sr-051110-8aCity Council Meeting: May 11, 22010
Agenda Item: C.~"~
To: Mayor and City Council
From: Eileen Fogarty, Director, Planning and Community Development
Subject: Development Agreement Compliance Review
Recommended Action
Staff recommends that the City Council:
1) Review the status of Development Agreement compliance
2) Determine good faith compliance for those that are in compliance
3) Direct staff to return to City Council regarding the remaining Agreements
Executive Summary
In February of this year, staff sent an Information Item to City Council regarding existing
Development Agreements compliance with specific fee obligations. A significant effort
has been made during the past year to review existing Development Agreements and
determine the level of compliance. The purpose of this report is to summarize the status
of each of the City's Development Agreements, highlight compliance issues, and
discuss next steps to address identified issues.
Development agreements are negotiated contracts between the City and the applicant
and are implemented by ordinance. Development agreements are generally reserved
for projects proposed for the City's commercial and- industrial districts that involve at
least one of the following project attributes: (a) complex multi-phase or multi-site
projects, (b) complex projects of significant scope and scale, (c) complex projects that
are expected to provide significant public benefits; or (d) projects involving extraordinary
conditions or circumstances that make code compliance and text amendments
inappropriate. Since the City has broad discretion in deciding whether to enter into a
development agreement, the City has substantial opportunities to shape a project in a
way that is beneficial and desirable for the City. One of the key elements of a
development agreement are the public benefits, infrastructure improvements, and
project mitigations that are being provided by the project applicant in return for being
authorized to deviate from established zoning requirements.
Staff has reviewed compliance reports for all 12 existing projects built pursuant to a
Development Agreement with the exception of The Arboretum which is currently in
litigation. Based on the review of each Agreement and the annual reports submitted by
the developers, or successors in interest, to demonstrate good faith compliance, four of
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the twelve Agreements are in compliance; five are in substantial compliance with limited
staff follow-up required; two projects require more significant staff follow-up to ensure
compliance with Agreement terms; and one is in litigation. Additionally, there are two
that do not require monitoring since construction has not yet commenced. Staff will
return to Council with a final summary of compliance review for the Development
Agreements where follow-up is required to address identified areas of potential non-
compliance.
Each Development Agreement contains a unique time frame, obligations, and
requirements. The obligations can be one-time or ongoing; some are fees, some are
actual physical improvements, and some are ongoing services. The Development
Agreements discussed in this report are listed below and include two Agreements
where construction has not yet commenced (The Village and Hill Street Partners III).
Constructed Development Agreements:
• Rand Corporation
• LantanaEast
• Lantana South
• Santa Monica College Parking Structure and Community Pool
• Yahoo Center (Previously MGM, Colorado Place I and II)
• NME (MTV)
• Water Garden (Phases I and II)
• Saint John's Health Center
• Maguire Thomas
Paseo Del Mar
• Bayview CA Unlimited Partnership
• Arboretum (Previously Colorado Place III)
Development Agreement's not yet built:
The Village
e Hill Street Partners III (Ocean Avenue Hotel)
Due to on-going litigation, compliance review of the Arboretum Development Agreement
will occur at a later date.
In addition to the 14 Development Agreements listed above, there are five other
Agreements entered into prior to 1982 and therefore not subject to submittal of
compliance reports with periodic compliance review but are required by state law to
demonstrate good faith compliance annually. Furthermore, these projects did not
feature the same level of community benefits and other requirements as found in more
recent Development Agreements. These projects include:
• Lincoln Property/Phase II of the Ocean Park Redevelopment Area
• 1426 California Avenue
• 2823-2825 Santa Monica Boulevard
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• 1040 4tn Street (Dorchester)
• 701 Santa Monica Boulevard
While these projects precede the City's 1982 ordinance and are therefore not subject to
code-mandated compliance review and are not further addressed in this report,
requirements are being monitored by the appropriate departments to ensure
compliance. Specifically, The Dorchester at 1040 4th Street is currently being reviewed
by the City Attorney's office for compliance with affordable housing obligations.
Background
Chapter 9.48 of the Municipal Code establishes the processes and requirements for the
City to enter into a Development Agreement. One of the provisions is annual review by
the City Council of each approved Development Agreement to determine good faith
compliance with the terms of the development agreement. Since the passage of this
ordinance in 1982, 13 Development Agreements with private developers and one
Development Agreement with a public entity have been enacted. This report provides a
review of the 14 agreements subject to the provisions of the Municipal Code.
