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SR-102307-7C~_ ~;tYOf City Council Report Santa Monica City Council Meeting: October 23, 2007 Agenda Item: ~"" "'~ To: Mayor and City Council From: Eileen Fogarty, Planning & Community Development Subject: Introduction and adoption of an Emergency Interim Ordinance Extension to require a Development Agreement for projects over 7,500 square feet of floor area or projects containing more than 5 or 15 housing units, artist studio units, or single room occupancy units, respectively for the Industrial Conservation (M1) and Light Manufacturing Studio (LMSD) districts, and for changes in land use on parcels that exceed 32,000 square feet in the LMSD and 15,000 square feet in the M1 district. Recommended Action Staff recommends that the City Council introduce and adopt the subject emergency interim ordinance extension subject to specified exemptions: 1. establishes a Development Agreement for projects over 7,500 square feet of floor area or projects containing more than 5 or 15 housing units, artist studio units, or single room occupancy units for the Industrial Conservation (M1) and Light Manufacturing Studio (LMSD) districts, respectively; and, 2. establishes a Development Agreement requirement for certain changes in land use on parcels that exceed an area of 32,000 square feet in the LMSD and 15,000 square feet in the M1 districts. Executive Summary The attached proposed interim emergency ordinance extension will add several discreet modifications to and continue for an eighteen month period the provisions adopted on August 28, 2007 addressing development within the industrial areas. To become 1 effective, the proposed emergency ordinance requires five affirmative votes from the City Council. On August 28, 2007, the City Council adopted Ordinance Number 2238 (CCS), effective for 60 days, to control the piecemeal development activity that was occurring in the City's industrial districts thereby providing the City the opportunity to adequately plan for the future of this area as contemplated by the City's Land Use and Circulation Elements and Zoning Ordinance comprehensive revision and update. Concerns included: • development of large, dense blocks of a single residential type without adequate infrastructure, amenities and services, • lack of adequate roadway structure, • lack of neighborhood environment, • increased conflict between housing and existing uses, • increased speculative development pressure, • precluded opportunities for improving traffic conditions through the development of the light rail • revised the street grid • lack of usable open space and public spaces Ordinance Number 2238 (CCS) only authorizes development that does not exceed 7500 square feet of floor area or 15 units in the LMSD or 7500 square feet of floor area or 5 units in the M1, excluding density bonus units, unless the project is developed pursuant to a development agreement, or is a school existing before September 1988. 2 Auto dealerships remain subject to Ordinance Number 2186 (CCS) rather than this interim ordinance. In addition, Ordinance Number 2238 (CCS) provides that no change of use shall be authorized on parcels in the LMSD that exceed 32,000 square feet and parcels that exceed 15,000 square feet in the M1 District unless the development is a City project, developed pursuant to a development agreement, or the Director of Planning and Community Development makes a written determination that the change of use within an existing multi-tenant property will not constitute a substantial change in mode or character of the property as a whole. Staff continues to study the current development market in light of the planning issues identified for the area through the LUCE process and has identified additional provisions to improve administration and better achieve the goal. This report outlines the following proposed modifications to the August 28 ordinance in relation to regulating existing buildings: • Single tenant buildings. Extend the Director's authority to allow changes in land use without obtaining a DA (previously authorized only for changes in multi-tenant buildings) to single tenant buildings; • Minor changes in land use. Projects less than 7,500 square feet. Exempt changes in land use up to 7,500 square feet from the DA requirement; • Significant changes in land use in existing buildings. Expand administrative review to permit projects that result in a change of land use, based on specified, objective criteria; and • Time period for Director's decision. Establishes a 45-day review period by the Director to determine if a change of use should be exempted from the DA requirement. 3 Discussion Background The August 28, 2007 staff report and accompanying ordinance contain significant information and analysis supporting adoption of the interim ordinance and provides background information as to the intent and character of the industrial districts and recent development activity in the area, and provide an update on the Land Use and Circulation Element (LUCE) project; all of which are key considerations in assessing the value and importance of the subject ordinance. Subsequent to the ordinance Since the Council's action, staff has further analyzed the ordinance with the broader planning objectives. and recommends the following modifications. Affordable Housing Projects At the August 28th hearing, the City Council directed that the proposed revised ordinance contain a provision establishing exemption to the DA requirement for 100 percent affordable, low and very low deed-restricted housing projects with fewer than 51 units. Qualifying affordable housing projects would be exempt from the interim ordinance. Instead, the projects would be subject to the underlying zoning district development standards. In the M1 District, affordable rental housing projects up to 50 units would be permitted by right. Similarly, qualifying housing (artist studio and single room occupancy) projects in LMSD, whether rental or ownership housing, would be permitted by right; discretionary tract map approval would be required for ownership housing. 