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SR-022608-7B'fir ~;tYOf City. Council Report Santa Monica City Council Meeting: February 26, 2008 Agenda Item: ~ '- To: Mayor and City Council From: Marsha Jones Moutrie, City Attorney Subject: Clarification of the Construction Rate Program Recommended Action Legal staff recommends that the Council adopt an emergency interim ordinance clarifying the construction rate program so that it clearly either prohibits any new construction project within a five hundred foot radius of another construction project or allows only one such project within that radius of another project.. Executive Summary On March 7, 2000, the Council adopted an interim construction rate ordinance applicable to multi-family neighborhoods. That ordinance allowed only one construction project at a time for each block and also prohibited any new construction project within 500 foot radius of an ongoing project, with certain specified exemptions. On May 17, 2000, a lawsuit was filed challenging that ordinance.. The case settled contingent upon the adoption of a less restrictive ordinance. The Council amended the ordinance.. As amended, Municipal Code Section 9.04.10.02.450(a) allows one project within a 500 foot radius of another. However, subsections (c) and (d) of the same section indicate that no new project may be authorized within 500 feet of another. This ambiguity has existed since the lawsuit settlement Staff has received complaints in the last month from members of the public regarding the application of this ordinance. Legal staff recommends that Council act to eliminate the ambiguity and clarify whether one project or no project is allowed within a 500 foot radius of another. Background The City of Santa Monica is geographically small, very dense, and has been fully built out for over 50 years. Each year, it is a destination for hundreds of thousands of workers and even more. visitors. And, in recent years, the City has experienced a construction boom. In response to these realities, the City Council has acted repeatedly to preserve neighborhood tranquility, protect circulation, and also afford adequate opportunities for housing production. Among the Council's actions was adoption of a construction rate program for residential neighborhoods. The rate program adopted in 2000 by interim ordinance imposed strong neighborhood protections. It allowed only one construction project per block and provided that this construction project must not be within a five hundred foot radius of another construction project. The restriction lasted for 18 months after issuance of the "first project's" building permit unless the owner of the previously permitted project formally relinquished the building permit for that project. Certain projects. were exempted from the program. The Santa Monica Housing Council filed suit. Its complaint asserted both constitutional and CEQA challenges based upon the duality and duration of the prohibitions. In addition, the Housing Council claimed that the rate ordinance violated state housing element law: Council assessed the suit and opted to resolve the claims by way of a settlement contingent upon adoption of a less restriction ordinance which would, in part, eliminate the requirement that only one construction project be allowed per block, but continue the radius restriction. Council adopted a less restrictive interim ordinance which eliminated the block limitation and amended the radius restriction to provide that only one construction project shall be allowed within a five hundred foot radius of another construction project .Other provisions were modified consistent with the settlement agreement including reducing the eighteen month restriction on issuance of new building permits to fifteen months. Ultimately, a permanent ordinance was adopted mirroring this modified interim ordinance. Discussion The basic prohibition of the rate ordinance allows one project, but only one, within a 500 foot radius of an existing permitted project. See SMMC section 9.04.10.02.450(a). This restriction is mirrored in the staff report accompanying the permanent ordinance. It states, "the current construction rate program allows only one construction project, or 2 substantial remodel project, within afive-hundred foot radius of another project subject to this program." However, other subsections state that a permit may not be issued for a project within 500 feet of an existing project and require that the project be placed on awaiting list if another building permit has been issued. Thus, there is an ambiguity as to whether only one or two projects (but not three) may exist within a 500 foot radius. In recent weeks, staff has received questions about whether two particular projects conformed to the construction rate program.. Staff investigated. In one case, the project which drew the complaint lacked the requisite permits and was halted. In the other case, the project was exempt from the rate program. Thus, the complaints were resolved. Fortunately, they triggered a review of the ordinance's ambiguity addressed in this report. Council can resolve the. ambiguity by adopting an ordinance which makes clear either that only a single project is allowed within a 500 foot radius or that only one project is allowed within a 500 foot radius of another permitted project. The attached ordinance would effectuate the latter alternative, consistent with current subsection (a). However, the proposed ordinance could readily be modified at the Council meeting to effectuate the first alternative. In either circumstance, staff recommends that subsection (b) of the current law should be modified to clarify that a building permit shall not be issued until the requirements of subsections (c) and (d) have been satisfied. This change would reflect current practice. Environmental Analysis The proposed ordinance is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3). Section 15061(b)(3) provides that CEQA only applies to those projects that have the potential for causing a significant effect on the environment. This proposed ordinance, which clarifies the existing rating program, is environmentally beneficial as it will ensure neighborhoods are protected from construction related impacts by limiting the number of projects in close proximity to each other through 3 regulating the timing and distribution of construcfion projects through the building permit process. Financial Impacts & Budget Actions Approval of either the attached ordinance or the alternative would not have financial impacts. Prepared by: Marsha Jones Moutrie, City Attorney Approved: Marsl a Jones o trie City orney 4 Forwarded to Council: Reference Ordinance No. 2250 (CCs).