Development agreements are negotiated contracts between the City and the applicant
and are implemented by ordinance. Development agreements are generally reserved
for projects proposed for the City's commercial and industrial districts that involve at
least one of the proposed following project attributes: (a) complex multi-phase or multi-
site projects, (b) complex projects of significant scope and .scale, (c) complex projects
that are expected to provide significant public benefits, or (d) projects involving
extraordinary conditions or circumstances that make public benefits, or (d) projects
involving extraordinary conditions or circumstances that make code compliance and text
amendments inappropriate. Since the City has broad discretion in deciding whether to
enter into a development agreement, the City has substantial opportunities to shape a
project in a way that is beneficial and desirable for the City. Some of the key elements
of a development agreement are the public benefits, infrastructure improvements, and
project mitigations that are being provided by the project applicant in return for being
authorized to deviate from established zoning requirements.
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The very nature of a Development Agreement means that each agreement is unique
and contains different time frames, obligations, and requirements. The City monitors
each Development Agreement through requiring an annual Compliance Report from
each developeNproperty owner. Additionally, periodic monitoring occurs through other
means, most notably in the context of estoppel requests which are filed by either the
owner or buyer when the property undergoes a real estate transaction. Currently, either
compliance reports have been submitted and reviewed or estoppel certificates have
been issued for all post 1982 Agreements except for the Arboretum Agreement, which
is currently undergoing litigation.
In accordance with the Municipal Code statute governing Development Agreements, the
applicant or successor must demonstrate good faith compliance with the terms of the
agreement. Although not true with the older Development Agreements more recent
development agreements specify how good faith compliance is demonstrated. If, as a
result of the periodic review, the City Council finds and determines, on the basis of
substantial evidence, that the applicant or successor has not complied in good faith with
the terms or conditions of the agreement, the City Council may commence proceedings
to enforce, modify, or terminate the Development Agreement.
Discussion
Over the past year the Planning and Community Development Department has
assigned a team of planners to focus on the monitoring of Agreements. The first phase
concentrated on contacting project representatives to ensure submittal of compliance
reports together with a review of both City records and compliance reports to confirm
that all fees due to the City were paid and on-going fee payments were current.
Following completion of this work, the Department re-established systematic monitoring
procedures and compiled comprehensive baseline information for each active
Agreement. This included the following work outlined more fully in Attachment A:
• Prepare a Master List of all Agreements to track status and compliance report due
dates;
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• Prepare a Master List of property owner/representative contact information to assist
in sending notices and letters regarding compliance reports and hearings; and
• Prepare a comprehensive monitoring spreadsheet for each Agreement to identify
requirements that are completed, on-going, or are a future obligation.
Summary of Active Development Agreements
Below is a brief summary of each project, its key public benefits, and a discussion of
issues that require further follow up by staff or action by City Council. This summary
supplements the February 23, 2010 City Council Information Item which presented an
update on Development Agreement monitoring and the status of Development
Agreement fees and payments. Based on staff's review of each Agreement, four of the
14 Agreements are in full compliance; five are in substantial compliance with limited
staff follow-up required;-two projects require more significant staff follow-up to ensure
compliance with Agreement terms; one is currently in litigation; and two do not require
monitoring because construction has not yet commenced, although annual reports are
required and have been requested.
Rand Corporation
1776 Main Street
Agreement Effective 11/23/2000
Expires 11/23/2055
In Compliance
The Rand Corporation Agreement involved the demolition and remediation of the
existing buildings on the 3.7 acre project site located at 1776 Main Street and the
construction of a 308,869 SF headquarters for Rand Corporation. The new five-story,
69' tall building houses research-related facilities, management, staff cafeteria, fitness
room, and meeting/conference rooms. Parking is provided in afour-level, 825-space
subterranean parking garage.
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Public Benefits Summary
• Land dedication and construction of Vicente Terrace
• Land dedication for Main Street Circle should this be constructed
• Transportation Demand Management Program
• Policy Analysis Partnership on Childhood Development and Education including
pursuing research funding for early childhood development
• Early Childhood Development Research, including organizing conferences and
maintaining a child policy website, www.promisinppractices.com
• $500,000 contribution to Early Childhood Development Programs/Early Childcare
Education in the Civic Center
Status of Compliance
The required annual compliance report was received by staff on October 5, 2009. The
property owner is in full compliance with all Development Agreement fee payments,
public benefits and operational requirements.
