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SR-011309-7C~® ~;~yot City Council Report Santa Monica City Council Meeting: January 13, 2009 Agenda -Item: ~"~ To: Mayor and City Council From: Marsha Jones Moutrie, City Attorney Subject: Introduction and First Reading of an interim ordinance extending the current interim ordinances modifying the discretionary review threshold to require a Development Review permit for projects exceeding 50 units and adjusting the applicability provision of these interim ordinances. Recommended Action Staff. recommends that the City Council adopt the subject interim ordinance, which extends the existing interim ordinances requiring housing projects with more than 50 units to obtain a Development Review permit throughout the City and adjusts the applicability provision of these ordinances to only include applications for a development project which .was filed on or after April 24, 2007, the effective date of Ordinance Number 2226 (CCS). The term of this extension would be through January 27, 2011. Executive Summary The .attached interim ordinance extends until January 27, 2011 Interim Ordinance Number 2232 (CGS) which implements the City Council's policy directive to require housing projects over 50 units to obtain a Development Review permit. The. purpose of these ordinances is to provide a public review process for large. and dense housing projects to ensure neighborhood compatibility and evaluation of potential environmental impacts. In addition to extending the existing ordinances, the attached ordinance would also adjust the applicability provision of this ordinance in response to lawsuits filed against the City challenging this ordinance. There are no budget related impacts associated with this action. Discussion Background On April 24, 2007, the City Council adopted Ordinance Number 2226 (CCS) to provide that any development that exceeds fifty units shall be subject to a development review permit. This ordinance was applicable to any application for a development project that 1 had not received an Administrative Approval. determination as of April 24, 2007, the effective date of Ordinance Number 2226 (CCS). The City Council extended this interim ordinance on May 22, 2007 through the adoption of Ordinance Number 2232 (CCS). In or about July 2007, three lawsuits were filed against the City challenging these interim ordinances. These lawsuits, filed by the same controlling owner, involved properties located at 819-829 Broadway, 1447-1453 Lincoln Boulevard, and 3025 Olympic Boulevard. In particular, the petitioners object to the provision of the interim ordinances which include "affordable housing projects" among the class of large multifamily residential development projects required to obtain a development review permit. They seek to develop affordable housing projects at each of the above- referenced properties and claim that these projects should be processed administratively under the rules in effect prior to the ordinances' adoption. ,During the pendency of this litigation, petitioners have significantly revised the proposed mixed-use affordable housing projects for the Broadway and Lincoln Boulevard properties and now seek to develop the Olympic Boulevard property through negotiation of a discretionary development agreement with the City, rather than administrative approval. Petitioners and the City have entered into a settlement agreement which is contingent, in part, upon the City's decision to adjust the applicability provision of the interim ordinances thereby allowing petitioners' revised mixed use affordable housing projects at Broadway and Lincoln to be reviewed administratively, subject to ARB or Landmarks Commission .review. The settlement agreement also provides that petitioners cannot amend the revised projects except as may be required to comply with local law or seek administrative approval of projects at .these properties that are not in substantial conformance with these revised projects. PCD staff has reviewed the revised applications for the Broadway and Lincoln Boulevard properties and has found them to be significantly more compatible with the LUCE direction then what could be developed ministerially under the City's current 2 Zoning Ordinance. This office believes that the interim ordinances are valid as currently drafted. However, in the interest of resolving the dispute and ensuring- that these ordinances continue to prevent the threat to the public health, safety and welfare which led to their adoption, the proposed ordinance extension modifies the applicability of the interim provision to any application for a development project that was filed on or after April 24, 2007, the effective date of Ordinance Number 2226 (CCS). In all other respects, the substance of the interim ordinances would remain intact. Analysis The emergency interim ordinance that the City Council adopted on April 24, 2007 and extended on May 22; 2007, modified the land .use entitlement process to include a discretionary review component for large, dense affordable housing projects throughout the City. This process change provides neighbors, the public and the City an opportunity to evaluate significant impacts .associated with the size, mass, scale, and density of these projects. The discretionary process also requires review and evaluation of potential environmental impacts related to traffic, noise, air and water quality, aesthetics and many other factors, pursuant to the California Environmental Quality Act. Housing projects continue to receive many incentives to encourage the production of more dwelling units citywide. Affordable housing projects in particular receive incentives from additional height and setback reduction to density and floor area. Smaller scale affordable housing projects that are 50 units or less will continue to be exempt from the discretionary review process throughout much of the City. The subject interim ordinance continues the City Council's long standing tradition of balancing a public review process. with the need for predictability, and incentives to support the production of housing generally, and affordable housing specifically. The proposed standards will be effective until January 27, 2011, allowing City staff and the community an opportunity to further examine these and other pressing issues in the Land Use and Circulation Element /Zoning Ordinance update. 