Loading...
SR 07-25-2017 7B City Council Report City Council Meeting: July 25, 2017 Agenda Item: 7.B 1 of 13 To: Mayor and City Council From: David Martin, Director, City Planning Subject: Adoption of the Final Downtown Community Plan (DCP), Certification of the DCP Final Environmental Impact Report (FEIR), Adoption of Associated Amendments to the Land Use and Circulation Element, Civic Center Specific Plan, Zoning Ordinance, Santa Monica Municipal Code Chapter 9.53, and Santa Monica Municipal Code Chapter 8.08. Recommended Action Staff recommends that the City Council (Council): 1) Adopt a resolution (Attachment B) certifying the Final Environmental Impact Report for the Downtown Community Plan; 2) Adopt a resolution (Attachment C) adopting a Statement of Overriding Considerations and Mitigation Monitoring Plan and making necessary CEQA findings for the Downtown Community Plan; 3) Adopt a resolution (Attachment D) adopting the Downtown Community Plan; 4) Adopt a resolution (Attachment E) adopting amendments to the Land Use and Circulation Element to implement and ensure consistency with the Downtown Community Plan; 5) Adopt a resolution (Attachment F) adopting amendments to the Civic Center Specific Plan to implement and ensure consistency with the Downtown Community Plan; 6) Adopt first reading of an ordinance (Attachment G) amending the Zoning Ordinance to ensure consistency with the Downtown Community Plan and incorporate by reference Chapter 4 of the Downtown Community Plan; 7) Adopt first reading of an ordinance (Attachment H) amending Santa Monica Municipal Code Section 9.53.130 (Transportation Demand Management) to ensure consistency with the Downtown Community Plan; and 2 of 13 8) Adopt first reading of an ordinance (Attachment I) amending Santa Monica Municipal Code Section 8.08.060 (Building Regulations – Administrative Code) to ensure consistency with the Downtown Community Plan. Executive Summary After six years of community discussion, the City Council held a public hearing on July 10 and July 11 to review, discuss, and provide final direction to staff on changes to the DCP for ratification on July 25, 2017. The Council p rovided direction on the following: 1. Established Large Sites: Keep the Established Large Sites Overlay in the draft DCP with “Option 1” as outlined in the July 10, 2017 staff report. 2. Mid-block Office Use in Neighborhood Village: Allow office as an allowable ground floor use in mid-block parcels within the Neighborhood Village district and a modification to Specific Limitation #3 to clarify use of corner parcels. 3. Tier 2 and Tier 3 Housing Projects Process and Requirements: a. Allow streamlined (Administrative Approval) process for Tier 2 and Tier 3 housing projects up to 75,000 square feet b. Increase FAR by 0.25 for housing projects in the Neighborhood Village (allows FAR of 3.5) c. Require Tier 2 and Tier 3 housing projects up to 75,000 square feet to provide affordable housing on-site or off-site as shown in the following table: Table 9.10.070.A: On-Site and Off-Site Affordable Housing Requirements Height (Feet) On-Site Affordable Housing % Off-Site Affordable Housing % 40-50 20% 25% 52 21% 26% 54 22% 27% 56 23% 28% 58 24% 29% 60 25% 30% 62 26% 31% 64 27% 32% 66 28% 33% 68 29% 34% 70-84 30% 35% 3 of 13 d. Reduce the Development Review Permit threshold to 10,000 square feet for commercial projects in order to provide a stronger process incentive for housing projects 4. 100% Affordable Housing Process and Incentives: a. Remove the 75-unit cap resulting in a streamlined (Administrative Approval) approval process for 100% affordable housing projects, regardless of size b. Provide incentives for 100% affordable housing projects through a 10’ height increase and 0.5 FAR increase within the Downtown area 5. Mobility a. Modify Action AM3.6G to allow the construction of replacement public parking before existing public parking is removed b. Change universal valet (Action AM3.7F) to a short-term action 6. Parking: a. Eliminate parking minimums in the Zoning Ordinance for the Downtown area b. Keep the parking maximums proposed in the Zoning Ordinance for Downtown 7. Clarifications: a. Add Action CCP1.6B to explore establishing a preference for Santa Monica workers and residents in market rate housing units. b. Modify Policy CCP1.3 and Table 2A.3 to explore stabilized rents for middle-income households giving priority to RHNA obligations. c. Add Policy CCP7.5 to explore accommodating artists within ground floor residential units. d. Modify description of Neighborhood Conservation Overlay District on Page 67 and Action HP1.2A to clarify language associated with properties identified with 6L status code in Historic Resources Inventory. 8. Additional Direction to Staff a. Modify Action PPS2.1D to add concept of vehicular traffic on slow street for Arizona Avenue 4 of 13 b. Move the Ocean Avenue protected bike lane to a short -term priority list for implementation and moving the bike lane to the west side of Ocean Avenue (Action AM4.3B) c. Identify the open space at 1250 4th St (Milken Institute) as a Privately Owned Publicly Accessible Space (POPS) on Illustration 2D.2 d. Modify Policy PPS2.2 to add dog parks e. Modify DCP Section 9.10.100 to add timeline for completion of the Gateway Master Plan before Tier 3 development standards become available to properties within the Gateway area f. Modify Table 2A.1 to include the Big Blue Bus site within the Gateway Master Plan study area g. Direction for staff to bring back information regarding a future comprehensive review of the Affordable Housing Production Program, income/rent limits, and length of affordable housing deed-restrictions. Council also asked that staff bring back more information on July 25 on three issues: 1) means to incentivize affordable lodging; 2) addressing the issues raised by the Boys and Girls Club regarding youth-serving, non-profit uses; and 3) options to address the issues raised by the property owner for 201 Wilshire Boulevard. The resolutions and ordinances necessary to effectuate Council’s direction are attached to this report. This report also provides responses to the three issues that Council requested additional information. Discussion Incentivizing Affordable Lodging Staff recommends adding a new policy (CCP2.3) to encourage overnight accommodations and a new action (CCP2.3A) to explore regulatory incentives for affordable overnight accommodations. 5 of 13 NEW Policy CCP2.3: Support Downtown’s role as a visitor destination by encouraging uses that appeal to both locals and tourists, including food, retail, entertainment and overnight accommodations. NEW Action CCP2.3A Evaluate regulatory incentives to establish a broader base of affordable overnight accommodations Downtown. Lead Agency: PCD, HED Timeframe: Mid-Term Boys and Girls Club Administrative Approval Request During the July 10, 2017 public hearing, public comments were made by a representative of the Boys and Girls Club raising questions as to whether the Boys and Girls Club is a permitted use, waiver of fees, and whether consideration for increasing the size thresholds to 35,000 square feet for Administrative Approval could be given for non-profit, youth-serving facilities. Council gave direction to bring back information on addressing the issues raised by the commenter. The Boys and Girls Club fits within the “community assembly” use classification in the Zoning Ordinance and is a permitted use in the Lincoln Transition district. Staff does not believe that the DCP is the appropriate vehicle for waiver of development f ees and would recommend deferring this to Council’s review of the comprehensive fee schedules. Regarding the review process thresholds for commercial projects, the DCP has higher Administrative Approval (AA) thresholds for housing projects (75,000 sf) and exempts 100% affordable housing from a Development Review Permit. The Zoning Ordinance also already includes an increased AA threshold of 25,000 sf for any auto dealer facility replacing an existing legally-established auto dealer facility or expansion of any existing auto dealer facility within Tier 1 limits. The Boys and Girls Club is currently located on a 37,500 sf parcel. There is an additional 7,500 sf parcel to the north that is also owned by the Boys and Girls Club and is currently occupied by administrative offices and housing. There is a significant difference in process for 35,000 sf buildings between the review thresholds that Council has endorsed (development agreement) and the 6 of 13 proposal by the Boys and Girls Club (Administrative Approval). The increased AA thresholds for housing projects and auto dealers was based on the desire to incentivize the land use and an understanding of the scale and type of building that may result. Since non-profit, youth-serving community assembly uses are not common, the size, massing, and placement of a future is somewhat unknown. A Development Review Permit would provide opportunity to shape a potentially larger project. Therefore, staff recommends that the AA threshold be set at 25,000 sf and a Development Review Permit be required for a project larger than 25,000 square feet, which would be similar to the benefit afforded auto dealers and balance incentives for non-profit, youth-serving facilities with public review. The following provides a comparison of the Council-endorsed thresholds, the Boys and Girls Club proposal, and Staff’s recommendation. Application Type Council Endorsed DCP Review Thresholds Boys and Girls Club Proposal Staff Recommendation Administrative Approval Up to 10,000 sf Up to 35,000 sf Up to 25,000 sf Development Review Permit 10,000-30,000 sf Greater than 35,000 sf Greater than 25,000 sf Development Agreement Greater than 30,000 sf N/A N/A In order to address the process issue, staff recommends the following language be added to Section 9.10.050 (DCP Page 180): Notwithstanding Section 9.10.050, a Development Review Permit shall be required for any new non-profit youth-serving community assembly facility replacing an existing legally-established non-profit, youth-serving community assembly facility or expansion of an existing facility if such replacement building or expansion exceeds 25,000 square feet within Tier 1 limits and is located on land occupied by the non -profit youth-serving community assembly use as of July 25, 2017 7 of 13 Further, to provide the Boys and Girls Club with the policy support to renovate their facilities, the following new policy and associated action is recommended to be added to the Community, Culture and Prosperity chapter (Chapter 2B): NEW Policy CCP2.4 Support the expansion and enhancement of community and social services that contribute to the wellbeing of residents, including youth and families, seniors, persons with disabilities, individuals experiencing homelessness and members of our most vulnerable populations. NEW Action CCP2.4A Collaborate with the Santa Monica Boys and Girls Club to identify and resolve obstacles to the renovation of their facilities on Lincoln Boulevard. Lead Agencies: CCS, PCD Timeframe: Mid-Term 201 Wilshire The property owner and representatives for the parcel at 201 Wilshire Boulevard spoke at the July 10, 2017 public hearing and requested that the City Council increase the height and FAR for the parcel because it does not abut residential uses. The commenters requested that height and FAR be increased to 60 feet and 3.5 FAR to match the Bayside Conservation District. The property is located within the Wilshire Transition district, which is intended to support the smaller, local-serving uses that provide easily accessible goods and services to the surrounding neighborhood and also to provide opportunity for housing above the ground floor of new development. The proposed scale for the District is established to be complementary to its urban context in the Downtown and provide new buildings that are consistent with the scale of nearby residential uses. The Wilshire Transition district has a maximum allowable height of 40’ and 1.75 FAR for commercial projects and 50’ and 2.25 FAR for housing projects. Further, the EIR studied th e north side of Wilshire as a transition zone with a maximum height of 50’ and 2.25 FAR. After 8 of 13 some discussion, Council directed staff to bring back more information and options to address the issues raised by the commenter. 201 Wilshire is a commercially designated parcel at the corner of Wilshire and 2nd Street. It is adjacent to other commercially designated parcels within the Wilshire Transition District. It is not directly adjacent to residential parcels, but within close proximity. Staff has further analyzed the request to increase height and FAR for 201 Wilshire Boulevard and found that the parcel is somewhat unique if the three following factors are considered:  Frontage on Wilshire Boulevard  Lack of adjacency to residentially-zoned parcels  Designated as Downtown Core in the LUCE The only other parcel that shares the same characteristics is the Miramar parcel, which has a pending development agreement application and is covered by the Established Large Site Overlay. Comparison of Development Standards FLOOR AREA RATIO BC (Promenade) BC (2nd and 4th Streets) Wilshire Transition (Housing) 201 Wilshire Proposal Tier 1 1.75 1.75 1.5 Tier 1 – With Housing 2.25 2.25 1.5 Tier 2 2.75 3.0 1.75 Tier 2 – With Housing 2.75 3.5 2.25 3.5 100% Affordable 3.25 4.0 2.75 4.0 HEIGHT BC (Promenade) BC (2nd and 4th Streets) Wilshire Transition (Housing) 201 Wilshire Proposal Tier 1 32’ 32’ 32’ Tier 1 – With Housing 39’ 39’ 39’ Tier 2 60’ 60’ 40’ Tier 2 – With Housing 60’ 60’ 50’ 60’ 100% Affordable 70’ 70’ 60’ 70’ 9 of 13 Alternatives for Council Consideration If Council would like to consider increasing height and FAR that has narrow applicability, the following language could be added to Section 9.10.060: For parcels in the Wilshire Transition District that (a) front on Wilshire Boulevard, (b) are not adjacent a residentially-zoned parcel, and (c) are designated Downtown Core under the LUCE, the Tier 2 maximum height and FAR for housing projects shall be 60 feet and 2.75 FAR. This language would apply only to one other property (Miramar) and would ensure that the increased height is only for housing projects. This approach is consistent with Council’s direction to provide process incentives for housing compared to commercial development. This language may best accomplish both the property owner’s objectives for flexibility in land use and Council’s objectives to incentivize housing while also maintaining balance with the remainder of the Wilshire Transition district. Alternatively, if Council would like to consider increasing height and FAR for both commercial and residential projects, staff would recommend that height and FAR for commercial projects be 50’ and 2.25 FAR and housing projects be 60’ and 2.75 FAR. Updated Feasibility Analyses Staff requested that HR&A prepare updated feasibility analyses that tested Council’s endorsement of both on-site and off-site affordable housing requirements for Tier 2 and qualifying Tier 3 housing projects. The analysis includes:  the DCP’s affordability mix from extremely low income to moderate income levels;  an 84-foot, 4.0 FAR variation of the 72 -foot, 40. FAR prototype that was previously tested; and  increased off-site affordable housing requirements per Council’s direction on July 11, 2017. On-Site Affordable Housing 10 of 13 As stated during the public hearing by HR&A, the on -site affordable housing percentages endorsed by Council on July 11, 2017 are technically financially feasible, but of the prototypes tested, nearly all produce marginal returns. Building Height FAR On-Site % Developer Profit Margin Difference Btw Return on Cost and Weighted Cap Rate 50 2.22 20% Marginal Marginal 60 2.75 25% Feasible Marginal 72 4.0 30% Feasible Feasible 84 4.0 30% Feasible Marginal There are many different conditions of prope rty ownership within the Downtown area and as noted previously by HR&A, this analysis includes assumptions to account for typical market conditions and therefore, is not intended to account for every possible scenario. The analysis may be read to measure the likelihood that developers will proceed with proposing housing projects that have on -site affordable housing units. The results suggest that these prototypes are particularly sensitive to shifts in market conditions where affordable housing hampers feasibility, which may result in a scenario where housing development is discouraged altogether. Off-Site Affordable Housing The off-site housing percentages were also tested and HR&A found that the 50 - and 60- foot prototypes are not financially feasible with only the 84-foot prototype producing marginal feasibility. Building Height FAR Off-Site % Developer Profit Margin Difference Btw Return on Cost and Weighted Cap Rate 50 2.22 25% Not Feasible Not Feasible 60 2.75 30% Not Feasible Not Feasible 84 4.0 35% Marginal Marginal HR&A indicates that the 50- and 60-foot prototypes under off-site requirements that are two to three percentage points above the Council-endorsed on-site requirement (i.e. 22- 23 or 27-28%, respectively) would be more likely to be feasible. However, if the intent is to not allow an off-site option, it may be prudent to eliminate the option entirely. Elimination of Parking Minimums 11 of 13 Staff has made changes to the Zoning Ordinance to reflect Council’s direction to eliminate parking minimums in the Downtown and keep the proposed parking maximums. There are several standards that rely on required parking and staff has attempted to address all of these changes. However, as with the Zoning Ordinance Update, it is likely that staff will need to return in a few months with further changes in order to implement this new policy direction for Downtown. This may include clarifications of language, revisiting fees, mobility requirements, and procedures on how existing parking is shared. Development Process Thresholds Council endorsed the following review process thresholds for housing projects which allowed Tier 2 and Tier 3 housing projects up to 75,000 square feet to be approved by Administrative Approval. Tier 2 housing projects greater th an 75,000 square feet are reviewed by Development Review Permit. However, Tier 3 housing projects greater than 75,000 square feet are reviewed by Development Agreement. The Planning Commission’s original proposal to allow for projects on lots between 15,000 and 22,500 square feet (effectively projects between 60,000 to 90,000 square feet) to be reviewed by Development Review Permit. In making the change for streamlining to 75,000 square feet, staff had inadvertently left out a possible Development Review Permit option for Tier 3 housing projects between 75,000 and 90,000 square feet. If Council intended to maintain three possible avenues for entitlement for Tier 3 projects, the following table demonstrates the appropriate review thresholds: Housing Project Size Administrative Approval Projects up to 75,000 sf Development Review Permit Tier 2 over 75,000 sf Tier 3: 75,000 – 90,000 sf Development Agreement Tier 3 greater than 90,000 sf Errata to Final EIR Staff and Planning Commission gave serious consideration to both the Final EIR (FEIR) and the public commentary lodged at every stage of the discussion, including the final Public Hearing before the City Council. As identified in the Final EIR, the DCP would have very few significant impacts due t o the self-mitigating nature of the plan, 12 of 13 integration of land use and transportation to reduce vehicle trips, and emphasis on sustainability. However, in the limited cases where potentially significant impacts have been identified a Mitigation Monitoring P lan and Statement of Overriding Considerations have been developed and necessary CEQA findings are summarized in a separate resolution. In addition, a memorandum is provided (ATTACHMENT A) that evaluates recommended changes to the Draft DCP since completion of the FEIR and concludes that no additional environmental analysis is needed to ensure that all potential impacts of the proposed DCP are addressed in compliance with CEQA. Conclusion Downtown is both the shared “living room” for all Santa Monica residents and the primary economic engine of the local economy. The DCP takes into consideration the diverse viewpoints that encompass our community’s vision for Downtown’s future, based on a far-reaching and inclusive process that engaged thousands of residents. This six-year effort included public workshops, discussions, presentations, surveys, and public hearings. The Final DCP will incorporate all of the modifications formally adopted by the City Council as part of the final DCP adoption resolution. F ollowing Council’s adoption of the Plan, a final DCP document will be prepared to incorporate the modifications, which will serve as an enduring long-term framework for preserving and enhancing the unique character and vitality of Downtown Santa Monica. Financial Impacts & Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. 13 of 13 Prepared By: Jing Yeo, Planning Manager Approved Forwarded to Council Attachments: A. Attachment A B. Attachment B - Resolution Certifying the Final Environmental Impact Report C. Attachment C - Resolution Adopting a Statement of Overriding Considerations and Mitigation Monitoring Plan and making necessary CEQA findings D. Attachment D - Resolution Adopting the Downtown Community Plan E. Attachment E - Resolution Adopting Amendments to the Land Use and Circulation Element F. Attachment F - Resolution Adopting Amendments to the Civic Center Specific Plan G. Attachment G - Ordinance Amending the Zoning Ordinance H. Attachment H - Ordinance Amending SMMC Chapter 9.53 (Transportation Demand Management) I. Attachment I - Ordinance Amending SMMC Chapter 8.08 J. Attachment J - HR&A Supplemental Memorandum re On- and Off-Site Affordable Housing Analysis for the DCP_07-18-17 K. Attachment K - 17-006 (PCS) DCP Adoption (signed) L. Attachment L - 17-007 (PCS) DCP LUCE Amend (signed) M. Attachment M - 17-008 (PCS) DCP CCSP Amend (signed) N. Attachment N - 17-009 (PCS) DCP ZO Amend (signed) O. Written Comments P. Powerpoint Presentation Item 7-B Supplement to Attachment A Downtown Community Plan Final EIR Errata (July 25, 2017)  Errata Page #9 for Change Nos. 243 and 244: Incorrectly references 101 Santa Monica Boulevard as the Miramar Site. Should read: The overlay district would establish a maximum FAR of 3.0 for 1133 Ocean Ave, 4.0 for Miramar 101 Santa Monica Boulevard, 3.5 for 4th/5th and Arizona, with heights up to 130’ for all three established large sites.  Errata Page #18 under EIR-5: Incorrect reference to the height of the existing Ocean Tower Should read Nevertheless, this height would be slightly lower than the existing height of the 143-foot tall Palisades Tower105-foot-tall Ocean Tower with 135 foot tall elevator tower extension that is currently on the property.11 Downtown Community Plan - City of Santa Monica 1 Final EIR Errata Memorandum July 19, 2017 Ms. Rachel Kwok, Environmental Planner Strategic and Transportation Planning Division Planning and Community Development Department City of Santa Monica 1685 Main Street, Room 212 PO Box 2200 Santa Monica, CA 90407-2200 Subject: Evaluation of Recommended Changes to the Draft Downtown Community Plan (DCP) and Program Environmental Impact Report (EIR) Since Issuance of the Final Program EIR This memorandum provides minor updates and corrections to the Program Environmental Impact Report (EIR) for the Downtown Community Plan (DCP) in light of the proposed changes to the DCP that were initiated after issuance of the Final Program EIR in April 2017. This memorandum addresses whether these changes to the DCP – made as result of the Planning Commission and City Council hearings – would create new or substantially more severe environmental impacts than those identified in the Program EIR, which was prepared in compliance with the California Environmental Quality Act (CEQA). 1.0 PROJECT BACKGROUND The DCP sets forth City policy guidance and an implementation plan for the Downtown through the 2030 planning horizon. Consistent with the framework provided by the Land Use and Circulation Element (LUCE), the DCP provides a proactive strategy for the Downtown to evolve into a more accessible, multi-modal, and pedestrian-friendly urban district that serves the needs for a diverse community. The LUCE specifically recommends that the DCP address a number of planning issues including:  Building form and public realm in the Downtown,  Provision of open space,  Affordable and workforce housing demand  Diverse mobility options  Quality of pedestrian access from areas south of the Downtown core  Constrained linkages from Downtown to the beach  Incorporation of the new western terminus station (Downtown Station) of the Expo Light Rail Transit line (Expo LRT) into the fabric of the Downtown The DCP is intended to be a plan for the long-term enhancement of the Downtown to improve the quality of life and sustainability while also conserving the character of the adjacent neighborhoods. The Plan addresses important issues in the Downtown including historic preservation, high quality architecture, sensitive urban design, diverse housing opportunities, sustainable features, expansion of cultural arts offerings, additional Downtown Community Plan - City of Santa Monica 2 Final EIR Errata Memorandum open spaces to support walkability, support for the retail/entertainment district, additional office space to meet the needs of the “Silicon Beach” creative businesses, and integration with the Expo LRT. The City of Santa Monica (City) has undertaken the following CEQA review process:  On September 13, 2013, a Notice of Preparation (NOP) for preparation of a Program EIR was filed with the California State Clearinghouse in the Governor’s Office of Planning and Research (OPR) and the Los Angeles County Clerk/Recorder (County Clerk).  A public Scoping Hearing was held on October 3, 2013, and public comments were received until October 21, 2013 (CEQA Guidelines §15082).  A Draft Program EIR was released by the City for a 90-day public review period and filed with OPR and the County Clerk on February 3, 2016 (State Clearinghouse No. 2010091056).  The Draft Program EIR released on February 3, 2016 included a Project Description that reflected the first draft of the Downtown Specific Plan that was released on February 20, 2014.  Subsequent to publication of the Draft Program EIR, the City prepared a Recirculated Draft Program EIR in accordance with CEQA Guidelines Section 15088.5. The Recirculated Draft Program EIR included only the revised portions of the EIR necessary to make the EIR consistent with the DCP in order to ensure that the Project Description was finite and stable consistent with CEQA Guidelines Section 15124. The Recirculated Draft Program EIR was released for a 45-day review period beginning February 1, 2017 and ending on March 20, 2017.  In April 2017, a Final Program EIR was issued by the City. The Final Program EIR provided written responses to all public comments received by the City during the public review period of the Draft Program EIR and Recirculated Draft Program EIR, as well as any text changes to the EIR and a mitigation monitoring program. Following the release of the Final Program EIR, a Final Public Hearing Draft DCP was released in April 2017. The Planning Commission conducted multiple hearings on the Draft DCP on April 26, May, 10, May 11, May 17, May 18, and May 31, 2017 and made recommendations for revisions, clarifications, additions, and deletions of policies. Following the Planning Commission hearings, the City Council conducted a public hearing and began deliberations on July 10 and July 11, 2017 and endorsed the Planning Commission’s recommendations and gave direction on changes to be made to the Final Public Hearing Draft DCP. This memorandum summarizes and evaluates the City Council’s complete recommended changes to the DCP and any resultant alterations to previous environmental analysis prepared in the Final EIR. A copy of the list of suggested changes is included as Attachment A to this memorandum. 2.0 CEQA REQUIREMENTS Under CEQA, a Lead Agency is required to recirculate an EIR when “significant new information” is added to the EIR subsequent to its issuance for public review/consideration (refer to Section 15088.5 of the CEQA Guidelines). Under Section 15088.5, subdivision (a), “significant new information” is defined as including the disclosure of any of the following: 1) A new significant environmental impact would result from the project or from a new mitigation measure proposed to be implemented; 2) A substantial increase in the severity of an environmental impact would result unless mitigation measures are adopted that reduce the impact to a level of insignificance; Downtown Community Plan - City of Santa Monica 3 Final EIR Errata Memorandum 3) A feasible project alternative or mitigation measure considerably different from others previously analyzed would clearly lessen the significant environmental impacts of the project, but the project’s proponents decline to adopt it; or 4) The draft EIR was so fundamentally and basically inadequate and conclusory in nature that meaningful public review and comment were precluded. New information added to an EIR is not significant unless the EIR is changed in a way that deprives the public of meaningful opportunity to comment upon a substantial adverse environmental effect of the project or a feasible way to mitigate or avoid such an effect that the project’s proponent has declined to implement. Under Section 15088.5, subdivision (b), “[r]ecirculation is not required where the new information added to the EIR merely clarifies or amplifies or makes insignificant modifications to an adequate EIR.” In light of CEQA Section 215088.5, this memorandum evaluates the recommendations for policy and language changes to the proposed DCP and to the EIR and makes a determination as to whether the recommended changes would constitute “significant new information.” 