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SR 05-10-2016 7D City Council Report City Council Meeting: May 10, 2016 Agenda Item: 7.D To: Mayor and City Council From: David Martin, Director, Planning and Community Development, Planning & Community Development, City Planning Subject: Introduction and first reading of an Ordinance adopting Development Agreement 13DEV-008 and General Plan Text Amendment 15ENT-0232 to allow a new 7-story (84 feet), 301,830 square foot mixed-use development project consisting of 35,428 square feet of ground floor commercial area, 24,217 square feet of subterranean commercial area, 249 residential units, and 524 parking spaces within a four-level subterranean parking garage. Additionally, a Zoning Map Amendment 15ENT-0307 is proposed to change the zoning district from M-1 (Industrial Conservation) to MUB (Mixed Use Boulevard) for the rear portion of the property located at 1626 Lincoln Boulevard for the development of a 100% Affordable Housing Development in connection with the 500 Broadway project (off-site affordable housing). Recommended Action Staff recommends the City Council: 1. Adopt a Resolution certifying the Final Environmental Impact Report prepared for the project in accordance with CEQA; 2. Adopt a Resolution adopting a Statement of Overriding Considerations and Mitigation Monitoring Program for the project; 3. Adopt a Resolution approving General Plan Text Amendment 15ENT-0232 for the 500 Broadway project; 4. Introduce for first reading an ordinance approving Zoning Map Amendment 15ENT-0307 for a 100% affordable housing project located at 1626 Lincoln Boulevard which is the off-site affordable housing for the 500 Broadway project; and, 5. Introduce for first reading an ordinance adopting the proposed Development Agreement. 1 of 50 Executive Summary As we look toward adoption of the Downtown Community Plan early next year, this project is one of the last (and the largest) Development Agreements to be processed under the Interim Zoning Ordinance. As such, it reflects a turning point away from project-by-project planning consideration toward a more comprehensive and consistent approach to achieving the lengthy and intense scrutiny involving the balancing the provision of both market rate and affordable housing and increasing services to Downtown residents with the addition of a grocery market with concerns about vehicle traffic, infrastructure impacts and the design character of new building. The applicant, DK Broadway, LLC, proposes a Development Agreement to allow a new mixed-use building located at 500 Broadway. The project involves the construction of a 7-story (84 feet) building consisting of 301,830 total square feet, including 24,217 square feet of basement area, 35,428 square feet of ground floor commercial space, 249 residential rental units, and 524 parking spaces within a four-level subterranean parking garage. The project site consists of two contiguous parcels with a total of th 67,500 square feet located on the southeast corner of Broadway and 5 Street, and th extending 450 feet in length along the east side of 5 Street (between Broadway and Colorado Avenue). The site is currently developed with a one-story commercial building and surface parking lot (Fred Segal). The site is located in the C3C zoning district and Downtown Core land use designation of the Land Use and Circulation E located in the Downtown Core land use designation with proposed buildings exceeding 32 feet in height. Furthermore, the project is subject to the 1984 Land Use and Circulation Element of the general plan until the adoption of the Downtown Community Plan. Project compliance is limited to the LUCE, while other aspects of the project such as height, floor area ratio, setbacks, open space, parking, and other standard zoning requirements would be established by the Development Agreement. The applicant requests General Plan Text Amendment 15ENT-0232 that would amend the 1984 LUCE maximum Floor Area Ratio from 3.5 to 4.0 and allow no limitation on the number of stories of any structure containing at least one floor of residential use, so long as the height does not exceed the maximum height in number of feet. No change to the LUCE maximum allowable building height of 84 feet is proposed. The proposed increase in allowable FAR from 3.5 to 4.0 within the Downtown Core area further reinforces the Downtown as the focus of the City, supporting the greatest concentration of activity adjacent to the Bayside District, and in proximity to the Expo light rail terminus station and Colorado Esplanade, consistent with LUCE objectives. The proposed amendment to allow no limitations on the number of stories provides a housing incentive that would allow projects with greater flexibility in achieving allowable floor 2 of 50 area. Staff is supportive of these LUCE amendments based on the findings provided in this report. The project includes an off-site affordable housing component that includes the dedication of land to Community Corporation of Santa Monica (CCSM), a non-profit housing provider, and the construction of a 100% affordable housing project with 64 residential units located at 1626 Lincoln Boulevard. The land dedication would satisfy tion while the additional land cost exceeding AHPP requirements, and the gap financing and construction of 64 affordable housing units would be provided as a community benefit negotiated in the 500 Broadway development agreement. CCSM is pursuing Low Income Housing Tax Credits (9% or 4% credits) for the 1626 Lincoln project. The off-site location is currently divided into two LUCE and Zoning designations; the approximate front ¾ depth of the property is located in the Mixed-Use Boulevard LUCE designation and Mixed-Use Boulevard Zoning designation. The approximate rear ¼ depth of the property is located in the Downtown Core LUCE designation and M1 zoning designation. In order to develop the site under the same zoning development standards, Community Corporation of Santa Monica (CCSM) requests a zone change of the rear portion of the parcel currently zoned M1 (Industrial Conservation) to MUB (Mixed-Use Boulevard) to be consistent with the current zoning for the front portion of the parcel. The 1626 Lincoln project will require approval of a Development Review permit, which will be considered by the Planning Commission on May 11, 2016. The order in which these for Low Income Housing Tax Credits by June 2016 to assist with financing the 100% affordable housing project. The proximity of the project site to the Expo light rail terminus station and the Colorado Esplanade are important considerations. From an urban design perspective and based on the draft DCP, increased density at the proposed site would be appropriate and is supported by the anticipated increase in pedestrian volumes in this transit-adjacent area of the Downtown. The project would provide transit-adjacent housing and neighborhood-serving commercial uses in proximity to light rail and transit opportunities, convenient for residents to use alternate modes of transportation other than private ogram, would further City goals of increasing transportation choice. Also consistent with mobility th goals for the Downtown, the project would widen sidewalks along 5 Street and Broadway that would expand pedestrian capacity and enhance the pedestrian experience adjacent to the project. Consistent with City goals to nurture a complete and long-term Downtown community, the Development Agreement would provide a mix of sizable units, and would also result in the construction of 64 affordable housing units that would expand affordable family housing and help balance the housing mix in the Downtown. For these reasons, in addition to a comprehensive community benefits package, staff recommends approval of the project based on the findings contained in the staff report. 3 of 50 On October 13, 2015, Council gave direction that certain priority projects could be processed prior to the adoption of the Downtown Community Plan. The 500 Broadway project was identified because it had completed float-up reviews and would provide a significant source of housing in the Downtown. In negotiating the project, staff closely followed the expectations identified in the draft Downtown Specific Plan (February 2014 version) in addition to those in the LUCE, Water Master Plan, Climate Action Plan, and direction from Planning Commission and City Council during the float-up discussions. The proposed project has an overall unit mix of 20% studios, 50% one-bedroom units, 20% two-bedroom units, and 10% three-bedroom units. Background The project site consists of two contiguous parcels with a total of 67,500 square feet th located on the southeast corner of Broadway and 5 Street. The site has 150 feet of th frontage along Broadway and 450 feet of frontage along the east side of 5 Street (between Broadway and Colorado Avenue). The site is currently developed with a one- story commercial building and a 92-space surface parking lot (Fred Segal). th View East on Broadway View North on 5 Street View South on 5 th Street View West on Broadway 4 of 50 Area Context thth Surrounding uses along 5 Street, Broadway, and across the 5 Court Alley include commercial retail and office, hotel (future Courtyard Marriott and Hampton Inn and Suites hotels), and residential uses. Across Broadway to the north is a one-story commercial building with a pending Development Agreement application for a 6-story mixed-use project. Existing structures in the area range in building height. The adjacent forthcoming 6-story Hampton Inn and Suites hotel would be 77 feet in height, th and all mixed-use residential buildings (4) across the 5 Court Alley on the west side of thth 6 Street (1522-1548 6 Street) are 5-stories, 60 feet in height. The adjacent office th building across the 5 Court Alley (520 Colorado Avenue) is 6-stories, 84 feet in height. th The west side of 5 Street is developed with a one-story retail building (420 Broadway, Fred Segal), the 6--- Up on Fifth residential building, and the forthcoming 6-st hotel. The project site is a half block from the future light rail terminus station at the th corner of 4 Street and Colorado Avenue. This development agreement application was submitted to the City on August 27, 2013, and has been reviewed consistent with the public process including a community meeting, ARB concept review, Planning Commission and City Council float-up reviews, and Planning Commission formal consideration as summarized in Attachment M. Planning Commission Action The Planning Commission reviewed this development agreement on March 9, 2016 and voted 6-1 recommending that the City Council certify the Final EIR and approve the 5 of 50 project, general plan amendment, LUCE map amendment, and adopt the proposed Development Agreement with the following recommendations: 1. The Development Agreement should include a provision that prohibits all commercial office use in the project. The applicant has agreed to this recommendation, and language prohibiting all office uses including Business and Professional, Creative, Medical and Dental, and Walk-in Clientele are prohibited \[DA Section 2.5.1(c)(7)\]. 2. The project should provide 20 additional long-term bike parking spaces for employees. The applicant has agreed to this recommendation, and an additional 20 long-term bike parking spaces for a total of 64 spaces are provided in the project as shown on the project plans. 3. The project should provide at least 3 electric charging stations within the EV ready parking spaces provided for the project. The applicant has agreed to this recommendation, and 3 electric charging stations within the EV ready parking spaces will be provided in the project as shown on the project plans. 4. The number of unreserved commercial parking spaces available for public use should be increased from 135 to 145. The applicant has agreed to this recommendation, and this change has been revised in the Agreement \[DA Section 2.8.10(a)\]. 5. The commercial parking demand shall be analyzed commencing two years from Certificate of Occupancy to determine whether any additional commercial spaces up to 55 additional spaces (200 in total) may become unreserved spaces available for public use. The applicant has agreed to this recommendation, and a provision in the Agreement has been added accordingly. \[DA Section 2.8.10(b)\]. 6. The project shall provide space within the subterranean garage for the storage of energy fuel cells. The applicant has agreed to this recommendation, and a provision in the Agreement has been added accordingly \[DA Section 2.8.21\]. 7. The developer should provide a transit subsidy between 25-50% of the cost of a monthly regional transit pass for 1-3 months for new project residents electing not to obtain the resident transportation allowance prescribed in the Agreement. The applicant has agreed to this recommendation, and proposes a transit subsidy of 25% of the cost of a monthly regional transit pass for 3 months for new project residents electing not to receive a transportation allowance \[DA Section 2.8.7(e)(3)(ii)\]. 6 of 50 thth 8. The cross court driveway connecting 5 Street and 5 Court Alley shall remain open at all times. Condition No. 7 has been added reflecting this recommendation. 9. Increase availability of the community room for public use from 2 to 4 times per month. The applicant has agreed to this recommendation, and DA section 2.8.10 has been revised accordingly. 10. Allow the ARB to have design flexibility in amount of floor area reduction that may result from the Architectural Review Board design review procedures no greater than a 2% reduction in ground floor commercial area and no greater than a 5% in upper residential floor. Staff is supportive of this recommendation. The applicant does not agree to this recommendation however considering the Planning Comm has revised their proposal from 2% to 3% specific for the residential floor area only. The applicant expresses concerns with since float-up review, including reductions in floor area (4.5 to 4.0), and increased ground floor open space. Staff and the applicant have agreed to disagree on this issue and as a result, both proposals are shown in the DA. \[DA Section 6.1\]. 11. The ARB should pay particular attentio it may affect Project and neighboring uses. Condition No. 2(e) has been added reflecting this recommendation. 12. The ARB should pay particular attention to ensure that the publicly-accessible open space immediately west of the main residential lobby is usable by the public and contributes to the pedestrian environment of the surrounding publicly accessible open space. Condition No. 2(f) has been added reflecting this recommendation. 13. The Planning Commission recommended that the City Council should further support the use of SMURRF water for this type of project. Project Analysis Project Description The project is a 7-story building with a maximum height of 84 feet, consisting of 35,428 SF of ground floor commercial space, 24,217 square feet of subterranean commercial space, 249 residential units with 233,600 square feet of residential floor area, and a floor area ratio (FAR) of 4.0. The four-level subterranean parking garage consists of 7 of 50 524 parking spaces, and a total of 29,041 square feet of commercial (24,217 SF) and residential (4,824 SF) area that are excluded from the floor area ratio calculation. The ground floor and subterranean commercial space could include pedestrian-oriented, neighborhood-serving commercial uses including a general market, restaurant, retail establishments, fitness/exercise facility. The development agreement places a leasing priority for at least 15,000 square feet of general market at the ground floor level. al component consists of 249 residential units with the following unit configuration: Unit Type Number of Units Bedrooms Percentage Average Sq Ft Studio 49 0 19.7% 573 1-Bed 125 125 50.2% 820 2-Bed 50 100 20.1% 1,174 3-Bed 25 75 10.0% 1,359 Total 249 300 100% 982 SF Total Project Average Bedroom Factor (300/249) = 1.2 The proposed unit mix percentages are consistent with Development Agreement priority processing guidelines established by the City Council of 20% maximum studios, minimum 20% two-bedroom units, and minimum 10% three-bedroom units. Further, the average number of bedrooms for all of the market-rate units combined is 1.2, consistent with the 1.2-1.5 unit mix threshold established for Tier 2 projects pursuant to the Zoning code. Project Design + Site Planning The proposed building design is modern/contemporary. The building is divided into four separate building forms above the podium level (second floor) with landscaped courts in between the structures designed with seat walls for project residents. The upper levels above the podium level consist of residential uses, and are connected by open pedestrian bridges on each floor providing access between the buildings. Separating the building into four sections breaks the overall length and building mass of the entire structure, and allows for adequate light and air passage through the project and separation between residential units. These physical breaks between the buildings also provide light, air, and building mass relief for adjacent office and residential uses across th the 5 Court alley. Exterior building materials would consist of smooth limestone plaster, 8 of 50 operable and fixed sunshade louvers, board formed concrete, and aluminum frame windows and balcony doors. The four building elements are designed with windows in a variety of sizes and arrangements (horizontally and vertically) on each internal and external elevation, and include private balconies with steel cable or semi-transparent glass railings. To ensure there is adequate privacy between north/south facing residential units, staff has included Condition No. 2 requiring that the ARB pay particular attention to the use and materiality of the privacy louvers/screens. th 5 Street Elevation | Corridor View Between Buildings Ground Floor Commercial Uses The ground floor commercial space would include pedestrian-oriented, neighborhood- serving commercial uses that may include market, restaurant, and retail establishments. The project includes approximately 34,577 SF of ground floor commercial area (35,428 SF including support areas) divided within two physically separated areas (8,068 SF and 26,509 SF). Although separate tenant spaces may be created to accommodate a variety of commercial uses, the larger of the spaces has been designed to accommodate a general market use. As indicated during concept review, a ground floor market had been commented by the Commission and Council as an important project component as proposed by the applicant. Accordingly, the Development Agreement (Article 2.25) includes a provision that prioritizes a general market use on the ground floor. Specifically, the developer is required to provide a general market on the ground floor, unless unable to secure a tenant after demonstrated good faith attempts for 180 days, and may propose alternate commercial uses, subject to discretion of the Planning Director. The provision also requires the market to participate in the Calfresh program, federally known as the Supplemental Nutrition Assistance Program (SNAP) that 9 of 50 provides debit cards to low-income individuals and families that can be used at markets to purchase food. This would allow the market to be more accessible to low-income individuals and families. Pedestrian Orientation + Open Space Ground Floor Open Space The conceptual ground floor design shown as Figure 1 below has been revised resulting in an increase in the amount of ground floor open space, an improvement in the overall th pedestrian realm, and adequate pedestrian space along 5 Street. Figure 1: Float-Up Conceptual Ground Floor Plan + Vehicular Access Changes to the conceptual ground floor plans include the following: 1. Reduced Ground Floor Commercial Space: The ground floor commercial space was reduced by approximately 4,000 SF, resulting in reduced floor area, and greater ground floor setbacks/open space. 2. Additional Ground Floor Setback: Portions of the building frontage have been th further recessed 18-24 feet on Broadway and 19-51 feet on 5 Street resulting in additional open space with a minimum unobstructed pedestrian clear zone of 12 feet along both street frontages. 3. Ground Floor Courtyard: Additional open space (plaza) in between the first two buildings from the street corner has been created on the ground floor and is open above (no projecting podium level above), leading to the recessed centralized residential lobby. Relocating the residential lobby from its previous location allows th for increased storefront visibility and improved use of the open space along 5 St. 10 of 50 4. Building/Cross Court Driveway Corner: The pedestrian orientation at the driveway th corner has been improved. The width of the cross court driveway connecting 5 Street and the alley has been reduced, allowing for additional open space for pedestrian circulation, outdoor seating, and short-term bike parking. Figure 2: Proposed Ground Floor Plan + Vehicular Access Loading Dock The proposed ground floor building design incorporates glazing surfaces with varying th setbacks throughout the 5 Street elevation, providing outdoor seating opportunities, adequate sidewalk space for pedestrian circulation, short-term bike parking, and gathering spaces adjacent to the public sidewalk. The ground floor would have a 20 foot floor-to-floor height with transparent glazing, exceeding the minimum draft DCP standard of 18 feet. Pockets of outdoor seating areas are th proposed facing 5 Street, with the largest open area identified on the plans as the public plaza at the street corner. The ground floor would include approximately 2,790 SF of outdoor dining area to support restaurant and food serving uses. The ground floor building setback provides additional sidewalk width exceeding th the minimum sidewalk width of 15 feet (curb to building) along 5 Street, and 18 feet along Broadway as contemplated in the draft Downtown Community Plan (DCP). More th specifically, the ground floor storefronts along 5 Street are generally setback from the curb ranging from 32-37 feet and 45-51 feet at the street corner, and range from 18-24 feet along Broadway, as shown in Figure 2 above. Although structural column, 11 of 50 stair/elevator shaft, and light well projections are located within the ground floor open space areas, a mi- maintained between the existing tree wells and these projections. This clearance would sidewalk, particularly at these reduced points along the sidewalk. No permanent physical obstructions, including outdoor dining, may be located within this clear pedestrian zone as described in DA Section 2.8.2 and as shown in the Publicly Accessible Open Space plan provided as Exhibit L. To ensure there is adequate space for pedestrian circulation, staff recommends that the ARB pay particular attention to the th proposed placement of the building columns on the ground floor along the 5 Street elevation (Condition 2). The main residential lobby is located between the first two buildings from the street corner, with a smaller secondary lobby adjacent to the cross court driveway. The primary lobby is also accessible from the rear alley through the short-term residential bike parking area. Short-term bike parking for commercial visitors is spread throughout the ground floor. Resident short-term bike parking is provided adjacent to the main residential lobby, accessible from the rear alley. Along the alley, passenger and commercial loading spaces are provided, and the ground floor is setback two feet from the property line that provides additional alley width to accommodate service and delivery vehicles for improved alley circulation. The proposed ground floor open space has increased from the conceptual plans from 5.6% to 20%, consistent with the 20% ground floor open space contemplated in the draft DSP at the time of concept review. As shown in Figure 3 below, the proposed 13,614 SF of ground floor open space includes the setback areas between the building th and minimum sidewalk width, provided primarily at the street corner and along 5 Street. Figure 3: Ground Open Space Plan Floor 12 of 50 Additional open space is provided in between the resident short-term bike parking area and the main residential lobby that would primarily be used by residents. The cross court driveway area is not included in the percentage, as recommended by the Commission during concept review. However, it should be noted that there are areas of open space not specifically designed for usable open space (accounting for approximately 3%) that the applicant has included in the ground floor percentage, including the 1,120 SF area provided along the rear alley and the 940 SF landscaped area adjacent to the cross court driveway along the southern property line. Resident Open Space and Roof Deck Amenities Resident common open space is provided on two second floor courtyards at the podium level consisting of 6,612 SF, and on the roof deck that includes 25,903 SF. Each building form includes resident amenities on the roof deck, collectively consisting of lounge, bbq/dining, dog run, and landscape/garden areas for residents, including a pool and spa. Photovoltaic solar canopies are proposed that would provide shading for residents with additional solar hot water panels provided above the mechanical Sustainability staff, the proposed area of solar panels (100 kilowatt system) would gene of the pool would be limited to 12,000 gallons and would be heated with 100% renewable energy. Figure 4: Roof Plan 13 of 50 Private balconies and patios averaging 50 SF per unit would provide an additional 12,544 SF of private open space. The project provides a total of 58,707 SF of open space or 86.9% of the parcel, including 20% on the ground floor. Building Mass + Area Context The upper floors above the podium level are divided into four separate building forms with openings in between approximately 27 and 30 feet in average width. Separating the building into four building forms/sections reduces the overall length and upper level building mass of the structure as viewed from the street and rear alley, and allows for adequate light and air passage through the buildings for residents. The building includes angled façades and varied building planes on each elevation in an alternating pattern between floors, an footprint is shaped differently. In efforts to reduce the upper level massing, parapets have been lowered and upper level units (3 bed units) include larger recessed balconies that provide added visibility and building relief. Each building form includes two façade types vertically divided: sculptural plaster faces on the north sides and fiber cement board in warm grey with fixed and operable sunshade louvers on the south sides. This façade treatment is also applied to the alley elevation. The operable sunshade louvers allow the facades to vary in their appearances depending on the natural lighting. These design elements provide added visual interest to each building form that further helps to reduce the perceived building mass on upper floors. 14 of 50 th Figure 5: 5 Street Elevation As described earlier in this report, the existing structures in the area range in building th Court Alley (520 Colorado Avenue) approximately 84 feet in height. At 7 stories, 84 feet in height, the proposed building would be taller than nearby existing buildings. However in reviewing the project contextually, the proximity of the project site to the Expo light rail station and the Colorado Esplanade are important considerations. From an urban design perspective and based on the draft DCP, increased density at the proposed site would be appropriate and is supported by the anticipated increase in pedestrian volumes in this transit-adjacent area of the downtown. Building Differentiation and Rear Elevation Design Design comments provided during concept review included that the building forms should be differentiated in building design, and the rear elevation needed further enhancement. Although the overall building forms are similar in concept, each form th includes subtle differences in appearance depending on the floor and location facing 5 Street, consisting of angled façades and varied building planes on each elevation in an alternating patterns. As shown in Figure 6 below, the rear alley has been further enhanced from the conceptual design. In addition to larger windows added throughout the elevation, additional balconies were added on upper floors that improve resident views and private open space. Further, the split façade design consisting of sculptural plaster and fiber cement board were added throughout that improves the relationship of s, providing a more cohesive design. Figure 6: Proposed Rear Alley Elevation 15 of 50 Conceptual Rear Alley Elevation Vehicular Parking and Access | Bike Parking Vehicle Parking th The four-level subterranean garage is designed with driveway access from both 5 th Street and 5 provides 524 vehicular parking spaces (and 12 motorcycle spaces on P2 level) for residents, guests, and commercial uses. Approximately 46 of these spaces would be provided in a tandem configuration. Fourteen commercial tandem spaces located on the P2 level would be operated by valet or attendant assist system, and 32 residential tandem spaces would be located on residential parking levels. Thirty-two residential units would have the option to lease two parking spaces in a tandem configuration. Both commercial and residential parking levels are accessed by their own separate ramps located off of the cross court driveway, which would remain open at all times. Commercial parking is located on the first and second (P1, P2) subterranean levels, and residential parking is located on the third and fourth (P3, P4) levels. Residential parking spaces would be secured and separated from the commercial parking spaces. Excess commercial parking demand may be accommodated by use of surplus residential parking managed by attendant parking. A parking demand analysis was prepared by Gibson Transportation Consulting, concluding that the projected peak parking demands for both the proposed commercial (204 spaces) and residential uses (306 spaces) could be sufficiently satisfied by the 16 of 50 proposed parking supply, and the proposed parking is appropriate for the project. The study compared the Zoning Ordinance and draft DCP parking standards, and further developed parking rates applied to a shared parking model to account for the inherent characteristics of a mixed-use development. Furthermore, the study concluded that the proposed number of tandem spaces would not adversely affect project operations. The parking demand study is provided as Attachment K. Pursuant to the DA Section 2.8.10, at least 145 commercial parking spaces would be unreserved such that the parking garage would serve the development and also P1 and P2 levels as unreserved commercial parking would be appropriate compared to reserving parking spaces for City use as negotiated in recent Development Agreements both resi (DA Section 2.8.7). The following table compares the minimum vehicular and bicycle parking requirements of the draft DCP with the proposed project. Table 1: Required and Proposed Parking Comparison Parking Type Draft DCP Proposed Project 287 residential 319 residential Automobile 208 commercial* 205 commercial** Off-Street Parking 495 total 524 total 368 residential 350 residential Bicycle Parking 64 commercial 42 commercial (Long Term) total 432 392 total 35 residential 37 residential Bicycle Parking 63 commercial 75 commercial (Short Term) 98 total 112 total 17 of 50 Parking Type Draft DCP Proposed Project 490 544*** Total Bike Parking * Based on 1/300 parking rate on all commercial SF(62,435 SF), per draft DCP parking rates. ** Exclude 12 proposed motorcycle parking spaces proposed on P2 level. Per ZO, 12 motorcycle spaces would equate to 3 vehicle spaces, per SMMC Section 9.28.180(G). *** Includes 51 cargo bike spaces. Bicycle Parking Long-term bike parking for both commercial and residential uses, including locker and shower facilities, would be located on the first and second garage levels in a location convenient to access elevators. Short-term bike parking for commercial visitors is spread throughout the ground floor, and conceptually includes 56 spaces within the public right of way (parkway) adjacent to the curb and sidewalk. However, due to competing interests for space in the public right-of-way, and to ensure the appropriate mix of uses within this area, staff will continue to work with the applicant on the appropriate number of bike parking spaces to be located within the parkway area (Condition No. 6), with a total of short-term spaces no less than the minimum required per the draft DCP. Pursuant to the Zoning Ordinance, at least 25% of the required short-term bike parking for properties located in the Downtown are required to be provided on-site, whereas the remainder may be provided within the public right-of-way, subject to Public Works approval. Commercial / Resident Loading The project includes two loading spaces; a passenger size loading space for residential use and a semi-tractor trailer loading space as required for a general market, and would also support other commercial uses. The semi-tractor trailer loading space is located off of the rear alley adjacent to the cross court driveway and is designed with sliding screen doors along the side of the space (facing the alley) that, when opened, would allow adequate turning maneuvers and improved accessibility into the loading area from both the alley and driveway. Condition No. 5 requires that the sliding screen doors be closed during loading operations to mitigate noise, particularly for residential uses located across the alley. 