3 The proposed ordinance would make the following modification to the current interim ordinances: rather than being applicable to any application for a development project for which an approval had not been granted on or after April 24, 2007, the ordinance would apply to any development application, filed on or after April 24, 2007. The effect of this change would be to authorize the Broadway and Lincoln Boulevard mixed-use affordable housing projects applications to be subject to Administrative Approval determinations. Upon the effective date of this interim ordinance, the pending litigation would be dismissed with prejudice and all the previously filed development applications would be deemed withdrawn, except the Broadway and Lincoln administrative applications revised pursuant to the settlement agreement. In the interest of resolving the dispute and ensuring that these ordinances continue to prevent the threat to the public health, safety and welfare which led to their adoption, this office supports this proposed modification. The Broadway and Lincoln Boulevard projects have been redesigned to address potential impacts related to size, mass, scale and density and these projects will remain subject to ARB or Landmark Commission review. Staff is unaware of any other projects which would be affected by this modification. As detailed in Ordinance Number 2226 (CCS), Ordinance Number 2232, the April 24 and May 7, 2007 City Council staff reports, and in the proposed ordinance, there continues to exist a current and immediate threat to the public health, safety, and welfare should this interim ordinance not be adopted, the current ihterim ordinances be allowed to expire, and public review of large, dense housing developments be precluded. Environmental Analysis The proposed interim ordinance is exempt from the California Environmental Quality Act (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. The proposed project, which continues the substantive provisions of Ordinance Number-2232 (CCS) and adjusts its applicability provision, does not have. this potential. Instead, the proposed interim ordinance as 4 modified is environmentally beneficial since it will ensure that a greater number of new development projects in the City, particularly-those which have the potential to be incompatible with existing. neighborhoods and cause significant adverse aesthetic, public safety, traffic and other public infrastructure impacts, will be subject to discretionary review and compliance with the provisions of CEQA. Budget/Financial Impact There are no funding implications associated with the recommendations contained in this report. Prepared by: Barry A. Rosenbaum, Senior Land Use Attorney roved: Forwarded to Council: Exhibits A: Interim Ordinance Extension 5 EXHIBIT A INTERIM ORDINANCE 6 f:\atty\muni\laws\barry\drthresholdinterimordext1-13-09 City Council Meeting 1-13-09 Santa Monica; California ORDINANCE NUMBER (CCS) (City Council Series) AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO EXTEND THE CURRENT INTERIM ORDINANCES MODIFYING THE DEVELOPMENT REVIEW THRESHOLDS TO REQUIRE THAT ANY HOUSING PROJECT IN EXCESS OF FIFTY UNITS OBTAIN A DEVELOPMENT REVIEW PERMIT AND TO ADJUST THE APPLICABILITY PROVISION OF THE ORDINANCES THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Findings and Purpose. The City Council finds and declares: (a) Santa Monica is a small, extremely dense, older, coastal city consisting of just 8 square miles of land bordered on one side by the Pacific Ocean and on three sides by the megalopolis of Los Angeles. (b) Approximately 87,000 people live in the City, on weekdays there are about 300,000 present in the City, and on weekends and holidays the number of persons in the City soars to between 500,000 and 1 million. (c) Santa Monica's population density, eleven thousand two hundred persons per square mile, is the second highest among neighboring and- nearby jurisdictions and is the densest among coastal communities in Los Angeles County. 1 (d) Santa Monica has been fully built out for over 50 years, much of its development having occurred during, and immediately after World War II. (e) In the last 25 years, land values within the City have soared due, ih large part, to the land's scarcity and prime location, the excellent climate, and to the desirability of living and working in a community which offers a vast array of urban amenities and services, a unique sense of community, pedestrian-oriented scale, and economic and social diversity. (f) In the past ten years, escalating land values, economic prosperity, and changes in state law have fueled a massive increase in development which has significantly altered the physical and social landscape of the City. (g) Throughout this period of rapid development and change, the City Council has adopted a series of laws relating to land use and housing intended to strike and restrike the balance between potentially conflicting municipal values and policies in order to best protect the health, safety and welfare of Santa Monica residents. (h) During this time, land use planning and regulation in Santa Monica has been driven by a continual effort to balance the City's commitment to economic and social diversity through the maintenance and production of housing for all economic segments of the community, with its commitment to protecting the environment, preserving the quietude of residential neighborhoods; and maintaining the experience of life on a human scale. (i) The City Council has also adopted a series of laws intended to foster the development of affordable housing by concentrating housing development in the City's 2 commercial districts ih order to both meet housing goals and preserve quality of life in established residential neighborhoods. Q) Additionally, the City has provided various incentives for the production of affordable housing, including height and density bonuses, FAR bonuses, and reduced parking and open space requirements. (k) This effort to both balance and achieve competing needs succeeded: during the RHNA Planning Period of January 1, 1998 through June 30, 2005, the City issued building permits for 2,920 units, 132% of its RHNA target of 2,208 units; 62% of new residential developments were constructed in the City's commercial districts and 84% of the residential units with building permits