3.0 RESULTS 3.1 Recommended Changes to the Proposed DCP This memorandum reviews the suggested policy and language revisions to the DCP as a result of City Council’s direction to staff on the Public Hearing Draft DCP, incorporates minor updates and revisions as necessary to the Final Program EIR, and determines whether conditions outlined in CEQA Guidelines Section 15088.5 are met. In all, 275 changes to the Draft DCP are recommended following the release of the Final Program EIR in April 2017 (see Attachment A). In addition, there are 3 potential changes that could be adopted by the City Council: Potential Change No. 1: Administrative Approval request for projects up to 25,000 square feet for any new non-profit youth-serving community assembly facility replacing an existing legally-established non-profit, youth-serving community assembly facility or expansion of an existing facility if such replacement building or expansion exceeds 25,000 square feet within Tier 1 limits and is located on land occupied by the non-profit youth-serving community assembly use as of July 25, 2017. Potential Change No. 2: For parcels in the Wilshire Transition District that (a) front on Wilshire Boulevard, (b) are not adjacent to a residentially-zoned parcel, and (c) are designated Downtown Core under the LUCE, the Tier 2 maximum height and FAR for housing projects shall be 60 feet and 2.75 FAR. Potential Change No. 3: Potential change in development process thresholds to allow housing projects between 75,000 and 90,000 square feet to be processed with a Development Review Permit. The above recommended and potential changes were reviewed and categorized in Table 1 as follows:  Text and format changes to address typographical errors  Clarifications to language in the DCP;  Revisions to the City’s process and administration;  Changes that related to City timing for implementation;  General deletions  Changes that represent refinement of existing policies and/or language in the Draft DCP Downtown Community Plan - City of Santa Monica 4 Final EIR Errata Memorandum None of these changes would have any impact on the physical environment described in the Final EIR. The remaining changes to the Draft DCP, which are not clarifying or administrative in nature, may have some limited potential to alter the analysis in the EIR and thus warrant further discussion. These changes include:  Inclusion of the Big Blue Bus site into the Gateway Master Plan;  Deletion of parking minimums and keeping parking maximums;  Bonuses and process incentives for 100% affordable housing projects;  Establishing 130 feet as the maximum height for the Established Large Sites overlay district and removing voter approval;  Location of public parking supply  Employee transportation allowance; and  Reduction in height and FAR within the Wilshire Transition district. However, as described below, these revisions would not result in new or greater physical environmental impacts and would not result in any substantial changes to the severity of the impacts described in the Final EIR. Downtown Community Plan - City of Santa Monica 5 Final EIR Errata Memorandum Table 1. Changes to the DCP Description Recommended Change No. Text and format changes (to fix typos, formatting, grammar, renumbering, nonmenclature, referencing, or eliminate duplication) These changes provide clerical corrections for formatting, spelling, typos, renumbering, or references. 1, 2, 4, 8, 19, 23, 40, 53, 54, 74, 76, 79, 83, 87, 95, 98, 111, 130, 141, 150, 161, 163, 164, 189, 190, 193, 195, 196, 211, 214, 231, 233, 234, 237, 275 Changes that clarify language in the Plan These changes are intended to clarify the language in the Plan. Would not materially change the policy, action, or program. As such, these changes would not result in physical environmental impacts that would be different from those described in the Final Program EIR. 7, 9, 11, 13, 14, 16, 18, 22, 24, 30, 31, 32, 33, 34, 36, 37, 39, 42, 43, 44, 45, 46, 51, 52, 56, 57, 58, 59, 60, 64, 65, 66, 78, 84, 85, 90, 94, 97, 102, 104, 106, 108, 112, 118, 119, 121, 122, 125, 128, 129, 131, 132, 135, 136, 137, 139, 140, 146, 148, 153, 155, 160,162, 165, 167, 169, 170, 172, 173, 175, 178, 179, 181, 182, 183, 184,192, 194, 201, 204, 209, 215, 216, 218, 220, 222, 228, 235, 248, 249, 251, 256, 259, 260, 261, 262, 266, 268, 269, 270, 271 Changes that relate to City process and administration These changes relate to the City’s administrative procedures, such as how projects are to be processed under the Plan. No physical impacts on the environment would occur as a result of these changes. 5, 6, 10, 12, 15, 21, 25, 41, 47, 48, 50, 62, 63, 67, 68, 72, 73, 107, 120, 124, 151, 152, 202, 203, 205, 206, 207, 272, 273, 274, Potential Change Nos. 1 and 3 Changes that related to City timing for implementation These changes address the timing/priority for implementation of the action in the Plan. These changes would not result in physical environment impacts that would be different from those described in the Final Program EIR 61, 75, 77, 80, 81, 82, 86, 88, 89, 91, 93, 96, 99, 100, 101, 103, 105, 109, 110, 114, 133, 134, 142, 143, 147, 154, 157, 158, 159, 166, 168, 171, 174, 176, 177, 180, 185, 186, 245 General deletions These changes would remove a proposed action, policy, or program from the Plan. Based on the nature of the actions, policies, and programs recommended for deletion, these changes would not result in physical environmental impacts that would be greater than those described in the Final Program EIR. 38, 49, 55, 123, 138, 144, 145, 149, 156, 188, 265 Changes in policy or standards that would not result in greater physical environmental impacts These changes address policies or requirements to a building’s design– would not increase the intensity (FAR) or height of a building use on a site. These changes would not result in environmental impacts that would be greater than those described in the Final Program EIR. 20, 26, 27, 28, 29, 35, 187, 191, 197, 198, 199, 200, 213, 217, 219, 221, 223, 224, 225, 226, 227, 229, 230, 232, 236, 238, 239, 240, 241, 246, 247, 250, 252, 253, 254, 255, 257, 258, 263,264, 267 Changes that need further discussion Please see additional discussion below. 3, 17, 69, 70, 71, 92, 113, 115, 116, 117, 126, 127, 208, 210, 212, 242, 243, 244 Notes: See attachment A for a complete list of Planning Commission and City Staff recommended changes to the Draft DCP. Downtown Community Plan - City of Santa Monica 6 Final EIR Errata Memorandum 3.2 Additional Discussion of Changes to the Draft DCP that are Relevant to the EIR Change No. 3, 70, and 71 - Addition of Big Blue Bus site as a Gateway Master Plan site The inclusion of the Big Blue Bus site into the Gateway Master Plan would not change the analysis of the EIR since the EIR already accounted for the development of the site as a Gateway Master Plan site. The EIR analysis incorporated the potential development of this site at the maximum FAR of 4.0 and height of 84 feet, including the circulation improvements associated with it. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change No. 3: Add BBB site to Table 2A.1 Gateway Master Plan Sites Table 2A.1 Gateway Master Plan Sites GATEWAY SITES 120 Colorado Avenue (Wyndham) 302 Colorado Avenue (Sears) 402 Colorado Avenue/1640 5th Street (Downtown Station Site) 1334 5th Street (Big Blue Bus Site) Change No. 70: Add entirety of Big Blue Bus site to Gateway Master Plan area by deleting a portion of a sentence. The study area includes the area between Colorado Avenue and the I-10 freeway from Ocean Avenue to 75th Street.treet and a portion of the Big Blue Bus site. Change No. 71: Add entirety of Big Blue Bus site to Gateway Master Plan area. Modify Illustration 3.13 Potential New Connections, Open Space and Pathways Change No. 69, 116, and 117 - Removal of Parking Minimums and In-Lieu Parking District City Council directed staff to eliminate minimum parking requirements within Downtown to prevent oversupply of parking, which would further discourage driving and advance the LUCE’s goal of “No Net New P.M. Peak Hour Trips”. Recent studies indicate that parking availability plays a strong role in influencing driving behavior.1 Eliminating parking minimum requirements would have a significant effect on reducing vehicle trips. As such, this requirement is likely to further reduce the number of vehicle trips to/from the Downtown and associated traffic impacts as analyzed in the Final Program EIR. Furthermore, any fiscal loss in parking 1 Chris McCahill and Norman Garrick, “Effects of Parking Provision on Automobile Use in Cities: Inferring Causality”, Transportation Research Board, November 13, 2015; Petter Christiansen, “Parking Facilities and the Built Environment: Impacts on Travel Behavior”, Transportation Research, January 2017; Zhan Guo, “Residential Street Parking and Car Ownership”, Journal of the American Planning Association, Winter 2013; Rachel Weinberger, “Death by a thousand curb-cuts: Evidence on the effect of minimum parking requirements on the chose to drive”, Transport Policy, March 2012; Kyle Gebhart, “Wasteful Parking Supply in East Harlem: An Analysis of Parking Occupancy and Mode Usage at East River Plaza in New York City”, First Place, American Planning Association, Transportation Planning Division Competition, December 16, 2011 Downtown Community Plan - City of Santa Monica 7 Final EIR Errata Memorandum in-lieu fees would not have a material effect on the ability to implement TDM measures and were not relied upon to achieve LUCE trip reduction goals, including the goal of No Net New PM Peak Hour Trips. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change No. 69: Delete reference to Parking In-Lieu Fee that was based on having a minimum parking requirement Expanding In-Lieu Fee Parking District Downtown pioneered an in-lieu fee parking district in the 1980’se, which was updated in 2013. The plan recommends expansion of the parking district to the new DCP. So new buildings and businesses could meet demand using shared parking instead of building single-use parking spaces. Over the life of the Plan, the fees could generate seed money for at least one additional parking structure, depending on parking requirements. It is anticipated that approximately 800 additional parking spaces will need to be added to the public network to keep pace with land use changes that opt into the parking in-lieu fee program. Most of this new parking should be built in peripheral locations to reduce vehicle trips into the center of the District. Caution should also guide new capital parking investments given the uncertain impact of driverless cars. Already rideshare companies are altering the amount of parking demand from trips to, from, and within Downtown. Change No. 116 Delete action: Action 3.5C Expand the parking in-lieu fee district to reflect current Downtown boundaries with an appropriate fee and flexible expenditure plan. Change No. 117 Delete action: AM3.5D Provide flexibility in meeting required parking through unbundled parking, shared parking, in-lieu fees and off-site parking for changes of use in existing buildings. Change No. 210 - FAR bonus for Housing Projects in Neighborhood Village In order to incentivize the production of housing, the City Council provided staff with direction to modify the Draft DCP to include a FAR bonus of 0.25 FAR for housing projects in the Neighborhood Village District. The Final Program EIR analyzed a maximum building height of 60 feet and maximum FAR up to 3.25 for Tier 2 Projects with Housing within the Neighborhood Village district under Scenario B. Additionally, the Final Program EIR analyzed a maximum FAR of 4.0 within the Bayside Conservation District. However, the maximum FAR for the Bayside Conservation District proposed in the final Draft DCP is 3.5 (leaving 0.5 FAR to be reallocated). Therefore, the inclusion of a 0.25 FAR bonus for housing projects in the Neighborhood Village District would be offset by the 0.5 reduction in maximum FAR allowed in the Bayside Conservation District and would not result in an overall increase in development within the Downtown. Environmental impacts would be similar to those identified in the Final Program EIR. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Neighborhood Village Bayside Conservation Final EIR Maximum FAR 3.25 4.0 Maximum Height 60 feet 84 feet Downtown Community Plan - City of Santa Monica 8 Final EIR Errata Memorandum Proposed DCP Maximum FAR 3.5 3.5 Maximum Height 60 feet 60 feet Change No. 210: Modify Table 4.2 Development Standards to increase FAR by 0.25 for Tier 2 Housing projects in the Neighborhood Village District NV Housing Maximum FAR Tier 2 –3.5 Maximum Building Height (ft.) Tier 2 –60’ Change No. 17 and 212 - Height and FAR Bonus for 100% Affordable Housing Projects Districtwide In order to incentivize the production of affordable housing, the City Council gave staff direction to modify the Draft DCP to give 100% affordable housing projects in the Downtown receive a height and FAR bonus of 10 feet and 0.5 FAR subject to a maximum height of 84 feet. As a result of this recommended change to the Draft DCP, there would be a slight increase in building height and FAR only for 100% affordable housing projects. Given that only a small fraction of future development projects are anticipated to be 100% affordable housing due to lack of government subsidy funding, these changes would not have a measurable effect on the overall bulk and scale of new structures within the sub-area. Further, these changes would not have an effect on the overall total development within the Downtown analyzed in the Final Program EIR, as this increase would be offset by the Final Program EIR’s conservative analysis of the development standards for the Bayside Conservation District. As previously stated, the Final Program EIR analyzes the maximum FAR of 4.0 within the Bayside Conservation District; however, the maximum FAR for the District in the Draft DCP is 3.5. Accounting for the recommended increase in FAR of 0.25 for housing projects in the Neighborhood Village District, there would be still be 0.25 FAR to spare. In addition, the DCP’s cap of 3.2 million square feet would ensure that overall development would not increase over what was analyzed for Scenario B of the EIR. Therefore, the inclusion of bonuses for 100% affordable housing projects in the Downtown would be offset and would not result in an overall increase in development within the Downtown. The bonus of 10 feet in height would also not result in significant increase in aesthetic impacts since this slight increase in height would only occur for 100% affordable housing projects (which would constitute only a fraction of future development in the Downtown). Environmental impacts would be similar to those identified in the Final Program EIR. This change would not result in any substantial new information (such as a new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change No. 17: Include narrative in Community, Culture, Prosperity (Chapter 2B) about Exemptions for 100% Affordable Housing Projects Special Incentives for 100% Affordable Housing Projects To incentivize the production of affordable housing, 100% Affordable projects are provided the following incentives districtwide:  Administrative Approval for all projects regardless of number of units  Height and FAR bonuses Downtown Community Plan - City of Santa Monica 9 Final EIR Errata Memorandum Change No. 212: Modify Table 4.2 Development Standards to incorporate height and FAR bonus for 100% Affordable Housing Projects Districtwide L T East LT West NV BC (Prom) BC (2nd/4th) TA OT WT FAR 2.75 3.25 4.0 3.25 4.0 4.0 3.25 2.75 Height 60’ 70’ 70’ 70’ 70’ 84’ 60’ 60’ Change No. 242 – Affordable Housing Production Requirements City Council gave staff direction to increase the affordable housing requirements for housing and mixed use Tier 2 and Tier 3 projects less than 75,000 sf. Establishing project requirements for on-site and off-site affordable housing is a procedural change that does not in and of itself result in new significant physical impacts on the environment. The DCP is consistent with the environmental impacts assessed in Scenario B, which analyzed a land use mix that is predominantly housing. The DCP has policies (LU4.1, 4.2, 4.3, 4.4; CCP1.1, 1.2, 1.3, 1.4, 1.5, 1.6) and actions (CCP1.1A, 1.2A, 1.2B, 1.3A) that are supportive of housing and provides process and development incentives for housing projects through a streamlined approval process and height and FAR bonuses compared to commercial projects. While there may be a possibility that this increase in inclusionary affordable housing requirements could result in developers choosing to proceed with commercial projects, this possibility is speculative given the development processing thresholds proposed for housing in the DCP compared to the lower development processing thresholds proposed for commercial development, which are designed to incentivize housing (e.g., the administrative approval threshold for commercial development is 10,000 sf and the development agreement threshold for commercial project is 30,000 square feet compared to the housing development thresholds proposed in Potential Change No. 3). Furthermore, , it would be speculative to determine the land use outcome of these requirements due to a diversity of economic conditions, property ownership, and a wide variety of individual factors that can only be considered on a case-by-case basis. Therefore, the change in inclusionary affordable housing requirements will not result in new significant impacts. Change No. 243 and 244 - Established Large Sites Approval Process The City Council gave staff direction to modify the Draft DCP to establish a maximum height of 130 feet for the overlay district for the three Established Large Sites in Downtown and to remove the concept of voter approval for projects on the Established Large Sites and to also remove the concept of voter approval for Specific Plan Amendments. The overlay district would establish a maximum FAR of 3.0 for 1133 Ocean Ave, 4.0 for Miramar, 3.5 for 4th/5th and Arizona, with heights up to 130’ for all three established large sites. The Final Program EIR analyzes the Established Large Sites at these respective FARs and a maximum height of 84 feet and acknowledges that the Draft DCP could establish an approval process for requests up to 130 feet, subject to additional environmental review, pursuant to CEQA. As previously described, impacts of development at the Established Large Sites have been thoroughly analyzed in the Final Program EIR with building heights of up to 84 feet. Impacts of development up to 130 feet at the Established Large Sites would remain consistent with the impacts described in the Final Program EIR. Specifically, changing the maximum height of these three Established Large Sites and the manner in which they are approved would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. In order to clarify Downtown Community Plan - City of Santa Monica 10 Final EIR Errata Memorandum these potential impacts, changes EIR-1 through EIR-11 have been recommended in Section 4.0¸Changes to the EIR (see also Attachment B). Change No. 243: Clarify maximum height limits considered for Established Large Sites. A. Height Limit. Projects on Established Large Sites may be authorized up to an absolute height limit of 130’ subject to the following requirements: Change No. 244: 9.10.080 ESTABLISHED LARGE SITES OVERLAY Projects within the Established Large Sites Overlay will be processed as a development agreement. These projects must provide, at minimum, Tier 3 project requirements and community benefits. Additional onsite uses, features, fees, programs or benefits expected for these projects are described in Chapter 2, Downtown Districts. Projects within Established Large Sites shall only be required to comply with development standards for Height Limit, Maximum Floor Area, and Open Space as required by 9.10.080. Height Limit. The maximum height for the Downtown is 84’. Projects on Established Large Sites may be authorized up to an absolute height limit of 130’ subject to the following requirements: Shall be processed through a development agreement [OPTIONS FOR PUBLIC DISCUSSION] OPTION A: Voter Approval required (may be changed with approval of Specific Plan Amendment by future Council) OPTION B: Voter Approval as approved through ballot measure (will require placing ballot measure on special election or next general election) OPTION C: Supermajority Approval of the City Council (requires Charter Amendment) Additional environmental review to the extent not analyzed in the Downtown Community Plan Final EIR. Shade and Shadow analysis of the project’s impacts on adjacent uses Include in the application submittal comprehensive responses to how the project meets each of the priorities described in the Downtown Districts Chapter Downtown Community Plan - City of Santa Monica 11 Final EIR Errata Memorandum Maximum Floor Area. 1133 Ocean Avenue shall have a maximum Floor Area Ratio of 3.0. 101 Santa Monica Boulevard shall have a maximum Floor Area Ratio of 4.0. 4th Street/Arizona Avenue shall have a maximum Floor Area Ratio of 3.5. Open Space Requirements. 50% of total parcel area comprised of the following: 25% located at Ground Floor and 25% without a regulated location. 9.10.090 VOTER APPROVAL OF SPECIFIC PLAN AMENDMENTS. [OPTIONS FOR PUBLIC DISCUSSION] OPTION A: Specific Plan Amendments for building height or FAR within 7 years after the effective date of the Plan shall require voter approval (may be changed with approval of Specific Plan Amendment by future Council) OPTION B: Specific Plan Amendments for building height or FAR within 7 years after the effective date of the Plan shall require voter approval as approved through ballot measure (will require placing ballot measure on special elections or next general election) OPTION C: Specific Plan Amendments for building height or FAR within 7 years after the effective date of the Plan shall require supermajority approval of the Council (requires Charter Amendment) Change No. 113, 115, 126 and 127 – Location of New Public Parking in the Downtown The Downtown has an inventory of over 10,000 existing publicly available parking spaces in a combination of public parking structures, private parking facilities, and on-street parking spaces. A considerable amount of time was devoted to the discussion of parking in the Downtown during the Planning Commission and City Council hearings. During the Planning Commission hearings of May 18, 2017 and May 31, 2017, the Planning Commission and City Staff discussed potential options to address changing parking needs and maximize the use and efficiency of public and private parking spaces within the Downtown. The City Council endorsed not allowing any new parking spaces in the Bayside Conservation District (with the exception of replacement public parking at the 4th/5th Arizona site) and providing parking entirely outside this sub-area. The intent of this change is to further enhance the community character and walkability within the Bayside Conservation District, which is considered the economic heart of the City. This is consistent with the DCP’s overall goal of “managing parking so that peripheral parking is incentivized for long-term parkers.” In conjunction with the other DCP policies to manage parking, including the policy to maximize the use of existing private parking inventory in the Downtown, this change would serve to minimize vehicle miles traveled into the Downtown and increase pedestrian trips in the Downtown. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change No. 113. Removed Action Action AM3.4B Locate public parking facilities at the periphery of the district to reduce trip distance and congestion in the Downtown core. Change No. 115. Removed Action AM3.5B Invest in maintenance of the existing public parking supply to extend its useful life. Change No. 126: Add New Action AM3.6G: Downtown Community Plan - City of Santa Monica 12 Final EIR Errata Memorandum Publicly provided parking shall be built entirely outside of the Bayside Conservation District, including building sites that are partially within the District. Replacement of public parking spaces may be included in the 4th/5th Arizona site before the existing parking is removed. Lead Agency: PCD Timeframe: Ongoing Change No. 127. Add New Action AM3.6H Pursue the reduction of 600 public parking spaces in the Bayside Conservation District by 2027. Lead Agency: PCD Timeframe: Long-Term Change No. 92 - 100% Employee Transportation Allowance Programs Implementation of the 100 percent transportation allowance programs would incentivize employees to utilize alternative modes of transportation including Big Blue Bus (BBB), Expo LRT, etc. The Draft DCP required all new Tier 2 and non-negotiated Tier 3 Projects to provide a transportation allowance of at least 75 and 100 percent respectively, of the cost of a regional transit pass (increase to 100 percent subsidy program on large sites). City Staff recommended a change requiring all new residential and non-residential development to implement a 100 percent transportation allowance program to further advance the LUCE’s goal of “No Net New P.M. Peak Hour Trips” and achieve the average vehicle ridership targets required by the City’s Transportation Demand Management (TDM) Ordinance. As such, this requirement is likely to further reduce the number of employee-related vehicle trips to/from the Downtown and associated traffic impacts as analyzed in the Final Program EIR. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change No. 92. Require transportation allowance for employees. Action AM2.1F: Require all new development to implement 100 percent employee transportation allowance programs Lead Agency: PCD Supporting Agencies: Metro, BBB, TMO Timeframe: Short Term Change No. 208 - Reduction in Height and FAR within the Wilshire Transition City Staff recommendations to further reduce the height and FAR standards within the Wilshire Transition (Wilshire Boulevard) sub-area would result in reduced scale and density for Tier 2 projects in this area relative to the Draft DCP. As the Final Program EIR analyzes a greater height and density allowance in this sub-area, aesthetic impacts are conservative. Furthermore, impacts that are dependent on the forecasted amount of future land use change (i.e., air quality, noise, traffic, public services, utilities, GHG, energy, etc.) would be less than analyzed within the Final Program EIR. This change would not result in any substantial new information (such as new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Change 206. Modify Table 4.2 to clarify WT FAR and Height Downtown Community Plan - City of Santa Monica 13 Final EIR Errata Memorandum WT FAR, Tier 2: 2.25 1.75 WT FAR, Tier 2 – with Housing 2.25 WT Height, Tier 2: 50’ 40’ WT Height, Tier 2 – with Housing 50’ Potential Change No. 2 - Height and FAR for Housing Project at 201 Wilshire Blvd. Additionally, there is a potential change to allow parcels in the Wilshire Transition District that (a) front on Wilshire Boulevard, (b) are not adjacent to a residentially-zoned parcel, and (c) are designated Downtown Core under the LUCE to have a Tier 2 maximum height of 60 feet and 2.75 FAR. This additional height and FAR would only occur for one parcel (201 Wilshire), and as such, would not have a measurable effect on the character of Wilshire Boulevard. Further, this would not have an effect on the overall total development within the Downtown analyzed in the Final Program EIR, as this increase would be offset by the Final Program EIR’s conservative analysis of the development standards for the Bayside Conservation District. As previously stated, the Final Program EIR analyzes the maximum FAR of 4.0 within the Bayside Conservation District; however, the maximum FAR for the District in the Draft DCP is 3.5. Accounting for the recommended increase in FAR of 0.25 for housing projects in the Neighborhood Village District, there would be still be 0.25 FAR to spare. In addition, the DCP’s cap of 3.2 million square feet would ensure that overall development would not increase over what was analyzed for Scenario B of the EIR. Therefore, the minor increase in height and FAR for 201 Wilshire Blvd. would be offset and would not result in an overall increase in development within the Downtown. The bonus of 10 feet in height would also not result in significant increase in aesthetic impacts since this slight increase in height would only occur for one parcel on Wilshire. Environmental impacts would be similar to those identified in the Final Program EIR. This change would not result in any substantial new information (such as a new significant impact or substantially more severe impact) that would affect the analysis of impacts in the EIR or would require recirculation of the EIR. Downtown Community Plan - City of Santa Monica 14 Final EIR Errata Memorandum 4.0 MINOR CHANGES TO THE FINAL EIR As shown in greater detail in Attachment B, there are 11 clarifications to the text of the EIR that have been deemed necessary subsequent to the issuance of the Final EIR. Each of these changes pertain to the maximum building height of 130 feet for Established Large Sites. These changes would not materially affect the analysis within the Final EIR as described. Further, these clarifications do not constitute a substantial change nor do they create new significant impacts that were not included in the Final EIR analysis. As such, these changes would not trigger a need for recirculation, consistent with Section 15088.5 of the CEQA Guidelines. 