Planning (p. 14) The latitude afforded the parties through use of a development agreement may also have potential disadvantages. For example, the agency's staff and legislative body may become convinced that, in exchange for the significant sales tax revenue the agency is likely to receive from a particular project, or in consideration of the fact that the project proponent is willing to construct a new city park or other significant public amenity, the agency should agree to compromise its planning standards in a manner that could reduce the qualityof life in the community. The pressure to compromise may be especially great in the case of a "friendly developer" who has a popular presence in the community. From the project proponent's perspective, it is possible that the legislative body may decide to disallow uses that would otherwise be allowed, and which are appropriate from a conventional planning perspective. The suggestions that appear in this manual are intended to help avoid misusing development agreements. They are based on the premise that from the outset, the planning policies and objectives that have been embraced by the community through adoption of the general plan, and those included in any applicable specific plan, should be an integral part of the discussions and negotiations between the parties to a development agreement. By identifying applicable planning policies early on, and continuing to use them as yardsticks in determining what land uses are appropriate, the parties should be able to avoid unacceptable compromises vvhen negotiating development agreements. Imposing Conditions (p. 14) Development agreements provide public agencies greater flexibility in imposing requirements on proposed development, such as development conditions, exactions and fees, because constraints and uncertainties that affect a local agency's ability to unilaterally impose such requirements do not apply to mutually agreed upon development agreement provisions.6 5- u16 See Cal. Gov't Code ~ 66000(b) (excluding "fees collected under development agreements" from the type offee covered under the Mitigation Fee Act). Conclusion Based on feedback from the Planning Commission and the City Council, the applicant will determine how best or whether to pursue a Development Agreement. As noted earlier, the city enjoys broad discretion in reviewing Development Agreement applications. This project is presented in conceptual form to allow the Planning Commission to comment on its merits, identify concerns with the project itself or the Development Agreement, and discusses potential public benefits. This feedback will inform the applicant and provide direction to City staff in determining whether a Development Agreement is the best approach for redevelopment of this site. In summary, there are two essential questions staff suggests the Commission focus on in considering this matter: 1. Is the Planning Commission potentially interested in a development agreement? 2. If so, what are the general negotiating points that should be addressed? RECOMMENDATION Staff recommends that the Planning Commission discuss this proposal and provide direction regarding the project's potential public benefits and the appropriateness of a Development Agreement application for the redevelopment of this site. Prepared by: Sarah D. Lejeune, Associate Planner Attachments: A. California Government Code Article 2.5: Development Agreements B. October 10, 2002 Letter from Wolff, DiNapoli outlining the proposal. C. Site plan sketches. D. Survey of existing site. F:\PLAN\SHARE\PC\STRPT\02\Miramar Discussion Item2.doc 6 CL17 ATTACHMENT C December 4, 2002, Planning Commission minutes L\.l~ 9-G. Planninq Commission discussion of the Fairmont Miramar Hotel Development Aqreement Concept Plan proposal to provide direction reqardinq the proiect's potential public benefits and the appropriateness of a Development Aqreement application for the redevelopment of this site. (Planner: Sarah Leieune) Associate Planner Sarah Lejeune gave the staff report. The owner of the Fairmont Miramar Hotel, Matt Dinopoli, and his architect, Howard List of Gensler Architects gave a detailed presentation on the proposed changes to the hotel site. Commissioner Dad asked how many units are proposed for the sixteen story residential building. Mr. List stated the proposal is for 75 residential units. Commissioner Dad asked how many market rate units are proposed in the three story building. Mr. Dinapoli stated that 27 units are proposed. Commissioner Dad asked about the mix of affordable and market rate units, specifically for their proposed locations. Mr. Dinapoli explained the placement of affordable units on Second Street. Commissioner Dad asked if the hotel will remain intact. Mr. Dinapoli answered in the affirmative, and added that the ballrooms will be remodeled and a spa may be added. Commissioner Dad asked what type of retail is proposed. Mr. Dinapoli stated that either a restaurant or other retail is being considered. Commissioner Dad asked if all the parking will be subterranean. Mr. Dinapoli answered in the affirmative. Commissioner Dad commented that the plans specify 677 parking spaces, then asked how many will be for the residential units. Mr. Dinapoli stated that there are a total of 224 parking spaces for residents and 65 spaces in a semi-subterranean garage on Second Street. He further stated that there will be 130 parking spaces for the hotel restaurant. Commissioner Dad asked about employee parking. Mr. Dinapoli stated there will be 91 parking spaces for employees and more than 1 ~)O parking spaces not required for any other use on the property. Commissioner Dad asked if the current parking for the hotel meets current parking standards. Mr. Dinapoli stated he does not think it complies and some parking is currently contracted out. Commissioner Dad stated that her concern is not the Development Agreement proposal, which is a positive step, and the addition of retail at Second Street and Wilshire Boulevard is also a good idea; however the proposal for a sixteen story residential building on the property is a great concern. Two members of the public addressed the Commission regarding the discussion item: Ellen Brennan and Arthur