issued as of December 2005 will be located in these districts. Since that time, the City has continued to experience significant housing development. According to the City's 2008-2014 Housing Element, it is estimated that 1,126 multi-family units have been completed, issued building permits, and/or received all required planning approvals between January 1, 2006 and June 19, 2007. (I) While fostering residential housing, the City has protected the environment and quality of life, in part, through the Development Review permit process. (m) A development review permit is intended to allow the construction of certain projects for which the design and siting could result in an adverse impact on the surrounding area such as development that is proposed to be built to a greater intensity and building height than generally permitted in the area. (n) A development review permit allows for the review of the location, size, massing, and placement of a proposed structure on the site; particularly as the project relates to the existing context of the area in which it is located. The development review 3 process is designed to ensure that the development is compatible with and relates harmoniously with the surrounding neighborhood. The development review process also is designed to ensure the preservation of peace, health, and safety of the. community by requiring affirmative findings that health and safety services (police., fire, etc.), automobile and pedestrian rights-of-way, and public infrastructure is sufficient to accommodate new development.. (o) A project that requires a development review permit is subject to public. review by the Planning Commission, vvith appeal to the City Council, whereas a project below the development review threshold can be administratively approved. (p) As detailed in Interim Ordinance Number 1999 (CCS), during the City's building boom, high development review thresholds resulted in the administrative approval of projects-that create significant adverse impacts oh neighborhoods such as noise, traffic, parking, aesthetic, privacy, light and air, and shade and shadow. Consequently, in December 2003, the Council adopted Ordinance No. 2102 (CCS) which in large measure reduced the development review threshold in many zoning districts in the City. Yet, in its continued efforf to foster the production of affordable housing, the Council also entirely exempted 100% affordable housing projects located in most commercial districts from the development review process. (q) For the most part, the City has been able to preserve residents' quality of life and the environment, notwithstanding significant development in an already extremely dense environment; this has been accomplished by carefully crafting and adjusting the public review processes applicable to development within the City. Such careful adjustment is particularly essential during the City's current planning efforts. 4 (r) In July of 2004, the City began preparing a new Land Use and Circulation Element of the General Plan (LUCE) and a comprehensive revision of the City's Zoning Ordinance, a massive project, crucial to the community's long-term welfare, which remains ongoing at this time. (s) The work oh the LUCE update included numerous public hearings and participation by thousands of residents, business owners, and visitors. Participants repeatedly articulated the goal that the City should carefully monitor future development -particularly large-scale development - to ensure that Santa Monica remains a livable city. (t) In these public hearings, residents demanded that development be regulated strategically to perfect the policy balance between the need for new housing and the community's insistence upon preserving quality of life and the environment. (u) Community input has demonstrated. significant interest in preserving the scale and character of existing neighborhoods and in reducing development standards in some parts of the City to ensure that the height and scale of new buildings is consistent with the existing context while promoting certain types of development. (v) Residents have noted that, in general, the development of affordable housing projects effectuates the City's goals and policies favoring. the preservation and creation of affordable housing; but those policies should not, and were never intended to, foster development of a size, scale and density so extreme as to threaten quality of life; rior were they intended to override the City's strong commitment to environmental protection. 5 (w) Experience shows that the policy decision to exempt all affordable housing projects from any development review threshold must be revisited and refined in order to protect neighborhoods and quality of life within the City, particularly while the LUCE process is ongoing. (x) This experience includes the City's receipt of community input as to the LUCE update and of applications for extremely large and extremely dense affordable housing projects. (y) These extremely large and dense projects far exceed historic development patterns in the City. Since 1998, the average new housing project has contained nineteen units. There are many additional sites ih the City which are or could be available for similar large, dense projects. (z) In order to address the community's concerns and properly balance competing housing and environmental policies, development review requiremehts must be revised as to very large, dense projects. (aa) Failure to reduce the development review threshold would pose an immediate threat to the existing character of the City's neighborhoods, the City's unique natural environment, and its quality of life. Adjusting the development review threshold to require a development review permit for projects exceeding 50 units would allow thorough review of the impacts of large projects and enable the public to participate in this review. Reducing the development review threshold in this regard would also ensure that administrative approval is only available to smaller scale developments. which produce far fewer adverse impacts on nearby neighborhoods. Additionally, this 50 unit threshold matches the existing standard in the City's. residential districts. 