5.0 CONCLUSIONS None of the changes to the DCP that have been endorsed by Council since the issuance of the Final EIR would result in environmental effects that would substantially alter or change the analysis in the Program EIR or trigger the requirement for full or partial recirculation of the EIR as set forth in CEQA Guidelines Section 15088.5, as shown above. Incorporation of these recommended changes to the Draft DCP would not represent new significant information such that recirculation of the EIR or the preparation of additional environmental analysis is required. All potential environmental impacts of the DCP are adequately analyzed/acknowledged in the EIR in compliance with CEQA. Downtown Community Plan - City of Santa Monica 15 Final EIR Errata Memorandum Attachment A Downtown Community Plan Addenda Sheet Downtown Community Plan - City of Santa Monica 16 Final EIR Errata Memorandum Attachment B Changes to the Final EIR The following changes have been made to the Final Program Environmental Impact Report (EIR). These changes are not significant in that they do not alter the level of significance of any impact addressed within the Final Program EIR or create new impacts that were not included in the Final Program EIR analysis. To show the revisions included in this errata, any text to be deleted from the Final Program EIR is reflected in strikethough and new text to be added is shown in underline. (Single strikethrough and underline depict the changes to the Draft Program EIR that were originally incorporated into the Final Program EIR.) EIR-1: Global Revision FourThree Established Large Sites have been identified in the Downtown that are capable of providing significant community benefits. Subject to a defined process (e.g., DA), these Established Large Sites would have the opportunity to achieve a maximum height of 84 feet and greater FARs than their underlying sub- area FARs. Further, the proposed DCP could allow for development on these Established Large Sites up to 130 feet with a public approval process and additional environmental review pursuant to CEQA, EIR-2: Section 3.3, Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-31 through 3.3-32 East-west streets in the Downtown such as Santa Monica Boulevard or Wilshire Boulevard and Colorado Avenue provide channelized westward-looking views of Palisades Park, Pacific Ocean, and the Santa Monica Pier, particularly from locations west of 2nd or 3rd Streets. Additionally, on clear days, viewers standing along east-west streets may have limited occasional eastward-looking views of the distant San Gabriel Mountains, particularly from locations located east of 6th Street. These public views are typically framed by existing buildings up to seven stories with occasional glimpses across limited surface parking areas. While building setbacks vary along these view corridors, the effect of urban development along these streets focuses views along the existing street grid. Many of these potential views are also obstructed by existing taller buildings and street trees. Therefore, potential development buildings (with maximum permitted heights of between 50 and 84 feet, depending on location, under the proposed Downtown Specific Plan Community Plan would not diminish views of scenic vistas along east-west streets (with maximum permitted heights of between 50 and 84 feet, depending on location, and up to 130 feet at the Established Large Sites with a public approval process and additional CEQA analysis, as necessary). Adjacent to the I-10 freeway and near the future Downtown Station for the Expo LRT, maximum permitted buildings of up to 84 feet in the Transit Adjacent subarea would not significantly diminish scenic views. Colorado Avenue would continue to provide channelized views of the Santa Monica Pier. EIR-3: Section 3.3, Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-47 KVL-3: Entrance to Santa Monica Pier (Ocean Avenue and Colorado Avenue): The view from the entrance of the Santa Monica Pier at Colorado Avenue includes an oblique view looking north along Ocean Avenue, which includes an eclectic mix of varied scale buildings along the east side of Ocean Avenue, with taller buildings as a backdrop such as the 15-story Pacific Plaza building. Between 2nd Street and Ocean Avenue, the proposed Downtown Specific Plan Community Plan would establish a maximum permitted building height of up to 50 feet in height, which is a modest change from the varied skyline profile of existing structures along Ocean Avenue. The two Established Large Sites on Ocean Avenue (101 Santa Monica Boulevard site [Ocean Downtown Community Plan - City of Santa Monica 17 Final EIR Errata Memorandum Hotel] and 1133 Ocean Avenue/101 Wilshire [Miramar site]) would be permitted to a maximum height of 84 feet with the provision of significant community benefits set forth in a DA.10 These Established Large Sites could also be developed to a maximum height of 130 feet with a public approval process and additional CEQA-compliant analyses, as necessary. Building profile changes are anticipated to be limited to a few sites since many existing buildings in this area already exceed the maximum permitted building height of the proposed Downtown Specific Plan Community Plan and are unlikely to redevelop. Additionally, because of the width of Ocean Avenue and green space in Palisades Park, new buildings, including new developments at the two Established Large Sites within this sub-area, would cause very limited decreases in public views of open sky from this viewpoint. Further, the Downtown Specific PlanCommunity Plan proposes development standards and guidelines such as stepbacks and building modulation to reduce the appearance of building mass and height. Moreover, public realm improvements including the Downtown Specific PlanCommunity Plan’s proposed Ocean Avenue signature sidewalk project, as well as significant new landscaping as called for by the proposed Downtown Specific PlanCommunity Plan would improve the view from this location. Therefore, implementation of the proposed Downtown Specific PlanCommunity Plan would result in a modest change in the view from this location. EIR-4: Section 3.3, Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-48 through Page 3.3-49 KVL-4: Ocean Avenue and Wilshire Boulevard: The view from the Ocean Avenue at Wilshire Boulevard looking southeast includes an oblique view along Ocean Avenue of some of the tallest buildings in the City, such as the 17-story 1221 Ocean Avenue Building and Pacific Plaza building. The large scenic palms fronting these structures and open sky views along Ocean Avenue are subordinate to the views of the tall office buildings in the foreground. As described above for KVL-3, new buildings with a maximum permitted building height of up to 50 feet would represent a modest change from the existing varied skyline profile of Ocean Avenue. The two Established Large Sites on Ocean Avenue (101 Santa Monica Boulevard [Ocean Hotel] and 1133 Ocean Avenue/101 Wilshire [Miramar site]) would be permitted to a maximum height of 84 feet, with the provision of significant community benefits set forth in a DA. These Established Large Sites could also be developed to a maximum height of 130 feet with a public approval process and additional CEQA- compliant analyses, as necessary. Building profile changes are anticipated to be limited to a few sites since many existing buildings in this area of the Downtown already exceed the maximum permitted building height of the proposed Downtown Specific PlanCommunity Plan and are unlikely to redevelop. Additionally, because of the width of Ocean Avenue and green space in Palisades Park, new buildings, including new developments at the two Established Large Sites within this sub-area, would cause very limited decreases in views of open sky from this viewpoint. Further, the proposed Downtown Specific PlanCommunity Plan proposes development standards and guidelines such as stepbacks and building modulation to reduce the appearance of building mass and height. Moreover, public realm improvements including the Downtown Specific PlanCommunity Plan’s proposed Ocean Avenue signature sidewalk project, as well as significant new landscaping as called for by the proposed Downtown Specific PlanCommunity Plan would improve the view from this location. The proposed Downtown Specific PlanCommunity Plan would not affect westward views of the Pacific Ocean and would not create significant changes to the aesthetic character of this boulevard from this view location. Downtown Community Plan - City of Santa Monica 18 Final EIR Errata Memorandum EIR-5: Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-51 through 3.3-52 KVL-7: 3rd Street and Wilshire Boulevard: This view from 3rd Street looking west along Wilshire Boulevard includes views of existing tall office buildings, including the Searise Office Tower at 233 Wilshire Boulevard, as well as some one- to three-story retail/restaurant buildings in the foreground with the Palisades Park, 100 Wilshire office building, and the Miramar Hotel in the background. For the area west of Wilshire Boulevard, the proposed Downtown Specific PlanCommunity Plan would establish maximum building heights of 50 feet similar to the heights permitted in the adjacent R3 Wilmont residential district. The 1133 Ocean Avenue/101 Wilshire (Miramar) Established Large Site could have a maximum permitted height of 84 feet with the provision of significant community benefits set forth in a DA; however, with a public approval process and the preparation of additional CEQA-compliant analysis as necessary, this site could be developed to a height of 130 feet. Nevertheless, Tthis height would be slightly lower than the existing height of the 143-foot-tall Palisades Tower currently on the property.11 As such, building profile would not dramatically change under the proposed Downtown Specific PlanCommunity Plan. Further, the Plan proposes development standards and design guidelines such as stepbacks and building modulation to maximize access to light and air, and ensure a smooth transition to the residential uses to the north. Moreover, public realm improvements including the Downtown Specific PlanCommunity Plan’s proposed Ocean Avenue signature sidewalk project, as well as significant new landscaping as called for by the proposed Downtown Specific PlanCommunity Plan would improve the view from this location. Building setbacks would be increased and associated sidewalk widths would be widened to 15 feet and the public realm would be improved with new landscaping and pedestrian amenities under the proposed Downtown Specific PlanCommunity Plan. Channelized views of the Palisades Park as well as the statue as framed by the buildings would remain available down the Wilshire Boulevard corridor. In general, the enhancements to the public realm as well as the Downtown Specific PlanCommunity Plan’s proposed development standards and design guidelines would result in improvements to the view of Wilshire Boulevard. EIR-6: Section 3.3, Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-63 through 3.3-64 Potential shading effects of new buildings within Downtown would vary widely depending upon location, time of day and year, surrounding use (e.g., surface parking and height of existing structures), and building design (i.e., height, mass) of a particular proposed project. In the City of Santa Monica, shadow effects are magnified during the winter, when the sun’s lower position in the sky creates longer shadows. Winter is also when maximum solar access is more crucial to solar energy and passive heat production. As such, for the purposes of this EIR analysis, Winter Solstice is considered the most severe condition for potential shade, shadows, and solar access effects. For example, aAccording to the accepted shadow length multipliers for the City of Los Angeles, an 84-foot tall building would create morning and afternoon shadows that would reach approximately 254.5 feet in length during the Winter Solstice; the same building would create shadows that would reach approximately 183.1 feet at the same times during the Summer Solstice (City of Los Angeles 2006). Winter is also when maximum solar access is more crucial to solar energy and passive heat production. For the purposes of this EIR analysis, Winter Solstice is considered the most severe condition for potential shade, shadows, and solar access effects. Within the Downtown, shadows are cast in a clockwise direction from west/northwest to east/northeast from approximately 7:00 A.M. to 4:00 P.M. or later depending on the time of the year. As such, shadows would be greatest where new taller buildings would replace surface parking or lower scale buildings in proximity to shadow-sensitive uses that are located to the north and east. The size, massing, and scale of buildings would be increased under Scenario A than under Scenario B of the proposed Downtown Specific PlanCommunity Downtown Community Plan - City of Santa Monica 19 Final EIR Errata Memorandum Plan. Scenario B includes the incorporation of specific design standards, such as building frontage standards, which would reduce shadow effects and maximize access to light and air. For various sites in the Downtown, shade and shadow effects are expected to generally occur within one block to the north and east of a particular building throughout the day and would be more pronounced (i.e., longer) during the winter when the sun rises lower in the sky. Scenario B of the proposed Downtown Specific PlanCommunity Plan includes design standards such as building frontage standards, which would reduce the potential shade, shadows, and solar access effects and maximize access to light and air. Due to the application of design standards that address access to light and air, Scenario B would result in reduced shade, shadows, and solar access effects relative to Scenario A. While the standards included in the proposed Downtown Specific PlanCommunity Plan would reduce shadow effects and maximize access to light and air for the majority of new buildings, some new projects would cast increased shadows on shadow sensitive uses due to the compact urban environment of the Downtown and the prevalence of shadow sensitive uses interspersed throughout the Downtown District. This could include developments at the three Established Large Sites, which could reach maximum heights of up to 130 feet with a public approval process and additional CEQA-compliant analyses, as necessary. Because the precise location and design of these individual projects that could potentially occur is not definitively known at this time, it is conservatively concluded that nearby sensitive uses could experience some shading. However, the Downtown is classified as a transit priority area under the provisions of Senate Bill (SB) 7432 – as shown on the SCAG (2016) Transit Priority Area Map – with infill residential, mixed-use, residential, and employment center development; therefore, aesthetic and shade, shadows, and solar access impacts would be considered less than significant and analyses of these impacts of projects within the Downtown are not required pursuant to CEQA. EIR-7: Section 3.3., Aesthetics and Shade, Shadows, and Solar Access, Page 3.3-65 Land use changes anticipated to occur under the proposed Downtown Specific PlanCommunity Plan, including development of the three Established Large Sites up to 130 feet with a public approval process and additional CEQA-compliant analysis, would , in general, contribute to cumulative shading effects in the Downtown. Pending development proposals with building height exceeding the established maximum height restrictions within the DCP (e.g., the Miramar Hotel Development Agreement Application) would have an increased potential to result in shading impacts within the Downtown. As previously discussed, potential new multi-story buildings anticipated to occur in the Downtown under Scenarios A and B would result in new shadows that could shade some nearby sensitive uses. However, the LUCE adopted neighborhood protection goals to direct land use changes away from the City’s residential neighborhoods and toward transit- rich areas, such as the Downtown District, to protect the character of existing neighborhoods. As a result of focusing land use changes within the Downtown, the proposed Downtown Specific PlanCommunity Plan would limit or avoid shadow effects on the City’s established residential neighborhoods. Thus, while new shade and shadow effects would occur within the Downtown and other Expo LRT areas, overall shade, 2 “Transit priority area” is defined as an area within 0.5-mile of a major transit stop that is existing or planned. 4th Street includes a number of existing major transit stops (defined as the “intersection of two or more major bus routes with a frequency of service intervals of 15 minutes or less during the AM and PM peak commute periods”), at Wilshire, Arizona, Santa Monica, Broadway, and Colorado Avenue. In addition, the Downtown is served by the Expo LRT with a station at 4th Street and Colorado Avenue. Downtown Community Plan - City of Santa Monica 20 Final EIR Errata Memorandum shadows, and solar access would remain largely unchanged throughout most of the City. Further, since the Downtown is considered a transit priority with infill residential, mixed-use, residential, and employment center development under CEQA, aesthetic impacts including shade, shadows, and solar access effects, are not considered significant impacts on the environment. EIR-8: Section 3.12, Land Use and Planning, Table 3.12-6, Policy LU1.3, Page 3.12-40 Additionally, the DCP’s proposed maximum height of up to 84130 feet (with a public approval process and additional CEQA-compliant analysis) at the Miramar Established Large Site at the corner of Ocean and Wilshire would be less than the surrounding buildings in the immediate vicinity including the adjacent 13- story, 150-foot Santa Monica Bay Tower, which is located in the immediate vicinity at the intersection of California and Ocean Avenue as well as other high rise buildings located near Wilshire, including the 160 foot First Federal Bank Building at 401 Wilshire, the Huntley Hotel, and the 233 Wilshire Office Building. Additionally, the proposed maximum height of 84 feet at the Miramar Established Large Site would represent an improvement from the existing 105-foot Ocean Tower Building that currently exists at the site. Additionally, while the maximum building height could reach 130 feet (with a public approval process and additional CEQA- compliant analysis), the proposed Downtown Community Plan includes development standards and design guidelines that prescribe minimum stepbacks for new building abutting any residentially zoned parcel, which would transition the building envelope design down from its maximum height to abutting residential neighborhoods. These development standards, design guidelines, and stepback requirements are intended to address aesthetic and land use issues, including maintaining a clear transition between the Downtown and adjacent residential neighborhoods, prevent a uniform building height of 130 feet at the Established Large Sites, ensure compatibility with adjacent uses and avoid adverse aesthetic changes. EIR-9: Section 3.12, Land Use and Planning, Table 3.12-6, Policy D1.6, Page 3.12-50 At the Miramar Established Large Site, maximum height could be 84 130 feet (with a public approval process and additional CEQA-compliant analysis), (as compared to the 105-foot Ocean Tower that currently exists on that site). However, as described for Policy LU1.3 Tthe DCP’s development standards as well as design guidelines addressing building modulation and stepbacks would ensure that new land uses occurring on these boulevards provide a smooth transition to the residential neighborhoods to the east and north. Additionally, the proposed Downtown Community Plan includes development standards and design guidelines that prescribe minimum stepbacks for new building abutting any residentially zoned parcel, which would transition the building envelope design down to abutting residential neighborhoods. These development standards, design guidelines, and stepback requirements are intended to address aesthetic and land use issues, including maintaining a clear transition between the Downtown and adjacent residential neighborhoods and would ensure compatibility with adjacent uses and avoid adverse aesthetic changes. EIR-11: Section3.13, Neighborhood Effects, Page 3.13-12 As analyzed in Section 3.3, Aesthetics and Shade, Shadows, and Solar Access, land use changes anticipated to occur under the proposed Downtown Specific PlanCommunity Plan would potentially result in the construction of new mixed use buildings up to 50 to 84 feet in height depending on sub-area. Within the three Established Large Sites, new buildings could be constructed to a maximum of 130 feet in height with a public Downtown Community Plan - City of Santa Monica 21 Final EIR Errata Memorandum approval process and additional CEQA analysis, as necessary. Over the life of the plan through 2030, the relative composition of buildings within Downtown would change as new buildings replace older buildings and/or surface parking lots. Development standards and design guidelines in the proposed Downtown Specific PlanCommunity Plan would ensure that new buildings incorporate transparent and visually interesting active ground floors, public realm improvements including outdoor seating areas and installation of wider landscaped sidewalks, and new public open space. Additionally, the proposed Downtown Specific PlanCommunity Plan would address the transition of the Wilshire and Lincoln Boulevards to adjacent residential neighborhoods through development standards related to building height and Floor Area Ratios (FARs). Specifically, along the Mixed-Use Boulevard, building height would be limited to a maximum of 60 feet and along the Wilshire Boulevard Transition Area, building height would be limited to a maximum height of 50 feet. These development standards as well as design guidelines addressing building modulation and stepback would ensure that new land uses occurring on these boulevards provide a smooth transition to the residential neighborhoods to the east and north. Development at the three Established Large Sites could reach maximum heights of up to 130 feet with a public approval process and additional CEQA-compliant analyses, as necessary. However, the proposed Downtown Community Plan includes development standards and design guidelines that prescribe minimum stepbacks for new building abutting any residentially zoned parcel, which would transition the building envelope design down from its maximum height to abutting residential neighborhoods. These development standards, design guidelines, and stepback requirements are intended to address aesthetic and land use issues, including maintaining a clear transition between the Downtown and adjacent residential neighborhoods, and would prevent a uniform building height of 130 feet at the Established Large Sites ensuring compatibility with adjacent uses and avoiding adverse aesthetic changes. Therefore, the proposed Downtown Specific PlanCommunity Plan would not substantially degrade the existing visual character or quality of the surrounding residential neighborhoods. Additionally, in accordance to CEQA, Section 21099 (amended by Senate Bill [SB] 743), all aesthetic impacts of infill mixed- use projects located within transit priority areas shall not be considered significant, therefore, the aesthetic effects of the proposed Downtown Specific PlanCommunity Plan would be less than significant. EIR-10: Section, 3.16, Public Services, Page 3.16-16 through Page 3.16-17 The addition of new buildings with a maximum height of up to 50 feet or 84 feet in height (up to 130 feet in height at the Established Large Sites with a public approval process and additional CEQA-compliant analyses, as necessary) is also a factor in response times under the proposed Downtown Specific PlanCommunity Plan. For taller buildings, data has shown that emergency responders including firefighters may spend more time on a particular call since additional time will be spent navigating inside the building to respond to a particular incident (National Institute of Standards and Technology [NIST] 2013). Upon conclusion of the call, additional time will be required to exit the building and return to the vehicle before the firefighter actually becomes available to perform other duties. To maintain response times and response reliability in the existing service area for Fire Station No. 1 and Fire Station No. 2 while providing adequate service to new and existing development, it is anticipated that SMFD will reallocate staffing and other resources between fire stations (Clemo 2014). In addition to response times and staffing considerations, the construction of new taller buildings in the Downtown may necessitate new fire protection equipment. The SMFD currently has one ladder truck with a 100 foot ladder, which is capable of servicing buildings up to 84 feet tall from a distance of 50 feet away. With this equipment, Fire Station No. 1 is currently adequately equipped to respond to calls for service to tall buildings in the Downtown. However, over the life of the proposed Downtown Specific PlanCommunity Plan (i.e., through the year 2030), the addition of new buildings up to 84 feet in height in the Downtown, and up to 130 feet in height within the Established Large Sites with a public approval process and additional CEQA- Downtown Community Plan - City of Santa Monica 22 Final EIR Errata Memorandum compliant analysis, may necessitate either replacement of the existing ladder truck or purchase of an additional ladder truck or similar equipment (e.g., telesquirt fire apparatus) to fight fires in these taller buildings. The SMFD is funded through general fund revenues generated by property, sales, and transient occupancy taxes, all of which are expected to increase in proportion to new development in the Downtown, particularly retail commercial and hotel development. Such increased revenues would be available for the SMFD to expand resources as needed to meet changing demands. A 100-foot ladder truck would not be able to reach buildings of 130 feet in height; however, buildings of this height would be constructed to meet the National Fire Protection Association code, with ladders (i.e., stairs). In case of fire, firefighters would go up the stairs, plug their hoses into a standpipe located on each floor of the stairwell and fight the fire from the inside. It is also important to note that these standards, design guidelines, and stepback requirements would be in place to address aesthetic and land use issues and would prevent a uniform building height of 130 feet at the Established Large Sites, ensure compatibility with adjacent uses and avoid adverse aesthetic changes. In summary, the proposed Downtown Specific PlanCommunity Plan is not anticipated to necessitate the construction of a new or expanded fire protection facility that would result in physical environmental impacts. As previously discussed, the SMFD has already begun planning for construction of a new Fire Station No. 1 with additional space for expanded staff and equipment as well as improved amenities for the SMFD and the public. The environmental impacts of this new fire station have been fully analyzed in an adopted Mitigated Negative Declaration (State Clearinghouse No. 2012081025). Therefore, this impact would be less than significant. However, to further ensure that response times are not substantially affected, mitigation measure MM PS-1 is recommended. EIR-11: Section, 3.16, Public Services, Page 3.16-33 through 3.16-34 Based on the City’s generation factor of 0.08 school-aged students per household in the Downtown, future development allowed under the proposed Downtown Specific Community Plan would result in approximately 242 new school aged residents under Scenario A and 186 under Scenario B by 2030. Considering the 13 year life of the Plan (through 2030), the up to 242 new students generated by the Plan amounts to a nominal increase in enrollment, averaging up to 17 students per year. Depending on enrollment trends, the generation of up to 242 new school-aged residents in Downtown through 2030 may require increased classroom space, new teachers, and additional equipment at the three schools serving Downtown. Based on the City’s calculations, the proposed Downtown SpecificCommunity Plan could gradually increase the Santa Monica student population by 2.6 percent under Scenario A and 1.9 percent under Scenario B. This projected long-term increase in school-aged children in Downtown may be tempered or reduced by the types of new residential units anticipated to be constructed within the Downtown and the resultant demographics of Downtown populations. Based on recent 2010 Census data, approximately 70 percent of Downtown households are single occupant and 30 percent have two or more occupants with only 5.2 percent having children (refer to Section 3.15, Population, Housing, and Employment). This current data, which shows low numbers of school-aged children in Downtown, may be related to an emphasis on the residential unit types that are less conducive to accommodating families (e.g., studios and one- and two-bedroom multi- family units) than traditional single-family homes. However, even considering the emphasis on the residential unit type, development under the proposed Downtown Specific Community Plan is expected to incrementally increase the demand for classroom space in the SMMUSD, particularly at the three Downtown-serving schools. Downtown Community Plan - City of Santa Monica 23 Final EIR Errata Memorandum It is expected that new residential uses anticipated under the proposed Downtown SpecificCommunity Plan has the potential to contribute additional students to Roosevelt Elementary, Lincoln Middle, and Santa Monica High schools. Based on a SMMUSD school capacity study (http://www.erichallassociates.com/wp- content/uploads/2017/05/SMMUSD-EHA-Capacity-Study-October-1-2014.pdf), these three schools meet the State and District capacity standards. Furthermore, Measure BB funds were recently used specifically for improvements at Lincoln Middle School which provides education for middle school students in the Downtown. The Lincoln Middle School Measure BB project included the installation of four relocatable classrooms, modernization of the former library into four new classrooms, two science labs, and a shared prep room. Measure BB funds were also used at Santa Monica High School for the replacement of the Science and Technology building with a more modernized