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SR-021208-7CCity Council Meeting: February 12, 2008 Agenda Item: ~' -`G- To: Mayor and City Council From: Eileen Fogarty, Director of Planning and Community Development Subject: Ordinances Amending the Lantana East, and Lantana South Development Agreements (07 DEV-009). Applicant: Maguire Properties, LLC Recommended Action Staff recommends that the City Council introduce for first reading two Ordinances, Attachment B and C approving modifications to the Lantana East, 3030 Olympic Boulevard and Lantana South, 3131 Exposition Boulevard, Development Agreements to allow a funding alternative to constructing facilities at Edison School campus for joint City use. Executive Summary Development Agreements were approved by the City Council on September 14, 2004 to allow the construction of two studio buildings at 3030 Olympic Boulevard (Lantana East) and 3131 Exposition Boulevard (Lantana South). The City has been monitoring both development agreements including provisions that require the developer to construct outdoor playground improvements at Edison School. Due to voter approval of a school bond measure last year, the Santa Monica-Malibu Unified School District (SMUSD) is preparing plans to completely reconfigure the Edison School campus. This change in circumstances makes construction of the playground facilities prior to February 2008 infeasible, necessitating modifications to both the Lantana East and Lantana South Development Agreements. Instead, it is recommended that the developer be required to post funds to the City which would be used to develop joint use public improvements as part of the forthcoming campus reconfiguration plan. This modified requirement will allow the developer to provide a comparable public benefit to the currently required public benefit. Discussion Development Agreements were approved by the City Council on September 14, 2004 to allow the construction of the following studio buildings on noncontiguous Lantana parcels. 1 Lantana East, 3030 Olympic Boulevard - a new three-story, 64,105 square foot entertainment production/post-production studio building with atwo-level subterranean parking garage providing parking for the existing building and 200 spaces for the proposed building. Lantana South, 3131 Exposition Boulevard -anew three-story, 130,000 square foot entertainment production/post-production studio building with a one level subterranean parking garage providing parking for the existing building and 364 spaces for the proposed building. The developer has obtained building permits and expects to be ready for final inspections for the Lantana East project in February and for the Lantana .South project in October. Both Lantana development agreements require that the Developer to construct the following improvements on the Edison School campus for the City's Playground Partnership Program: 1. New restroom/storage/office building as shown in Exhibit E of the development agreements; 2. An 8' high chainlink security fence between the playground and school buildings; and 3. New playground equipment comparable to other Playground Partnership sites. The development agreements require that these improvements be completed prior to the City issuing a Certificate of Occupancy for the first building to be completed. The developer is also required to provide an annual operating subsidy for this Playground Partnership facility of $35,600 per year for five (5) years. The developer has worked in good faith with City staff to comply with all requirements of both projects. However, due to voter approval of a school bond last year, the Santa Monica-Malibu Unified School District (SMUSD) is preparing plans to completely reconfigure the Edison School campus. As a result, it is infeasible for the developer to construct the improvements prior to the campus redevelopment. In light of these developments, staff and the developer entered into negotiations to establish a substitute 2 public benefit. As a result of these negotiations, the developer has agreed to deposit the value of the original capital improvement work, $356,200, with the City for use when the campus is redeveloped. Since the original scope of work cannot presently be undertaken, both Development Agreements must be modified. Requiring the developer to deposit the funding with the City to develop joint use public improvements in conjunction with the forthcoming campus reconfiguration plan will allow the City to implement this public benefit. The $356,200 payment for the future construction of joint use facilities is based on the City's past experience implementing the Playground Partnership on other school campuses and pertinent costs estimates for the City projects. At the time the City entered into the original Development Agreement 3Yz years ago, the City estimated it would cost the developer between $250,000 and $280,000 to construct the 600 square foot restroom/office/storage building, chainlink fence and additional playground equipment to augment the existing playground equipment that is specified in the Development Agreement. The existing requirement is specified in Section 3 of Exhibit G of both development agreements (attached to this report as Exhibit A). Staff recommends replacing Section 3 with the following requirement: 3. Edison School Joint Use Improvements. Prior to the issuance of a Certificate of Occupancy for the project, the Developer shall pay a fee of $356 200 to the Citv to be deposited into a separate fund to be used for Joint Use Improvements and programming for these improvements by the City of Santa Monica and The Santa Monica-Malibu Unified School District (SMMUSD) at the Edison School campus (the Edison School Joint Use Improvements). These funds shall be used either for capital or operating costs for the Joint Use Improvements at the school. The specific Edison School Joint Use Improvements shall be subseauently determined by the City and 3 SMMUSD. Developer shall be released from this obliaation to pay the fee of $356 200 to the extent that the developer of Lantana (East or Southl satisfies this requirement. In addition to the above obligation, Developer shall pay the City an annual operating subsidy for this ~Irninrr~nnr+ D.