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SR-401-006 cge, PCD:SF:JT:AS:f:\plan\share\council\strpt\2003\ 1319PalisadesBeachRoad .doc Council Mtg: November 25,2003 Santa Monica, California NOV 2 5 2003 TO: Mayor and Councilmembers FROM City Staff SUBJECT: Proposed Development Agreement for 1319 Palisades Beach Road Applicant: Micki McClure INTRODUCTION This report recommends that the City Council discuss a proposal for a development agreement for 1319 Palisades Beach Road 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 property owner of 1319 Palisades Beach Road is requesting a development agreement to rebuild the property. The structures, destroyed by fire on March 1, 2002, contained five one-story multi-family units. The property is located in the R2B Zoning District and could not be built (or rebuilt) today because the structures that existed before the fire were nonconforming as to density, parking, lot coverage and setbacks and the zoning ordinance regulations do not permit reconstruction of these nonconforming structures. The Planning Commission conducted a hearing on December 11, 2002 on a text amendment revising the rebuilding standards for multi-family projects. In the course of 1 <38 NOV 2 5 2003 the hearing, the applicant spoke about her situation and in response to her testimony, some Commissioners suggested that the remedy to the problem was a development agreement. City staff acts as the negotiator for Development Agreements and, to avoid negotiating a project the City cannot accept, staff scheduled this matter with the Planning Commission on August 6, 2003 for discussion The Commission unanimously agreed that they would support a Development Agreement if the City Council should authorize staff to commence Development Agreement proceedings with the property owner. Commission noted the proposed replacement building should remain within the setbacks prescribed by current code. The applicant is requesting to rebuild the property, maintaining the pre-fire nonconforming parking, lot coverage, density, and setbacks. In addition, the applicant is requesting the ability to add additional square footage and height, up to the 40 foot permitted height. Although the number of units would remain the same, the size and configuration of the units would change. The Zoning Ordinance only allows reconstruction to th~ original footprint and configuration that existed prior to the damage. A Development Agreement is requested in order to override the Zoning Ordinance restrictions. In exchange for the right to retain the existing non-conforming conditions and additional floor area, Ithe applicant is proposing to deed restrict one of the five units as a 2 low-income unit. In ,addition, the new units would provide universal accessibility design features such as wider doors, two accessible ground floor units and grab bars Three of the tenants who lived on the site before the fire will be offered their units at the pre-fire rental rate. If the tenants choose not to return or decide to move, rents will revert to market rate. Conclusion Entering into a development agreement for a five unit multi-family project is highly unusual. Typically development agreements are reserved for large-scale multi-phase developments Based on 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 City Council believe a development agreement is appropriate for this site and the project concept? 2, If so, what are the general negotiating points that should be addressed? 3 BUDGET/FINANCIAL IMPACT The recommendation presented in this report does not have any budget or fiscal impact. RECOMMENDATION It is recommended that the Council discuss this proposal 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. 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 Development Department Attachments: A. Micki McClure Letter to Planning Commission 4 ATTACHMENT A Micki McClure Letter to Planning Commission 5 2/27/03 Suzanne Frick, Director of Planning and Community Development Richard Bloom, Honorable Mayor Marsha Moutrie, City Attorney Susan McCarthy, City Manager Santa Monica City Council Santa Monica Planning Commission Micki McClure 555 East Hardy Street Inglewood, CA 9030 I (310) 680-8027 Dear City Officials: It has been a painful and educational experience working to get our lives and livelihood back in the wake of the fire that destroyed 1319 Palisades Beach Road last March. Enclosed is a proposal for a development agreement that will allow me to get funding and rebuild a home not just for myself and my daughter, but for a number of good people, former Santa Monica residents, who will no longer live on the beach, nor in Santa Monica without your assistance. I am willing to work with the City as needed to make revisions that will allow the City to move forward on this development agreement. I urge you to consider in particular the information I received from Rent Control that since 1986, 16 rental properties have been removed under the Ellis Act along the larger stretch of Palisades Beach Road in Santa Monica. Almost all of this rental housing was comprised of small properties such as mine. More than 47 units were taken off the market, and a much larger number of people lost their affordable homes on the beach. A development agreement, though unusual for a project of this size, would allow four families to live in this increasingly less diverse area, an idea that I believe is very much a part of City Government's charter to make all areas of Santa Monica a place where residents representing all ages, colors, and income levels can live. I will offer the units back to the three previous rent control tenants that I have been able to contact since the fire - at their previous rental amounts with the rents frozen at those exact rates for the entire duration of their full time residency in the new building. I will also enact a 55 year deed restriction to make the remaining rental unit a Low Income Affordable Housing Unit, the most needed level of housing in Santa Monica with wait lines to get in. Additionally, all of the rental units will have design