building housing fifteen science labs equipped with state-of-the-art equipment. Additionally, at Lincoln Middle School and Santa Monica High School, SMMUSD would continue to adjust to increased enrollments through increased classroom size, conversion of other space to classroom uses, increased staffing levels, and use of traveling teachers as needed within existing campus properties. At Roosevelt Elementary School where the school is currently at capacity and does not have room for expansion, the SUMMUSD would need to continue to adjust enrollment through similar means as available, or continue to overflow student to other neighboring schools. If there are no means for expanding Roosevelt Elementary school and the Downtown student population continues to increase, redrawing district individual school enrollment boundaries may become necessary. HR&A Advisors, Inc. | Los Angeles | New York | Dallas | Washington, D.C. | Raleigh MEMORANDUM To: Jing Yeo, City of Santa Monica From: HR&A Advisors, Inc. Date: July 18, 2017 Re: Supplemental Financial Feasibility Analysis of Downtown On- and Off-Site Affordable Housing Requirements This memorandum summarizes HR&A Advisors, Inc.’s (“HR&A”) supplemental analysis of the financial feasibility of varying levels of on-site affordable housing requirements as proposed in the Draft Downtown Community Plan (the “DCP”); recommended by the Santa Monica Housing Commission (the “Housing Commission”); and endorsed by the Santa Monica City Council (the “City Council”) at its meeting on July 11, 2017; and off-site affordable housing requirements also endorsed by the City Council. This analysis supplements the work HR&A recently prepared for the City of Santa Monica (the “City”) to estimate the upper limits of financially feasible increases to the City’s approved Transportation Impact, Parks and Recreation Impact, and Affordable Housing Commercial Linkage Fees that could be charged on incremental increases in floor area in Tier 2 and Tier 3 developments located within the DCP area, as well as related increases in on- and off- site affordable housing requirements. This analysis differs from HR&A’s previously prepared analyses in that it accounts for: ▪The on-site mix of affordable housing income levels (i.e. 20 percent Extremely Low, 20 percent of Very Low, 30 percent of Low, and 30 percent of Moderate Income) proposed in the DCP, whereas HR&A’s previous analyses examined only the financial feasibility impacts of affordable units at individual Extremely Low, Very Low and Low income levels; ▪An 84-foot/4.0 FAR variation of a 72-foot/4.0 FAR prototype to assess the City Council’s endorsement of 30 percent on-site affordable housing requirement; and ▪Increased off-site affordable housing requirements, per the City Council’s endorsement. HR&A Advisors, Inc. Downtown On- and Off-Site Affordable Housing Feasibility Analysis | 2 Methodology & Assumptions HR&A used the same modelling approach, basic cost and revenue assumptions, and financial feasibility metrics as in the preceding analytic work described above. The one exception is that the assumed hard construction cost for an 84-foot/4.0 FAR prototype was increased somewhat to account for the possibility that a second concrete podium level would be needed to achieve that height. The analysis also used the same two industry-standard metrics to determine financial feasibility: 1) Return on Total Development Cost (which equals net operating income divided by total development cost); and 2) Developer Profit Margin (capitalized project value less sale costs and total development cost). Based on HR&A’s experience with development projects in Santa Monica, a prototype was considered “financially feasible” if it met both minimum thresholds: ▪ Return on Cost equal to 0.75 percent above the applicable weighted average income capitalization rate (“cap rate”) for the prototype’s land uses; and ▪ Developer Profit Margin of 12.5 percent. HR&A prepared three separate analyses of the following on-site affordable housing requirements as percentage shares of total project units (copies of the model runs are included herewith as Attachments A, B and C, respectively): ▪ As proposed in the DCP o 15 percent for Tier 2, 50-foot buildings; o 20 percent for Tier 2, 60-foot buildings; and o 25 percent for Tier 3, 72-foot buildings. ▪ As recommended by the Housing Commission o 20 percent for 50-foot/2.50 FAR buildings; o 25 percent for 60-foot/2.75 FAR buildings; o 30 percent for 62-foot/3.50 FAR buildings; and o 35 percent for 72-foot/4.00 FAR buildings. ▪ As endorsed by the City Council o 20 percent for 50-foot buildings; o 25 percent for 60-foot buildings; and o 30 percent for 72- and 84-foot buildings. Inasmuch as the City Council’s endorsed percentage requirements are equal to or lower than those recommended by the Housing Commission, it stands to reason that if the scenarios are financially feasible under the Housing Commissions’ recommended requirements, then they will also be feasible under the City Council’s. HR&A therefore first tested the 50-, 60-, 62-, and 72-foot prototypes with the on-site affordable housing percentages recommended by the Housing Commission, and only an 84-foot/4.0 FAR prototype under the 30 percent requirement endorsed by the City Council, as that scenario had not been included in any of HR&A’s previous analyses. In addition to the above three on-site affordable housing analyses, HR&A also tested the financial feasibility of the City Council-endorsed off-site affordable housing requirements at five HR&A Advisors, Inc. Downtown On- and Off-Site Affordable Housing Feasibility Analysis | 3 percentage points exceeding its endorsed on-site requirements. Thus, the off-site affordable housing percentage shares of total market rate project units that HR&A tested were: ▪ 25 percent for 50-foot buildings; ▪ 30 percent for 60-foot buildings; and ▪ 35 percent for 72- and 84-foot buildings. Consistent with previous analysis of off-site affordable requirements, as presented in a memorandum dated April 10, 2017, HR&A multiplied the total development cost of an affordable unit1 by the number of off-site affordable housing units required, per the applicable percentages, and then added the resulting amount to the total development cost included in each 100 percent market-rate prototype’s pro forma analysis. Findings, Conclusions and Considerations On-Site Affordable Housing HR&A found that all prototypes produce investment returns that exceed the minimum feasibility thresholds for all three of the on-site affordable housing requirement scenarios, and therefore can support the shares of on-site affordable units proposed in the DCP, recommended by the Housing Commission, and by extension, endorsed by the City Council. Although HR&A found all the prototypes to be financially feasible as a technical matter under all the above conditions, many of the prototypes produced only “marginal” returns, particularly under the Housing Commission recommended and City Council-endorsed percentages. HR&A considered the Developer Profit Margin as marginal if it fell within 250 basis points (i.e., 2.5%) of the minimum threshold, and Return on Cost as marginal if it fell within 25 basis points (i.e., 0.25%) of the minimum threshold. This suggests that the affordable percentages cause these prototypes to achieve only the bare minimum level of financial feasibility, and thus adverse change in market conditions (e.g. decreases in market rents, or increases in the vacancy rate, construction loan interest rates or adverse changes in lending standards, increases in cap rates or construction costs) could result in a scenario whereby affordable housing requirements hamper financial feasibility, and potentially discourage housing development altogether. The results of HR&A’s on-site affordable housing analysis are summarized in Table 1 below. Green cells indicate that a prototype is financially feasible, and yellow cells indicate that a prototype is marginally feasible. 1 As discussed in the April 10, 2017 memorandum, this affordable unit cost was derived from the Affordable Housing Linkage Fee Nexus Study prepared in 2013 by RSG. HR&A inflated the $442,337 total development cost per unit used in the 2013 nexus study to 2017 dollars using an Engineering News Record construction cost index, resulting in an inflation-adjusted cost of $497,010 per unit. HR&A Advisors, Inc. Downtown On- and Off-Site Affordable Housing Feasibility Analysis | 4 Table 1: On-Site Affordable Housing Analysis Results Summary Developer Profit Margin (Threshold > 12.4%) Difference Between Return on Cost and Weighted Cap Rate (Threshold = > 0.74%) Bldg. Height (ft) DCP Housing Commission City Council DCP Housing Commission City Council 50 16.7% 14.65% 14.65% 0.90% 0.79% 0.79% 60 20.9% 16.6% 16.6% 1.16% 0.81% 0.81% 72 26.8% 18.8% 22.1% 1.60% 0.84% 1.13% 84 n/a n/a 19.9% n/a n/a 0.97% Off-Site Affordable Housing HR&A found that among the 50-, 60-, and 84-foot prototypes under the City Council-endorsed off- site affordable housing requirements, the 50- and 60-foot prototypes produce returns below the required feasibility thresholds, and only the 84-foot prototype produces returns above the required feasibility thresholds, albeit marginally. Therefore, HR&A found that only the 84-foot prototype is technically financially feasible with a requirement for off-site affordable housing of five percent above the City Council’s approved on-site requirement. However, the 50- and 60-foot prototypes are financially feasible under off-site requirements of two to three percentage points above the corresponding City Council-approved on-site requirement, although they produce only marginal returns. The results of HR&A’s off-site affordable housing analysis are summarized in Table 2 below. Red cells indicate that a prototype is not financially feasible, and yellow cells here again indicate that a prototype is marginally feasible. Table 2: Off-Site Affordable Housing Analysis Results Summary Bldg. Height (ft) Council- Endorsed Percentages Developer Profit Margin (Threshold > 12.4%) Difference Between Return on Cost and Weighted Cap Rate (Threshold = > 0.74%) 50 25% 11.5% 0.70% 60 30% 11.8% 0.71% 84 35% 13.2% 0.78% In conclusion, to the extent that City Council favors allowing an off-site option in the probably limited circumstances where a developer might find that practical, the Council may wish to reconsider the additional five percentage point increases above the on-site requirement, and make the off-site and on-site requirement the same percentages. If, on the other hand, the City Council wishes to discourage an off-site option, it may be more prudent to simply eliminate that option altogether. HR&A Advisors, Inc. Downtown On- and Off-Site Affordable Housing Feasibility Analysis | 5 HR&A’s pro forma models with detailed calculations are included in the following attachments to this memo. Attachment A: DCP Proposed On-Site Affordable Housing Requirements Attachment B: Housing Commission Recommended On-Site Affordable Housing Requirements Attachment C: City Council Approved On-Site Affordable Housing Requirements Attachment D: City Council Approved Off-Site Affordable Housing Requirements Attachment A: DCP Proposed On-Site Affordable Housing Requirements ATTACHMENT A DCP Proposed On-Site Affordable Housing Requirements Results Summary Program Summary (see Sheet A) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard LUCE Tier 323 Permit Requirement # Parcels 1 1 1 Bldg. Height (Feet)72 50 60 Stories (#)6 4 5 Site Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Floor Area Ratio (FAR) - Gross Area 4.68 2.64 3.25 Floor Area Ratio (FAR) - Net Area 4.00 2.22 2.75 Net Leasable Areas Residential (SF)55,000 28,250 36,250 Market Rate Units 51 29 36 Affordable Units 17 6 9 Extremely Low Income 4 3 4 Very Low Income 3 1 1 Low Income 5 1 2 Moderate Income 5 1 2 Total Units 68 35 45 Affordable Share of Total Units 1 25%17%20% Retail (SF)5,000 5,000 5,000 Office (SF)- - - Hotel (SF)- - - Development Costs (see Sheet B&C&D) Land Costs 7,500,000$ 7,500,000$ 7,500,000$ Hard Costs 14,738,932$ 9,011,775$ 10,740,737$ Soft Costs 3,845,211$ 2,137,367$ 2,720,199$ Net Parks/Recreation Fee 808,876$378,157$ 556,578$ Net Transportation Impact Fee 185,003$42,821$ 103,095$ Other City Costs (see Sheet E)690,554$ 435,965$ 512,943$ Other Soft Costs 3,154,657$ 1,701,402$ 2,207,257$ Financing Costs 2,880,659$2,020,351$2,287,754$ Total Development Cost 28,964,802$ 20,669,493$ 23,248,690$ per GSF $412 $522 $477 Net Operating Income (NOI) (see Sheet E) Residential-Market Rate Effective Gross Income 2,394,000$ 1,355,460$ 1,680,360$ Less: Operating Expenses (765,000)$(435,000)$ (540,000)$ Net Operating Income 1,629,000$ 920,460$ 1,140,360$ Residential-Affordable Effective Gross Income 81,264$ 17,112$ 32,076$ Less: Operating Expenses (75,000)$(15,000)$ (30,000)$ Net Operating Income 6,264$ 2,112$ 2,076$ Retail Effective Gross Income 342,000$ 342,000$ 342,000$ Less: Operating Expenses (10,260)$(10,260)$ (10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Office Effective Gross Income -$ -$ -$ Less: Operating Expenses -$-$ -$ Net Operating Income -$ -$ -$ Total Net Operating Income 1,881,696$ 1,212,168$ 1,416,612$ Project Component Values (see Sheet F) Residential-Market Rate NOI 1,629,000$ 920,460$ 1,140,360$ Cap Rate 4.80%4.80%4.80% Value 33,937,500$ 19,176,250$ 23,757,500$ Residential-Affordable NOI -$ -$ -$ Cap Rate 4.80%4.80%4.80% Value -$ -$ -$ Retail NOI 331,740$ 331,740$ 331,740$ Cap Rate 5.90%5.90%5.90% Value 5,622,712$ 5,622,712$ 5,622,712$ Office NOI -$ -$ -$ Cap Rate 5.70%5.70%5.70% Value -$ -$ -$ Total Project Value 39,560,212$ 24,798,962$ 29,380,212$ Developer Returns Developer Profit Total Project Value 39,560,212$ 24,798,962$ 29,380,212$ Less: Total Development Cost (28,964,802)$(20,669,493)$ (23,248,690)$ Profit 10,595,410$ 4,129,469$ 6,131,522$ % of Value 26.8%16.7%20.9% Profit No Fees 11,589,289$ 4,550,447$ 6,791,194$ Feasible? (i.e. = or > 12.5%)YES YES YES Return on Total Development Cost NOI 1,881,696$ 1,212,168$ 1,416,612$ Total Development Cost (28,964,802)$ (20,669,493)$ (23,248,690)$ Return on Cost 6.50%5.86%6.09% Return on Cost No Fees 6.73%5.99%6.27% Feasible? (i.e. = or > 0.75% + Weighted Cap)YES YES YES Weighted Cap Rate 4.89%4.97%4.93% 1 May not reflect exact percentages of affordable housing recommended in the Draft Downtown Community Plan due to rounding. Page 1 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/Summary 7/13/2017 ATTACHMENT A Sheet A Physical Parameters Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard LUCE Area LUCE Tier 3 2 3 Permit Requirement # Parcels 1 1 1 Bldg. Height (Feet)72 50 60 Stories (#)6 4 5 Land Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)1 70,229 39,587 48,751 Floor Area Ratio (FAR)-Gross Area1 4.7 2.6 3.3 Floor Area Ratio (FAR)-Net Area 4.0 2.2 2.75 Net Leasable Areas (SF)1 60,000 33,250 41,250 Residential2 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Office Hotel - # Hotel Rooms - - - Residential Unit Mix Office SF - - - Retail SF 5,000 5,000 5,000 Hotel SF - - - Residential SF-Target 55,000 28,250 36,250 # Market Rate Studio (SF)600 600 600 1-BR (SF)700 700 700 2-BR (SF)950 950 950 3-BR (SF)1,300 1,300 1,300 Studio (# units)7 4 5 1-BR (# units)26 15 19 2-BR (# units)10 6 7 3-BR (# units)8 4 5 Subtotal (# units) 51 29 36 Affordable -- Extremely Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)- 1 1 2-BR (# units)1 1 2 3-BR (# units)3 1 1 Subtotal (# units) 4 3 4 Affordable -- Very Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)1 1 1 2-BR (# units)2 - - 3-BR (# units)- - - Subtotal (# units) 3 1 1 Affordable -- Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)5 1 2 2-BR (# units)- - - 3-BR (# units)- - - Subtotal (# units) 5 1 2 Affordable -- Moderate3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)2 - 1 1-BR (# units)3 1 1 2-BR (# units)- - - 3-BR (# units)- - - Subtotal (# units) 5 1 2 Affordable -- TOTAL Studio (# units)2 - 1 1-BR (# units)9 4 5 2-BR (# units)3 1 2 3-BR (# units)3 1 1 Total 17 6 9 Total Units 68 35 45 Page 2 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/A-Program 7/13/2017 Sheet A Physical Parameters (con'd) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Parking Residential Market Rate (wtd. avg. per unit)4 1.11 1.10 1.10 Affordable (avg. per unit)1.12 1.17 1.11 Subtotal Spaces (#)67 36 45 Subtotal Plus Guest Spaces (#)74 40 50 Retail 6 1 2 Spaces/500 SF 1 1 1 Subtotal Spaces (#)10 10 10 Office Spaces/500 SF 1.0 1.0 1.0 Subtotal Spaces (#)- - - Hotel Spaces/Guest Room 0.75 0.75 0.75 Subtotal Spaces (#)- - - Total Spaces Number 84 50 60 Gross Area/Space (SF)-Surface 300 300 300 Gross Area/Space (SF)-Subt.350 350 350 Total Parking Area (SF)29,400 17,500 21,000 # Surface - - - # Subt. Levels Total 2.0 1.2 1.4 Spaces/Levels 1-2 84 50 60 Spaces/Levels 3-5 - - - Construction Period (months)18 18 18 Gross Floor Area by Story Site Area 15,000 15,000 15,000 Total Gross Bldg. Area 70,229 39,587 48,751 Total Floors 6 4 5 Floor 1 5,727 5,727 5,727 Floor 2 14,318 11,455 11,455 Floor 3 14,318 10,882 10,882 Floor 4 12,600 10,023 10,023 Floor 5 10,882 - 9,164 Floor 6 10,882 - - Floor 7 - - - Total Gross Floor Area 70,229 39,587 48,751 FAR-Gross Area 4.68 2.64 3.25 Net Floor Area by Story Floor 1 5,000 5,000 5,000 Floor 2 12,500 10,000 10,000 Floor 3 12,500 9,500 9,500 Floor 4 11,000 8,750 8,750 Floor 5 9,500 - 8,000 Floor 6 9,500 - - Floor 7 - -- Total 60,000 33,250 41,250 Net/Gross Floor Area Overall 85.4%84.0%84.6% 2 Based on unit mix and net leasable floor area by unit type, per City Planning Staff and HR&A. 4 Assumes 0.5 spaces/studio; 1.0 spaces/1-BR unit; and 1.5 spaces/2- & 3-BR units. 1 Per guidance provided by City Planning staff and adjusted for Tier 2 scenarios by HR&A based on efficiency factors for Tier 3 scenarios 3 Mix of affordable income levels is based on the Draft Downtown Community Plan, with any fractional units allocated to Extremely Low Income households. Page 3 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/A-Program 7/13/2017 ATTACHMENT A Sheet B Development Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Net Leasable Areas (SF) Residential 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Office - - - Hotel - - - Hotel Rooms - - - Subterranean Parking (spaces)84 50 60 1-2 Levels 84 50 60 3-5 Levels - - - Land Cost 7,500,000$ 7,500,000$ 7,500,000$ Hard Cost1 Building Construction/GSF Varies $149 $157 $154 Demo/On-Site Improvements $10 per Land Area 150,000$ 150,000$ 150,000$ Off-Site Improvements $100,000 Allowance 100,000$ 100,000$ 100,000$ Building Core & Shell Varies 10,464,050$ 6,215,168$ 7,507,632$ Retail Tenant Improvements $70 x Net Leasable SF 350,000$ 350,000$ 350,000$ Office Tenant Improvements $60 x Net Leasable SF -$ -$ -$ Hotel FF&E $25,000 x Rooms -$ -$ -$ Subterranean Parking Surface $5,000 per Space -$ -$ -$ 1-2 Levels $37,000 per Space 3,108,000$ 1,850,000$ 2,220,000$ 3-4 Levels $42,000 per Space -$ -$ -$ Contingency 4% x Subtotal Hard Costs 566,882$ 346,607$413,105$ Subtotal Hard Costs 14,738,932$ 9,011,775$ 10,740,737$ Soft Costs2 Net Parks/Recreation Fee See Sheet D 808,876$ 378,157$ 556,578$ Net TIF Fee See Sheet D 185,003$ 42,821$ 103,095$ Other City Permits & Fees See Sheet C 690,554$ 435,965$ 512,943$ A&E/Other Professionals 6% x Hard Costs 884,336$ 540,707$ 644,444$ Marketing/Leasing Commissions Residential $7.50 x Net Leasable SF 412,500$ 211,875$ 271,875$ Retail/Office $3.00 x Net Leasable SF 15,000$ 15,000$ 15,000$ Legal & Accounting 1%x Hard Costs 147,389$ 90,118$ 107,407$ Taxes & Insurance 1% x Hard Costs 147,389$ 90,118$ 107,407$ Pre-Opening Expenses $4.00 x Net Leasable SF -$ -$ -$ Developer Fee 3%x Hard Costs 442,168$ 270,353$ 322,222$ Contingency 3% x Subtotal Soft Costs 111,996$ 62,253$79,229$ Subtotal Soft Costs 3,845,211$ 2,137,367$ 2,720,199$ Subtotal Land + Hard + Softs Costs 26,084,143$ 18,649,142$ 20,960,936$ Financing Costs3 Loan Term (months)18 Average Loan Balance 65.00% Construction Loan Interest Rate 6.50% Construction Loan Interest 1,653,083$ 1,181,889$ 1,328,399$ Construction Loan Fees 3.00%782,524$ 559,474$ 628,828$ Capitalized Project Value per Sheet E Permanent Loan Percent x Value 75.00% Permanent Loan Fees 1.50%445,052$ 278,988$330,527$ Subtotal Financing Costs 2,880,659$ 2,020,351$ 2,287,754$ Total Development Cost Land +Hard + Soft + Financing 28,964,802$ 20,669,493$ 23,248,690$ per GSF 412.44$ 522.13$ 476.89$ 2 Per HR&A's experience with similar projects. 3 Per RealtyRates mortgage rates and terms survey for Q1 2016. Assumptions 1 83% x calculated values, per Marshall & Swift Commercial Cost Estimator, May 2016; HR&A Advisors, Inc., to account for certain hard costs and soft costs accounted for separately. Page 4 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/B-Dev Costs 7/13/2017 ATTACHMENT A Sheet C Proposed New Fees, Existing City Fees & Permit Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studios 7 4 5 1-BR 26 15 19 2-BR 10 6 7 3-BR 8 4 5 Affordable Studios 2 - 1 1-BR 9 4 5 2-BR 3 1 2 3-BR 3 1 1 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - New Parks Fee1 808,876$ 378,157$ 556,578$ New TIF Fee1 185,003$ 42,821$ 103,095$ Planning Permits2 Development Review $17,738 per project -$ -$ -$ Development Agreement $25,000 per project -$ -$ -$ Architectural Review Board $3,588 per project 3,588$ 3,588$ 3,588$ CEQA Categorical Exemption $15,648 per project 15,648$ 15,648$ 15,648$ Subtotal 19,236$ 19,236$19,236$ Other Requirements3 Arts Fee New Residential/Commercial 1.00% x $200/SF 140,457$ 79,174$ 97,502$ Tenant Improvements 1.00%x $50/SF 2,500$ 2,500$ 2,500$ Child Care Fee Market Rate Residential $142.40 per unit 7,262$ 4,130$ 5,126$ Retail $4.84 x leasable area 24,200$ 24,200$ 24,200$ Office $6.76 x leasable area -$ -$ -$ Hotel $3.39 x leasable area -$ -$ -$ School Facilities Fee Residential $3.48 x leasable area 191,400$ 98,310$ 126,150$ Commercial $0.56 x leasable area 2,800$ 2,800$ 2,800$ Subtotal 368,619$ 211,114$258,278$ Bldg./Construction Permits2 Plan Check Residential 4+ stories $533.14 $0.98 x leasable area 54,246$ 28,122$ 35,935$ Commercial <10K SF $511.91 $1.36 x leasable area 7,312$ 7,312$ 7,312$ Commercial >10K SF/4 stories $0.41 x leasable area -$ -$ -$ Mechanical $778 per project $778 $778 $778 Electrical $778 per project $778 $778 $778 Plumbing $778 per project $778 $778 $778 Building Permits/Inspections Multi-family 4+ Stories 130.37 $1.10 x leasable area 60,377$ 31,075$ 39,839$ Commercial 1-Story 124.75 $1.28 x leasable area 6,507$ 6,507$ 6,507$ Commercial 4+ stories $0.80 x leasable area -$ -$ -$ Tenant Improvements <10K SF 132.54 $0.38 x leasable area 2,057$ 2,057$ 2,057$ Tenant Improvements >10K SF $0.30 x leasable area -$ -$ -$ Geotechnical Reports $2,655 per project 2,655$ 2,655$ 2,655$ Subtotal 135,489$ 80,063$96,640$ Utility Fees2 Water Meter3 $4,291 3/4" meter per project 4,291$ 4,291$ 4,291$ Fireline Meter3 $26,816 4" meter per project 26,816$ 26,816$ 26,816$ Wastewater Capital Facilities Studio/1-BR Units $1,168 per unit 51,392$ 26,864$ 35,040$ 2-BR Units $1,557 per unit 20,241$ 10,899$ 14,013$ 3-BR Units $1,947 per unit 15,576$ 7,788$ 9,735$ Commercial $779 per 1,000 leasable SF 3,895$ 3,895$ 3,895$ Water Neutrality In-Lieu Fee $45,000 per project 45,000$ 45,000$ 45,000$ Subtotal 167,210$ 125,552$138,789$ Total City Fees 1,684,433$ 856,943$1,172,615$ per GSF $23.99 $21.65 $24.05 1 Based on current fee rates; see Sheet D for Tier sensitivity calculation details. 2 Per FY 2015-16 City fee schedules. 3 Includes meter and capital facilities charges. Assumptions Page 5 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/C-City Cost Detail 7/13/2017 ATTACHMENT A Sheet D Proposed Parks/Recreation, and Transportation Impact Fee Increases Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 68 35 45 Market Rate Studios 7 4 5 1-BR 26 15 19 2-BR 10 6 7 3-BR 8 4 5 Affordable Studios 2 - 1 1-BR 9 4 5 2-BR 3 1 2 3-BR 3 1 1 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - Parks/Recreation Fee 90% of Nexus Study Maximum Tier 1 Tier 2 Tier 3 Market Rate Housing 100% 352% 352% 0-1 BRs 100% 352% 352% $4,231.93 per unit 401,526$ 176,387$ 293,188$ 2+ BRs 100% 352% 352% $6,816.30 per unit 411,160$ 205,580$ 267,200$ Affordable Housing 100% 352% 352% $0 per unit -$ -$ -$ Retail 100% 352% 352% $1.52 x leasable area 7,619$ 7,619$ 7,619$ Office 100% 352% 352% $2.36 x leasable area -$ -$ -$ Hotel 100% 352% 352% $3.18 x leasable area -$-$-$ Subtotal Fee 820,305$ 389,586$ 568,007$ Less: Fee on Existing SF Retail 100% 352% 352% $1.52 x leasable area (11,429)$ (11,429)$ (11,429)$ Office 100% 352% 352% $2.36 x leasable area -$-$-$ Net Fee 808,876$ 378,157$ 556,578$ TIF Fees 90% of Nexus Study Maximum 100% 139% 139% Market Rate-Area 1 100% 139% 139% $2,773.75 per unit 241,011$ 98,829$ 159,103$ Market Rate-Area 2 100% 139% 139% $3,520.52 per unit -$ -$ -$ Affordable 100% 139% 139% $0.00 per unit -$ -$ -$ Retail-Area 1 100% 139% 139% $22.40 x leasable area 112,017$ 112,017$ 112,017$ Retail-Area 2 100% 139% 139% $32.11 x leasable area -$ -$ -$ Office-Area 1 100% 139% 139% $10.35 x leasable area -$ -$ -$ Office-Area 2 100% 139% 139% $11.52 x leasable area -$ -$ -$ Hotel-Area 1 & 2 100% 139% 139% $3.84 x leasable area -$-$-$ Subtotal 353,028$ 210,846$ 271,120$ Reduction for Existing Retail Allowance (168,025)$ (168,025)$(168,025)$ NET TIF Fee 185,003$ 42,821$ 103,095$ Combined New Fees 993,879$ 420,978$ 659,673$ Assumptions Assumptions Page 6 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/D-Fee Sensitivities 7/13/2017 ATTACHMENT A Sheet E Net Operating Income Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 56 30 38 Market Rate 51 29 36 Studio 7 4 5 1-BR 26 15 19 2-BR 10 6 7 3-BR 8 4 5 Affordable (EL)4 3 4 Studio - - - 1-BR - 1 1 2-BR 1 1 2 3-BR 3 1 1 Affordable (VL)3 1 1 Studio - - - 1-BR 1 1 1 2-BR 2 - - 3-BR - - - Affordable (L)5 1 2 Studio - - - 1-BR 5 1 2 2-BR - - - 3-BR - - - Affordable (M)5 1 2 Studio 2 - 1 1-BR 3 1 1 2-BR - - - 3-BR - - - Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - Hotel (Net Leasable SF)- - - Parking Spaces 84 50 60 Residential 67 36 45 Retail 10 10 10 Office - - - Hotel 000 For-Rent Residential- Market Rate1 Studio Rent/Unit/Month Varies $3,300 $3,300 $3,300 1-BR Rent/Unit/Month Varies $3,800 $3,800 $3,800 2-BR Rent/Unit/Month Varies $4,300 $4,300 $4,300 3-BR Rent/Unit/Month Varies $5,000 $5,000 $5,000 Units Income/Year 2,458,800$ 1,392,000$ 1,725,600$ Other Income 100.00 $ x Unit 61,200$34,800$43,200$ Gross Income 2,520,000$ 1,426,800$ 1,768,800$ Less: Vacancy & Collection Loss 5.0% x Gross Income (126,000)$(71,340)$(88,440)$ Effective Gross Income (EGI)2,394,000$ 1,355,460$ 1,680,360$ Less: Operating Expenses (incl. reserve) 1 15,000 $ x Unit (765,000)$ (435,000)$ (540,000)$ Net Operating Income 1,629,000$ 920,460$ 1,140,360$ For-Rent Residential - Affordable (EL) Studio Rent/Unit/Month 340$ 340$ 340$ 1-BR Rent/Unit/Month 389$ 389$ 389$ 2-BR Rent/Unit/Month 437$ 437$ 437$ 3-BR Rent/Unit/Month 486$ 486$ 486$ Units Income/Year 22,740$ 15,744$ 20,988$ Other Income 0.0% x Units Income -$-$-$ Gross Income 22,740$ 15,744$ 20,988$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)22,740$ 15,744$ 20,988$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (60,000)$ (45,000)$ (60,000)$ Net Operating Income (37,260)$ (29,256)$ (39,012)$ For-Rent Residential - Affordable (VL) Studio Rent/Unit/Month 567$ 567$ 567$ 1-BR Rent/Unit/Month 648$ 648$ 648$ 2-BR Rent/Unit/Month 729$ 729$ 729$ 3-BR Rent/Unit/Month 810$ 810$ 810$ Units Income/Year 25,272$ 7,776$ 7,776$ Other Income 0.0% x Units Income -$-$-$ Gross Income 25,272$ 7,776$ 7,776$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)25,272$ 7,776$ 7,776$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (45,000)$ (15,000)$ (15,000)$ Net Operating Income (19,728)$ (7,224)$ (7,224)$ For-Rent Residential - Affordable (L) Studio Rent/Unit/Month 680$ 680$ 680$ 1-BR Rent/Unit/Month 778$ 778$ 778$ 2-BR Rent/Unit/Month 875$ 875$ 875$ 3-BR Rent/Unit/Month 972$ 972$ 972$ Units Income/Year 46,680$ 9,336$ 18,672$ Other Income 0.0% x Units Income -$-$-$ Gross Income 46,680$ 9,336$ 18,672$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)46,680$ 9,336$ 18,672$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (75,000)$ (15,000)$ (30,000)$ Net Operating Income (28,320)$ (5,664)$ (11,328)$ For-Rent Residential - Affordable (M) Studio Rent/Unit/Month 1,247$ 1,247$ 1,247$ 1-BR Rent/Unit/Month 1,426$ 1,426$ 1,426$ 2-BR Rent/Unit/Month 1,604$ 1,604$ 1,604$ 3-BR Rent/Unit/Month 1,782$ 1,782$ 1,782$ Units Income/Year 81,264$ 17,112$ 32,076$ Other Income 0.0% x Units Income -$-$-$ Gross Income 81,264$ 17,112$ 32,076$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)81,264$ 17,112$ 32,076$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (75,000)$ (15,000)$ (30,000)$ Net Operating Income 6,264$ 2,112$ 2,076$ Retail2 Average Rent/SF/Month (NNN)Varies 6.00$ 6.00$ 6.00$ Gross Rental Income/Year 360,000$ 360,000$ 360,000$ Less: Vacancy & Collection Loss 5.0% x Gross Income (18,000)$(18,000)$(18,000)$ Effective Gross Income (EGI)342,000$ 342,000$ 342,000$ Less: Unreimbursed Operating Expenses 3.0%x EGI (10,260)$ (10,260)$ (10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Office2 Average Rent/SF/Month (MG)4.55$ 4.55$ 4.55$ Gross Rental Income/Year -$ -$ -$ Parking Income4 $2,223 Wtd. Avg./Space/Yr.-$ -$ -$ Less: Vacancy & Collection Loss 5.0% x Gross Income -$-$-$ Effective Gross Income (EGI)-$ -$ -$ Less: Operating Expenses 15.0% x EGI -$ -$ -$ Less: Parking Expense 50.0% x Parking Income -$-$-$ Net Operating Income -$ -$ -$ Total Net Operating Income 1,881,696$ 1,212,168$ 1,416,612$ 1 Per HR&A's experience with similar projects. 2 Per HR&A review of third-party market data (i.e. CoStar Group data for similar, recently constructed buildings in the Downtown Community Plan area). 3 Per City's 2015 rent schedule. 