Lantana East
3030 Olympic Boulevard
Agreement Effective 10/28/2004
Amended 8/2008
Expires 10/28/2024
In Compliance
Lantana East consists of a 3-story, 64,105 SF building containing entertainment
production/post-production studio space and a total 433 parking spaces provided in a
subterranean parking garage and surface lot.
Public Benefits Summary
• $356,200 joint use improvement fee for improvements to Edison School, plus
$35,600 paid annually for 5 years (this requirement is shared with Lantana
South)
• $266,650 childcare contribution
• $90,000 arts fee
• New public restrooms at Stewart Park
• Construction of neighborhood traffic protection improvements
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• Off-site roadway improvements
Status of Compliance
An estoppel certificate was issued in December 2009 and a Certificate of Performance
was fully executed on April 1, 2010. The property owner is in full compliance with all
Development Agreement fee payments, public benefits and operational requirements.
Lantana South
3131 Exposition Boulevard
Agreement Effective 10/28/2004
Amended 8/2008
Expires 10/28/2024
In Compliance
Lahtana South consists of a 3-story, 130,000 SF building for entertainment
production/post-production studio space with a total of 456 parking spaces located within a
subterranean garage and surface lot.
Public Benefits Summary
$356,200 joint use improvement fee for improvements to Edison School, plus
$35,600 paid annually for 5 years (this requirement is shared with Lantana East)
• $133,350 childcare contribution
• $60,000 arts fee
Off-site roadway improvements
Status of Compliance
An estoppel certificate was issued in December 2009 and a Certificate of Performance
is pending execution. The property owner is in full compliance with all Development
Agreement fee payments and public benefits, and operational requirements.
Santa Monica College
Parking and Community Pool
1900 Pico Boulevard
Agreement Effective 11/14/1989
Amended 1/99; Restated 12/2000
Expires 12/31 /2014 .
In Compliance
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This Development Agreement covers specific locations on the Santa Monica College
Campus, including 3 parking structures (A, B and C) and the Municipal Swimming Pool,
which is located on the northwest side of the campus. The Municipal Pool Facility is a
28' tall building surrounded by an 18' sound wall. Parking Structure B, with a total of 486
spaces, was approved for a maximum height of 30' and 165,000 square feet of gross
floor area. The restated agreement lists parking structures A and C as completed prior
to the restatement, and are no longer included in the Development Agreement terms.
The original Development Agreement between the City and the District was entered into
on November 14, 1989. Due to damage sustained in the Northridge earthquake, the
agreement was revised on January 12, 1999, to relocate a damaged parking structure
and rebuild the Municipal Pool Facility in its place.
Public Benefits Summary
Santa Monica Swim Center, a first class recreational facility open to the public
with guaranteed parking availability at peak hours
• Improved circulation for neighborhood, with relocated traffic signals and 16tH
Street parking structure rebuilt as exit only with right turn toward Pico Boulevard
• Earthquake-damaged parking structures replaced to meet. needs of college
community and to reduce impacts on neighborhood
Status of Compliance
The required annual compliance report was received by staff on April 30, 2010. A Joint
Operating Agreement between the City and the Community College District regulates
parking for pool users as well as hours of operation, staffing requirements and
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maintenance. The property owner is in full compliance with all Development Agreement
fee payments, public benefits and operational requirements.
Yahoo Center
2600-2800 Colorado Avenue
Agreement Effective 10/27/1981
Amended 4/84; 7/84; 5/85; 12/87
Expires 9/15/2036
In Substantial Compliance
The project was approved for approximately 900,000 SF of office uses along with a
daycare center, park, health club, food services and community rooms. Building heights
range from 65' to 80'. On-site parking structures currently contain 3,085 parking spaces.
