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SR-11-12-2013-7ECity Council Meeting: November 12, 2013 Agenda Item: To: Mayor and City Council From: David Martin, Director of Planning and Community Development Subject: Development Agreement 11 DEV -010 to allow a 6 -story hotel development project (Courtyard by Marriott) consisting of 136 guest rooms, up to 78,750 SF of floor area, and up to 108 parking spaces within a two -level subterranean parking garage at 1554 5th Street Recommended Action Staff recommends the City Council: 1. Certify the Final Environmental Impact Report prepared for the project in accordance with CEQA; 2. Adopt a Resolution adopting the Mitigation Monitoring Program and Statement of Overriding Considerations for the project; and 3. Introduce for first reading an ordinance approving the proposed Development Agreement. Executive Summary The applicant proposes a Development Agreement to allow a new moderately - priced, limited - service hotel located at 1554 5th Street. The project involves the construction of a 6 -story (74 feet) hotel that would include 136 guest rooms, up to 78,750 square feet of floor area on a 22,500 square foot parcel (3.5 FAR), and up to 108 parking spaces with a mix of valet and self - parking within a two -level subterranean parking garage. The project site is located on the northwest corner of 5th Street and Colorado Avenue and is currently developed with an auto repair facility and an office building. The developer is also proposing a separate hotel Development Agreement (11 DEV- 009, Hampton Inn & Suites by Hilton) at 501 Colorado Avenue concurrent with this application (also on this agenda), which is located directly across the street from the Courtyard Marriott site on the northeast corner of 5th Street and Colorado Avenue. Both projects are developed with similar densities and building heights on equally sized parcels. Although each project is being processed through separate Development Agreement applications because they function independently with different operators, a single Environmental Impact Report has been prepared that analyzed both project sites. Similarly, the Council should review and consider the projects together from a contextual standpoint. Pursuant to the City's Interim Zoning Ordinance No. 2417 (CCS) ( "IZO "), this project requires approval of a Development Agreement since it exceeds 32 feet in height. The proposed hotel is situated at a key downtown location directly across from the Exposition Light Rail terminus. This regional transportation system will support the transit needs of hotel guests and employees, in particular providing local tourists with broader and easier access to key destinations in the Santa Monica and Los Angeles area. The project further provides an active use with pedestrian oriented amenities along the future Colorado Esplanade, enhancing this new public space both in terms of project design as well as monetary contributions to support construction. Further, the proposed project results in limited environmental impacts, including a single traffic impact to an intersection under the approval year (2013) conditions. Notably, the proposed project would have a lower trip generation compared to a commercial mixed - use project alternative, as identified in the project's environmental impact report, which would result in higher am /pm peak hour trips compared to the proposed project. Earlier this year, Council determined priority categories for new projects, which includes revenue generating projects. The proposed project therefore qualifies as a priority project, as it includes both significant project benefits and community benefits. Consideration of the significant project benefits is important while evaluating the proposed community benefits. Unlike the mixed -use development agreement projects reviewed by the City, the proposed hotel results in a greater positive fiscal impact to the City from annual tax revenues including transient occupancy tax, sales tax, and property tax, generating approximately $1.5M annually. Individually, the project would result in a net fiscal benefit of $1.36M to the City's general fund; the two hotel projects combined (Hampton Inn and Courtyard Marriott) would result in a net fiscal benefit of $2.74M annually. Furthermore, the project would result in positive local economic activity, generating an estimated $7.1M of total direct/indirect benefits annually. The proposed hotel would provide socio- economic benefits by providing new employment opportunities, estimated at 52 permanent jobs, with a living wage for hotel employees. However, as intended by the applicant, these hotels would be union hotels. As union hotels, the financial feasibility analysis prepared for the project determined that each project would be somewhat below financial feasibility. More specifically, for the Courtyard Marriott, the feasibility analysis determined that the residual land value would be $469 per square foot; $500 per square foot is the benchmark residual land value for project feasibility. 2 The Architecture Review Board, in its conceptual review of the project, were supportive of the overall design, and believe the project's design is unique to Santa Monica and greatly enhanced compared to typical Courtyard Marriott hotels. Community benefits have been negotiated as part of the Development Agreement. The applicant proposes the following community benefits for this project: • Applicant agrees with staff's recommendation to provide a total of $650,000 in contributions towards the Colorado Esplanade, Hospitality Training, Historic Preservation, Fourth Court Alley Improvements, and Affordable Housing. • A Transportation Demand Management (TDM) plan with measures intended to reduce project parking demand and vehicular trips in the area. • The project construction is proposed to achieve a minimum LEEDO Gold certification as established by the LEEDO Rating System. • Solar energy systems, including photovoltaic solar panels, would be installed on the building's roof areas, to a maximum extent available as determined by the City. b • One electric vehicle (EV) charging station and seven EV stub -outs for charging stations would be located within the subterranean garage. • The Project would include a water conservation requirement of a minimum 30% water reduction for the hotel's total water use. • Physical improvements would consist of a ground floor setback that widens the adjacent sidewalks. Although staff agrees to the overall ground floor setback proposed, staff recommends that the Architecture Review Board, in its review of the project, pay particular attention to the placement of the columns under the arcade area at the street corner to ensure there is adequate space for pedestrian circulation, and adequate space for the proposed bike share /short-term bike parking. • A permanent Historic Commemorative Installation would be provided on the property in a publicly accessible location of the project that portrays one or more aspects of the past history and significance of the site. • An Artistic Exhibition Program for the purpose of showcasing different forms of art in periodic exhibitions at the hotel, including art sourced from professional galleries; local artists, and Santa Monica students would be implemented. • Community access to on -site meeting space would be provided. • Physical space would be dedicated for a future bicycle sharing program station, in conjunction with any bicycle sharing program instituted by the City or another operator. • Shared Parking: Any unused on -site parking available for monthly lease at market rates to third parties in the surrounding area in need of parking, including area residents, businesses, and employees, provided the developer can demonstrate 3 through a parking study that such spaces are not needed to meet the project's peak parking demand. • A local hiring provision is proposed to facilitate the employment of local workers during construction and for project employees, including a job fair, internship program, and a local hiring goal of 40% of the total full and part -time jobs in the project. The site is located in the Downtown Core land use designation and Downtown District of the Land Use and Circulation Element (LUCE) of the General Plan. The proposed use is consistent with the Downtown Core land use designation. While the project does not comply with floor area ratio, building stepbacks, parking, and landscaping requirements for the underlying C3C.zoning district, such compliance is not required as the development agreement will establish the site's precise development standards. In addition to the Development Agreement findings provided in this report, the following issues should be considered by the City Council in its review of the proposed project: • Whether the proposed design and site plan are appropriate and compatible with the neighborhood and the subject site. • Whether the proposed plan and proposed community benefits are consistent with the objective, goals, general land uses, and programs specified in the LUCE. Background The project site consists of 22,500 SF located on the northwest corner of 5th Street and Colorado Avenue in the CK downtown overlay commercial district. The site consists of an existing building occupied by auto repair facilities (Midas and Royalty Auto Body Shop). Adjacent uses along 5th Street and Colorado include residential, retail, service, and restaurant commercial. Existing structures in the area range in building height, however adjacent residential buildings along the north side of Colorado Avenue range from 52 to 60 feet in height. The project site is '/z block east from the Santa Monica Place, and across the street from the future light rail terminus station at the corner of 4th Street and Colorado Avenue. 3 Planning Commission & City Council Float -Up At the December 14, 2011 Planning Commission meeting, the Planning Commission reviewed the Development Agreement proposal (float up review) and recommended that the City Council initiate the Development Agreement negotiation and review process. The Commission provided the following comments: - The project should provide a living wage for hotel employees and a local hiring provision. - Enhancement of the overall design concept and relationship with the concurrent Hampton Inn project, improvement of the ground floor pedestrian- orientation and its transit - oriented uses, and additional ground floor open space to provide expanded sidewalks. - The Courtyard Marriott driveway should be relocated from Colorado Avenue to 5`" Street, to reduce the project's overall auto - centric design, and ensure the proposed number of parking spaces can accommodate the project's parking demand. - The TDM plan should include a bike share program, transit passes for employees, and flex car spaces on -site for car - sharing. - Consider providing shuttle service to hotel patrons to common destinations (i.e. airport), and within the local area (in Santa Monica). In response to this comment, although shuttle service for guests within the local area may provide a convenient service, staff believes that shuttles would be contrary to goals of the downtown in that they may contribute to the amount of vehicular trips in the area. The downtown area is a walkable area for hotel guests, and the use of public transit should be encouraged. Furthermore, staff anticipates that a convenient non -stop bus service to LAX will be offering services between LAX and the Santa Monica Civic Auditorium in the near future, providing hotel guests with a near direct transit option. Therefore, staff does not believe a provision for the hotel to provide shuttle service for hotel patrons is necessary. - The project should provide a Transportation Impact contribution. In response to this comment, based on the current Transportation Impact Fee formula, a zero fee amount would be required for the project. The TIF measures the intensification of a proposed use and the existing use, and for this project site, a fee amount would not be required based on the TIF formula. Furthermore, when evaluating other priority contribution areas, such as the Colorado Esplanade and Historic Preservation, a TIF contribution was not a negotiation priority. 9 At the April 10 2012 City Council meeting, the City Council recommended that City Planning staff proceed with the Development Agreement negotiation and review process. The Council provided the following comments: - Consistent with the Commission, the City Council recommended that the project provide a living wage for hotel employees, health care benefits, a local hiring provision, a Transportation Impact contribution, additional ground floor open space for expanded sidewalks, enhanced overall design concept with pedestrian - oriented ground floor uses, flex car spaces on -site for car - sharing, and transit passes for employees. - Transit passes should be provided to hotel guests. In response to this comment, staff believes providing subsidized transit passes for employees would be more effective in reducing vehicular trips. Furthermore, the downtown area is a walkable area for hotel guests, and the use of public transit should be encouraged. Valet drop -off operations should occur in the subterranean garage level to avoid vehicle queuing on the 5th Street. In response to this comment, a condition has been included, requiring all vehicular areas to be monitored by hotel staff to ensure that no queuing occurs, and further requires that the City and developer monitor the performance of the proposed Parking and Deliveries Management Plan and make operational changes as needed. Operational changes may include, but not limited to, that all valet operations occur in the subterranean level, as recommended by Council. Historic Resources Inventory (HRI) The existing auto repair building is listed on the City's Historic Resource Inventory (56) as being locally significant both individually (listed, eligible, or appears eligible as a Santa Monica Landmark) and as a contributor to a downtown Santa Monica Historic District. The Midas Building was designed and constructed in 1928 as an auto dealership and operated as such until 1935. Aviation and aerospace tenants that occupied the building after 1935 are of potential interest, including Waldo Waterman, an inventor /promoter of the flying car. Although Waterman utilized the Midas Building, his notoriety and importance in aviation is primarily connected with places and events that occurred at other locations. Overall, the majority of the building has lost important components of its original architectural integrity, and most of the changes and alterations are irreversible. The Midas Building retains enough residual integrity and architectural interest to remain a contributor to the potential Central Business Historic VA District, but does not possess sufficient architectural distinction or historical significance to be considered individually eligible as a historical resource at the federal, state or local level. The EIR determined that the demolition of the structure would be considered an adverse, but not a significant impact, due to mitigation, which would include preparation and recordation of a Historic American Buildings Survey (HABS) (MM CUL -1). The HABS document would preserve information associated with the Midas Building's history by including an historical narrative on the architecture and history of the building, and its occupants and activities. The EIR also determined, however, that the loss of this contributing structure results in a significant and unavoidable cumulative impact to the potential Central Business Historic District. This is further detailed in the Environmental Analysis section of this report. The Landmarks Commission filed a Landmark Designation application for this site on February 13, 2012. On June 11, 2012, the Landmarks Commission determined that the property lacked sufficient architectural integrity in its current condition, and its connection with Waldo Waterman was not significant enough to warrant designation, thereby not designating the site as a City Landmark, and approved the applicant's request for a demolition permit for the site. Project Analysis Proiect Description The proposed project involves the construction of a 6 -story (74' -0" in height) limited - service hotel including 136 guest rooms, up to 78,750 square feet of floor area on a 22,500 SF parcel (3.5 FAR), and up to 108 parking spaces with a mix of valet and self - parking within a two -level subterranean parking. Pedestrian access would be primarily provided along Colorado Avenue, with vehicular access from 5t" Street. The ground floor would include a mix of hotel uses, including lobby operations and offices, house laundry fAcilities, business and media centers with seating, and associated service areas. Up to 4,500 square feet of restaurant space would provide food service for both hotel patrons and the general public, and would include an outdoor dining area adjacent to the public sidewalk along Colorado Avenue. A small retail L sundry market stand within the hotel lobby would provide prepackaged food, drinks, sundries, periodicals, etc. Guest rooms and associated support areas, pool /sun deck, exercise room, and a meeting room would be located on the second floor. Floors 3 -6 would consist of guest rooms and associated support areas. The sixth floor includes less floor area and fewer guest rooms compared to lower floors, and would only cover a portion of the general building footprint. The roof level would not include a rooftop deck for usable open space for guests, as previously designed in the original conceptual plans. The development agreement includes a provision that would allow alcohol service within the restaurant and hotel common areas (including pool /spa, lobby lounge, etc.), and the sale of alcoholic beverages in the ground floor sundry market within the hotel lobby. The agreement does not include provisions for alcohol to be provided through in -room mini bars. Conceptual Proiect Design; Float -Up Review Conceptual Design: Subject Courtyard by Marriott on left, Hampton Inn on right. As a result of the Development Agreement process, the architectural design of the project has been substantially changed and improved from the original design concept proposed during the float -up review, and greatly enhanced in comparison with typical Courtyard by Marriott hotels. The concept design rendering above was first presented to the Commission and then redesigned prior to Council review during the float -up review process. The current building design (below) consists of a stronger architectural concept that is unique to Santa Monica. It provides greater ground floor setbacks and pedestrian- orientation including outdoor dining and a second floor pool deck overlooking E Colorado Avenue. The design acknowledges that this is a prominent street corner in the Downtown that will experience significant growth in pedestrian activity with the completion of the future light rail station and Colorado Esplanade. durtyard by Marriott Corner Elevation: Colorado Avenue + 51" Street Proiect Design The modern /contemporary building design features expansive storefront glazing, and metal canopies /sun shading devices for pedestrians. The building includes a series of interlocking planes along both street elevations consisting of different materials, including metal panel cladding, window wall systems, and smooth stucco. These planes would be varied along street elevations on upper floors to provide visual interest, and to reduce the perceived building mass. The corner element consists of a larger building volume that wraps around the building core in bold panel cladding that enhances the element as a focal point. 10 Colorado Ave. Elevation: View from Future Light Rail Station The overall building is designed with a U- shaped configuration with an internal courtyard. This design configuration would allow internally- facing guest rooms with windows to face the courtyard. In an effort to improve these guest room views, the lower rooftops would be designed with a combination of hardscape and limited use of planters, primarily for trees. This configuration would provide necessary building relief and open space along the northern common property line shared with the Step Up on Fifth residential building, allowing for additional light and air circulation between the buildings that would otherwise not be achieved if the building were designed to maximize the building envelope along this elevation. Existing buildings in the area are relatively consistent in terms of building height. The adjacent Step Up on 5th residential building (north side) is 5 stories, 52 feet in height, and the residential property across the 4th Court alley (1539 4th Street) is 5 stories, 56 feet in height. The property across the alley on the corner of 4th Street and Colorado is currently developed with a one -story commercial building (Bank of the West). The residential building on the southeast corner of 5th Street and Colorado Avenue (Community Corporation) is 5 stories, 52 feet in height. At 6 stories, 74 feet in height, the proposed building would be taller than nearby existing buildings. However, in reviewing the Courtyard and Hampton Inn projects contextually, the proximity of the project sites to the Expo terminus station/ Colorado Esplanade are important 11 considerations. From an urban design perspective, increased density in these proposed locations is appropriate and supported by the anticipated pedestrian growth in the area. Buildings in Context: Corner Design Features Contextually, the Courtyard and Hampton Inn buildings are comparable in height, scale, mass, and size. However, each building is an original design concept, particularly in their shape and form. The Courtyard design consists of an eroding interlocking geometry whereas, the Hampton Inn building consists more of a solid form with additive features. Each building addresses the street corner in a different manner. While the Courtyard building consists of a bold frame that defines the corner, the Hampton Inn building consists of a corner feature that, by comparison, appears more recessive. Both buildings would provide a strong street wall presence that helps define this southern edge of the Downtown. 