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sr-041409-7aCity Council Meeting: April 14, 2009 Agenda Item: ~ _ To: Mayor and City Council From: Eileen Fogarty, Director of Planning & Community Development Subject: Introduction and adoption of an Emergency Interim Ordinance Extending Interim Ordinance 2238 and 2242 (CCS) 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 districts (LMSD), and for changes in land use over 7,500 square feet 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 an emergency interim ordinance extending Interim Ordinance 2242 (CCS). Executive Summary The attached proposed interim ordinance emergency extension continues until January 9, 2012 the provisions adopted on August 28, 2007 and extended on October 23, 2007 addressing development within. the industrial area which is due to expire on April 23, 2009. If approved, this ordinance will take effect immediately. The provisions of this ordinance: 1. Establishes a Development Agreement requirement 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 over 7,500 square feet on parcels that exceed an area of 32,000 square feet in the LMSD and 15,000 square feet in the M1 districts. On August 28, 2007, the City Council adopted Interim Ordinance Number 2238 (CCS). This ordinance authorized only development not exceeding 7,500 square feet of floor area or 15 units in the LMSD or 7,500 square feet of floor area or 5 units in the M1, 1 excluding density bonus units, unless the project is developed pursuant to a development agreement, or is a school existing before September 1988.. Auto dealerships remain subject to Ordinance Number 2186 (CCS) [extended by Ordinance Number 2264 (CCS)]. In addition, Ordinance Number 2238 provided 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 certain specified written findings. On October 23, 2007 the City Council adopted Ordinance Number 2242 (CCS), extending for 18 months Ordinance Number 2238 (CCS), and modifying the original ordinance to allow: • Single tenant buildings. Extends 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. Exempts changes in land use for projects up to 7,500 square feet from the DA requirement; • Significant changes in land use in existing buildings Expands 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. The interim ordinance has been effective and continues to be necessary until a new Land Use Element is adopted. Staff continues to study the current development market in light of the planning issues identified for the area through the LUCE process and is not proposing any additional provisions to the ordinance at this time. Ordinance Number 2242 (CCS) is due to expire on April 24, 2009 if not extended. The impetus for the interim ordinance was the construction and subsequent submittal of additional development applications for several developments that would be inconsistent with the long-term goals for the area such as artist studios and single-room occupancy projects with no accompanying services and amenities. Continued piecemeal development of the industrial area will significantly constrain the City's opportunity to adequately plan for the future. Development would likely yield large dense blocks of a single residential type without adequate infrastructure, an .absence of amenities and services, lack of adequate roadway structure, lack of neighborhood environment, increasing conflict between housing and existing uses, and increased speculative development pressure. Since the effective date of the interim ordinance, only two development applications involving new construction have been submitted in the LMSD and M1 zoning districts for minor remodels of less than 7,500 square feet. Projects involving only tenant improvements and changes of use have similarly been few or small scale. The interim ordinance has had the effect of allowing necessary tenant improvements and business turnover to occur while allowing the City to more 2 carefully evaluate large-scale proposals for consistency with the community's vision realized in the LUCE Strategy Framework: Discussion Background The October 23, 2007 staff report and accompanving ordinance contain additional background information as to the intent and character of the industrial districts and recent development activity in the area, which are key considerations in assessing the value and importance of the subject ordinance. As noted in both the staff report and ordinance, the City had experienced a dramatic increase in application submittals for large, dense developments that lacked significant amenities for the residents and provided virtually no services to support the housing use. In the year prior to the ordinance being passed, the City received applications for over 1,000 housing units in or immediately adjacent to the City's industrial area. The interim ordinance was adopted 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 through the Land Use and Circulation Elements and Zoning Ordinance 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, • precluding opportunities for improving traffic conditions through the development of the light rail, • revising the street grid, and • lack of usable open space and public spaces. Ordinance Number 2242 (CCS) authorizes only development that does not exceed 7,500 square feet of floor area or 15 units in the LMSD, or 7,500 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. 