Public Benefits Summary
• Child care center (Hill `N Dale)
• Public park with tennis courts, children's play structure, basketball court, and
public gathering space
• 51 units of affordable housing which per an agreement between the City Housing
Authority and the County, are monitored by the County and a contribution of
$2,652,909 to the City's Affordable Housing fund
• Community rooms open to the public and available free of charge for community
& neighborhood groups
• Nearly $3 million worth of art and social service benefits through Park &
Community room maintenance
• Transportation Demand Management Program
• Off-site traffic signal, street lighting, and turn lane improvements
Status of Compliance
The required annual compliance report was received by staff on August 25, 2009. The
property owner is in full compliance with all Development Agreement fee payments and
public benefits. However, review of the existing parking utilization is necessary to
confirm that the use of the parking is consistent with the Development Agreement.
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NME (MTV)
2700 Colorado Avenue
Agreement Effective 4/16/1982
Amended 1/87; 4/87; 5/88
Expires 4/16/2037
In Substantial Compliance
The project consists of a 5-story, 312,000 square foot building with creative offices
known as MTV Networks. The site also contains an 800 square foot day care center, a
7,200 square foot public park, and a 1,000 space subterranean parking garage.
Public Benefits Summary
• Provision of 30 affordable rental units, later amended to require the payment of a
$1,500,000 in lieu fee
• On-site child care center;
• Payment of $25,000 to Santa Monica Arts Foundation
Park of approximately 7,200 square feet to be open to the public during
reasonable hours
Status of Compliance
The required annual compliance report was received by staff on October 1, 2009.
Review of the Agreement indicates that the project is in general compliance. However,
additional investigation is needed to ensure that the development is in compliance with
the child care provisions of the Agreement.
Water Garden (Phases I & Ili
1620 26th Street & 2425 Olympic Boulevard
Agreement Effective 3/23/1988
Expires 3/23/2043
In Substantial Compliance
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The project was constructed in two phases and consists of four, six-story buildings,
totaling approximately 1,259,577 SF. The development contains commercial office,
medical office, retail space, restaurants, health club, child care facility, and
subterranean parking for 4,035 vehicles. The development also includes an open
space area and man-made lake.
Public Benefits Summary "
• $3,811,307 Housing and Parks Mitigation Fee payment
• On-site child care facility for 54 children
• Transportation Demand Management Program submitted annually to the City
• $6,408,486 Traffic Improvement Fee payment
• Annual preferential Parking District fee paymerit to cover permit and district
administration costs
• $150,000 fee payment to the Santa Monica Arts Foundation
• $300,000 fee payment to the City for homeless services
Status of Compliance
The required annual compliance report was received by staff on August 4, 2009. After
reviewing the Agreement terms, all of the supporting documentation provided to the
City, and conducting a site visit, it appears that Water Garden is in good faith
compliance with the terms and conditions of its Development Agreement. Staff is
following up on several minor issues concerning verification of addresses and income
eligibility of scholarship recipients attending the on-site child care facility and developer
consultation with the Arts Commission regarding selection and placement of on-site art
works. In addition, staff is working with the Public Works Department to confirm
submittal of previously-prepared off-site improvement plans.
Saint John's Health Center
1328 22"d Street
Agreement Effective 6/9/1998
First Amendment Pending
Expires 6/9/2053
In Substantial Compliance subject to
Development Agreement Amendment
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The Agreement grants approval for construction of new hospital facilities that would
occur in two phases. Phase I consists of vested rights fora 10-year term, subject to
extension, for the construction of a new 475,000 square foot hospital with a total of 468
parking spaces that includes:
• Below-grade central plant
Inpatient Center (205,000 SF & maximum height of 75 feet);
• Outpatient and Diagnostic & Treatment Center (265,000 SF & maximum height
of 58 feet) with ambulance entrance and North Lawn
• 442-space North Subterranean Parking Garage and Entry Plaza
• 26 parking spaces located in various areas on site
Phase II has a 17-year vested rights term, subject to extension, to implement a health
center master plan with sufficient floor area for health care-related uses and parking as
outlined in the Agreement; the City retains broad discretion to review future applications
for Phase II buildings. Key components include:
• Permit construction of up to 799,000. square feet of hospital and hospital-related
development with maximum building heights ranging from 70-95 feet;
• Requires City approval of a South Campus Master Plan prior to approval of any
Phase II buildings;
• Development Review Application required prior to approval of any Phase II
buildings; and
• CEQA determination/review required for Phase 11 buildings.