4 Assumes $200/month reserved (10% of supply); $165/month unreserved (85%); and $500/month daily use (5%). Assumptions Page 7 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/E-Net Ops Income 7/13/2017 ATTACHMENT A Sheet F Returns Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studio 7 4 5 1-BR 26 15 19 2-BR 10 6 7 3-BR 8 4 5 Affordable Studio 2 - 1 1-BR 9 4 5 2-BR 3 1 2 3-BR 3 1 1 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - Project Value Residential-Market Rate Net Operating Income From App, E 1,629,000$ 920,460$ 1,140,360$ Cap Rate1 4.80% Value NOI/Cap Rate 33,937,500$ 19,176,250$ 23,757,500$ Residential-Affordable Net Operating Income From App, E -$ -$ -$ Cap Rate1 4.80% Value NOI/Cap Rate -$ -$ -$ Retail Net Operating Income From App, E 331,740$ 331,740$ 331,740$ Cap Rate1 5.90% Value NOI/Cap Rate 5,622,712$ 5,622,712$ 5,622,712$ Office Net Operating Income From App, E -$ -$ -$ Cap Rate1 5.70% Value NOI/Cap Rate -$ -$ -$ Total Project Value 39,560,212$ 24,798,962$ 29,380,212$ Developer Returns Developer Profit Total Project Value From above 39,560,212$ 24,798,962$ 29,380,212$ Less: Total Development Cost From Sheet B (28,964,802)$ (20,669,493)$ (23,248,690)$ Profit 10,595,410$ 4,129,469$ 6,131,522$ % of Value 26.8%16.7%20.9% Return on Total Development Cost NOI From Sheet E 1,881,696$ 1,212,168$ 1,416,612$ Total Development Cost From Sheet B (28,964,802)$ (20,669,493)$ (23,248,690)$ Return on Cost 6.50%5.86%6.09% 1 Based on Real Estate Research Corporation cap rate data for Q1 2016. Assumptions Page 8 of 8 HR&A Advisors, Inc. DCP On-Site Affordable Housing Percentages/F-Returns 7/13/2017 Attachment B: Housing Commission Recommended On-Site Affordable Housing Requirements ATTACHMENT B Housing Commission Recommended On-Site Affordable Housing Requirements Results Summary Program Summary (see Sheet A) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard LUCE Tier 3 2 3 Permit Requirement # Parcels 1 1 1 Bldg. Height (Feet)72 50 60 Stories (#)6 4 5 Site Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Floor Area Ratio (FAR) - Gross Area 4.68 2.64 3.25 Floor Area Ratio (FAR) - Net Area 4.00 2.22 2.75 Net Leasable Areas Residential (SF)55,000 28,250 36,250 Market Rate Units 44 28 33 Affordable Units 24 7 12 Extremely Low Income 6 2 4 Very Low Income 4 1 2 Low Income 7 2 3 Moderate Income 7 2 3 Total Units 68 35 45 Affordable Share of Total Units 1 35%20%27% Retail (SF)5,000 5,000 5,000 Office (SF)- - - Hotel (SF)- - - Development Costs (see Sheet B&C&D) Land Costs 7,500,000$ 7,500,000$ 7,500,000$ Hard Costs 14,469,572$ 9,011,775$ 10,663,777$ Soft Costs 3,658,120$ 2,117,905$ 2,651,893$ Net Parks/Recreation Fee 686,406$363,260$ 511,888$ Net Affordable Housing Linkage Fee -$-$-$ Net Transportation Impact Fee 158,014$38,965$91,527$ Other City Costs (see Sheet E)688,000$ 435,822$ 511,348$ Other Soft Costs 2,970,120$ 1,682,083$ 2,140,546$ Financing Costs 2,786,499$2,011,630$2,254,812$ Total Development Cost 28,414,191$ 20,641,310$ 23,070,482$ per GSF $405 $521 $473 Net Operating Income (NOI) (see Sheet E) Residential-Market Rate Effective Gross Income 2,069,100$ 1,311,000$ 1,552,680$ Less: Operating Expenses (660,000)$(420,000)$(495,000)$ Net Operating Income 1,409,100$ 891,000$ 1,057,680$ Residential-Affordable Effective Gross Income 113,340$ 32,076$ 49,188$ Less: Operating Expenses (105,000)$(30,000)$(45,000)$ Net Operating Income 8,340$ 2,076$ 4,188$ Retail Effective Gross Income 342,000$ 342,000$ 342,000$ Less: Operating Expenses (10,260)$(10,260)$(10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Office Effective Gross Income -$ -$ -$ Less: Operating Expenses -$-$-$ Net Operating Income -$ -$ -$ Total Net Operating Income 1,627,368$ 1,187,340$ 1,324,320$ Project Component Values (see Sheet F) Residential-Market Rate NOI 1,409,100$ 891,000$ 1,057,680$ Cap Rate 4.80%4.80%4.80% Value 29,356,250$ 18,562,500$ 22,035,000$ Residential-Affordable NOI -$ -$ -$ Cap Rate 4.80%4.80%4.80% Value -$ -$ -$ Retail NOI 331,740$ 331,740$ 331,740$ Cap Rate 5.90%5.90%5.90% Value 5,622,712$ 5,622,712$ 5,622,712$ Office NOI -$ -$ -$ Cap Rate 5.70%5.70%5.70% Value -$ -$ -$ Total Project Value 34,978,962$ 24,185,212$ 27,657,712$ Developer Returns Developer Profit Total Project Value 34,978,962$ 24,185,212$ 27,657,712$ Less: Total Development Cost (28,414,191)$(20,641,310)$ (23,070,482)$ Profit 6,564,771$ 3,543,902$ 4,587,230$ % of Value 18.8%14.7%16.6% Profit No Fees 7,409,191$ 3,946,127$ 5,190,644$ Feasible? (i.e. = or > 12.5%)YES YES YES Return on Total Development Cost NOI 1,627,368$ 1,187,340$ 1,324,320$ Total Development Cost (28,414,191)$ (20,641,310)$ (23,070,482)$ Return on Cost 5.73%5.75%5.74% Return on Cost No Fees 5.90%5.87%5.89% Feasible? (i.e. = or > 0.75% + Weighted Cap)YES YES YES Weighted Cap Rate 4.89%4.97%4.93% 1 May not reflect exact percentages of affordable housing Recommended by the Housing Commission due to rounding. Page 1 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/Summary 7/13/2017 ATTACHMENT B Sheet A Physical Parameters Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard LUCE Area LUCE Tier 3 2 3 Permit Requirement # Parcels 1 1 1 Bldg. Height (Feet)72 50 60 Stories (#)6 4 5 Land Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)1 70,229 39,587 48,751 Floor Area Ratio (FAR)-Gross Area1 4.7 2.6 3.3 Floor Area Ratio (FAR)-Net Area 4.0 2.2 2.75 Net Leasable Areas (SF)1 60,000 33,250 41,250 Residential2 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Office Hotel - # Hotel Rooms - - - Residential Unit Mix Office SF - - - Retail SF 5,000 5,000 5,000 Hotel SF - - - Residential SF-Target 55,000 28,250 36,250 # Market Rate Studio (SF)600 600 600 1-BR (SF)700 700 700 2-BR (SF)950 950 950 3-BR (SF)1,300 1,300 1,300 Studio (# units)6 4 4 1-BR (# units)22 14 17 2-BR (# units)9 6 7 3-BR (# units)7 4 5 Subtotal (# units) 44 28 33 Affordable -- Extremely Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)- - - 2-BR (# units)2 1 2 3-BR (# units)4 1 2 Subtotal (# units) 6 2 4 Affordable -- Very Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)1 1 2 2-BR (# units)3 - - 3-BR (# units)- - - Subtotal (# units) 4 1 2 Affordable -- Low3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)- - - 1-BR (# units)7 2 3 2-BR (# units)- - - 3-BR (# units)- - - Subtotal (# units) 7 2 3 Affordable -- Moderate3 Studio (SF)500 500 500 1-BR (SF)600 600 600 2-BR (SF)850 850 850 3-BR (SF)1,080 1,080 1,080 Studio (# units)3 1 1 1-BR (# units)4 1 2 2-BR (# units)- - - 3-BR (# units)- - - Subtotal (# units) 7 2 3 Affordable -- TOTAL Studio (# units)3 1 1 1-BR (# units)12 4 7 2-BR (# units)5 1 2 3-BR (# units)4 1 2 Total 24 7 12 Total Units 68 35 45 Page 2 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/A-Program 7/13/2017 Sheet A Physical Parameters (con'd) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Parking Residential Market Rate (wtd. avg. per unit)4 1.11 1.11 1.12 Affordable (avg. per unit)1.13 1.07 1.13 Subtotal Spaces (#)61 36 44 Subtotal Plus Guest Spaces (#)67 40 48 Retail 8 2 3 Spaces/500 SF 1 1 1 Subtotal Spaces (#)10 10 10 Office Spaces/500 SF 1.0 1.0 1.0 Subtotal Spaces (#)- - - Hotel Spaces/Guest Room 0.75 0.75 0.75 Subtotal Spaces (#)- - - Total Spaces Number 77 50 58 Gross Area/Space (SF)-Surface 300 300 300 Gross Area/Space (SF)-Subt.350 350 350 Total Parking Area (SF)26,950 17,500 20,300 # Surface - - - # Subt. Levels Total 1.8 1.2 1.4 Spaces/Levels 1-2 77 50 58 Spaces/Levels 3-5 - - - Construction Period (months)18 18 18 Gross Floor Area by Story Site Area 15,000 15,000 15,000 Total Gross Bldg. Area 70,229 39,587 48,751 Total Floors 6 4 5 Floor 1 5,727 5,727 5,727 Floor 2 14,318 11,455 11,455 Floor 3 14,318 10,882 10,882 Floor 4 12,600 10,023 10,023 Floor 5 10,882 - 9,164 Floor 6 10,882 - - Floor 7 - - - Total Gross Floor Area 70,229 39,587 48,751 FAR-Gross Area 4.68 2.64 3.25 Net Floor Area by Story Floor 1 5,000 5,000 5,000 Floor 2 12,500 10,000 10,000 Floor 3 12,500 9,500 9,500 Floor 4 11,000 8,750 8,750 Floor 5 9,500 - 8,000 Floor 6 9,500 - - Floor 7 - -- Total 60,000 33,250 41,250 Net/Gross Floor Area Overall 85.4%84.0%84.6% 2 Based on unit mix and net leasable floor area by unit type, per City Planning Staff and HR&A. 4 Assumes 0.5 spaces/studio; 1.0 spaces/1-BR unit; and 1.5 spaces/2- & 3-BR units. 1 Per guidance provided by City Planning staff and adjusted for Tier 2 scenarios by HR&A based on efficiency factors for Tier 3 scenarios 3 Mix of affordable income levels is based on the Draft Downtown Community Plan, with any fractional units allocated to Extremely Low Income households. Page 3 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/A-Program 7/13/2017 ATTACHMENT B Sheet B Development Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Net Leasable Areas (SF) Residential 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Office - - - Hotel - - - Hotel Rooms - - - Subterranean Parking (spaces)77 50 58 1-2 Levels 77 50 58 3-5 Levels - - - Land Cost 7,500,000$ 7,500,000$ 7,500,000$ Hard Cost1 Building Construction/GSF Varies $149 $157 $154 Demo/On-Site Improvements $10 per Land Area 150,000$ 150,000$ 150,000$ Off-Site Improvements $100,000 Allowance 100,000$ 100,000$ 100,000$ Building Core & Shell Varies 10,464,050$ 6,215,168$ 7,507,632$ Retail Tenant Improvements $70 x Net Leasable SF 350,000$ 350,000$ 350,000$ Office Tenant Improvements $60 x Net Leasable SF -$ -$ -$ Hotel FF&E $25,000 x Rooms -$ -$ -$ Subterranean Parking Surface $5,000 per Space -$ -$ -$ 1-2 Levels $37,000 per Space 2,849,000$ 1,850,000$ 2,146,000$ 3-4 Levels $42,000 per Space -$ -$ -$ Contingency 4% x Subtotal Hard Costs 556,522$ 346,607$410,145$ Subtotal Hard Costs 14,469,572$ 9,011,775$ 10,663,777$ Soft Costs2 Net Parks/Recreation Fee See Sheet D 686,406$ 363,260$ 511,888$ Net TIF Fee See Sheet D 158,014$ 38,965$ 91,527$ Other City Permits & Fees See Sheet C 688,000$ 435,822$ 511,348$ A&E/Other Professionals 6% x Hard Costs 868,174$ 540,707$ 639,827$ Marketing/Leasing Commissions Residential $7.50 x Net Leasable SF 412,500$ 211,875$ 271,875$ Retail/Office $3.00 x Net Leasable SF 15,000$ 15,000$ 15,000$ Legal & Accounting 1%x Hard Costs 144,696$ 90,118$ 106,638$ Taxes & Insurance 1% x Hard Costs 144,696$ 90,118$ 106,638$ Pre-Opening Expenses $4.00 x Net Leasable SF -$ -$ -$ Developer Fee 3%x Hard Costs 434,087$ 270,353$ 319,913$ Contingency 3% x Subtotal Soft Costs 106,547$ 61,687$77,240$ Subtotal Soft Costs 3,658,120$ 2,117,905$ 2,651,893$ Subtotal Land + Hard + Softs Costs 25,627,692$ 18,629,680$ 20,815,670$ Financing Costs3 Loan Term (months)18 Average Loan Balance 65.00% Construction Loan Interest Rate 6.50% Construction Loan Interest 1,624,155$ 1,180,656$ 1,319,193$ Construction Loan Fees 3.00%768,831$ 558,890$ 624,470$ Capitalized Project Value per Sheet E Permanent Loan Percent x Value 75.00% Permanent Loan Fees 1.50%393,513$ 272,084$311,149$ Subtotal Financing Costs 2,786,499$ 2,011,630$ 2,254,812$ Total Development Cost Land +Hard + Soft + Financing 28,414,191$ 20,641,310$ 23,070,482$ per GSF 404.60$ 521.42$ 473.23$ 2 Per HR&A's experience with similar projects. 3 Per RealtyRates mortgage rates and terms survey for Q1 2016. Assumptions 1 83% x calculated values, per Marshall & Swift Commercial Cost Estimator, May 2016; HR&A Advisors, Inc., to account for certain hard costs and soft costs accounted for separately. Page 4 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/B-Dev Costs 7/13/2017 ATTACHMENT B Sheet C Proposed New Fees, Existing City Fees & Permit Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studios 6 4 4 1-BR 22 14 17 2-BR 9 6 7 3-BR 7 4 5 Affordable Studios 3 1 1 1-BR 12 4 7 2-BR 5 1 2 3-BR 4 1 2 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - New Parks Fee1 686,406$ 363,260$ 511,888$ New TIF Fee1 158,014$ 38,965$ 91,527$ Planning Permits2 Development Review $17,738 per project -$ -$ -$ Development Agreement $25,000 per project -$ -$ -$ Architectural Review Board $3,588 per project 3,588$ 3,588$ 3,588$ CEQA Categorical Exemption $15,648 per project 15,648$ 15,648$ 15,648$ Subtotal 19,236$ 19,236$19,236$ Other Requirements3 Arts Fee New Residential/Commercial 1.00% x $200/SF 140,457$ 79,174$ 97,502$ Tenant Improvements 1.00%x $50/SF 2,500$ 2,500$ 2,500$ Child Care Fee Market Rate Residential $142.40 per unit 6,266$ 3,987$ 4,699$ Retail $4.84 x leasable area 24,200$ 24,200$ 24,200$ Office $6.76 x leasable area -$ -$ -$ Hotel $3.39 x leasable area -$ -$ -$ School Facilities Fee Residential $3.48 x leasable area 191,400$ 98,310$ 126,150$ Commercial $0.56 x leasable area 2,800$ 2,800$ 2,800$ Subtotal 367,623$ 210,971$257,851$ Bldg./Construction Permits2 Plan Check Residential 4+ stories $533.14 $0.98 x leasable area 54,246$ 28,122$ 35,935$ Commercial <10K SF $511.91 $1.36 x leasable area 7,312$ 7,312$ 7,312$ Commercial >10K SF/4 stories $0.41 x leasable area -$ -$ -$ Mechanical $778 per project $778 $778 $778 Electrical $778 per project $778 $778 $778 Plumbing $778 per project $778 $778 $778 Building Permits/Inspections Multi-family 4+ Stories 130.37 $1.10 x leasable area 60,377$ 31,075$ 39,839$ Commercial 1-Story 124.75 $1.28 x leasable area 6,507$ 6,507$ 6,507$ Commercial 4+ stories $0.80 x leasable area -$ -$ -$ Tenant Improvements <10K SF 132.54 $0.38 x leasable area 2,057$ 2,057$ 2,057$ Tenant Improvements >10K SF $0.30 x leasable area -$ -$ -$ Geotechnical Reports $2,655 per project 2,655$ 2,655$ 2,655$ Subtotal 135,489$ 80,063$96,640$ Utility Fees2 Water Meter3 $4,291 3/4" meter per project 4,291$ 4,291$ 4,291$ Fireline Meter3 $26,816 4" meter per project 26,816$ 26,816$ 26,816$ Wastewater Capital Facilities Studio/1-BR Units $1,168 per unit 50,224$ 26,864$ 33,872$ 2-BR Units $1,557 per unit 21,798$ 10,899$ 14,013$ 3-BR Units $1,947 per unit 13,629$ 7,788$ 9,735$ Commercial $779 per 1,000 leasable SF 3,895$ 3,895$ 3,895$ Water Neutrality In-Lieu Fee $45,000 per project 45,000$ 45,000$ 45,000$ Subtotal 165,652$ 125,552$137,621$ Total City Fees 1,532,420$ 838,047$1,114,762$ per GSF $21.82 $21.17 $22.87 1 Based on current fee rates; see Sheet D for Tier sensitivity calculation details. 2 Per FY 2015-16 City fee schedules. 3 Includes meter and capital facilities charges. Assumptions Page 5 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/C-City Cost Detail 7/13/2017 ATTACHMENT B Sheet D Proposed Parks/Recreation, and Transportation Impact Fee Increases Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 68 35 45 Market Rate Studios 6 4 4 1-BR 22 14 17 2-BR 9 6 7 3-BR 7 4 5 Affordable Studios 3 1 1 1-BR 12 4 7 2-BR 5 1 2 3-BR 4 1 2 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - Parks/Recreation Fee 90% of Nexus Study Maximum Tier 1 Tier 2 Tier 3 Market Rate Housing 100% 352% 352% 0-1 BRs 100% 352% 352% $4,231.93 per unit 327,043$ 161,490$ 248,498$ 2+ BRs 100% 352% 352% $6,816.30 per unit 363,173$ 205,580$ 267,200$ Affordable Housing 100% 352% 352% $0 per unit -$ -$ -$ Retail 100% 352% 352% $1.52 x leasable area 7,619$ 7,619$ 7,619$ Office 100% 352% 352% $2.36 x leasable area -$ -$ -$ Hotel 100% 352% 352% $3.18 x leasable area -$-$-$ Subtotal Fee 697,835$ 374,689$ 523,317$ Less: Fee on Existing SF Retail 100% 352% 352% $1.52 x leasable area (11,429)$ (11,429)$ (11,429)$ Office 100% 352% 352% $2.36 x leasable area -$-$-$ Net Fee 686,406$ 363,260$ 511,888$ TIF Fees 90% of Nexus Study Maximum 100% 139% 139% Market Rate-Area 1 100% 139% 139% $2,773.75 per unit 214,022$ 94,973$ 147,535$ Market Rate-Area 2 100% 139% 139% $3,520.52 per unit -$ -$ -$ Affordable 100% 139% 139% $0.00 per unit -$ -$ -$ Retail-Area 1 100% 139% 139% $22.40 x leasable area 112,017$ 112,017$ 112,017$ Retail-Area 2 100% 139% 139% $32.11 x leasable area -$ -$ -$ Office-Area 1 100% 139% 139% $10.35 x leasable area -$ -$ -$ Office-Area 2 100% 139% 139% $11.52 x leasable area -$ -$ -$ Hotel-Area 1 & 2 100% 139% 139% $3.84 x leasable area -$-$-$ Subtotal 326,039$ 206,990$ 259,552$ Reduction for Existing Retail Allowance (168,025)$ (168,025)$(168,025)$ NET TIF Fee 158,014$ 38,965$ 91,527$ Combined New Fees 844,420$ 402,225$ 603,415$ Assumptions Assumptions Page 6 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/D-Fee Sensitivities 7/13/2017 ATTACHMENT B Sheet E Net Operating Income Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 51 30 36 Market Rate 44 28 33 Studio 6 4 4 1-BR 22 14 17 2-BR 9 6 7 3-BR 7 4 5 Affordable (EL)6 2 4 Studio - - - 1-BR - - - 2-BR 2 1 2 3-BR 4 1 2 Affordable (VL)4 1 2 Studio - - - 1-BR 1 1 2 2-BR 3 - - 3-BR - - - Affordable (L)7 2 3 Studio - - - 1-BR 7 2 3 2-BR - - - 3-BR - - - Affordable (M)7 2 3 Studio 3 1 1 1-BR 4 1 2 2-BR - - - 3-BR - - - Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - Hotel (Net Leasable SF)- - - Parking Spaces 77 50 58 Residential 61 36 44 Retail 10 10 10 Office - - - Hotel 000 For-Rent Residential- Market Rate1 Studio Rent/Unit/Month Varies $3,300 $3,300 $3,300 1-BR Rent/Unit/Month Varies $3,800 $3,800 $3,800 2-BR Rent/Unit/Month Varies $4,300 $4,300 $4,300 3-BR Rent/Unit/Month Varies $5,000 $5,000 $5,000 Units Income/Year 2,125,200$ 1,346,400$ 1,594,800$ Other Income 100.00 $ x Unit 52,800$33,600$39,600$ Gross Income 2,178,000$ 1,380,000$ 1,634,400$ Less: Vacancy & Collection Loss 5.0% x Gross Income (108,900)$(69,000)$(81,720)$ Effective Gross Income (EGI)2,069,100$ 1,311,000$ 1,552,680$ Less: Operating Expenses (incl. reserve) 1 15,000 $ x Unit (660,000)$ (420,000)$ (495,000)$ Net Operating Income 1,409,100$ 891,000$ 1,057,680$ For-Rent Residential - Affordable (EL) Studio Rent/Unit/Month 340$ 340$ 340$ 1-BR Rent/Unit/Month 389$ 389$ 389$ 2-BR Rent/Unit/Month 437$ 437$ 437$ 3-BR Rent/Unit/Month 486$ 486$ 486$ Units Income/Year 33,816$ 11,076$ 22,152$ Other Income 0.0% x Units Income -$-$-$ Gross Income 33,816$ 11,076$ 22,152$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)33,816$ 11,076$ 22,152$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (90,000)$ (30,000)$ (60,000)$ Net Operating Income (56,184)$ (18,924)$ (37,848)$ For-Rent Residential - Affordable (VL) Studio Rent/Unit/Month 567$ 567$ 567$ 1-BR Rent/Unit/Month 648$ 648$ 648$ 2-BR Rent/Unit/Month 729$ 729$ 729$ 3-BR Rent/Unit/Month 810$ 810$ 810$ Units Income/Year 34,020$ 7,776$ 15,552$ Other Income 0.0% x Units Income -$-$-$ Gross Income 34,020$ 7,776$ 15,552$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)34,020$ 7,776$ 15,552$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (60,000)$ (15,000)$ (30,000)$ Net Operating Income (25,980)$ (7,224)$ (14,448)$ For-Rent Residential - Affordable (L) Studio Rent/Unit/Month 680$ 680$ 680$ 1-BR Rent/Unit/Month 778$ 778$ 778$ 2-BR Rent/Unit/Month 875$ 875$ 875$ 3-BR Rent/Unit/Month 972$ 972$ 972$ Units Income/Year 65,352$ 18,672$ 28,008$ Other Income 0.0% x Units Income -$-$-$ Gross Income 65,352$ 18,672$ 28,008$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)65,352$ 18,672$ 28,008$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (105,000)$ (30,000)$ (45,000)$ Net Operating Income (39,648)$ (11,328)$ (16,992)$ For-Rent Residential - Affordable (M) Studio Rent/Unit/Month 1,247$ 1,247$ 1,247$ 1-BR Rent/Unit/Month 1,426$ 1,426$ 1,426$ 2-BR Rent/Unit/Month 1,604$ 1,604$ 1,604$ 3-BR Rent/Unit/Month 1,782$ 1,782$ 1,782$ Units Income/Year 113,340$ 32,076$ 49,188$ Other Income 0.0% x Units Income -$-$-$ Gross Income 113,340$ 32,076$ 49,188$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$-$-$ Effective Gross Income (EGI)113,340$ 32,076$ 49,188$ Less: Operating Expenses (inc. reserve) 1 15,000 $ x Unit (105,000)$ (30,000)$ (45,000)$ Net Operating Income 8,340$ 2,076$ 4,188$ Retail2 Average Rent/SF/Month (NNN)Varies 6.00$ 6.00$ 6.00$ Gross Rental Income/Year 360,000$ 360,000$ 360,000$ Less: Vacancy & Collection Loss 5.0% x Gross Income (18,000)$(18,000)$(18,000)$ Effective Gross Income (EGI)342,000$ 342,000$ 342,000$ Less: Unreimbursed Operating Expenses 3.0%x EGI (10,260)$ (10,260)$ (10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Office2 Average Rent/SF/Month (MG)4.55$ 4.55$ 4.55$ Gross Rental Income/Year -$ -$ -$ Parking Income4 $2,223 Wtd. Avg./Space/Yr.-$ -$ -$ Less: Vacancy & Collection Loss 5.0% x Gross Income -$-$-$ Effective Gross Income (EGI)-$ -$ -$ Less: Operating Expenses 15.0% x EGI -$ -$ -$ Less: Parking Expense 50.0% x Parking Income -$-$-$ Net Operating Income -$ -$ -$ Total Net Operating Income 1,627,368$ 1,187,340$ 1,324,320$ 1 Per HR&A's experience with similar projects. 2 Per HR&A review of third-party market data (i.e. CoStar Group data for similar, recently constructed buildings in the Downtown Community Plan area). 3 Per City's 2015 rent schedule. 4 Assumes $200/month reserved (10% of supply); $165/month unreserved (85%); and $500/month daily use (5%). Assumptions Page 7 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/E-Net Ops Income 7/13/2017 ATTACHMENT B Sheet F Returns Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studio 6 4 4 1-BR 22 14 17 2-BR 9 6 7 3-BR 7 4 5 Affordable Studio 3 1 1 1-BR 12 4 7 2-BR 5 1 2 3-BR 4 1 2 Retail (Net Leasable SF)5,000 5,000 5,000 Office (Net Leasable SF)- - - Hotel (Net Leasable SF)- - - Project Value Residential-Market Rate Net Operating Income From App, E 1,409,100$ 891,000$ 1,057,680$ Cap Rate1 4.80% Value NOI/Cap Rate 29,356,250$ 18,562,500$ 22,035,000$ Residential-Affordable Net Operating Income From App, E -$ -$ -$ Cap Rate1 4.80% Value NOI/Cap Rate -$ -$ -$ Retail Net Operating Income From App, E 331,740$ 331,740$ 331,740$ Cap Rate1 5.90% Value NOI/Cap Rate 5,622,712$ 5,622,712$ 5,622,712$ Office Net Operating Income From App, E -$ -$ -$ Cap Rate1 5.70% Value NOI/Cap Rate -$ -$ -$ Total Project Value 34,978,962$ 24,185,212$ 27,657,712$ Developer Returns Developer Profit Total Project Value From above 34,978,962$ 24,185,212$ 27,657,712$ Less: Total Development Cost From Sheet B (28,414,191)$ (20,641,310)$ (23,070,482)$ Profit 6,564,771$ 3,543,902$ 4,587,230$ % of Value 18.8%14.7%16.6% Return on Total Development Cost NOI From Sheet E 1,627,368$ 1,187,340$ 1,324,320$ Total Development Cost From Sheet B (28,414,191)$ (20,641,310)$ (23,070,482)$ Return on Cost 5.73%5.75%5.74% 1 Based on Real Estate Research Corporation cap rate data for Q1 2016. Assumptions Page 8 of 8 HR&A Advisors, Inc. Housing Commission On-Site Affordable Housing Recommendations/F-Returns 7/13/2017 Attachment C: City Council Approved On-Site Affordable Housing Requirements ATTACHMENT B City Council Approved On-Site Affordable Housing Requirements Results Summary Program Summary (see Sheet A) Prototype Name Residential/Retail Location Transit-Adjacent LUCE Tier 3 Permit Requirement # Parcels 1 Bldg. Height (Feet)84 Stories (#)7 Site Area (SF)15,000 Gross Bldg. Area (SF)70,229 Floor Area Ratio (FAR) - Gross Area 4.68 Floor Area Ratio (FAR) - Net Area 4.00 Net Leasable Areas Residential (SF)55,000 Market Rate Units 47 Affordable Units 21 Extremely Low Income 5 Very Low Income 4 Low Income 6 Moderate Income 6 Total Units 68 Affordable Share of Total Units 1 31% Retail (SF)5,000 Office (SF)- Hotel (SF)- Development Costs (see Sheet B&C&D) Land Costs 7,500,000$ Hard Costs 15,203,871$ Soft Costs 3,800,503$ Net Parks/Recreation Fee 731,096$ Net Affordable Housing Linkage Fee -$ Net Transportation Impact Fee 169,581$ Other City Costs (see Sheet E)689,206$ Other Soft Costs 3,111,297$ Financing Costs 2,887,737$ Total Development Cost 29,392,111$ per GSF $419 Net Operating Income (NOI) (see Sheet E) Residential-Market Rate Effective Gross Income 2,196,780$ Less: Operating Expenses (705,000)$ Net Operating Income 1,491,780$ Residential-Affordable Effective Gross Income 96,228$ Less: Operating Expenses (90,000)$ Net Operating Income 6,228$ Retail Effective Gross Income 342,000$ Less: Operating Expenses (10,260)$ Net Operating Income 331,740$ Office Effective Gross Income -$ Less: Operating Expenses -$ Net Operating Income -$ Total Net Operating Income 1,721,796$ Project Component Values (see Sheet F) Residential-Market Rate NOI 1,491,780$ Cap Rate 4.80% Value 31,078,750$ Residential-Affordable NOI -$ Cap Rate 4.80% Value -$ Retail NOI 331,740$ Cap Rate 5.90% Value 5,622,712$ Office NOI -$ Cap Rate 5.70% Value -$ Total Project Value 36,701,462$ Developer Returns Developer Profit Total Project Value 36,701,462$ Less: Total Development Cost (29,392,111)$ Profit 7,309,351$ % of Value 19.9% Profit No Fees 8,210,028$ Feasible? (i.e. = or > 12.5%)YES Return on Total Development Cost NOI 1,721,796$ Total Development Cost (29,392,111)$ Return on Cost 5.86% Return on Cost No Fees 6.04% Feasible? (i.e. = or > 0.75% + Weighted Cap)YES Weighted Cap Rate 4.89% 1 May not reflect exact percentages of affordable housing adopted by City Council due to rounding. Page 1 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/Summary 7/13/2017 ATTACHMENT B Sheet A Physical Parameters Prototype Name Residential/Retail Location Transit-Adjacent LUCE Area LUCE Tier 3 Permit Requirement # Parcels 1 Bldg. Height (Feet)84 Stories (#)7 Land Area (SF)15,000 Gross Bldg. Area (SF)1 70,229 Floor Area Ratio (FAR)-Gross Area1 4.7 Floor Area Ratio (FAR)-Net Area 4.0 Net Leasable Areas (SF)1 60,000 Residential2 55,000 Retail 5,000 Office Hotel # Hotel Rooms - Residential Unit Mix Office SF - Retail SF 5,000 Hotel SF - Residential SF-Target 55,000 Market Rate Studio (SF)600 1-BR (SF)700 2-BR (SF)950 3-BR (SF)1,300 Studio (# units)7 1-BR (# units)24 2-BR (# units)9 3-BR (# units)7 Subtotal (# units)47 Affordable -- Extremely Low3 Studio (SF)500 1-BR (SF)600 2-BR (SF)850 3-BR (SF)1,080 Studio (# units)- 1-BR (# units)- 2-BR (# units)2 3-BR (# units)3 Subtotal (# units)5 Affordable -- Very Low3 Studio (SF)500 1-BR (SF)600 2-BR (SF)850 3-BR (SF)1,080 Studio (# units)- 1-BR (# units)2 2-BR (# units)2 3-BR (# units)- Subtotal (# units)4 Affordable -- Low3 Studio (SF)500 1-BR (SF)600 2-BR (SF)850 3-BR (SF)1,080 Studio (# units)- 1-BR (# units)6 2-BR (# units)- 3-BR (# units)- Subtotal (# units)6 Affordable -- Moderate3 Studio (SF)500 1-BR (SF)600 2-BR (SF)850 3-BR (SF)1,080 Studio (# units)3 1-BR (# units)3 2-BR (# units)- 3-BR (# units)- Subtotal (# units)6 Affordable -- TOTAL Studio (# units)3 1-BR (# units)11 2-BR (# units)4 3-BR (# units)3 Total 21 Total Units 68 Page 2 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/A-Program 7/13/2017 Sheet A Physical Parameters (con'd) Prototype Name Residential/Retail Location Transit-Adjacent Parking Residential Market Rate (wtd. avg. per unit)4 1.10 Affordable (avg. per unit) 1.10 Subtotal Spaces (#)63 Subtotal Plus Guest Spaces (#) 69 Retail 7 Spaces/500 SF 1 Subtotal Spaces (#)10 Office Spaces/500 SF 1.0 Subtotal Spaces (#)- Hotel Spaces/Guest Room 0.75 Subtotal Spaces (#)- Total Spaces Number 79 Gross Area/Space (SF)-Surface 300 Gross Area/Space (SF)-Subt.350 Total Parking Area (SF)27,650 # Surface - # Subt. Levels Total 1.8 Spaces/Levels 1-2 79 Spaces/Levels 3-5 - Construction Period (months)18 Gross Floor Area by Story Site Area 15,000 Total Gross Bldg. Area 70,229 Total Floors 7 Floor 1 5,727 Floor 2 14,318 Floor 3 14,318 Floor 4 12,600 Floor 5 10,882 Floor 6 5,441 Floor 7 5,441 Total Gross Floor Area 70,229 FAR-Gross Area 4.68 Net Floor Area by Story Floor 1 5,000 Floor 2 12,500 Floor 3 12,500 Floor 4 11,000 Floor 5 9,500 Floor 6 4,750 Floor 7 4,750 Total 60,000 Net/Gross Floor Area Overall 85.4% 2 Based on unit mix and net leasable floor area by unit type, per City Planning Staff and HR&A. 4 Assumes 0.5 spaces/studio; 1.0 spaces/1-BR unit; and 1.5 spaces/2- & 3-BR units. 1 Per guidance provided by City Planning staff and adjusted for Tier 2 scenarios by HR&A based on efficiency factors for Tier 3 scenarios 3 Mix of affordable income levels is based on the Draft Downtown Community Plan, with any fractional units allocated to Extremely Low Income households. Page 3 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/A-Program 7/13/2017 ATTACHMENT B Sheet B Development Costs Prototype Name Residential/Retail Location Transit-Adjacent Land Area 15,000 Gross Bldg. Area (SF)70,229 Net Leasable Areas (SF) Residential 55,000 Retail 5,000 Office - Hotel - Hotel Rooms - Subterranean Parking (spaces)79 1-2 Levels 79 3-5 Levels - Land Cost 7,500,000$ Hard Cost1 Building Construction/GSF Varies $158 Demo/On-Site Improvements $10 per Land Area 150,000$ Off-Site Improvements $100,000 Allowance 100,000$ Building Core & Shell Varies 11,096,107$ Retail Tenant Improvements $70 x Net Leasable SF 350,000$ Office Tenant Improvements $60 x Net Leasable SF -$ Hotel FF&E $25,000 x Rooms -$ Subterranean Parking Surface $5,000 per Space -$ 1-2 Levels $37,000 per Space 2,923,000$ 3-4 Levels $42,000 per Space -$ Contingency 4% x Subtotal Hard Costs 584,764$ Subtotal Hard Costs 15,203,871$ Soft Costs2 Net Parks/Recreation Fee See Sheet D 731,096$ Net TIF Fee See Sheet D 169,581$ Other City Permits & Fees See Sheet C 689,206$ A&E/Other Professionals 6% x Hard Costs 912,232$ Marketing/Leasing Commissions Residential $7.50 x Net Leasable SF 412,500$ Retail/Office $3.00 x Net Leasable SF 15,000$ Legal & Accounting 1%x Hard Costs 152,039$ Taxes & Insurance 1% x Hard Costs 152,039$ Pre-Opening Expenses $4.00 x Net Leasable SF -$ Developer Fee 3%x Hard Costs 456,116$ Contingency 3% x Subtotal Soft Costs 110,694$ Subtotal Soft Costs 3,800,503$ Subtotal Land + Hard + Softs Costs 26,504,374$ Financing Costs3 Loan Term (months)18 Average Loan Balance 65.00% Construction Loan Interest Rate 6.50% Construction Loan Interest 1,679,715$ Construction Loan Fees 3.00%795,131$ Capitalized Project Value per Sheet E Permanent Loan Percent x Value 75.00% Permanent Loan Fees 1.50% 412,891$ Subtotal Financing Costs 2,887,737$ Total Development Cost Land +Hard + Soft + Financing 29,392,111$ per GSF 418.52$ 2 Per HR&A's experience with similar projects. 