3 Auto dealerships remain subject to Ordinance Number 2186 (CCS) rather than this interim ordinance. In addition, Ordinance Number 2242 (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 if the change of use will involve more than 7,500 square feet of floor area within an existing building or buildings 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 a property will not constitute a substantial change in mode or character of the property as a whole. The ordinance establishes a 45-day review period by the Director to determine if a change of use should be exempted from the DA requirement. Since the Council's action, the endorsement of the LUCE Strategy Framework has made the extension of the interim ordinance critical so that the principles established in the Strategy Framework are not negated. Staff has also further evaluated the effect of the subject ordinance on development applications in the LMSD and M1 zoning districts and can conclude the ordinance has been effective in allowing the development process to proceed through more controlled methods while giving the LUCE time to evolve the. vision for the districts. One of the key goals stated in the Strategy Framework is to focus limited change in areas of the City where transportation is readily available as well as to conserve some of the existing light industrial and creative arts uses. The LMSD and M1 zoning districts were identified as such areas for conservation of existing long- term industrial uses in addition to targeted redevelopment around and near the proposed stations for the Expo light rail line. LUCE Strategy Framework The LUCE Strategy Framework is a conservation plan that places the highest priority on the preservation of the scale and character of Santa Monica's neighbourhoods. In order to achieve this goal, the Strategy Framework focuses limited change in areas with accessible transit, such as the industrial areas of the City where Expo light rail line stations are anticipated at Olympic Boulevard/26th Street (Bergamot Transit Village), 4 17th Street/Colorado Avenue (Memorial Park Activity Center), and 4tn StreeUColorado Avenue (Downtown/Civic Center). Some change is also allowed in the Mixed Use Creative District, currently primarily zoned LMSD, which is walking distance from Bergamot Station and would provide creative arts space near affordable and workforce housing. In recent years, the community's vision articulated for the industrial areas in the LUCE Strategy Framework has been threatened by the proposed construction of large-scale "artist studios" and single -room occupancy developments, which the code allowed to proceed with either minimal or no public input and no requirements for providing amenities or connecting with. services. These were often stand-alone developments at locations with limited open space, lack of access to services and inappropriate circulation infrastructure, and lacked the amenities that would make the new residential development livable. The Strategy Framework includes a comprehensive approach to critically evaluate new development to ensure adequate infrastructure, provide necessary public benefits, and compatibility to a larger context. Effect on Development Applications Since the adoption of the interim ordinance, only two development applications involving minor remodels have been submitted. There are four large-scale developments requiring a Development Agreement that are either in ongoing negotiations or preliminary discussion. One of these is at the location of a previously submitted 623- unit single-room occupancy project, which has been withdrawn. The other three Development Agreement projects are adjacent sites making up approximately 8 acres between Colorado Avenue, Stewart Street, and Stanford Street. Staff has had ongoing discussions with property owners on all three properties regarding infrastructure, circulation, site and project design, and open space. The Development Agreement process that has resulted from the interim ordinance has promoted public engagement, with community meetings being held while projects are still conceptual and through subsequent design phases. The Development Agreement process has also given the City greater flexibility to derive considerable public benefits from all of these projects such as new roads and bike paths, green space and public plazas, sidewalks, utilities, green buildings, and affordable and workforce housing. 5 Previous Council Actions Over the past twenty-four months the City Council has taken the following actions with regard to the industrial area: April 24, 2007 May 22, 2007: July 24, 2007: August 28, 2007: October 23, 2007: July 24, 2008: Alternatives Adopted Interim emergency ordinance requiring housing projects over 50 units to obtain a DR permit (Ordinance 2226 expired June 23, 2007) Adopted Interim Ordinance 2226 extended (Ordinance 2232 Expires May 8, 2009) Directed staff to prepare subject interim ordinance for industrial lands Adopted Interim Emergency Ordinance Number 2238 establishing DA requirement in the industrial districts Adopted Ordinance Number 2242 (CCS) extending for 18 months Interim Emergency Ordinance Number 2238 (CCS) Endorsed the Land Use and Circulation Element Strategy Framework The City Council previously rejected alternatives that relate to status quo (no changes to development standards) and moratorium options. As an alternative to this recommendation, the City Council may consider eliminating or modifying specific components of the ordinance. 