Public Benefits Summary
• Community Benefit Program and Annual Plan: program to support the health and
well-being of Santa Monica residents and community; annual plan summarizes
benefits provided and economic valuation (Fiscal Year 2008: equal to $31,025,732
for the value of benefit activities, cash support, and unreimbursed Medicare costs).
• Santa Monica Community Access Plan: included in the Annual Community
Benefit Plan, delineating recipient agencies; dollar value; level of service provided to
non-profits, the Santa Monica-Malibu School District; charitable medical and mental
health service provided; free health education; and preventive health service
provided (minimum $732,000 dollar value subject to 1Yz% compounded annual
adjustment).
• Child Care Program: providing a minimum of 49 full-day child care for employees
and the community; 21 of these spaces must be infant/toddler care.
• North Lawn: 41,000 SF of public open space, including landscaping, benches and
walkways.
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• Off-site traffic mitigation improvements: payment of a minimum of $332,000 in
fees fo the City to construct improvements.
• Off-site public works improvements: payment of $641,000 in fees to the City to
construct sidewalks, curbs, streetlights, and street paving in the project area.
Status of Compliance
The required annual compliance report was received by staff on November 6, 2009.
After reviewing the Saint John's Development Agreement, all of the supporting
documentation provided to the-City, and conducting an extensive site visit, it appears
that Saint John's is in substantial compliance with the terms and conditions of its
Development Agreement. Staff is following up on a few less significant issues, one of
which is to ensure that PCD has on file copies of various previously-prepared
reports/calculations. The second issue involves a requirement to construct a minimum
three-foot screen wall to reduce the visibility of the emergency department parking area
on Arizona Avenue. The required landscape buffer has been planted; however, the low
screen wall has not yet been constructed. Saint John's is working with City staff to
resolve the inconsistency.
In 2007, Saint John's Health Center filed an application to amend its Development
Agreement to defer for ten years construction of the 442 space north subterranean
parking garage and Entry Plaza accessed off of Santa Monica Boulevard that was
approved as part of the third stage of Phase I Development on the site. The applicant
proposes to lease off-site parking spaces to satisfy the majority of its parking
requirement and construct an interim entry plaza for use during the period of deferment.
This request will be considered by City Council later this year.
PCD has assigned a Code Compliance Officer to serve as the primary point of contact
for code enforcement matters related to Saint John's construction. Staff continues to
work closely with both Saint John's and concerned parties to reach resolution and
compliance on issues related, in particular, to the ongoing construction activities on site
such as suspected noise ordinance and construction hours violations.
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Saint John's is currently performing necessary upgrades to the design of their sewage
disposal facility that was originally approved by the CA Office of Statewide Health
Planning and Development (OSHPD). Specifically, Saint John's is performing upgrades
to three sewage pits in response to administrative citations issued by the City for
exceeding the limit of hydrogen sulfide discharge into the City's sanitary sewer system.
This corrective action is being performed pursuant to a compliance schedule that has
been established with Public Works Department and City Attorney's Office oversight.
Work has been completed for pits #1 and #2; it is anticipated that work on pit #3 will be
completed by May 24, 2010. Saint John's will continue to provide the City with bi-
weekly status reports on the progress of remediation requirements until all work is
completed to the City's satisfaction. The City will also continue to sample the Saint
John's outflow on a weekly basis until full compliance is achieved.
Maguire Thomas
1733 Ocean Avenue
Agreement Effective 10/18/1990
AmendedlReinstated 12/95
Expires 10/18/2045
In Substantial-Compliance
This Agreement authorizes construction of a 4-story, 56 foot tall mixed-use commercial
development. It allows fora 68,040 square foot building, including a maximum 5,983
square foot/250 seat restaurant and a maximum of 8,040 square feet of retail space.
Three levels of subterranean parking provide 267 parking spaces.
Public Benefits Summary
• $250,000 contribution to the Civic Center/Oceanfront Improvement Special Fund
• $403,399 Housing and Parks Impact Mitigation Fee
• $820,854 Affordable Lodging Mitigation Fee
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Status of Compliance
The required annual compliance report was received by staff on January 14, 2010. All of
the public benefit fees have been paid in full and these requirements are completed.
Compliance Report review and site inspection has determined that the development is
in substantial compliance, with a few outstanding issues. In order to ensure full
compliance, staff has requested that the property owner provide additional information
regarding the valet parking operation, public parking rates on weekends and holidays,
transportation management plan, and affirmative action practices.