1984 LUCE Consistency 500 Broadway: General Plan Text Amendments to FAR and Number of Stories Pursuant to the LUCE and the IZO, the 1984 LUCE and zoning standards remain applicable to Downtown properties until the adoption of the Downtown Community Plan. Accordingly, the project is subject to the 1984 LUCE Downtown Core standards and the 18 of 50 C3C Zoning standards from the 1988 Zoning Ordinance (previous ZO). The 1984 LUCE establishes the maximum building height of 84 feet, 6 stories, and 3.5 FAR for the Downtown Core area where the subject site is located. The proposed project is consistent with the allowable building height of 84 feet, however is inconsistent with the number of stories and FAR limitations. The applicant requests to amend the maximum Floor Area Ratio from 3.5 to 4.0 and to add a provision that there shall be no limitation on the number of stories of any structure containing at least one floor of residential use. The 1984 LUCE Policy 1.3.6 would be amended as follows: Core Area Specific Plan is adopted, allow in the Downtown area a maximum of: And permit by site review up to: 3.5 4.0 FAR There shall be no limitation on the number of stories of any structure containing at least one floor of residential uses, so long as the height does not exceed the maximum height in number of feet. The Downtown Core area affected by these amendments includes the area bounded by ndthth 2 Street (east side) to 4 Court between Broadway and Colorado Ave (north side), 5 Street (both sides) between Wilshire Blvd and Colorado Ave (north side), and the south th side of Wilshire Blvd between 5 Court and Lincoln Blvd. The proposed amendment would be consistent with the goals, objectives, policies, and land uses of the 1984 LUCE. Specifically, the proposed increase in allowable FAR from 3.5 to 4.0 within the Downtown Core area further reinforces the Downtown as the focus of the City, supporting the greatest concentration of activity, consistent with LUCE Objective 1.3. Consistent with this objective, the proposed amendment would allow additional commercial and residential floor area in the Downtown Core area where it would be appropriate adjacent to the Bayside District and be within a transit-adjacent area in proximity to the Expo light rail terminus station and Colorado Esplanade. The proposed amendment to allow no limitations on the number of stories of any structure 19 of 50 containing at least one floor of residential uses, so long as the height does not exceed the maximum height in number of feet, provides a housing incentive and would provide projects with greater design flexibility in achieving allowable floor area. The proposed amendments support residential mixed-use development and would result in increased housing opportunities, consistent with Policy 1.3.5 which encourages residential uses in the Downtown on upper floors and neighborhood commercial uses for the Downtown residential community. The draft DCP contemplates a 4.0 FAR for the Transit Adjacent district where the project is located, and does not include story limitations for the Downtown. Therefore, the proposed amendments would be consistent with the contemplated draft standards. The DCP, when adopted, would establish the LUCE and zoning development standards for the project site, and would replace the 1984 LUCE standards that are currently applicable to the project, including the proposed General Plan Amendments to FAR and number of stories. Due to the review and consideration of the draft DCP by City Council within the next year, the applicability of the proposed amendments would be limited to the subject project, and any development projects seeking a 4.0 FAR would be subject to Commission and Council review as a Development Agreement per the Interim Zoning Ordinance for the Downtown. . Staff supports the proposed amendments based on consistency with 1984 LUCE objectives and policies for the area and that the amendments are consistent with the contemplated standards in the draft DCP. 1626 Lincoln Boulevard: Zoning Map Amendment To facilitate the 64 units of off-site affordable housing proposed for the 500 Broadway project, the applicant, Community Corporation of Santa Monica, requests a Zoning Map Amendment to change the zoning district from M-1 (Industrial Conservation) to MUB (Mixed Use Boulevard) for the rear portion of the parcel. Currently, the parcel is divided by a Zoning District boundary in which the development standards applicable to each district are applied to the area within the District. The proposed zone change would allow the project to be developed consistently throughout the site according to the Mixed-Use Boulevard development standards. Community Corporation of Santa Monica is developing the site pursuant to a Development Review (DR) Permit 15ENT-0306. The 1626 Lincoln Boulevard project requires the following entitlements/approvals: - Certification of 500 Broadway Final EIR (PC recommendation, Council approval) - Development Review Permit 15ENT-0306 (PC approval) - Zoning Map Amendment 15ENT-0307 (PC recommendation, Council approval) 20 of 50 The City has reviewed this off-site affordable housing project concurrently with 500 Broadway, and the project was analyzed as a project alternative in the 500 Broadway Final EIR to a project level of detail. Therefore, the environmental clearance for this project, in accordance with the California Environmental Quality Act (CEQA), will be provided on May 11, 2016, provided Council approves the 500 Broadway Development Agreement, the zoning map amendme in which these requests are being reviewed by the Commission and Council will assist 100% affordable housing project. The property located at 1626 Lincoln Boulevard is currently divided into two land use and zoning designations; the approximate front ¾ depth of the property (easterly) is located in the Mixed-Use Boulevard LUCE designation and Mixed-Use Boulevard Zoning designation. The approximate rear ¼ depth of the property (westerly) is located in the Downtown Core LUCE designation and M1 Industrial Conservation Zoning designation. Similar to 500 Broadway, the 1984 LUCE and 1988 Zoning standards remain applicable to downtown properties until the adoption of the Downtown Community Plan. Accordingly, while the front portion of the parcel is subject to the current MUB LUCE and MUB zoning designations, the subject rear portion of the parcel is subject to the 1984 LUCE Downtown Frame standards and the M1 Zoning standards from the 1988 Zoning Ordinance (previous ZO). Figure 7: M1 Downtown Core MUBMUB Land Use Designation Map: Property divided into Zoning District Map: Property divided into two Land Use Designations: MUB + Dowtown Core two Zoning Districts: MUB + M1 CCSM requests to change the zoning for the portion of the parcel currently zoned M1 to the MUB zoning district, consistent with the front portion of the property. The proposed Mixed-Use Boulevard zoning district for the subject rear portion of the property would result in development standards that would remain consistent with the underlying 1984 21 of 50 LUCE Downtown Frame requirements. Therefore, the proposed zone change would be consistent with the General Plan. As indicated in the chart below, the 1984 LUCE allows 6 stories, 84 feet in height, and FAR of 3.0. Consistent with these requirements, the proposed MUB zoning district includes no limit on the number of stories, 55 feet in height, and FAR of 2.75. Although the MUB does not limit the number of stories, a project would practically not be able to achieve greater than 6 stories within the maximum height of 55 feet, and is therefore consistent with the 1984 LUCE requirement. Furthermore, the proposed affordable housing project would be required to comply with the MUB zoning development standards. Table 2: Development Standards Comparison for 1626 Lincoln 1984 LUCE Draft DCP M1 zone MUB zone Project Frame FAR 3.0 2.75 1.0 2.75 1.7 Height 60 Stories 6 No Limit 2 No Limit 5 Below is the draft DCP Downtown District map that identifies the subject property located in the Mixed-Use Boulevard (MUB) district. The draft standards are generally consistent with the existing MUB zoning standards currently applicable to properties along this segment of Lincoln Boulevard. The DCP, when adopted, would replace the existing Mixed-Use Boulevard zoning and land use designation along this portion of Lincoln Boulevard. According to the map in the draft DCP, the subject site will be entirely located within the MUB district, and will not remain divided into multiple districts. The draft map recognizes this existing parce inconsistency will be addressed. Staff is supportive of the proposed map amendment based on its consistency with the draft DCP. Figure 8: Proposed Zone Change M1 MUB 22 of 50 Draft DCP District Map Proposed Zoning Change The affordable housing project is designed based on the entire property being subject to the current Mixed-Use Boulevard zoning standards consisting of a maximum building height of 55 feet and 2.75 FAR allowable for Tier 2 100% affordable housing projects. The underlying M1 development standards currently applicable to the rear portion of the property (per the IZO) would limit development in that particular area to two stories with a maximum building height of 30 feet, and a 1.0 FAR. The proposed amendment would be consistent with the goals, objectives, policies, and land uses of the 1984 LUCE. Specifically, the proposed Mixed-Use Boulevard zoning district for the subject rear portion of the property would result in development standards, including building height, number of stories, and floor area ratio, that are consistent with the underlying 1984 LUCE Downtown Frame requirements, and as such, the proposed zoning map amendment would be consistent with the General Plan. In addition, the proposed map amendment is requested in conjunction with a 100% affordable housing development project at the subject property, consistent with LUCE Objective 1.1 which seeks to increase the amount of affordable housing particularly in the Downtown. For these reasons, staff supports the proposed map amendment. Draft Downtown Community Plan (DCP) Consistency The project is currently subject to the 1984 Downtown Core LUCE standards and would be consistent with the objectives and policies of the 1984 LUCE with the approval of the proposed General Plan Text Amendment related to the allowable number of stories and FAR. The DCP, when adopted, would establish the LUCE and zoning development standards for the project site, and replace the 1984 LUCE standards that are currently applicable to the project, including the proposed General Plan Amendments. The project site is identified in the draft DCP within the Transit Adjacent district. As recommended during float-up review, the design of the project has been modified to be compliant with the draft standards provided in the draft DSP issued in February 2014. Based on the February 2016 draft DCP, certain standards have been revised and new standards have been added. The draft DCP includes maximum floor plate ratio, maximum upper level building frontage occupancy, and minimum open space requirements based on small, medium, large, and sites exceeding 100,000 SF building types. As defined, the project would fall under the sites exceeding 100,000 SF building type category. The DCP identifies four sites (table 2A.2) in the Downtown that, given the parcel size and development standards, could potentially produce projects 100,000 SF in size or greater, which does not include the 500 Broadway project. This is based on the anticipation that the timing of the 500 Broadway project would precede the adoption of the DCP. 23 of 50 Attachment F contains a table that compares the proposed project to the 1984 LUCE and draft DCP standards. Based on the draft DCP standards, the project is consistent with the building height, floor area ratio (FAR), maximum average building height, and maximum unbroken primary façade length, however is inconsistent with the following standards as further described in Attachment H: Floor Plate Ratio Upper Level Building Frontage Occupancy Open Space Pedestrian Level Building Frontage Consistent with the draft DCP, increased density at the proposed site, in proximity to the Expo light rail terminus station and the Colorado Esplanade, would be appropriate and is supported by the anticipated increase in pedestrian volumes in this transit-adjacent area of the Downtown. The draft DCP seeks to establish an urban form strategy that places the greatest height and density near the Expo terminus station and adjacent to the I-10 freeway, where there is the most convenient access to high frequency transit, istoric core and at edge transitions to residential neighborhoods in order to preserve existing scale and character. The project would provide transit-adjacent housing and neighborhood-serving commercial uses in proximity to light rail and transit opportunities, convenient for residents to use alternate modes of transportation other than private vehicles, and in City goals of increasing transportation choice. Also consistent with mobility goals for the th Downtown, the project would widen sidewalks along 5 Street and Broadway that would expand pedestrian capacity and enhance the pedestrian experience adjacent to the project. Consistent with City goals to nurture a complete and long-term Downtown community, the Development Agreement would provide a mix of sizable units, and would also result in the construction of 64 affordable housing units that would expand affordable family housing and help balance the housing mix in the Downtown. Housing Element Consistency Council previously expressed interest in information from the LUCE monitoring report that would provide some context to the proposed housing project. For the purpose of evaluating the impacts of potential land use changes during the 20-year time horizon of the LUCE, among other factors, the LUCE Final EIR (FEIR) considered residential and non-residential land use changes. The LUCE FEIR analyzed 4,955 residential units. The projections of land use change in the LUCE FEIR are not a cap on development but 24 of 50 rather were used to analyze the environmental impact of the General Plan. Table 3 provides information regarding the land use change analyzed in the LUCE FEIR and the proposed project. Table 3: Residential Units Completed, Under Construction or Approved Since LUCE Adoption Residential UnitsResidential Units Approved/500 Broadway Residential Units Completed Under ConstructionNo Building Permits 1,064429551249 The 2013-2021 Housing Element incorporates the housing goals from the LUCE, which generally seek to produce more housing in transit accessible locations. The proposed project is located adjacent to the Expo light rail corridor and is within ½ mile of the Downtown terminus station. Santa Monica was allocated 1,674 units in the 2014-2021 Regional Housing Needs Assessment (RHNA) with a quantified objective of 1,371 units. Based on information from the Housing Division, there are 871 units that have been completed or are under construction leaving 500 units remaining to achieve the quantified objective. Table 4 illustrates the remaining quantified objective by income category with information from recently approved housing projects. Approved projects will actually need to be completed projects in order to achieve the quantified objective. Table 4: Housing Element Remaining Quantified Objectives 30% AMI 50% AMI 80% AMI Moderate Above Moderate Remaining Quantified Objective2510811486167 Recently Approved Housing Projects --1010--80 1415 5 St DA--104--50 th 1601 Lincoln Blvd DA (Norms)--144171 3008 Santa Monica Blvd DR -- 4 -- -- 22 500 Broadway DA (PENDING) 7 56 1 -- 249 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 25 of 50 of time. Development agreements provide developers with guaranteed development rights in exchange for community benefits. A development agreement must comply with the General Plan, 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 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 development agreements are negotiated contracts. The proposed development agreement is included as Attachment B. Community Benefits The development agreement includes a negotiated community benefits package that includes a contribution amount of $6.4M excluding affordable housing, summarized in Table 4, with values assigned to each community benefit where possible to monetize the value of the benefit. The total cost of the off-site affordable housing project to the applicant is dependent on the amount of TCAC financing available for the project. As discussed, the cost of the land ($16.3M) more than satisfies AHPP requirements and the additional land cost exceeding AHPP requirements ($8.9M) would be considered community benefit value. Remaining costs to the applicant to complete the project are also considered the community benefit, and based on a monetary value would range between $18-32M depending on the public financing secured by CCSM. Therefore, the total monetized value of the community benefits package would range between $ 33.3M-$ 47.3M, consisting of $6.4M in contributions, $8.9M in additional land cost exceeding AHPP requirements, and $18-32M value of completing the affordable housing project. Community benefits are described in further detail below: Off-Site Affordable Housing Through Land Acquisition dedicating land located at 1626 Lincoln Boulevard to Community Corporation of Santa Monica (CCSM) for the construction of a 100% affordable housing project with 64 residential units. Pursuant to the guidelines, the applicant may meet the affordable housing obligation by dedicating land to a non-profit housing provider that must be of a value at least equivalent to the affordable housing obligation, which would be approximately $7.45M based on the current affordable housing fee rate of $31.25/project square footage (238,424 SF x -site property located at 1626 Lincoln Boulevard would be $16.3M, exceeding the minimum land value, thereby more than satisfying the AHPP obligation. The additional cost of the land would be considered 26 of 50 a community benefit. It is anticipated that the project would be constructed concurrently with the 500 Broadway project, and to ensure that the affordable housing project is completed, as outlined in DA Section 2.8.1, 500 Broadway may not obtain its Certificate of Occupancy (C of O) or offer residential units for rent until 1626 Lincoln Blvd has obtained its C of O and offered residential units for rent, with specified exception. The off-site housing project as it relates to community benefit is described later in this report. The Development Review Permit for 1626 Lincoln Boulevard will be heard by the Planning Commission on May 11, 2016. In addition to exceeding AHPP requirements, the applicant would also provide additional financing for constructing the 64-unit affordable housing project, and funding on-site resident services annually once the project is completed. CCSM will seek construction financing through the California Tax Credit Allocation Com with remaining financing provided by the applicant. Depending on the amount of public financing secured by CCSM, the applicant estimates total financing (including land costs) of approximately $34-48M. The off-site housing project would consist of 64 affordable units with a unit mix and affordability level consisting of the following: Unit Type Number of Units Bedrooms Percentage Average Sq Ft 1-Bed 29 29 45.3% 500 2-Bed 18 36 28.1% 750 3-Bed 17 51 26.6% 1,000 Total 64 116 100% 750 SF 29 (45%) 1-Bedroom Units (Ave Size: 500 SF) 18 (28%) 2-Bedroom Units (Ave Size: 750 SF) 17 (27%) 3-Bedroom Units (Ave Size: 1,000 SF) Affordable Housing Average Bedroom Factor (116/64) = 1.8 r would be 1.8 bedrooms 27 of 50 The affordability levels for these units are as follows: 30% AMI 40% AMI 50% AMI 60% AMI 80% AMI Total ŷƩĻĻΏĬĻķ Ћ ЊЎ 17 ǞƚΏĬĻķ Ћ ЊЌ Ћ Њ 18 hƓĻΏĬĻķ Ќ ЊЌ ЊЌ 29 Total 7 13 26 17 1 64 10% units affordable to 30% income households or lower per TCAC. 89% units affordable to 60% income households or lower per TCAC. 1% unit affordable to 80% income households or lower per TCAC (managers unit). The off-site 100% affordable housing project would be owned in whole or in part and operated by Community Corporation of Santa Monica. The project includes a considerable percentage of larger two and three bedroom units (55% of the units) intended to accommodate growing families. Accordingly, the project includes extensive open space, play areas and gardens, and communal space that would be utilized for on-site training and activities specifically for project residents. As further detailed in DA Section 2.8.1(a), the applicant would also provide a 100% transportation allowance for residents of the affordable housing project, and wi-fi access for residents at no cost. The off-site project would consist of approximately 26% of the total units at the 500 Broadway site as affordable off-site units. This would be a considerable increase in the percentage of affordable housing units provided by a project based on recently approved projects in the downtown that have provided between 20-22% affordable units (on-site). Also, the project would include 3-bedroom units that would expand family living in the Downtown area. Based on the number of affordable units, unit composition, and the family service amenities that would be available for residents, staff is supportive of the project providing the affordable housing units at the proposed off-site location. Although the applicant is actively pursuing the off-site affordable housing project, alternatively, in the event that the off-site affordable housing project cannot be achieved, applicant may elect to provide on-site affordable units instead of providing affordable housing through the land acquisition option. Pursuant to DA Section 2.7.5(b), the 28 of 50 applicant would satisfy AHPP requirements by providing 25 on-site units (10%) affordable to 50% income households. Pursuant to 2.8.1(c)(1), twelve additional units affordable to 50% income households would be provided and 20 additional units affordable to 80% income households, for a total of 32 community benefit affordable units. In total, 57 affordable units or 23% of the total 249 residential units would be provided on-site. The affordability levels for the on-site option would be as follows: 37 (15%) units for 50% income households. 20 (8%) units for 80% income households. 57 (23%) total affordable units The proposed affordable housing unit mix for the on-site option would consist of the following: 5 (9%) Studio Units (Ave Size: 500 SF) 37 (65%) 1-Bedroom Units (Ave Size: 600 SF) 10 (18%) 2-Bedroom Units (Ave Size: 850 SF) 5 ( 9%) 3-Bedroom Units (Ave Size: 1,080 SF) Affordable Housing Average Bedroom Factor (72/57)= 1.26 The average affordable housing bedroom factor would be 1.26 bedrooms per unit, The affordability levels for the total 57 residential units are as follows: 65% of the affordable units provided to 50% income households: 37units 5 (8.7%) Studio Units 25 (44%) 1-Bedroom Units 5 (8.7%) 2-Bedroom Units 2 (4%) 3-Bedroom Units 35% of the affordable units provided to 80% income households: 20 units 12 (21%) 1-Bedroom Units 29 of 50 5 (8.7%) 2-Bedroom Units 3 (5%) 3-Bedroom Units The on-site proposal would include 57 of the 249 residential units, or 23% as affordable units. Compared to the off-site 100% affordable housing project, the on-site scenario would provide 7 fewer affordable units, 44 fewer bedrooms, significantly fewer 2- and 3- bedroom units, and a significantly decreased level of affordability overall. The monetized community benefit value of providing the 32 affordable housing units on- site would be an estimated $10M value based on the 2014-15 affordable housing unit unit of housing affordable to 30%, 50%, 80%, or moderate-income households. The total monetized value under this on-site affordable housing scenario, including contributions would be $16.7M, as provided in Table 5 below. In the on-site scenario, the developer would be required to inform local disability advocacy organizations of the availability of the affordable units and the process to be adopted by the City Council in the Administrative Guidelines for the Affordable Housing Production Program, households having at least one member of the household with a physical disability shall have a preference for one-half of the affordable units in the project. Enhanced Impact Fees The development agreement includes augmented impact fees compared to adopted fees that would otherwise be required by the Municipal Code in addition to negotiated contributions to priorities established in the LUCE. The following summarizes the negotiated contributions: 30 of 50 Enhanced Transportation Impact Fee A monetary contribution of $1,650,000 towards transportation programs. This contribution is a 50% increase above adopted Transportation Impact fees for the incremental development above Tier 1 - an increment of approximately $310,000. Enhanced Parks and Recreation Impact Fee A monetary contribution of $1,700,000 towards parks and recreation programs. This contribution is a 50% increase above adopted Parks and Recreation fees for the incremental development above Tier 1 - an increment of approximately $385,000. Enhanced Affordable Housing Commercial Linkage Fee A monetary contribution of $325,000 to fund development of affordable housing units in the City. This contribution is a 50% increase above adopted Affordable Housing Linkage fees for the incremental development above Tier 1- an increment of approximately $42,000. Early Childhood Initiatives Contribution A monetary contribution of $1,100,000 that would support early childhood initiatives and resident services including but not limited to infant, toddler and pre-school tuition subsidies; family services, family support and parent engagement strategies; home visitation programs; facility and playground improvements; and kindergarten readiness models. The City shall deposit such monies into a separate restricted account to be used exclusively for the early childhood initiatives and resident services as described above through guidelines to be established by the City. First priority for receipt of these monies shall be residents of the affordable housing project located at 1626 Lincoln or agencies who will serve residents of the 1626 Lincoln project. This total contribution would replace the Child Care Linkage Program ordinance requirements for the project. 31 of 50 Historic Preservation Contribution A monetary contribution of $150,000 towards historic preservation programs throughout the City. Big Blue Bus Contribution A monetary contribution of $240,000 towards Big Blue Bus transit improvements in the Downtown. Transportation Management Association Contribution A monetary contribution of $150,000 towards Transportation Management Association programs. Physical Improvements The ground floor building setback provides additional sidewalk width exceeding the th minimum sidewalk width of 15 feet (curb to building) along 5 Street, and 18 feet along Broadway as contemplated in the draft Downtown Community Plan (DCP). More th specifically, the ground floor storefronts along 5 Street are generally setback from the curb ranging from 33--25 feet along Broadway. The proposed 13,614 SF of ground floor open space includes the -wide clear pedestrian zone and approximately 2,790 SF of outdoor dining area to support restaurant and food serving uses. Unreserved Commercial Parking The project would provide 145 unreserved commercial parking spaces such that the parking garage would serve the development and also function as a public parking resource for the area. The applicant anticipates at least 60 reserved parking spaces would be needed for potential commercial tenants. As recommended by the Planning commencing two years from Certificate of Occupancy to determine whether any additional commercial spaces up to 55 additional spaces (200 in total) may become unreserved spaces available for public use. The recommendation is based on efforts to maximize the amount of publicly available parking at the site while ensuring that the Draft DCP Action AM3.5A seeks to encourage shared (unreserved) parking and discourage reserved parking, ensuring that shared parking is open to all motorists, regardless of whether they are customers, employees or building tenants, with the same parking prices, restrictions, and privileges as building occupants. Chapter 3.3H of the Draft DCP (Page 132) discusses the need for shared/unreserved parking, seeking 32 of 50 public parking opportunities as infill projects occur. The draft DCP anticipates that approximately 800 additional public parking spaces will need to be added to the public network to keep pace with land use changes that opt to participate in an expanded parking in-lieu fee program. The development agreement supports maximizing the amount of publicly available parking for visitors and employees by requiring that: All parking be unbundled Developer must charge for parking at rates not competitive with comparable transit This parking framework provides flexibility for the Developer to efficiently manage the spaces to off-site users. accessible parking supply in the Downtown area, and would also help with reducing vehicular trips further into the downtown area. Specifically, the unreserved spaces would be offered at market rates to commercial customers, all residential guests, and any commercial tenants and their employees, and the general public in need of parking. Community Meeting Space The project would provide community meeting space available to non-profit or other community organizations at a cost consistent with City-owned facilities, available at least 4 times per month, as shown on the project plans (400 SF minimum space). Local Hiring The project would include local hiring provisions for construction-related and permanent employment. The Developer and commercial tenants would be required to follow certain steps to ensure that the greatest opportunity for interviewing local residents and employees is provided. All hiring decisions would continue to remain at the discretion of the Developer and commercial tenants. Table 5: Summary of Proposed Community Benefits Able To Be Monetized Community Benefit Value Est.