sr-120809-1eCity Council Meeting: December 8, 2009
Agenda Item: 1 ~`~
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Travelodge Hotel (.1515-1525 Ocean Avenue and 1530 Second Street)
License Agreement
Recommended Action
Staff recommends that the Council authorize the City Manager to negotiate and execute
a 75-year agreement with Ocean Avenue Management LLC for air rights for athree-
level pedestrian bridge and a subsurface utility easement in First Court Alley, as
required by the Travelodge Hotel Development Review Permit 05-007 for development
located at 1515 - 1525 Ocean Avenue and 1530 Second Street.
Executive Summary
On September 23. 2008, Council approved the development of the Travelodge Hotel to
replace the existing hotels at 1515-1525 Ocean Avenue. The new 164-room
Travelodge Hotel will be located at 1515-1525 Ocean Avenue and 1530 Second Street
and will include athree-level pedestrian bridge to connect the Ocean Avenue and
Second Street properties. As a condition of development, the developer was required
to negotiate and pay for the air rights privileges. The developer also requires an
easement for underground utilities. The value of the 75 year agreement for air rights
and subsurface rights has been determined to be $54,280.
Discussion
The pedestrian bridge connecting the hotel facility at 1525 Ocean Avenue with the hotel
facility at 1530 Second Street will have a footprint of 215.62 square feet over the public
right-of-way in First Court at each of three levels. The first level clearance above the
alley will be approximately 14'6". The pedestrian bridge will encompass nearly 11,000
cubic feet above the alley.
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The new hotel will also require a portion of First Court Alley (200 square feet) for the
purposes of laying, constructing, maintaining, operating, repairing, renewing and
removing underground utilities for the hotel development. Construction is due to begin
on December 15, 2009, starting with demolition and should last 18 months with
completion anticipated for the summer of 2011.
Very few appraisers specialize in valuing air rights and there are not many new
oceanfront hotel developments in the area that provide comparable sales data. In
determining value for the air rights staff discussed methodology with several appraisers
and reviewed the other air rights agreements over apublic-right-of-way that the City had
granted previously. One was the Shutters Hotel license agreement (1988), and the
second was the Pluralistic School Inc Encroachment Agreement (1998.)
For this project, the value of the pedestrian bridge was based upon the portion of the
fair market value of the property attributed to air rights and the enhanced value that the
pedestrian bridge contributes to the adjoining properties. The air rights were determined
to be $45,280. The value of the subsurface utility easement was based upon the
portion of the fair market value of the property attributed to subsurface rights and was
determined to be $9,000.
Combined, the total value of the Travelodge air and subsurface rights is $54,280 for a
75 year period. In addition to specifying the value, the Agreement will contain
maintenance and insurance requirements and will preserve existing rights of entry for
the City. The encroachment rights granted to the Lessee (Ocean Avenue Management
LLC) will commence upon the effective date of the License Agreement and continue for
75 years, the useful life of the pedestrian bridge, unless terminated earlier (e.g. due to
substantial damage or destruction or lack of maintenance of the Bridge.)
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Environmental Analysis
An Environmental Impact Report was prepared for the project in accordance with the
CEQA guidelines and was certified on September 23, 2008 by Resolution No. 6694
(CCS).
Financial Impacts & Budget Actions
The License Agreement will-generate $54,280 in revenue for the City in Account No.
01224.404170.
Prepared by: Jennifer Taylor, Senior Development Analyst
Approved:
Andy Agle, C
Housing and
Attachments:
Development
Forwarded to Council:
A: Travelodge Hotel Site Plan and Aerial View
B: Architectural Rendering of the Travelodge Hotel Pedestrian Bridge
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Attachment A
Travelodge Hotel (1515-1525 Ocean Avenue and 1530 Second Street)
Site Plan and Aerial Map
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Attachment B
Architectural Rendering of the Travelodge Hotel Pedestrian Bridge
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Reference Contract No.
9156 (CCS).