~rFn°rc~h'n *^^•~,+., the Edison School Joint Use Improvements of $35,600 per year for five (5) years. The first payment shall be due ~~..^.. +~.,°' ^.,,^;;.,~+.;o^ ~f ~..ch ;,^;pr~.~^;c^t~, ~, prior to the issuance of a Certificate of Occupancy for Lantana East [South] (C of O) whether or not the improvements have been constructed '' +"^ '^• °^*° ^ ° ^~+.• •^+^,+ "•, ' ...,+..^.. ~.. +, and the next four payments shall be due on the first, second, third and fourth anniversaries of s+~# se~letiert the C of O, respectively. Developer shall be released from the obligation to make an annual operating subsidy payment to the extent that the developer of Lantana South [East] ^^^^+•~ ~^+^ ^ •^" ' °^+^ has made such a payment. uaw~oe~ .+..wwp...• .auw Section 2.5.5 of the Development Agreement also needs modification, replacing reference to the developer constructing playground improvements to be consistent with the new requirement. The recommended modification is provided in Attachment 1. Two ordinances have been prepared to modify the Lantana East Development Agreement (Attachment A) and Lantana South Development Agreement (Attachment B). Commission Action After conducting a public hearing on January 16, 2007, the Planning Commission recommends that the City Council approve the modification as presented. No one from the public appeared to speak at the Planning Commission hearing and no correspondence from the public was received in time to include with this report. A Copy of the Planning Commission staff report is contained in Attachment C. 4 Alternatives In addition to the recommended action, the City Council could consider the following with respect to the project: Al Adopt alternative modifications; A2 Make no modification to the development agreements; or A3 Continue the project for specific reasons, consistent with applicable deadlines and with agreement from the applicant; Environmental Analysis The City Council certified the Supplemental Environmental Impact Report (EIR) for this project on July 14, 2004. No subsequent environmental analysis is required pursuant to CEQA Guidelines Section 15162 since the proposed modification would not intensify any project impact analyzed in the certified EIR. While the development agreements identified specific playground improvements, the school campus is being redesigned so the actual improvements that will be constructed with this funding is unknown and cannot be analyzed at this time. However, potential environmental impacts that would be associated with this funding will be analyzed pursuant to CEQA requirements for the campus project. Public Outreach Pursuant to Municipal Code Section 9.04.20.20.080, at least ten days prior to the public hearing date, the applicant submitted a photograph to verify the site posting and to demonstrate that the sign provides the following information: Project case number, brief project description, name and telephone number of applicant, site address, date, time and location of public hearing, and the City Planning Division phone number. It is the applicant's responsibility to update the hearing date if it is changed after posting. In addition, pursuant to Municipal Code Section 9.04.20.22.050, notice of the public hearing was mailed to all owners and residential and commercial tenants of property located within a (500 foot) radius of the project and published in the Santa Monica Daily Press at least ten consecutive calendar days prior to the hearing. 5 Financial Impacts & Budget Actions The recommendation presented in this report to approve the Development Agreement modification would require the developer to pay funds to the City to be used by the City to assist in the development and operation of joint City and school use of public improvements at the Edison School campus. The funding will also supplement the City's costs to operate joint programs at this facility. While the developer's funding offsets City operating costs during the first five years, the City's income will be reduced by $35,600 per year after the term of the Agreements. Because the School District is in the early stages of planning and designing the school campus, staff has flexibility to develop joint use proposals with the School District and return to the City Council with specific proposals at a later date. Prepared by: Bruce Leach, Special Projects Administrator Forwarded to Council: ~ileeri Fogarty Director, Plangl Development tt Attachments: 1. First Modification of Lantana Development Agreement A. Draft Ordinance amending the Lantana East Development Agreement B. Draft Ordinance amending the Lantana South Development Agreement C. January 16, 2008 Planning Commission Staff Report F:\CityPlanning\Share\COUNCIL\STRPT\2007\07DEV009 Lantana Modification.doc 6 Additional attachments available for review at City Clerk's Office.