$26.6-$40.6M (less $7.4M land cost Off-Site Affordable Housing Project (Cost satisfying AHPP requirement) to the Developer $34M-$48M total including land costs 33 of 50 Enhanced TIF $1,650,000 Enhanced Parks and Recreation Fee $1,700,000 Enhanced Affordable Housing $325,000 Commercial Linkage Fee Early Childhood Initiative contribution $1,100,000 Historic Preservation contribution $150,000 Big Blue Bus contribution $240,000 Transportation Management Association $150,000 Recycled Water Infrastructure Program $900,000 Treated Urban Runoff distribution main $200,000 (SMURRF) extension $6,415,000 without affordable housing Total $33.3M-$47.3M including afford. housing On-Site Affordable Scenario On-Site Affordable Housing (32 Units) $312,609 x 32 = $10,003,488 Contributions $6,415,000 $6,415,000 without affordable housing Total $16,718,488 including afford. housing Transportation Demand Management The development agreement includes TDM measures that would reduce vehicular trips and parking demand generated by the proposed project. Measures include, but are not limited to, a transportation information center, average vehicle ridership (AVR) targets, unbundled parking, parking cash-out, transportation allowances for employees and residents equivalent to 100% of the cost of a monthly regional transit pass, a transit subsidy of 25% of the cost of a monthly regional transit pass for 3 months for new project residents, showers and lockers for commercial employees who bike to work, ground level short-term visitor bike parking, long-term resident and commercial bike parking, and active participation in a Transportation Management Association. The TDM plan also includes a formula to calculate an alternative compliance fee should the 34 of 50 project not meet its annual AVR target. Further, the plan includes a PM peak hour trip EIR. The provision requires exceeding the trip generation limit, including working with staff on changes to the TDM plan and penalty fees. The proposed TDM measures are further detailed in Section 2.8.7 of the development agreement. Sustainability Elements The negotiated sustainability elements are intended to ensure that the project meets the highest levels of sustainability possible for the project. Many elements would likely have long- sustainability elements: LEED Status The project will be designed and constructed to achieve a minimum LEED® for Homes Platinum certification as established by the LEED® Rating System. The applicant studied the possibility of achieving Platinum certification under the version 4 (v4) rating system and concluded that a lack of clarity regarding compliance with the energy standards and credits still remain. The applicant has discussed v4 certification with the Green Building Council as it relates to the project, and understand that the Council will apply a hybrid of current v3 requirements since v4 standards have not been fully established. Staff acknowledges this lack of clarity regarding compliance with the energy standards. Staff understands that the main differences between version 2009 (v3) and v4 are potentially more efficiency gained in building energy performance and greater transparency in material supply chains but it would be difficult to provide a comparison of whether v4 provides significantly meaningful benefits over version 2009. Considering that the Development Agreement includes energy reduction requirements, including that the building shall use 15% less energy than required by California Energy Code, staff would be supportive of the project achieving certification under v3. As a result, the development agreement includes Platinum certification under the current rating system. Solar Infrastructure The project would include renewable energy generation including roof-mounted photovoltaic solar panels (100 kilowatt system) above trellis structures sufficient to power all of the common areas, and solar water heating technology that would allow the pool to be heated with 100% renewable energy. Furthermore, the building would be designed to use 15% less energy than required by California Energy Code. 35 of 50 Consistent with zoning code requirements, the trellis structure projections are subject to Architectural Review Board approval for photovoltaic solar energy systems exceeding 5 feet (not to exceed 14 feet) in height above district height limits. Water Conservation The project would use non-potable water sources for landscape irrigation and commit to a 30% reduction below CalGreen baseline for interior building water usage. Specific performance standards for all of the interior fixtures, washers, and toilets are outlined in Section 2.8.4 of the development agreement. The applicant provided an estimate of the -year average for the use has a historical average use of 3885 gallons per day (gpd) and the project is estimated to use approximately 13,800 gpd, which is a 41% reduction below CalGreen baseline and 9,915 gpd more than the historical average water use of the existing use. These performance standards would reduce water usage below baseline requirements, however would not completely off-Council provided direction regarding a potential water neutrality requirement applying to new development on November 24, 2015. Potential approaches to offset water demand from new development were presented including a proposal for how off-sets might be calculated. Based on this concept, the Development Agreement includes a contribution of $900,000 towards recycled water infrastructure program improvements throughout the City. Furthermore, DA Section 2.8.20 requires that the developer extend the existing Treated Urban Runoff (TUR) distribution main (SMURRF water main) to service the project that would allow the use of SMURRF water for landscape irrigation and potentially for future indoor usage as described below. Further, the developer would provide $200,000 to the City to be used for extending the Treated Urban Runoff distribution main from the project site to Santa Monica Boulevard that would assist with extending the availability of SMURRF water into the Downtown area for landscape irrigation and potential alternate uses such as toilet flushing for future projects. There have been extensive discussions between the developer, the City, and the LA County Department of Public Health on the use of recycled water and greywater for toilet flushing for this project. On February 16, 2016, the LA County Department of Public Health issued guidelines for alternate water sources for indoor/outdoor non- potable water uses, notably including the use of non-potable water for residential toilet flushing. In researching other multi-family residential projects around the country that have installed on-site greywater recycling systems, projects tended to be consistent with the size of the proposed project (250 units), had obtained sizeable grants from a public utility, or were no longer using the greywater system due to maintenance difficulties. In speaking with manufacturers of greywater systems, it appears that the cost of maintenance and regulatory compliance for water quality testing could be substantial. Further, the City is continuing its research on a regulatory framework that would provide 36 of 50 appropriate oversight for testing of water quality produced by on-site recycled greywater systems. Runoff Recycling Facility (SMURRF) currently has capacity to provide the proposed project with recycled water for toilet flushing. The City is seeking opportunities to expand the capacity of the SMURRF facility and also extend the availability of SMURRF water into the Downtown area. Based on this available resource, staff pursued extensive research with ongoing discussions with the applicant, City staff, and the LA residential and common area commercial toilet flushing. This arrangement would -site greywater recycling systems. In comparing the potential options for reducing potable water use in the project, staff determined that in the long-term, a more comprehensive to individual on-site greywater recycling systems. Expanding the capacity of the SMURRF facility goal to achieve water self-sufficiency. For SMURRF water to be utilized at the project site, the Treated Urban Runoff distribution main (SMURRF) along Colorado Avenue would be extended to the project site. The building would also be designed with dual plumbing that would allow the use of potable water during instances where SMURRF water is unavailable. The applicant has expressed concerns with using SMURFF water for indoor toilet flushing, given the lack of precedent and still developing regulatory framework for governmental approvals that are not yet in place authorizing the use of treated urban runoff/recycled water in multi-family residential housing. In working with the applicant, the Development Agreement (Section 2.8.5) includes a two-step approach for the project to utilize SMURRF water for residential toilets and common area toilets in the garage and employee shower/locker room. This approach would include (1) purple pipe installation and (2) SMURRF water usage. The provisions outlined in the DA are to ensure that the review of the purple pipe verall building permit timeframe. For the installation of purple pipe, the City shall prepare a public handout, within 30 days after generally describing regulatory procedures for dual plumbing of a building and other regulatory and permitting agencies having the jurisdiction over the installation of the purple piping system in the project. Further, the DA provides that the applicant and the City initiate early discussion on the design of the purple pipe system and that if through the plan check process, that the installation of the purple pipe system is determined to be infeasible that the $900,000 recycled water infrastructure programs contribution negotiated for the project would be increased by $300,000 for a total of $1.2M, in lieu of installing purple pipe (and using SMURRF water 37 of 50 for indoor use). However, staff believes that satisfying this initial step as outlined in the DA is achievable. Once the purple piping system has been approved and installed within the project, the developer would be required to switch from using potable water in the purple piping system to using SMURRF water when authorized for use. The City is required to obtain necessary regulatory approvals authorizing SMURRF water for indoor toilet use in multi- family in the project, as outlined in the DA. The LA County Department of Public Health would have regulatory authority over reviewing the use of SMURRF water for indoor toilet flushing in multi-family residential buildings. As such, SMURRF would need to comply with Title 22. SMURRF is currently operated as a Best Management Practice (BMP) because it is a unique facility for treating dry-weather urban runoff that was not specifically contemplated in Title 22, which was intended to address recycled wastewater. As a result, SMURRF currently does not technically meet all Title 22 requirements, and the City is continuing discussions with County and State departments regarding permitting requirements for SMURRF to become a Title 22 permitted facility. Staff believes the timeframe could be 1-2 years depending on the requirements. Until such time when SMURRF water is authorized for indoor use, the project will utilize potable water for indoor toilet flushing. Bioswales Bioswales are landscape elements that allow for the collection, conveyance, filtration and infiltration of stormwater, in efforts to reduce contaminated stormwater runoff. In addition to satisfying the on-site stormwater requirements for the project, staff and the developer is exploring the feasibility of constructing a bioswale and infiltration system th within the public right-of- Street and Broadway property front determined that the project would be responsible for the collection of approximately th 1,720 cubic feet of stormwater runoff for percolation beneath 5 Street. However, the surface area (landscaping) needed to collect the desired capacity is limited based on the existing site conditions. Specifically, large existing ficus street trees are spread th along 5 Street and Broadway that will be maintained, and include critical root zone radius boundaries where construction activity would either be limited (+/- 22 foot radius) or prohibited (+/-13 foot radius) to ensure preservation. These boundaries result in limited surface areas available in between the existing street trees. The parkway space would also include needs for parking meters, access between curb and sidewalk for people utilizing street parking, and potentially space for short-term bike parking. The overall sidewalk design would need to accommodate a variety of uses and therefore overall space is limited. With the many competing interests for space in the public right-of-way, bioswale against the function, aesthetics, and management of public streets. These will be 38 of 50 guided by the development of a comprehensive streetscape manual, identified as a major action item in the draft DCP. In the event that soil percolation conditions make it impractical for the installation of a bioswale/infiltration system or if the City cannot identify an appropriate location on the project frontage for bioswales, the developer would provide an equitable fee of $205,000 to the City, sufficient to cover the design and construction of a similar system elsewhere in the City. Electric Vehicle Parking Developer shall in the parking garage provide panel capacity and conduit stubs for installation of electrical outlets designed to allow the simultaneous charging of a minimum number of 208/240 V 40 amp, grounded AC outlets of at least 10 percent (10%) of the total parking spaces (53) as shown on the Project Plans. In addition, the project would provide 3 of the spaces with electric charging equipment, as recommended by the Planning Commission. Significant Project Features In addition to the negotiated community benefits, there are project features that are otherwise required by the Municipal Code as further outlined in the Development Agreement, including the following: Private Developer Cultural Arts Requirement The project would provide on-site public art valued at approximately $1.2 M, and the process for approval would be consistent with the Private Developer Cultural Arts Requirement ordinance. The proposed on-site art would be reviewed and approved by the Director of the Community and Cultural Services Department, in coordination with the Arts Commission. This on-site provision would satisfy the Private Developer Cultural Arts Requirement for the project. Pending DA Items for Discussion Article 6.1: Architectural Review Board Approval The project is subject to review and approval by the ARB. This DA provision includes that the ARB cannot require modifications to the building design which negate the s recommendation prior to the Planning Commission hearing was for reductions in the project floor area limited to no greater than 5% for the entire project, consistent with recently approved Development Agreements. It is not the intent of this provision to include modifications to the fundamental development standards established by the Agreement including number of stories, number of units, and overall height. Instead, 39 of 50 providing the 5% discretion for the ARB provides flexibility to adjust the project design in The Planning Commission concluded discussions on the provision with a recommendation of a floor area reduction of no greater than a 2% reduction in the ground floor commercial area and no greater than a 5% in upper residential floor. A Commissioner reiterated the intent of the provision to allow the ARB to have flexibility when reviewing the project, and a Commissioner believed the 5% for the upper residential floors could allow for any revisions to the building that may allow for improved variations in designs between the building forms. Another Commissioner commented that the size of the ground floor should be maintained for the potential The applicant does not agree to this recommendation however considering the Planning 3% specific for the residential floor area only. The applicant expresses concerns with additional reduction in -up review, including reductions in floor area (4.5 to 4.0), and increased ground floor open space. This is one area where staff and the applicant have agreed to disagreed and as a result, both proposals or shown in the draft development agreement. Section 2.8.5(b) SMURRF Water Usage While the applicant has generally agreed to the installation of purple pipe and using SMURRF water in the project, there are three details regarding the conditions precedent to using SMURRF water for residential and common area toilet flushing that staff and the applicant do not agree upon. The applicant has proposed the following: 1. potable water. 2. The City shall have completed a six-month pilot program using SMURRF water in multi-strate that conversion to the use of recycled water in residential buildings for toilet and 3. This City shall have required some other multi-family residential projects which have access to SMURRF water to install purple pipe for residential toilets. The applicant would like to ensure that if the project is required to use SMURRF water that they would not be unfairly penalized with higher rates than potable water. While the City currently charges lower rates for SMURRF water than potable water, staff could not -potable water rates in the interest of not committing to potential rate increases in the future. Further, if there are statutory 40 of 50 requirements that SMURRF water be sold at rates lower than potable water, the City would be required to comply and the DA provision is unnecessary. The applicant is concerned that because the project will be the first multi-family residential project in the City to commit to using SMURRF water for indoor toilet flushing, that there be assurance that any issues have been resolved through a 6-month demonstration project sponsored by the City. Staff believes that issues regarding water quality and safe use of SMURRF water in multi-family residential structures will be required to be demonstrated to the County before authorization for use of SMURRF water in multi-family residential buildings is granted. Therefore, staff does not recommend this provision. Similarly, the applicant would like the City to require other multi-family residential projects which have access to SMURRF to also install purple pipe in their projects. If this is done outside of a development agreement context, the City would be required to make local findings to impose a requirement more stringent than State law. There is no guarantee that these findings can be made and therefore, staff does not recommend this provision. 41 of 50 Economic Analysis The City contracted The Natelson Dale Group, Inc. (TNDG) to prepare an economic study of the project consisting of a Value Enhancement Analysis and Fiscal Impact Analysis. The following is a summary of those analyses, which are attached to this report in Attachment I and J. 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 the site. For this project, the baseline project was defined as a Tier 1 project with a base height of 32 feet and 2.4 FAR, pursuant to the Interim Zoning Ordinance that requires a Development Agreement for projects exceeding 32 feet in height. To quantify the amount of this value enhancement, TNDG independently prepared a pro forma analyses, and estimated the difference in residual land values (estimated value less estimated construction costs) for the baseline project and the Proposed Project. TNDG estimates that the proposed project would provide a value enhancement of approximately $13.5 million over the value of the existing development. This analysis does not include the $6.4 million in monetary contributions or the value of the off-site affordable housing financing exceeding AHPP requirements. Fiscal Impact Analysis o the City was evaluated, and measured in terms of revenue 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 result in annual revenue of approximately $227,365 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 500 Broadway Mixed-Use project, both individually and cumulatively. However, subsequent to the publication of the Draft EIR, the applicant elected to pursue development of a project that is substantively similar to Alternative 4, which was thoroughly described and analyzed in Chapter 5.0, Alternatives, of the EIR. As currently proposed, Alternative 4 would include demolition of the existing commercial building on the 500 Broadway site, and construction of 249 units consisting of 173 studios/one- bedrooms, 51 two-bedrooms, and 25 three-bedrooms with 64,526 square feet of commercial uses. The off-site affordable housing would be located at 1626 Lincoln Boulevard and would include 64 affordable housing units, comprised of 29 one- bedrooms, 16 two-bedrooms, and 17 three-bedrooms within a 55 foot building (FAR 2.75). The total number of units would be 313 units, which is less than the 332 units analyzed for Alternative 4. As analyzed in Chapter 5.0, Alternatives of the EIR, 42 of 50 Alternative 4 would result in significant impacts in the areas of transportation/traffic impacts and sewer (cumulative only). The project, that is substantially similar to Alternative 4, is the project that was the basis for development agreement negotiations. In accordance with Section 15082 of the CEQA Guidelines, a Notice of Preparation was published on November 20, 2014 for a 30-day comment period which indicated the intent to prepare an EIR for the project. On September 28, 2015, 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/Shade & Shadow Effects Air Quality Construction Effects Cultural Resources and Historic Structures Geology and Soils Greenhouse Gas Emissions Hazards and Hazardous Materials Land Use and Planning Neighborhood Effects Noise Population and Housing Public Services Transportation/Traffic Utilities and Service Systems The Final EIR, which was published in February 2016, contains all comments and responses to comments received during the comment period as well as minor changes to the Draft EIR. The Draft EIR identified mitigation measures in the areas of Construction Effects, Cultural Resources (Archaeological Resources), Geology/Soils, Hazards and Hazardous Materials, Noise (Construction), Public Services (Fire and Police Protection Services), and Transportation/Traffic (Construction) 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. Significant and Unavoidable Impacts For the previously proposed project, significant and unavoidable impact was identified in the area of Transportation/Traffic and cumulative impacts to Sewer and Utilities. Transportation/Traffic Operation of the proposed project would generate up to an estimated 199 net new AM peak hour trips, 308 net new PM peak hour trips, and 355 net new weekend peak hour trips. Although the project is a mixed use development located in the transit-rich Downtown District that also offers opportunities for walking and biking, the project would increase the number of vehicle trips traveling on the surrounding local street network. 43 of 50 esholds for intersections, the project would result in significant traffic impacts at 4 intersections during the Approval Year (2016); impacted intersections would include Palisades Beach Road (PCH) & California Incline (all peak hours), 4th Street & I-10 Eastbound On-ramp (weekend midday peak hour), Lincoln Boulevard & Colorado Avenue (AM peak hour), and Lincoln Boulevard & I-10 Westbound Off-ramp/ Olympic Boulevard (all peak hours). In addition, the proposed project would also create cumulatively considerable impacts at 5 intersections under the Future Year (2025), which includes the 4 intersections listed above and the intersection at Lincoln Boulevard & Santa Monica Boulevard (weekend midday peak hour). No feasible mitigation measures are available to reduce these impacts due to physical and policy constraints. Therefore, the proposed project would result in a significant and unavoidable impact to transportation and traffic. Sewer/Utilities The project would contribute to potentially significant and unavoidable cumulative impacts to wastewater utilities and infrastructure. Although the existing wastewater utilities would be able to accommodate the proposed project, the project would incrementally contribute to a cumulatively considerable increase from future projects in the City that may exceed the capacity of the sewer lines. Cumulative development may necessitate future upgrades to maintain adequate service capacity for existing and future development. As a result, there would be cumulative significant impacts to the significant impact at the cumulative level. The City is anticipating preparation of a sewer model and completion of a Citywide Sewer Master Plan that would analyz sewer system and identify any necessary upgrades. If this master plan is completed prior to the issuance of a building permit for the proposed project, Mitigation Measure U- 1 would require that the project provide a fair share contribution to upgrade sewer Comments on the Draft EIR The Draft EIR was available for a 45-day public review period, during which a total of four comment letters were received. Two of the comment letters were from public agencies, one from a general member of the public, and one from the project applicant. The most substantive comment letter was from the project applicant, who provided mostly clarifying comments on the EIR. Responses to all comments received are included in the Final EIR. Alternatives Studied The EIR studied five alternatives to the originally proposed project, which are intended to reduce the significant environmental impacts of the project. Alternative 1 No Project Alternative 2 C3-C (Downtown Overlay) Zoning Compliant Alternative Alternative 3 Draft Downtown Specific Plan Tier III Compliant Alternative Alternative 4 Project with Offsite Affordable Housing Alternative Alternative 5 32 foot Height Alternative Alternative 1 No Project Alternative 44 of 50 The No Project Alternative assumes the proposed project is not approved, and that the project site will remain in its current condition. The No Project Alternative would reduce the significant environmental impacts associated with the proposed project. However, the No Project Alternative would not satisfy any of the project objectives, and would not achieve the goals of the LUCE. Alternative 2 C3-C (Downtown Overlay) Zoning Compliant Alternative Alternative 2 (the C3-C Zoning Compliant Alternative) would develop a mixed use -C Downtown Overlay Zoning District standards. This alternative would reduce impacts through a reduction of the overall height, total floor area, and density of proposed development. Alternative 2 would consist of a 60-foot tall mixed use project totaling 191,696 sf with 52,648 sf of ground floor commercial uses and 139,048 sf of upper floor residential uses for a FAR of 3.5. Commercial uses would include a 37,834 sf grocery store, 12,814 sf of retail, and 2,000 sf of restaurant. Residential uses would include a total of 158 units, with a mix of 32 studios, 79 one-bedrooms, 31 two-bedrooms, and 16 three-bedrooms. This alternative would result in the same number of significantly impacted intersections as the proposed project. Feasible mitigation is not available to address these impacts. This alternative would not meet many of the Project objectives or achieve LUCE consistency and implementation to the same extent. Alternative 3 Draft Downtown Specific Plan Tier III Compliant Alternative Alternative 3 (Draft DSP Tier III Compliant Alternative) would consist of an 84-foot mixed use project totaling 265,977 sf with 61,699 sf of commercial uses and 204,278 sf of upper floor residential uses for a FAR of 4.0. Commercial uses would include 24,850 sf of restaurant, 24,850 sf of retail, and 12,000 sf of fitness center uses. In efforts to study a range of alternatives, a grocery store which is the highest trip generating use in the proposed project, would not be included in Alternative 3. Residential uses would include a total of 232 units, with a mix of 46 studios, 116 one-bedrooms, 47 two- bedrooms, and 23 three-bedrooms. As compared to the proposed project, the total floor area of Alternative 3 would be reduced by 50,679 sf or 16 percent. In terms of the uses, Alternative 3 represents a 17.8 percent reduction in residential floor area and 30 fewer units than the project, and an 11.8 percent decrease in commercial uses. This alternative would meet all the proposed requirements of the Draft DSP, including FAR, building height, floor plate ratios, parking standards, and ground floor open space standards. Under the Draft DSP, the project site lies within the Transit Adjacent Zone, which promotes increased activity near transit to minimize new automobile trips in the City. The Draft DSP permits development of 84 feet in height with a maximum FAR of 4.0 in the Transit Adjacent Zone. This alternative would result in the same number of significantly impacted intersections as the proposed project. Feasible mitigation is not available to address these impacts.Without the grocery store, Alternative 3 would not achieve project objectives to the same extent as the project or meet LUCE policies and -serving retail uses. If Alternative 3 had a grocery component, however, it would increase auto trips generated, part of the challenging trade-offs involved in Downtown infill development. Alternative 4 Project with Offsite Affordable Housing Alternative 45 of 50 The Offsite Affordable Housing Alternative (Alternative 4) assumes development of the proposed project (as proposed at 500 Broadway) plus the provision of offsite affordable housing requirements (as determined by the Development Agreement) would be met either fully or partially through the provision of offsite affordable housing units. Accordingly, this alternative assumes that up to 70 multi-family affordable housing units would be developed on up to 2 single lots (approximately 7,500 sf each) or one larger site (approximately 15,000 sf) within the Downtown area only. Limiting the potential location of the offsite affordable units to the Downtown area would ensure that LUCE goals for affordable housing in proximity to transit would be achieved with this alternative. The 500 Broadway project, as currently proposed, is consistent with this project alternative. The EIR specifically identifies 1626 Lincoln Boulevard as a site for the off-site affordable housing project, and analyzed this alternative to a project level of detail. This 28,070 sf site is located in the Downtown and currently developed a with a single-story 8,906 sf building for automotive repair and painting uses, including approximately 15 automotive service bays. However, to provide for a conservative traffic analysis, the EIR does not take credit for the trips associated with the existing automotive repair uses. Alternative 4 assumed development of the offsite affordable housing development(s) within a multi-story building with ground floor commercial uses and upper level residential uses. The structure(s) would have a height up to 76 feet and 2 to 3 levels of subterranean parking. Under this alternative, the project would develop 70 deed- restricted offsite affordable residential units. The offsite affordable housing would provide a mix of studios, one-bedrooms, two-bedrooms, and three-bedrooms. For purposes of studying the most conservative (greatest) level of impacts, a combination of 49 two-bedroom units and 21 three-bedroom units is assumed for this alternative. Additionally, up to 4,000 sf of ground-floor commercial uses are assumed for the project site. This alternative would result in additional intersection impacts, which include Ocean Avenue & Colorado Boulevard (weekday midday peak for Approval and Future th Year conditions), 4 Street & I-10 Eastbound Off-Ramp (PM peak hour for Approval Year and Future Year conditions); and the Lincoln Boulevard & the I-10 Westbound Off- Ramp (AM peak hour and weekend midday peak hour for Future Year Conditions). Feasible mitigation is not available to address these impacts. Alternative 5 32 foot Height Alternative Alternative 5 (the 32-Foot Height Alternative) would consist of a 32-foot tall mixed use project totaling 157,680 sf with 55,924 sf of ground floor commercial uses and 101,756 sf of upper floor residential uses for a FAR of 2.3. Commercial uses would include a 31,317 sf grocery store, 22,929 sf of retail, and 1,678 sf of restaurant. Residential uses would include a total of 105 units, with a mix of 10 studios, 66 one-bedrooms, 25 two- bedrooms, and 4 three-bedrooms. As compared to the proposed project, this alternative would result in 157 fewer units than the project, a 60 percent reduction in residential uses. This alternative would also reduce commercial floor area by 18 percent or 12,169 sf and would not include a mezzanine. This alternative would only partially meet project objectives with reduced provision of affordable housing and lower levels of employment, economic and fiscal benefits and with diminished LUCE consistency. 