4 Effective dates. As proposed in the ordinance, the affordable housing exemption will not become effective until on or after August 1, 2008. The delayed implementation of this exemption will provide the public and decision-makers an opportunity to assess the results of the upcoming industrial lands workshop and review the draft LUCE document. The long range planning goals and infrastructure evaluation established in the endorsed draft plan will enable the Council to determine the appropriateness of certain housing opportunities in this part of the City based on a future vision. If inappropriate due to lack of infrastructure or other planning objectives, the Council will have sufficient time to direct staff to make modification to the subject ordinance to remove the exemption. If there is a clear direction and consensus for the future land uses and infrastructure in the industrial areas, Council could choose to address these issues in late spring. Single Tenant Buildings The change of use provision in existing buildings established in the adopted and proposed ordinances apply to exceptionally large properties. Specifically, properties containing more the 15,000 and 32,000 square feet of land area in the M1 and LMSD, respectively, are subject to this provision. The adopted ordinance further applied this change in land use exclusively to multi-tenant buildings. The proposed ordinance extends this standard to single tenant uses. In both ordinances, the Director retains the authority to evaluate when a project results in a substantial change to the mode or character of operation and, therefore, requires a DA. 5 Minor Changes in Land Use The proposed ordinance includes a provision exempting land uses that occupy less than 7,500 square feet of floor area from the ordinance. Uses meeting this threshold would be allowed to change use without evaluation of the change in mode or character of operation. The City has previously established 7,500 square feet as a development threshold that ensures preservation of the scale and character of existing neighborhoods. Significant Changes in Land Use in Existing Buildings To improve administration and ensure that future land uses are consistent with broader community objectives, it is recommended that additional criteria be established to better evaluate changes in land use. Using the previously adopted change of use standard applied to large parcels, it is recommended that the Director also evaluate projects in existing buildings that result in a substantial change to the mode or character of operation. The objective of this provision is to ensure that projects for which the community has already articulated support for can continue to be allowed without a DA and subject to existing development standards. Projects would only be exempt from the DA process if the Planning and Community Development Director finds that: • The change of use is permitted in the district in which it is located (i.e.; no conditionally permitted uses) • No additional floor area is added to the existing building • The proposed use, given its location, would not impair the LUCE process by unduly restricting the City's ability to plan the future development of 6 neighborhoods with appropriate mixes of uses, adequate infrastructure, streetscape, services and other amenities essential to quality of life, and would not interfere with resident and business owners' present quality of life • The change of use results in the property complying with all current development standards (parking, setbacks, open space, eliminates a nonconforming land use, etc.) • The change of use does not result in a substantial remodel • The change of use does not result in remodel construction costs that exceed four million dollars cumulatively over the life of the subject ordinance. (This figure is based on a $200 per square foot valuation of a 20,000 square foot building). Time Period for Director's Decision The change of use provision requires the Director of Planning and Community Development to assess whether certain projects represent a substantial change to the mode or character of operation or does not fulfill other criteria and, therefore, subject to a DA. The previously adopted ordinance did not establish a time period to render this determination. The proposed ordinance establishes a 45-day review period. This time period is reasonable to prepare a written determination and provides applicants with a measure of predictability in this review process. Previous Council Actions Over the past sixteen months the City Council has taken the following actions with regard to the industrial area: 7 April 11, 2006: Implemented the City's state density bonus (Ordinance 2180 expires May 11, 2008, citywide) April 24, 2007 Adopted Interim emergency ordinance