3 Per RealtyRates mortgage rates and terms survey for Q1 2016. Assumptions 1 83% x calculated values, per Marshall & Swift Commercial Cost Estimator, May 2016; HR&A Advisors, Inc., to account for certain hard costs and soft costs accounted for separately. Page 4 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/B-Dev Costs 7/13/2017 ATTACHMENT B Sheet C Proposed New Fees, Existing City Fees & Permit Costs Prototype Name Residential/Retail Location Transit-Adjacent Land Area 15,000 Gross Bldg. Area (SF)70,229 Residential Units Market Rate Studios 7 1-BR 24 2-BR 9 3-BR 7 Affordable Studios 3 1-BR 11 2-BR 4 3-BR 3 Residential (Net Leasable SF)55,000 Retail (Net Leasable SF)5,000 Office (Net Leasable SF)- Hotel (Net Leasable SF)- New Parks Fee1 731,096$ New TIF Fee1 169,581$ Planning Permits2 Development Review $17,738 per project -$ Development Agreement $25,000 per project -$ Architectural Review Board $3,588 per project 3,588$ CEQA Categorical Exemption $15,648 per project 15,648$ Subtotal 19,236$ Other Requirements3 Arts Fee New Residential/Commercial 1.00% x $200/SF 140,457$ Tenant Improvements 1.00%x $50/SF 2,500$ Child Care Fee Market Rate Residential $142.40 per unit 6,693$ Retail $4.84 x leasable area 24,200$ Office $6.76 x leasable area -$ Hotel $3.39 x leasable area -$ School Facilities Fee Residential $3.48 x leasable area 191,400$ Commercial $0.56 x leasable area 2,800$ Subtotal 368,050$ Bldg./Construction Permits2 Plan Check Residential 4+ stories $533.14 $0.98 x leasable area 54,246$ Commercial <10K SF $511.91 $1.36 x leasable area 7,312$ Commercial >10K SF/4 stories $0.41 x leasable area -$ Mechanical $778 per project $778 Electrical $778 per project $778 Plumbing $778 per project $778 Building Permits/Inspections Multi-family 4+ Stories 130.37 $1.10 x leasable area 60,377$ Commercial 1-Story 124.75 $1.28 x leasable area 6,507$ Commercial 4+ stories $0.80 x leasable area -$ Tenant Improvements <10K SF 132.54 $0.38 x leasable area 2,057$ Tenant Improvements >10K SF $0.30 x leasable area -$ Geotechnical Reports $2,655 per project 2,655$ Subtotal 135,489$ Utility Fees2 Water Meter 3 $4,291 3/4" meter per project 4,291$ Fireline Meter3 $26,816 4" meter per project 26,816$ Wastewater Capital Facilities Studio/1-BR Units $1,168 per unit 52,560$ 2-BR Units $1,557 per unit 20,241$ 3-BR Units $1,947 per unit 13,629$ Commercial $779 per 1,000 leasable SF 3,895$ Water Neutrality In-Lieu Fee $45,000 per project 45,000$ Subtotal 166,431$ Total City Fees 1,589,883$ per GSF $22.64 1 Based on current fee rates; see Sheet D for Tier sensitivity calculation details. 2 Per FY 2015-16 City fee schedules. 3 Includes meter and capital facilities charges. Assumptions Page 5 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/C-City Cost Detail 7/13/2017 ATTACHMENT B Sheet D Proposed Parks/Recreation, and Transportation Impact Fee Increases Prototype Name Residential/Retail Location Transit-Adjacent Land Area 15,000 Gross Bldg. Area (SF)70,229 Residential Units 68 Market Rate Studios 7 1-BR 24 2-BR 9 3-BR 7 Affordable Studios 3 1-BR 11 2-BR 4 3-BR 3 Residential (Net Leasable SF)55,000 Retail (Net Leasable SF)5,000 Office (Net Leasable SF)- Hotel (Net Leasable SF)- Parks/Recreation Fee 90% of Nexus Study Maximum Tier 1 Tier 2 Tier 3 Market Rate Housing 100% 352% 352% 0-1 BRs 100% 352% 352% $4,231.93 per unit 371,733$ 2+ BRs 100% 352% 352% $6,816.30 per unit 363,173$ Affordable Housing 100% 352% 352% $0 per unit -$ Retail 100% 352% 352% $1.52 x leasable area 7,619$ Office 100% 352% 352% $2.36 x leasable area -$ Hotel 100% 352% 352% $3.18 x leasable area -$ Subtotal Fee 742,525$ Less: Fee on Existing SF Retail 100% 352% 352% $1.52 x leasable area (11,429)$ Office 100% 352% 352% $2.36 x leasable area -$ Net Fee 731,096$ TIF Fees 90% of Nexus Study Maximum 100% 139% 139% Market Rate-Area 1 100% 139% 139% $2,773.75 per unit 225,589$ Market Rate-Area 2 100% 139% 139% $3,520.52 per unit -$ Affordable 100% 139% 139% $0.00 per unit -$ Retail-Area 1 100% 139% 139% $22.40 x leasable area 112,017$ Retail-Area 2 100% 139% 139% $32.11 x leasable area -$ Office-Area 1 100% 139% 139% $10.35 x leasable area -$ Office-Area 2 100% 139% 139% $11.52 x leasable area -$ Hotel-Area 1 & 2 100% 139% 139% $3.84 x leasable area -$ Subtotal 337,606$ Reduction for Existing Retail Allowance (168,025)$ NET TIF Fee 169,581$ Combined New Fees 900,677$ Assumptions Assumptions Page 6 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/D-Fee Sensitivities 7/13/2017 ATTACHMENT B Sheet E Net Operating Income Prototype Name Residential/Retail Location Mixed Boulevard Land Area 15,000 Gross Bldg. Area (SF)70,229 Residential Units 53 Market Rate 47 Studio 7 1-BR 24 2-BR 9 3-BR 7 Affordable (EL)5 Studio - 1-BR - 2-BR 2 3-BR 3 Affordable (VL)4 Studio - 1-BR 2 2-BR 2 3-BR - Affordable (L)6 Studio - 1-BR 6 2-BR - 3-BR - Affordable (M)6 Studio 3 1-BR 3 2-BR - 3-BR - Retail (Net Leasable SF)5,000 Office (Net Leasable SF)- Hotel (Net Leasable SF)- Parking Spaces 79 Residential 63 Retail 10 Office - Hotel 0 For-Rent Residential- Market Rate1 Studio Rent/Unit/Month Varies $3,300 1-BR Rent/Unit/Month Varies $3,800 2-BR Rent/Unit/Month Varies $4,300 3-BR Rent/Unit/Month Varies $5,000 Units Income/Year 2,256,000$ Other Income 100.00$ x Unit 56,400$ Gross Income 2,312,400$ Less: Vacancy & Collection Loss 5.0% x Gross Income (115,620)$ Effective Gross Income (EGI)2,196,780$ Less: Operating Expenses (incl. reserve) 1 15,000$ x Unit (705,000)$ Net Operating Income 1,491,780$ For-Rent Residential - Affordable (EL) Studio Rent/Unit/Month 340$ 1-BR Rent/Unit/Month 389$ 2-BR Rent/Unit/Month 437$ 3-BR Rent/Unit/Month 486$ Units Income/Year 27,984$ Other Income 0.0% x Units Income -$ Gross Income 27,984$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$ Effective Gross Income (EGI)27,984$ Less: Operating Expenses (inc. reserve) 1 15,000$ x Unit (75,000)$ Net Operating Income (47,016)$ For-Rent Residential - Affordable (VL) Studio Rent/Unit/Month 567$ 1-BR Rent/Unit/Month 648$ 2-BR Rent/Unit/Month 729$ 3-BR Rent/Unit/Month 810$ Units Income/Year 33,048$ Other Income 0.0% x Units Income -$ Gross Income 33,048$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$ Effective Gross Income (EGI)33,048$ Less: Operating Expenses (inc. reserve) 1 15,000$ x Unit (60,000)$ Net Operating Income (26,952)$ For-Rent Residential - Affordable (L) Studio Rent/Unit/Month 680$ 1-BR Rent/Unit/Month 778$ 2-BR Rent/Unit/Month 875$ 3-BR Rent/Unit/Month 972$ Units Income/Year 56,016$ Other Income 0.0% x Units Income -$ Gross Income 56,016$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$ Effective Gross Income (EGI)56,016$ Less: Operating Expenses (inc. reserve) 1 15,000$ x Unit (90,000)$ Net Operating Income (33,984)$ For-Rent Residential - Affordable (M) Studio Rent/Unit/Month 1,247$ 1-BR Rent/Unit/Month 1,426$ 2-BR Rent/Unit/Month 1,604$ 3-BR Rent/Unit/Month 1,782$ Units Income/Year 96,228$ Other Income 0.0% x Units Income -$ Gross Income 96,228$ Less: Vacancy & Collection Loss 0.0% x Gross Income -$ Effective Gross Income (EGI)96,228$ Less: Operating Expenses (inc. reserve) 1 15,000$ x Unit (90,000)$ Net Operating Income 6,228$ Retail2 Average Rent/SF/Month (NNN)Varies 6.00$ Gross Rental Income/Year 360,000$ Less: Vacancy & Collection Loss 5.0% x Gross Income (18,000)$ Effective Gross Income (EGI)342,000$ Less: Unreimbursed Operating Expenses 3.0%x EGI (10,260)$ Net Operating Income 331,740$ Office2 Average Rent/SF/Month (MG)4.55$ Gross Rental Income/Year -$ Parking Income4 $2,223 Wtd. Avg./Space/Yr.-$ Less: Vacancy & Collection Loss 5.0% x Gross Income -$ Effective Gross Income (EGI)-$ Less: Operating Expenses 15.0%x EGI -$ Less: Parking Expense 50.0% x Parking Income -$ Net Operating Income -$ Total Net Operating Income 1,721,796$ 1 Per HR&A's experience with similar projects. 3 Per City's 2015 rent schedule. 4 Assumes $200/month reserved (10% of supply); $165/month unreserved (85%); and $500/month daily use (5%). Assumptions 2 Per HR&A review of third-party market data (i.e. CoStar Group data for similar, recently constructed buildings in the Downtown Community Plan area). Page 7 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/E-Net Ops Income 7/13/2017 ATTACHMENT B Sheet F Returns Prototype Name Residential/Retail Location Transit-Adjacent Land Area 15,000 Gross Bldg. Area (SF) 70,229 Residential Units Market Rate Studio 7 1-BR 24 2-BR 9 3-BR 7 Affordable Studio 3 1-BR 11 2-BR 4 3-BR 3 Retail (Net Leasable SF) 5,000 Office (Net Leasable SF) - Hotel (Net Leasable SF) - Project Value Residential-Market Rate Net Operating Income From App, E 1,491,780$ Cap Rate1 4.80% Value NOI/Cap Rate 31,078,750$ Residential-Affordable Net Operating Income From App, E -$ Cap Rate1 4.80% Value NOI/Cap Rate -$ Retail Net Operating Income From App, E 331,740$ Cap Rate1 5.90% Value NOI/Cap Rate 5,622,712$ Office Net Operating Income From App, E -$ Cap Rate1 5.70% Value NOI/Cap Rate -$ Total Project Value 36,701,462$ Developer Returns Developer Profit Total Project Value From above 36,701,462$ Less: Total Development Cost From Sheet B (29,392,111)$ Profit 7,309,351$ % of Value 19.9% Return on Total Development Cost NOI From Sheet E 1,721,796$ Total Development Cost From Sheet B (29,392,111)$ Return on Cost 5.86% 1 Based on Real Estate Research Corporation cap rate data for Q1 2016. Assumptions Page 8 of 8 HR&A Advisors, Inc. City Council Approved On-Site Affordable Housing Percentages/F-Returns 7/13/2017 Attachment D: City Council Approved Off-Site Affordable Housing Requirements ATTACHMENT D City Council Approved Off-Site Affordable Housing Requirements Program Summary (see Sheet A) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Mixed Boulevard Mixed Boulevard Mixed Boulevard # Parcels 1 1 1 Bldg. Height (Feet)84 50 60 Stories (#)7 4 5 Site Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Floor Area Ratio (FAR) - Gross Area 4.68 2.64 3.25 Floor Area Ratio (FAR) - Net Area 4.00 2.22 2.75 Net Leasable Areas Residential (SF)55,000 28,250 36,250 Market Rate Units 66 36 45 Off-Site Affordable Units 24 9 14 Retail (SF)5,000 5,000 5,000 Office (SF)- - - Hotel (SF)- - - Development Costs (see Sheets B,C&D) Land Costs 7,500,000$ 7,500,000$ 7,500,000$ Hard Costs 16,007,791$ 9,242,655$ 11,087,057$ Soft Costs 4,340,316$ 2,291,586$ 2,954,532$ Net Parks/Recreation Fee 1,086,902$ 473,335$ 708,840$ Net Transportation Impact Fee 242,835$ 69,809$ 137,794$ Other City Costs (see Sheet. E)695,805$ 438,129$ 515,393$ Other Soft Costs 3,644,511$ 1,853,457$ 2,439,140$ Financing Costs 3,156,688$ 2,102,773$ 2,405,452$ Total Development Cost 31,004,795$ 21,137,014$ 23,947,041$ Off-Site Affordable Housing Costs 11,928,243$ 4,473,091$ 6,958,142$ Total Development Cost + Off-Site Affordable Housing Costs 42,933,038$ 25,610,105$ 30,905,183$ Net Operating Income (NOI) (see Sheet. E) Residential-Market Rate Effective Gross Income 3,093,960$ 1,658,700$ 2,086,200$ Less: Operating Expenses (990,000)$ (540,000)$ (675,000)$ Net Operating Income 2,103,960$ 1,118,700$ 1,411,200$ Retail Effective Gross Income 342,000$ 342,000$ 342,000$ Less: Operating Expenses (10,260)$ (10,260)$ (10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Total Net Operating Income 2,435,700$ 1,450,440$ 1,742,940$ Project Component Values (see Sheet. F) Residential-Market Rate NOI 2,103,960$ 1,118,700$ 1,411,200$ Cap Rate 4.80%4.80%4.80% Value 43,832,500$ 23,306,250$ 29,400,000$ Retail NOI 331,740$ 331,740$ 331,740$ Cap Rate 5.90%5.90%5.90% Value 5,622,712$ 5,622,712$ 5,622,712$ Total Project Value 49,455,212$ 28,928,962$ 35,022,712$ Developer Returns Developer Profit Total Project Value 49,455,212$ 28,928,962$ 35,022,712$ Less: Total Development Cost + Off-Site Affordable Housing Costs (42,933,038)$ (25,610,105)$ (30,905,183)$ Profit 6,522,174$ 3,318,857$ 4,117,529$ % of Value 13.2%11.5%11.8% Feasible? (i.e. = or > 12.5%)YES NO NO Return on Total Development Cost NOI 2,435,700$ 1,450,440$ 1,742,940$ Total Development Cost + Off-Site Affordable Housing Costs (42,933,038)$ (25,610,105)$ (30,905,183)$ Return on Cost 5.67%5.66%5.64% Feasible? (i.e. = or > 0.75% + Weighted Cap)YES NO NO Weighted Cap Rate 4.89%5.0%4.9% Results Summary Page 1 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/Summary 7/13/2017 ATTACHMENT D Sheet A Physical Parameters Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Permit Requirement # Parcels 1 1 1 Bldg. Height (Feet)84 50 60 Stories (#)7 4 5 Land Area (SF)15,000 15,000 15,000 Gross Bldg. Area (SF)1 70,229 39,587 48,751 Floor Area Ratio (FAR)-Gross Area1 4.7 2.6 3.3 Floor Area Ratio (FAR)-Net Area 4.0 2.2 2.75 Net Leasable Areas (SF)1 60,000 33,250 41,250 Residential2 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Residential Unit Mix Retail SF 5,000 5,000 5,000 Residential SF-Target 55,000 28,250 36,250 Market Rate Studio (SF)600 600 600 1-BR (SF)700 700 700 2-BR (SF)950 950 950 3-BR (SF)1,300 1,300 1,300 Studio (# units)10 3 6 1-BR (# units)32 24 25 2-BR (# units)14 6 9 3-BR (# units)10 35 Total Units 66 36 45 Affordable3 Required % of Off-Site Affordable Units3 35%25%30% Required Off-Site Affordable Units 24 9 14 Parking Residential Market Rate (wtd. avg. per unit)4 1.11 1.08 1.09 Affordable (avg. per unit)- - - Subtotal Spaces (#)80 42 54 Subtotal Plus Guest Spaces (#)88 46 59 Retail --- Spaces/500 SF 1 1 1 Subtotal Spaces (#)10 10 10 Total Spaces Number 98 56 69 Gross Area/Space (SF)-Surface 300 300 300 Gross Area/Space (SF)-Subt.350 350 350 Total Parking Area (SF)34,300 19,600 24,150 # Subt. Levels Total 2.3 1.3 1.6 Spaces/Levels 1-2 84 56 69 Spaces/Levels 3-5 14 -- Construction Period (months)18 18 18 4 Assumes 0.5 spaces/studio; 1.0 spaces/1-BR unit; and 1.5 spaces/2- & 3-BR units. 3 Off-site affordable housing requirements are set as 5% above the percentage of on-site requirements, per City Council 1 Per guidance provided by City Planning staff and adjusted by HR&A based on efficiency factors. 2 Based on unit mix and net leasable floor area by unit type, per City Planning Staff and HR&A. Page 2 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/A-Program 7/13/2017 Sheet A Physical Parameters (con'd) Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Gross Floor Area by Story Site Area 15,000 15,000 15,000 Total Gross Bldg. Area 70,229 39,587 48,751 Total Floors 7 4 5 Floor 1 5,727 5,727 5,727 Floor 2 14,318 11,455 11,455 Floor 3 14,318 10,882 10,882 Floor 4 12,600 10,023 10,023 Floor 5 10,882 - 9,164 Floor 6 5,441 - - Floor 7 5,441 -- Total Gross Floor Area 70,229 39,587 48,751 FAR-Gross Area 4.68 2.64 3.25 Net Floor Area by Story Floor 1 5,000 5,000 5,000 Floor 2 12,500 10,000 10,000 Floor 3 12,500 9,500 9,500 Floor 4 11,000 8,750 8,750 Floor 5 9,500 - 8,000 Floor 6 4,750 - - Floor 7 4,750 -- Total 60,000 33,250 41,250 Net/Gross Floor Area Overall 85.4%84.0%84.6% Page 3 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/A-Program 7/13/2017 ATTACHMENT D Sheet B Development Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Net Leasable Areas (SF) Residential 55,000 28,250 36,250 Retail 5,000 5,000 5,000 Subterranean Parking (spaces)98 56 69 1-2 Levels 84 56 69 3-5 Levels 14 - - Land Cost 7,500,000$ 7,500,000$ 7,500,000$ Hard Cost1 Building Construction/GSF Varies $158 $157 $154 Demo/On-Site Improvements $10 per Land Area 150,000$ 150,000$ 150,000$ Off-Site Improvements $100,000 Allowance 100,000$ 100,000$ 100,000$ Building Core & Shell Varies 11,096,107$ 6,215,168$ 7,507,632$ Retail Tenant Improvements $70 x Net Leasable SF 350,000$ 350,000$ 350,000$ Subterranean Parking Surface $5,000 per Space -$ -$ -$ 1-2 Levels $37,000 per Space 3,108,000$ 2,072,000$ 2,553,000$ 3-4 Levels $42,000 per Space 588,000$ -$ -$ Contingency 4%x Subtotal Hard Costs 615,684$355,487$426,425$ Subtotal Hard Costs 16,007,791$ 9,242,655$ 11,087,057$ Soft Costs2 Net Parks/Recreation Fee See Sheet. D 1,086,902$ 473,335$ 708,840$ Net TIF Fee See Sheet. D 242,835$ 69,809$ 137,794$ Other City Permits & Fees See Sheet. C 695,805$ 438,129$ 515,393$ A&E/Other Professionals 6%x Hard Costs 960,467$ 554,559$ 665,223$ Marketing/Leasing Commissions Residential $7.50 x Net Leasable SF 412,500$ 211,875$ 271,875$ Retail/Office $3.00 x Net Leasable SF 15,000$ 15,000$ 15,000$ Legal & Accounting 1%x Hard Costs 160,078$ 92,427$ 110,871$ Taxes & Insurance 1%x Hard Costs 160,078$ 92,427$ 110,871$ Pre-Opening Expenses $4.00 x Net Leasable SF -$ -$ -$ Developer Fee 3%x Hard Costs 480,234$ 277,280$ 332,612$ Contingency 3%x Subtotal Soft Costs 126,417$66,745$86,054$ Subtotal Soft Costs 4,340,316$ 2,291,586$ 2,954,532$ Subtotal Land + Hard + Softs Costs 27,848,107$ 19,034,241$ 21,541,589$ Financing Costs3 Loan Term (months)18 Average Loan Balance 65.00% Construction Loan Interest Rate 6.50% Construction Loan Interest 1,764,874$ 1,206,295$ 1,365,198$ Construction Loan Fees 3.00%835,443$ 571,027$ 646,248$ Capitalized Project Value per Sheet. E Permanent Loan Percent x Value 75.00% Permanent Loan Fees 1.50%556,371$325,451$394,006$ Subtotal Financing Costs 3,156,688$ 2,102,773$ 2,405,452$ Total Development Cost Land +Hard + Soft + Financing 31,004,795$ 21,137,014$ 23,947,041$ per GSF 441.48$ 533.94$ 491.21$ Off-Site Affordable Housing Cost4 $497,010 per Unit 11,928,243$ 4,473,091$ 6,958,142$ Total Development Cost + Off-Site Affordable Housing Costs 42,933,038$ 25,610,105$ 30,905,183$ 2 Per HR&A's experience with similar projects. 3 Per RealtyRates mortgage rates and terms survey for Q1 2016. Assumptions 1 83% x calculated values, per Marshall & Swift Commercial Cost Estimator, May 2016; HR&A Advisors, Inc., to account for certain hard costs and soft costs accounted for separately. 4 Per the City of Santa Monica's 2013 Affordable Housing Linkage Fee Nexus Study prepared by RSG, and inflated to 2017 dollars using Engineering News Record's Construction Cost Index. Page 4 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/B-Dev Costs 7/13/2017 ATTACHMENT D Sheet C Proposed New Fees, Existing City Fees & Permit Costs Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studios 10 3 6 1-BR 32 24 25 2-BR 14 6 9 3-BR 10 3 5 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 New Parks Fee1 1,086,902$ 473,335$ 708,840$ New TIF Fee1 242,835$ 69,809$ 137,794$ Planning Permits2 Development Review $17,738 per project -$ -$ -$ Development Agreement $25,000 per project -$ -$ -$ Architectural Review Board $3,588 per project 3,588$ 3,588$ 3,588$ CEQA Categorical Exemption $15,648 per project 15,648$15,648$15,648$ Subtotal 19,236$19,236$19,236$ Other Requirements3 Arts Fee New Residential/Commercial 1.00%x $200/SF 140,457$ 79,174$ 97,502$ Tenant Improvements 1.00%x $50/SF 2,500$ 2,500$ 2,500$ Child Care Fee Market Rate Residential $142.40 per unit 9,398$ 5,126$ 6,408$ Retail $4.84 x leasable area 24,200$ 24,200$ 24,200$ Office $6.76 x leasable area -$ -$ -$ Hotel $3.39 x leasable area -$ -$ -$ School Facilities Fee Residential $3.48 x leasable area 191,400$ 98,310$ 126,150$ Commercial $0.56 x leasable area 2,800$2,800$2,800$ Subtotal 370,755$ 212,110$259,560$ Bldg./Construction Permits2 Plan Check Residential 4+ stories $533.14 $0.98 x leasable area 54,246$ 28,122$ 35,935$ Commercial <10K SF $511.91 $1.36 x leasable area 7,312$ 7,312$ 7,312$ Commercial >10K SF/4 stories $0.41 x leasable area -$ -$ -$ Mechanical $778 per project $778 $778 $778 Electrical $778 per project $778 $778 $778 Plumbing $778 per project $778 $778 $778 Building Permits/Inspections Multi-family 4+ Stories 130.37 $1.10 x leasable area 60,377$ 31,075$ 39,839$ Commercial 1-Story 124.75 $1.28 x leasable area 6,507$ 6,507$ 6,507$ Commercial 4+ stories $0.80 x leasable area -$ -$ -$ Tenant Improvements <10K SF 132.54 $0.38 x leasable area 2,057$ 2,057$ 2,057$ Tenant Improvements >10K SF $0.30 x leasable area -$ -$ -$ Geotechnical Reports $2,655 per project 2,655$2,655$2,655$ Subtotal 135,489$ 80,063$96,640$ Utility Fees2 Water Meter3 $4,291 3/4" meter per project 4,291$ 4,291$ 4,291$ Fireline Meter3 $26,816 4" meter per project 26,816$ 26,816$ 26,816$ Wastewater Capital Facilities Studio/1-BR Units $1,168 per unit 49,056$ 31,536$ 36,208$ 2-BR Units $1,557 per unit 21,798$ 9,342$ 14,013$ 3-BR Units $1,947 per unit 19,470$ 5,841$ 9,735$ Commercial $779 per 1,000 leasable SF 3,895$3,895$3,895$ Water Neutrality In-Lieu Fee4 $45,000 per project 45,000$ 45,000$ 45,000$ Subtotal 170,325$ 126,720$139,957$ per GSF $13.37 $12.83 $13.40 1 Based on current fee rates; see Sheet D for Tier sensitivity calculation details. 2 Per FY 2015-16 City fee schedules. 3 Includes meter and capital facilities charges. 4 Per City staff direction for in-lieu fee for proposed Water Neutrality Ordinance. Assumptions Page 5 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/C-City Cost Detail 7/13/2017 ATTACHMENT D Sheet D Proposed Parks/Recreation, and Transportation Impact Fee Increases Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 66 36 45 Market Rate Studios 10 3 6 1-BR 32 24 25 2-BR 14 6 9 3-BR 10 3 5 Residential (Net Leasable SF)55,000 28,250 36,250 Retail (Net Leasable SF)5,000 5,000 5,000 Adopted Parks/Recreation Fee 352% x Adopted Fees 1 Tier 1 Tier 2 Market Rate Housing 100% 352% 0-1 BRs 100% 352% $4,231.93 per unit 535,593$ 295,558$ 397,463$ 2+ BRs 100% 352% $6,816.30 per unit 555,119$ 181,587$ 315,187$ Affordable Housing 100% 352% $0 per unit -$ -$ -$ Retail 100% 352% $1.52 x leasable area 7,619$ 7,619$ 7,619$ Subtotal Fee 1,098,331$ 484,764$ 720,269$ Less: Fee on Existing SF Retail 100% 352% $1.52 x leasable area (11,429)$ (11,429)$ (11,429)$ Net Fee 1,086,902$ 473,335$ 708,840$ TIF Fees 139% x Adopted Fees 1 100% 139% Market Rate-Area 1 100% 139% $2,773.75 per unit 298,843$ 125,817$ 193,802$ Market Rate-Area 2 100% 139% $3,520.52 per unit -$ -$ -$ Affordable 100% 139% $0.00 per unit -$ -$ -$ Retail-Area 1 100% 139% $22.40 x leasable area 112,017$ 112,017$ 112,017$ Retail-Area 2 100% 139% $32.11 x leasable area -$ -$ -$ Subtotal 410,860$ 237,834$ 305,819$ Reduction for Existing Retail Allowance (168,025)$ (168,025)$ (168,025)$ NET TIF Fee 242,835$ 69,809$ 137,794$ Combined New Fees 1,329,737$ 543,144$ 846,634$ 1 Equivalent to 90% of maximum justifiable fee per nexus studies prepared for each fee, per City staff direction. Assumptions Assumptions Page 6 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/D-Tier Fee Detail 7/13/2017 ATTACHMENT D Sheet E Net Operating Income Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units 66 36 45 Market Rate 66 36 45 Studio 10 3 6 1-BR 32 24 25 2-BR 14 6 9 3-BR 10 3 5 Retail (Net Leasable SF)5,000 5,000 5,000 Parking Spaces 98 56 69 Residential 80 42 54 Retail 10 10 10 For-Rent Residential- Market Rate1 Studio Rent/Unit/Month Varies $3,300 $3,300 $3,300 1-BR Rent/Unit/Month Varies $3,800 $3,800 $3,800 2-BR Rent/Unit/Month Varies $4,300 $4,300 $4,300 3-BR Rent/Unit/Month Varies $5,000 $5,000 $5,000 Units Income/Year 3,177,600$ 1,702,800$ 2,142,000$ Other Income 100.00 $ x Unit 79,200$ 43,200$ 54,000$ Gross Income 3,256,800$ 1,746,000$ 2,196,000$ Less: Vacancy & Collection Loss 5.0% x Gross Income (162,840)$ (87,300)$ (109,800)$ Effective Gross Income (EGI) 3,093,960$ 1,658,700$ 2,086,200$ Less: Operating Expenses (incl. reserve) 1 15,000 $ x Unit (990,000)$ (540,000)$ (675,000)$ Net Operating Income 2,103,960$ 1,118,700$ 1,411,200$ Retail2 Average Rent/SF/Month (NNN)Varies 6.00$ 6.00$ 6.00$ Gross Rental Income/Year 360,000$ 360,000$ 360,000$ Less: Vacancy & Collection Loss 5.0% x Gross Income (18,000)$ (18,000)$ (18,000)$ Effective Gross Income (EGI) 342,000$ 342,000$ 342,000$ Less: Unreimbursed Operating Expenses 3.0%x EGI (10,260)$ (10,260)$ (10,260)$ Net Operating Income 331,740$ 331,740$ 331,740$ Total Net Operating Income 2,435,700$ 1,450,440$ 1,742,940$ 1 Per HR&A's experience with similar projects. Assumptions 2 Per HR&A review of third-party market data (i.e. CoStar Group data for similar, recently constructed buildings in the Downtown Community Plan area). Page 7 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/E-Net Ops Income 7/13/2017 ATTACHMENT D Sheet F Returns Prototype Name Residential/Retail Residential/Retail Residential/Retail Location Transit-Adjacent Mixed Boulevard Mixed Boulevard Land Area 15,000 15,000 15,000 Gross Bldg. Area (SF)70,229 39,587 48,751 Residential Units Market Rate Studio 10 3 6 1-BR 32 24 25 2-BR 14 6 9 3-BR 10 3 5 Retail (Net Leasable SF)5,000 5,000 5,000 Project Value Residential-Market Rate Net Operating Income From Sheet, E 2,103,960$ 1,118,700$ 1,411,200$ Cap Rate1 4.80% Value NOI/Cap Rate 43,832,500$ 23,306,250$ 29,400,000$ Retail Net Operating Income From Sheet, E 331,740$ 331,740$ 331,740$ Cap Rate1 5.90% Value NOI/Cap Rate 5,622,712$ 5,622,712$ 5,622,712$ Total Project Value 49,455,212$ 28,928,962$ 35,022,712$ Developer Returns Developer Profit Total Project Value From above 49,455,212$ 28,928,962$ 35,022,712$ Less: Total Development Cost + Off-Site Affordable Housing Costs From Sheet. B (42,933,038)$ (25,610,105)$ (30,905,183)$ Profit 6,522,174$ 3,318,857$ 4,117,529$ % of Value 13.2%11.5%11.8% Return on Total Development Cost NOI From Sheet. E 2,435,700$ 1,450,440$ 1,742,940$ Total Development Cost + Off-Site Affordable Housing Costs From Sheet. B (42,933,038)$ (25,610,105)$ (30,905,183)$ Return on Cost 5.67%5.7%5.6% 1 Based on Real Estate Research Corporation cap rate data for Q1 2016. Assumptions Page 8 of 7 HR&A Advisors, Inc. City Council Approved Off-Site Affordable Housing Requirements/F-Returns 7/13/2017 1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Wednesday, July 19, 2017 2:08 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:councilmtgitems; Clerk Mailbox Subject:FW: Final DCP draft Council- Please see the email below regarding the DCP. Thanks, Estefania From: Daniel Shenise [mailto:dan@danielshenise.com] Sent: Wednesday, July 19, 2017 11:45 AM To: Council Mailbox Subject: Final DCP draft Honorable Council members, I wanted to write in support of the DCP with some caveats. Though I appreciate the desire to add more affordable units in the city, I am afraid that the high numbers included in the DCP for administrative approval of buildings higher than 40-50’ will only encourage developers to shoot for buildings less than 50 feet. This will reduce the total number of units built and since this area is already suffering from scant production of housing, this is a poor choice. My understanding is San Francisco has a requirement of 25% and that number has resulted in decreased production of units. We ought to be encouraging new units, as every new unit means one less chance of displacement of an existing resident. Also, in a city that is roughly 4 miles across at its furthest points, differentiating between on-site and off-site makes little sense to me. I know we want things to be inclusive, but its not like there are any really bad neighborhoods in the city. I’d be happy to live in any neighborhood. So why penalize developers and in essence discourage production of new housing by jacking up numbers. Its like a retail store at a mall complaining they are next to the Banana Republic and not Burberry. The whole city is nice and its small so any new affordable housing will be inclusive simply by being here. If the DCP has to pass as is, I can live with that. But I do encourage you to drop these higher requirements that I think will only discourage new housing production. I recently read something by Leslie Lambert that says what I’m thinking better and with proper citation of evidence. The Planning Commission did an excellent job studying the issue and I think their inclusionary housing requirements and administrative approval process should be the model adopted by the DCP. Thanks for your time, -- Item 7-B 7/25/17 1 of 43 Item 7-B 7/25/17 2 Daniel Shenise 834 - 4th Street Apartment 211 Santa Monica, CA 90403 Item 7-B 7/25/17 2 of 43 Item 7-B 7/25/17 1 Chair West Hooker Locanda del Lago Past Chair Yesenia Monsour Kaiser Permanente Chief Financial Officer Dave Nelson Tegner-Miller Insurance Brokers Vice Chairman Richard Chacker Perry’s at the Beach Vice Chairman Michael Gruning Pence Hawthorn Vice Chairman Ellis O’Connor MSD Hospitality Fairmont Miramar Hotel & Bungalows Vice Chairman Peter Trinh Avery/The Craftsman Bar and Kitchen Board Members Daniel Abramson RAND Corporation Matthew Allnatt Jonathan Club Alisha Auringer LAcarGuy Judy Barker Barker Hanger Barbara Bishop BBPR, Inc. Gauri Brienda-Ramnath A Day in LA Tours Julia Cooksey Frontier Communications Kiersten Elliott Santa Monica College Colby Goff Rustic Canyon Family Jeff Klocke Pacific Park on the Santa Monica Pier Mitchell Kraus Capital Intelligence Associates Board Members, Cont. Bob Kull The Lobster Restaurant Tim Kusserow Carlthorp School Leonard “Len” Lanzi Los Angeles Venture Association Richard Lawrence National Bank of California Paul Leclerc Le Meridien Delfina Gary Loeb Chezgal Merchandising Creations John Loyacono Bank of America Sara Mailloux Hulu Brian Mac Mahon Expert Dojo Jennifer McElyea Watt Investment Partners Pat McRoskey The Water Garden Greg Morena The Albright Restaurant Evan Pozarny Muselli Commercial Realtors Susan Gabriel Potter Bob Gabriel Insurance Dave Rand Armbruster Goldsmith & Delvac Scott Schonfeld Linwood Ventures Camille Strickland Orthopaedic Institute for Children Nat Trives Coalition for Engaged Educations Juan Viramontes Georgian Hotel John Warfel Metropolitan Pacific David Woodbury Arthur Murray Dance Studio. July 21, 2017 Santa Monica Council 1685 Main Street, Room 212 Santa Monica, CA 90401 Re: Housing and the Downtown Community Plan Dear Councilmembers: The Santa Monica Chamber of Commerce urges you to reject the last- minute proposal to increase the affordable housing requirements to 20-30% and instead adopt the Planning Commission and Staff’s recommendation. We are very concerned that adding burdens to building housing in Santa Monica will drastically reduce or entirely halt housing production. This is not a risk we can afford to take considering our regional and Statewide housing crisis. We instead ask the Council to adopt the Planning Commission and Staff’s recommended 15- 20% inclusionary affordable housing requirements, despite our remaining concern that this increase will negatively impact housing production. A.Given the High Stakes, A Change of this Magnitude Requires and Deserves In-Depth Study and Meaningful Opportunities for Public Review and Discourse. The breakdown of public process that led to the City Council initiating this drastic policy shift on July 11th is shocking. The City has prided itself on the DCP public process, including significant public outreach and dozens of opportunities for public input at public hearings over the course of many years. The July 11th hearing threw this process out the window when Staff introduced new information about the public hearing was closed. The Council’s July 11th discussion about potential increases to affordable housing requirements was based almost entirely on new information prepared hastily over a weekend and presented after the public hearing had been closed. As of July 19th, the new “feasibility” information has still not been posted for public review. There has been no meaningful opportunity for public review and discourse. At the July 11th hearing, the City’s economic consultant expressed concern that this new increase is at the verge of economic feasibility and reiterated that Staff’s recommendation remains at 15-20%. The