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SR-111583-12BCA:RMM:rmsor City Council Meeting 11-15-83 STAFF REPORT TO: Mayor and City Council FROM: City Attorney SUBJECT: Findings and Conditions in Connection with Approval of Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207 (631-705 Bay Street) At its meeting on November 8, 1983, the City Council approved Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207 and directed the City Attorney to return on November 15, 1983, with findings and conditions. RECOMMENDATION It is respectfully recommended that the City Council make the following findings, decision, and conditions in connection with Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207: FINDINGS 1. The subject property is a sixteen (16) unit apartment building located at 631-705 Bay Street, Santa Monica, California. The subject property is zoned R-2. The building is commonly known as La Belle Monique. 1 2. Billie Z. Sorrel ("Sorrel") purchased the subject property on July 31, 1964. 3. Commencing in the latter part of 1978, Sorrel commenced the process of "renovating" the subject property. Sorrel refinanced the subject property on numerous occasions and performed substantial improvements to the building. 4. In January 1979, Sorrel gave eviction notices to a11, tenants of the subject property. 5. On April 10, 1979, the electorate of the City of Santa Monica added Article XVIII to the Santa Monica City Charter entitled "Santa Monica Rent Control Charter Amendment ("Rent Control Law)." The Rent Control Law regulated, amonq other things, the circumstances under which tenants could be lawfully evicted and the circumstances under which landlords could remove rent controlled apartments from the market by demolition, conversion and other means. 6. In conjunction with the renovations to the subject property, Sorrel filed Petition For Rent Increase 0079 on August 29, 1979, seeking rent increases for all-units pursuant to the standards and procedures set forth in Section 1805 of the Santa Monica City Charter. 7. On December 17, 1979, the Santa Monica Rent Control Board granted rent increases for all units ranging between $332 and $487 per unit. The Board also granted conditional authorization for rent increases based upon $163,000 in proposed capital improvements. 2 8. On August 1, 1980, Sorrel filed an application for Removal Permit No. 059R pursuant to Section 1803(t) of the Santa Monica City Charter. On May 28, 1981, the Rent Control Board denied Removal Permit No. 059R based upon findings that the removal of these controlled rental units would adversely affect the supply of affordable housing in the City and that Sorrel could make a fair return by maintaining the units as rental apartments. 9. On January 7, 1981, Sorrel filed Petition For Rent Increase 0471 seeking additional rent increases for all the units at the subject property. On May 28, 1981, the Rent Control Board denied any rent increases. 10. On August 25, 1981, Sorrel filed a Petition For Writ Of Mandate in Los Angeles Superior Court, Billie Z. Sorrel v. Rent Control Board, et al.; LASC Case No. C 379899. On January 14, 1982, Judge John L. Cole issued an Alternative Writ of Mandate in the case. 11. On June 9, 1982, Sorrel filed a petition for relief pursuant to Chapter 11 of the United State Bankruptcy Code; Case No. LA 82-09514-RO. 12. On August 3 and 25, 1982, a trial was conducted in Case No. C 379899 in Department 88 of Los Angeles Superior Court, Judge Leon Savitch presiding. On January 31, 1983, Judge Savitch granted a peremptory writ of mandate compelling the Rent Control Board to set aside its prior decision in Petition For Rent Increase 0471 and remanded the case for further proceedings pursuant to the recently adopted Regulation 4100. 3 13. On March 31, 1983, the Rent Control Board filed a Notice of Appeal in the case. On April 19, 1983, Sorrel filed a Notice of Cross-Appeal in the case. 14. Pursuant to the court ordered remand, Sorrel refiled a new Petition For Rent Increase I-0665 in conjunction with a new application for Removal Permit 103R-B. On June 2, 1983, the Rent Control Board voted to grant Removal Permit 103R-B. The Rent Control Board adopted findings of fact and conclusions of law in support of this determination in a Notice Of Decision Of Rent Control Board. 15. Sorrel filed a Notice of Intent to Convert the subject property with the Santa Monica Planning Department on July 15, 1983. Sorrel also filed an application for Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207. 16. On October 17, 1983, the Santa Monica Planning Commission denied the application for Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207. The denial was based upon the .fact that the proposed conversion was inconsistent with Program 25 of the Housing Element of the General Plan as adopted on January 25, 1983. Program 25 of the Housing Element limits the conversion of rental units to market rate condominiums until the number of rental units demolished or converted in 1978 and 1979 are replaced. The Planning Commission found that the units removed in 1978 and 1979 had not been replaced as of October 17, 1983. Sorrel filed a timely appeal of this decision. 4 17. On November 8, 1983, the City Council considered Sorrel's appeal. The City Council voted to grant the appeal thereby reversing the actions of the Planning Commission and approving Tentative Tract Map Number 37984, Conditional Use Permit Number 358, and Development Review Number 207. 18. Although Tentative Tract Map Number 37984 is inconsistent with the Housing Element of the General Plan, and, although under normal circumstances the tentative map would be required to be disapproved under the Subdivision Map Act, the City Council determines that approval of tentative map is appropriate for the following reasons: a. Prior to the adoption of the Housing Element, Sorrel incurred substantial expenses to obtain a removal permit from the Santa Monica Rent Control Board for the purpose of condominium conversion. A removal permit is a condition precedent to obtaining the right to convert an apartment building to condominiums in the City of Santa Monica. b. Sorrel is the only landlord who sought a removal permit for purposes of condominium converson prior to the adoption of the City's Housing Element. c. All of Sorrel's tenants consent to the conversion and desire to purchase their units. d. The conversion will not result in the displacement of tenants. Because of the singularly unique circumstance in which Sorrel is placed, the decision with respect to Sorrel will have no precedent and will not encourage the 5 displacement of tenants in other buildings through other conversion activity. e. Because application of the newly adopted Housing Element to Sorrel would possibly result in an