15545 M Street (Courtyard by Marriott) + 501 Colorado Avenue (Hampton Inn) Pedestrian Orientation The ground floor design consists of expansive glazing surfaces, sun shading devices for pedestrians, and short -term bicycle parking for visitors. The project would provide 12 short -term bicycle spaces for hotel visitors and commercial patrons. Furthermore, the project would provide space underneath the arcade at the street corner to accommodate a future bike sharing program station (instituted by the City or another operator). The ground floor would have a floor to floor height of 18 feet, and would consist of up to 4,500 square feet of restaurant space (sublease), with outdoor dining opportunities along Colorado Avenue within the expanded sidewalk. The existing sidewalk is approximately 10 feet wide along this segment of Colorado Avenue, and 12 feet wide along 5t" Street. The ground floor would be setback from the front property line, and would provide a building setback of 20 feet between the curb and building 12 along Colorado Avenue, and 15 feet along 5t" Street. The proposed setbacks would be consistent with the building setbacks (curb to building) contemplated in the Downtown Specific Plan for these streets, thereby effectively expanding the existing sidewalks to allow for adequate pedestrian accessibility. Additional setback area is provided at the street corner. A majority of this area would be underneath a cantilevered portion of the building, which is designed as the building's corner element. The height inside this covered arcade would be approximately 16 feet. Based on the previous design reviewed by the Planning Commission (October 16, 2013), this corner design element was supported by three columns (each column 3'x3', shown in red below) along the arcade's building edge that would ground in the middle of the expanded sidewalk at the corner. Staff and the Commission recommended the removal of these columns since they would visually and physically separate the public and private space for pedestrians, and would be contrary to the ground floor setback contemplated for the Downtown Specific Plan. The applicant has not removed the columns entirely, stating structural limitations. Instead, in response to this recommendation, the subject columns have been relocated from within the minimum enhanced walkway space (defined as the ground floor setback of 20' -0" from Colorado Avenue and 15' -0" from 5 t Street), to an area closer to the building, underneath the arcade. This revision results in an improved clear unobstructed area at the street corner within the enhanced walkway area, however staff remains concerned with the column placement within the arcade. Therefore, staff recommends that the Architecture Review Board, in its review of the project, pay particular attention to the proposed placement of the columns under the arcade area at the street corner to ensure there is adequate space for pedestrian circulation, and adequate space for the proposed bike share /short-term bike parking (Exhibit D, Section B, Condition No. 14). Revised Ground Floor Setback @ Street Corner 13 The adjacent Fourth Count Alley is contemplated as a bike connection between the future light rail station and the Broadway bike lanes. Therefore, should this connection be implemented, the southwest corner of the building at the alley should highlight and provide building- integrated wayfinding signage through the use of architectural elements or fixtures. Features may include bike - oriented fagade treatments, signage or graphics, lighting, or bike - themed public art. The design of the alley fagade should acknowledge the adjacent bike connection by including a strong integrated design element. Staff recommends that the applicant continue to work with staff on developing these design elements, subject to ARB review and approval (Condition No. 12), in the event the bike connection is implemented. Otherwise, additional attention to the alley elevation would not be necessary. Parking I Vehicular Access I Loading Operations The two -level subterranean garage would provide 77 striped vehicular parking spaces, and up to 108 spaces for hotel guests could be achieved through of the use of attendant or valet service (stacked parking). The P1 level of the garage would consist of 31 secured long -term bike parking spaces for employees (storage room) and an employee lounge. The development agreement allows for flexibility in the size of the ground floor restaurant, not to exceed 4,500 SF. Pursuant to City Parking Standards, based on a maximum sized restaurant of 4,500 square feet (assuming a 60% seating area and 40% kitchen /support area) the project requires approximately 184 parking spaces, and is therefore non - compliant with parking standards. The current restaurant floor plan consists of 3,264 SF, which would reduce the parking requirement to approximately 172 spaces. The applicant has provided a parking demand study prepared by Linscott Law & Greenspan, Engineers (LL &G) which analyzed the potential parking demand that would be generated by the proposed hotel. The City commissioned traffic consultant Fehr & Peers (F &P) to perform a peer review of this analysis, and to provide an independent parking demand analysis: for the hotel. Based on differences between both analyses as described in the Fehr &'Peers' memo (Attachment H), including the use of higher City parking requirements for ,Irestaurants, a slightly higher guestroom peak demand rate, 14 and the application of the ULI guestroom time of day factors, Fehr & Peers' parking analysis resulted in a greater peak in parking demands for the hotel compared to the LL &G analysis (F & P: 92 spaces, LUG: 74 spaces). Based on the project including the 3,264 SF ground floor restaurant, the F & P study indicates that the hotel (restaurants & guests) would generate a peak parking demand of 92 parking spaces (97 spaces for 4,500 SF restaurant) during the peak hour of demand at 9pm on a weekend evening. The parking demand of 92 spaces can be accommodated on -site through the use of attendant/valet parking service (stacked parking in subterranean garage). Therefore, staff believes the proposed number of on- site parking spaces, in conjunction with attendant/valet parking, would adequately meet the parking demand for'the project. However, based on the peak demand, staff recommends that attendant/valet parking service is provided between the peak demand hours of 6pm -9am daily to accommodate the anticipated parking demand (Condition No. 5). Any increases in the size of the ground floor restaurant as allowed per the DA, may warrant additional attendant/valet parking service hours, as determined by the Planning Director, and would be authorized through a minor amendment pursuant to DA section 2.4.2. Parking and Deliveries Management Plan The Development Agreement includes the applicant's parking and delivery management plan (DA Exhibit 1), consisting of three parking scenarios: self - parking option, attendant/valet parking option, and a hybrid attendant/valet parking with self - parking option. Vehicles would enter the site from 5th Street into the ground floor driveway that includes three loading /unloading spaces. During self - parking, hotel patrons would either utilize these loading spaces at grade or continue to the P1 subterranean garage level and utilize designated parking spaces for guest check -in. Similarly, taxis may utilize the loading /unloading spaces, and continue to P1 for turn- around. During attendant/valet operations, service would occur in the ground floor driveway as available, or on the lower P1 level. Hotel guest departure /loading operations would occur on the P1 level or using the ground floor driveway loading spaces, as available. 'I 15 All vehicular areas would be monitored by hotel staff to ensure adequate circulation within the ground floor driveway, and that vehicle queuing does not impede pedestrian access on the adjacent sidewalk or block travel lanes along 5t" Street (Condition No 2). Staff's recommended Condition No. 3 also requires the City and developer to monitor the performance of Parking and Deliveries Management Plan during the first two years of the hotel's operation and, as needed, the City may impose additional operational measures or conditions to the plan to ensure compliance with the condition. Any additional measures imposed would be at the Planning Director's discretion. Ongoing monitoring of the Parking and Deliveries Management Plan would occur thereafter during the project's annual Development Agreement compliance review and /or whenever queuing occurs (thereby requiring action by the City's Code Compliance Department), with additional measures or conditions to the plan as necessary by the Planning Director. Small scaled delivery vehicles would utilize the ground floor driveway loading spaces, and larger sized delivery vehicles would utilize the Fourth Court Alley during limited hours. Considering the anticipated use of the Fourth Court alley as a bike connection between the Esplanade and Broadway bike lanes, staff recommends delivery hours of 10am -2pm daily (Condition No. 4). Similar to the condition above, the City shall monitor the performance of the Fourth Court deliveries biannually for the first two years to ensure that the deliveries do not impede pedestrian, cyclists, or vehicular circulation on Fourth Court between Colorado Avenue (Esplanade) and Broadway, with delivery hours subject to change. Architecture Review Board — Concept Review The Architecture Review Board reviewed the project's design on March 4, 2013, and individual design comments were provided by board members for the applicant's consideration. Board members were supportive of the hotel uses based on proximity to the future light rail station, and characterized the uses as assets to the Downtown. Board members were generally supportive of the project's design, shape, massing, and pedestrian orientation, and commented that the proposed buildings are unique and well - designed as appropriate for the significant Downtown sites. For both projects, the Board members emphasized the importance in the quality of the materials pallet, and Wl stated that the pool decks would activate and enhance the project's relationship with both Colorado Avenue and 5th Street. Board members believed that the Courtyard building consists of a stronger design compared to the Hampton Inn, and appeared more sculptural with its interlocking geometry and interchanging materials. A Board member expressed concerns with the Fourth Court Alley elevation, and recommended careful consideration in improving the design's relationship with the primary interlocking design concept. Staff agrees that the elevation is a different design concept, however it provides visual interest to the overall alley elevation. Board members recommended the use of extensive green roofs on lower rooftops of the buildings within the interior courtyard areas to improve guestroom views facing the courtyard. In an effort to improve these guest room views, the lower rooftops would be designed with a combination of hardscape designs and limited use of planters, primarily for trees. The applicant does not intend to install a typical "green- roof' in efforts to conserve water and limit long -term maintenance. Zoning Ordinance Development Standards Interim Zoning Ordinance Pursuant to the City's Interim Zoning Ordinance No. 2428 (CCS) ( "IZO "), the maximum by -right building height for the proposed project is 32 feet in height. An IZO -based project with a maximum building height of 32 feet could achieve two stories, with a 1.9 Floor Area Ratio (approximately 44,700 SF due to landscaping requirement that would reduce floor area). Based on this interim standard, the differences between development that can be achieved under the IZO and the proposed project should be considered. For perspective purposes, the next section discusses the underlying CK zoning district standards in effect prior to the City's Interim Zoning Ordinance. However, the project is not required to comply with these C3C standards. C3C Zoning District The C3C zoning district establishes property development standards which govern the height, bulk, and mass of buildings. Furthermore, this zoning district was established to provide for a concentration of retail and cultural uses, in addition to complementary uses such as hotels, offices, and housing. The development standards for the district are intended to permit a greater amount of floor area per parcel in efforts to encourage an 17 increase in the mix of activity in the area, while ensuring that development is pedestrian - oriented in character. Development standards in the CK district allow for a baseline maximum height of four stories and 56 feet in height, and a baseline floor area ratio of 2.5. However, the subject property is permitted a maximum height of 76 feet with unlimited stories for hotels. The ground floor level floor -to -floor height requirement is a minimum of 15 feet within the front 50 feet of the building, and the ground floor street frontage must be designed with pedestrian- orientation and designed to accommodate pedestrian- oriented uses. As proposed, the project does not comply with building height, floor area ratio, upper -level stepbacks, and parking requirements of the district. Below is a comparison of the district development standards and the proposed project: Develop. Standard District Requirement Proposed Project FAR: 2.5 (3.5 GP) 3.5 Height: 76'(32' IZO, 84' GP) 74' -0'$ Stories: Unlimited for Hotels 6 Stories Parking: 172 -184 depending on restaurant size. 77 to108 " IZO based project with 32' height max could achieve 2 stories, +/ -1.9 FAR As mentioned, the proposed project is compliant with applicable zoning requirements with the exception of the following standards: Interim Zoning Ordinance No. 2417 (CCS) Building Height: The Interim Zoning Ordinance establishes a maximum building height of 32 feet (zoning compliant project) for permitted projects. The proposed project is 74 feet in height and therefore exceeds the maximum building height established for a permitted project. Consistency with this requirement would result in a two -story commercial building due to the height limitation. Relief from this requirement allows the project to provide additional floors and guest rooms. 9.04.08.20.060 Floor Area Ratio: The maximum floor area ratio of the CK district for the project is 2.5. The proposed project consists of 78,750 SF with a floor area ratio of 3.5. This exceeds the amount of floor area that can be achieved based on the IZO's 32 foot height limitation, and the underlying C3C zoning requirements, however complies with the floor area ratio (3.5) established by the 1984 Land Use and Circulation Element for the Downtown Core. 9.04.10.02.040 Buildinq Volume Envelope: Buildings shall not project beyond the building volume envelope which requires additional setbacks / stepbacks as the building increases in height. This requirement results in a tiered stepback of floors M 3 -6. As designed, portions of the building above 30 feet exceed this envelope along the Colorado Avenue and 5t" Street elevations. Relief from this particular standard allows for flexibility in design, resulting in a series of interlocking building planes along both street elevations that visually reduces the overall building mass of the project. 9.04.10.08.040 Parking: Pursuant to City parking standards, the project requires approximately between 172 -184 parking spaces. The project would provide 77 vehicular parking spaces within the two -level subterranean garage, and up to 108 parking spaces could be achieved through a mix of attendant/valet and self - parking. Therefore, the project is non - compliant with parking standards. Based on Fehr & Peer's parking demand study, and also considering the project's proximity to the future light rail station, and the proposed TDM program, staff believes the proposed parking would be adequate to accommodate the anticipated parking demand generated by the proposed hotel and restaurant. 9.04.08.20.070(f) Landscaping: A landscaped area of 25 square feet per 50 feet of parcel street frontage shall be provided and incorporated in the pedestrian- oriented design elements. This totals 75 square feet for each street elevation is required. The project does not propose landscaping along any of the street elevations. Instead, the additional ground floor setback along Colorado Avenue would be utilized by an outdoor dining area that would activate the sidewalk, while the 15 feet of clear unobstructed sidewalk along the 5t" Street elevation would provide adequate pedestrian accessibility in an area that will experience significant growth in pedestrian activity. Staff is thereby supportive of this modification. d Economic Analysis An economic study of the proposed project compared to the existing development on the site was performed. The City contracted The Natelson Dale Group (TNDG) to prepare "a Value Enhancement Analysis and Fiscal Impact Analysis, and a financial feasibility analysis related to the project alternatives discussed in the Environmental Analysis section of this report. The following is a summary of those analyses, which are attached to this report (Attachment G). Value Enhancement Analysis The premise of the value enhancement analysis is that additional building height and floor area above the baseline project would enhance the economic value of a site. In recent projects, the IZO Base Project threshold (32 feet max height) has been used as the baseline project. For this particular project, however, the baseline project was defined as the existing development on -site since it was determined that a developer would likely upgrade the existing building as opposed to new construction compliant with the IZO Base Project threshold. The existing development consists of a IL commercial building of approximately 22,100 square feet. To quantify the amount of this value enhancement, the City's financial consultant, TNDG, independently prepared a pro forma analysis, and estimated the difference in residual land values (estimated value less estimated construction costs) for the existing development and the Proposed Project. TNDG estimated value enhancement under two scenarios; a project that would provide market wages to hotel employees, and a project that would provide comparable hotel union wages to hotel employees. TNDG estimates that the Proposed Project based on market wages would provide a value enhancement of approximately $14,226,831 over the value of the existing development. Under the comparable union wage scenario, TNDG estimates that the Proposed Project would provide a value enhancement of approximately $7,176,831 over the value of the existing development. Fiscal Impact Analysis The project's fiscal impacts to the City were evaluated, and measured in terms of revenue and cost impacts to the City's General Fund. The fiscal benefit is calculated by subtracting the anticipated costs to the City generated by the project from the anticipated revenues (various taxes) generated by the project. On an annually recurring basis, the proposed project would generate a net fiscal benefit of approximately $1.38 million ($1.5M annual tax revenue less cost impacts to City police /fire resources) to the City's General Fund. This amount does not include one -time community benefit contributions or required child care and cultural arts fees. The complete TNDG analysis is included as Attachment G. Development Agreement Overview A development agreement is a contract between the City and a developer that authorizes the type and amount of development that may occur within a specific period of time. Development agreements provide developers with guaranteed development rights in exchange for community benefits. A development agreement must comply with the Land Use and Circulation Element, but can establish different development standards than provided by zoning regulations. A development agreement can provide greater latitude to advance local planning policies compared to the Development Review Permit process. While a development agreement is an alternative to the standard development approval process, in practice it ORM is similar to other public review processes where the City Council makes the final decision with the exception that the City Council has more discretion in imposing conditions and requirements on the proposed project since the Development Agreements are adopted by ordinance and are negotiated contracts. The proposed Development Agreement is included as Attachment F. Significant Proiect Features The project consists of both significant project features and community benefits. Staff recognizes that for this particular project, consideration of the significant project features is important while considering the community benefits that are proposed for the project. Unlike mixed -use development agreement projects, the proposed hotel use results in a significant positive fiscal impact to the City, consisting of an estimated $1.5M of annual tax revenues from transient occupancy tax, sales tax, and property tax. Moreover, the proposed hotel would provide socio- economic benefits to the City by providing substantial new employment opportunities, both temporary (construction - related employment) and permanent (hotel and retail /restaurant employees). Importantly, the proposed development agreement would include a living wage rate of $14.08/HR for future hotel employees. Although required by Code, the project would provide approximately $250,400 ($500,000 combined projects) in childcare fees, and approximately $157,500 ($315,000 combined projects) in cultural arts fees. Furthermore, as a result of the development agreement review process, the architectural design of the project has been greatly enhanced from the original design concept proposed during the float -up review, and greatly enhanced in comparison with typical Courtyard by Marriott hotels. The proposed design is unique to Santa Monica, with an enhanced architectural design and associated costs which are significant project benefits that provide added value to the project. Although these features are not specifically identified in the LUCE as community benefits, they are nonetheless features of the project that significantly contribute to the project's overall benefit to the City. Council should consider these project features when reviewing /weighing the proposed community benefits for the project. 