46 of 50 Environmentally Superior Alternative In general, the environmentally superior alternative as defined by CEQA should minimize adverse impacts to the project site and its surrounding environment. Of the impacts; therefore, it is environmentally superior to a project, which proposes to change existing conditions. However, CEQA Guidelines section 15126.6 states that if the environmentally superior alternative is the No Project Alternative, the EIR shall also identify an environmentally superior alternative from among the other alternatives. Therefore, because hazards, cultural resources, traffic, noise, and air quality impacts would be reduced the greatest under the Alternative 5, this alternative is considered to be the environmentally superior alternative over other alternatives that may have fewer impacts in more resource areas. This Alternative, however, would not achieve many of the project objectives. It also raises an inherent shortcoming of conventional CEQA analysis since analysis of where alternative fails to account for the need for additional market and affordable housing in both the local area and the larger region, a down-sized project leaves out the impacts of those units being built elsewhere or the social and economic impacts of units not being built at all. Statement of Overriding Considerations Due to the significant and unavoidable impacts of Alternative 4 (the currently proposed project) with respect to Transportation/Traffic, approval of Alternative 4 will require the City Council to adopt a Statement of Overriding Considerations. The benefits of the Alternative 4 have been discussed earlier in this staff report and have been incorporated into the Council resolution adopting the Statement of Overriding Considerations and Mitigation Monitoring Program should the Council determine that an override is appropriate. With respect to the anticipated Transportation/Traffic impact, the proximity of the project site to the Expo light rail terminus station and the Colorado Esplanade are important considerations. The project would provide transit-adjacent housing and neighborhood-serving commercial uses in proximity to Expo and other transit opportunities, convenient for residents to use alternate modes of transportation. In addition, the development agreement includes a Transportation Demand Management (TDM) Program that is based on increasing transportation choice, a core strategy for the City to achieve the long-term citywide goal of No Net New PM Peak Period Trips. The TDM program requires a transportation allowance be offered to all tenants residents and employees in the project to provide options for commute and non-commute trips. The program also includes a PM-period trip cap and AVR targets with financial penalties for non-compliance. Furthermore, the project includes a comprehensive community benefits package including but not limited to, affordable housing, physical improvements, monetary contributions, and sustainable elements, 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, Inc. 47 of 50 (TNDG), approval of the proposed project, on an annually recurring basis, would result In addition, the project would provide one-time monetary contributions in an amount of $6.4 million in the form of community benefits that the applicant will be required to provide pursuant to the proposed development agreement: Enhanced Transportation Impact fee contribution in the amount of $1,650,000 to be deposited in revenue account 04267.402050. Enhanced Parks and Recreation fee contribution in the amount of $1,700,000 to be deposited in revenue account 04501.408710. Enhanced Affordable Housing Commercial Linkage fee contribution in the amount of $325,000 to be deposited in revenue account 04264.408690. Early Childhood Initiatives contribution in the amount of $1,100,000 to be deposited in revenue account 04262.408760. Historic Preservation contribution in the amount of $150,000 to be deposited in revenue account 04266.409240 . Big Blue Bus contribution in the amount of $240,000 to be deposited in a revenue account 41642.410080 . Transportation Management Association contribution in the amount of $150,000 to be deposited in revenue account 04267.402840. Recycled Water Infrastructure Program contribution in the amount of $1,200,000 to be deposited in revenue account 04226.408750 . Treated Urban Runoff distribution main (SMURRF) extension contribution in the amount of $200,000 to be deposited in a new special revenue account to be created. 48 of 50 Prepared By: Steve Mizokami, Associate Planner Approved Forwarded to Council Attachments: A. Ordinance Adopting Development Agreement 13DEV-008 B. 500 Broadway Final DA for City Council C. Development Agreement Findings D. Resolution Certifying Final EIR E. Resolution Adopting the Statement of Overriding Considerations and Mitigation Monitoring Plan F. Resolution Amending 1984 LUCE G. Ordinance Amending Districting Map H. Development Standards Project Compliance Table I. Economic Impact Memo-500 Broadway_Final J. VEA & Fiscal Impact Memo - 500 Broadway (4-28-16) K. Parking Analysis 2-22-16 L. PV - Common Area MEMO 11-10-15 M. ARB PC CC Float-Up Comments + PC Recommendation N. Planning Commission Meeting March 9, 2016 - Web link 49 of 50 O. Final Environmental Impact Report (EIR) - Web link P. Supplemental Report Q. Written comments R. Powerpoint 50 of 50 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, in that Land Use and Circulation Element (LUCE) Goal D1 advantage as a premier local and regional shopping, dining, and entertainment destination, and support its evolution in order to respond to changing market conditions. Specifically, Policy D1.5 seeks to focus new investment in the areas near the Expo Light Rail station that are accessible to transit, accommodate mixed- use development, contribute to the pedestrian-oriented environment, and support substantial community benefits. The project is located approximately 300 feet from the Expo Light Rail station and consists of mixed-use development that includes expansive sidewalks and outdoor seating areas that will support restaurant and other food-serving uses on the ground floor. Specifically, the project includes approximately 13,614 SF of ground floor open space. Consistent with Goal D7 and Policy D7.1 that seeks to create a balanced mix of uses in the Downtown that reinforces its role as the greatest concentration of activity in the City, the project proposes a variety of commercial retail and restaurant uses. Further, the project proposes 249 residential units with a diverse unit configuration, and the project will provide a diverse range of affordable housing unit types within the Downtown, consistent with Policy D7.7. The implementation of a Transportation Demand Management (TDM) plan to reduce vehicle trips in the area and associated parking demand is consistent with LUCE Circulation Policy T19.2 which seeks appropriate TDM requirements for new development. Furthermore, the project is consistent including but not limited to, affordable housing, and contributions that would support transportation, parks and recreation, early childhood initiatives, historic preservation, and recycled water infrastructure programs in the City. 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 Specific Plan district that allows multi-family residential and commercial uses. The proposed Development Agreement is consistent with LUCE Goal D7 and Policy D7.1 that seeks to create a balanced mix of uses in the Downtown that reinforces its role as the greatest concentration of activity in the City in that the project proposes a variety of commercial retail and restaurant uses. Further, the project proposes 249 residential units with a diverse unit configuration, and the project will provide a diverse range of affordable housing unit types within the Downtown, consistent with Policy D7.7. 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 an existing, underutilized property with a mixed-use project that is consistent with the Land and Use Circulation Element vision for the area. The proposed project replaces a small-scaled commercial building and surface parking lot with 249 new residential units that will feature neighborhood- serving commercial uses on the ground floor, and will provide community benefits including affordable housing, and contributions that would support transportation, parks and recreation, early childhood initiatives, historic preservation, and water infrastructure programs in the City. Further, the project seeks to be consistent with certification with a building designed to achieve 15% less energy than required by California Energy Code, the use of renewable sources for heating the roof-top pool, -potable water sources for landscape irrigation, and committing to indoor water use of 30% below CALGreen baseline standards. 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 an existing, underutilized parcel with a use that is consistent with the Land and Use 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 249 new residential units and will feature neighborhood serving commercial uses on the ground floor, and will provide community benefits including affordable housing, and contributions that would support transportation, parks and recreation, early childhood initiatives, historic preservation, and water infrastructure programs in the City. 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 Land Use and Circ 6. The proposed Development Agreement would result in annual revenue of approximately $227,365 However, the project would provide an estimated $6.4 million in monetary contributions that would support transportation, parks and recreation, big blue bus, transportation management association, early childhood initiatives, affordable housing, recycled water infrastructure, and historic preservation programs in the City. Further, the ground floor commercial uses would generate City business license taxes towards . GENERAL PLAN TEXT AMENDMENT FINDINGS1984 LUCE AMENDMENTS : 1. The proposed amendment is consistent in principle with the goals, objectives, policies, land uses, and programs specified in the adopted Land Use and Circulation Element. Specifically, the proposed increase in allowable Floor Area Ratio from 3.5 to 4.0 within the Downtown Core area further reinforces the Downtown as the focus of the City, supporting the greatest concentration of activity, consistent with LUCE Objective 1.3. Consistent with this objective, the proposed amendment would allow additional commercial and residential floor area in the Downtown Core area adjacent to the Bayside District that would be appropriate, supported by the anticipated growth in this transit-adjacent area in proximity to the future Expo light rail station and Colorado Esplanade. The proposed amendment to allow no limitations on the number of stories of any structure containing at least one floor of residential uses, so long as the height does not exceed the maximum height in number of feet, provides a housing incentive and would provide projects with greater design flexibility in achieving allowable floor area. The amendments support residential mixed-use development and would result in increased housing opportunities, consistent with Policy 1.3.5 which encourages residential uses in the Downtown on upper floors and neighborhood commercial uses for the Downtown residential community. 2. The public health, safety, and general welfare require the adoption of the proposed amendments in that the general welfare of the City is enhanced when the development of new mixed-use housing projects in the Downtown area is encouraged. LUCE Objective 1.3 seeks to reinforce the Downtown as the focus of the City, supporting the greatest concentration of activity. The proposed amendments would allow for greater density in an area of the Downtown where appropriate, supported by the anticipated growth in this transit-adjacent area in proximity to the future Expo light rail station and Colorado Esplanade. ZONING MAP AMENDMENT FINDINGS 1. The proposed map amendment is consistent in principle with the goals, objectives, policies, land uses, and programs specified in the adopted Land Use and Circulation Element in that the map amendment would change the zoning of the rear portion of the subject parcel located at 1626 Lincoln Boulevard that is current zoned M1 to the Mixed-Use Boulevard zoning designation, consistent with the remaining front portion of the property. The proposed Mixed-Use Boulevard zoning designation for the subject rear portion of the property would result in development standards, including building height, number of stories, and floor area ratio, that is consistent with the underlying 1984 LUCE Downtown Frame requirements, and as such, the proposed zoning map amendment would be consistent with the general plan. In addition, the proposed map amendment is requested in conjunction with a 100% affordable housing development project at the subject property, consistent with LUCE Objective 1.1 which seeks to increase the amount of affordable housing particularly in the Downtown. 2. The public health, safety, and general welfare require the adoption of the proposed map amendment in that the general welfare of the City is enhanced when the development of new 100% affordable housing projects in the Downtown area is encouraged. Specifically, the proposed map amendment is requested in conjunction with a 100% affordable housing development project at the subject property, consistent with LUCE Objective 1.1 which seeks to increase the amount of affordable housing particularly in the Downtown. Further, the map amendment would allow the property to be developed under consistent zoning development standards that would further encourage redevelopment of the site. Development Standards Project Compliance Table and Description of Non-Compliant Areas Development Draft Proposed 1984 LUCE Compliance Standard DCP Project Height / Stories No LUCE: (LUCE Amendment Stories DCP: Yes Required) Floor Area Ratio 4.0 w/housing (FAR) 4.0 w/housing LUCE: 3.5 No LUCE: (LUCE Amendment Required) DCP: Yes Basement Commercial SF (P1, P2) exempted as FA, per IZO 2490 and draft ZO. Ground Floor N/A N/A Commercial SF 35,428 SF N/A Basement Commercial Not Including 24,217 SF (P1, P2) exempted Basement SF as FA, per IZO 2490. Residential Units N/A N/A Studio / % / Ave Size 49 / 19.7% / 590 - - SF 1-Bed / % / Ave.Size 124 / 49.8% / 839 - - SF 2-Bed / % / Ave.Size 51 / 20.5%/ 1,191 - - SF 3-Bed / % / Ave.Size 25 / 10.0%/ 1,343 - - SF 5% extremely low Land Dedication (12 units) or 10% Affordable Units and additional very-low (25 units) financing for off-site Yes - or 20% low-income 100% affordable (50 units), or 100% housing project with moderate (249 64 res units. units) Commercial Space 60average Min 60 Yes N/A Depth depth provided. Ground Fl. to Fl. Yes 20 Height Maximum Average Yes N/A Building Height For Large Building Maximum Unbroken Types: Yes Primary Façade Bldg Length Length rd 3 rd 3 Floor 100% 56.7% Floor th 4 th 4 Floor 55% 56.6% Floor No Floor Plate Ratios* N/A th 5 th 5 Floor 55% 56.2% Floor th 6 th 6 Floor 40% 55.9% Floor th 7 th 7 Floor 40% 54.9% Floor Max occupancy of Maximum Upper front bldg. façade No Level Building N/A 71.5% proposed height is Frontage Occupancy: 70% Minimum Pedestrian Building frontage Ground floor Level Building No N/A shall occupy a setback exceeds Frontage Occupancy minimum 70% at frontage line. the frontage line. Building Frontage Line: Widened Sidewalk th 5 th Yes N/A 5 Sidewalks Exceed Minimum Req. No Open Space N/A 50% of lot area 66.46% total 25% of lot area 20% at-grade provided at- grade. (not including cross court or widened sidewalk SF) Average private Private Deck SF open space N/A N/A N/A Range provided through balconies Studio Units - - 90 SF 1-Bed Units - - 90 SF 2-Bed Units - - 90 SF 3-Bed Units - - 90 SF LEED Gold or LEED Certification CalGreen Tier 2 Yes N/A LEED Platinum green building standards * Maximum floor plate ratios for Floors 3 & 4 and 4 & 5 may be averaged and applied to all floors included in the average (DCP page 171). Therefore, Floors 6-7 cannot be averaged, and the maximum floor plate ratio is 40% for each floor. Draft Downtown Community Plan (DCP) Inconsistencies The project is consistent with the draft building height, FAR, maximum average building height, and maximum unbroken primary façade length, however is inconsistent with the following Floor Plate Ratio, Upper Level Building Frontage Occupancy, Open Space, and Pedestrian Level Building Frontage standards as described below: Maximum Floor Plate Ratios This standard attempts to modulate upper-level building mass, establishing maximum floor plate ratios for floors 3-7. The maximum floor plate ratio is the amount of floor plate divided by the total buildable area, meaning the total lot size (67,500 SF) for this project. Maximum floor plate ratios for floors 3 and 4 or floors 4 and 5 may be averaged and applied to all floors included in the average, however floors 6-7 cannot be included in the average, and the maximum floor plate ratio is 40% for each of these floors. The project would comply with floors 3 and 4 when averaged, however would exceed the maximum floor plate ratios for floors 5-7, as indicated below: Table 3: Floors Draft DCP Proposed 3 100% 56.7% 4 55% 56.6% 5 55% 56.2% 6 40% 55.9% 7 40% 54.9% divided into four separate building forms that reduces the overall building length and th massing of the structure along the 5 Street elevation. Furthermore, the spacing of the building forms provide adequate light and air passage through the project and separation between residential units. The building includes angled façades and varied building planes on each elevation in an alternating pattern between floors. Each building form includes two façade types that are vertically divided: sculptural plaster faces on the north sides and fiber cement board in warm grey with fixed and operable sunshade louvers on the south sides. These design elements provide added visual interest to each building form that further helps to reduce the perceived building mass on upper floors. Maximum Upper Level Building Frontage Occupancy: The intent of this standard is to maintain the quality of light and air easily accessible to the pedestrian. The standard requires that the maximum occupancy of the front building exceeding this percentage is setback a minimum of 20 feet. As proposed, the façade is slightly inconsistent with this standard. The building provides three vertical breaks in the building elevation established in between the building forms above the podium level, with building separation ranging from 27-30 feet in width. These consistent breaks of the upper level building forms provide building relief beginning from the second floor podium level with less building frontage occupancy throughout the overall elevation compared to Open Space minimum 22,501 SF. The initial draft standard required no less than 20% open space on the ground floor with the remaining 10% provided on a podium above grade, on exterior balconies, roof decks, or any combination thereof. Overall, the project exceeds the minimum 30% open space and is consistent with the ground floor requirement of 20% (20.02%). Approximately 8,266 SF of the 13,614 SF of publicly accessible open space would be covered by the cantilevered 2nd floor (60%) that has a height clearance of approximately 17 feet above grade. The updated draft DCP standards state that sidewalk widening exceeding the minimum amount may count towards ground floor open space requirements, provided any overhanging encroachments have a minimum vertical the project is compliant with a floor to floor height of 20 feet. The current DCP open space standard requires 50% of the lot area as open space, with 25% located at the ground floor and the remaining 25% without regulated location. The project would be consistent with the overall requirement providing 66.46% open space, however would be inconsistent with ground floor requirements. However in response to direction provided by the Planning Commission and City Council during the float-up discussion, the applicant significantly increased the amount of ground floor open space (from 5.9% to 20%) based on the 20% requirement indicated in the initial draft DSP. Minimum Pedestrian Level Building Frontage Occupancy occupy a minimum 70% at the frontage line (also known as the minimum sidewalk width th setbacks that exceed the minimum sidewalk width standards along both street frontages providing open space to accommodate outdoor seating areas and adequate pedestrian space, as previously described. Except for a small portion of the building along Broadway, no other portion of the ground floor is proposed at the minimum sidewalk width. within proximity of the frontage line, however would occupy less than 34% of the pedestrian level occupancy anticipated size of the ground floor commercial uses, the greater ground floor setbacks proposed in the site design would still be designed to activate the sidewalk and street through allowances for outdoor display of merchandise, allowance for on-site outdoor dining, and a clear pedestrian zone that would encourage a continuous flow of pedestrian activity as intended by this provision. M E M O R A N D U M TO: Steve Mizokami, AssociatePlanner DATE:February 25, 2016 City of Santa Monica FROM: Roger Dale, Managing Principal FILE: #4051 The Natelson Dale Group, Inc. (TNDG) SUBJECT: Economic Impact Analysis for500 Broadway As a companion document to the Fiscal Impact and Value Enhancement analyses prepared for the proposed project, this memorandum evaluates the project’s broader economic benefits, measured in terms of output (the value of industry production), local jobs and income created. Separate calculations are provided for two categories of benefits: a.Temporary (construction phase) benefits; and b.Permanent benefits associated with the ongoing operation of the new on-site commercial operations. Consistent with standard practice for these types of impact studies, our analysis considers the direct (i.e., onsite) impacts associated with the proposed 500 Broadway project, as well as “multiplier” impacts within the larger Los Angeles economy (these “indirect” and “induced” impacts are calculated both for the City Santa Monica and County of Los Angeles). These multiplier impacts have been projected using the IMPLAN model. The IMPLAN model was originally developed by researchers at the University of Minnesota and is widely used throughout the United States for economic impact analysis. The model estimates impacts at the city and county levels (based on data that are specific to Los Angeles County). The programmatic data used in the IMPLAN analysis were derived by TNDG from construction cost summary data from the project pro forma, along with the project’s Draft Environmental Impact Report (DEIR). Economic benefits were estimated through the following process. Construction Phase. Based on data from the project pro forma, the estimated construction values were matched to appropriate IMPLAN construction sectors. Construction costs do not include land acquisition costs, as this is simply an asset swap and does not produce any economic activity. The appendix table shows the distribution of construction costs among the IMPLAN construction industry-related sectors. Operations Phase. Operations-phase impacts are based on the projected number of employees at the project’s onsite commercial operations. The projected number of employees by commercial land use type are used as inputs in the IMPLAN model to estimate ongoing impacts associated with the proposed project 1. 1 Consistent with assumptions in the project’s DEIR, this analysis assumes that there will be 425 square feet of commercial building space per employee. Economic Impact Summary February 25, 2016 Page 2 The project will generate the following types of economic benefits in the regional economy: Direct Benefits. Direct benefits relate to: a) the short-term business activity of general contractors involved in the project construction, and b) the ongoing business activity of retailers and other firms located within the developed project. Indirect Benefits. Indirect benefits will result when local firms directly impacted by the project in turn purchase materials, supplies or services from other firms. An example would include increased sales of building materials as a result of construction activity. Induced Benefits. Induced benefits relate to the consumption spending of employees of firms that are directly or indirectly affected by the project. These would include all of the goods and services normally associated with household consumption (e.g., housing, retail purchases, local services, etc.). The analysis quantifies the above benefits in terms of the following measures: Total industry output – the increase in gross industry receipts, representing the total economic activity generated by the project; Total value added – The difference between an industry’s total output and the cost of its intermediate inputs. It is the portion of total output that most accurately reflects local economic activity (i.e., local payrolls and profits, as distinct from gross output which may include the value of raw materials purchased outside the region); Employment – Expressed as new full- and part-time jobs ; and Employee compensation – Payroll and benefits associated with the created jobs, including wage and salary, all benefits (e.g., health, retirement) and payroll taxes (both sides of social security, unemployment taxes, etc.). Abbreviated Summary of Total City and Total County Economic Impacts Table 1, below, provides a summary of the total one-time construction impacts, as described in the two sets of bullet points above, that would be generated by the proposed project. Table 2, on the following page, provides a summary of the total ongoing impacts, resulting from project operations, which would be generated by the proposed project’s on-site commercial components evaluated in this analysis. Economic Impact Summary February 25, 2016 Page 3 Table 1. Summary of Total Impacts for 500 Broadway, Construction Phase 1 CategoryAmount ($000s, except where noted) Santa Monica Output194,058 Value Added99,867 2 Employees1,260 Employee Compensation65,889 Remainder of County Output42,573 Value Added21,458 2 Employees222 Employee Compensation10,675 County Total Output236,630 Value Added121,326 2 Employees1,482 Employee Compensation76,564 Notes: Totals may not sum due to rounding. 1. Sum of direct, indirect, and induced impacts. 2. Actual number of part-time and full-time employees. Source: TNDG; IMPLAN Economic Impact Summary February 25, 2016 Page 4 Table 2. Summary of Total Impacts for 500 Broadway, Operations Phase 1 CategoryAmount ($000s, except where noted) Santa Monica Output10,977 Value Added8,013 2 Employees140 Employee Compensation5,044 Remainder of County Output3,464 Value Added2,058 2 Employees22 Employee Compensation1,051 County Total Output14,441 Value Added10,071 2 Employees162 Employee Compensation6,096 Notes: Totals may not sum due to rounding. 1. Sum of direct, indirect, and induced impacts. 