consultant also explained the inherent problems with a standardized feasibility analysis as compared to a project-specific analysis. Moreover, the Council was not provided with information about other jurisdictions’ affordability levels, the lack of housing being produced in other areas of the City, the regional and Statewide housing crisis, or an analysis of the potential loss of housing units if the new Item 7-B 7/25/17 3 of 43 Item 7-B 7/25/17 2 proposal is adopted. A change of this magnitude, especially one with such a clear risk of making housing projects economically unfeasible, merits significant in-depth study, including an assessment of the inclusionary housing policies of other communities. By contrast, the Planning Commission and Staff’s recommendation to significantly increase the affordable housing requirement in the Downtown to 15- 20% resulted from the multi-year DCP process with the benefit of a published feasibility study and meaningful opportunities for review and discourse. During this process, the Chamber and others have had the opportunity to express concerns about the inclusionary affordable housing requirements leading to stagnation, and to critique the assumptions in the City’s feasibility analysis. While we continue to have concerns about the Planning Commission and Staff’s recommendation, the process has appropriately allowed for these concerns to be discussed and considered in a public forum. This public discourse led the Planning Commission to recommend a streamlined process for housing projects to mitigate against the risk that the additional burdens would stem housing production. B. The City’s Utmost Concern Should be the Number of New Homes Being Provided in our Community. The Chamber is concerned that adding such a drastic burden on housing projects will eliminate the last meaningful opportunity for new housing in the City. As the Chamber noted in its prior letter on the draft DCP, Citywide downzoning that eliminated Tier 3 along major corridors and slashed FAR and development potential in the Bergamot Area have virtually halted new housing production in other commercial areas of the City. This should be of special concern as California’s statewide housing crisis grows more severe with each passing month. According to an article published in the New York Times earlier this week, “[a] full-fledged housing crisis has gripped California, marked by severe lack of affordable homes and apartments for middle-class families.” (The Cost of a Hot Economy in California: A Severe Housing Crisis, July 17, 2017) The article notes that there is wide agreement among economists that the “high cost of all housing is first and foremost the result of a failure to build.” Given the context of the ever-worsening state and regional housing crisis, it is irresponsible to enact a policy that presents a profound risk of curtailing housing production in the only part of the City where significant new housing is remotely viable. Requiring 20-30% inclusionary affordable housing is beyond what any recent private development has been able to achieve in this City, what almost any other city in the State, if not the country, is requiring, and what the Planning Commission and Staff are recommending. Item 7-B 7/25/17 4 of 43 Item 7-B 7/25/17 3 The Chamber is aware of only one jurisdiction in Southern California with an affordable housing requirement above 20%, Laguna Beach. Between 1990 to 2013, Laguna Beach only produced about 100 units of multi-family housing. (Laguna Beach 2013-2021 Housing Element, p. II-6) This is a stark example of the risks posed with increasing affordable housing requirements to the brink of economic feasibility. A few similarly-sized municipalities (Pasadena, Santa Barbara and Palo Alto) have inclusionary housing programs that require 15% on-site affordable and one (West Hollywood) requires 20%, but there are important distinctions. For example, Palo Alto allows payment of an in-lieu fee for apartments and only requires 15% on-site affordable for condominium projects. Santa Barbara’s 15% requirement is for moderate (not low, very-low or extremely-low) units. West Hollywood’s 20% requirement only applies when a density bonus is provided. Thus, the Planning Commission and Staff’s recommendation of 15-20% affordable housing is closer to, but still more aggressive than, affordable housing required in similarly-sized jurisdictions. As has been seen in other communities, an attempt to create additional affordable housing units can kill almost all new housing projects. We are concerned that requiring 20-30% affordable housing in new Downtown projects will be the final nail in the coffin for new housing in Santa Monica, and the City will have failed to implement the central policy objective of both the DCP and the LUCE. We urge you not to take this risk as the stakes are too great. In sum, the Chamber urges the City Council to adopt the Planning Commission and Staff’s original proposal for affordable housing requirements despite our remaining concerns that these requirements could stem housing production in the Downtown. Sincerely, Laurel Rosen President / CEO cc: Rick Cole David Martin Jing Yeo Peter James Joseph Lawrence Alan Seltzer Susan Cola Item 7-B 7/25/17 5 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:Elizabeth Van Denburgh <emvandenburgh@gmail.com> Sent:Monday, July 24, 2017 5:47 PM To:Ted Winterer Cc:Laurence Eubank; Deborah Roetman; Manju Raman; John C Smith; Stacy Dalgleish; Clerk Mailbox Subject:Wilmont Executive Committee DCP issues upon review of July 25th Staff Report; denial of 201 Wilshire zoning variance request Attachments:DCP2017Changes.pdf Mayor Winterer, We appreciate the extensive work that you and the City have put into the DCP. Having read the July 25th Staff Report, the Wilmont Executive Committee requests the Council's attention to the following items based on their quality of life impact on the surrounding neighborhoods of Wilmont and Mid-City and the City in general. 1. 201 Wilshire: 201 Wilshire is part of the DCP Wilshire Transition District. The WT District has a maximum allowable height of 40 ft. and 1.75 FAR for commercial projects and 50 feet and 2.25 for housing projects. The property has requested that height and FAR be increased to 60 feet and 3.5 FAR. The Wilmont Executive Committee requests that you deny this request as "spot zoning" and maintain the zoning outlined in the Wilshire Transition District. Wilmont continues to be concerned about commercial incursion into Wilmont and would request this commercial building zoned at the 40ft. height and 1.75 FAR for a reasonable neighborhood transition. We have continually asked for a three-story transition to the neighborhoods and look for your support with this building. 2. Elimination of Minimum Parking: In eliminating minimum parking requirements for new development and halving parking maximums the City's effort to shift the traffic paradigm is "wishful thinking". In looking at the neighborhoods, this policy will push parking and traffic into the neighborhoods, especially Wilmont. We CONTINUE to point out the perfect storm of parking at Ocean and Wilshire near the Miramar hotel. The parking requirements of this hotel includes: hotel guests and their visitors, Promenade visitors, CA Incline and Pacific Palisades visitors, beach goers, banquet and conference attendees, spa and retail visitors, Miramar employees, it is more than 1/2 mile from Expo and the neighborhood is R3 with minimal street and underground parking; many people continue to use their cars whether the City acknowledges it or not. We request that the Miramar and downtown hotels be required to meet Citywide parking standards. How is a downtown hotel different from other hotels throughout the City in terms of parking? 3. 1/4 mile Offsite Affordable Housing: The Downtown area expanded its borders more than 30% in the 2010 LUCE. We request that off-site distance for DCP affordable housing requirements of 1/4 mile from project site be eliminated from the DCP. The original requirement was that the off-site affordable housing be within 500 feet of the project. Please eliminate this 1/4 mile expansion of Downtown into the surrounding neighborhoods. Why else would this condition be in the DCP except to expand into Mid-City and Wilmont?  4. Private/Public Space: We continue to question the viability of private/public space and request that public space be managed by the City and not by private building/property owners. We continue to be concerned because of a history of private/public space being closed to residents/visitors, a lack of enforcement when it is closed, the easy ability to close/restrict access if it is not on grade level AND proposed changes in No. 268, 269 and 270 of the DCP 2017 Changes. At a minimum we strongly recommend striking "Determined by building/property owner" in DCP changes 268, 269 and 270. (See attachment. DCP2017Changes from July 25th City Council Agenda). Private/public space should be established by negotiated contract, not by building/property owner as is currently proposed in DCP. We continue to strongly endorse public space be managed by the City. Building/property owners have every incentive to eliminate/reduce private/public space Item 7-B 7/25/17 6 of 43 Item 7-B 7/25/17 2 and it is hard for residents and the City to continually enforce something that is buried in development agreements/negotiated contracts with extreme benefits to property/building owners to gain complete control over this space. 5. Administrative Approval of Housing Projects: As Peter James stated at the beginning of the DCP review, the history of Santa Monica is not only written in books but in the buildings it creates. ALL housing projects for Tier 2 and Tier currently only need Administrative Approval (AA) up to 75,000 square feet. These are extremely large buildings i.e., 21/2 times the Whole Foods at 23rd and Wilshire that will have absolutely no City or resident input. This is not acceptable given the importance of large buildings in the City and the architectural and sustainable framework these buildings will create. We support a lower AA at 30,000 for housing projects i.e., the size of Whole Foods (23rd/Wilshire). These large buildings will be in place for a 100 years; why are we letting their definition and design be without City and resident input? 6. 2nd St. and CA entrances to Miramar: Fairmont Miramar project should continue to use its entrances on Wilshire and Ocean and NOT create entrances on residential neighborhood streets of 2nd Street or California. As well, any entrance on California will impact the flow of the California Incline traffic going east. We appreciate all your efforts on behalf of Wilmont and Mid-City neighborhoods and the City overall. Best, Elizabeth Van Denburgh Wilmont Treasurer and Executive Committee Member Item 7-B 7/25/17 7 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:santamonicamidcityneighbors <santamonicamidcityneighbors@gmail.com> Sent:Monday, July 24, 2017 3:28 PM To:Council Mailbox; Clerk Mailbox; Pam OConnor; Terry O’Day; Gleam Davis; Ted Winterer; Councilmember Kevin McKeown; Tony Vazquez; Sue Himmelrich Cc:Rick Cole Subject:City Council votes on DCP tomorrow - Step-downs into neighborhoods Dear City Council, Thank you for your work on behalf of our City, the residents and the DCP. The only item I wish you would reconsider is the step-down into the neighborhoods of Mid City and Wilmont. These areas overlook our neighborhood in Mid City and should be kept at 3 stories. Thank you very much. Respectfully, Stacy President Santa Monica Mid City Neighbors Email: SantaMonicaMidCityNeighbors@gmail.com Website: MidCityNeighbors.org https://www.facebook.com/pages/Santa-Monica-Mid-City-Neighbors/472617166107849 Begin forwarded message: From: City of Santa Monica <downtownplan@smgov.net> Subject: City Council votes on DCP tomorrow Date: July 24, 2017 at 3:00:01 PM PDT To: <santamonicamidcityneighbors@gmail.com> Reply-To: City of Santa Monica <downtownplan@smgov.net> Item 7-B 7/25/17 8 of 43 Item 7-B 7/25/17 2 The final draft Downtown Community Plan goes to Council for final vote July 25. View this email in your browser Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet. City Council Votes on Downtown Community Plan Tomorrow The Santa Monica City Council will vote on the final draft Downtown Community Plan (DCP) at tomorrow's City Council meeting at 6:30 p.m. At its last meeting, the Council unanimously endorsed the final draft DCP after more than 100 members of the community provided public testimony the night before. Public testimony will reopen tomorrow night before a vote that would ratify the DCP. This comes after a six year-long planning process that you have been deeply involved in - thank you. For a summary of Council changes made on July 11 in response to public comment, read this press release. Changes include incentives for housing production, California’s most ambitious affordable housing requirements, a rigorous process and clear limits for Established Large Sites, and eliminating parking minimums to encourage shared parking and mass transit. Final Vote: Tuesday, July 25, 6:30 p.m. Council Chambers, City Hall, 1685 Main St., 2nd Floor Public comment will be open before the Council vote. Agenda > Thank you for staying involved in the DCP. For more information, visit downtownsmplan.org. Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet. Item 7-B 7/25/17 9 of 43 Item 7-B 7/25/17 3 Copyright © 2017 City of Santa Monica Want to change how you receive these emails? You can update your preferences or unsubscribe from this list Item 7-B 7/25/17 10 of 43 Item 7-B 7/25/17 4 Item 7-B 7/25/17 11 of 43 Item 7-B 7/25/17 Ocean Avenue LLC c/o MSD Capital, L.P. 100 Wilshire Boulevard, Suite 1700 Santa Monica, California 90401 July 25, 2017 City of Santa Monica City Council Santa Monica City Hall 1685 Main Street Santa Monica, CA 90401 Re: Final Draft Downtown Community Plan Dear Mayor Winterer and Honorable City Council Members, On behalf of Ocean Avenue LLC, the owner of the Fairmont Miramar Hotel & Bungalows, we respectfully submit this letter regarding the final Downtown Community Plan (“DCP”) and the Final EIR Errata Memorandum (the “Errata”) submitted by Amec Foster Wheeler. After six years of comprehensive work and analysis by City Staff, Planning Commission, and City Council, with extensive participation by a broad cross-section of stakeholders, it appears that the DCP is approaching final approval. We have been grateful for the opportunity to participate in the DCP process and appreciate the difficult task of striking the right balance for all stakeholders with this long-term plan for the Downtown. Several sections of the Errata reference development standards and guidelines to address aesthetic and land use issues, including maintaining a clear transition between the Down town and the adjacent neighborhoods and preventing a uniform building height of 130’ on the “Established Large Sites” (as defined in the DCP). Given the extensive written comments submitted over the course of the DCP process by the law firm representing the Huntley Hotel, and their apparent strategy of creating a record in order to pursue a CEQA challenge to the DCP, we feel compelled to add to the record some important additional information about the Miramar site: - As noted by Interim Assistant City Attorney Alan Seltzer in the July 11th DCP hearing, the 4.5-acre Miramar site was not identified in the 2010 Land Use and Circulation Element (the “LUCE”) as a transition site. Rather, per Section D1.5, the site was identified as an opportunity site for new investment. Following the completion of the LUCE, and as part of the City’s more detailed planning process for the Downtown, the Miramar was further identified to be an Established Large Site in the “Ocean Transition Zone” (as defined in the DCP), not the “Wilshire Transition zone” (as defined in the DCP) or “Mixed-Use Item 7-B 7/25/17 12 of 43 Item 7-B 7/25/17 Boulevard zone” (as defined in the DCP). The Wilshire Transition Zone and the Mixed-Use Boulevard zone are the only two zones identified in the DCP as the transition zones for adjacent residential uses. Further, based on City Council’s direction at the DCP hearing on July 11th, the Miramar will be subject to Staff’s proposed Established Large Site overlay consistent with the original direction in the LUCE. - The only portion of the Miramar site where residential uses are located directly across the street is the northern perimeter, along California Avenue. The western half of that border faces a 130’ condominium tower (across California Avenue). The eastern half of that border is occupied by the historic Palisades Building (the height of which is approximately 74 feet), which will be preserved and restored in its current building form as part of any redevelopment plan. - In contrast, the Miramar site is surrounded on three sides by very tall, relatively dense buildings (see Exhibit A to this letter). The issue of compatibility for any development on our site must be addressed in that very specific urban context. - In April 2012, we received clear direction from the City Council to concentrate the height of any new development in the center of our site, in the general location of the existing Ocean Tower, which is 135’ to its highest point and has been in that location since 1957. Every massing option we have considered since that time places the tallest structure in the center of our site. - The Established Large Sites overlay will require our proposed project to go through an extensive Development Agreement process, including a project-specific EIR and multiple public hearings at Planning Commission, City Council, and Landmarks Commission /Architectural Review Board. This process will provide ample opportunity for Staff review and public feedback on every aspect of the plan, including location of the building heights on the site. - Since a Development Agreement is required for any project on our site pursuing greater than 84’ in height, State law and the Municipal Code require the Development Agreement to be consistent with the City’s General Plan (including the LUCE) and the Downtown Community Plan, all of which include policies regarding land use compatibility. These mandatory Development Agreement findings will further ensure no significant adverse impact regarding land use of a project including any elements of up to 130’ in height. - Any additional development along California Avenue, adjacent to the Palisades Building (a designated City Landmark), must be “compatible” with the existing building, consistent with the guidelines published by the Secretary of the Interior. Based on these guidelines and Staff’s prior direction, all current redevelopment options under study are about the same height along California Avenue as the Palisades Building. We respectfully submit that the additional policies, guidelines and procedures described above will ensure the compatibility of any structures proposed for the Miramar site that might exceed the 84’ height limit that otherwise prevails in the Downtown . As we have stated previously, our goal in redeveloping our 100-year old hotel is to ensure its continued success for the next 100 years. We hope to redevelop the site in a manner that makes a significant contribution to the urban fabric of Downtown Santa Monica, is respectful of the Item 7-B 7/25/17 13 of 43 Item 7-B 7/25/17 community’s priorities, is consistent with the final DCP, helps solve the City’s chronic need for affordable housing and reinforces the City’s fiscal sustainability. We are truly excited about our new design direction, which has evolved consistent with the direction in the final approved DCP. We are eager to share our new design with a broader group of stakeholders in the months ahead, and to move forward on executing the vision for Downtown originally put forth in the 2010 LUCE. Authorized Representative cc: Denise-Anderson Warren, City of Santa Monica Susan Y. Cola, City of Santa Monica Rick Cole, City of Santa Monica Peter James, City of Santa Monica Rachel Kwok, City of Santa Monica David Martin, City of Santa Monica Dustin Peterson, The Athens Group Francie Stefan, City of Santa Monica Roxanne Tanemori, City of Santa Monica Jing Yeo, City of Santa Monica Item 7-B 7/25/17 14 of 43 Item 7-B 7/25/17 Exhibit A Miramar Neighborhood Context Item 7-B 7/25/17 15 of 43 Item 7-B 7/25/17 I t e m 7 - B 7 / 2 5 / 1 7 1 6 o f 4 3 I t e m 7 - B 7 / 2 5 / 1 7 I t e m 7 - B 7 / 2 5 / 1 7 1 7 o f 4 3 I t e m 7 - B 7 / 2 5 / 1 7 I t e m 7 - B 7 / 2 5 / 1 7 1 8 o f 4 3 I t e m 7 - B 7 / 2 5 / 1 7 I t e m 7 - B 7 / 2 5 / 1 7 1 9 o f 4 3 I t e m 7 - B 7 / 2 5 / 1 7 Item 7-B 7/25/17 20 of 43 Item 7-B 7/25/17 Item 7-B 7/25/17 21 of 43 Item 7-B 7/25/17 Item 7-B 7/25/17 22 of 43 Item 7-B 7/25/17 Item 7-B 7/25/17 23 of 43 Item 7-B 7/25/17 Dear City Leaders, I am writing regarding the Downtown Specific Plan. Although prior engagements prevent me from attending the public meeting on Tuesday, July 25, I respectfully request that this letter be included in the public comment and that you take it into consideration while evaluating your own position on the subject. I was incredibly disappointed to read the comments in a recent LA Times article (Santa Monica’s ‘grand bargain’ on growth and housing by Christopher Hawthorne, found online here: http://www.latimes.com/entertainment/arts/la-ca-cm-building-type-santa-monica-downtown- 20170721-story.html ) in which our City Manager, Mr. Cole stated, “We may not be able to get much new middle-class housing, because of factors beyond our control, but by God we’re going to get the maximum amount for the lower end.” In the clearest and simplest terms I can say it, giving up on middle-class housing is giving up on Santa Monica. This represents a giving over of Santa Monica to the ultra-rich and the government-assisted poor (both of whom, but not only whom, should absolutely have a place here), and of giving Santa Monica up to an unrecognizable future city of immense inequality where basic neighborhood- serving retail will not survive. In fact, it represents a giving up of Santa Monica to a city in which traffic will increase: the ultra-rich are less likely to use public transportation, and the most poor are more susceptible to job changes that require use of a car. Giving up on middle-class housing in Santa Monica will bring about all of the negative effects that so many in our city claim they hope to avoid when protesting any change or increase in land-use in our town. I have included with this letter a photo. This image is from Google’s Street View of my street. It captures my wife and I standing on the sidewalk next to a moving truck on the day we moved into this fair city. It was a hot day. We were exhausted, having risen early to get our keys and rent the truck, pack up our apartment in Los Angeles, and make the move with help of some friends and family. In all the craziness, while our friends were inside, we took a simple quiet moment outside to reflect. With my arm around her – water bottle in hand to beat back the heat, vacuum sitting next to us on the sidewalk, and so much work left to do – we stood in wonder and joy looking at our new home. Santa Monica is a fantastic place to live, and we were so happy to be here. I didn’t realize at the time that this moment would be captured for all the world to see, but I’m glad that it was. Item 7-B 7/25/17 24 of 43 Item 7-B 7/25/17 Our apartment is exactly the type of middle-class housing that our city needs more of. As it is, supply is so restricted that you must be at the very top edge of that class to rent it. And of course, we’ve long passed the point that any solidly middle-class family can purchase a home in our city. We recognize how fortunate we are. Now that we’re in, we appreciate Santa Monica’s rent control ordinance, which can help keep us here no matter how much demand increases and rents rise for vacant apartments in the future. But there’s another edge to the rent-control sword: it also consistently increases the divide between the ever-richer new residents and those who have been here for a long time or who live in otherwise subsidized housing. Our rent is over $1,000 more expensive than it was for the tenant who moved out. If and when the neighbors in our building move out, the rent on those units will similarly increase. The building is in the process of evolving and will continue to evolve from a middle-class building – not “affordable” in the government-supported sense, but affordable and accessible to most people with consistent jobs – to one in which only the richest can afford. It is not a luxury building by any stretch of the word, but it’s all that’s available, and the rich will win out. Couple this phenomenon with the lack of new housing being built across our city, and the effects are dramatic. Many of Santa Monica’s neighborhoods already have a mix of housing types, where single-family homes are next to duplexes/triplexes, small apartment buildings like ours, and larger apartment Item 7-B 7/25/17 25 of 43 Item 7-B 7/25/17 buildings as well. These neighborhoods can afford to increase in density dramatically, without any impact to the sacred “neighborhood character.” And without touching the zoning in neighborhoods that are solidly single-family. The palm trees on my street surely started lower than the building height, but now they tower above every structure around. They have changed, they have grown over time, but our neighborhood has not grown with them. My 6-unit building could easily be 8 or 12 units. It could easily be 1-2 floors taller, without any dramatic impact to the feel of the street. Yes, street parking will surely remain an issue, but it’s precisely the middle-class housing that needs the least amount of it. As an anecdotal example, we moved to Santa Monica for the express reason that my wife can walk to work and I can walk to the Expo Line. We own one car between the two of us – and we store it in our apartment’s included off-street spot only because the spot comes with the apartment and the car is paid off. To be honest, we don’t need it on a daily basis and would probably be better off without it (and with the cash that we’d have from selling it). If our apartment didn’t include a spot, we’d likely own zero cars at this point and never contribute to traffic in Santa Monica. I grew up in a neighborhood whose elementary school has now closed because no families can afford to live there. I had 12 kids my age on my small street growing up not too long ago, with too many siblings to count. And now, only retirees downsizing from richer neighborhoods or couples without kids can afford the homes; no family can buy in the city like my parents did. Santa Monica has fantastic schools, good streets and parks. It’s a wonderful place for a family, and we intend to raise one here – but it’s rapidly growing more and more out of reach not only to us but to any other young family. We must not allow this to happen. The future of Santa Monica truly depends on it. I realize that this plan is only about Downtown Santa Monica, but the issues facing our entire city are connected. If we do not prioritize adding housing in Downtown, how do we believe we’ll ever be able to have enough in the rest of the city? While some may believe this city was perfect the moment they moved in and nothing should be added or changed beyond that, I guarantee that residents who have moved to Santa Monica at various times throughout the past decades all believe that their decade was the best. In fact, no decade was best, and they’re all part of a constantly evolving city. It’s important that we direct the way it involves, so that the changes are positive for as many people as possible, because we will never be able to stop them. Many of the residents – renters and owners alike – who live in our city would not be able to afford moving in today or in the near future. It is time for us to double down on middle-class housing, on affordable housing, and yes even on luxury housing. If we don’t, then even the most basic of homes – our entire city – will effectively become luxury. I urge you to support a Downtown Specific Plan that encourages housing growth. The current plan is not it. Respectfully, Steve White Item 7-B 7/25/17 26 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 12:33 PM To:councilmtgitems; Clerk Mailbox Subject:FW: City Council votes on DCP tomorrow - Step-downs into neighborhoods Hi,     Please see the email below for public record.     