unconstitutional application to Sorrel since Sorrel faces loss of the property and may not, in the determination of the Rent Control Board, earn a fair return if the unit remains a rental unit, the City Council, believes in this one instance the Housing Element s ould not be applied. The City Council believes that it is unlikely to encounter such a unique situation in the future nd that all • future applicants will be required to comply with the Housin ~~ Element 19. Conditional Use Permit Number 358 is consistent with Municipal Code Section 9122 in that the proposed building meets the standards for conversion set forth in Municipal Code Section 9122F. 20. Development Review Number 207 is consistent with Ordinance Number 1251 (CCS) and will not prejudice the ability of the City to adopt a land use element. DECISION Based upon the foregoing findings, City of Santa Monica approves Tentative Conditional Use Permit Number 358, and D. 207 subject to the following conditions: 1. In accordance with Municipal condominium agreements shall contain, the City Council of the Tract Map Number 37984, avelopment Review Number Code Section 9122E(3), but not be limited to, 6 adequate provisions for maintenance, repair, and upkeep; provisions that in the event of destruction or abolishment, reconstruction shall be in accordance with codes in effect at the time of such reconstruction; and provisions for dedication of land or establishment of easements for street widening or other public purpose. 2. The CC&R's shall include agreement by the subdivider, that the following shall be guaranteed by the subdivider: a. Common area items, including but not limited to, the roof, plumbing, heating, air-conditioning, and electrical systems, until one (1) year elapses from the date of the sale of the last individual unit sold. b. Items provided or installed within individual units by the subdivider, including but not limited to, appliances, fixtures, and facilities, for a period of one (1) year from the date of close of escrow of each individual unit. 3. The CC&R's shall provide that the non-subdivider owners have the right to select or change the management group or the homeowner association ninety (90) days after sale or transfer of title of fifty-one percent (51$) of the units; the subdivider agrees not to change the CC&R's submitted to obtain approval of a project without the consent of the Planning Commission; and subsequent owners agree to make no changes in the CC&R's imposing non-discrimination restrictions without the consent of the Planning Commission. 4. The subdivider shall submit an estimate of and guarantee the maintenance costs for a period of twelve (12) 7 months beginning at the close of escrow on the first twelve (12) months beginning at the close of escrow on the first units sold, the subdivider to be responsible for all costs of normal maintenance in excess of the estimate. 5. No tenant of the subject property on the date of approval of the tentative map shall be evicted, except for good cause, until written notice of not less than one (1) year from, the date of tentative approval has been given to all tenants to locate alternative housing. 6. Parking shall be assigned to and travel with each unit at a ratio not less than one space per unit and all tandem spaces shall be assigned to the same unit as the independently accessible space comprising the other half of the tandem arrangement, such assignment to be included in the CC&Rs. 7. Each tenant, and each person applying for the rental of a unit in such residential real property, has, or will have, received all applicable notices and rights now or hereafter required by the Subdivision Map Act, including the notice required by Government Code Section 66452:8. Each tenant shall receive 10 days' written notification that an application for a public report will be, or has been, submitted to the Department of Real Estate, and that such report will be available on request. The written notices to tenants shall be deemed satisfied if such notices comply with the legal requirements for service by mail. 8 8. Each of the tenants of the proposed condominium has been, or will be, given written notification within 10 days of approval of a final map for the proposed conversion. 9. Each of the tenants of the proposed condominium has been, or will be, given 180 days' written notice of intention to convert prior to termination of tenancy due to the conversion or proposed conversion. This requirement shall not alter or abridge the rights or obligations of the parties in performance of their covenants, including, but not limited to, the provision of services, payment of rent or the obligations imposed by Sections 1941, 1941.1, and 1941.2 of the Civil Code. 10. Each of the tenants of the proposed condominium has been, or will be, given notice of an exclusive right to contract for the purchase of his or her respective unit upon the same terms and conditions that such unit will be initially offered to the general public or terms more favorable to the tenant. The right shall run for a period of not less than 90 days from the date of issuance of the subdivision public report pursuant to Section 11018.2 of the Business and Professions Code, unless the tenant gives prior written notice of his or her intention not to exercise the right. 11. Prior to shall certify that safety systems of the and maintenance. 12. Prior to subdivider shall cert submittal of the the structural, structure are in the submittal ify that the plum final map, the subdivider electrical, fire and life a condition of good repair of the final map, the ping is in sound condition, 9 that all hot water heaters are insulated, that all pipes for circulating hot water are insulated unless the Building Officer determines that such insulation is infeasible, that the property has adequate and protected trash areas, and that the property has individual gas and electric meters unless the Building Officer determines that individual metering is inadvisable or impractical. 13. The CC&Rs shall contain a non-discrimination clause in substantially the following form: No unit owner shall execute or file for record any instrument which imposes a restriction upon the sale, leasing or occupancy of his or her unit on the basis of sex, race, color, religion, ancestry, national origin, age, pregnancy, marital status, family composition, or the potential or actual occupancy of minor children. A condominium association shall not discriminate on the basis o£-`"sex, race, color, religion, ancestry, national origin, age: pregnancy, marital status, family composition, or the potential or actual occupancy of minor children. 10 14. The CC&Rs shall be approved by the City Attorney for compliance with the conditions set forth above. PREPARED BY: Robert M. Myers, City Attorney 11