Harris. Mr. Dinapoli responded to the public comment. Chair Clarke expressed his appreciation for the opportunity to review the early stage of this proposal. Commissioner Moyle expressed curiosity as to why a hotelier would want to add rental housing on-site. Mr. Dinapoli responded that this is a good question since the obvious option would be to expand the hotel rooms. He stated that the hotel is currently the "right size" for the City and it was the owners thought to accommodate the City's goal for more housing units on a portion of the hotel property. He stated that the project must be economically feasible for the owners and a benefit to the City. H Commissioner Moyle asked if a fifteen story residential building is the only way for the project to "pencil out." Mr. Dinapoli stated that there may be other options and this project is still in the early development phase. He also stated that the proposed placement of the residential units is logical given the hotel site specifics and the height of adjacent buildings along Ocean Avenue. Commissioner Moyle stated that she appreciates Mr. Dinapoli's presence at this meeting, however she expressed the opinion that siting the tall buildings along Ocean Avenue is an "absolutely abysmal mistake." She stated that the height of the proposed residential building is a deal-breaker for her. She stated that her personal reaction to the proposal is shock. On the other hand, Commissioner Moyle stated that she loves the idea of opening up the property so the historic fig tree can be seen. She suggested the removal of the ten-story hotel building might be a better idea if it is replaced with something better. Mr. Dinapoli thanked Commissioner Moyle for her comments, especially about 100 Wilshire Boulevard. Commissioner Johnson asked staff about Proposition S, which prohibits new hotels on the beach. Ms. Frick stated that this property does not fall within the perimeters for Proposition S. She also stated that the proposal is not for a new hotel. Proposition S was discussed by the Commission briefly with Commissioner Dad giving some specifics on the history of the proposition. Chair Clarke asked staff about the Development Agreement proposal and currently permitted uses along Wilshire Boulevard. Ms. Lejeune stated that the current development has non-conforming parking. Chair Clarke asked how deep the proposed parking will need to be. Mr. Dinapoli U020 stated that the proposal is for 3 % to 4 levels of subterranean parking. Commissioner Dad asked if there has been any meetings with neighborhood groups. Mr. Dinapoli stated that he has only met with City staff and consultants and that the concept has not been widely disseminated. Commissioner Olsen commented that this proposal would provoke a referendum and much excitement in Santa Monica. He noted that the Land Use Element height requirements for Ocean Avenue are very low due to 19605 buildings such as 100 Wilshire (the GTE Tower). He stated he is glad this proposal was brought forth early, however he expressed his opinion that it will not work. Commissioner Johnson expressed agreement with the comments made by Commissioners Moyle and Olsen. He stated that the concept to update the property is good, but there needs to be less height. Commissioner Dad stated she is willing to forward a recommendation to City Council to start negotiations for a Development Agreement with Fairmont Miramar, but the project needs to be scaled back substantially. She stated that code required stepbacks and setbacks must be adhered to and underground parking would be an asset as well as residential units on Second Street. Of course, she noted, a smaller development would not require a Development Agreement. Chair Clarke noted an early staff comment that the property owner is using the public benefit aspect to gain approval through a Development Agreement for the proposed project. He stated that luxury apartments are not needed in Santa Monica and the proposed building would block the view of the northwest coastline. He also stated that the addition of residential units on Second Street would not require a Development Agreement. Lastly, Chair Clarke suggested the idea of an upper level restaurant for the site. Mr. Dinapoli thanked the Commission for their comments and honesty. He stated it is better to hear the Commission's views this early in the process so the proposal can be adjusted. Ms. Frick asked the Commission if they have a sense of whether or not to recommend the City Council begin negotiating a Development Agreement with the property owner. Chair Clarke asked if the tower is removed from the proposal, why would the property owner need a Development Agreement. Ms. Frick stated that a Development Agreement would help with issues of setbacks, heights and floor area ratios (F ARs). Chair Clarke stated that it is important that the Morton Bay Fig Tree be preserved as well as the low scale nature of the corner of Wilshire Boulevard and Ocean Avenue. It also important that there be no high-rise development on the site. Ov21 Commissioners Moyle and Olsen expressed the opinion the presentation has no basis for what may be approved or built. Commissioners Moyle and Johnson stated they cannot support a Development Agreement. Commissioner Dad commented that consideration of a Development Agreement does not mean that what was presented at this meeting will be approved or built. She noted that the Commission may dislike what can be built on the site per code and a Development Agreement would set or change parameters for development of the site. City Council Liaison McKeown commented that a Development Agreement for a unique parcel may mean greater flexibility with the developer as regards making demands. He stated that having employee parking on-site would be a plus for the City as well has gaining over 100 uncommitted parking spaces for public use. Commissioner Olsen stated that he respectfully disagreed with the City Council Liaison with "every fiber of my body." He stated that the Commission has gotten better projects designed without Development Agreements. Chair Clarke asked staff if they had enough comments. Ms. Frick stated that sufficient comments had been made and she heard no consensus from the Commission. \":;..22