21 Living Wage During float -up discussions, the Planning Commission and City Council recommended that the Development Agreement include a living wage provision with health care benefits for future hotel employees. The City has an existing Living Wage Ordinance, however similar to a majority of cities in California, the Ordinance is limited to "business assistance" living wage where the requirement is triggered only if a private project receives public funding assistance, is a City contractor, or is providing a service on City property. Santa Monica's Living Wage Ordinance applies to all contractors providing services to the City in excess of $54,200. The FY2013 -14 wage rate is $14.08 /HR and includes a CPI adjustment. The hourly wage proposed in the Development Agreement would be an amount consistent with the City's Living Wage Ordinance, which is currently $14.08 /HR, and would be adjusted annually pursuant to the Living Wage Ordinance. The purpose of the living wage provision in the Development Agreement is to ensure that the proposed hotel provides its workers fair and reasonable compensation comparable to similar Santa Monica hotels and hotels in nearby communities without placing the proposed hotel at a competitive disadvantage. The provision would apply to all workers performing Hotel Use services, pursuant to Section 2.7.1(1) of the Development Agreement, without any adjustments for tips received, which are the sole property of the employee as provided by State law. Other employee classifications would receive at least the minimum wage of $8.00 /HR, as established by the State, or compensation as determined by the Hotel Operator. The proposed living wage, however, would be superseded by any future collective bargaining agreement resulting in higher hotel and food service employee wages. Community Benefits Staff and the applicant have agreed on the following community benefits: Local Hiring Provision I Hospitality Training A local hiring provision to facilitate the hiring of local workers during construction and for hotel and leasable space employees would be implemented, as defined in Exhibits F -1 and F -2 of the development agreement. The purpose of the local hiring policy is to facilitate the employment by the hotel, restaurant, or leasable space tenants of the 22 project of residents of the City, and in particular, those residents who are low- income individuals by ensuring residents are aware of project employment opportunities, and have a fair opportunity to apply and compete for such jobs. The provision includes a local hiring goal of 40% of the total full and part-time jobs in the project. Furthermore, the following provisions would also be implemented: - Job Fair. The Developer /Hotel or Restaurant Operator would conduct an on -site job fair exclusive to Santa Monica residents targeted during the Advanced Recruitment Period for the intended purpose of recruiting Targeted Job Applicants for on -site Hotel and /or Restaurant jobs. - Internship Program: The developer would develop and implement a program that would provide at least one paid (unless taken for school credit) internship per school session to interested and qualified students who are Santa Monica residents and attend a high school or Santa Monica College. "I am Santa Monica" Workshop Attendance: The hotel would send representatives to the "I Am Santa Monica" Workshop to contribute to the educational program by sharing the hospitality experience with participants. Financial Contributions The applicant has agreed with staff's recommendation to provide a total of $650,000 in contributions towards the Colorado Esplanade, Hospitality Training, Historic Preservation, Fourth Court Alley Improvements, and Affordable Housing. The applicant's previous contribution proposal during the Planning Commission review was $425,000. The Planning Commission supported staffs recommended contribution amounts, and further recommended that the Courtyard Marriott and Hampton Inn projects provide a combined Colorado Esplanade contribution of $1,000,000 (or $500,000 per project). Contribution PC Recommendation Staff Recommendation Applicant Proposal Colorado Esplanade $500,000 $294,000 $294,000 Hospitality Training Academy $50,000 $50,000 $50,000 Historic Preservation $75,000 $75,000 $75,000 Fourth Court Alley Improvements $210,000 $210,000 $210,000 Affordable Housing Linkage $21,000 $21,000 $21,000 Total Contribution Amount $856,000 $650,000 $650,000 The recommended contribution areas are detailed below: 1 23 Colorado Esplanade Contribution Staff recommends a $294,000 contribution for the Colorado Esplanade project. The contribution would fund the development of the Esplanade between 4th and 5th Street on the north side of Colorado Avenue, directly adjacent to the project site. The total contribution amount ($588,000, including the portion from the Hampton Inn Development Agreement project) would fully fund the associated costs of constructing the sidewalk improvements that would directly benefit the project, excluding any redesign costs directly attributable to the project site. The City would, therefore, be responsible for designing and building this portion of the Esplanade. Due to the timing of review and permitting for this portion of the Esplanade, the applicant shall coordinate with the City's Public Works Department to design and construct the Enhanced Walkway (private property adjacent to the public right -of -way) consistent with the Esplanade design. The applicant shall be responsible for any Esplanade redesign costs associated for the portion immediately adjacent to the project site on Colorado Avenue. The full Esplanade contribution amount ($588,000, projects combined) would be provided as a pre- condition to building permit issuance. Hospitality Training Academy Contribution The applicant proposes a $50,000 contribution to the Hospitality Training Academy (HTA), or functional equivalent, to be used specifically for job training and recruitment opportunities for disadvantaged youths targeted from the Pico Neighborhood. The contribution would be provided directly to the HTA, with verification of payment to the City. Historic Preservation Contribution Given the significant number of historic resources in the downtown, the applicant has agreed to a $75,000 contribution that exclusively supports historic preservation programs for the Downtown. Potential areas of contribution could include support for a Plaque Program for Landmarks and significant structures in the Downtown, and way- finding signage. The developer would create a separate interest - bearing trust fund for this contribution. 24 Fourth Court Alley Improvement Contribution The Planning Commission recommended a $210,000 contribution that supports improvements to the adjacent Fourth Court Alley contemplated as a bike connection between the future light rail station and the Broadway bike lanes. Should this connection be implemented, improvements may consist of wayfinding signage through the use of architectural elements or fixtures, lighting, or paving materials. This contribution was initially recommended by staff as a contribution towards parks and recreation /open space, however the Planning Commission recommended that this contribution be distributed towards the contemplated Fourth Court alley improvements instead. Staff supports this recommendation. In the event that these improvements are not implemented by the City, this contribution shall be provided as a parks and recreation /open space contribution. Affordable Housing Linkage Contribution Staff recommends a $21,000 contribution that supports affordable housing production in the City. The contribution would help to increase the affordable housing stock, and would provide the project's employment base with affordable housing within the City. This fee would be administered consistent with the City's Affordable Housing Production Program. Transportation Demand Management Plan The applicant has agreed to implement the following TDM Plan program measures: 1. AVR Requirements: Achieve an Average Vehicle Ridership (AVR) of 2.0 commencing from one year after issuance of Certificate of Occupancy for the project, concurrent with the operation of the Expo Light Rail. 2. Transportation Demand Management Association (TMA): Hotel operator and building tenants would be required to participate in formation of a geographic - based TMA that may be defined by the City. 3. Employee Transportation Coordinator: An Employee Transportation Coordinator (ETC) would be designated for this Project by the Developer, and shall manage all aspects of this TDM program and participate in the local TMA that may be established by the City. 4. Transportation Information Center (TIC): The TIC will include information on -site for hotel and commercial tenant employees, and hotel guests about local public transit services and bicycle information. 25 5. Secure Bicycle Parking for Employees /Hotel Guests: Project would provide secure bicycle parking for hotel employees and guests in the amount of 27 long- term spaces as shown on the Project Plans. Secured bicycle parking shall be provided for the retail /commercial tenant space employees in the amount of 4 long -term spaces, for a total of 31 spaces for the project. For the purpose of this Section, secure bicycle parking shall mean bicycle lockers, an attended cage, or a secure parking area. 6. Visitor Bicycle Parking: Project would provide short -term bicycle parking for hotel guests in the amount of 8 spaces for the hotel use, and 4 spaces for the retail /commercial tenant space, for a total of 12 spaces, located on the ground floor of the project. 7. Bicycle Rentals by Hotel Guests: The Hotel operator would either provide or may contract with a local bicycle rental business to make no less than ten (10) bicycles available on -site for rental by. hotel guests, whereas additional bicycles shall be provided as needed based on guest demand. 8. Transit Subsidy for Hotel Employees and Leasable Space Employees: Developer would make available to all of its Hotel employees and all Leasable Space employees a Metro EZ public transit pass (or equivalent multi- agency monthly transit pass) valid every day for the first three months of the new employee's employment (offered during the first three months of employment only) to establish on -going ridership habits. 9. On -Site Shower and Locker Facilities. A minimum of two showers and locker facility (one for each gender) would be provided for hotel and commercial employees who bicycle or use another active means, powered by human propulsion, of getting to work or who exercise during the work day. 10. Parking and Deliveries: Parking and deliveries would be managed as described in the Parking and Deliveries Management Plan (Exhibit 1). 11. Carpool Program: Developer would provide preferential parking within the Project's parking garage for Project employees who commute to work in employer- registered carpools, and would provide financial incentives for carpooling /vanpooling. 12. Rddeshare Matching Service: Developer would initiate a referral to all Project employees about a rideshare matching service at least once per year to assist employees in finding carpool /vanpool opportunities. 13. Parking Pricing: Hourly parking pricing would be market -based and adjusted periodically in an effort to ensure parking availability for hotel guests, commercial tenant employees, and visitors during peak parking hours. 14. Carshare Service: Developer would rent parking to a car sharing service for a minimum of two vehicles and maximum of five vehicles to a third party provider. 15. Rental Car Availability: The hotel operator would make information available to Hotel guests on rental car agency locations within the City. W 16. Unbundled Parking: Parking would be leased to commercial tenants separately from the commercial space. 17. Guaranteed Return Trip: Guaranteed return trip for employees who rideshare at no cost to employee when emergency situation requires. LEED® Gold Certification The developer would design and construct the project to achieve a minimum LEED® Gold certification as established by the LEED® Rating System. Solar Energy Systems Solar energy systems, including photovoltaic solar panels and solar thermal /hot water systems, would be installed on the building's roof areas, to a maximum extent available as determined by the City. Areas of the roof available and appropriate for solar systems placement shall exclude areas necessary for rooftop equipment, Fire Department access, or other code - related clearances. The types of such renewable energy systems shall be recommended by a professional engineer trained in solar system design who shall consult with the City's Office of Sustainability during the process of evaluating and selecting the types of renewable energy systems for the building. Electric Vehicle Charging Stations The project would provide one electric vehicle charging station and seven electric vehicle stub -outs for charging stations within the subterranean garage, available for project employees or visitors. These stations would accommodate and encourage the use of electric vehicles that would help to reduce vehicle emissions in the Downtown. Water Conservation The Planning Commission recommended reducing water consumption by an additional 15% above the standard 20% reduction required by City /Cal Green requirements (35% above state requirements). The project would achieve a minimum 30% water reduction of the hotel's total water use. The applicant wouldi`coordinate with the City's Office of Sustainability and the Environment to evaluate appropriate measures to be implemented in achieving the 27 requirement, including but not limited to, gallons per flush for toilets, gallons per minute for showerheads, water factor for clothes washers, commercial dishwasher requirements, and cooling tower requirements While the Planning Commission recommended a 15% water reduction above Cal Green requirements (35 %), staff believes a 30% reduction of the hotel's total water use (not based on Cal Green baseline requirements) would be appropriate, given the unique operational requirements of a hospitality use. Cal Green requirements are limited to hotel room fixtures (toilets, showers, faucets, urinals), which accounts for only 30% of a typical hotel's total water use. The proposed provision would allow water reduction in areas in addition to hotel room fixtures, including provisions for laundry, dishwashers, heating /cooling, and pools. Urban Design/ Physical Improvements The project would provide a ground floor setback of at least 20 feet between the curb and building along Colorado Avenue, and at least 15 feet along 5t" Street, with additional space at the street corner underneath the arcade. The proposed setbacks would be consistent with the building setbacks (curb to building) contemplated in the Downtown Specific Plan for these streets, thereby effectively expanding the existing sidewalks and street corner to allow for adequate pedestrian accessibility. Furthermore, in response to staff and the Commission's recommendation to remove the three building columns, the applicant has relocated the columns outside of the enhanced walkway area. The revised column locations are an improvement from the previous design, however as proposed, does not provide a clear unobstructed area within the proposed open space. Therefore, staff recommends that the Architecture Review Board, in its review of the project, pay particular attention to the proposed placement of the columns under the arcade area at the street corner to ensure there is adequate space for pedestrian circulation, and adequate space for the proposed bike share /short-term bike parking (Exhibit D, Section B, Condition No. 14). Historic Commemorative Installation The applicant would install a permanent commemorative installation on the property in a publicly accessible location of the project that portrays one or more aspects of the past history and significance of the site as reflected in the Santa Monica Landmarks 28 Commission files for Landmark Designation Application LC -12LM -003. In the process of designing such commemorative installation, the applicant shall consult with and solicit suggestions from the Santa Monica Conservancy. Artistic Exhibition Program The applicant and /or the hotel operator would develop and implement an Artistic Exhibition Program for the purpose of showcasing different forms of art in periodic exhibitions at the hotel, including art sourced from professional galleries, local artists, and Santa Monica students. The purpose of such exhibitions shall be to establish and build a connection between the hotel, visitors /guests and the local Santa Monica artistic community. The Artistic Exhibition Program shall endeavor to host events at the hotel a minimum of twice each year and showcase various forms of art (including but not limited to paintings, drawings, sculptures, photography, digital media, film, music, literature, theater, dance, performing arts and /or other recognized forms of art). Community Meeting Space The developer would allow community access to the on -site meeting room available to non - profit or other community organizations on a reduced cost based on fees that are required for similar City -owned facilities, at least 12 times per year for up to 5 hours per meeting. Bike Sharing Program The developer would dedicate space (14' x 12') compatible with the operation of the project for a bicycle sharing program station, in conjunction with any bicycle sharing program instituted by the City or another operator. A shared bicycle facility at the project site would benefit the bike share program (contemplated by the City) based on its proximity to the light rail station, especially since it is currently unknown whether bike sharing at the light rail station would occur. Shared Parking Developer may make any unused on -site parking available for monthly lease at market rates to third parties in the surrounding area in need of parking, including area residents, businesses, and employees, provided the developer can demonstrate 29 through a parking study that such spaces are not needed to meet the project's peak parking demand. Planning Commission Action The Planning Commission considered this development agreement on July 24, 2013 (minutes), October 2 2013, and October 16, 2013 (10/2/13 and 10/6/13 minutes available 11/7/13). The Commission recommended that the City Council deny the proposed Development Agreement unless the applicant addressed the Commission's concerns and provided the following recommendations for City Council's consideration: 1. Living Wage: Provide a hotel living wage of $15.371HR, not including health benefits. The current hourly wage proposed in the Development Agreement is an amount consistent with the City's Living Wage Ordinance, which is currently $14.08/HR, and would be adjusted annually pursuant to the Living Wage Ordinance. Staff continues to recommend a hotel living wage consistent with the City's Living Wage Ordinance, which is also higher than prior hotel approvals in the Downtown. The applicant is in agreement with this recommended wage amount. 