features facilitating aging in place. I believe my proposal offers a win-win solution to the catastrophe that has devastated not just my own family's, but wonderful tenants' lives as well. Again, I want to indicate my eagerness to work with City Planning and other departments to make this a workable agreement. I appreciate the City's compassionate and practical consideration. Sincerely, 1/'rYl~ Micki McClure Summary: I am asking the City of Santa Monica to enter into a development agreement with me to keep and rebuild with expedited permit processing the non-conforming elements of my fife-destroyed five-unit buildings while allowing me to consolidate three buildings into one building and to enlarge the building up to current height maximum such that the enlargement conforms to all of the current code regulations. This will allow me to continue to provide four rental units and one owner's unit as before. I will offer the units back to the three previous rent control tenants I have been able to contact since the fire - at their previous rental amounts with the rents maintained at those exact rates for the entire duration of their full time residency in the new building. I will also enact a 55 year deed restriction to make the remaining rental unit a Low Income Affordable Housing Unit, the most needed level of housing in Santa Monica with wait lines to get in. Additionally, all of the rental units will have design features facilitating aging in place. Although the amount of housing I provide is small, it is in a key location of the City where rent control and affordable housing has largely disappeared over the last few years. For example, according to Rent Control, since 1986, 16 rental properties have been removed under the Ellis Act along the larger stretch of Palisades Beach Road in Santa Monica. Almost all of this rental housing was comprised of small properties such as mine. More than 47 units were taken off the market, and a much larger number of people lost their affordable homes on the beach. A development agreement, though unusual for a project of this size, would allow four families to live in this increasingly less diverse area, an idea that I believe is very much a part of City Government's charter to make all areas of Santa Monica a place where residents representing all ages, colors, and income levels can live. Background: I own a five unit property which was severely damaged by fife on March 15" 2002. I lost my home and the city lost four rent controlled units, among the very few left in this highly desirable area. The three buildings which contained the five units were very old and did not conform to several current development standards applicable in the R2B Zone, including those relating to setbacks, number of units and parking. The buildings are historically significant structures listed in the City's historic Resources Inventory. Under current Section 9.04. 1 8.020(f), these buildings can be rebuilt to the previous non- conforming configuration and use so long as each "is rebuilt to its square footage, site orientation and height and setbacks that existed prior to the destruction." The problem with this limitation is that, like many older structures, the Buildings cannot be realistically utilized as a five-unit apartment building under current building codes and in the current market without enlargement/modifications. The City faced a similar problem on a much larger scale after the 1994 Northridge earthquake. In order to replace my home plus the four rental units, I need to restore the buildings using the various non-conforming features which existed prior to the fife but, at the same time, to consolidate the previous three buildings into one building and increase the height. If I cannot make these changes, I am ~ forced to replace the five-unit buildings with either a single family or two-unit building - or more likely, to have to sell. Program la of the City's Housing Element. Part of Program lofthe City's Housing Element recommends referring to the 1994 Earthquake Recovery Act as a guide to any new ordinance. This act provided incentives for reconstruction of multi-family rental buildings in both size and height. It also provided for expedited permit processing. I am asking that you consider these incentives in the context of a development agreement for my property and major source of livelihood destroyed by flTe/gas explosion in light of my willingness to offer units back to the previous tenants at their previous rental amounts for their entire full-time residency and to also enact a 55 year deed-restriction to make one of the four rental units a Low Income Affordable Housing Unit. Under such a development agreement, one-quarter of my small rental property would be low income, and the other units less than current market at a great advantage to the wonderful tenants that plan to come back so they can again be residents of Santa Monica and live at the beach. Additionally, as described in the following section, with this plan all rental apartments will be designed with senior-friendly features. This is an opportunity for the City to preserve housing and gain senior friendly housing at the private sector's cost, and will also allow my former renters and I to go home. New Building Features: The rental apartments will include the following senior-friendly design modifications: slimmer and easier to hold handrails and room rails disguised as chair molding, contrasting borders in flooring and around countertops, 32 inch-wide doors, higher electrical outlets and lower-placed light switches, accessible bathrooms with grab bar tubs with adjustable hand-held showerheads and accessible entryways on the ground floor for two units. This will facilitate aging in place, or living through periods of temporary disability for building tenants. Neighborhood Considerations: The turnover of building ownership, the look and the style of other buildings in this strip of housing support the agreement provisions I am requesting. There were two protests against the proposed text amendment related to city-wide multi-unit