Paseo Del Mar
1541 Ocean Avenue
Agreement Effective 1/26!1982
Expires 10/1/2031
Follow-up Required
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The project consists of approximately 54,000 SF in two buildings ranging in height from
28 to 36 feet. Uses include restaurant, office, retail, and 10 units of low, median, and
moderate income housing. The subterranean parking garage contains 72 spaces.
Public Benefits Summary
• 10 deed-restricted affordable housing units at a prime oceanfront location
• $75,000 Art and Social Service fee or in-kind provision of art on-site
• Parking, Carpool, and Transit Incentive Program
Status of Compliance
The required annual compliance report was received on September 18, 2009. The
City's Housing Division actively monitors compliance with housing affordability.
requirements. Staff has requested additional income verification from the property
owner for two tenants to ensure compliance with resident income requirements.
Additionally, the Agreement has a public art contribution. A portion of this has been paid
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with the remainder being satisfied through the installation of on-site art. Staff has
requested documentation to verify this statement. Staff has also requested further
documentation to ensure full compliance with the Parking, Carpool, and Transit
Incentive Program.
Bayview CA Unlimited Partnership
530 Pico Boulevard
Agreement Effective 6/29/1983
Expires 12/1/2022
Follow-up Required
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This Agreement allowed for the 72,400 square foot expansion of an existing Holiday Inn
hotel. The development included the addition of 134 hotel rooms and 282 parking
spaces. The hotel is currently operated by the Sheraton Delfina.
Public Benefits Summary
• Hiring priority to Ocean Park and Pico neighborhood residents, and then to other
City residents
• Job Training Program, with priority given to Santa Monica High School Students
and City residents (this requirement expires in 2011)
• Hotel Room Voucher Program (this requirement expired in 1996)
• Free Hotel Parking with sign denoting this in parking area
• Valet parking tipping prohibition with sign denoting this in parking area
• Relocation of on-site, rent-controlled apartment buildings (five of these units were
subsequently converted through the TORCA process)
• $50,000 annual contribution to the Big Blue Bus for the Tide Shuttle operation
(this requirement expires in 2011)
• Six rent controlled units added to the existing building at 1920 6th Street
• Installation of public art piece approved by the Arts Commission
Status of Compliance
The required annual compliance report was received by staff on February 11, 2010.
There have been some on-going compliance issues with certain operational
requirements, in particular, the parking provisions. Additionally, staff has requested
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supplemental information to verify compliance with the Agreement's hiring program
provisions and Job Training Program. Follow up is also required regarding the public art
piece and necessary landscaping on hotel room balconies. However, both Code
Compliance and Planning staff have been working closely with the hotel operator to
ensure on-going compliance with these requirements.
Arboretum (Previously Colorado Place III)
2000 Colorado Avenue
Agreement Effective 12!16/1987
Amended 12/88; 2/95
Expires 1/1/2042
Follow-up Required
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This Agreement involves the construction of Phase III of Colorado Place, a 12.7 acre
parcel located on Colorado Avenue. The Agreement initially allowed for the construction
of 1,040,490 square feet of floor area, with a Floor Area Ratio of 1.85, and specifically
allowed 25,000 square feet of restaurant space, 10,000 square feet of retail, 35,000
square feet medical office, 20,000 square feet for banks, up to 720,490 square feet for
commercial office space, a 270,000 square foot hotel, and a 60,000 square feet for a
health club. However, subsequent modifications to the Development Agreement
removed the hotel as a permitted use, and allowed for a general market/grocery use
(not to exceed 50,000 square feet), and multi-family residential development with some
affordable units. The Agreement indicates that no building may exceed a height 84 feet
at specified locations.
Public Benefits Summary
Transportation Demand Management Program/Traffic Emission Abatement Program
$721,318 Housing Parks Mitigation Fee
• $5,000,000 Traffic Improvement Fee
• On-site art installation
$250,000 child care contribution
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Status of Compliance
The City filed litigation to enforce the property owner's compliance with the
Development Agreement's affordable housing requirements. The parties are currently in
settlement negotiations and it appears that there will be a settlement.