2. Local Hiring: Establish a local hiring goal that 40% of the hotel workers are hired locally from Santa Monica. In response, a local hiring goal has been added to Exhibit F -2 (6)(a) establishing a local hiring goal of 40% of the total full and part -time jobs in the Project (hotel and leasable space employees). There shall be no penalties to the applicant, nor shall the applicant be deemed to be in default under the Development Agreement, if such goal is not achieved. Furthermore, the Developer shall provide hiring results to the City thereafter initial hire, and annually through the Agreement's annual compliance report. 3. Local Hiring Provision: Revise Section 4 of Exhibit F -2 (Priority for Targeted Job Applicants) to include the following priorities: 1. First Priority to include low- income individuals living in census tracts throughout the city for which household income no greater than 80% of area median; 2. Second Priority to include low- income individuals living anywhere in the city; 3. Third Priority to include low- income individuals living within 5 miles of the project site. In response, this section of the Agreement has been modified according to the recommendation. C 4. Added DA Language on HTA Contribution ("functional equivalent'): The Commission agreed with staffs recommended language to Section 2.7.2 (h)(v) that the HTA contribution be provided "to the Hospitality Training Academy or functional equivalent organization ". This language was added, in the event that the HTA was not available to provide services, that a "functional equivalent" would be selected, as determined by the City Manager. 5. Water Reduction: Reduce water consumption by an additional 15% above the standard 20% reduction required by City /Cal Green requirements (35% above state requirements). In response, the project would achieve a minimum 30% water reduction of the hotel's total water use. The applicant would coordinate with the City's Office of Sustainability and the Environment to evaluate appropriate measures to be implemented in achieving the requirement, including but not limited to, gallons per flush for toilets, gallons per minute for showerheads, water factor for clothes washers, commercial dishwasher requirements, and cooling tower requirements. While the Planning Commission recommended a 15% water reduction above Cal Green requirements (35 %), staff believes a 30% reduction of the hotel's total water use (not based on Cal Green baseline requirements) would be appropriate, given the unique operational requirements of a hospitality use. Cal Green requirements are limited to hotel room fixtures (toilets, showers, faucets, urinals), which accounts for only 30% of a typical hotel's total water use. The proposed provision would allow water reduction in areas in addition to hotel room fixtures, including provisions for laundry, dishwashers, heating /cooling, and pools. 6. Solar Energy Systems: Maximize the available roof areas with renewable energy systems. In response, Section 2.7.2(f) has been amended accordingly to state that solar energy systems, including photovoltaic solar panels, shall be installed on the building's roof areas, to a maximum extent available as determined by the City. 7. Sustainable Design Features: Section 2.7.2(e)(v): In the event that the project is denied LEED Gold Certification, the Developer shall be either subject to a fine in an amount of $4 1SF (increased from $2 1SF as proposed), or $21SF, in addition to achieving LEED Gold under the LEED ® Existing Buildings Operations and Maintenance (LEED EBOM) rating system. City staff to recommend appropriate alternative. The intent of this recommendation is to further ensure that the applicant acts in good faith in achieving LEED Gold status by further intensifying the penalty for not achieving the status. In response, staff believes increasing the fine amount to $4 /SF (increased from $2 /SF) would be appropriate, and language in the DA has been revised. 8. Contributions: Project shall provide staffs recommended contributions, with additional contribution towards the Colorado Esplanade. The total recommended contribution amount „would be $856, 000: 31 CYM - $500,000 (Colorado Esplanade) - $210,000 (Bike Connection Improvements @ Fourth Court Alley) - $75,000 (Historic Preservation) - $21,000 (Affordable Housing Linkage) - $50.000 (Hospitality Training Academy) $856,000 Total Recommended Contribution In response, the applicant has increased their proposed contribution from $450,000 to $650,000, consistent with staff's recommendation. Considering the project's significant project benefits, living wage component, and other negotiated community benefits, staff believes a total contribution of $650,000 would be appropriate. 9. Design: The three columns currently proposed within the enhanced walkway at the street corner (supporting the arcade) should be removed (supporting staff's recommendation). In response, the applicant has not removed the columns entirely as recommended, stating structural limitations. Instead, the subject columns have been relocated out pf the minimum enhanced walkway space (defined as the ground floor setback of 20' -0" from Colorado Avenue and 15' -0" from 51' Street), to an area closer to the building, underneath the arcade. This revision results in an improved clear unobstructed area at the street corner within the enhanced walkway area, however staff remains concerned with the column placement within the arcade. Therefore, staff recommends that the Architecture Review Board, in its review of the project, pay particular attention to the proposed placement of the columns under the arcade area at the street corner to ensure there is adequate space for pedestrian circulation, and adequate space for the proposed bike share /short-term bike parking (Exhibit D, Section B, Condition No. 14). 10. Design: Ground floor lobby should provide art provided by local artists on a rotational basis. In response, the applicant and /or the hotel operator would develop and implement an Artistic Exhibition Program for the purpose of showcasing different forms of art in periodic exhibitions at the hotel, including art sourced from professional galleries, local artists, and Santa Monica students. This program has been added to the community benefits section of the DA. 11. Design: The proposed ground floor outdoor seating along Colorado Avenue and 51h Street shall be provided in accordance to the approved plans. The intent of this recommendation is to ensure that the sidewalk is activated with outdoor seating. In response, language in section 2.7.2(a) has been added reflecting this recommendation. 32 12. Design: The Architecture Review Board, in its review of the project, shall pay particular attention to the quality of building materials, the design of the Fourth Court alley building elevation, enhancements to the ground floor storefront for the leasable space to increase the amount of outdoor seating area and /or ways to improve the connection between the interior and exterior seating /dining areas, and the extent of glazing along the ground floor frontage on Fifth Street. In response, Condition No. 13 has been added to Exhibit D, Section B reflecting this recommendation. 13. Restaurant Alcohol CUP Conditions: Exhibit H. Limit the outdoor dining hours to 12am midnight daily. Staff believes the proposed closing hours for the outdoor dining area of 12am Sunday through Thursday, and lam Friday through Saturday are consistent with the closing hours for other alcohol establishments in the downtown, and also do not have concerns with the proposed closing hours at this particular site in proximity to the light rail station. 14. TDM Plan: Project shall provide a 2.0 AVR, effective upon beginning operation of the Expo Light Rail. In response, the applicant proposes an Average Vehicle Ridership (AVR) of 2.0 commencing from one year after issuance of Certificate of Occupancy for the project, concurrent with the operation of the Expo Light Rail, which is slightly differentiated from the Commission's recommendation. Staff however believes allowing the applicant one year to develop a strategy to achieve the 2.0 AVR would be appropriate. 15. Architecture Review Board: Section 6.1: Allow additional flexibility for the ARB in its review of the project by removing language that the number of rooms cannot be reduced, and that the overall project square footage may be reduced up to 4% (from 2% proposed) of the overall square footage. Staff believes a 2% reduction in total floor area would be appropriate, and a higher percentage would not be necessary given the general support for the project's overall design and massing as expressed by the ARB during concept review. 16. Local Hiring Outreach Plan: Prepare and provide a Local Hiring Outreach Plan to the Planning Director. In response, the applicant will submit a local hiring outreach plan to the Planning Director for review and approval at least sixty days before recruitment is opened up to general circulation for the initial hiring by the new Hotel or Restaurant, pursuant to section 2.7.2(b) of the DA. 33 Neutrality Agreement Although the applicant has signed and presented a neutrality agreement (contract between a union and an employer under which the employer agrees to support a union's attempt to organize its workforce) to Unite Here Local 11 for each hotel for consideration, an agreement has not been reached at this time. A neutrality agreement would result in Collective Bargaining Agreements increasing hotel and food service employee wages and benefits (comparable to union wages) for future hotel workers. If this agreement is reached, wages and benefits of a future Collective Bargaining Agreement would take the place of the living wage included in the Development Agreement. According to the applicant, the annual impact of these above - market wages and benefits would increase labor costs nearly $1.9 million annually (combined for both hotels), and $20,043,000 for the Courtyard ($17,952,000 for the Hampton) over 20 years. According to the applicant, the proposed neutrality agreement would also include increased wages for employees of any food serving uses in the leasable spaces, thereby increasing labor costs that may limit potential restaurant tenants for the ground floor. Restaurants /bars, sandwich /bagel /coffee shops, and other food /beverage serving uses would be required to negotiate separate Collective Bargaining Agreements. The applicant has expressed concerns that this would make leasing the space to potential restaurant operators challenging. Although it is the,applicant's intentions to lease the space to a third party restaurant operator, and the City's preference to have a restaurant included on the ground floor, the DA includes a provision that would allow the Director of Planning to consider alternate pedestrian and transit - oriented ground floor uses, in the event that a restaurant or food serving tenant cannot be obtained. Staff believes this provision would be appropriate considering the circumstances. LUCE Consistency: Downtown Core The project is located in the Downtown Core land use designation and within the LUCE Downtown District. The LUCE vision for the Downtown Core seeks to maintain and enhance the Downtown area as a thriving, mixed -use urban environment in which people can live, work, be entertained, and be culturally enriched. The Downtown Core designation and District allows for the broadest mix of uses and activities, and seeks to provide new hotel projects in the area. 34 The project is consistent with the 1984 LUCE for the Downtown which limits development to 84 feet in building height and a floor area ratio of 3.5. The 2010 LUCE does not define building height, FAR, or stepback requirements for the Downtown Core, however, these standards are currently being developed as a part of the Downtown Specific Plan. In regards to other policies of the 2010 LUCE, the project is consistent with LUCE Policy D7.1 of the Downtown District, in that the proposed project balances a broad mix of uses that creates dynamic activity in both the daytime and evening hours including hotel uses in the Downtown. The project is also consistent with LUCE Policy D1.4 of the Downtown District which encourages new hotels and other visitor - serving uses in the Downtown. Goal D8 seeks to ensure that new buildings in the Downtown District contribute to the pedestrian character of the Downtown and are compatible in scale with existing buildings. Policies to implement this goal include D8.1 which promotes locating primary facades of buildings fronting the street at the property line or back side of the sidewalk, to create a lively streetscape with places for people to socialize. Moreover, D8.6 limits ground floor uses mostly to active retail. Goal D9 seeks to enhance the quality and character of the streetscape and urban pattern in the Downtown. Such policies include D9.1 which states to design streets as integral parts of the urban open space in the Downtown by encouraging strategies such as widening sidewalks in key locations, and D9.4 which states to locate active retail space on a pedestrian street facing the sidewalk at the ground floor. The ground floor design is consistent with these goals, providing a ground floor setback of 20 feet along Colorado Avenue and 15 feet along 5th Street as contemplated in the future Downtown Specific Plan, that effectively widens the sidewalk for adequate pedestrian accessibility, and would allow for outdoor dining opportunities that would activate the street. Overall, the proposed project is consistent with these LUCE goals and policies for the downtown. The implementation of a Transportation Demand Management (TDM) plan to reduce vehicle trips in the area and reduce associated parking demand would be consistent with LUCE Circulation Policy T19.2 which seeks appropriate TDM requirements for new development. Furthermore, the LUCE's overall land use policies include providing 35 community benefits for the area, including but not limited to, a Colorado Esplanade Contribution, a Historic Preservation Contribution, and a TDM plan. Environmental Analysis In accordance with the California Environmental Quality Act (CEQA), an Environmental Impact Report (EIR) was prepared to determine the environmental effects of the proposed project, and the Courtyard by Marriott project, both individually and cumulatively. As required by Section 15082 of the CEQA Guidelines, a Notice of Preparation was published on April 30, 2012 for a 30 -day comment period which indicated the City's intent to prepare an EIR for the project. On December 13, 2012, a Notice of Completion and Public Availability was published for the Draft EIR which commenced a 45 -day public comment period. The areas studied in the Draft EIR include: • Aesthetics /Shadows ■ Air Quality • Construction Effects ■ Cultural Resources ■ Geology and Soils ■ Greenhouse Gas Emissions ■ Hazards and Hazardous Materials ■ Land Use and Planning • Neighborhood Effects ■ Noise ■ Solar Access and Shadows ■ Transportation/Traffic The Final EIR, which was published in May 2013, contains all comments and responses to comments received during the comment period. The EIR identified mitigation measures in the areas of Construction Effects (Air Quality, Noise, Traffic), Cultural Resources, Geology and Soils, and Hazards and Hazardous Materials to reduce potential impacts to less than significant levels. To ensure that these measures are properly enacted, a mitigation monitoring program is necessary and will be enforced during the construction and operation of the project, if approved. The proposed mitigation measures are provided in the Final EIR. 36 Significant and Unavoidable Impacts For the proposed Courtyard by Marriott project, significant and unavoidable impacts were identified in the areas of Construction - related Noise (Groundborne Vibration), Cultural Resources (loss of contributor to potential historic district), Solar Access and Shadows, and Transportation/Traffic (intersections). Construction Effects Section 3.3 of the Final EIR studied the environmental impacts of the project related to construction. Construction effects related to groundborne vibration were determined to be significant due to the proximity to nearby residential projects that are considered sensitive receptors. Mitigation measure MM NO]-1a could reduce these impacts somewhat by limiting the timing of the most vibration intensive activities, locating vibration - generating equipment as far away as feasible from existing sensitive receptors, and ensuring that haul trucks associated with construction activities are routed away from residential streets such as 5th Street. However, because the site is adjacent to a residential structure and the building envelope extends to the site boundaries, such measures would be of only limited effectiveness. Another potential mitigation measure is the use of trenching; however, this option is infeasible because the projects' building envelopes extend to the property line. Therefore, construction - related groundborne vibration would be significant and unavoidable. Cultural Resources Section 3.4 of the Final EIR studied the environmental impacts of the project related to cultural resources. The construction of the proposed Courtyard by Marriott would result in demolition of the Midas Building at 1554 5th Street, which is not considered as a historic resource under federal, state, or City of Santa Monica criteria. Because the Midas Building is not eligible for listing as a historic resource under the criteria of the National Register or the California Register, or as a local landmark under the City of Santa Monica's ordinances, its demolition and replacement with new construction would be considered an adverse, but less than significant impact on an individual project level. Notwithstanding, to provide for an archival record of the Midas Building (a contributor to the potential Central Business Historic District), Mitigation Measure CUL -1 is i° recommended. 37 While not significant on an individual level, the identification of the Midas Building as a contributing structure to the potential Central Business District Historic District would qualify the building as a historic resource under Section 15064.5(a)(3) of the State CEQA Guidelines. Removal of the Midas Building would result in a decrease in the number of contributing structures within the potential Central Business District Historic District. The number of contributing structures within this potential Historic District has dropped 37 percent from 105 in 1986 to 66 in 2012. The continuous loss of contributing structures in the downtown has the potential to eventually threaten the viability of a potential Historic District. Therefore, the cumulative impact to the potential Central Business Historic District, due to the removal of this historic resource to the district, would be significant and unavoidable. Solar Access and Shadows Section 3.11 of the Final EIR studied the environmental impacts of the project related to solar access and shadows. Based on City thresholds for significance related to shade and shadows, a project impact would be considered significant if shadow - sensitive uses would be shaded by project - related structures for more than 3 hours between the hours of 9:00 AM and 3:00 PM between late October and early April (winter solstice), or for more than 4 hours between the hours of 9:00 AM and 5:00 PM between early April and late October (summer solstice). The adjacent Step -Up on Fifth residential project, considered a shadow - sensitive use, would be shaded for greater than 3 hours in the winter and 4 hours in the summer, resulting in a potentially significant shadow impact on the building. Specifically, the Step -Up on Fifth building is designed with internal courtyard areas that would be shaded by the proposed project during morning and afternoon periods throughout the year. Elimination of this significant shadow impact would require step backs of at least nine feet for the fifth and sixth stories adjacent to the Step Up on Fifth building. In addition, the stairwell for the Courtyard by Marriott building closest to Step Up on Fifth would need to be relocated at least 50 feet to the southeast in order to eliminate the shade and shadow impact on that building. While such modifications would eliminate shadow impacts, they would potentially result in building code conformity issues (i.e., appropriate distances from fire stairwells), major design complications due to relocation of the stairwells that would require significant changes to the overall building design, 38 and substantial losses in useable floor space. Because full mitigation of these impacts would require such major design changes that are more akin to a project alternative, shadow impacts would remain significant and unavoidable. Transportation/Traffic Section 3.12 of the Final EIR studied the environmental impacts of the project related to transportation and traffic. A total of 25 intersections were studied within the area, and given the project site's location within the highly commercialized Downtown area, neighborhood street segment analysis was not necessary for this project. Three project scenarios were fully analyzed for traffic impacts which included 1) the development of the Hampton Inn & Suites only; 2) the development of