2. Actual number of part-time and full-time employees. Source: TNDG; IMPLAN Economic Impact Summary February 25, 2016 Page 5 Summary of One-Time Construction Impacts The one-time economic benefits associated with the construction phase are summarized for the proposed project in Table 3 on the following page. These one-time economic benefits are based on the construction hard and soft costs estimated in the project pro forma. See the appendix table for a breakdown of the construction costs by IMPLAN industry sector. Table 4, on page 7, shows the top 10 industries affected by employment, in terms of direct, indirect, and induced impacts. The construction impacts would include the following: Direct Benefits: During its construction phase, the proposed project would directly generate approximately $150.6 million in total economic activity, result in approximately $71.5 million in local value added, create approximately 961 full- and part-time jobs, and generate more than $50.0 million in employee compensation. Given that the project would be developed in the City of Santa Monica, all direct impacts would be in the City. Indirect/Inducted Benefits: Along with its direct impacts to the City, the indirect/induced (“multiplier”) impacts during project construction would include about $43.5 million in total economic activity, approximately $28.3 million in local value added, approximately 299 jobs, and about $15.5 million in employee compensation. Beyond the City’s boundaries, the construction phase would also generate additional multiplier impacts in other parts of Los Angeles County, as shown in Table 3. Total Construction Phase Benefits: During its construction phase the project is projected to generate a grand total of approximately $194.1 million in total industry output, $99.9 million in local value added, 1,260 jobs, and about $65.9 million in employee compensation through direct, indirect and induced economic activity. See Table 3 for the total impacts in the remainder of the County. Economic Impact Summary February 25, 2016 Page 6 Table 3. Summary of One-Time Construction Impacts for 500 Broadway CategoryDirectIndirectInducedTotal Output ($000s) City150,55636,7216,781194,058 Remainder of County021,76520,80842,573 ________________________________________ Total County150,55658,48627,588236,630 Total Value Added ($000s) City71,54823,8654,45499,867 Remainder of County08,93212,52621,458 ________________________________________ Total County71,54832,79716,981121,326 Employee Compensation ($000s) City50,35113,2672,27165,889 Remainder of County04,5056,17010,675 ________________________________________ Total County50,35117,7728,44176,564 Employees City961250491,260 Remainder of County091131222 ________________________________________ Total County9613411801,482 Note: Totals may not sum due to rounding. Source: TNDG; IMPLAN Economic Impact Summary February 25, 2016 Page 7 Table 4. Top 10 Industries Affected by Employment, Construction Impacts, L.A. County Labor Value EmploymentIncomeAddedOutput IMPLAN Sector ($000s) 37Construction of new residential permanent site 39829,60730,07075,391 single- and multi-family structures 34Construction of new nonresidential commercial 23212,99713,36027,390 and health care structures 36Construction of other new nonresidential 1428,0818,25117,778 structures 355Nondepository credit intermediation and 12713,33012,10619,331 related activities 360Real estate establishments348995,3226,541 369Architectural, engineering, and related services343,6043,6175,339 413Food services and drinking places329081,2182,145 319Wholesale trade businesses312,4954,6086,557 358Insurance agencies, brokerages, and related251,8302,4323,913 activities 382Employment services23728806986 Notes: Sum of direct, indirect, and induced impacts. Labor income includes employee compensation and proprietor income. Source: TNDG; IMPLAN Economic Impact Summary February 25, 2016 Page 8 Summary of City and County Ongoing Impacts The ongoing economic benefits associated with the proposed project’s on-site commercial operations are summarized in Table 5 (page 9). In addition, Table 6, on page 10, shows the top 10 industries affected by employment, in terms of direct, indirect, and induced impacts. The ongoing impacts would include the following: Direct Benefits: From ongoing operations, the proposed project would directly generate approximately $8.5 million in total economic activity, result in approximately $6.3million in local value added, create 124 jobs, and generate approximately $4.2 million in employee compensation. Given that the project would be developed in the City of Santa Monica, all direct impacts would be in the City. Indirect/Inducted Benefits: Along with its direct impacts to the City, the indirect/induced (“multiplier”) impacts would include approximately $2.5 million in total economic activity, close to $1.7 million in local value added, approximately 16 jobs, and more than $800,000 in employee compensation. Beyond the City’s boundaries, the construction phase would also generate additional multiplier impacts in other parts of Los Angeles County, as shown in Table 5. Total Ongoing Benefits: On an annual basis, the project is projected to generate a grand total of approximately $11.0 million in total industry output, $8.0 million in local value added, 140 jobs, and about $5.0 million in employee compensation through direct, indirect and induced economic activity. See Table 5 for the total impacts in the remainder of the County. Economic Impact Summary February 25, 2016 Page 9 Table 5. Summary of Ongoing Operational Impacts, 500 Broadway (Commercial Components) CategoryDirectIndirectInducedTotal Output ($000s) City8,4501,4921,03510,977 Remainder of County05492,9153,464 ________________________________________ Total County8,4502,0413,95014,441 Total Value Added ($000s) City6,3301,0026808,013 Remainder of County03061,7512,058 ________________________________________ Total County6,3301,3092,43110,071 Employee Compensation ($000s) City4,2264723475,044 Remainder of County01898621,051 ________________________________________ Total County4,2266611,2086,096 Employees City12487140 Remainder of County041822 ________________________________________ Total County1241226162 Note: Totals may not sum due to rounding. Source: TNDG; IMPLAN Economic Impact Summary February 25, 2016 Page 10 Table 6. Top 10 Industries Affected by Employment, Ongoing Operations Impacts, L.A. County Labor Value EmploymentIncomeAddedOutput IMPLAN Sector ($000s) 324Retail Stores - Food and beverage75.03,1093,8785,238 329Retail Stores - General merchandise50.91,7612,5473,337 413Food services and drinking places3.5100134236 360Real estate establishments2.156330406 394Offices of physicians, dentists, and other health p1.6133135215 382Employment services1.6505668 319Wholesale trade businesses1.4113210298 397Private hospitals1.2114125209 398Nursing and residential care facilities0.9384364 388Services to buildings and dwellings0.9263257 Notes: Sum of direct, indirect, and induced impacts. Labor income includes employee compensation and proprietor income. Source: TNDG; IMPLAN APPENDIX IMPLAN MODEL INPUTS CONSTRUCTION AND OPERATIONS PHASES Construction Categories IMPLAN SectorModel Input 34 – Construction of new nonresidential commercial and health care structures $27,459,089 36 -Construction of other new nonresidential structures 17,823,348 37 -Construction of new residential permanent site single- and multi-family structures 75,582,972 355 -Nondepository credit intermediation and related activities 26,914,341 358 -Insurance agencies, brokerages, and related activities2,634,444 360 -Real estate 6,348,076 369 -Architectural, engineering, and related services5,631,567 Value Added 10,731,152 Not Modeled 1,008,727 Total 174,133,716 Source: IMPLAN; TNDG. Operations Categories Land Use Square IMPLAN Sector Model Input Feet(Employees) Grocery 31,200 324 - Retail Stores (Food and Beverage) 74 Retail 21,308 329 - Retail Stores (General Merchandise) 50 Total 52,508 124 Source: IMPLAN; TNDG. M E M O R A N D U M TO:DATE: Steve Mizokami, Associate PlannerFebruary 25, 2016 City of Santa Monica FROM:FILE: Roger Dale, Managing Principal#4051 The Natelson Dale Group, Inc. (TNDG) SUBJECT:Value Enhancement & Fiscal Impact Analysis for 500 Broadway At your request, The Natelson Dale Group, Inc. (TNDG) has reviewed the mixed-use project proposed for development at 500 Broadway Avenue (Site). The project would include apartments, ground floor retail space, below grade commercial space, and a four-level parking garage (Proposed Project). The TNDG analysis consists of the following components: 1.Pro forma financial analyses to compare the land value supported by the following: a.A project that meets the base zoning standards imposed on the Site (Base Case); and b.The Proposed Project, which would reflect certain height and floor area ratio (FAR) incentives provided by the City of Santa Monica (City). 2.A fiscal impact analysis of the Proposed Project. The fiscal impact assumptions are based on the City’s fiscal year 2015/16 budget. EXECUTIVE SUMMARY The following table summarizes the differences between the Proposed Project and the scope of development allowed by the Base Zoning Alternative: Base Zoning Proposed Difference – Alternative Project Proposed to Base Apartment Units 105 249 144 Retail Square Footage (leasable)52,508 52,508 0 Required Parking Spaces301 524 223 Key Findings The analysis prepared by TNDG concludes that the Proposed Project supports a land value that is $13.5 million more than the land value supported by the Base Zoning Alternative. This represents the estimated value enhancement created by the height and FAR incentives proposed to be utilized for the Proposed Project. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 2 TNDG prepared a fiscal impact analysis based on the development scope for the Proposed Project. This analysis estimates the net impact (benefit) to the City's General Fund at approximately $227,000 per year. VALUE ENHANCEMENT ANALYSIS (VEA) The scope of development included in the Proposed Project exceeds the development scope allowed by the base zoning standards imposed on the Site. In order to obtain height and FAR incentives, the Developer is proposing to enter into a Development Agreement with the City. As one metric in the evaluation of the proposed Development Agreement terms, the City requested that TNDG analyze any enhanced value created by the proposed incentives. To quantify the amount of the value differential, TNDG conducted pro forma analyses for the Base Zoning Alternative and the Proposed Project. The value enhancement is estimated by comparing the supportable land value for the Base Zoning Alternative to the supportable land value for the Proposed Project. TNDG then crosschecked this analysis with a review of recent property sales in the area. The TNDG financial analyses are described in the following sections of this memorandum. These analyses are presented in Appendices A (Base Zoning Alternative) and B (Proposed project), and are organized as follows: Table 1: Estimated Construction Costs Table 2: Estimated Stabilized Net Operating Income Table 3: Estimated Supportable Land Value Methodological Notes TNDG’s assumptions and also the structure of this analysis used, as a point of departure, a recently completed VEA analysis prepared by Keyser Marston Associates (KMA) for a project in the City. Construction cost estimates for the Proposed Project were derived by the TNDG team based on an itemized construction budget supplied by the Applicant. TNDG developed cost figures for the Base Case project based on an internal review of the project costs. Estimates for both the Proposed and Base cases were reviewed for TNDG by John Mauk, CPE, of O'Connor Construction Management, Inc., using the design development facility drawings supplied by the Applicant and information on the Base Zoning Alternative contained in the Draft EIR for the project. Based on this review, Mauk recommended certain adjustments to the cost estimates for the Base Zoning Alternative. Mauk’s analysis also included recommendations to supplement the Base alternative’s program with upgrades that made it more comparable to the Proposed alternative. This is accomplished in the model by the line item labeled “Enhancements in Proposed Project Carried over into Base Zoning Alternative.” A more detailed description of the cost estimation process is provided in Appendix F. Residential and commercial rental rates projected for the two alternatives were derived as follows: Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 3 Proposed project. Residential and commercial rents were based on a review of comparables that focused on recent, high-quality projects. Projected residential rates reflect averages for the overall project, recognizing that rent premiums may be applied to some of the upper-floor units with superior views (see additional discussion on residential rents below). Commercial rents for the ground floor reflect a combination of lower-cost market space and other retail space that would rent at a higher level. Rents for the below-grade commercial space are discounted substantially, in keeping with rent comparables for similar space in the City. Base Zoning Alternative. Rental rates for the Base case were presumed to be approximately 10% lower than the Proposed Project, since fewer rent premiums would be available and the building would not convey the same impression as the larger project. Residential rents for the proposed project have been projected based on the following monthly rents per square foot: Studios - $6.00 1-bedroom units - $5.50 2-bedroom units - $4.75 3-bedroom units - $4.75 These per-square foot rent factors were derived by TNDG based on an online search of apartments currently available for rent in Santa Monica. The sample focuses on newer buildings (constructed within the last 5 years) in the general vicinity of the proposed project. Given the project’s location and design, and the applicant’s intention to develop a high-amenity residential environment, TNDG has assumed that the proposed project would achieve residential rents equivalent to the 85 th percentile of the comparable buildings included in TNDG’s sample. Appendix C of this memorandum provides the data for the comparable buildings and shows the derivation of the 85 th percentile factors. Base Zoning Alternative Analysis Scope of Development The scope of development under the Base Zoning Alternative can be described as follows: 1.The gross building area (GBA) is estimated at 164,191 square feet (exclusive of parking garage area), and is comprised of the following: a.Residential Component – 101,756 square feet; and b.Retail Component – 62,435 square feet. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 4 2.The development includes 105 residential units, with the sizes shown below. The units are allocated as follows: Number of Units Unit Size (Square Ft.) Studio Units 10 590 One-Bedroom Units 66 810 Two-Bedroom Units 25 1,200 Three-Bedroom Units 4 1,260 Total 105 3.Three hundred one (301) subterranean parking spaces are required for the Base Zoning Alternative. These spaces can be provided in three subterranean parking levels. 4. The City's Affordable Housing Production Program requirements were met through the dedication ofland to a non-profit housing provider at an off-site location equivalent to $31.25 per square foot of the gross residential area. Pro Forma Analysis (Appendix A) The following sections of the analysis summarize the major assumptions applied in the TNDG pro forma analysis of the Base Zoning Alternative. The assumptions for the Base Zoning Alternative are based primarily on the description of alternatives in the draft EIR dated September 2015. Estimated Construction Costs (Appendix A – Table 1) Direct Costs TNDG assumed that the Base Zoning Alternative could be developed using Type V construction standards. In addition, TNDG assumed that the Base Zoning Alternative would not be subject to prevailing wage requirements. Based on these assumptions, TNDG estimated the direct costs as follows: 1.The site improvement costs are estimated at $15 per square foot of land area, or $1,012,500. 2.The subterranean parking costs are estimated as follows: a.The 1 st-level subterranean parking costs are estimated at $30,000 per space. b.The 2 nd-level subterranean parking costs are estimated at $35,000 per space. rd c.The 3-level subterranean parking costs are estimated at $40,000 per space. 3.Based on Type V construction standards, the building costs are estimated as follows: Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 5 a.The residential building costs are estimated at $270 per square foot of residential GBA; and b.The retail building costs are estimated at $100 per square foot of retail GBA. 4.The contractor costs, inclusive of overhead, profit, general conditions, builder's risk insurance and contingency allowance, are estimated at 20% of other direct costs. As another step in aligning the development concept for the Base Zoning Alternative more closely with that of the Proposed project, a cost line item labeled “Enhancements in Proposed Project Carried over into Base Zoning Alternative” was added to TNDG’s Base Zoning Alternative project pro forma (Appendix A, Table 1). TNDG estimates the total direct costs at $56.5 million, or $344 per square foot of GBA. Indirect Costs TNDG utilized the following assumptions to estimate the indirect costs for the Base Zoning Alternative: 1.The architecture, engineering and consulting costs are estimated at 8% of direct costs. 2.The public permits and fees costs are estimated at $16 per square foot of GBA. 3.The taxes, insurance, legal and accounting costs are estimated at 3% of direct costs. 4.The marketing and leasing costs are estimated as follows: a.The residential marketing costs are estimated at 2% of direct costs; and b.The retail marketing costs are estimated at $3 per square foot of retail space. 5.A development management fee equal to 4% of direct costs is included. 6.An indirect cost contingency allowance equal to 5% of other indirect costs is included. TNDG estimates the total indirect costs at $13.0 million. Financing Costs The financing costs for the Base Zoning Alternative are estimated as follows: 1.The land carrying costs are estimated at $1.9 million based on a 5.5% interest rate and a 21- month development period. 2.The construction and absorption period interest costs are estimated at $5.1 million. These costs are based on the following assumptions: Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 6 a.The construction-period interest costs are based on a 5.5% interest rate, an 18-month construction period, and a 60% average outstanding loan balance. b.The absorption-period interest costs are based on a three-month absorption period with a 100% average outstanding balance. 3.The financing fees for both the construction and permanent loan are set at 2.50 points. This equates to $4.2 million in financing fees. TNDG estimates the total financing costs at $11.2 million. Total Construction Costs The following table summarizes the TNDG construction cost estimates for the Base Case: Total Direct Costs $56,451,208 Total Indirect Costs13,031,624 Total Financing Costs 11,180,583 Total Construction Costs $80,663,415 Per Square Foot of GBA $491.28 Estimated Stabilized Net Operating Income (Appendix A – Table 2) Residential Net Operating Income 1.The rents for the residential units are estimated to be as follows: Studio Units $3,186 One-Bedroom Units $4,010 Two-Bedroom Units $5,160 Three-Bedroom Units $5,418 2.A $10 per unit per month allowance is provided for miscellaneous income. 3.The City requires the parking to be unbundled from the residential and retail rents. The parking revenues are estimated as follows: The market rent for the parking is estimated at $150 per space per month. This rate is applied to 125 spaces in the Base Zoning Alternative. 4.A 5% vacancy and collection allowance is provided. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 7 5.TNDG estimates the residential operating expenses at $15,056 per unit per year. Based on the preceding assumptions, TNDG estimates the effective gross income (EGI) for the residential component at $5.3 million and the operating expenses at $1,580,884. The resulting residential net operating income (NOI) is $3.7 million. Commercial Net Operating Income 1.Revenues: a.The restaurant and retail space rent is set at $66.00 per square foot of gross leasable area (GLA) per year. b.The grocery market rent is set at $45.00 per square foot of gross leasable area (GLA) per year. c.The common area maintenance (CAM) reimbursements are estimated at $10 per square foot of GLA per year. 2.A 5% vacancy and collection allowance is provided. 3.TNDG estimates the retail operating expenses as follows: a.The CAM expenses are estimated at $10 per square foot per year. b.The management fee is set at 3% of effective gross retail income. TNDG estimates the EGI for the retail component at $3.2 million, and the operating expenses at $621,802. Based on these assumptions, the retail NOI is $2.6 million. Total Net Operating Income The sum of the NOI for the residential component and for the retail component, for the Base Zoning Alternative, equals $6.3 million. Estimated Supportable Land Value (Appendix A – Table 3) The supportable land value is equal to the difference between the estimated value of the Base Zoning Alternative and the sum of the estimated construction costs plus an allowance for developer profit equal to 12% of the Base Zoning Alternative's estimated value. The value supported by the Base Zoning Alternative is estimated by capitalizing the NOI at a capitalization rate that reflects current market conditions. To estimate the value supported by the Base Zoning Alternative, TNDG capitalized the NOI at a 4.72% rate; this rate is derived from a weighted average (by building area) of 4.5% for the residential Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 8 component and 5.5% for the retail component. The valuation analysis prepared by TNDG is summarized in the following table: Estimated Net Operating Income $6,344,725 Capitalization Rate 4.72% Project Value $134,490,601 The resulting supportable land value for the Base Zoning Alternative under the TNDG analysis can be summarized as follows: Project Value $134,490,601 (Less) Developer Profit (16,138,872) (Less) Total Construction Costs(83,843,290) Supportable Land Value $34,508,439 Per Square Foot of Land Area $511.24 Analysis of Proposed Project Scope of Development The following summarizes the scope of development for the Proposed Project: 1.The project includes 302,467 square feet of GBA (exclusive of parking garage area), which is comprised of the following: a.Residential Component – 229,012; and b.Retail Component – 62,435 square feet (gross). c.Other space – 11,020 square feet. 2.The development includes 249 residential units, sized and allocated as follows: Number of Unit Size Units(Square Ft.) Studio Units 49 590 One-Bedroom Units 124 810 Two-Bedroom Units51 1,200 Three-Bedroom Units 25 1,260 Total249 3.Five hundred twenty-four (524) subterranean parking spaces are provided. It is assumed that four subterranean parking levels will be required to accommodate these spaces. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 9 4. The City's Affordable Housing Production Program requirements were met through the dedication of land to a non-profit housing provider at an off-site location equivalent to $31.25 per square foot . of the gross residential area Pro Forma Analysis (Appendix B) The following sections of the analysis summarize the major assumptions applied in the TNDG pro forma analysis of the Proposed Project. The assumptions incorporate those applied by the Applicant to the proposed project, within the analysis framework used for the Base Zoning Alternative described above. In doing so, some variations in the analysis structure prepared by the Applicant and the system used above were unavoidable. Estimated Construction Costs (Appendix B – Table 1) Direct Costs TNDG assumed, per the Applicant’s description, that the Proposed Project will be developed using Type I / II-A construction standards. In addition, TNDG assumed that the Proposed Project will not be subject to prevailing wage requirements. Based on these assumptions, TNDG estimates the direct costs as follows: 1.The site improvement costs are estimated at $15 per square foot of land area, or $1,012,500. 2.The subterranean parking costs are estimated as follows: st a.The 1-level subterranean parking costs are estimated at $30,000 per space; nd b.The 2-level subterranean parking costs are estimated at $35,000 per space; and c.The 3 rd-level and 4 th-level subterranean parking costs are estimated at $40,000 per space. 3.As part of the process of reconciling the Applicant’s cost estimates with the analysis format used by TNDG for the Base Zoning Alternative, a separate cost line item was added labeled, “Additional estimated parking costs associated with relationship of podium to garage.” 4.Based on Type I / II-A construction standards, the building costs are estimated as follows: a.The residential building costs are estimated at $285 per square foot, for a total of $65.3 million; and b.The retail building costs are estimated at $100 per square foot, for a total of $6.2 million. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 10 5.The contractor costs, inclusive of overhead, profit, general conditions, builder’s risk insurance and contingency allowance, are estimated at 20% of other direct costs. With these assumptions, the direct costs total to $119.3 million, or $394 per square foot of GBA. Indirect Costs TNDG utilized the following assumptions to estimate the indirect costs for the Proposed Project: 1.The architecture, engineering and consulting costs are estimated at 8% of direct costs. 2.Public permits and fees costs are estimated at $16 per square foot of GBA. 3.The taxes, insurance, legal and accounting costs are estimated at 3% of direct costs. 4.The marketing and leasing costs are estimated as follows: a.The residential marketing costs are estimated at 2% of direct costs; and b.The retail marketing costs and leasing commissions are estimated at $3.00 per square foot of retail GBA. 5.A development management fee equal to 4% of direct costs is provided. 6.An indirect cost contingency allowance equal to 5% of other indirect costs is provided. TNDG estimates the total indirect costs at $26.4 million. Financing Costs The financing costs for the Proposed Project are estimated as follows: 1.Land carrying costs are estimated at $2.7 million based on a 5.5% interest rate and a 30-month development and absorption period. 2.The construction and absorption period interest costs are estimated at $17.0 million. These costs are based on the following assumptions: a.The construction period interest costs are based on a 5.5% interest rate, a 24-month construction period, and a 60% average outstanding loan balance. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 11 b.The absorption period interest costs are based on a six-month absorption period with a 100% average outstanding balance. 3.The financing fees for both the construction and permanent loan are set at 2.50 points. This equates to $8.8 million in financing fees. TNDG estimates the total financing costs at $28.5 million. Total Construction Costs Total Direct Costs $119,283,704 Total Indirect Costs26,373,587 Total Financing Costs 28,476,425 Total Construction Costs $174,133,716 Per Square Foot of GBA $575.71 Estimated Stabilized Net Operating Income (Appendix B – Table 2) Residential Net Operating Income 1.The monthly market rents are estimated as follows: Studio Units $3,540 One-Bedroom Units $4,455 Two-Bedroom Units $5,700 Three-Bedroom Units $5,985 2.A $10 per unit per month allowance is provided for miscellaneous income. 3.The parking rents have been unbundled from the residential and retail rents. The parking revenues are estimated as follows: Three hundred nineteen (319) parking spaces will be leased at the estimated market rate rent of $150 per space per month. 4.A 5% vacancy factor is provided. Based on the on the preceding assumptions, TNDG estimates the EGI for the residential component at $13.9 million. Operating expenses of $6,000 per unit per year and property taxes of $10,267 per unit per year yield annual expenses of $4.0 million. The resulting residential NOI is $9.9 million. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 12 Retail Net Operating Income 1.Revenues: a.The rental rate for the grocery store is set at $50 per square foot of GLA per year, on the ground floor, and at $18 per square foot for the below-grade space. b.The rental rate other ground-floor retail and restaurant is set at $75 per square foot of retail GLA per year. c.The CAM reimbursements are estimated at $10 per square foot of GLA per year. 2.A 5% vacancy and collection allowance is provided. 3.TNDG estimates the retail operating expenses as follows: a.The CAM expenses are estimated at $10 per square foot of GLA per year. b.The management fee is set at 3% of effective gross retail income. TNDG estimates the EGI for the retail component at $3.0 million, and the operating expenses at $614,133. Based on these assumptions, the retail NOI is set at $2.4 million. Total Net Operating Income Combining the NOI for the residential component and the retail component yields a Project NOI of $12.2 million. Estimated Supportable Land Value (Appendix B – Table 3) The valuation analysis prepared by TNDG for the Proposed Project is summarized in the following table. The 4.69% capitalization rate is derived from a weighted average (by area) of 4.5% for the residential component and 5.5% for the retail component. Estimated Net Operating Income $12,222,146 Capitalization Rate 4.69% Project Value $260,530,969 The resulting supportable land value based on the results of the TNDG analysis is summarized in the following table: Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 13 Project Value $260,530,969 (Less) Developer Profit (31,263,716) (Less) Total Construction Costs(181,290,341) Supportable Land Value $47,976,912 Per Square Foot of Land Area $710.77 Estimated Value Enhancement The value enhancement created by the proposed increase in height and FAR is equal to the difference between the land values supported by the Base Zoning Alternative and the Proposed Project. The following table presents the TNDG estimate of the value enhancement. Supportable Land Value Proposed Project $47,976,912 Base Zoning Alternative $34,508,439 Estimated Value Enhancement $13,468,473 As a crosscheck to the land value estimates derived from the value enhancement analyses, TNDG compiled information for properties that have recently sold within the vicinity of the Site. Given the limited number of vacant land parcels near the Site, TNDG focused the research on the recent sales of commercial buildings. The parameters of the property sales survey are as follows: 1.Sales transactions between July 2014 and January 2016 were included in the survey. 2.Non-arms length transactions, multi-property transactions, and transactions without sales prices were excluded, based on our interpretation of the data. Based on the search parameters outlined above, TNDG documented five improved property sales transactions within a 0.5-mile radius of the Site. The survey results are detailed in Appendix D, and the values per square foot of land area are summarized in the following table: Property Sales Minimum Price $355 Maximum Price$690 Average Price $460 As can be seen in the preceding table, the values associated with recent property sales range from $355 to $690 per square foot of land area. The large spread in the values is likely due to the varying quality and intensity levels of the existing improvements on the properties. The TNDG value enhancement analyses resulted in a supportable land value of $511.24 per square foot of land area for the Base Zoning Alternative, and a $710.77 per square foot land value for the Proposed Project. Value Enhancement & Fiscal Impact Analysis –500 Broadway February 25, 2016 Page 14 FISCAL IMPACT ANALYSIS (APPENDIX E) The City has requested that TNDG provide an analysis of the fiscal impacts of the Proposed Project could potentially create on the City’s General Fund. TNDG reviewed the City’s fiscal year 2015/16 budget, and estimated the Proposed Project’s fiscal impacts as follows. Where appropriate, the analysis uses a marginal increase methodology to evaluate revenues that would increase proportionately with new development. To calculate these marginal increases in revenue, the analysis calculates per unit factors that are applied to the incremental development proposed for the project. In this analysis, we have derived an equivalent dwelling unit (EDU) factor, which incorporates a variety of inputs to derive a factor that represents the City’s resident “daytime population” (employees). Assumptions regarding each of these populations’ relative effect on the General Fund are provided on Appendix Table 1. Following from the assumptions summarized in Appendix Table 1, Appendix Table 2 provides the calculations that convert the proposed development characteristics into EDUs, for purposes of calculating revenue impacts. For some revenue categories, the analysis uses a case study approach to estimate project-generated revenues. For example, property taxes are based on the project’s estimated assessed valuation, while sales taxes are based on the projected gross sales. See Appendix Table 3 for a summary of the revenue projection methodology for each revenue category. Fiscal Impact Analysis Assumptions The major assumptions used in this fiscal impact analysis can be described as follows: 1.Population estimates a.TNDG applied an average household size of 1.50 persons per residential unit. b.The retail employment is estimated at 425 commercial square feet per employee. c.The employment-based resident equivalent factor is set at 0.5 employees per resident. 