The Village
1725 Ocean Avenue
Agreement Effective 5/27/2008
Expires 12/31/2028
Compliance Not Required at this Time
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The Village development provides six residential buildings with approximately 324
residences, and approximately 20,000 square feet of commercial retail on three
separate development sites. The following summarizes the number of units, height and
square footage per site:
Site A
• Two condominium buildings, with ground floor retail on Ocean Avenue
• Olympic Drive and Main Street frontages with approximately 66 residences
• Maximum 65' building height
• 109,346 gross square feet (GSF) of residential and 9,930 GSF of retail uses
• 180 parking spaces
Site B:
• 4 affordable apartment buildings with ground-floor live/work space
• Approximately 28 one-bedroom, 56 two-bedroom, and 66 three-bedroom units
• 10 affordable units of live/work space intended for artists
Maximum 60' building height
• 191,549 GSF
• 197 parking spaces
Site C:
• One condominium building with ground floor retail
• Approximately 98 one-bedroom and 98 two-bedroom residences
• Maximum 96' building height
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• 159,288 GSF of residential. and 7,400 GSF of retail uses
• 237 parking spaces
Since this project has not advanced to the building permit stage, pubic benefits have yet
to be realized and there are no compliance issues to report. However, an annual report
is still required and has been requested.
Hill Street Partners III
1333-1337 Ocean Avenue
Agreement Effective 4/24/2007
Expires 4/24/2027
Compliance Not Required at this Time
This Development Agreement allows development of a new 73-room hotel which
includes the adaptive re-use of two designated City Landmark properties. The project
contains a total of approximately 41,810 square feet over a 129 space subterranean
garage. The project includes the demolition. of two commercial buildings on the property
and the on-site re-location of the Landmark Victorian building to create a publicly
accessible plaza in the center of the site. Building permits have not been submitted on
this project.
Since this project has not advanced to building permit, public benefits have yet to be
realized and there are no compliance issues to report. However, an annual report is still
required and has been requested.
Public Outreach
The Code requires that that the City provide at least ten days' notice to the Applicant or
Successor of the City Council's scheduled meeting to review the agreements. This
notice has been provided.
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Next Steps
Staff will continue to follow-up on any outstanding issues and bring this item back to
Council with a final summary of Development Agreement compliance for those
Agreements where follow up is required.
Financial Impacts & Budget Actions
All fees associated with Development Agreements have been paid to .date. The
recommendations presented in this report do not have any direct budget or fiscal
impact.
Prepared by: Amanda Schachter, Planning Manager
Approved:
Attachment A:
Forwarded to Council:
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Rod Gould
City Manager
• Procedures & Policies for Development Agreement Compliance Monitoring
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Development
ATTACHMENT A
Procedures and Policies for Development Agreement Compliance Monitoring
The Planning and Community Development Department (PCD) has begun
implementation of a program to comprehensively monitor compliance of each of the
Development Agreements that are currently in effect and require monitoring pursuant to
the terms of the agreement. The City has 12 Development Agreements where the
project has been completed or commenced construction; there are two development
agreements where the property owners have yet to initiate the building permit process.
In addition, there are five agreements that are not subject to Development Agreement
monitoring by PCD but are subject to ordinary compliance with the terms of the
entitlements. Monitoring procedures have been updated and strengthened to better
ensure that all Development Agreements are systematically reviewed and potential
areas of non-compliance are identified, addressed by staff, and corrected by the
applicant/responsible party in a timely manner.
Development Agreement Compliance Monitoring Team
PCD has established a team of planners overseen by the Planning Manager to handle
Development Agreement compliance monitoring. Each Development Agreement has
been assigned to a staff member who is responsible for completing the various steps
required to monitor compliance with agreement terms. These steps include preparing
monitoring spreadsheets, reviewing compliance reports, conducting site visits as
needed to verify compliance, and working with applicants/responsible parties to resolve
areas of potential non-compliance.
The team has focused its initial efforts on re-establishing systematic monitoring
procedures and a comprehensive baseline of information for each active Development
Agreement. The team has also continued to conduct its periodic review of the annual
compliance reports that have been submitted to the City.
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Development Agreement Compliance Monitoring Procedures
Key components of the City's monitoring procedures include the following:
Establish a Master List of all Development Agreements Monitored by PCD.
A master list of Development Agreements has been established with pertinent
information regarding execution date and term of the agreement; timing requirements
for annual compliance report submittal; and status of compliance report review. This list
provides staff with a summary tool for easily tracking the status of annual compliance
report submittal and review.