the Courtyard by Marriott only and; 3) development of both the Hampton Inn & Suites and the Courtyard by Marriott. Project - generated traffic would create a significant impact at the intersection of Lincoln Boulevard & 1 -10 Westbound Ramps /Olympic Blvd as a result of the development of either the Hampton Inn(scenario 1), the Courtyard Marriott (scenario 2), or both hotels (scenario 3). As discussed below, due to the lack of available feasible mitigation measures, the impacts at this intersection would be significant and unavoidable. i, Approval Year (2013) plus Project: Scenario 3: Development of Both Hotels Under approval year conditions, after taking into account the removal of the existing uses, the proposed hotels would be expected to generate 101 net new trips during the weekday AM peak hours, 121 net new trips during the weekday PM peak hours, and 150 net new trips during the weekend peak hours. Using approval year (2013) traffic conditions as the baseline to conduct impact analysis, the project would result in a significant traffic impact at 1 of the 25 studied intersections. The following intersection would be impacted under City of Santa Monica significance criteria during at least one of the analyzed peak hours: ® Lincoln Boulevard & 1 -10 Westbound Ramps /Olympic Blvd (AM, PM, WKND peak hour) Mitigation Measures Physical improvements are discussed in the EIR which could potentially reduce the severity of the project approval and future year traffic impacts. However, these improvements are either not scheduled or funded, or would create substantial 1910; secondary impacts to pedestrian mobility and transit operation, and would create potential inconsistencies with adopted City policies. As a result, the potential mitigation measures described in the EIR would be infeasible. Therefore, the impact at this intersection would be significant and unavoidable. Future Year (2020) plus Project: Scenario 3: Development of Both Hotels During the future year 2020 conditions, after taking into account the removal of the existing uses and the operation of the Expo LRT, which is expected to reduce project - generated traffic by at least 3 percent, the proposed hotels would be expected to generate 93 net new trips during the weekday AM peak hours, 114 net new trips during the weekday PM peak hours and 141 net new trips during the weekend peak hours. Using future year 2020 traffic conditions as the baseline to conduct impact analysis, the project would result in a significant traffic impact at 4 of the 25 studied intersections. The following intersections would be impacted under City of Santa Monica significance criteria during at least one of the analyzed peak hours: ■ 4th Street & Colorado Avenue (WKND peak hour) • 5th Street & Colorado Avenue (PM peak hour) ■ Lincoln Boulevard & Colorado Avenue (WKND peak hour) ■ Lincoln Boulevard & 1 -10 Westbound Ramps /Olympic Blvd (AM, PM, WKND peak hour) Mitigation Measures Physical improvements are discussed in the EIR which could potentially reduce the severity of the project approval and future year traffic impacts. However, these improvements are either not scheduled or funded, or would create substantial secondary impacts to pedestrian mobility and transit operation, and would create potential inconsistencies with adopted City policies. As a result, the potential mitigation measures described in the EIR would be infeasible. Therefore, the impacts at these intersections would be significant and unavoidable. Comments on Draft EIR The Draft EIR was available for a 45 -day public review period, in which a total of eight comment letters were received. A total of four letters were received from the applicant, applicant's representatives, and their consultants, three from agencies (Caltrans, Native American Heritage Commission, Los Angeles County Metropolitan Transportation aul Authority), and one letter from the public. Comments were wide ranging but primarily focused on historic resources, economic /social issues, traffic analysis, and on project alternatives. Responses torbll comments received are included in the Final EIR. Alternatives Studied The EIR studied five alternatives to the proposed project intended to reduce potential adverse environmental impacts. In addition to the No Project Alternative, the following alternatives were studied: ■ Incorporation of Midas Building Alternative (2) ■ Zoning Compliant Alternative (3) ■ Reduced Development Alternative (4) ■ Mixed -Use Development Alternative (5) Alternative 2 - Incorporation of Midas Building Alternative Under the Incorporation of the Midas Building Alternative, the objective of the proposed alternative would be to reduce or avoid significant and unavoidable cumulative impacts to historic resources associated with demolition of the Midas Building. The Midas Building would be rehabilitated and incorporated into the proposed project under the Secretary of the Interior's Standards for the Treatment of Historic Properties, with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings with a focus on maintaining the remaining key character defining historic architectural features of the structure. The project would consist of approximately 50 hotel rooms, up to 4,500 SF of ground floor retail /restaurant, and would be between 2 -3 stories with a building height betweren 25 to 45 feet. Retention of the Midas Building at the street corner would preclude the proposed ground floor setback that would provide a widened sidewalk along Colorado Avenue and 5th Street contemplated in the Downtown Specific Plan. This alternative would result in reducing the potential impacts to Cultural Resources (maintain contributor status), and Solar Access & Shadows to less than significant. Short -term construction noise impacts (groundborne vibration) would remain significant. Assuming the proposed Hampton Inn & Suites project is also similarly reduced in size and density, transportation /traffic impacts would be reduced however would still remain significant. Specifically, transportation /traffic impacts to one intersection in the Approval Year (2013) and to three intersections in the Future Year (2020) would remain significant and unavoidable. This alternative would result in a 41 higher - priced boutique hotel. based on the reduced number of guest rooms, and comparatively high cost of rehabilitation. This would be inconsistent with the applicant's objectives and LUCE policies to provide moderately - priced hotels in the Downtown. Alternative 3 - Zoning Compliant Alternative Under this alternative, the project would consist of 85 guest rooms, 4- stories and up to 56 feet in height, and a baseline floor area ratio (FAR) of 2.5. The ground floor square footage would remain unchanged. This alternative would meet the majority of the objectives of the proposed project, however would reduce project impacts through a reduction of the overall height and intensity of proposed development to be compliant with the existing Zoning Ordinance development standards for the C3 -C zoning district. With the elimination of the upper two stories, shadow impacts are anticipated to be less than significant. Short -term construction noise impacts (groundborne vibration) would remain significant. Assuming construction of a total of 175 new rooms between both hotels and a similar level of restaurant and retail development, transportation /traffic impacts to one intersection in the Approval Year (2013) and to three intersections in the Future Year (2020) would remain significant and unavoidable. Moreover, the decrease in the number of rooms would likely lead to increased construction costs per room, and a shift toward a more boutique or higher end hotel type. This would be inconsistent with the applicant's objectives and LUCE policies to provide a moderately - priced hotel in the Downtown. Alternative 4 - Reduced Development Alternative Under the Reduced Development Alternative, the project would consist of 108 guest rooms, 5- stories and up to 68 feet in height, and an approximate 20% reduction in floor area (68,000 SF, 3.0 FAR). The ground floor square footage would remain unchanged. This alternative would meet most of the objectives of the proposed project, however would incrementally reduce project impacts through a limited reduction in building height and a slight decrease in overall permitted development. The potential impacts to solar access and shadows would remain significant. Additionally, this alternative would still have a significant transportation /traffic impact on one intersection under the Approval Year (2013) condition and up to four area intersections under the Future Year (2020) condition(assuming construction of a total of 222 new rooms between both hotels and a similar level of restaurant and retail development). Moreover, the decrease in the EPA number of rooms would likely lead to increased construction costs per room, and a shift toward a more boutique or higher end hotel type. This would be inconsistent with the applicant's objectives and LUCE policies to provide a moderately - priced hotel in the Downtown. Alternative 5 - Mixed -Use Development Alternative Under the Mixed -Use Development Alternative, the project would consist of a 6 -story mixed -use building up to 84 feet in height, consisting of approximately 11,120 SF of ground floor retail /restaurant, with approximately 60,000 SF of office space. The potential impacts to cultural resources, noise /construction, solar access /shadows, and transportation /traffic would be similar to or greater compared to the proposed project. Moreover, this alternative would be inconsistent with the applicant's objectives to provide moderately - priced hotels in the Downtown. All project alternatives are fully analyzed in the Final EIR in Section 5.0. Environmentally Superior Alternative Considering that the potential impacts to cultural resources and solar access and shadows would be reduced to less than significant, Alternative 2 (Incorporation of Midas Building Alternative) would be considered the Environmentally Superior Alternative. However, pursuant to a financial feasibility analysis prepared by the Natelson Dale Group, (Attachment E), this Alternative was found to be financially infeasible, and therefore under the provisions of CEQA, this alternative is not required to be considered. Financial Feasibility Analysis The Natelson Dale Group performed a financial feasibility analysis (table 2, VEA) that analyzed the proposed project, the zoning compliant alternative, and the incorporation of the midas building alternative. The analysis studied all three projects under two scenarios that consisted of projects that would provide employment wages at either market -rate or comparable union - rates. Comparing supportable land values for each alternative to prevailing sales prices for comparable properties in the area, the study found that the incorporation of the midas building alternative to be financially infeasible. Furthermore, the study found that the zoning compliant alternative would be financially 43 infeasible under both wage scenarios, and concluded that the reduced project alternative may be feasible under market - wages, however infeasible under the union wage scenario. The study indicates the proposed project would be feasible with market - wages, however slightly under the feasibility threshold under the union -wage scenario. Statement of Overriding Considerations Due to the significant and unavoidable impacts of the project with respect to Construction Effects (Groundborne Vibration ), Cultural Resources (loss of contributor to potential historic district), Solar Access and Shadows, and Transportation/Traffic (intersections), approval of the proposed project will require the City Council to adopt a Statement of Overriding Considerations, determining that the community benefits of the proposed project would outweigh the potential impacts to the area identified in the EIR. The benefits of the proposed project have been discussed earlier in this staff report, and would be incorporated into the Council resolution adopting the Statement of Overriding Considerations and Mitigation Monitoring Program. Community Meeting and Public Input A community meeting to review the concept plans was held on October 27, 2011 at the Santa Monica Main Public Library, with 15 members of the public in attendance. An informative discussion was held as the participants had questions regarding the project and review process. The participants had questions related to the light rail's impact on Colorado Avenue and the proposed project, and whether there would be sufficient parking for guests or surplus parking for the public. The community expressed concerns with the existing traffic congestion along this portion of Colorado Avenue adjacent to the project site. Other comments included the possible use of parking off - site and use of hotel shuttles to reduce parking demand and trips, and managing hotel guest arrival times during off -peak hours to reduce congestion. Financial Impacts & Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific actions are required in the future. Based on the fiscal impact analysis provided by the Natelson Dale Group, approval of the proposed project would result in an additional $1.5 million in annual Z! revenues to the General Fund in the form of additional sales tax, transient occupancy tax, property tax, utility user's tax, and business license tax. Additionally, the project would provide one -time contributions in FY 2014 -15 in the form of community benefits that the applicant will be required to provide pursuant to the proposed development agreement: ® Colorado Esplanade contribution in the amount of $294,000 to be deposited in account 04267.410060. • Fourth Court Improvement contribution in the amount of $210,000 to be deposited in account 04267.410260, or a Parks and Recreation contribution in the amount of $210,000 to be deposited in account 045551.410070. • Affordable Housing Linkage contribution in the amount of $21,000 to be deposited in account 04267.410270. Prepared by: Steve Mizokami, Associate Planner Approved: Forwarded to Council: �A e( Da�iic� Martin, Director Rod Gould Planning and Community Development City Manager Prepared by: Steve Mizokami, Associate Planner Attachments A. Public Notification B. Development Agreement Findings C. Resolution Certifying the Environmental Impact Report D. Resolution Adopting the Statement of Overriding Considerations and Mitigation Monitoring Plan E. Ordinance Adopting Development Agreement 11 DEV010 F. Proposed Development Agreement G. The Natelson Dale Group Economic Analyses H. Fehr & Peers Parking Demand Study I. Planning Commission & City Council Float -Up Comments [ii J. Final EIR and Mitigation Monitoring Program K. Project Plans I Sign posting and mailed notices are not required by Code for this initial discussion procedure, however, notice of the public hearing was mailed to all owners and residential and commercial tenants of property located within a (1,000 foot) radius of the project and published in the Santa Monica Daily Press at least ten consecutive calendar days prior to the hearing. On October 16, 2013, the applicant was notified of the subject hearing date. The applicant provided the following information regarding attempts to contact area property owners, residents, and recognized neighborhood associations: Community Meetings: A community meeting was held at the Santa Monica Main Public Library on October 27, 2011 to discuss the project. Fifteen members of the public were in attendance. iM AOTICE OF A PUBLIC HEARING SUBJECT: Development Agreement 11 -0 10 Environmental Impact Report 12 -001 1554 Fifth Street APPLICANT: OTO Development PROPERTY OWNER: 1550 5" Street, LLC A public hearing will be held by the City Council to consider the following request: The applicant is requesting City Council approval of a Development Agreement, Final Environmental Impact Report, and Statement of Overriding Considerations to allow a new 6 -story hotel development project (Courtyard by Marriott) consisting of 136 guest rooms, a total of 78,750 SF of floor area, and a two -level subterranean parking garage providing between 77 -108 parking spaces. The project site consists of 22,500 SF and is located on the northwest corner of 5th Street and Colorado Avenue in the downtown. As a part of the Development Agreement, the proposed project would provide certain community benefits. DATE /TIME: TUESDAY, NOVEMBER 12, 2013, AT 6:30 PM LOCATION: City Council Chambers, Second Floor Santa Monica City Hall 1685 Main Street, Santa Monica, California HOW TO COMMENT The City of Santa Monica encourages public comment. You may comment at the City Council public hearing, or by writing a letter. Written information will be given to the City Council at the meeting. Address your letters to: Steve Mizokami, Associate Planner Re: 11 DEV -010 City Planning Division 1685 Main Street, Room 212 Santa Monica, CA 90401 MORE INFORMATION If you want more information about this project or wish to review the project file, please contact Steve Mizokami at (310) 458 -8341, or by e-mail at steve.mizokami@sm og v.net. The Zoning Ordinance is available at the Planning Counter during business hours and on the City's web site at www.smgov.net. The meeting facility is wheelchair accessible. For disability - related accommodations, please contact (310) 458 -8341 or (310) 458 -8696 TTY at least 72 hours in advance. All written materials are available in alternate format upon request. Santa Monica Big Blue Bus Lines numbered 1, 2, 3, 5, 7, 8, 9, and 10 serve City Hall. EVA Pursuant to California Government Code Section 65009(b), if this matter is subsequently challenged in Court, the challenge may be limited to only those issues raised at the public hearing described in this notice, or in written correspondence delivered to the City of Santa Monica at, or prior to, the public hearing. ESPANOL Esto es una noticia de una audiencia publica para revisar applicaci6nes proponiendo desarrollo en Santa Monica. Si deseas mas informaci6n, favor de Ilamar a Carmen Gutierrez en la Divisi6n de Planificaci6n al numero (310) 458 -8341. APPROVED AS TO FORM: Amanda Schachter Planning Manager f UT R ► Development Agreement Findings DEVELOPMENT AGREEMENT FINDINGS 1. The proposed Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan. Specifically, the project is consistent with LUCE Policy D7.1 of the Downtown District, in that the proposed project balances a broad mix of uses that creates dynamic activity in both the daytime and evening hours including hotel uses in the Downtown. The project is also consistent with LUCE Policy D1.4 of the Downtown District which encourages new hotels and other visitor - serving uses in the Downtown. Goal D8 seeks to ensure that new buildings in the Downtown District contribute to the pedestrian character of the Downtown and are compatible in scale with existing buildings. Policies to implement this goal include D8.1 which states to locate primary facades of buildings fronting the street at the property line or back side of the sidewalk, to create a lively streetscape with places for people to socialize. Moreover, D8.6 states to limit ground floor uses mostly to active retail. Goal D9 seeks to enhance the quality and character of the streetscape and urban pattern in the Downtown. Such policies include D9.1 which states to design streets as integral parts of the urban open space in the Downtown by encouraging strategies such as widening sidewalks in key locations, and D9.4 which states to locate active retail space on a pedestrian street facing the sidewalk at the ground floor. The ground floor design is consistent with these goals, providing a ground floor setback of 20 feet along Colorado Avenue and 15 feet along 5th Street as contemplated in the future Downtown Specific Plan, that effectively widens the sidewalk for adequate pedestrian accessibility, and would allow for outdoor dining opportunities that would activate the street. Overall, the proposed project is consistent with these LUCE goals and policies for the downtown. 2. The proposed Development Agreement is compatible with the uses authorized in the district in which the real property is located, in that the subject property is located in the Downtown C3 -C District that permits hotels and commercial uses. The proposed Development Agreement is consistent with LUCE Policy D7.1 of the Downtown District in that the proposed hotel project balances a broad mix of uses that creates dynamic activity in both the daytime and evening hours including hotel and restaurant/commercial uses in the Downtown. Consistent with Policy D7.2 the project encourages local- serving uses that are an integral part of complete neighborhoods and support an overall trip reduction strategy. The proposed TDM plan seeks to reduce the overall parking demand and vehicular trips within the area by providing bicycle facilities for hotel guests and employees, and provisions for transit subsidies for hotel and commercial retail employees. 