2.The total General Fund revenue that could potentially be generated by the Proposed Project is estimated at $987,376 based on the following assumptions: a.The property taxes are estimated based on a $260.5 million assessed value for the Proposed Project, and the assumption that the City’s General Fund receives 17.16% of the 1.0% base property tax levy. After subtracting current land values ($43.1 million), TNDG projects the Proposed Project will generate $373,050 per year in additional property tax revenue. Value Enhancement & Fiscal Impact Analysis 500 Broadway February 25, 2016 Page 15 b.TNDG estimated the motor vehicle license in-lieu fee (MVLF) revenue that could be value represents of the total assessed value of properties within Santa Monica. When this ratio is applied to the $9.33 million in MLVF the City received in the fiscal year 2015/16, the Proposed Project is estimated to generate $65,132 in MVLF revenue annual. c.The sales tax revenue that could be received by the City is estimated at $272,007 per year, based on the following assumptions: i. in Santa Monica. This includes the revenue generated by Measure Y. ii.The expenditu retail establishments in Santa Monica, are estimated at approximately $17,048 per unit per year. iii.The taxable sales projected to be generated by the retail component of the Proposed Project are estimated at $333 per square foot per year of commercial GLA. This factor is a weighted average that reflects the assumption that a market (at which only a portion of sales are taxable). d.The utility tax revenue is estimated at $439.93 per EDU. This equates to $127,580 annually. e.Parking tax revenue is estimated at $57,420 per year based on the following assumptions: i.The project will have a total of 319 residential parking spaces (commercial parking spaces are assumed to generate no income). ii.The parking charge for residential tenants is projected at $150 per space per month. iii.The Citys parking facility tax is calculated at 10% of total parking income. f.The business license fee rate is set by the City at $1.25 per $1,000 in gross receipts for both the commercial components of the Project. The annual revenues are estimated at $15,981 per year. Value Enhancement & Fiscal Impact Analysis 500 Broadway February 25, 2016 Page 16 g.Franchise fee revenue is estimated at $13.03 per EDU. This equates to $3,779 annually. h.Other license and permit revenue is estimated at $196.35 per EDU. This equates to $56,942 annually. i.Revenue from fines and forfeitures is estimated at $53.40 per EDU. This equates to $15,486 annually. 3.The General Fund expenditures projected to be incurred as a result of the following Proposed Project are estimated at $760,012 annually based on the following assumptions: a.Public safety expenditures are estimated at $1,088.29 per EDU, or $315,604 per year. b.Fire protection services are estimated at $478.06 per EDU, which equals $138,637 per year. c.Community service expenditures are estimated at $331.51 per EDU, or $96,138 per year. d.Library expenditures are estimated at $165.37 per EDU, or $47,957 per year. e.Public works expenditures are estimated at $557.50 per EDU, or $161,675 per year. Fiscal Impact Analysis Findings The General Fund revenue and expenditures analysis for the Proposed Project is presented in Appendix D. The results are summarized in the following table: Estimated General Fund Revenues $987,376 (Less) Estimated General Fund Expenditures ($760,012) Net Annual General Fund Revenue/(Cost) $227,365 APPENDIXA BASE ZONING ALTERNATIVE SUPPORTABLE LAND VALUE APPENDIXB PROPOSED PROJECT SUPPORTABLE LAND VALUE APPENDIX B - TABLE 1 ESTIMATED CONSTRUCTION COSTS PROPOSED PROJECT - TYPE I/II-A CONSTRUCTION 500 BROADWAY SANTA MONICA, CALIFORNIA I.Direct Costs Site Improvement Costs67,500SF Land$15/SF Land$1,012,500 Parking Spaces 1st-Level Subterranean73Spaces$30,000/Space$2,190,000 2nd-Level Subterranean134Spaces$35,000/Space$4,690,000 3rd-Level Subterranean155Spaces$40,000/Space$6,200,000 4th-Level Subterranean162Spaces$40,000/Space$6,480,000 Parking garage total524$19,560,000 Additional est. parking costs associated with relationship of podium to garage$7,460,000 Building Costs Residential229,012SF Res GBA$285/SF Res GBA$65,268,420.00 Commercial Ground Floor40,475SF Retail GBA Below Grade21,960SF Retail GBA Total Commercial62,435SF Retail GBA$100/SF Retail GBA$6,243,500 Other area11,020$100/SF Retail GBA$1,102,000 1 Contractor Costs20%Other Direct Costs$18,637,284 Total Direct Costs302,467SF Total GBA$394/SF GBA$119,283,704 II.Indirect Costs Arch, Eng, & Consulting8%Direct Costs$9,542,696 2 Public Permits & Fees/Impact Fees302,467SF GBA$16.00/SF GBA$4,839,472 Fractional Unit AH Fee0.00Fractional Unit/AH Dev Cost$0 Taxes, Ins, Legal & Acctg3.00%Direct Costs$3,578,511 Marketing Residential2%Direct Costs$2,385,674 Commercial0SF Retail GBA$3.00/SF Retail GBA$0 Development Management4%Direct Costs$4,771,348 Soft Cost Contingency 5%Indirect Costs$1,255,885 Total Indirect Costs$26,373,587 III.Financing Costs100%Avg. Outstanding Bal.100%Avg. Outstanding Bal. 24Month Const. Period6-Month Absorption 3 Land Carrying Costs$19,500,000Financed5.50%Interest$2,681,250 60%Avg. Outstanding Bal.100%Avg. Outstanding Bal. 24Month Const. Period6-Month Absorption Interest During Construction 4$181,300,000\[Max. Financeable\]5.50%Interest$16,951,550 Financing Fees Construction Loan$181,300,000Financed2.50Points$4,532,500 Permanent Loan$172,445,000Financed \[65% of cap. 2.50Points$4,311,125 value\] Total Financing Costs$28,476,425 IV.Total Construction Costs302,467SF GBA$575.71/SF GBA$174,133,716 Affordable Housing Costs$7,156,625 Total Construction & Affordable Housing Costs$181,290,341 1 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 2 From a recent similar study by Keyser Marston Associates (KMA). According to KMA, City staff should verify the accuracy of this estimate. 3 Based on an 18-month construction period and a 3-month absorption period with a 100% average outstanding balance. 4 Based on an 18-month construction period with a 60% average outstanding balance and a 3-month absorption period with a 100% average outstanding balance. APPENDIX B - TABLE 2 ESTIMATED STABILIZED NET OPERATING INCOME PROPOSED PROJECT - TYPE I/II-A CONSTRUCTION 500 BROADWAY SANTA MONICA, CALIFORNIA I.Residential Rental Income Market Rate Units$/Per Unit SFAnnual rent SF Studio Units49Units$6.00590$3,540/Unit/Month$2,081,520 One-Bedroom Units124Units$5.50810$4,455/Unit/Month$6,629,040 Two-Bedroom Units51Units$4.751,200$5,700/Unit/Month$3,488,400 Three-Bedroom Units25Units$4.751,260$5,985/Unit/Month$1,795,500 Gross Rental Income$13,994,460 Laundry and Miscellaneous Income249Units$10/Unit/Month$29,880 Parking Income 1 319Spaces$150/Space/Month$574,200 Gross Residential Income$14,598,540 (Less) Vacancy and Collection5%Gross Residential Income-$729,927 Effective Gross Residential Income$13,868,613 II.Residential Operating Expenses General Operating Expenses249UnitsCap Res. NOIProperty $6,000/Unit/Year$1,494,000 RateTax Rate 2 Property Taxes249Units4.50%$9,865,0001.1435%$10,067/Unit/Year$2,506,806 Total Residential Operating 249Units$16,067/Unit/Year$4,000,806 Expenses III.Residential Net Operating Income$9,867,807 IV.Retail Income Commercial Ground Floor Retail/Restaurant21,308SF Leasable$75.00/SF/Year$1,598,088 Ground Floor Market13,748SF Leasable$50.00/SF/Year$687,408 Below Grade (assumed Market)17,452SF Leasable$18.00/SF/Year$314,133 Total52,508SF Leasable$2,599,629 CAM Reimbursements52,508SF Leasable$10.00/SF GLA/Year$525,078 Gross Retail Income$3,124,707 (Less) Vacancy and Collection5%Gross Retail Income(156,235) Effective Gross Retail Income$2,968,472 V.Retail Operating Expenses CAM Expenses52,508SF Retail$10.00/SF GLA/Year$525,078 Management Fee3%Effective Gross Inc.89,054 Total Retail Operating Expenses62,435SF Retail GBA$9.84/SF/Year$614,133 VI.Retail Net Operating Income$2,354,339 VII.Total Net Operating Income$12,222,146 1 The parking is uncoupled from the market rate units and retail space. The space rent is estimated at $150/space/month. 2 Based on a 4.50% capitalization rate for the residential component and a 1.1435% property tax rate. APPENDIX B - TABLE 3 ESTIMATED SUPPORTABLE LAND VALUE PROPOSED PROJECT - TYPE I/II-A CONSTRUCTION 500 BROADWAY SANTA MONICA, CALIFORNIA Estimated Project Value I. Net Operating Income$12,222,146 1 Capitalization Rate4.69% Estimated Project Value$260,530,969 II. Supportable Land Value $260,530,969 Estimated Project Value Estimated Project Value (Less) Developer Profit12%(31,263,716) (181,290,341) (Less) Total Construction Costs III.SF Land$710.77SF Land Supportable Land Value 67,500$47,976,912 / Based on a weighted average of: a 4.50% capitalization rate for the residential component and a 5.50% 1 capitalization rate for the commercial component. Rates are based on a recent similar study by Keyser Marston Associates (KMA), citing the rates published by RERC for the 4th quarter of 2014 and an adjustment by KMA reflecting the strength of the Santa Monica real estate market. APPENDIXC RESIDENTIAL RENT COMPARABLES Table C-1 Sample of Comparable Apartment Buildings Monthly Rent $Square Feet$/SF BuildingAddressStudio1 BR2 BR3BRStudio1 BR2 BR3BRStudio1 BR2 BR3BR Sway Santa Monica525 Broadway$3,632$6,0666091,233$5.96$4.92 NMS 15481548 6th Street$3,295$3,895688870$4.79$4.48 NMS 15391539 4th Street$3,104620$5.01 NMS 14301430 5th Street$3,995$3,895623852$6.42$4.57 NMS 14271427 7th Street$2,095340$6.16 NMS 15111511 5th Street$1,805333$5.42 NMS 14201420 5th Street$4,395$4,095785853$5.60$4.80 NMS 14101410 5th Street$3,245$4,243656959$4.95$4.42 Arrezo5th/Wilshire$2,810$3,381484871$5.81$3.88 LuganoBroadway/6th Court$2,700$3,295$4,6704886451,365$5.53$5.11$3.42 Positano6th/Santa Monica$3,200$3,047$3,526551697860$5.81$4.37$4.10 Biella7th/Santa Monica$2,834707$4.01 Genoa7th/Santa Monica$3,024$3,213580855$5.21$3.76 San Remo7th/Colorado$3,052693$4.40 Sorrento7th/Santa Monica$2,670$3,492706798$3.78$4.38 Livorno6th/Colorado$3,364827$4.07 Revello6th/Wilshire$3,486847$4.12 San RemoLincoln/Colorado$3,252868$3.75 Venezia6th/Colorado$3,170854$3.71 N/A1502 Broadway$3,295$4,9957511,094$4.39$4.57 N/A1751 Appian Way$7,7951,757$4.44 N/A947 4th Street$11,2492,050$5.49 Source: The Natelson Dale Group, Inc. (TNDG), based on February 2016 online search of available Santa Monica apartments. Table C-2 Projected Rent per Square Foot - Studio Apartments BuildingRentSquare Feet$/SF NMS 1511$1,805333$5.42 NMS 1427$2,095340$6.16 Arrezo$2,810484$5.81 Lugano$2,700488$5.53 Positano$3,200551$5.81 Percentile85%$5.95 wƚǒƓķĻķυЏ͵ЉЉ Source: TNDG Table C-3 Projected Rent per Square Foot - 1 Bedroom Apartments BuildingRentSquare Feet$/SF DĻƓƚğυЌͲЉЋЍЎБЉυЎ͵ЋЊ {ǞğǤ {ğƓƷğ aƚƓźĭğυЌͲЏЌЋЏЉВυЎ͵ВЏ ba{ ЊЎЌВυЌͲЊЉЍЏЋЉυЎ͵ЉЊ ba{ ЊЍЌЉυЌͲВВЎЏЋЌυЏ͵ЍЋ \[ǒŭğƓƚυЌͲЋВЎЏЍЎυЎ͵ЊЊ ba{ ЊЍЊЉυЌͲЋЍЎЏЎЏυЍ͵ВЎ ba{ ЊЎЍБυЌͲЋВЎЏББυЍ͵АВ {ğƓ wĻƒƚυЌͲЉЎЋЏВЌυЍ͵ЍЉ tƚƭźƷğƓƚυЌͲЉЍАЏВАυЍ͵ЌА {ƚƩƩĻƓƷƚυЋͲЏАЉАЉЏυЌ͵АБ .źĻƌƌğυЋͲБЌЍАЉАυЍ͵ЉЊ ЊЎЉЋ .ƩƚğķǞğǤυЌͲЋВЎАЎЊυЍ͵ЌВ ba{ ЊЍЋЉυЍͲЌВЎАБЎυЎ͵ЏЉ tĻƩĭĻƓƷźƌĻБЎіυЎ͵ЏА wƚǒƓķĻķυЎ͵ЎЉ {ƚǒƩĭĻʹ b5D Table C-4 Projected Rent per Square Foot - 2 Bedroom and 3 Bedroom Apartments BuildingRentSquare Feet$/SF Sorrento$3,492798$4.38 Livorno$3,364827$4.07 Revello$3,486847$4.12 NMS 1430$3,895852$4.57 NMS 1420$4,095853$4.80 Venezia$3,170854$3.71 Genoa$3,213855$3.76 Positano$3,526860$4.10 San Remo$3,252868$3.75 NMS 1548$3,895870$4.48 Arrezo$3,381871$3.88 NMS 1410$4,243959$4.42 1502 Broadway$4,9951,094$4.57 Sway Santa Monica$6,0661,233$4.92 Lugano$4,6701,365$3.42 1751 Appian Way$7,7951,757$4.44 947 4th Street$11,2492,050$5.49 Percentile85%$4.71 wƚǒƓķĻķυЍ͵АЎ Source: TNDG APPENDIXD PROPERTY SALES COMPARABLES PROPERTY SALES COMPARABLES 500 BROADWAY BOULEVARD SANTA MONICA, CALIFORNIA Type Address Sales Date Site Size (SF) (2) Sales Price Price / SF Land Comm./Ind. (1) 1124 Santa Monica Blvd. 7/31/2014 17,500 $6,250,000 $357 Multi-Family 1445 9 th St.9/17/2014 7,500 $3,400,034 $453 Multi-Family 1236 9 th St.10/3/2014 15,000 $7,300,073 $487 Comm./Ind. 626 Wilshire Blvd. 3/31/2015 15,000 $5,326,053 $355 Comm./Ind. 1547 7 th St.7/1/2015 7,500 $3,500,035 $467 Vacant Land 711 Colorado Ave. 7/16/2015 7,500 $3,000,030 $400 Multi-Family 1514 7 th St.7/16/2015 7,500 $3,000,030 $400 Vacant Land 1235 5 th St.10/26/2015 7,500 $5,175,051 $690 Multi-Family 1433 9 th St.12/1/2015 7,500 $3,965,039 $529 Average $460 Minimum $355 Maximum$690 (1) Comparable 1 was taken from VEA 1560 Lincoln Boulevard Memo dated 9-18-2015 by Keyser Marston Associates, Inc. The remaining comparables were provided by TNDG. Square Footage values have been rounded. It is important to note that adjustments have not been applied to sales comparables. Both physical and economic units of comparison could affect how comparable these properties are to the project location. Some of these factors include smaller property size, mid-block location in proximity to corner property commercial frontage, purchases with respect to the improved portions of the property, date of sale, sale terms, lack of parking or other encumbrances, proximity to beach front, as well as other circumstances that might not permit the highest and best use of the property. APPENDIXE PROPOSED PROJECT FISCAL IMPACT ANALYSIS Summary of Fiscal Revenue Impacts Proposed Project City of Santa Monica General Fund Revenues Property Tax$373,050 Property Tax in lieu of MVLF 65,132 Sales Tax 272,007 Utility User Tax 127,580 Business License Tax 15,981 Parking Facility Tax 57,420 Other Taxes 76,206 Total City of Santa Monica General Fund Revenues$987,376 Additional Fiscal Revenues to Other Funds and Other Taxing Entities City of Santa Monica (Non-General Fund) 10,215 Santa Monica-Malibu Unified School District 527,947 Santa Monica Community College District 223,168 Metro Water District 7,609 Total Additional Fiscal Benefits$768,939 Total Fiscal Revenues to the City of Santa Monica and Other Taxing Entities$1,756,315 Source: TNDG Appendix Tables Table E-1: Calculation of City of Santa Monica EDUs Population (Household) 91,137 Persons Per Dwelling Unit 1.90 Occupied Dwelling Units 47,904 Employees 92,908 Employment Resident Equivalent50% Employment Resident Equivalents 46,454 Employment Resident / Persons Per DU 24,417 Hotel Rooms Supply 3,500 Occupancy80% Occupied Hotel Rooms 2,800 Visitors per Room 1.89 Visitors / Hotel Room 5,290 Visitors / Persons Per DU 2,781 Equivalent Dwelling Units (EDU) 75,102 (1) California Department of Finance (2) Southern California Association of Government (SCAG) (3) Santa Monica CVB and PKF Source: TNDG Table E-2: Calculation of Equivalent Dwelling Units (EDUs) by Project Scenario Proposed Project Population (Household) 374 Persons Per Dwelling Unit 1.50 Occupied Dwelling Units 249 On-Site Employees 124 Employment Resident Equivalent50% Employment Resident Equivalents 62 Equivalent Dwelling Units 41 Equivalent Dwelling Units (EDU) 290 Source: TNDG. Table E-3: City of Santa Monica 2015 - 2016 Adopted Budget - Revenue Factors FY 2015-16 Affected by % Variable Variable BudgetGrowthRevenueRevenueGrowth FactorPro-Rata Factor Revenue Property Taxes$48,777,926 Property Tax-Secured 26,715,138YesSpecial ModelSee Table 4 VLF Swap 9,334,156YesSpecial ModelSee Table 5 Other 12,728,632NoZero Forecast Sales Taxes 53,992,812YesSpecial ModelSee Tables 6&7 Other Taxes 132,040,131 Transient Occupancy Tax 51,410,000YesNot Applied Utility User Tax 33,039,386Yes100%$33,039,386EDU$439.93 Documentary Property Tax 5,400,000YesNot Applied Business License Tax 30,870,745YesSpecial ModelSee Table 9 Condominium Tax 20,000YesNot Applied Vehicle License Fees - Yes100%$0Not Applied Parking Facility Tax 11,300,000YesSpecial ModelSee Table 10 Licenses/Permits 37,844,117 Franchise Fees 978,698Yes100%$978,698EDU$13.03 Other 36,865,419Yes40%$14,746,168EDU$196.35 Intergovernmental 140,615NoZero Forecast Charges for Service 37,637,857NoZero Forecast Fines/Forfeitures 16,041,500Yes25%$4,010,375EDU$53.40 Investment Income 3,500,000NoZero Forecast Rent 9,787,576NoZero Forecast Other Revenues 7,840,090NoZero Forecast Total$347,602,624 Source: TNDG; City of Santa Monica, FY 2015-17 Biennial Budget. Table E-4: Estimated Property Tax - Proposed Project Total Units or Monthly RentSquare FeetTotal Proposed Project Residential Rent per Unit Studio Apartments$3,540 49$2,081,520 1 BR Apartments 4,455 124 6,629,040 2 BR Apartments 5,700 51 3,488,400 2 BR Affordable Apartments 689 - - 3 BR Apartments 5,985 25 1,795,500 Total Residential Operating Revenue 249$13,994,460 Miscellaneous Residential Income Residential Parking Income - Market Rate$150 319$574,200 Residential Miscellaneous Income 10 249 29,880 Total Miscellaneous Income$604,080 Total Residential Operating Revenue$14,598,540 1 Total Residential Operating Expenses 32.41% 4,730,733 Net Residential Operating Expenses$9,867,807 CommercialRent per SF Commercial - General Retail / Restaurant$4.13 21,308$1,054,942 Commercial - Grocery 4.13 31,200 1,544,687 Commercial - Fitness Center 4.13 - - Total Commercial Operating Revenue 52,508$2,599,629 Total Commercial Operating Revenue$2,599,629 Total Commercial Operating Expenses9.44% 245,290 Net Commercial Operating Expenses$2,354,339 Net Operating Income$12,222,146 Cap Rate4.69% Estimated Project Value$260,530,969 Less Existing Value 43,135,576 Net Project Assessed Value$217,395,393 Total Property Tax$2,173,954 City General Fund Property Tax Share17.16%$373,050 (1) Includes Vacancy, Property Management, Utilities, etc. Source: TNDG. Table E-5: Estimated Property Tax In-Lieu of VLF Proposed Project 2015 Assessed Valuations$31,155,457,336 2015/16 VLF Swap$9,334,156 1 Project Assessed Value (Net) $217,395,393 Cumulative Citywide AV$31,372,852,729 Share of AV due to Project0.70% VLF Adjustment Attributed to Project$65,132 (1) See Table 4 Source: TNDG; City of Santa Monica, FY 2015-17 Adopted Biennial Budget; Los Angeles County Assessor's Office Annual Report, 2015. Table E-6: Estimated On-Site Sales Tax Revenues Proposed Project Commercial (SF) Commercial - General Retail / Restaurant 21,308 Commercial - Grocery 31,200 Commercial - Fitness Center - Total 52,508 Taxable Retail Sales ($000s) 1 Commercial - Above Grade $12,785 2 Commercial - Below Grade - 2 Commercial - Grocery 4,680 Total Taxable Retail Sales ($000s)$17,465 Annual Sales Taxes to the City @ 1.25% ($)$218,310 (1) Assumes gross taxable sales of $400/SF (2) Assumes no taxable sales Source: TNDG. Table E-7: Estimated Off-Site Sales Tax Revenues Proposed Project Residents Total Residential Units 249 Weighted Average Monthly Rent$4,684 Weighted Average Annual Rent$56,203 Annual Rent as Ratio of Household Income30% Average Household Income$187,342 Aggregate Household Income$46,648,200 % Spent on Taxable Retail Sales26% Total Taxable Retail Sales$12,128,532 % Captured in City35% New Taxable Sales in City$4,244,986 Employees Total Employees 124 1 Average Daily Spend $7 1 Aggregate Employee Taxable Sales in Santa Monica $203,237 Less On-Site Capture (75%) (152,428) Net Employee Taxable Sales (Off-Site, within City)$50,809 Annual Sales Taxes to the City @ 1.25%$53,697 (1) TNDG estimate based on ICSC Employee Shopping Survey (2004). Source: TNDG Table E-8: Estimated Business License Tax (BLT) Revenues Proposed Project Gross Receipts by Land Use Commercial Revenue$12,784,800 1 BLT Estimate $15,981 BLT Total$15,981 (1) Assumes a BLT of $1.25 per $1,000 in gross receipts Source: TNDG. Table E-9: Estimated Parking Tax Revenues Parking SpacesAnnual Revenue City Parking Tax Proposed Project Commercial Parking 205 $0$0 Residential-Market Rate Parking 319 574,200 57,420 Residential-Affordable Parking - - - Total 524 $574,200$57,420 Source: TNDG. Table E-10: Property Tax and Voter Indebtedness Property Tax Assessments to City of Santa Monica Non-General Funds and Other Taxing Entities Proposed Project 1 Estimated Net new Assessed Value $217,395,393 2 1% Property Tax General Levy Santa Monica Community College District4.26%$92,524 Santa Monica-Malibu Unified School District17.22%$374,339 2 Property Taxes Above 1% Voter Indebtedness City of Santa Monica0.47%$10,215 Metro Water District0.35%$7,609 Community College6.01%$130,644 Unified Schools7.07%$153,607 (1) As estimated in Table 4 (2) Rates were obtained from the Los Angeles County Assessor's Office. Source: TNDG; Los Angeles County Assessor's Office. Table E-11: Potential Fiscal Revenue Impact on City General Fund Revenues Proposed Project General Fund Revenues Property Taxes Property Tax-Secured$373,050 MVLF Swap 65,132 Sales Taxes On-Site$218,310 Off-Site 53,697 Other Taxes Utility User Tax $127,580 Business License Tax 15,981 Parking Facility 57,420 Licenses/Permits Franchise Fees$3,779 Other 56,942 Fines/Forfeitures 15,486 Total General Fund Revenues$987,376 Source: TNDG. Table E-12: City of Santa Monica 2015 - 2016 Budget - Expenditures Affected by % Variable Variable 2015-2016 BudgetProjectRevenueRevenueGrowth FactorPro-Rata Factor General Fund Operating Budget City Council$925,022NoZero Forecast City Manager 14,630,309NoZero Forecast Records & Election Services 2,406,499NoZero Forecast Finance 12,511,969NoZero Forecast City Attorney 10,213,362NoZero Forecast Human Resources 4,238,638NoZero Forecast Information Systems 9,157,535NoZero Forecast Planning & Comm. Development 33,195,622NoZero Forecast Police 81,733,010 Administrative Services 14,844,059Yes100% 14,844,059EDU$197.65 Operations 30,869,538Yes100% 30,869,538EDU$411.03 Strategic Services 20,718,113Yes100% 20,718,113EDU$275.87 Criminal Investigation 15,301,300Yes100% 15,301,300EDU$203.74 Fire 35,903,531Yes100% 35,903,531EDU$478.06 Community Services 26,625,203 Administration & Planning Services 1,727,328NoZero Forecast Community Recreation 6,435,817Yes100% 6,435,817EDU$85.69 Cultural Affairs 2,818,929Yes100% 2,818,929EDU$37.53 Human Services 15,643,129Yes100% 15,643,129EDU$208.29 Library 12,419,751Yes100% 12,419,751EDU$165.37 Public Works 41,869,033Yes100% 41,869,033EDU$557.50 Housing & Economic Development 5,718,966NoZero Forecast Non-Departmental 34,477,516NoZero Forecast Interfund Transfers (6,932,074) NoZero Forecast Capital Budget 28,487,683NoZero Forecast Operating Budget$347,581,575 Source: TNDG; City of Santa Monica, FY 2015-17 Biennial Budget. Table E-13: Potential Fiscal Expenditure Impact on City General Fund Proposed Project General Fund Category Police Administrative Services$57,319 Operations 119,199 Special Enforcement 80,002 Criminal Investigation 59,085 Fire 138,637 Community & Cultural Services Administration & Planning Services - Community Services 24,850 Cultural Affairs 10,884 Human Services 60,404 Library 47,957 Public Works 161,675 Total General Fund Expenditures$760,012 Source: TNDG. Table E-14: General Fund Fiscal Impact Summary Proposed Project General Fund Category General Fund Revenues Property Tax$373,050 Property Tax in lieu of MVLF 65,132 Sales Tax 272,007 Utility User Tax 127,580 Business License Tax 15,981 Parking Facility Tax 57,420 Other Taxes 76,206 Total Revenue$987,376 General Fund Expenses Police$315,604 Fire 138,637 Community Services 96,138 47,957 Library Public Works 161,675 Total Expenses$760,012 Net Fiscal Impact$227,365 Source: TNDG. APPENDIXF CONSTRUCTION COST ESTIMATION PROCESS This appendix describes the process whereby TNDG estimated construction cost factors for the Proposed Project and for the Base Case alternative. The Base project is a theoretical 3-story building, Type V construction over 3 levels of subterranean parking. The proposed project is a 7- story building, Type I/II-A construction over 4 levels of subterranean parking. TNDG was supported on this component of the analysis by John Mauk, CPE, of O'Connor Construction Management, Inc. (OCMI). The Applicant’s detailed estimated construction costs for the proposed project were presented to TNDG and OCMI in a 2-hour meeting at OCMI’s office on February 5, 2016.Webcor Builders, a large general contractor represented by Bob Zarubin, presented their conceptual level cost estimate and described the process used to develop the estimate. OCMI reviewed the estimate in conjunction with the project drawings and asked pertinent questions regarding scope, cost of materials, logistics, etc. During the meeting, OCMI reviewed unit prices and systems costs on a $/SF basis to determine the reasonableness of Webcor’s underlying cost assumptions. Mr. Zarubin explained Webcor’s process for obtaining costs from subcontractors. Specifically, Webcor received a minimum of three subcontractor quotes per trade and then interviewed key subcontractors to ensure that they had an accurate understanding of the project and were providing competitive estimates of costs. On the basis of this review, OCMI assisted TNDG in developing cost factors to use in the VEA pro forma for the Proposed Project. In addition to confirming the appropriateness of the cost estimates for the Proposed Project, OCMI supported TNDG in developing comparable cost factors to use in the VEA pro forma for the Base Case project. In this regard, TNDG and OCMI were careful to develop Base Case cost estimates that assumed that the Base Case project would be developed at a comparable level of quality (in terms of design amenities and other cost enhancements) to what the Applicant is proposing for the Proposed Project. As such, any differentials in unit costs (i.e., costs per square foot) would be attributable to differences in construction types necessitated by the differences in building heights, rather than any material difference in building quality. This approach allowed for an “apples to apples” comparison between the two development scenarios considered in the VEA. Subsequent to the meeting with TNDG and OCMI, the Applicant provided a list of what they believe are features driving per-square foot costs of the proposed project over the theoretical base project. According to the developer, the major cost-driver differences include the following: Construction type: Type I/II-A light gauge steel framing versus Type V wood framing. 84-foot building height triggers high-rise construction requirements. The building form, with four blocks rising out of a podium, results in a significantly higher ratio of building skin to floor area, which drives up costs. Extensive rooftop amenities, including a swimming pool, drive up hardscape and landscape costs as well as structural costs. compared 20-foot floor-to-floor height on the ground floor drives up building skin costs (i.e. glazing) to the shorter height of the ground floor in the base case. Four levels of underground parking bring the parking garage down close to the water table, causing higher drainage and waterproofing costs. The deeper garage also requires significantly more shoring costs. Elevators must serve 4 levels of parking plus 7 levels of residential and commercial, leading to the need for more expensive elevators. LEED Platinum increases costs for glazing and mechanical / HVAC systems. The public open spaces along Fifth Street and Broadway frontages would not be as large and would not be improved to the same extent in the Base Case project. OCMI assigned Order of Magnitude Costs to these enhancements and assisted TNDG in determining which enhancements would be relevant to the Base Case scenario. This enabled TNDG to normalize the per-square-foot cost factors between the Proposed and Base projects, allowing for an “apples to apples” comparison between the two scenarios. Qualifications of John Mauk, CPE. John Mauk is a Certified Professional Estimator (C.P.E.) by the American Society of Professional Estimators and a Certified Cost Professional (C.C.P.) by the Association for the Advancement of Cost Engineering International (AACE). These certifications, combined with a background in developing conceptual cost estimates for complex building projects, provide a strong understanding of how to develop cost estimates at the conceptual level and to review cost estimates prepared by others. Mr. Mauk’s resume and certifications are provided on the following pages. John Mauk, CPE, LEED AP Senior Cost Estimator John Mauk has 25 years of cost engineering experience. He is a Regional Manager and supervises O’Connor’s Project Estimators and their subordinates to ensure the highest quality of each administration, change order analysis, preparing budgets, cost estimating, and claims analysis and negotiation. With regard to estimating, John has provided estimates at all levels of design, from conceptual through construction documents. John’s project experience includes every type of building and infrastructure. Project Experience  City of Coronado — City Hall and Civic Center  County of Los Angeles — Western Regional Public Safety Facility  County of Riverside — Perris County Complex  Orange County Fire Authority — Regional Fire Operations and Training Center  LAC+USC Medical Center Replacement Hospital  VA Medical Center Condition Assessments  Eisenhower Army Medical Center  Tuscaloosa Federal Building & Courthouse  U.S. Land Port of Entry — McAllen, TX  Hilton Waterfront Beach Resort  Hyatt Regency Resort & Spa  State of California — 4th Appellate Court  North Los Angeles Federal Building  CSU San Marcos — Social and Behavioral Sciences Building  CSU Dominguez Hills — Cain Educational Resources Center  University of California, Los Angeles — Sproul Hall Housing  Foothill Transit — Irwindale Maintenance Facility  Jet Propulsion Laboratory — Flight Projects Center  B.S. Construction Management — Cal Poly, San Luis Obispo   Construction Control Professional — National Association of Construction Auditors  LEED Accredited Professional — U.S. Green Building Council 1 MEMORANDUM TO: Kevin Becker, DK Santa Monica, LLC Tom Paradise, Paradise Development FROM: Patrick Gibson, P.E., PTOE Eugene Tang, AICP DATE: February 22, 2016 RE: Parking Demand Analysis for 500 Broadway Ref: Santa Monica, California J1221 Gibson Transportation Consulting, Inc. (GTC) was asked to prepare a parking analysis for the proposed 500 Broadway mixed-use project (Project) in Santa Monica, California. With interim development standards, GTC researched and developed appropriate parking rates for development of the Project’s parking demand and prepared a shared parking analysis. This memorandum presents the findings of these analyses. PROJECT SETTING AND DESCRIPTION DK Santa Monica, LLC is proposing the redevelopment of the Project site, located on the th southeast corner of 5 Street & Broadway in downtown Santa Monica. The primary street th frontage of the site is along the east side of 5 Street, between Broadway and Colorado Avenue; the secondary frontage is along Broadway. A retail building is located on the th existing site, along with a surface parking lot served by two driveways along 5 Street. The site is located in close proximity to the western terminus station of the future Metro Expo Line, which is anticipated to begin operation in 2016. The future station is located approximately a half-block southwest of the Project site. Figure 1 illustrates the location of the Project site relative to the surrounding streets. Project Description The Project will consist of residential units located above ground floor and subterranean commercial space, with a subterranean parking garage. Upon completion, the Project will provide 249 residential units and approximately 62,435 square feet (sf) of commercial floor area (including outdoor dining). 