requiring housing projects over 50 units to obtain a DR permit. (Ordinance 2226 expired June 23, 2007) May 22, 2007: Adopted Interim Ordinance 2226 extended (Ordinance # 2226 (Ordinance 2232 Expires May 8, 2009) July 24, 2007: Directed staff to prepare subject interim ordinance for industrial lands August 28, 2007: Adopted Interim Emergency Ordinance establishing DA requirement in the industrial districts adopted /effective Alternatives The City Council previously rejected alternatives that relate to a status quo (no changes to development standards) and moratorium options. Implementing any of the alternative actions has the potential to increase or decrease the number of projects that will be subject to a Development Agreement process. Other alternatives the City Council may consider include: 1. Modify the thresholds at which a Development Agreement is required. 2. Eliminate or modify specific components of the ordinance, such as the Development Agreement requirement for changes in land use on large parcels Environmental Analysis The proposed emergency interim ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines in that CEQA applies only to projects having the potential to cause a significant effect on the environment. The proposed action to require a Development Agreement application for development over 7,500 square feet in area or more than 15 units, or for changes in land use on certain sized parcels in the industrial district does not have this potential. Rather, 8 the proposed amendment will expand the number of projects subject to public review and evaluated pursuant to CEQA. Additional findings supporting this exemption are included in the attached ordinance. The proposed ordinance is also exempt pursuant to CEQA Guidelines Section 15183, which provides that projects that are consistent with development density established by existing zoning or general plan policies for which an EIR was certified shall not require additional environmental review except as might be necessary to examine project- specific significant effects which are peculiar to the project or its site. The proposed ordinance modifies development application and review procedures by requiring a Development Agreement application for development over 7,500 square feet in area or more than 15 units, or for changes in land use on certain sized parcels in the LMSD and M1 zone districts. Within these designated zone districts, projects below these thresholds will remain subject to existing development standards and procedures. Projects above these thresholds will require a Development Agreement application and approval. No change in the General Plan Land Use and Circulation Element (LUCE) is proposed. No parcel rezoning is proposed; all affected parcels will retain their current zone district classification. Thus, under the proposed ordinance, potential development will be the same or less than the density established by existing zoning and general plan policies for which the following environmental documents were certified pursuant to CEQA: Final EIR on the proposed Santa Monica General Plan LUCE, February 1984; Final EIR for the City of Santa Monica Zoning Ordinance, December 1986; Final Supplemental EIR for the City of Santa Monica Zoning Ordinance, June 1988. 9 As stated above, the proposed ordinance makes procedural changes for development above identified thresholds; they do not change existing density-related standards contained in the LUCE or Zoning Ordinances and reviewed in the above-referenced EIRs. In addition, there are no project-specific significant effects which are peculiar to the proposed ordinance or sites subject to it. There are no reasonably foreseeable project-specific significant effects caused by the enactment of the ordinance and the Development Agreement requirement since physical changes do not directly result from these ordinance amendments. Rather, these amendments are of general application and at least twice removed from potential physical changes. Future physical changes will not occur unless (1) a specific development project is proposed, and (2) the City grants its approval for that specific project by Development Agreement. The intervening project application and City review and approval prevent any impacts asserted to result from future projects to be characterized as peculiar to the ordinance amendments themselves. Accordingly, the proposed project is categorically exempt under CEQA Guidelines section 15183, and no additional environmental review is required. Budget/Financial Impact The recommendation in this report does not have any significant budget or fiscal impacts, however, the Planning and Community Development Department expects minor decreases in revenue generated from fees that may. have been collected over the next two years related to permit activity. The City would not receive increased property taxes generated by a property that might have been redeveloped under existing zoning. 10 Since it is unknown which properties may have been redeveloped and to what extent proposed improvements would contribute to a property's valuation, it is not possible to calculate unrealized tax revenue. Prepared by: Jonathan Lait, AICP, Principal Planner Approved: Forwarded to Council: Director, Pt.l~nning & Development Attachments: Exhibit A: Emergency Interim Ordinance F:\CityPlanning\Share\COUNCIL\STRPT\2007\Industrial Zoning IEO Pt. II v.d(cao).doc 11 Reference Ordinance No. 2242 (CCS).