6 (bb) The vast majority of projects that must obtain a development review permit receive City approval. However, prior to such approval, such projects have been subject to thorough public review and assessment of the project impacts. (cc) Reducing the development review threshold as proposed by this ordinance will not materially alter the City's substantial incentives for residential or mixed use development in non-residential zoning districts as is manifest in City policy and law. Residential development in all of the City's commercial districts would still be authorized. Thus, residential development could still occur in over 80% of the City's acreage. Additionally, among other incentives, the City will continue to either provide FAR bonuses for the residential components of development projects or discount the residential floor area for the purpose of calculating FAR and to enhance the number of stories and height of a project if a residential use is proposed. The City would also continue to provide the density and development bonuses and incentives established by State and local law. (dd) The City has extensively studied whether modifying the development review threshold constrains the production of housing and has determined that it would not. (ee) Adoption of this ordinance would also not prohibit any uses currently authorized in any district in the City. (ff) In light of the above-detailed concerns, the City Council adopted. Ordinance Number 2226 (CCS) on April 24, 2007 which provided that any development that exceeds fifty units shall be subject to a development review permit. On May 22, 2007, the City Council adopted Ordinance Number 2232 (CCS) which extended Ordinance Number 2226 (CCS). 7 (gg) In or about July 2007, three lawsuits were filed against the City challenging these interim ordinances, involving properties located at 819-829 Broadway; 1447-1453 Lincoln Boulevard, and 3025 Olympic Boulevard. In particular, the petitioners object to the provision of the interim ordinances which include "affordable housing projects" among the class of large multifamily residential development projects required to obtain a development review permit. Petitioners seek to develop affordable housing projects at each of the above-referenced properties and claim that these projects should be processed ministerially under the rules in effect prior to the ordinances' adoption. (hh) During -the pendency of this litigation, petitioners have proposed substantially revised mixed use affordable housing projects for the Broadway and Lincoln Boulevard .properties and seek to develop the Olympic Boulevard property through negotiation of a development agreement with the City. The Broadway and Lincoln Boulevard projects have been .redesigned to address potential impacts related to size, mass, scale and density and these projects will remain subject to ARB or Landmark Commission review. Staff is unaware of any other projects which would be affected by this modification. (ii) Although the City believes that the interim ordinances would withstand these legal challenges, in the interest of resolving the dispute and ensuring that these. ordinances continue to prevent the threat to the public health, safety and welfare which led to their enactment, this ordinance modifies the applicability of this interim provision to any application for a development project that was filled on or after April 24, 2007, the effective date of Ordinance Number 2226 (CCS). 8 (gg) As detailed above, in Ordinance Number 2226 (CCS), and in the April 24, 2007 City Council staff report, there exists a current and immediate threat to the public health, safety, and welfare should this interim ordinance not be adopted, the initial interim ordinance be allowed to expire, and public review ofiarge, dense development projects inconsistent with contemplated revisions to the City's development standards be precluded. Administrative approval of large dense development projects as authorized by the City's existing Zoning Ordinance -projects which far exceed existing development patterns -- would result in a threat to public. health, safety and welfare. However, Ordinance 2232 (CCS) will expire on May 8, 2009 unless extended. (hh) The Zoning Ordinance requires review and revision as it pertains to the development review threshold for development projects in the City. Pending completion of this review and revision, which. will occur as part of the Land Use and Circulation Element/Zoning Ordinance update; it is necessary to continue on an interim basis to modify the Zoning Ordinance td require that all housing projects in the City in excess of fifty units be subject to a development review permit. Adoption of the proposed extension ordinance will provide sufficient time for these standards to be revised on a permanent basis in conjunction with the comprehensive Land Use and Circulation Element/Zoning Ordinance update and the development standards adopted thereto. (ii) This ordinance hereby extends and modifies the provisions of Ordinance Number 2226 (CCS) and Ordinance 2232 (CCS) up to and including. January 27, 2011, establishing the interim zoning requirement set forth in Section 2 of this Ordinance. SECTION 2. Interim Zoning. 9 Notwithstanding the exemptions from the Development Review thresholds specified in Santa Monica Municipal Code Section 9.04.10.14.050(a), and the thresholds for Development Review in Santa Monica Municipal Code Sections 9.04.08.15.060(d), 9.04.08.18.060(g), and 9.04.08.20.070(g), aDevelopment Review permit shall be required for any development that exceeds 50 units. SECTION 3. This ordinance shall apply to any application for a development project filed on or after April 24, 2007, the effective date of Ordinance Number 2226 (CCS). SECTION 4. This ordinance shall be of no further force or effect after January 27, 2011, unless prior to that date; aftera public hearing, noticed pursuant to Santa Monica Municipal Code Section 9.04.20.22.050, the City Council, by majority vote, extends this interim ordinance. SECTION 5. Any provision of the.Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of .this Ordinance, to the extent of such inconsistencies and no further, is .hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, 10 or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 7. -The Mayor shall sign and the City Clerk shall attest to the passage of this .Ordinance. The City Clerk shall cause. the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. APPROVED AS TO FORM: MARS JON MOUTRIE aZ- City Attorney 11