523W.6thStreet,Suite1234LosAngeles,CA90014p.213.683.0088f.213.683.0033 Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 2 The residential units are comprised of: 49 studio units 124 one-bedroom units 51 two-bedroom units 25 three-bedroom units On a floor-by-floor basis, the commercial development is based on: 35,428 sf of ground floor commercial (this includes the areas shown as commercial and covered loading on the Project plans) 2,790 sf of ground floor outdoor dining area 20,870 sf of Level P1 commercial 3,347 sf of Level P2 commercial For purposes of the parking demand study, we have studied the outer parameters of the higher intensity parking uses (general market, eating/drinking establishments \[restaurants\]) and commercial recreation (health club/fitness center). The commercial land use program consists of: Commercial recreation 15,000 sf O Eating/drinking establishments 7,000 sf (including 2,790 sf of outdoor dining) O General market 30,000 sf O Retail sales 10,435 sf O Parking Supply The parking supply totals 524 spaces within the four-level subterranean garage. The first two levels of the structure (P1 and P2) provide a total of 205 commercial parking spaces, which consists of 177 non-tandem spaces and 28 tandem spaces. Levels P3 and P4 provide a total of 319 residential spaces, which consist of 157 non-tandem standard spaces, 98 non-tandem compact spaces, and 64 tandem spaces. The following provides a discussion on the operational aspects of the parking structure, as configured. Tandem Spaces. The Project proposes that 92 spaces of the 524-space parking supply be 1 tandem spaces, where the inside, or forward, spaces are subject to be blocked at times by another parked vehicle. These tandem spaces are not anticipated to adversely affect the overall operation of the Project. 1 A total of 92 spaces of tandem capacity or 46 side-by-side spaces with capacity for two vehicles will be available. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 3 For commercial demand, 28 tandem spaces will be available and are expected to be operated through a valet or valet-assist system. For residential demand, up to 64 tandem spaces will be available. Thus, up to 32 residential units will have the option to lease two parking spaces in a tandem configuration. Based on the 2 number of multi-bedroom units proposed (76), it is anticipated that demand will exist for more than one residential parking space for at least 32 of the Project’s 249 units. There are a total of 287 non-tandem (side-by-side) spaces available in the residential supply which will be available for use by the residents. Thus, the 64 tandem spaces are not anticipated to adversely affect the residential parking operations. Compact Spaces. The Project proposes that 98 of the 319 residential spaces (approximately 30% of the residential parking supply) will be provided as compact spaces, which are 7’6” wide 3 by 15’ long. Because residential parking is leased/reserved, the spaces are not as frequently used as commercial spaces. Parking will be unbundled from the residential lease and tenants will have the opportunity to lease compact or standard spaces that are appropriately sized for their vehicles. OFF-STREET PARKING STANDARDS Development standards are identified in the Santa Monica Municipal Code (SMMC), which recently adopted updates developed through the Zoning Ordinance (ZO) update process and become effective in July 2015. The SMMC provides development guidance, including off-street parking requirements, on a citywide basis except in specifically designated areas. For those projects located in the downtown area, an effort is underway to establish specific development standards through the Draft Downtown Community Plan (City of Santa Monica, February 2016) (the Draft DCP). As the Draft DCP is in the public review process, the referenced standards described below are subject to change and provided here for reference purposes. Ultimately, the Draft DCP development standards will supersede citywide standards where applicable. Draft DCP The Draft DCP was developed with a focus on identifying development standards for the downtown area, while ensuring consistency with the adopted Land Use and Circulation Element (City of Santa Monica, 2010) (the LUCE) of the Santa Monica General Plan. Off-street parking standards are one of the zoning categories addressed by the Draft DCP. 2 A total of 76 multi-bedroom units, or approximately 30% of the total unit count, are proposed. Of those units, up to 32 multi-bedroom units will have the opportunity to lease a tandem space. 3 Comparatively, a standard parking space is 8’6” wide by 18’ long. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 4 The relevant off-street parking standards identified in Chapter 4, Table 4.3 of the Draft DCP include: Multi-Family Residential Studio o 0.5 space per dwelling unit One bedroom o 1.0 space per dwelling unit Two or more bedrooms o 1.5 spaces per dwelling unit Guests o 1.0 space per 10 dwelling units (or 0.1 spaces per dwelling unit) Minimum requirements for units with deed restrictions on maximum allowable o rent below 120% shall be halved. Physical Training – Health Clubs, Indoor Athletic Facilities, Exercise/Dance Studios Space 2,500 sf or less:1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Space 2,501 sf or more:1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Eating and Drinking Establishments Less than 2,500 sf:1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Between 2,501 sf and 5,000 sf:1.0 space per 300 sf, (3.3 spaces per 1,000 sf) o Greater than 5,000 sf:1.0 space per 200 sf (5.0 spaces per 1,000 sf) o If outdoor seating is less than 500 sf,no additional parking o If outdoor seating exceeds 500 sf,park at rate associated with interior use o Food and Beverage Sales (Convenience Market, General Market and Liquor Stores) Less than 5,000 sf: 1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Greater than 5,000 sf: 1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Retail Sales Less than 5,000 sf: 1.0 space per 500 sf (2.0 spaces per 1,000 sf) o 5,000 sf or more: 1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Santa Monica Municipal Code Chapter 9.28 of the SMMC was updated through the ZO update process with the intent to modernize the SMMC and to ensure consistency with the LUCE policies adopted in 2010. While a citywide standard, the SMMC provides two levels of off-street parking requirements dependent on the project location. The standards for Parking Overlay Area 1, Downtown Specific Plan Area, and Bergamot Plan Area were developed to incorporate the unique characteristics of mixed-use transportation districts not necessarily experienced in other parts of the City. For the purposes of this analysis, the Parking Overlay Area 1 parking rates are discussed below. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 5 The relevant Parking Overlay Area 1 off-street parking requirements in SMMC Chapter 9.28.060 include: Residential, Multiple-Unit Dwelling (Market Rate Apartment) Studio, no bedrooms o 1.0 space per dwelling unit One bedroom o 1.0 space per dwelling unit Two or more bedrooms o 1.5 spaces per dwelling unit Guests o 1.0 space per 10 dwelling units (or 0.1 spaces per dwelling unit) Commercial Entertainment and Recreation (Small-Scale and Large-Scale) Small-Scale Facilities less than 1,500 sf (e.g., Yoga Studio/Health Club):1.0 o space per 300 sf (3.3 spaces per 1,000 sf) Small-Scale Facilities 1,500 sf and greater (e.g., Yoga Studio/Health Club up to o 5,000 sf): 1.0 space per 100 sf (10 spaces per 1,000 sf) Large-Scale Facilities (e.g., Fitness Center exceeding 5,000 sf): 1.0 space per o 100 sf (10 spaces per 1,000 sf) Eating and Drinking Establishments (Restaurant) Less than 2,500 sf:1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Between 2,500 sf and 5,000 sf:1.0 space per 200 sf (5.0 spaces per 1,000 sf) o Greater than 5,000 sf:1.0 space per 125 sf (8.0 spaces per 1,000 sf) o Outdoor eating areas less than 200 sf:no additional parking o Outdoor eating areas of 200 sf or greater:same as required for restaurant type o Food and Beverage Sales (General Market) Less than 2,500 sf: 1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Between 2,500 sf and 5,000 sf:1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Greater than 5,000 sf: 1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Retail Sales Less than 2,500 sf: 1.0 space per 500 sf (2.0 spaces per 1,000 sf) o Between 2,500 sf and 5,000 sf:1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Greater than 5,000 sf: 1.0 space per 300 sf (3.3 spaces per 1,000 sf) o Table 1 provides a side-by-side summary of the various off-street parking requirements for each source. Application of Parking Standards Both the off-street parking rates adopted in the SMMC and standards identified in the Draft DCP were developed to generally account for the local conditions in Santa Monica (i.e., travel characteristics, location, etc.) and recognize that separate land uses generate different parking demands on an individual basis. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 6 The Project’s land use program was applied to the parking rates detailed above. Table 2 summarizes the off-street parking that would be required per the SMMC Parking Overlay 1 rates and Draft DCP rates. As identified, the SMMC Parking Overlay 1 rates would require 632 spaces, whereas the Draft DCP rates would require 496 spaces. The parking calculations serve to illustrate the difference in the parking standards and reflect the assumption that each land use would simultaneously generate peak parking demand. The standards do not reflect the fact that when a mixture of land uses share the same parking supply, the combined peak parking demand can be substantially less than the sum of the individual demands because some land uses experience peak parking demand at different times of the day. This variation in parking demand, over the course of the day, is better expressed through the concept of shared parking. SHARED PARKING In order to account for these effects common to a mixed-use development, the concept of shared parking should be applied. As part of its national research on shared parking, Urban Land Institute (ULI) and International Council of Shopping Centers (ICSC) developed a computer model that measures the peak demand for every land use within a mixed-use nd development. Shared Parking, 2 Edition (ULI/ICSC, 2005) updated the basic methodology for analyzing parking demand in mixed-use developments by investigating parking demand rates and accumulation patterns by land use. Shared parking is the result of two conditions: 1. Variations of the peak accumulation of parked vehicles occur because of time differences in the activity patterns of adjacent or nearby land uses (by hour, by day, and by season). For example, a parking facility may be used by office employees during the day and serve patrons of an adjacent cinema at night. 2. There are clearly relationships among land use activities that result in people being attracted to two or more land uses on a single automobile trip to a given area or mixed- use development. In other words, shared parking recognizes that parking spaces can be used to serve two or more individual land uses without conflict or encroachment. The shared parking phenomenon has long been observed in central business districts, suburban commercial districts, and other areas where land uses are combined. The assessment of the parking demand for a mixed-use project is accomplished through the development of a shared parking model, based on the methodology above. The model identifies the individual parking demand rates and takes into account the various adjustment factors which contribute toward reduced parking demand, including monthly variation, hourly pattern, mode share, and internal capture. These factors were developed through the data collection efforts used to support the ULI/ICSC parking database and briefly described below. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 7 Parking Demand Rate Identification of the appropriate parking demand rates forms the basis of the parking demand projection. Generally, the use of industry standard parking demand rates from the ULI/ICSC national database and adjusted for local conditions is an accepted practice in the absence of local data; local parking demand data should be used whenever available. The applicability of the SMMC/Draft DCP off-street parking requirements relative to the shared parking methodology was evaluated for this Project. Table 2 summarizes the hypothetical application of these requirements to the Project and illustrates the differences of each standard without consideration for the effects of shared parking. As described above, the shared parking model recommends use of the database parking rates unless local data is available; adjustments to reflect local conditions are also recommended. While the Project would be typically subjected to specific downtown area requirements, the Draft DCP has not yet been adopted. In the absence of adopted downtown parking rates, the SMMC rates for Parking Overlay Area 1 were substituted for most of the proposed land uses (eating/drinking establishments, general market, and retail sales). Use of the SMMC Parking Overlay Area 1 rates for most of the proposed land uses is generally appropriate, as they were recently developed to reflect the local parking demand characteristics of these commercial uses and, for most of the proposed land uses, the rates are similar to the Draft DCP rates. Residential Multiple-Unit Dwelling (Market Rate Apartment). The SMMC Parking Overlay Area 1 rates were generally utilized for the residential units and guest parking with a modification for the two- and three-bedrooms units. The SMMC Parking Overlay Area 1 rates are the same as the Draft DCP except for studio units where the SMMC Parking Overlay Area 1 rate is one space per unit and the Draft DCP rate is 0.5 spaces per unit. Due to the number of multi-bedroom units in the Project (76 units or approximately 30% of the residential units) and to account for the possibility of a multi-vehicle household, an adjusted 4 parking ratio of 1.75 spaces per unit for the multi-bedroom units is recommended. With this adjustment, the parking demand for the residential units is 306 spaces plus 25 spaces for residential guests, resulting in a total parking demand of 331 spaces for the residential 5 component. This results in an aggregate parking ratio of 1.33 spaces for the residential units. For the purposes of this Project, the residential and residential guest components of the parking demand have been separated. The residential guest parking demand (25 spaces) is incorporated into this shared parking analysis, as those vehicles are anticipated to utilize the commercial parking supply. However, parking demand for the residential units (306 spaces) is not included in the shared portion of this parking analysis as there is a dedicated residential parking supply. Residential parking demand is included here to demonstrate the overall parking demand of the Project. 4 This adjusted rate represents the average of the Parking Overlay Area 1 rate (1.5 spaces per unit) and citywide rate (2.0 spaces per unit) for the multi-bedroom residential units. This rate accounts for the possibility that some multi- bedroom tenants may lease a second parking space despite their location and proximity to transit facilities, as well as their choice to utilize non-automobile modes for their daily activities. 5 The aggregate rate is calculated by determining the total off-street parking need (306 spaces) and dividing by the total residential units (249 units) for a rate of 1.23 spaces per unit, plus 0.1 space per unit for residential guests. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 8 Fitness Center. The parking rate utilized for the commercial recreation facility was based on the ULI/ICSC database rate, which is equivalent to one space per 143 sf or one space per 174 6 sf, depending on the day of the week. For comparison purposes, this range of fitness center parking rates is higher than the Draft DCP rate of one space per 300 sf for fitness centers over 5,000 sf and lower than the SMMC rate of one space per 100 sf for fitness centers over 5,000 sf. Eating and Drinking Establishments (Restaurants). The SMMC Parking Overlay Area 1 rates were generally utilized for the restaurant uses with use of the Draft DCP’s exclusion of 500 sf of outdoor dining. Both the SMMC and Draft DCP rates differ based on the size of the establishment. The size of individual restaurant tenants is unknown at this time. In order to allow leasing flexibility and provide a conservative projection of parking demand, all of the restaurant square footage (except for 500 sf of outdoor dining) was parked at the SMMC’s rate for eating and drinking establishments between 2,500-5,000 sf (one space per 200 sf). Individual tenant spaces may be smaller than 2,500 sf (where the SMMC has a parking ratio of one space per 500 sf) or larger than 5,000 sf (where the SMMC has a parking ratio of one space per 125 sf. The Draft DCP proposed that the rate of one space per 200 sf apply to restaurant uses exceeding 5,000 sf. Thus, the use of one space per 200 sf is consistent with the intent of the Draft DCP. The SMMC does not require parking for the first 200 sf of outdoor dining, whereas the Draft DCP does not require parking for the first 500 sf of outdoor dining. Given the Project’s location in the Downtown, the City’s desire to incentivize outdoor dining in the Downtown, and the use of the more conservative SMMC parking rate for the remainder of the restaurant square footage, the Draft DCP’s exclusion of 500 sf of outdoor dining was utilized. Food and Beverage Sales (General Market). Any General Market use in the Project will most likely exceed 5,000 sf. As a result, the SMMC Parking Overlay Area 1 rate for General Markets exceeding 5,000 sf was utilized. This rate (one space per 300 sf) is the same as the Draft DCP’s rate for General Markets exceeding 5,000 sf. Retail Sales. The SMMC Parking Overlay Area 1 rates were generally utilized for the retail uses. Both the SMMC and Draft DCP rates differ based on the size of the establishment. The size of individual retail tenants is unknown at this time. In order to allow leasing flexibility and provide a conservative estimate of parking demand, the entire retail sales square footage was parked at the SMMC’s rate for retail sales areas exceeding 5,000 sf (one space per 300 sf, which is the highest parking rate for this use) even though individual tenant spaces may be smaller. This rate (one space per 300 sf) is the same as the Draft DCP’s rate for Retail Sales uses exceeding 5,000 sf. 6 The range is due to separate weekday and weekend rates identified by ULI/ICSC; these base rates are also respectively expressed as 5.75 and 7.0 spaces per 1,000 sf. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 9 Other Adjustments Monthly Variation. The monthly variation is inherent to the shared parking model and applied to the respective land uses. For this analysis, the monthly variation was based on the ULI/ICSC database with no other adjustments applied. Hourly Pattern. The hourly pattern is inherent to the shared parking model and applied to the respective land uses. The patterns for the eating/drinking establishment, retail sales, and multi- family residential uses were based on the ULI/ICSC database without other adjustments. The hourly patterns for the commercial recreation and general market uses were developed from empirical data compiled from comparable and respective locations. Mode Split. The mode split adjustment is directly applied to the parking demand rate. For the commercial recreation use, a mode split adjustment was applied to the ULI/ICSC parking rate in order to reflect local conditions. Specifically, a customer and employee mode split adjustment of 40% and 20% were respectively applied to account for the high density of residential units within the study area, the Project’s location along the Broadway bicycle corridor, and the future Metro Expo line station on Colorado Avenue. Because the SMMC parking rates were developed to reflect local conditions, no additional mode split adjustments were applied to parking rates for the eating/drinking establishments, general market, retail sales, and multi-family residential uses. Non-Captive Ratio. The non-captive ratio adjustment is directly applied to the parking demand rate, after any adjustments for the mode split. Based on the mixture of land uses at the Project, adjustments were applied to non-residential uses to account for the interaction described above and reflect the unique conditions of the Project; the following adjustments express the ratio of users anticipated to originate from within the Project. A conservative adjustment of 5% was applied to the eating/drinking establishment and retail sales uses; the general market use was conservatively adjusted by 10%. A daytime adjustment of 10% and nighttime adjustment of 20% was utilized for the commercial recreation use; the variation in the daytime and nighttime adjustments reflects the residential nature of the Project. In order to determine the parking supply needed to accommodate the peak demand for the Project, the parking demand patterns of the various land uses were evaluated in conjunction with the parking demand rates and adjustments discussed above. PARKING DEMAND PROJECTION The ULI/ICSC shared parking model was utilized to project the parking demand of the refined program. The peak month of Project parking demand occurs in December. The overall peak is projected on a weekday with a demand of 510 spaces, comprised of 204 spaces of commercial demand and 306 spaces of residential demand. The corresponding peak weekend demand is projected at 493 spaces, comprised of 187 commercial spaces and 306 residential spaces. The total parking supply, along with the individual commercial and residential parking supplies, are anticipated to adequately meet the Project’s peak parking demands. Tables 3 and 4 detail the overall peak month peak parking demand projections and Figure 1 illustrates the hourly pattern of the peak month parking demand. Mr. Kevin Becker and Mr. Tom Paradise February 22, 2016 Page 10 For the remainder of the year (January through November), weekday parking demand fluctuates between 480 and 497 spaces and weekend demand fluctuates between 464 and 478 spaces. The monthly patterns of weekday and weekend parking demand, respectively, are illustrated in Figures 2 and 3. These results indicate that the parking demand of the proposed land use program can also be adequately satisfied by the proposed supply of parking throughout the year. CONCLUSION While the off-street parking rates from the SMMC and Draft DCP were developed to reflect the local conditions of Santa Monica, they do not necessarily reflect the characteristics inherent to mixed-use developments. As applied, the rates assume that peak demand would occur simultaneously for all land uses within a mixed-use development and do not take into account the interaction of these land uses. As applied, the SMMC would require 632 spaces and the Draft DCP would require 496 spaces, a fairly significant difference. In order to better reflect the Project’s characteristics, parking rates were developed and applied to a shared parking model to account for the inherent characteristics of a mixed-use development. The parking rates developed for this analysis were reasonably adjusted from their base and better reflect the anticipated parking characteristics of the Project; therefore, the developed rates are appropriate for use in the context of this Project. With application of the tailored parking rates and shared parking model, the peak parking demand is projected to be 510 spaces, compared with the proposed parking supply of 524 spaces. The commercial peak parking demand is projected to be 204 spaces, compared with the proposed commercial parking supply of 205 spaces. The residential peak parking demand is projected to be 306 spaces, compared with the proposed residential parking supply of 319 spaces. The results indicate that the projected peak parking demands could be sufficiently satisfied by the proposed parking supply during the peak month and throughout the year. The parking supply, as proposed, is anticipated to meet the projected parking demands and is appropriately sized to the Project. TABLE 1 OFF-STREET PARKING STANDARDS 500 BROADWAY Santa Monica Municipal Code \[a\]Draft Downtown Community Plan \[b\] Land Use CategoryRequirementRecommended Requirement Residential Multi-family/Multiple Unit - Market Rate Studio, no bedroom1 sp / du0.5 sp / du 1 bedroom1 sp / du1 sp / du 2 or more bedrooms1.5 sp / du1.5 sp / du Guest1 sp / 10 du1 sp / 10 du Commercial Fitness Center/Health Club Less than 1,500 sf1 sp / 300 sf1 sp / 500 sf 1,500-2,500 sf1 sp / 100 sf1 sp / 500 sf Greater than 2,500 sf1 sp / 100 sf1 sp / 300 sf Eating and Drinking Establishments, Restaurant Less than 2,500 sf1 sp / 500 sf1 sp / 500 sf Between 2,500-5,000 sf1 sp / 200 sf1 sp / 300 sf Greater than 5,000 sf1 sp / 125 sf1 sp / 200 sf Outdoor seating, less than 200 sfNo additional parkingNo additional parking Outdoor seating 200-500 sfSame as restaurant typeNo additional parking Outdoor seating more than 500 sfSame as restaurant typeSame as restaurant type Food and Beverage Sales, General Market Less than 2,500 sf1 sp / 500 sf1 sp / 500 sf Between 2,500-5,000 sf1 sp / 300 sf1 sp / 500 sf Greater than 5,000 sf1 sp / 300 sf1 sp / 300 sf Retail Sales Less than 2,500 sf1 sp / 500 sf1 sp / 500 sf Between 2,500-5,000 sf1 sp / 300 sf1 sp / 500 sf Greater than 5,000 sf1 sp / 300 sf1 sp / 300 sf Notes: \[a\] Minimum parking off-street requirements for Parking Overlay Area 1 per Chapter 9.28.060 of the SMMC. \[b\] Minimum parking requirements as proposed by the Draft DCP. TABLE 2 COMPARISON OF PARKING REQUIREMENTS 500 BROADWAY Land Use CategoryQuantitySanta Monica Municipal CodeDraft Downtown Community Plan RESIDENTIAL Multi-family/Multiple Unit - Market Rate Studio49units49spaces25spaces 1 Bedroom124units124spaces124spaces 2 Bedrooms51units77spaces77spaces 3+ Bedrooms25units38spaces38spaces Guest249units25spaces25spaces Residential Subtotal313spaces289spaces COMMERCIAL Fitness Center/Health Club15,000sf150spaces50spaces Eating and Drinking Establishments, Restaurant Interior Seating Area4,210sf21spaces14spaces Outdoor Seating Area \[a\]2,790sf13spaces8spaces Food and Beverage Sales, General Market30,000sf100spaces100spaces Retail Sales 10,435sf35spaces35spaces Commercial Subtotal319spaces207spaces TOTAL632spaces496spaces Notes: Parking space requirements for each land use were calculated by the applicable rates detailed in Table 1. \[a\] Per the SMMC (first 200 sf) and Draft DCP (first 500 sf), portions of the outdoor dining area do not require additional parking. TABLE 3 SHARED PARKING DEMAND SUMMARY FOR THE 500 BROADWAY MIXED-USE PROJECT PEAK MONTH: DECEMBER -- PEAK PERIOD: 5 PM, WEEKDAY Projected Parking Supply:524 StallsWeekdayWeekendWeekdayWeekend Non-Non-Peak HrPeak MoEstimatedPeak HrPeak MoEstimated Project DataBase ModeCaptiveProjectBase ModeCaptiveProjectAdjAdjParking AdjAdjParking Land UseQuantityUnitRateAdjRatioRateUnitRateAdjRatioRateUnit5 PMDecemberDemand12 PMDecemberDemand Retail Sales, 2,500+ sf10,435sf GLA3.331.000.953.16/ksf GLA3.331.000.953.16/ksf GLA0.851.00280.851.0028 Employee0.001.001.000.00/ksf GLA0.001.001.000.00/ksf GLA0.951.0001.001.000 Restaurant, <5,000 sf7,000sf GLA5.001.000.954.75/ksf GLA5.001.000.954.75/ksf GLA0.751.00251.001.0033 Employee0.001.001.000.00/ksf GLA0.001.001.000.00/ksf GLA0.951.0001.001.000 General Market, 5,000+sf30,000sf GLA3.331.000.903.00/ksf GLA3.331.000.903.00/ksf GLA0.981.00880.931.0084 Employee0.001.001.000.00/ksf GLA0.001.001.000.00/ksf GLA0.951.0001.001.000 Commercial Recreation, 1,500+ sf15,000sf GLA6.600.600.903.56/ksf GLA5.500.600.902.97/ksf GLA1.000.90480.850.9034 Employee0.400.801.000.32/ksf GLA0.250.801.000.20/ksf GLA1.001.0051.001.003 Residential, Multiple Unit Dwelling249units0.001.001.000.00/unit0.001.001.000.00/unit0.851.0000.651.000 Reserved1.23sp/unit1.231.001.001.23/unit1.231.001.001.23/unit1.001.003061.001.00306 Guest249units0.101.001.000.10/unit01.001.000/unit0.401.00100.201.005 ULI base data have been modified from default values.Customer199Customer184 Employee5Employee3 Reserved306Reserved306 Total510Total493 TABLE 4 PEAK MONTH SHARED PARKING SUMMARY FOR THE 500 BROADWAY MIXED-USE PROJECT December Weekday Estimated Peak-Hour Parking Demand Projected Parking Supply:524 StallsOverall PkAM Peak HrPM Peak HrEve Peak Hr Monthly Adj.6 AM7 AM8 AM9 AM10 AM11 AM12 PM1 PM2 PM3 PM4 PM5 PM6 PM7 PM8 PM9 PM10 PM11 PM12 AM5 PM11 AM5 PM6 PM Retail Sales, 2,500+ sf100%- 2 5 10 18 25 30 33 33 33 32 28 27 25 22 17 10 3 - 28 25 28 27 Employee100%- - - - - - - - - - - - - - - - - - - - - - - Restaurant, <5,000 sf100%8 17 20 25 28 30 33 30 17 15 15 25 27 27 27 20 18 17 8 25 30 25 27 Employee100%- - - - - - - - - - - - - - - - - - - - - - - General Market, 5,000+sf100%- 9 23 36 60 68 82 81 81 90 89 88 87 81 60 46 22 - - 88 68 88 87 Employee100%- - - - - - - - - - - - - - - - - - - - - - - Commercial Recreation, 1,500+ sf90%34 42 45 43 45 44 42 38 40 41 40 48 37 34 34 30 15 4 - 48 44 48 37 Employee100%4 4 5 5 5 5 4 4 4 4 5 5 5 5 4 2 1 1 - 5 5 5 5 Residential, Multiple Unit Dwelling100%- - - - - - - - - - - - - - - - - - - - - - - Reserved100%306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 Guest100%- 3 5 5 5 5 5 5 5 5 5 10 15 25 25 25 25 20 13 10 5 10 15 Customer42 73 98 119 156 172 192 187 176 184 181 199 193 192 168 138 90 44 21 199 172 199 193 Employee4 4 5 5 5 5 4 4 4 4 5 5 5 5 4 2 1 1 - 5 5 5 5 Subtotal Demand by User Type Reserved306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 GRAND TOTAL DEMAND 383352 409 430 467 483 502 497 486 494 492 510 504 503 478 446 397 351 327 510 483 510 504 ULI base data have been modified from default values. 