3. The proposed Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices, in that it allows for the redevelopment of existing, underutilize properties with a hotel 49 project that is compliant with the new Land Use and Circulation Element vision for the area. The proposed project provides a 136 guest room hotel and will feature ground floor pedestrian- oriented uses, and would provide community benefits including, but not limited to, a Colorado Esplanade contribution, an historic preservation contribution, and a TDM plan. 4. The proposed Development Agreement will not be detrimental to the health, safety and general welfare, in that the agreement would allow for the redevelopment of existing, underutilized parcels with a use that is compliant with the new Land Use and Circulation Element vision for the area. The proposed project will be located in an urbanized area and is consistent with other similar improvements in the area, and does not have the potential to disrupt the urban environment or cause health or safety problems. The proposed project provides a 136 guest room hotel and will feature ground floor pedestrian- oriented uses, and would provide community benefits including but not limited to, a Colorado Esplanade contribution, an historic preservation contribution, and a TDM plan. 5. The proposed Development Agreement will not adversely affect the orderly development of the property, in that the Development Agreement is contingent upon the review and approval of a specific site plan consistent with recognized urban design principles that reflect the goals and policies of the City of Santa Monica which were established through a long range planning process and are reflected in the recently adopted update of the Land Use and Circulation Element of the City's General Plan. 6. The proposed Development Agreement will have a positive fiscal impact on the City, in that the ground floor commercial uses are subject to City business license taxes. The City will incur no cost associated with the implementation of the applicant's Transportation Demand Management plan and the associated community benefit of reduced vehicle trips and parking demand in the area. Furthermore, if the fee or monetary contribution options required in SMMC Sections 9.04.10.20 and 9.72 for cultural arts and child care respectively are exercised, the payment of fees related to cultural arts (approximately $157,500) and child care (2012 -2013 rate: $250,425) will be required to obtain project approval. Moreover, the project would provide one -time contributions in the form of community benefits that the applicant will be required to provide pursuant to the proposed Development Agreement, including but not limited to, a Colorado Esplanade contribution of $294,000, a Fourth Court Improvement contribution of $210,000, an Historic Preservation contribution of $75,000, an Affordable Housing Linkage contribution of $21,000, and a Hospitality and Training Academy contribution of $50,000. For these reasons, the project will have a positive fiscal impact on the City. W Resolution Certifying the Environmental Impact Report 51 City Council Report - City of Santa Monica EIR Certification Resolution City Council Meeting: November 12, 2013 RESOLUTION NO. (City Council Series) Santa Monica, California A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA CERTIFYING THE FINAL ENVIRONMENTAL IMPACT REPORT ON THE 5T" AND COLORADO HOTEL PROJECTS Pagel of 3 WHEREAS, a Notice of Preparation of an Environmental Impact Report for the 5th and Colorado Hotel Projects was issued on April 30, 2012; and WHEREAS, a Notice of Completion of a Draft Environmental Impact Report was published on December 13, 2012 in compliance with the California Environmental Quality Act and the City of Santa Monica CEQA Guidelines; and WHEREAS, the Draft Environmental Impact Report was circulated for a 45 -day period which ended on January 28, 2013; and WHEREAS, the Draft EIR analyzed the potential development of the Courtyard by Marriott project at 1554 5th Street and the Hampton Inn & Suites at 501 Colorado Avenue; and WHEREAS, the Final EIR was published on May 2013; and http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -3.htm 6/5/2014 City Council Report - City of Santa Monica Page 2 of 3 WHEREAS, on October 16, 2013, the Planning Commission reviewed and considered the Final EIR and recommended that the City Council certify it; and WHEREAS, the City Council has reviewed and considered the contents of the Final EIR in its decision - making process; and WHEREAS, on November 12, 2013 the City Council, as Lead City Agency, reviewed the Final EIR; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council has reviewed and considered the information contained in the Final Environmental Impact Report on the 5t" and Colorado Hotel projects ( "Final EIR ") prior to acting on the projects. SECTION 2. The City Council certifies that the Final EIR for the projects was presented to the City Council, that the Final EIR for the projects was completed in full compliance with State law and City CEQA Guidelines, that there was adequate public review of the Draft Environmental Impact Report, that it has considered all comments on the Draft Environmental Impact Report and responses to comments, that the Final Environmental Impact Report adequately discusses all significant environmental issues, that the Final Environmental Impact Report reflects the independent judgement and analysis of the City, and that the City Council has reviewed and considered the information contained in the Final Environmental Impact Report in its decision - making process prior to acting on the projects. http: / /Www.smgov. net /departmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -3.htm 6/5/2014 City Council Report - City of Santa Monica Page 3 of 3 SECTION 3. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: MARSHA J. MOUTRIE City Attorney http: / /www.smgov. net /departments /Councillagendas/ 2013 /20l3lll2/s20l3lll207- E -3.htm 6/5/2014 RUNATO, Resolution Adopting the Statement of Overriding Considerations and Mitigation Monitoring Plan 52 City Council Report - City of Santa Monica Page 1 of 22 RESOLUTION NO. (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA MAKING FINDINGS NECESSARY TO APPROVE THE COURTYARD BY MARRIOTT PROJECT, ADOPTING A STATEMENT OF OVERRIDING CONSIDERATION, AND MITIGATION MONITORING PLAN WHEREAS, a Draft Environmental Impact Report was prepared in December 2012 and a Final Environmental Impact Report (Final EIR) was prepared in May 2013 which analyzes the environmental effects of the Courtyard by Marriott Project; and WHEREAS, the Santa Monica City Council, as Lead City Agency, reviewed the Final Environmental Impact Report in full compliance with State and City CEQA Guidelines; and WHEREAS, on November 12, 2013, the City Council certified that the Final Environmental Impact Report was prepared in full compliance with State and City CEQA Guidelines, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Consistent with Article IV, Section 12 of the City of Santa Monica CEQA Guidelines and Section 15128 of the State CEQA Guidelines, the Initial Study /Notice of Preparation determined that the following environmental impacts were not considered potentially significant and were not addressed further in the Final Environmental Impact Report: Agriculture and Forestry Resources, Biological Resources, Hydrology/Water Quality, Mineral. Resources, Population /Housing, Public Services, Recreation, and Utilities /Service Systems. SECTION 2. Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines and Section 15091 and 15092 of the State CEQA Guidelines, and as detailed in the Final EIR, the City Council finds that impacts would be less than significant without mitigation for aesthetics, air quality (operational), greenhouse gas emissions, land use, and noise (operational). http: / /www.smgov .net/departments /Council/agendas/ 2013 /20131112/s20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 2 of 22 SECTION 3. Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines and Sections 15091 and 15092 of the State of California CEQA Guidelines, the City Council finds that most impacts resulting from the proposed project can be reduced to an acceptable level. More specifically, significant environmental effects as identified below can feasibly be avoided and have been eliminated or substantially lessened to less than significant. (a) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts as a result of construction - related air quality effects. Consistent with Article VI, Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's construction - related air quality impacts to below levels of significance: AQ -2a Air Quality Management Plan. An Air Quality Management Plan for project construction shall be prepared and approved by the City. The Plan would address air quality impacts and outline measures that would be used to reduce impacts. Measures would include: • Fugitive Dust Control. All construction shall comply with the requirements of SCAQMD Rule 403, Fugitive Dust, which requires the implementation of Reasonably Available Control Measures (RACM) for all fugitive dust sources, and the Air Quality Management Plan (AQMP), which identifies Best Available Control Measures (BACM) and Best Available Control Technologies (BACT) for area sources and point sources, respectively. • Staging Area. Construction contractors shall establish an on -site construction equipment staging area and construction worker parking lot, located on either paved surfaces or unpaved surfaces subjected to soil stabilization treatments. http: / /www.smgov.netldepartments /Council/ agendas/ 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 3 of 22 Control access to public roadways by limiting curb cuts/ driveways to minimize project construction impacts upon roadway traffic operations. ®. Non- Vehicular Equipment Engines. Construction contractors shall properly maintain non - vehicular equipment engines.to minimize the volume of exhaust emissions. • Electricity. Construction contractors shall use electricity primarily from power poles, rather than temporary diesel or gasoline powered generators. • Alternative Fuel Sources. To the extent feasible, construction contractors shall use on -site mobile equipment powered by alternative fuel sources (i.e., methanol, natural gas, propane or butane). Expected use of non - alternative fuels shall be described within the Air Quality Management Plan. • Inspection of Equipment. Construction contractors shall inspect construction equipment prior to leaving the sites and wash off loose dirt with wheel washers, as necessary. • Ridesharing/ Shuttle. Construction contractors shall provide encourage ridesharing or provide shuttle service for parking by construction workers in satellite parking lots, as needed. • PM10 Reduction Measures for Grading Activities. Particulate matter reduction measures from the SCAQMD shall be applied to all grading activities occurring on the project sites throughout the construction phase. These shall include: • Apply water every 3 hours to disturbed areas within the sites; • Require minimum soil moisture of 12% for earthmoving by use of a moveable sprinkler system or a water truck; o Replace ground cover in disturbed areas as quickly as possible. If disturbed graded areas remain inactive for greater than four days, non- toxic soil stabilizers shallbe applied; and o All trucks hauling dirt, sand, soil, or other loose materials shall be tarped with a fabric cover and maintain a freeboard height of 12 inches. http:// www. smgov .netldepartmentsICounciVagendasl 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 4 of 22 • PM10 Reduction Measures for Haul Road Vehicle Activity. Particulate matter reduction measures from the SCAQMD shall be applied to all haul road vehicle activities occurring on the project sites throughout the construction phase. These shall include: • Limit on -site vehicle; • Install pipe -grid trackout - control device to reduce mud/ dirt trackout from exit routes; o Replace ground cover in disturbed areas as quickly as possible - if disturbed graded areas remain inactive for greater than four days, non- toxic soil stabilizers shall be applied; and o Apply chemical dust suppressant annually to unpaved parking areas. • PM10 Reduction Measures for Demolition Activity. Particulate matter reduction measures from the SCAQMD shall be applied to all demolition activities occurring on the project sites throughout the construction phase. These shall include: o Apply water every 4 hours to the area within 100 feet of a structure being demolished, to reduce vehicle trackout; o Apply water to disturbed soils after demolition is completed or at the end of each day of cleanup; o Prohibit demolition activities when wind speeds exceed 25 miles per hour; and o Apply dust suppressants (e.g. polymer emulsion) to disturbed areas upon completion of demolition. • Street Sweeping for Mud /dirt Trackout onto Local Streets. Implement a street sweeping program with Rule 1186 compliant PM10 efficient vacuum units (14 -day frequency). http:// www. smgov. netldepaitmentsICouncillagendasl 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 5 of 22 (b) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts to cultural resources. Consistent with Article VI, Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's cultural resources impacts to below levels of significance: MM COLA A Historic American Buildings Survey (NABS) Level II recordation document of the existing historic building on the project site shall be prepared. The HABS document shall be prepared by a qualified architectural historian, historic architect, or historic preservation professional who satisfies the Secretary of the Interior's Professional Qualification Standards for History, Architectural History, or Architecture, pursuant to 36 CFR 61. This document shall include a historical narrative on the architecture and history of the building, its architect, its occupants and their activities during the time of occupancy, and shall record the existing appearance of the building in professional large format HABS photographs. In addition, any existing and available historic photographs as well as design and/ or as -built drawings shall be compiled, reproduced, and incorporated into the recordation document. The building exterior, representative interior spaces, character - defining features, as well as the property setting and contextual views shall be documented. All documentation components shall be completed in accordance with the Guidelines for Architectural and Engineering Documentation (NABS standards). Original archivally -sound copies of the report shall be submitted to the National Park Service, Library of Congress, and the Santa Monica Historical Society. Non - archival copies shall be distributed to the City of Santa Monica Planning Division, and the Santa Monica Museum of Flying. MM CUL -2a If archaeological resources are encountered during implementation of the proposed projects, ground- disturbing activities shall temporarily be redirected from the http:// www. smgov .netldepartments /Councillagendasl 2013 l20l31112ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 6 of 22 vicinity of the find. The Applicant shall immediately notify a qualified archaeologist of the find and coordinate with the archaeologist as to the immediate treatment of the find until a proper site visit and evaluation is made by the archaeologist. The archaeologist shall be allowed to temporarily divert or redirect grading or excavation activities in the vicinity in order to make an evaluation of the find and determine appropriate treatment. Treatment may include implementation of archaeological data recovery excavations to remove the resource from the project area or preservation in place. The archaeologist shall prepare a final report about the find and shall be submitted by the Applicant to the lead agency, the South Central Coastal Information Center, and representatives of other appropriate or concerned agencies to signify the satisfactory completion of the project and required mitigation measures. The report shall include documentation and interpretation of the resources recovered including evaluation of the find's eligibility for listing in the California Register of Historic Places. The landowner, in consultation with the archaeologist and the lead agency, shall designate repositories in the event that archaeological material is recovered. The archaeologist shall also determine the need for archaeological monitoring for any ground- disturbing activities thereafter. MM CUL -2b If human remains are encountered unexpectedly during implementation of the proposed projects, State Health and Safety Code Section 7050.5 requires that no further disturbance shall occur until the County Coroner has made the necessary findings as to origin and disposition pursuant to PRC Section 5097.98. If the remains are determined to be of Native American descent, the coroner has 24 hours to notify the Native American Heritage Commission (NAHC). The NAHC shall then identify the person(s) thought to be the Most Likely Descendent (MLD). The MLD may, with the permission of the land owner, or his or her authorized representative, inspect the site of the discovery of the Native American remains and may recommend to the owner or the person responsible for the excavation work means for treating or disposing, with appropriate dignity, the human remains and any associated grave goods. The MLD shall http: / /www.smgov. net /departmentsICouncillagendasl 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 7 of 22 complete their inspection and make their recommendation within 48 hours of being granted access by the land owner to inspect the discovery. The recommendation may include the scientific removal and nondestructive analysis of human remains and items associated with Native American burials. Upon the discovery of the Native American remains, the landowner shall ensure that the immediate vicinity, according to generally accepted cultural or archaeological standards or practices, where the Native American human remains are located, is not damaged or disturbed by further development activity until the landowner has discussed and conferred, as prescribed in this mitigation measure, with the MLD regarding their recommendations, if applicable, taking into account the possibility of multiple human remains. The landowner shall discuss and confer with the descendants all reasonable options regarding the descendants' preferences for treatment. Whenever the NAHC is unable to identify a MLD, or the MLD identified fails to make a recommendation, or the landowner or his or her authorized representative rejects the recommendation of the descendants and the mediation provided for in Subdivision (k) of Section 5097.94, if invoked, fails to provide measures acceptable to the landowner, the landowner or his or her authorized representative shall inter the human remains and items associated with Native American human remains with appropriate dignity on the property in a location not subject to further and future subsurface disturbance. MM CUL -3a A qualified paleontologist shall attend a pre - grading /excavation meeting and develop a paleontological monitoring program for excavations into older Quaternary Alluvium deposits. A qualified paleontologist is defined as a paleontologist meeting the criteria established by the Society for Vertebrate Paleontology. The qualified paleontologist shall supervise a paleontological monitor who shall be present at such times as required by the paleontologist during construction excavations into native soils associated with older Quaternary Alluvium deposits. Monitoring shall consist of visually inspecting fresh exposures of rock for larger fossil remains and, where appropriate, http:// www. smgov .netldepartmentsICounciVagendasl 2013 l2013lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 8 of 22 collecting wet or dry screened sediment samples of promising horizons for smaller fossil remains. The frequency of monitoring inspections shall be determined by the paleontologist and shall be based on the rate of excavation and grading activities, the materials being excavated, and the depth of excavation, and if found, the abundance and type of fossils encountered. MM CUL -316 If a potential fossil is found, the paleontological monitor shall be allowed to temporarily divert or redirect grading and excavation activities in the area of the exposed fossil to facilitate evaluation and, if necessary, salvage. At the Paleontologist's discretion and to reduce any construction delay, the grading and excavation contractor shall assist in removing rock samples for initial processing. Any fossils encountered and recovered shall be prepared to the point of identification and catalogued before they are donated to their final repository. Any fossils collected shall be donated to a public, non - profit institution with a research interest in the materials, such as the Natural History Museum of Los Angeles County. Accompanying notes, maps, and photographs shall also be filed at the repository. MM CUL -3c The paleontologist shall prepare a report summarizing the results of the monitoring and salvaging efforts, the methodology used in these efforts, as well as a description of the fossils collected and their significance. The report shall be submitted by the Applicant to the lead agency, the Natural History Museum of Los Angeles County, and representatives of other appropriate or concerned agencies to signify the satisfactory completion of the proposed projects and