disaster recovery build backs to nonconforming elements. One ofthese speakers came up to me after the meeting and let me know she supported my unique request if it could be done under a development agreement. The immediate neighborhood of 1319 that can be roughly defined as lying between the pier parking lot and parking lot number 3 (1100) has become primarily speculative, newer construction high- end one-family homes. At least five such homes are now up for sale or newly purchased, including a newly completed single family home two doors north of 1319 (Four of them were once multi-unit rent control properties, now lost to the city,). The somewhat older single family home immediately south of my home (1321) has been up for sale for the second time in less than three years, along with at least two other older buildings in this small stretch of about 28 properties. "For Sale" buildings equal almost one third of the total buildings here. Height: As can be seen in the pictures enclosed, my building was the exception in height, not the rule, with both immediate neighbors and almost the entire row of approximately 30 buildings either taller than, or approximately the same height as my building would be with the enlargement section built up to the current maximum site view envelope. Instead of being half the size of the my neighbors' buildings, it would be a few feet shorter than the building immediately North now under construction, and approximately the same size as the building immediately South. Non-conforming Set-BackslFeatures: Both immediate neighbors' homes and many others in this neighborhood have non-conforming setbacks allowed with preservation of old exterior walls/etc. due to the difficulties of building on the typical 25' by 100' lot size in this area. My home would again not be an exception in non-conforming setbacks, but fairly typical. As the backs of the buildings are right off of the Pacific Coast Highway, appearance is not as crucial here as it is on the ocean-front side, or as from the Cliff-top view from the Park over the buildings. Driver's eyes tend to be on the road ahead as they pass this stretch of buildings, and people only walk this stretch to get to their cars. There are several buildings without parking similar to 1319 as it formerly stood, and as I hope to rebuild, which I believe enhances and certainly does not detract from the rear street-level appearance. Since the number of units remain the same, unlike the Sea Castle rebuild, there will be zero impact on the number of cars parked in the beach lots. The parking office has confirmed that in particular Parking Lot number 3 (1100) is not used heavily for residents. The fact that a car is not at the door encourages use of the beach walkways, the Blue and other mass transit, and a walk village lifestyle that benefits the City by decreasing' decrease congestion and pollution. The residents of our building walkedlbikedlroller-bladed and enjoyed the Promenade daily. With no change in number of units/parking, there would be zero impact on parking. Insurance and Funding Issues: I will briefly discuss insurance in light of statements made in the text amendment meeting regarding my plan. I paid premium rates to ensure that "Replacement Up to Code" was a part of my insurance policy. Regardless, I am now forced to go to court to fight the unreasonable limits my insurer has applied to my policy that in fact, negate the up to code provisions. After the Northridge earthquake, insurance companies blatantly and drastically under-paid many homeowners by dragging out negotiations until the owners were forced fmancially to sign agreements that did not allow them to rebuild without significant funding from other sources. As a result of this gross abuse of policyholders, there is now a state limitation that insurers must settle or get in court within eighteen month. Unfortunately, although I have every reason to believe I will win after this sizable wait, during which time I will need to carry a sizable loan, after 55 to 65 or greater contingency fees and charges on a "make whole" settlement/court win I will still be carrying a challenging mortgage. That is why the number of units, etc. as described in my plan is so critical. It is also important for me in obtaining funding. Closing: This proposed agreement will make the difference in whether I can provide homes for City renters and my own family at our site at 1319 Palisades Beach Road. I believe my proposal offers a win-win solution to the catastrophe that has devastated not just my own family's, but wonderful tenants' lives as well. I appreciate the City's compassionate and practical consideration. Thank vou. TO 913106954772 P.01/02 ~:ter Of Aereement This letter of agreement certifies that Paul Dawkins, former resident of 1319 Palisades Beach Road is guaranteed the oPPortunity to move into an equivalent room unit in a rebuilt five unit complex if the development agreement is authorizecl by the City of Santa MOnica Beach and financing and building completion is achieved by owner Maureen McClure. Furthermore, in taking residency again upon building completion, Paul Dawkins will be guaranteed his former monthly renlial rate for the entire duration ofhis use of the rebuilt apartInent as his full time residence with no expiration date. To enact the provisions of this letter, Paul Dawkins will be infonned by owner Maureen McClure by mail and phone at residence and/or business number at least 90 days in advance of the anticipated completion date for the building. Paul Dawkins must take:full time residency within 30 days of the completion date. Additionally, Paul Dawkins must maintain the apartl11ent as his full time residence to retain his monthly rental rate. This offer is good for an equivalent room 1lnit in any five unit building owned by MaureCll McClure at 13 19 Palisades Beach Road authorized by the City of Santa Monica and built within 5 years of the destruction date of March 1 It, 2002. ~)c..t l-26'~ - Paul Dawkins! Former Tenant Date /;l7~'~D Maureen McClure, Property Owner :2J2b/1J? Date' FEB 26 2003 14:54