483510 510 504 Footnote(s): December Weekend Estimated Peak-Hour Parking Demand Overall PkAM Peak HrPM Peak HrEve Peak Hr Monthly Adj.6 AM7 AM8 AM9 AM10 AM11 AM12 PM1 PM2 PM3 PM4 PM5 PM6 PM7 PM8 PM9 PM10 PM11 PM12 AM12 PM11 AM12 PM6 PM Retail Sales, 2,500+ sf100%- 2 3 12 20 23 28 32 33 33 32 30 27 25 22 17 12 5 - 28 23 28 27 Employee100%- - - - - - - - - - - - - - - - - - - - - - - Restaurant, <5,000 sf100%3 8 15 23 30 30 33 28 22 13 15 20 23 23 22 10 8 5 3 33 30 33 23 Employee100%- - - - - - - - - - - - - - - - - - - - - - - General Market, 5,000+sf100%- 9 23 41 56 79 84 81 80 90 83 85 72 53 44 35 21 - - 84 79 84 72 Employee100%- - - - - - - - - - - - - - - - - - - - - - - Commercial Recreation, 1,500+ sf90%18 18 30 33 35 40 34 23 25 28 28 27 17 15 11 4 - - - 34 40 34 17 Employee100%2 2 3 3 3 3 3 2 2 2 2 2 2 2 2 1 1 1 - 3 3 3 2 Reserved100%306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 306 Guest100%- 5 5 5 5 5 5 5 5 5 5 10 15 25 25 25 25 20 13 5 5 5 15 Customer21 42 76 114 146 177 184 169 165 169 163 172 154 141 124 91 66 30 16 184 177 184 154 Subtotal Demand by User TypeEmployee2 2 3 3 3 3 3 2 2 2 2 2 2 2 2 1 1 1 - 3 3 3 2 306 306 306 306 306 306 306 306 306 306 Reserved306 306 306 306 306 306 306 306 306 306 306 306 306 GRAND TOTAL DEMAND 350329 385 423 455 486 493 477 473 477 471 480 462 449 432 398 373 337 322 493 486 493 462 ULI base data have been modified from default values. 486493 493 462 FIGURE 1 PEAK MONTH DAILY PARKING DEMAND BY HOUR THE 500 BROADWAY MIXED-USE PROJECT 600 Parking Supply: 524 Stalls Weekday Weekend 500 400 Parking Stalls 300 200 100 0 Hour FIGURE 2 WEEKDAY MONTH-BY-MONTH ESTIMATED PARKING DEMAND THE 500 BROADWAY MIXED-USE PROJECT 600 Parking Supply: 524 Stalls 500 400 300 200 100 0 JanFebMarAprMayJunJulAugSepOctNovDecLate Dec Month FIGURE 3 WEEKEND MONTH-BY-MONTH ESTIMATED PARKING DEMAND THE 500 BROADWAY MIXED-USE PROJECT 600 Parking Supply: 524 Stalls 500 400 300 200 100 0 JanFebMarAprMayJunJulAugSepOctNovDecLate Dec Month November 10, 2015 To: KRE Capital Attention:Mr. Tom Paradise Regarding: 500 Broadway Santa Monica, CA Subject: Photovoltaic (PV) System Dear Mr. Paradise, The following is a load calculation to determine the house lighting and power loads for the referenced project for the purpose of designing a PV system with an equal power output capacity. Also included is the recommended size of proposed PV solar system for these loads. A. Lighting Loads Lighting loads are calculated based on the average allowable per square feet lighting loads by the 2013 State of California Title 24 for each area. Residential Interior Common Area Lighting = 1940 sf x 0.6 w/sf = 1164 w Residential Exterior Common Area Lighting = 22964 sf x 0.25 w/sf = 5741 w Residential Parking Lighting = 231566 sf x 0.25 w/sf=57892 w Commercial Parking Lighting = 51191 sf x 0.25 w/sf = 12798 w Public Exterior Lighting = 19183 sf x 0.25 w/sf = 4796 w ---------------------------------------------------------------------------------------------------------- Total Common Area Lighting Load = 82391 w The project lighting design will be designed @ 15% below Title 24 allotments; Total Estimated Lighting Load @ 85% = 82391 x 0.85 =70032 w B. Power Loads Residential Interior Common Area Power = 2500 w Residential Exterior Common Area Power = 7500 w Residential Parking Power = 5000 w Commercial Parking Power = 3000 w Public Exterior Power = 2000 w ---------------------------------------------------------------------------------------------------------- Total Estimated Common Area General Power Load * = 20000 w Page 2 of 2 500 Broadway SM CA PV SOLAR SYSTEM November 9, 2015 C. Total Estimated Common Area Power & Lighting Loads* = 90032 w *NOTE: Does not include HVAC, pumps, elevator loads. D. Proposed PV Solar System Capacity Based on the above lighting & power load estimates, we propose to design & install a PV Solar System Rated for 100 KW maximum output. One way to deliver this power capacity would be to install 350 PV solar panels with rated output of 315 watts each which would require approximately 7500 square feet of roof area. Alternately, panels with higher output and efficiency could deliver the 100 kW maximum output with a reduced number of panels in a smaller roof top footprint. Please let me know if you have any questions or require additional information or assistance regarding this matter. Sincerely, DAVIDOVICH & ASSOCIATES Fred Ahi Senior Electrical Engineer 6059 Bristol Parkway Suite 200 Culver City, California 90230 T: 310-348-5101 ext. 221 F: 310-348-5102 fred@davidovich.com www.davidovich.com GENERAL BACKGROUND INFORMATION Company Ownership: Davidovich & Associates , a California Corporation, privately held Location (1): 6059 Bristol Parkway, 2nd Floor Culver City, CA 90230 Telephone Number: (310) 348-5101 Facsimile Number: (310) 348-5102 Date of Founding: 1989 Principal Lines of Business: Mechanical, Electrical, Plumbing, Lighting Design, Fire Sprinklers, Fire Alarm, Dry Utilities, Low Voltage, Energy Conservation and Commissioning Consulting Engineers Days/Hours of Operation: Monday through Friday 8:00 a.m. 6:00 p.m. Disclosure of Conditions: Davidovich & Associates does not have any pending litigation, office closures, impending merger, bankruptcy or any other condition that may adversely affect our ability to perform contractually. Certification: Davidovich & Associates certifies that the firm has not been debarred, suspended or otherwise declared ineligible to contract by any federal, state or local public agency. D&A has a full-time staff of 22 professional Electrical and Mechanical Engineers, Project Managers and Administrators. All have a long history with the firm and are experienced in MEP design. D&A provides Integrated Engineering services and has earned recognition for an emphasis on sustainable, cost efficient and quality design. Firm History Davidovich & Associates (D&A) is a multi-disciplined LEED certified engineering firm that provides a complete scope of Mechanical, Electrical, Plumbing, Lighting Design, Fire Sprinklers, Fire Alarm, Dry Utilities, Low Voltage, Energy Conservation and Commissioning Engineering Services as well as Design-Build and Design Assist solutions services under one roof. Based in Culver City since its inception in 1989, D&A been in business for the last 25 years and has earned the trust and respect of development, design, construction and real estate communities involved in higher education, commercial, institutional, aerospace, aviation and health care industries. technological advancements and a highly competitive industry. The clients demand comprehensive studies, quick responses and a no-nonsense performance with an emphasis on cost efficiency. Davidovich & Associates offers more than licensed professional LEED AP engineers who perform in a timely manner without compromising the quality of the design. We pride ourselves in our organization where: Professional engineers check the final plans. BIM, CADD, NavisWorks and Revit 2013 Environment. Mechanical, Electrical, Plumbing, Lighting Design, Fire Sprinklers, Fire Alarm, Dry Utilities, Low Voltage, Energy Conservation and Commissioning Engineering trades have melded with computer technology into a new dynamic and creative process called Integrated Engineering. D&A is well known for promoting and delivering thoroughly integrated construction drawings and taking full responsibility for all necessary coordination issues between all the dynamic trades that we represent. Our QA and QC D&A Company Information Page 2 of 2 system requires all the disciplines to be conflict free internally and properly coordinated with the static trades such as architecture and structural engineering. Our construction drawings are designed to emphasize the importance of minimizing change orders and assuring the accuracy, validity and usefulness of our drawings after the construction cycle has been completed. As an experienced provider of multifaceted engineering services, D&A is very well versed in different project delivery systems, including, but not limited to, design-bid, design-assist, and design-build programs. Whether single or multi-phased design and construction approached is suggested, D&A feels comfortable to become a fully cooperating part of the team. For instance, during the design and construction of the Mark Taper Imaging Center for Cedars Sinai Medical Center, 60,000 s.f. of existing functioning hospital needed to be dynamically connected to a new 60,000 s.f. addition that required a sophisticated multi-phase design and construction approach for a total of 28 months. Firm Experience D&A is involved in master planning, creation of development requirements, engineering evaluations, project scope determination, cost estimating and facility planning studies for both the public & private sector. Long standing relationships with companies & institutions such as City of Los Angeles, City of Santa Monica, UCLA, USC, LACCD, South Western University, CalTech, Cedars Sinai Medical Center, Manhattan Beach Studios, The Aerospace Corporation, Century City Hospital, Playa Vista Development, Related Companies,Brookfield Development, Rising Realty etc. have been developed over our extensive history. Timely production of all the drawings are supported by the fact that D&A does not employ any drafting personnel and requires all engineering staff to produce their own design and drafting. D&A engineers provide their own field verification, write their own reports, create on-site analysis, and coordinate all the information with the design and construction team. This approach eliminates any miscommunications within the office and allows our partners to connect directly to the person who has performed engineering services. We are perfectly capable estimating the construction cost of our trades from the engineering perspective and make sure that our design decisions are always technically sound and economically feasible. D&A is constantly looking for new ways of improving our design and construction practices. We have developed a new system of RFPs that allowed us to grade the quality of RFP and COs in a way that reduced unnecessary RFP by 35%. Our Construction Administration services are structured in a manner that allows the team members to talk either to the Director of Construction Administration Services or approach the individual eng Being in design and construction community for the last 25 years, D&A has acquired deep knowledge of all applicable code, standards and regulations related to different disciplines and types of construction. This experience is constantly helping us to successfully and timely resolve the challenges presented by different authorities having jurisdiction as well as power, gas and water utilities. Community Meeting A community meeting was held for the project on December 5, 2013 at the Santa Monica Main Public Library. Thirty-five (35) members of the public were in attendance. The following comments were provided during the meeting: 1. Positive comments regarding the design approach in breaking the building massing into four elements, including the podium court openings. 2. Positive comments regarding residential unit mix and sizes, although a higher percentage of 2 and 3 bedroom units should be considered. 3. Positive comments regarding the proposed widened sidewalks. 4. Building should be further stepped- 5. Consider more sculptural elements to further differentiate buildings, with greater emphasis along Broadway. 6. Concern with the parking access. th 7. Landscape concept along 5 Street and within each opening should be unique in efforts to enhance/activate the street. ARB Concept Design Review Overall design discussions between the applicant and the City design team will occur based on direction from the Planning Commission pedestrian orientation, and streetscape design. The project was conceptually reviewed by the Architecture Review Board on February 3, 2014, and the Board provided the following design comments: 1. commercial uses. 2. Good design approach of breaking the overall building mass into four separate building forms. 3. A Board member commented that the project is a good precedent for development of this scale. 4. Project has good color composition (white-on-white) and contrasting treatments on each façade elevation. 5. Positive comment on the cantilevered upper floors, and fin extensions beneath cantilevers. 6. Project has sculptural elements that should be continued to the ground level; the legs of the building are less successful compared to other components of the building. 7. Compositional activity on the Broadway elevation works well. 8. Internal access for residents (including bridges) would enhance the quality of life for residents. 9. Project appears that it would be very active with visitors and residents. 10. Concerns with north-facing facades looking directly at the south-facing facades in between buildings. The proposed screens and louvers would somewhat address this concern, however the glazing could be angled to help further provide privacy. 11. Pay particular attention to the materiality properties of the louver screens (durability, adjustable, ease of use). 12. Concern with the spacing between buildings 1-2 (from Broadway) that is narrower compared to other building openings (livability). 13. Particular attention should be made to the interior livability of the units internal to the courtyard, and the courtyards themselves. PC Float-Up Concept Review: July 9, 2014 500 Broadway: Planning Commission Float-Up Review Comments Summary: 1. Design: General support for the overall building design concept. 2. Design: Concerns with the spacing between buildings 1-2 closest to Broadway. The average spacing between buildings 1- average spacing between buildings 2-3 and 3- 3. separate building forms. (Project floor area and residential units have been reduced on upper floors, resulting in reduced building mass overall). 4. Design: Each building form should be differentiated to improve the overall visual interest. (Although the overall building forms are similar in concept, each form includes subtle th differences in appearance depending on the floor and location facing 5 Street, consisting of angled façades and varied building planes on each elevation in an alternating patterns). 5. Design: Rear alley design appears one-dimensional and needs further enhancement. (Larger windows added throughout the elevation, and additional balconies were added on upper floors that improve resident views and private open space. Further, the split façade design consisting of sculptural plaster and fiber cement board were added throughout that facing elevations, providing a more cohesive design). 6. Design: Resident Bridges: Access bridges connecting residents between building forms appear to add to the overall building mass. 7. Design: Floor Plate Ratios: Non-compliance with the draft DSP floor plate ratio standards would be appropriate, given tdesign. Comment added not is support of the Floor Plate Ratio requirement that requires a reduction in building size as the building increases in height. th 8. Design: Corner Design: The corner design of the 5 Street elevation side does not share the same level of attention (detail, articulation) compared to the Broadway elevation. Face thth of the building on the 5 Street elevation side on upper floors at the street corner (5 and Broadway) needs improvement. (Additional glazing at the corner added that reduced previous blank façade areas). th 9. Design: Sidewalks: Relocate the subterranean garage stairwell (midblock 5 Street) immediately in front of the (market) tenant space that would allow for better open space for patron use. (Clear unobstructed path of 12 feet between the garage stairwell and closest tree well, as shown on project site plan.) 10. Consider further stepbacks on upper floors from the property lines when reducing the R. 11. Design: Ground Floor Open Space: -Comment provided that the ground floor open space shall be increased in size closer to the 20% requirement provided in the draft DSP (however may not need to fully comply with 20%). (Project revised and includes 20% ground floor open space). -Comment provided that the ground floor open space was appropriate. Comment provided that the corner plaza was appropriate, providing adequate shade. -Comment that the corner plaza should be reevaluated: not clear that the open space would be utilized by all segments of the public. 12. Design: 3-Bed Unit Configurations: Concern expressed that all three-bed units are located facing the rear alley. th (6 three-bed units are located along the front elevation facing 5 Street). 13. Floor Area Ratio: -Comments to reduce project FAR from 4.5 to 4.0 building size, bulk, and massing, to be more consistent within the context of the Downtown. Concurrently, increase the amount of open space on the ground floor. -Comments that the p the downtown in proximity to light rail. (Project floor area ratio has been reduced from 4.5 to 4.0, consistent with the draft DCP). 14. TDM: Establish and provide funding for a Transportation Management Organization for the Downtown area, initiate transit circulator within the downtown. (DA includes a $150,000 contribution towards Transportation Management Association programs for the area). 15. TDM: Importance of Trip Reduction: Plan shall focus on trip reduction. (TDM Plan with measures applicable to both the commercial and residential components of the project including a 100 percent Transportation Allowance). 16. TDM: Bike Parking: Bike parking should be consistent with draft DSP requirements. (Bike parking is consistent with draft DCP requirements). 17. Parking: Provide a parking study that identifies the actual parking demand for the project. Comment that less parking would be encouraged. (Parking demand study concludes the proposed amount of parking is appropriate). 18. Community Benefits: Cross Court: Driveway should not be considered either open space or a community benefit. 19. Community Benefits: Affordable Housing: Comment that the project should fully comply with AHPP requirements, specifically with the bedroom and size requirements, and amenities (2-bedroom units @ minimum 850 SF). (64 unit off-site affordable housing project proposed at 1626 Lincoln Blvd). 20. Community Benefits: Affordable Housing: Comment to consider doubling the AHPP requirement when considering the appropriate number of affordable units exceeding AHPP considered as community benefits. Quantity needs to be appropriate based on the size of the building. (64 unit off-site affordable housing project proposed at 1626 Lincoln Blvd). 21. Community Benefits: Affordable Housing: Community benefit units shall consist of all residential unit types provided in the 500 Broadway project. (64 unit off-site affordable housing project proposed at 1626 Lincoln Blvd, consisting of 1- 3 bed units). 22. Community Benefits: Affordable Housing: On-Site versus Off-Site: -Two Commissioners expressed preference of affordable housing on-site, however would consider off-site option provided the right opportunity and service environment, and that it would be worth more to the City compared to the on-site option. -If off-site, two Commissioners expressed preference of the affordable housing units provided within the Downtown area. -If off-site, one Commissioner expressed that the affordable units may be provided anywhere in the City, and one Commissioner added that the units should be located in proximity to transit. (64 unit off-site affordable housing project proposed at 1626 Lincoln Blvd, owned in whole or in part and operated by CCSM). 23. Community Benefits: Affordable Housing: If affordable units are provided off site, the investment should be the same (equivalency) as if they are provided on-site. -site property located at 1626 Lincoln Boulevard would be $16.3M, exceeding the minimum land value of $7.45M, thereby satisfying the AHPP obligation). 24. Community Benefits: Affordable Housing: Provide financial study that demonstrates equivalency in investment (see above comment), include in financial studies for the project. (See TNDG Financial Studies) 25. Community Benefits: Consider requirement that a market shall be provided within the project. (See DA section 2.25 Priority General Market Uses). 26. Community Benefits: Sustainable Design: Project shall achieve a LEED Platinum Certification in its building design. (Project shall achieve LEED® Platinum certification v3). 27. Applicant should review residential access on upper floors with the Building and Safety Department to ensure proposed elevators and stairwells as proposed complies with building code access requirements. (Per Building and Safety comments, each building form includes a minimum stairway to comply with accessibility standards). 28. Applicant should study angles of residential unit windows facing each other in between buildings to further ensure privacy between residential units. (Applicant has reviewed, further, Condition No.2 recommends the ARB pay particular attention to the use of louvers/screens or angled glazing to ensure privacy between north/south facing units). 29. Council Recommendation: Recommend that Council proceed with DA discussions and negotiations with the caveat that other important issues/discussions related to the downtown have not been studied/resolved that can impact the project, (such as the discussion on appropriate recreational open space, and surplus parking). The Planning Commissi Plan. City Council Float-Up Concept Review: October 14, 2014 500 Broadway: City Council Float-Up Review Comment Summary: 1. Design: General support for the overall building design concept. 2. Design: 4.5 FAR would be appropriate considering the location of the site in proximity to Expo station and the downtown area. (Project floor area ratio has been reduced from 4.5 to 4.0, consistent with the draft DCP). 3. Design: Ground Floor Open Space: Meaningful ground floor open space should be provided and increased overall, however should balance with other project components, such as designing to accommodate a market use. Consider providing additional Open Space contribution if amount of ground floor open space is less than appropriate. Cantilevered areas over open space would be appropriate given the height clearance proposed. (Project revised and includes 20% ground floor open space. In addition, the DA would provide an enhanced Parks and Recreation contribution of $1.7M). 4. Design: Floor Plate Ratios: Non-compliance with the draft DSP floor plate ratio standards would be appropriate, given t. Council discussed preference of having design guidelines and less prescriptive design standards for the DSP. 5. Design: Enhance cross court design relating to pedestrians and consider enhancing the alley experience for pedestrians. (The pedestrian orientation at the driveway corner has been improved. The width of the th cross court driveway connecting 5 Street and the alley has been reduced, allowing for additional open space for pedestrian circulation, outdoor seating, and short-term bike parking at the driveway corner). 6. Design: All commercial tenant space and residential units shall be individually sub- metered for potable water. (See DA section 2.8.4(i). All commercial tenant space and residential units shall be individually sub-metered for potable water. 7. Design: Cross Court Driveway: The cross-court driveway should not be considered a community benefit or ground floor open space. 8. Design: Project should include an art component. (See DA section 2.7.6. Project shall provide on-site Cultural Arts obligation (significant project feature). 9. Land Use: Discussed the importance of having a full service market use component of the project, and that the market should be an affordable market. Consider late night commercial uses that would support nearby hotel visitors and light rail commuters. (See DA section 2.25 Priority General Market Uses. Further, the market is required participate in the Calfresh program,federally known as the Supplemental Nutrition Assistance Program (SNAP) that provides nutrition benefits to low-income individuals and families that can be used at markets to purchase food. This would allow the market to be more accessible to low-income individuals and families). 10. TDM: Establish and provide funding for a Transportation Management Organization for the Downtown area, initiate transit circulator within the downtown. (DA includes a $150,000 contribution towards Transportation Management Association programs for the area). 11. TDM: Importance of Trip Reduction: Plan shall focus on trip reduction. (TDM Plan with measures applicable to both the commercial and residential components of the project including a 100 percent Transportation Allowance). 12. TDM: Establish trip caps for the project. (See DA section 2.8.6 (a)(3)(1)(iv) PM Peak Hour Trip Cap). 13. TDM: Bike Parking: Bike parking should be consistent with DSP requirements. Consider bike parking for all bike sizes. (Bike parking is consistent with draft DCP requirements). 14. Parking: Parking demand study should demonstrate the appropriate number of parking spaces for the project. Project should include unbundled parking and unreserved parking for public use provisions. Parking pricing for unreserved space should be established. (Parking demand study concludes the proposed amount of parking is appropriate. DA section 2.8.6 includes provisions for unbundled residential and commercial parking, and DA section 2.8.9 includes provisions for unreserved parking). 15. Circulation: EIR should study one-way streets being considered in the Downtown and how it affects the project. 16. EIR should address construction impacts through construction mitigation plan. (EIR provides a construction mitigation plan (MM HAZ 1a-1b, MM NOI-1, MMT-1). 17. Community Benefits: Affordable Housing: housing could be provided off-site, transit-adjacent within the Downtown area. An off-site project operated by an affordable housing provider that can provide a range of services to project residents would be beneficial. (64 unit off-site affordable housing project proposed at 1626 Lincoln Blvd within the Downtown area, owned in whole or in part and operated by CCSM that would provide a range of services to project residents). 18. Community Benefits: Affordable Housing: Provide a percentage of the units available for seniors and the disabled. 19. Community Benefits: Local Hiring Provision: Ensure ongoing local hiring outreach efforts. 20. Community Benefits: Establish a local preference marketing plan for rental units that would hospitals, healthcare providers, and school districts. (See DA section 2.8.6(e)(3)(v) Local Preference Marketing Plan). 21. Community Benefits: Sustainable Design: Project shall achieve a LEED Platinum Certification in its building design. (Project shall achieve LEED® Platinum certification v3). 22. Council Recommendation: Recommend that staff and the applicant proceed with the proposed project and DA negotiations. Planning Commission Formal Review: March 9, 2016 500 Broadway: Planning Commission Formal Recommendation Summary: The Planning Commission reviewed this development agreement on March 9, 2016 and voted 6-1 to recommend that the City Council approve the project and adopt the proposed Agreement with the following recommendations: 1. The development agreement should include a provision that prohibits all commercial office use in the project. The applicant has agreed to this recommendation, and language prohibiting all office uses including Business and Professional, Creative, Medical and Dental, and Walk-in Clientele are prohibited \[DA Section 2.5.1(c)(7)\]. 2. The project should provide 20 additional long-term bike parking spaces for employees. The applicant has agreed to this recommendation, and an additional 20 long-term bike parking spaces for a total of 64 spaces are provided in the project as shown on the project plans. 3. The project should provide at least 3 electric charging stations within the EV ready parking spaces provided for the project. The applicant has agreed to this recommendation, and 3 electric charging stations within the EV ready parking spaces will be provided in the project as shown on the project plans. 4. The number of unreserved commercial parking spaces available for public use should be increased from 135 to 145. The applicant has agreed to this recommendation, and this change has been revised in the Agreement \[DA Section 2.8.9(a)\]. 5. The commercial parking demand shall be analyzed commencing two years from Certificate of Occupancy to determine whether any additional commercial spaces up to 55 additional spaces (200 in total) may become unreserved spaces available for public use. The applicant agrees in concept to this recommendation, however proposes language that is not agreeable by staff. Pending further discussions with the applicant. \[DA Section 2.8.9(b)\]. 6. The project should provide space within the subterranean garage for the storage of fuel cells that will be used to store energy for an anticipated pilot program by Southern California Edison for a public shuttle system in the Downtown. The applicant has agreed to this recommendation, and a provision in the Agreement has been added accordingly \[DA Section 2.8.20\]. 7. The developer should provide a transit subsidy between 25-50% of the cost of a monthly regional transit pass for 1-3 months for new project residents electing not to obtain the resident transportation allowance prescribed in the Agreement. The applicant has agreed to this recommendation, and proposes a transit subsidy of 25% of the cost of a monthly regional transit pass for 3 months for new project residents \[DA Section 2.8.6(e)(3)(ii)\]. thth 8. The cross court driveway connecting 5 Street and 5 Court Alley shall remain open at all times. Condition No. 7 has been added reflecting this recommendation. 9. Increase availability of the community room for public use from 2 to 4 times per month. The applicant has agreed to this recommendation, and DA section 2.8.10 has been revised accordingly. 10. Allow the ARB to have design flexibility in amount of floor area reduction that may result from the Architectural Review Board design review procedures no greater than a 2% reduction in ground floor commercial area and no greater than a 5% in upper residential floor. The applicant does not agree to this recommendation and maintains their proposal of 2% specific for the residential floor area only. The applicant expresses concerns with additional reduction in floor area, considering -up review, including reductions in floor area (4.5 to 4.0), and increased ground floor open space. This item remains pending for discussion. \[DA Section 6.1\]. 11. The ARB should pay particu it may affect Project and neighboring uses. Condition No. 2(e) has been added reflecting this recommendation. 12. The ARB should pay particular attention to ensure that the publicly-accessible open space immediately west of the main residential lobby is usable by the public and contributes to the pedestrian environment of the surrounding publicly accessible open space. Condition No. 2(f) has been added reflecting this recommendation. 13. The Planning Commission recommended that the City Council should further support the use of SMURRF water for this type of project. A-3B A-1B A-1B A-2B A-2BA-2B A-1B A-1B A-1B A-3BA-3B A-1B A-1BA-1B A-1B A-1B A-1B A-2B A-1B A-1B A-1B A-2B A-1B A-1B A-1B A-1B A-1B A-1B A-3B A-3B A-1B A-1B A-1BA-1B A-1B A-2B A-2BA-2B A-1B A-1B A-2B A-2BA-2B A-1B A-1BA-1B A-St A-St A-StA-St A-St AFFORDABLE HOUSING ON-SITE OPTIONS A49 CITY COUNCIL 4/21/2016 wĻŅĻƩĻƓĭĻʹ wĻƭƚƌǒƷźƚƓ bƚ͵ ЊЉВЎЍЊЉВЎЏΛ//{Μ