required mitigation measures. MM CUL-4 As part of ongoing planning within the Downtown, the City shall review and identify significant historic resources, including the potential boundaries and key character defining features of the potential Central Business District Historic District as well as eligible contributing structures and determine if such a District meets the criteria http:// www. smgov .netldepartmentsICouncillagendasl 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 9 of 22 of the City's Landmark and Historic Preservation Ordinance. If this potential District is found to meet ordinance criteria, the City shall consider its adoption as part of the Downtown Specific Plan process. (c) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts related to geology /soils. Consistent with Article VI, Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's impacts related to geology /soils to below levels of significance: MM GEO -1 The foundation should be designed to distribute the building loads uniformly onto the supporting subgrade. By designing a relatively stiff mat, the settlement of the structure will be relatively uniform. The foundation should be designed to be sufficiently rigid to prevent the introduction of excess stresses in the superstructure above the foundation. Concrete slab -on -grade floors should be underlain by a water. vapor retarder. The water vapor retarder should consist of a vapor retarder sheeting underlain by a minimum of 3 inches of compacted, clean, gravel of 0.75 inch maximum size. The granular fill should consist of damp clean sand with at least 10 to 30 percent of the sand passing the 100 sieve. The sand should be free of clay, silt, or organic material. Concrete slabs should be reinforced with at least No. 3 reinforcing bars, places at 18 inches on center in each direction within the slabs middle third. MM GEO -2a The means and methods of installation, design and implementation of the shoring system shall be the responsibility of a licensed shoring engineer and general contractor who shall satisfy the requirements of City of Santa Monica Building & Safety and Public Works officials as well as applicable codes and laws. Whenever excavation is made adjacent to existing streets, utilities and structures, there is the potential for http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l31112ls20l3111207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 10 of 22 movement. The existing structures should be inspected and documented to preclude claims for damage or settlement that are not associated with the construction of the planned development. A monitoring program should be established so excessive movement is detected early. The monitoring program should include optical surveying of the shoring and adjacent streets and buildings to detect any horizontal or vertical movement. (d) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts related to hazards /hazardous materials. Consistent with Article A Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's impacts related to hazards /hazardous materials to below levels of significance: MM HAZ -2a Prior to any the issuance of a demolition permit, the contractor shall follow all applicable local, state and federal codes and regulations related to the treatment, handling, and disposal of ACM and LBP. MM HAZ -2b Prior to the issuance of a demolition permit, additional subsurface sampling of soil /bedrock and groundwater shall be conducted to assess potential releases associated with the listed former land uses and the potential migration of contaminants onto the project site. The analytical suite selected shall be consistent with those uses, and shall include applicable analytical methods for appropriate waste characterization and disposal. The sampling strategy shall take into account the locations of potential source areas, and the anticipated lateral and vertical distribution of contaminants in soil and /or groundwater. The results of the investigation shall be documented in a report that is signed by a qualified environmental specialist (e.g., California Professional Geologist, a licensed Professional Engineer, or similarly qualified individual). The report shall http : / /www.smgov.netldepartments /Council /agendas/ 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 11 of 22 include recommendations based upon the findings for additional investigation /remediation if contaminants are detected above applicable screening levels (e.g., excavate and dispose, groundwater and /or soil vapor extraction, or in situ bioremediation). MM HAZ -2c If remediation for contaminated soils is required, all remediation activities shall be accomplished in a manner that reduces risk to below applicable standards and the need for remediation shall be completed prior to beginning construction. Closure report or other reports regarding remediation activities of contaminated soil shall be submitted to DTSC or the appropriate governmental agency for review and approval upon completion of remediation actions. If regulatory governmental agencies determine that construction of the projects would interfere with necessary remediation, construction shall be postponed as necessary to allow for adequate remediation. (e) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts related to construction - related noise effects. Consistent with Article A Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's impacts related to construction - related noise effects to below levels of significance: MM NOI -1a Construction Noise Management Plan. A Construction Noise Management Plan shall be prepared and approved by the City. The Plan would address noise and vibration impacts and outline measures that would be used to reduce impacts. Measures would include: • To the extent that they exceed applicable construction noise limits, excavation, foundation - laying, and conditioning activities shall be restricted to between the hours of http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 12 of 22 10:00 a.m. and 3:00 p.m., Monday through Friday, in accordance with Section 4.12.110 (d) of the Santa Monica Municipal Code. • The Applicant's construction contracts shall require implementation of the following construction best management practices (BMPs) by all construction contractors and subcontractors working in or around the project sites to reduce construction noise levels: o The Applicant and its contractors and subcontractors shall ensure that construction equipment is properly muffled according to manufactures specifications or as required by the City's Department of Building and Safety, whichever is the more stringent. o The Applicant and its contractors and subcontractors shall place noise - generating construction equipment and locate construction staging areas away from sensitive uses, where feasible, to the satisfaction of the Department of Building and Safety. o The Applicant and its contractors and subcontractors shall implement noise attenuation measures which may include, but are not limited to, noise barriers or noise blankets to the satisfaction of the City's Department of Building and Safety. • The Applicant's contracts with its construction contractors and subcontractors shall include the requirement that construction staging areas, construction worker parking and the operation of earthmoving equipment within the project sites, are located as far away from vibration- and noise - sensitive sites as possible. Contract provisions incorporating the above requirements shall be included as part of the projects' construction documents, which shall be reviewed and approved by the City. • The Applicant shall require by contract specifications that heavily loaded trucks used during construction shall be routed away from residential streets to the extent possible. Contract specifications shall be included in the proposed projects' construction documents, which shall be reviewed by the City prior to issuance of a grading permit. • Meetings shall be coordinated with the management of neighboring buildings such as Step Up on Fifth, Luxe @ 1548, Luxe @ 1539, Silvercrest Retirement Home, http:// www. smgov .netldepartmentsICouncillagendasl 2013 l2Ol3lll2ls2Ol3lll2O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 13 of 22 and the Colorado Court Building to seek solutions to minimize noise impacts. Additionally, neighboring residents would be notified of the construction schedule and upcoming high level noise events. MM NOI -2a If project construction uses pile driving or vibratory techniques for foundation construction and construction of the Expo LRT has progressed to the point that infrastructure is in place that may be subject to damage from vibration, the Applicant shall install surface vibration monitors to detect vibrations that may affect future operation of the trains. The details of the placement and reporting of the vibration monitors shall be developed in coordination with the Exposition Construction Authority and Los Angeles County Metropolitan Transportation Authority. (f) The Final EIR determined that without mitigation the proposed project could result in significant adverse impacts related to construction - related transportation /traffic effects. Consistent with Article VI, Section 12 of the City CEQA Guidelines and Section 15091 and 15092 of the State of California CEQA Guidelines and as detailed in the Final EIR, the City Council finds that the following mitigation measures have been required for the project that will avoid or reduce most of the project's impacts related to construction - related transportation /traffic effects to below levels of significance: MM T -1a The Applicant shall prepare, implement and maintain a Construction Impact Mitigation Plan for review and approval prior to issuance of a building permit to address manage traffic during construction and shall be designed to: • Prevent traffic impacts on the surrounding roadway network • Minimize parking impacts both to public parking and access to private parking to the greatest extent practicable • Ensure safety for both those constructing the project and the surrounding community http: / /www.smgov .net/departments /CounciVagendas/ 2013 /20131112/s20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 14 of 22 • Prevent substantial truck traffic through residential neighborhoods The Construction Impact Mitigation Plan shall be subject to review and approval by the following City departments: Public Works, Fire, Planning and Community Development, and Police to ensure that the Plan has been designed in accordance with this mitigation measure. This review shall occur prior to issuance of grading or building permits. It shall, at a minimum, include the following: Ongoing Requirements throughout the Duration of Construction • A detailed Construction Impact Mitigation Plan for work zones shall be maintained. At a minimum, this shall include parking and travel lane configurations; warning, regulatory, guide, and directional signage; and area sidewalks, bicycle lanes, and parking lanes. The plan shall include specific information regarding the project's construction activities that may disrupt normal pedestrian and traffic flow and the measures to address these disruptions. Such plans shall be reviewed and approved by the Strategic and Transportation Planning Division prior to commencement of construction and implemented in accordance with this approval. • Work within the public right -of -way shall be performed between 9:00 AM and 4:00 PM. This work includes dirt and demolition material hauling and construction material delivery. Work within the public right -of -way outside of these hours shall only be allowed after the issuance of an after -hours construction permit. • Streets and equipment shall be cleaned in accordance with established PW requirements. • Trucks shall only travel on a City- approved construction route. Truck queuing /staging shall not be allowed on Santa Monica streets. Limited queuing may occur on the construction site itself. • An Applicant- funded on -site monitor shall be present to ensure safety when Metro workers are in the immediate vicinity, or when more dangerous activities http:// www. smgov. netldepartmentsICouncillagendasl 2013 l20l31112ls20l3111207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 15 of 22 are occurring (e.g., raising of heavy equipment to roof levels). The Plan shall identify the activities that would prompt the presence of an on -site monitor. ® Materials and equipment shall be minimally visible to the public; the preferred location for materials is to be on -site, with a minimum amount of materials within a work area in the public right -of -way, subject to a current Use of Public Property Permit. ® Any requests for work before or after normal construction hours within the public right -of -way shall be subject to review and approval through the After Hours Permit process administered by the Building and Safety Division. • Provision of off - street parking for construction workers, which may include the use of a remote location with shuttle transport to the site, if determined necessary by the City of Santa Monica. Project Coordination Elements That Shall Be Implemented Prior to Commencement of Construction • The Applicant shall advise the traveling public of impending construction activities (e.g., information signs, portable message signs, media listing /notification, and implementation of an approved Construction Impact Mitigation Plan). ® The Applicant shall obtain a Use of Public Property Permit, Excavation Permit, Sewer Permit, or Oversize Load Permit, as well as any Caltrans permits required, for any construction work requiring encroachment into public rights -of -way, detours, or any other work within the public right -of -way. • The Applicant shall provide timely notification of construction schedules to all affected agencies (e.g., Big Blue Bus, Police Department, Fire Department, Public Works Department, and Planning and Community Development Department) and to all owners and residential and commercial tenants of property within a'radius of 500 feet. http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3111207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 16 of 22 The Applicant shall coordinate construction work with affected agencies in advance of start of work. Approvals may take up to two weeks per each submittal. ® The Applicant shall obtain Strategic and Transportation Planning Division approval of any haul routes for earth, concrete, or construction materials and equipment hauling. MM T -2a The applicant shall prepare a Construction Impact Mitigation Plan and make its best faith efforts to coordinate with the Caltrans, City of Santa Monica, Los Angeles County Metropolitan Transportation Authority, and the Exposition Construction Authority. The final Construction Impact Mitigation Plan for the proposed hotels shall ensure that transportation mitigation measures set forth do not conflict with the implementation of transportation mitigation measures associated with the Colorado Esplanade Project, Expo LRT, and 520 Colorado Avenue Affordable Housing Project. Any changes to the construction or building plans that may impact the Expo LRT railroad right -of -way shall be communicated in writing by the Applicant or their contractor to Los Angeles County Metro and the Exposition Construction Authority. SECTION 4. Consistent with Article IV, Section 12 of the City of Santa Monica CEQA Guidelines and Section 15091, 15092, and 15093 of the State of California CEQA Guidelines, the City Council finds that significant adverse environmental effects in the areas of cultural resources (cumulative level), shadows, construction - related vibration impacts, and transportation /traffic (operation) cannot feasibly be avoided or mitigated to below a level of significance. Nevertheless, these impacts are found to be acceptable due to overriding considerations as discussed in Section 6. (b) (a) The Final EIR determined that the proposed project would result in significant adverse impacts to cultural impacts on a cumulative level. Consistent with Article VI, http: / /www.smgov. net /departments /Councillagendas/ 2013 /20l3lll2/s20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 17 of 22 Section 12 of the City of Santa Monica CEQA Guidelines, and as detailed in the Final EIR, the City Council finds that the project would result in demolition of the Midas Building at 1554 5th Street, which is not considered as a historic resource under federal, state, or City of Santa Monica criteria. Because the Midas Building is not eligible for listing as a historic resource under the criteria of the National Register or the California Register, or as a local landmark under the City of Santa Monica's ordinances, its demolition and replacement with new construction would be considered an adverse, but less than significant impact on an individual project level. However, the identification of the Midas Building as a contributing structure to the potential Central Business District Historic District would qualify the building as a historic resource under Section 15064.5(a)(3) of the State CEQA Guidelines. Demolition of the Midas Building would remove a visible gateway to the Central Business District and would result in the loss of the building's character - defining features that contribute to the potential historic district. Implementation of MM CUL -1 and MM CUL -4 requiring compliance with standard regulatory conditions would provide for an archival record of the potential historic district in the vicinity of the project area and ensure the proposed building design meets design standards and historic values consistent with the District. However, these measures would not fully mitigate the impacts associated with loss of this contributing structure. The Final EIR determined that the proposed project would result in significant adverse impacts to shadow impacts. Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines, and as detailed in the Final EIR, the City Council finds that the project's shadow impacts can only be mitigated through a reduction in the height and design of the building. The following mitigation measure was included in the Final EIR to address shadow impacts from the proposed project. MM SHDW -1a In order to protect solar access, the Planning Commission and City Council shall review the design (i.e., stepbacks, height, structural elements, site coverage) of the proposed projects. For the proposed Courtyard by Marriott, redesign measures such as additional step back of the fifth and sixth level and relocation the proposed stairwell closest to the Step Up on Fifth Building would be required to http: / /www.smgov. net /departments /Councillagendas/ 2013 /2Ol3lll2/s20131112O7- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 18 of 22 eliminate the shadow impact. For the Hampton Inn and Suites, relocation of both stairwells would be required or elimination of the sixth story. While the relocation of the stairwells (in addition to the step- backs), as described in MM SHDW -1a, would reduce impacts to solar access and shadows to less than significant, such modification would result in major design complications and would require significant changes to the overall building design. Therefore, barring project redesign, shadow impacts would remain significant and unavoidable. (c) The Final EIR determined that the proposed project would result in significant adverse impacts to construction - related vibration impacts. Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines, and as detailed in the Final EIR in Section 3.3, the City Council finds that the proposed project would result in construction - related vibration impacts due to the proximity of residential uses. Groundborne vibration levels have the potential to exceed the FTA human annoyance threshold of 85 VdB for residences. Although periods of high vibration levels would be limited to construction and would occur primarily during excavation, shoring and construction of foundations, the vibration levels would be disruptive to these sensitive receptors. Although Municipal Code Section 4.12.070 exempts from regulation any vibration associated with construction, it presents a significant impact under CEQA. Mitigation measure MM NOI -1a could reduce these impacts somewhat by limiting the timing of the most vibration intensive activities, locating vibration - generating equipment as far away as feasible from existing sensitive receptors, and ensuring that haul trucks associated with construction activities are routed away from residential streets such as 5th Street. However, because the sites are adjacent to residential structures and the building envelope extends to the site boundaries, such measures would be of only limited utility. Another potential mitigation measure is the use of trenching; however, this option is infeasible because the projects' building envelopes extend to the property line. Therefore, impacts to residential sensitive receptors associated with construction vibration would be significant and unavoidable. http:// www. smgov. netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 19 of 22 (d) The Final EIR determined that the proposed project would result in significant adverse impacts from transportation /traffic (intersection delay). Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines, and as detailed in Final EIR in Section 3.12, the City Council finds that the proposed project would result in traffic- related impacts that would exceed significance thresholds at one intersection under Approval Year (2013) Plus Project conditions and at four intersections under Future Year (2020) Plus Project conditions. Physical improvements are available which could potentially reduce the severity of the project approval and future year traffic impacts. However, these improvements are either: • Not scheduled or funded; or, • Would create substantial secondary impacts to pedestrian mobility and transit operation and would create potential inconsistencies with adopted City policies. As such, these potential mitigation measures would be infeasible. Therefore, the impacts at Lincoln Boulevard & 1 -10 Westbound Ramps /Olympic Boulevard under Approval Year (2012) Plus Project conditions would be significant and unavoidable, and the impacts at the four significantly impacted intersections under Future (Year 2020) Plus Project conditions would be significant and unavoidable. SECTION 5. The Final EIR found that the No Project Alternative would be environmentally superior to the proposed project on the basis of the minimization or avoidance of physical environmental impacts. However, the CEQA Guidelines require that if the environmentally superior alternative is the No Project alternative, that the EIR also identify an environmentally superior alternative among the other alternatives. Consistent with Article VI, Section 12 of the City of Santa Monica CEQA Guidelines and Section 15091, 15092, and 15093 of the State of California CEQA Guidelines, and as detailed in Final EIR Chapter 5.0, the City Council finds that, based on the other project alternatives, Alternative 2, the Incorporation of Historic Buildings Alternative, would reduce significant impacts to cultural resources to less than significant, and traffic, solar access and shadows, and aesthetics impacts would also be http: / /Www.smgov. net ldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 20 of 22 reduced. Therefore this alternative is considered to be the environmentally superior alternative for the Courtyard by Marriott site. However, this alternative would not fully meet the Project Objectives for providing moderately priced accommodations downtown. In addition, the value enhancement and financial feasibility analysis prepared by the City's economic consultant indicates that this alternative would not be financially feasible. SECTION 6. The preceding Findings, although based primarily on conclusions in the Final EIR, have not attempted to describe the full analysis of each environmental impact contained in the Final EIR. Instead, the Findings incorporate by reference the discussions and analyses in the Final EIR and supporting reference documents supporting the Final EIR's determinations regarding the nature and severity of the impacts of the LUCE and mitigation measures designed to address those impacts. In making these findings, the City Council ratifies, adopts, and incorporates into these findings the analysis and explanation in the Final EIR and ratifies, adopts, and incorporates in these findings the determinations and conclusions of the Final EIR. SECTION 7. The Final EIR found that the project would result in significant unavoidable adverse impacts in the areas of cultural resources, shadows, construction - related vibration, and traffic /transportation. Consistent with Article VI, Section 13 of the City CEQA Guidelines and Section 15093 of the State of California CEQA Guidelines, the City Council hereby makes a Statement of Overriding Considerations and finds that the benefits of the project outweigh its unavoidable environmental impacts based on the reasons stated below. The benefits identified are each one, in and of themselves, sufficient to make a determination that the adverse environmental effects are acceptable. The applicant will provide the following project and community benefits required by Article 2.7 of the Development Agreement, which is incorporated herein by reference: http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 21 of 22 • Tax revenues, including transient occupancy tax, sales tax, property tax, business license tax, parking tax, and utility user's tax. • Providing new construction jobs and employment opportunities in the Hotel and Leasable Space. • Providing the Santa Monica - Malibu Unified School District with fee revenue for capital improvements. • Providing a Hotel Living Wage consistent with the City's Living Wage Ordinance. • Ground floor open space for public use. • Local hiring program for construction and permanent hotel and leasable space employees. Program includes a job fair for Santa Monica residents. • Transportation Demand Management measures, including: • AVR of 2.0. • Financial incentives for project employees to use public transit. • Bicycle parking for employees, hotel guests and visitors. • Bicycle rentals for shared use by hotel guests. • Parking spaces reserved for car share spaces. • Unbundled parking for commercial tenants. • On -site bicycle shower and locker facilities for employees. • Building design that would achieve LEED® Gold certification. • Roof - mounted solar energy systems, including photovoltaic solar panels. • Monetary contributions supporting the Colorado Esplanade, Historic Preservation, and Hospitality Training. • "Electric Vehicle ready" parking spaces. • Shared parking for surrounding residents and businesses. • Paid internships for students of Santa Monica High and Santa Monica College. • Community meeting space for non - profit or other community organizations. • Reserved space for a future bike share facility instituted by the City. http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 City Council Report - City of Santa Monica Page 22 of 22 SECTION 8. Consistent with Public Resources Code Section 21081.6, the City Council adopts the Mitigation Monitoring and Reporting Program, which is included as Section 11 of the Final EIR, to mitigate or avoid significant effects of the project on the environment, as detailed in Sections 3 and 4 of this resolution, and to ensure compliance during project implementation. SECTION 9. Consistent with Section 21081.6 of the California Environmental Quality Act, the documents which constitute the record of proceedings for approving this project are located in the Planning and Community Development Department, 1685 Main Street, Room 212, Santa Monica, California. The custodian of these documents is Steve Mizokami, Associate Planner. SECTION 10. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: MARSHA JONES MOUTRIE City Attorney http:// www. smgov .netldepartmentsICouncillagendasl 2013 l20l3lll2ls20l3lll207- E -4.htm 6/5/2014 53 City Council Meeting 11 -12 -13 Santa Monica, California ORDINANCE NUMBER (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA APPROVING THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SANTA MONICA, A MUNICIPAL CORPORATION, PALMETTO HOSPITALITY OF SANTA MONICA I, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AND 1550 5TH STREET LLC, A CALIFORNIA LIMITED LIABILITY COMPANY WHEREAS, on July 14, 2011, Palmetto Hospitality of Santa Monica I, LLC, a California limited liability company, hereinafter "Developer," submitted an application for a development agreement for a mixed -use limited service hotel project that also includes separately leasable commercial space on portions of the ground; and WHEREAS, a Draft Environmental Impact Report, dated December 13, 2012, and a Final Environmental Impact Report, dated May 2013, have been prepared analyzing the environmental effects of the development agreement; and WHEREAS, on November 12, 2013, the City Council adopted resolutions certifying the Final Environmental Report and adopting a statement of overriding considerations and mitigation monitoring plan; and WHEREAS, the proposed Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan, as described below and as detailed in the accompanying u City Council staff report prepared for this proposed project and exhibits thereto, including but not limited to: (a) The project is consistent with LUCE Policy D7.1 of the Downtown District, in that the proposed project balances a broad mix of uses that creates dynamic activity in both the daytime and evening hours including a 136 guest room hotel and ground floor pedestrian- oriented uses in the Downtown. (b) The project is also consistent with LUCE Policy DI A of the Downtown District, which encourages new hotels and other visitor - serving uses in the Downtown. (c) LUCE Goal D8 of the Downtown District seeks to ensure that new buildings in the Downtown District contribute to the pedestrian character of the Downtown and are compatible in scale with existing buildings. Policies to implement this goal include LUCE Policy D8.1 of the Downtown District, which seeks to locate primary facades of buildings fronting the street at the property line or back side of the sidewalk, to create a lively streetscape with places for people to socialize. LUCE Goal D9 of the Downtown District seeks to enhance the quality and character of the streetscape and urban pattern in the Downtown. Policies to implement this goal include LUCE Policy D9.1 of the Downtown District, which seeks to design streets as integral parts of the urban open space in the Downtown by encouraging strategies such as widening sidewalks in key locations. The ground floor design of the project provides a ground floor setback of 20 feet along Colorado Avenue and 15 feet along 5th Street as contemplated in the future Downtown Specific Plan, which effectively widens the sidewalk for adequate pedestrian accessibility, and allows for outdoor dining 2 opportunities that would activate the street. Thus, the proposed project is consistent with the above referenced LUCE goals and policies for Downtown. (d) Consistent with LUCE Policy D7.2 of the Downtown District, the project encourages local- serving uses that are an integral part of complete neighborhoods and support an overall trip reduction strategy. The proposed Transportation Demand Management ( "TDM ") plan for the project seeks to reduce the overall parking demand and vehicular trips within the area by providing bicycle facilities for hotel guests and employees, and provisions for transit subsidies for hotel and commercial restaurant and /or retail employees. (e) The proposed Development Agreement allows for the redevelopment of existing, underutilize properties with a hotel project that is compliant with the new Land Use and Circulation Element vision for the area. (f) The Development Agreement is consistent with recognized urban design principles that reflect the goals and policies of the City of Santa Monica which were established through a long range planning process and are reflected in the recently adopted update of the Land Use and Circulation Element of the City's General Plan. (g) The proposed project would provide community benefits consistent with Chapter 3.2 of the LUCE, including but not limited to, a Colorado Esplanade contribution, an historic preservation contribution, and a TDM plan. 3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The Development Agreement attached hereto as Exhibit 1 and incorporated herein by reference by and between the City of Santa Monica, a municipal corporation, Palmetto Hospitality of Santa Monica I, LLC, a California limited liability company, and 1550 5th Street LLC, a California limited liability company, is hereby approved. SECTION 2. Each and every term and condition of the Development Agreement approved in Section 1 of this Ordinance shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The City Council of the City of Santa Monica finds that public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Development Agreement, to the extent of such inconsistencies and no further, be repealed or modified to that extent necessary to make fully effective the provisions of this Development Agreement. SECTION 3. 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, are hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 4. 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 any 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, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. 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 be effective 30 days from its adoption. APPROVED AS TO FORM: A Reference: Attachment E - Proposed Development Agreement Is available at the City Clerk's Office Filed with Staff Report 11 -12- 2013, Item 7E Within Legislative File 401 -022 Reference: Attachment G — The Natelson Dale Group Economic Analyses Is available at the City Clerk's Office Filed with Staff Report 11 -12 -2013, Item 7E Within Legislative File 401 -022 Reference: Attachment H — Fehr & Peers Parking Demand Study Is available at the City Clerk's Office Filed with Staff Report 11 -12 -2013, Item 7E Within Legislative File 401 -022 .: • • • a: • •. ! • 57 PC Float -Up Meeting: December 14, 2011 1554 5th Street + 501 Colorado Avenue Courtyard Marriott I Hampton Inn & Suites Planning Commission Comments: Float -Up Review 1. Courtyard Marriott Site: Potential historic preservation of Midas building should be analyzed immediately. Any adaptive re -use of the building could be considered as a community benefit (preservation of historic property). 2. Ensure that both hotels remain as mid - ranged priced hotels. 3. Living Wage: Provide a living wage for hotel employees. 4. Local Hiring Provision: Include a local hiring provision for both construction workers and hotel employees. 5. Design Concept and Ground Floor Uses: The hotel projects must be designed to accommodate the light rail and Colorado Esplanade projects. Specifically, the ground floor design and uses should accommodate light rail and Esplanade pedestrians. 6. Design Concept: Enhance both project's overall design to Santa Monica, and improve the gateway and street corner presence of each site. 7. Design Concept: Differentiate the two building designs; they don't necessarily have to mimic each other, and should have some design independence while relating. 8. Design: Improve the ground floor pedestrian- orientated design for both sites. Ground floor design should include outdoor seating areas for the restaurant /retail service component and should be designed to activate the sidewalk. 9. Design /Community Benefit: Provide additional open space adjacent to the sidewalk to effectively expand the existing sidewalks adjacent to the project along Colorado Avenue, 51h Street, and at the street corners. 10. Design: Ground floor programming should be oriented to the street. Uses that do not activate the street, such as offices or blank walls, should be located away from the sidewalk elevations. 11. Design: Ground floor should have floor to floor heights of 15' -18'. 12. Design: Design the rooftop outdoor deck area to limit potential noise impacts on adjacent residential uses. 13. Design: Enhance the facade designs for the elevations along the north property lines (adjacent to the Step -Up building and Fred Segal park lot) for both projects. 14. Use: Provide ground floor retail /service component for both hotels to activate the street. The type of retail /service use should cater to /support future light rail passengers and esplanade pedestrians such as a cafe, coffee, food, drink, media, etc. 15. Courtyard Marriott Driveway Access: Due to future light rail along Colorado Avenue and anticipated growth of pedestrian activity, the vehicular driveway should be relocated from Colorado Avenue to 5th Street. 16. Site Design: Ensure that the ground floor design does not impact and embraces the Bike Action Plan's 41h Street bike paths. 17. Design: Reduce the auto - centric design. ?if 18. Design /Operations: Reduce levels of energy consumption of both hotels. Consider methods of water reduction /recycling. Proactively research other hotels in Santa Monica regarding sustainable operations /methods. 19. Design: Project should increase water efficiency, use of reclaimed water (purple pipe) for these sites. 20. Parking: Demonstrate that the proposed number of parking spaces is appropriate, considering the adjacency of the light rail. 21. Meeting Space: Limit meeting space to local community in efforts to reduce parking demand and traffic. 22. Community Benefit: Provide a Downtown Transportation and Circulation Infrastructure Contribution to support a variety of improvements in the downtown area. The amount should be greater than previous amounts for downtown projects. 23. TDM Program: Initiate a bike share program. 24. TDM Program: Include provision to provide metro /bus passes for hotel employees, and include flex -car parking spaces on -site for car - sharing programs. 25. TDM /Operations: Consider use of shuttles for guests to places in Santa Monica to help reduce vehicular trips in the area. 26. Subterranean Garages: Alternative to access along 5th Street, consider connecting the two project subterranean garages below grade, thereby eliminating the need for vehicular access to the Courtyard Marriott site. 27. ARB Review: Consider a courtesy review of the project by ARB prior to formal hearings by PC and CC? 28. Timing of Construction: Timing of construction considering the light rail and esplanade improvements, is a concern. 29. Building Height Comparison /Analysis: Provide building height analysis /graphics and show relationship between the project and other buildings in the area, and include code requirements VS. proposed building heights analysis. Council Float -Up Meeting: April 10, 2012 1554 5'h Street + 501 Colorado Avenue Courtyard Marriott I Hampton Inn & Suites City Council Comments: Float -Up Review 1. Prioritize community benefits. 2. Community Benefits: Some of the community benefits identified in the staff report should no longer be considered "community benefits ". Must re- evaluate. 3. Community Benefit: Provide a Downtown Transportation and Circulation Infrastructure Contribution to support a variety of improvements in the downtown area, including an open space contribution. The amount should be greater than previous amounts for downtown projects. 4. Design /Community Benefit: Provide greater /additional open space adjacent to the sidewalk to effectively expand the existing sidewalks adjacent to the project along Colorado Avenue, 5th Street, and at the street corners (wider sidewalks). 5. Community Benefit: Local Circulator Subsidy /Contribution: Consider providing funding resource for a local circulator (such as the Tide Ride) within the Downtown. 6. Community Benefit: Local Hiring Provision: Provide a local hiring provision for employees. 7. Living Wage: Provide a living wage for hotel employees. 8. Health Care: Health care details must be provided, with greater health care benefits for hotel employees. 9. Valet Parking /Drop -Off Operations: Provide valet and drop -off operations on subterranean garage level to avoid vehicle queuing onto the street /sidewalk and to improve the street experience (minimize autocentric design). 10. TDM Plan: Metro /Bus Passes: Provide metro /bus passes for employees (on- going) to encourage the use of public transportation and reduce vehicular trips. The rate of subsidy, whether 100% or 'reduced" to be negotiated. Council recommended either free or slightly reduced passes (deep subsidy). 11. TDM Plan: Metro /Bus Passes: Provide metro /bus passes for hotel guests (on- going) to encourage the use of public transportation and reduce vehicular trips. The rate of subsidy to be negotiated. 12. TDM Plan: Flex Car /Car Sharing: Provide parking spaces designated for car sharing program, and initiate car sharing program for hotel guests /public. 13. Design Concept and Ground Floor Uses: The hotel projects must be designed to accommodate the light rail and Colorado Esplanade projects. Specifically, the ground floor design and uses should accommodate light rail and Esplanade pedestrians. The project should relate to the Esplanade. 14. Design: Courtyard Marriot: Concerns with stucco material and lack of movement of the windows along Colorado Avenue + 5th Street elevations. 15. Design: Eyes on Street Concept: Courtyard Marriott: Provide balconies along elevations to provide open space and visual interest. 16. Design: Would additional height help t articulation, movement of the building, consider FAR limitation) > achieve other goals such as additional greater ground floor open space? (Must 17. Courtyard Marriot: Ground floor restaurant operator must appeal to the general public (potentially via third party operator), and not be a typical hotel restaurant that serves hotel guests. 18. ARB Review: Consider a courtesy review of the project by ARB prior to formal hearings by PC and CC. 19. Financial Analysis: Provide a financial analysis on the project. 20. Provide a Price Elasticity Analysis (Average Daily Rate analysis). 21. Brand of the hotel to run consistent with the DA timeframe. Reference: Attachment H — Fehr & Peers Parking Demand Study Is available at the City Clerk's Office Filed with Staff Report 11 -12 -2013, Item 7E Within Legislative File 401 -022 Reference: Attachment K— Project Plans Is available at the City Clerk's Office Filed with Staff Report 11 -12 -2013, Item 7E Within Legislative File 401 -022