Establish a Master List of all Development Agreement Contact Information.
A master list of property owner representatives has been established to facilitate contact
regarding compliance issues, notification regarding compliance report submittal, and
notification of City Council compliance hearings.
Establish a Comprehensive Monitoring Spreadsheet for Each Agreement.
Staff has prepared a spreadsheet for each Development Agreement that
comprehensively identifies the following information:
• Each term of Agreement
• Requirements that are ongoing or remain a future obligation
• Action(s) taken in conjunction with each requirement
• City department responsible for monitoring
• Status of compliance for each Agreement
This documentation for each Agreement has been established so that staff is better able
to systematically monitor compliance throughout the year and more efficiently review
the applicant/responsible party's annual Agreement compliance reports.
Implement Systematic Notification for Annual Report Submittal.
Staff has devised a system where a courtesy letter will be sent by staff to the
applicant/responsible party 60 days in advance of the date that annual compliance
reports are due to the City. The date that annual compliance reports are due to the City
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varies based, typically, on the anniversary of the date the Development Agreement was
originally executed. With the recent establishment of the Master List described above,
these due dates are readily available and will enable staff to send a courtesy reminder
and also send follow-up correspondence if reports are not provided in a timely manner.
Conduct Review of Annually-Required Compliance Reports.
As described above, staff has already created a comprehensive monitoring spreadsheet
for each Development Agreement that includes a detailed description of each term of
the Agreement and the action the applicant/responsible party has taken, or the status of
compliance. This document is used to assist in staffs annual compliance report review
submitted for each Agreement.
When monitoring projects that have completed construction, staff pays particular
attention to ensure that ongoing obligations continue to be met; for example, provision
of childcare programs; provision and maintenance of open space; provision of required
parking spaces; payment of various in-lieu or mitigation fees, etc. As part of staff's
periodic review, site visits are also conducted if necessary to document compliance
while terms of the Agreement.
Following the completion of initial compliance report review, staff will send afollow-up
letter to either require compliance with specific terms of the Agreement that are out of
compliance, or certify that the project is in good faith compliance with the terms of the
Agreement. For compliance issues that remain unresolved and out of compliance,
Planning staff can refer the matter to the City's Code Compliance Division for
documentation and enforcement action.
Additional Periodic Monitoring.
Periodic monitoring of a Development Agreement also occurs at various stages of the
projects through the following mechanisms:
• Estoppel Request.
In instances where the property undergoes a real estate transaction, an
estoppel request is filed by the owner or buyer. An estoppel requires the City
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to determine whether the project is in compliance with the Development
Agreement. An estoppel request is a common trigger for monitoring
compliance and can result in the request for a compliance report if one is due
and has not yet been submitted.
Building Permits & Inspections.
During the plan check process, the .project is reviewed for compliance and
consistency with development agreement conditions and .fee
requirements. Plan check allows for staff to monitor conditions related to
aesthetics, materials, specific parking requirements, structural features
depicted in the detailed mechanical plans and mitigation measures. Plans
that are not consistent with the conditions of the development agreement
will not be issued a building permit unless all outstanding issues are
resolved and required fees paid.
• Certificate of Occupancy.
Prior to issuance of a Certificate of Occupancy for the project, City staff
review the Development Agreement and visit the site for a final inspection to
confirm consistency with approved plans and the installation any required off-
site improvements. Staff also checks that all payments and fees required prior
to Certificate of Occupancy have been paid. A Certificate of Occupancy is not
issued unless the provisions of the Development Agreement have been met
and the project is in compliance.
• Zoning Conformance.
Zoning Conformance applications are routinely requested from lenders and
appraisers evaluating the subject properties. Staff reviews and prepares a
letter indicating outstanding compliance issues as part of the letter request.
Future Development Agreements.
As new Development Agreements are executed, information will be logged into the
Development Agreement Master List so that periodic review dates and annual
compliance. report submittal are immediately tracked. Finally, before closing out the
project file following Council approval, each Development Agreement project manager
will be required to create the comprehensive monitoring spreadsheet for the project so
that tracking and monitoring of requirements commences immediately. This will be
particularly useful in systematically identifying project obligations that are timed for
implementation prior to plan check submittal and/or prior to issuance of a building permit
(submittal of studies, payment of construction deposits and mitigation fees, etc.).
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