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 extension of this ordinance continues to require a larger number of projects to be subject to public review and evaluated pursuant to CEQA. Additional findings supporting this exemption .are included in the attached ordinance. The proposed emergency interim 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 6 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 requires a Development Agreement application for developments over 7,500 square feet in area or more than 5 or 15 units, or for changes in land use over 7,500 square feet on certain sized parcels in the LMSD and M1 zone districts. Within these designated zoning 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 existing General Plan Land Use and Circulation Element is proposed. No parcel rezoning is proposed; all affected parcels will retain their current zoning 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. As stated above, the proposed ordinance changes the permit process for development above identified .thresholds; it does not change existing density-related standards contained in the General Plan or Zoning Ordinances 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 extension of the ordinance- and the Development Agreement. Rather, this ordinance extension is of general application and will not result in future physical changes 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 7 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 related to permit activity. The City would not receive increased property taxes generated by a property that might have been redeveloped under existing zoning. However, projects are still proposed and under negotiation through the development agreement process, so this interim ordinance has not had the effect of stopping the development process. 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: Travis Page, Associate Planner Approved: / _. ~' ~ ~ Eileen Fogarty /f Director, Planning & o unity Development Forwarded to Council: ®~~ P. ont Ewell City Manager Attachments: Exhibit A: Emergency Interim Ordinance 8 ~~ ~ 7-~ APR 1 4 2009 CIFY Cr Er"<~ r~~: ".. ac~o~ Abrk AasaG1615pr s~r~~k flot~tc~, ca~.rF. April 14, 2009 Mayor Genser and Councilmembers, Re: Agenda Item 7A The Board of the Ocean Park Association is troubled by staffs recommendation that you extend Interim Ordinance 2242 until 2012. When this ordinance was originally proposed in 2007, it was intended to be a stopgap measure as staff assured you the LUCE revisions would be completed by May of 2009. Extending this ordinance would acknowledge that a completed LUCE and updated Zoning Ordinance will take much longer than promised and substitute instead in the LMSD and M1 districts a piecemeal planning process which encourages development agreements. We don't care for development agreements. What should be an infrequent and exceptional planning Yool has instead become too common and threatens to make a mockery of the outcome of the LUCE revisions. Moreover, development agreements rarely provide sign cant public benefits, are never audited for compliance, are threatening our dwindling stock of affordable rental housing, and apparently can subsequently be renegotiated, as we've teamed via recent attempts to remove hotel funding for our local Tide shuttle. We believe there is a better way to assure that future development is consistent with the goals of the LUCE: a citywide moratorium on all projects greater than 7500 square feet, with an exemption for affordable housing. In fact, that is the strategy we promoted along with every other neighborhood organization in 2007. And we believe in hindsight rejecting such a moratorium was a mistake. For example, we recently reviewed a proposed Walgreen's at Lincoln and Pico, an area which the LUCE targets for development of well-designed transit-oriented housing and walkable services. As the LUCE is so long delayed, this project will instead move forward as an ugly one story commercial building with a drive through window and no pedestrian orientation and with no housing component. A moratorium on new projects would have assured tha4 the LUCE goals were not thwarted by projects approved in the last two years and would have freed staff to complete the LUCE by next month, as promised. So once again we are convinced there is a better way to assure new development in the LMSD and M1 districts is consistent with the LUCE: a moratorium on large projects until the LUCE is completed. But if you must instead extend Ordinance 2242, please refrain from entering into negotiations for new development agreements until the LUCE is completed. Respectfully Mary arlow, resident APR 14 2009 ,44aD ~ ~-~ Ocean Park Association CC: Eileen Fogarty, Planning Director Santa Monica Daiiy Press Santa Monica Mirror