Best,   Estefania    Estefania Zavala  Intern | City of Santa Monica, City Manager’s Office   Master of Public Policy Student | UCLA    From: santamonicamidcityneighbors [mailto:santamonicamidcityneighbors@gmail.com]   Sent: Monday, July 24, 2017 3:28 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>; Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Pam OConnor  <Pam.OConnor@SMGOV.NET>; Terry O’Day <Terry.Oday@smgov.net>; Gleam Davis <Gleam.Davis@SMGOV.NET>; Ted  Winterer <Ted.Winterer@SMGOV.NET>; Councilmember Kevin McKeown <Kevin.McKeown@SMGOV.NET>; Tony  Vazquez <Tony.Vazquez@SMGOV.NET>; Sue Himmelrich <Sue.Himmelrich@SMGOV.NET>  Cc: Rick Cole <Rick.Cole@SMGOV.NET>  Subject: City Council votes on DCP tomorrow ‐ Step‐downs into neighborhoods  Dear City Council, Thank you for your work on behalf of our City, the residents and the DCP. The only item I wish you would reconsider is the step-down into the neighborhoods of Mid City and Wilmont. These areas overlook our neighborhood in Mid City and should be kept at 3 stories. Thank you very much. Respectfully, Stacy President Santa Monica Mid City Neighbors Email: SantaMonicaMidCityNeighbors@gmail.com Website: MidCityNeighbors.org https://www.facebook.com/pages/Santa-Monica-Mid-City-Neighbors/472617166107849 Item 7-B 7/25/17 27 of 43 Item 7-B 7/25/17 2 Begin forwarded message: From: City of Santa Monica <downtownplan@smgov.net> Subject: City Council votes on DCP tomorrow Date: July 24, 2017 at 3:00:01 PM PDT To: <santamonicamidcityneighbors@gmail.com> Reply-To: City of Santa Monica <downtownplan@smgov.net> Item 7-B 7/25/17 28 of 43 Item 7-B 7/25/17 3 The final draft Downtown Community Plan goes to Council for final vote July 25. View this email in your browser City Council Votes on Downtown Community Plan Tomorrow The Santa Monica City Council will vote on the final draft Downtown Community Plan (DCP) at tomorrow's City Council meeting at 6:30 p.m. At its last meeting, the Council unanimously endorsed the final draft DCP after Item 7-B 7/25/17 29 of 43 Item 7-B 7/25/17 4 more than 100 members of the community provided public testimony the night before. Public testimony will reopen tomorrow night before a vote that would ratify the DCP. This comes after a six year-long planning process that you have been deeply involved in - thank you. For a summary of Council changes made on July 11 in response to public comment, read this press release. Changes include incentives for housing production, California’s most ambitious affordable housing requirements, a rigorous process and clear limits for Established Large Sites, and eliminating parking minimums to encourage shared parking and mass transit. Final Vote: Tuesday, July 25, 6:30 p.m. Council Chambers, City Hall, 1685 Main St., 2nd Floor Public comment will be open before the Council vote. Agenda > Thank you for staying involved in the DCP. For more information, visit downtownsmplan.org. Item 7-B 7/25/17 30 of 43 Item 7-B 7/25/17 5 Copyright © 2017 City of Santa Monica Want to change how you receive these emails? You can update your preferences or unsubscribe from this list Item 7-B 7/25/17 31 of 43 Item 7-B 7/25/17 6 Item 7-B 7/25/17 32 of 43 Item 7-B 7/25/17 Dear Councilmembers: As tomorrow night’s votes draw closer, my concerns have only increased. Full disclosure: I am writing only as an individual, this has not been discussed with either the CCSM board or the Housing Commission. Some on both would disagree with me. As you are aware, the housing currently being built at 1626 Lincoln is the only major new construction of deed restricted family housing going up since the last of the redevelopment fund related projects was finished. And this is with no housing trust fund dollars, making thodse funds available for something more. I have been watching how cities across the state are responding (or not) to the current housing deficet. The lack of new housing in San Francisco since they changed the requirements is enough to cause concern. Just, what ever you do, don’t make another project like 1626 more difficult to bring to reality. This one was difficult enough and should be a model, not a once-in-a- lifetime event. Sincerely, Joanne Leavitt Item 7-B 7/25/17 33 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:Leonora <leonorasc@gmail.com> Sent:Tuesday, July 25, 2017 12:43 PM To:Clerk Mailbox Subject:Input on Agenda Item 7B My name is Leonora Yetter and I have previously testified that the DCP does not do enough to encourage housing development in Downtown Santa Monica. I wanted to write my objection to Agenta Item 7B, which involves a last-minute change to the proposed affordable housing requirements threatens to undermine the goal of producing more housing -- including affordable housing -- in our downtown. The last minute proposal would require all new housing projects between 60 feet and 84 feet (about five to seven stories) to provide 25 to 30% affordable units on-site. I am for promoting affordable housing, but having extreme and unrealstic affordable housing requirements for taller buildings discourages the building of large housing developments, and so overall the number of affordable housing units will be limited. The affordable housing requirements should incentivize the building of *as many units as possible* so that we can maximize affordable housing units. It is hard to understand why we would incentivize building smaller developments with fewer overall affordable housing units when the city faces an affordability crisis. The Downtown Community Plan must have realistic requirements for housing and that the staff and Planning Commission's earlier recommendations of 15% to 20% in each new project is the right balance to assure that new housing continues to be built while also providing more affordable homes where we need them most. We are in a housing crisis and we need to be taking that seriously. Item 7-B 7/25/17 34 of 43 Item 7-B 7/25/17 July 25, 2017  Santa Monica City Council  1685 Main Street, Room 212  Santa Monica, CA 90401  Re:  The Downtown Santa Monica Plan and the Boys & Girls Clubs of   Santa Monica  Dear Members of the City Council:  I am writing on behalf of the Boys & Girls Clubs of Santa Monica with respect  to the proposed Downtown Community Plan.  We thank Staff for their  recommendation to increase the Development Review Threshold applicable to  the Boys & Girls Club property on Lincoln Boulevard (1237 Lincoln Boulevard)  to 25,000 sf.  We respectfully reiterate our request that the threshold be  increased to 35,000 sf in order to allow the redevelopment of our facility on  Lincoln Boulevard to be processed by an Administrative Approval.   Requiring a Development Review Permit will be extremely burdensome on the  Club, imposing significant additional costs on our nonprofit institution, as well  as significant delay and uncertainty.  As the Staff Report notes, 1237 Lincoln  Boulevard is approximately 37,500 sf.  Therefore, a project 35,000 sf or smaller  would represent an FAR of less than 1.0 and would result in a building that is  relatively modest compared to many other nearby structures.    Imposing a Development Review Permit process on the Club will provide  minimal benefits to the City.  Staff notes that the Development Review Permit  process would “provide opportunity to shape a potentially larger project,”  especially with respect to size, massing and placement.  We respectfully  suggest that the Architectural Review Board process will be sufficient to ensure  that Staff’s concerns are addressed in this regard.    We appreciate Staff’s recommendation to include new Action CCP2.4A, to  “[c]ollaborate with the Santa Monica Boys and Girls Club to identify and  resolve obstacles to the renovation of their facilities on Lincoln Boulevard.”   Fortunately, the Council has an opportunity to resolve one of the largest  obstacles we are facing right now, by increasing the Development Review  Threshold applicable to the Club to 35,000 sf.   The Boys & Girls Club respectfully asks that you consider this important change  to the Downtown Community Plan.    Item 7-B 7/25/17 35 of 43 Item 7-B 7/25/17 Thank you for your time and consideration.  Respectfully,    Michelle Arellano  President & CEO  cc:  Rick Cole    David Martin   J i n g   Y e o     Peter James    Roxanne Tanemori    Joseph Lawrence    Susan Cola    Boys & Girls Clubs of Santa Monica Board of Directors  Item 7-B 7/25/17 36 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:Michele Perrone <micheleperrone@me.com> Sent:Tuesday, July 25, 2017 1:45 PM To:Clerk Mailbox; Council Mailbox; Rick Cole Subject:DCP Honorable Mayor Winterer and City Council Members,    At each meeting I have been to I hear City Manager Cole and staff state that the 56% of people who do not want the  height is the equivalent of a 50/50 divide on opinion. 56%/44% is what the vote on LV was, yet you stated that the  majority of people didn’t want the limitations in that measure. Now you are hanging your hats on the same ration being  a 50/50 opinion? Come on! It doesn’t make sense.    It is frustrating as a citizen to continually participate and watch each time as the majority of citizens are ignored. Why do  you spend the money if you are not going to give people what they want. It is not a 50/50 decision and you know it.    I am writing to ask for the following:    1)  Change your vote to restrict all heights to 85’, including in opportunity sites.    2)  4th/5th and Arizona must be a park. There is no park space to speak of in this downtown area. Now that downtown  has and is expanding to Lincoln Blvd it requires another park in the center. DON’T LOSE THIS OPPORTUNITY! THIS IS  YOUR OPPORTUNITY AT THIS SITE! PLEASE.      Hope you read this.    Sincerely,    Michele Perrone        Item 7-B 7/25/17 37 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:jim gerstley <jimggers@yahoo.com> Sent:Tuesday, July 25, 2017 3:19 PM To:Councilmember Kevin McKeown; Gleam Davis; Pam OConnor; Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Clerk Mailbox; Council Mailbox Subject:Council meeting 7/25/17 item 7B: Downtown Community Plan I'm concerned about loss of essential services due to high cost of land developers are willing to pay,2] housing, 3] EIR; 4) parking; 5) natural resources. 1] The latest essential store to close will be Whole Foods at 5th and Wilshire. If not replaced by another good market, we will be driving a lot more; so will others. I don't see that the DCP is concerned about spatial planning of markets, drug stores, and other essential services that would make Santa Monica a walkable city. Many stores, including markets and even physicians [with low payments from Medicare] work on small profit margins and cannot increase prices as rent rates go up. I believe one of the forces driving land prices is the price developers are willing to pay. The bigger, denser project they can build on a piece of land, the more they are willing to pay. a] If allowable developments were restricted to three or 4 stories in the downtown area, what would developers be willing to pay compared to the current and proposed regulations? b] What store types are we likely to lose and what will we end up with as rentals escalate? c] If we had no developers, what would the land prices be and how would that impact the future outlets here? The same issue is going to occur if major development is approved along other roads such as Montana, Lincoln, Wilshire. Markets cannot afford the high rents that would occur. 2] Housing. We passed a bond issue recently for affordable housing. I understand the State is also considering money for affordable housing. We shouldn't be dependent on developers for affordable housing. a] Seems dollars would stretch further if low income housing should were not built on the most expensive real estate parcels in the city. Seems to me if built anywhere along the light rail or major bus routes, they would have the same advantages at low transportation cost to them as if they were built in the middle of downtown. Why do we take the most expensive approach to low income housing? b] As is, seems developers are being asked to pay a pittance towards low income housing 3] Environmental Impact report: So much of the report was ignored or waved off yet still has significant impact on Santa Monica. The EIR in its current form should not be approved. 4] Parking. Seems to me that more parking gets cars off the street faster, reduces traffic congestion, more attractive to residents and visitors alike to shop downtown. a] Don't want more traffic downtown? Put in peripheral lots around the city with frequent bus service to light rail and downtown. b] based on freeways, a lot of cars come from out of town every day. More businesses will mean more cars still. c] Parking needs determined by car usage and requirements. If some portion of residents cannot bike and distances are too far to walk [including walking to public transport] they need a car d] Because so many drive from out of town, I believe it will be many years before people can leave their cars behind until both Santa Monica AND Los Angeles and neighboring communities ramp up their public transportation system. I certainly don't see it happening by 2030, and will probably get worse before then. Item 7-B 7/25/17 38 of 43 Item 7-B 7/25/17 2 5] I'm still concerned about whether our natural resource plan for water and power is adequate in normal, wet, and dry periods. How many people can be serviced? How is that going to limit development? How will that impact current residential and commercial users? Thanks Jim Gerstley 90403 Item 7-B 7/25/17 39 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:David Whatley <dwhatley@ucla.edu> Sent:Tuesday, July 25, 2017 3:26 PM To:Council Mailbox Cc:David Martin; Clerk Mailbox; Rick Cole Subject:Re: The Plaza at Santa Monica July 25, 2017 Dear City Council, Please receive my email to Rick Cole dated Tue, Jul 25, 2017 at 5:14 PM, found below, along with this email, as my public comment tonight for the Downtown Community Plan vote. I feel the letter I planned to write to you could impact how you might vote, but because i was not provided with the information I asked for from the Planning Department till yesterday----even though I originally asked them for it in February/March of this year, I now don't have the time review the information and include it in my letter to you. I have sent this Council countless emails on why I feel I have been treated differently by the City due to my protected class. This experience with the Planning Department is yet another example. David Whatley cc: David Martin Rick Cole City Clerk David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education On Tue, Jul 25, 2017 at 5:14 PM, David Whatley <dwhatley@ucla.edu> wrote: Rick, I am concerned about my recent communication with David Martin's office. As I stated in my email, the Council vote on the Downtown Plan is tonight and David's staff just responded to my inquiry yesterday--- after several months---now i will have no time to review the float-up plan and the other link that his staff sent me so that I can compose a letter to the Council that is informed. I feel my letter could impact the way a Council member might vote. I mentioned to David that it is a fact that this City has a history of treating certain residents from protected classes differently than other residents. Item 7-B 7/25/17 40 of 43 Item 7-B 7/25/17 2 This experience is just yet another example. David cc: City Council City Clerk David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education On Tue, Jul 25, 2017 at 5:09 PM, David Whatley <dwhatley@ucla.edu> wrote: Hi David, Thank you for your time just now on the phone. I appreciate your efforts to assist me, however, you were unable to answer my question about whether or not you feel I was treated fairly by your department with respect to the information I asked for. I sent 1/2 a dozen emails asking for information from your office pertaining to affordable housing and other document retailed to the 4/5th project, which is a part of the Downtown Community Plan. I am sorry if your staff feels offended about my email communication last night...I was simply trying to get an answer to my question about if you feel I was treated fairly and i never got one. So I ask you again: do you feel I was treated fairly? You still, even after a 45 minutes phone conversation, refuse to answer that question. I appreciate the other information you provided but please understand that this is yet one more example of the City treating me differently and unfairly than other residents. Now the Council vote on the Downtown Plan is tonight and your staff just responded to my inquiry yesterday---after several months---i will have no time to review the float-up plan and the other link Jing sent me so that I can compose a letter to the Council that is informed. David cc: Rick Cole David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education Item 7-B 7/25/17 41 of 43 Item 7-B 7/25/17 3 On Tue, Jul 25, 2017 at 1:09 PM, David Whatley <dwhatley@ucla.edu> wrote: okay great, thanks so much for your time. David Whatley David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education On Tue, Jul 25, 2017 at 1:08 PM, Carmen Gutierrez <Carmen.Gutierrez@smgov.net> wrote: Yes, you can discuss those concerns at 2:15 as well. From: David Whatley [mailto:dwhatley@ucla.edu] Sent: Tuesday, July 25, 2017 11:05 AM To: Carmen Gutierrez <Carmen.Gutierrez@SMGOV.NET> Subject: Re: The Plaza at Santa Monica How what dates do you have open regarding my concerns with respect to the Planning Department's Email Policy.....or would David be willing to discuss and address those concerns in today's 2:15 call? David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education On Tue, Jul 25, 2017 at 1:00 PM, Carmen Gutierrez <Carmen.Gutierrez@smgov.net> wrote: Phone call confirmed for 2:15pm today. Please call 310 458-2275. From: David Whatley [mailto:dwhatley@ucla.edu] Sent: Tuesday, July 25, 2017 10:52 AM To: Carmen Gutierrez <Carmen.Gutierrez@SMGOV.NET> Subject: Re: The Plaza at Santa Monica Thank you Carmen for your email. Yes, I am available for a phone call regarding the project at 4th/5th Street. How about 2:15pm? In addition I would like to request an separate phone call meeting regarding the email policy of the Planning Department, and whether or not David feels I was treated fairly...I asked him this question via email yesterday and never answered the question. David Item 7-B 7/25/17 42 of 43 Item 7-B 7/25/17 4 David Whatley MA, International Studies alumnus: UCLA, EGAP Gobierno y Política Pública & Harvard Kennedy School Executive Education On Tue, Jul 25, 2017 at 12:38 PM, Carmen Gutierrez <Carmen.Gutierrez@smgov.net> wrote: Hi David, I’m David Martin’s assistant and I can help set up a phone call regarding the project at 4th/5th Street. Are you available for a phone call this afternoon between 2:00-5:00pm? Carmen Gutierrez City of Santa Monica | Planning & Community Development 1685 Main Street, Room 214 | Santa Monica, CA 90401 (310) 458-2275 x5547 Item 7-B 7/25/17 43 of 43 Item 7-B 7/25/17 1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 4:50 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:Stephanie Venegas; Clerk Mailbox; councilmtgitems Subject:FW: Agenda Item No. 7b Ordinance on DCP on July 25, 2017 Council Meeting Council‐    Please see the email below regarding DCP.     Thanks,   Estefania    ‐‐‐‐‐Original Message‐‐‐‐‐  From: Kathy Knight [mailto:kathyknight66@gmail.com]   Sent: Tuesday, July 25, 2017 4:14 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>  Subject: Agenda Item No. 7b Ordinance on DCP on July 25, 2017 Council Meeting    July 25, 2017    Dear Council Members ‐     PLEASE VOTE NO on Agenda Item No. 7b.   It is TOTALLY INSANE to increase the downtown density of our city by 73%.      WE are already one of the most densely populated cities in LA County.      You are creating a major safety issue for our residents.      A close friend of mine had a heart attack yesterday and had to be rushed to the emergency room at a local hospital.    They performed surgery immediately on his heart, and the doctor said if a few minutes more had passed, he would have  died.      But traffic is getting so bad in our city that emergency vehicles cannot guarantee that they will be able to get to a  location in time.  The horrible gridlock traffic in the central district is creating a situation where they cannot get through fast enough.    How many people do you want to take responsibility for that are not helped fast enough due to increasing our traffic?    I do not believe that the 73% increased residents, and their family and friends who visit them, in downtown Santa  Monica will not drive any cars.    Please vote NO on Agenda Item No. 7b, and work towards making our City safe for our residents.    Thank you,  Kathy Knight  30 year resident of Sunset Park  2 (310) 613‐1175  kathyknight66@gmail.com   1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 4:51 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:Stephanie Venegas; councilmtgitems; Clerk Mailbox Subject:FW: Buy the old post office and make it part of the new DCP Council‐    Please see the email below regarding DCP.     Thanks,   Estefania    From: Richard Orton [mailto:laxlon@aol.com]   Sent: Tuesday, July 25, 2017 3:59 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>  Subject: Buy the old post office and make it part of the new DCP  Council, Please give us a park at 4th/5th/Arizona, the residents should be given something out of this proposed plan. In the article in the Times this weekend about the new DCP, Rick Cole talked about this plan being a synthesis of different points of view. But frankly I can't see any concessions to residents, only to the developers. They get:  More density  More height  Reduced parking requirements So please give us:  The park, this is my concept for a small craftsman building which would divide the park into 3 outdoor spaces. 2   Because:  It will increase the property values of all the property in the area.  It will be a great place to build condos that overlook it.  It will provide white space in the middle of a dense downtown.  There will be parking underneath One more thing:  Buy the Post Office back, make that part of the plan. It is clear now we can't trust outside forces to be good stewards of that precious building. Thank you for your attention. Richard Orton Ocean Park 1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 5:09 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:councilmtgitems; Clerk Mailbox; Stephanie Venegas Subject:FW: DCP Council‐    Please see the email below regarding the DCP.     Thank you,   Estefania    From: Michele Perrone [mailto:micheleperrone@me.com]   Sent: Tuesday, July 25, 2017 3:36 PM  To: Rick Cole <Rick.Cole@SMGOV.NET>; Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Council Mailbox  <Council.Mailbox@SMGOV.NET>  Cc: Jing Yeo <Jing.Yeo@SMGOV.NET>; Peter James <Peter.James@SMGOV.NET>; Council Mailbox  <Council.Mailbox@SMGOV.NET>; David Martin <David.Martin@SMGOV.NET>  Subject: Re: DCP  Rick, Thank you for your response. Sadly, I have been to about 3-4 public meetings since the survey. At each one I specifically remember Peter James stating that the 56%/44% was the equivalent of a 50/50 opinion. If you don’t believe me I will dig it out of the video. I was sitting with others who heard the same. Your staff represent you and your are responsible for what they state. As well, in your recent statements to LA Times your tone was that certain types of development were good, regardless of public opinion. I disagree. And the fact that staff recommended to council to continue with DAs on these opportunity sites even after the Planning Commission recommended against it, is evidence of ignoring us. I do appreciate your lengthy, thoughtful response. I have come to care about the future of this (now unrecognizable) city, where I have spent the last 27 years. But, if it gets any worse, it will be beyond repair. Height brings density and we can’t afford it. We need that park at 4th/5th and Arizona and we need downtown to breath; For the air to flow and for our city not to give into this never ending chase to fund pensions. It’s becoming impossible to afford and impossible to move about. Thanks for your time. Michele On Jul 25, 2017, at 3:07 PM, Rick Cole <Rick.Cole@SMGOV.NET> wrote: 2 Michelle:     I don't believe that I have personally characterized the results of the survey in the way you suggest ‐‐ nor do I believe it  to be true that “56% of people who do not want the height is the equivalent of a 50/50 divide on opinion.”     I think the Planning staff have said that the online & workshop survey is not scientific enough to show either a precise  breakdown of community opinion or a clear consensus on this issue.  We have consistently reported that the survey  results show that a majority of respondents to the survey do not support increased height on the Established Large  Sites.  The purpose of the survey, however, was not scientifically assess voter attitudes – it was to ask a wide range of  detailed questions of workshop participants and online respondents that would help inform the planners in preparing a  comprehensive plan for Downtown Santa Monica.      I understand your comparison with LV which also shows a divided community, but there is a huge difference between an  online/workshop survey with fewer than 500 responses from self‐identified residents and a certified municipal election  in which 44,281 ballots were officially counted on the LV measure.     I think we can say with reasonable certainty that a majority of Santa Monica voters did not support LV after a vigorous  campaign by both sides.  What Planning staff has said is that a majority of the survey respondents did not support  increased heights, but we can't say that is an accurate reflection of a majority of voters.     Importantly, under the California Constitution and the Santa Monica City Charter (both approved by voters) the Council  can be overruled by the people's right to initiative, subject only to judicial review on constitutionality.  But frustrating as  it may be to active citizens, the City Council makes the laws taking into account more than results of online surveys  sponsored by the City government.  In fact, letters from citizens like you make a difference as well.  A compelling  argument also has weight with elected decision‐makers.     Cordially,     Rick Cole  City Manager        ‐‐‐‐‐Original Message‐‐‐‐‐  From: Michele Perrone [mailto:micheleperrone@me.com]   Sent: Tuesday, July 25, 2017 1:45 PM  To: Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Council Mailbox <Council.Mailbox@SMGOV.NET>; Rick Cole  <Rick.Cole@SMGOV.NET>  Subject: DCP     Honorable Mayor Winterer and City Council Members,     At each meeting I have been to I hear City Manager Cole and staff state that the 56% of people who do not want the  height is the equivalent of a 50/50 divide on opinion. 56%/44% is what the vote on LV was, yet you stated that the  majority of people didn’t want the limitations in that measure. Now you are hanging your hats on the same ration being  a 50/50 opinion? Come on! It doesn’t make sense.     It is frustrating as a citizen to continually participate and watch each time as the majority of citizens are ignored. Why do  you spend the money if you are not going to give people what they want. It is not a 50/50 decision and you know it.     I am writing to ask for the following:     1)  Change your vote to restrict all heights to 85’, including in opportunity sites.  3    2)  4th/5th and Arizona must be a park. There is no park space to speak of in this downtown area. Now that downtown  has and is expanding to Lincoln Blvd it requires another park in the center. DON’T LOSE THIS OPPORTUNITY! THIS IS  YOUR OPPORTUNITY AT THIS SITE! PLEASE.        Hope you read this.     Sincerely,     Michele Perrone  1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 5:10 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:councilmtgitems; Clerk Mailbox; Stephanie Venegas Subject:FW: City Council Meeting July 25, 2017 Item 7-B Council‐    Please see the email below regarding DCP.     Thank you,  Estefania    From: Cindy Bendat [mailto:cbendat@gmail.com]   Sent: Tuesday, July 25, 2017 3:08 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>; Rick Cole <Rick.Cole@SMGOV.NET>  Subject: City Council Meeting July 25, 2017 Item 7‐B  Dear City Council and City Manager: I am writing to you again on the issue of our public land at 4th and Arizona. We don't often have the opportunity to create park space or a public square in the middle of an urban area, but we do at 4th and Arizona. This is public land, and it should be used for a public purpose. There are NO parks in the Downtown area. We are not only park poor, we are park empty! This is your opportunity to create a park, or a public square, and if you do not do so, that opportunity will be lost forever. This is a legacy decision for you to make, and it impacts community health and the environment for us and for future generations for decades to come. I think it is important for you to create public spaces and green spaces, as all great cities have, particularly when you can do so. It is what the vast majority of residents who live here and voted for you want. I want to enjoy that land at 4th and Arizona and know that my government with my tax dollars created something different than what any for-profit private developer would create. I hope you do too. While I am unable to come to the meeting tonight, I will pay attention to your votes. Thank you. Cindy Bendat 1 Vernice Hankins From:Ellen Brennan <ellen.brennan160@gmail.com> Sent:Tuesday, July 25, 2017 5:34 PM To:Clerk Mailbox; Coucilmeeting@smgov.net Cc:Rick Cole Subject:Tonight's council meeting.   I am unfortunately  unable to attend. the council meeting.tonight.  But if I could I would simply remind you that the  long‐term  residents of SAnta Monica    want a llow‐ rise. downtown.    They do not want more  tall buildings in our downtown.I stayed up all night last night  printing out the  staff  reports and attachments and I understand that the DSP is all about providing incentives for developers to build   affording housing.      The incentives  are height and density.  And since residents do not go downtown presently, and the DSP will just create   more of exactly what  tourists find unattractive, , I fear that iff this passes, it will cause the collapse of our downtown.  ‘    Developers can put  pen to paper and figure the profits they will make with more  height and density.  But that assumes that residents and tourists will come and spend money to provide that profit.    As Ron Goldman reminds, us,    Jane Jacobs says, in here masterpiece ,  “The Life and Death of Great American Cities”,     that cities work best when the buildings are of 4 stories.    As you debate tonight,  I ask you to ask yourselves the question,  “What happens if this doesn’t work?  What  if the international tourists you expect are NOT Attracted to the downtown the DSP will allow?     More gridlock,  high  priced  hotels,  an urban environment when they come to SAnta Monica for the beach town environment that Santa Monica  has been   known  for.    As you debate,  ask yourselves if more time is needed to create a better down town.    I realized you’re being pressured by developers,  people who want affording housing, But what is really best for the City  in the long run?  That’s the question that should be uppermost  in your minds tonight.    Cordially,  Ellen Brennan’  26 year resident of Santa Monica.                  1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 5:09 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:councilmtgitems; Clerk Mailbox; Stephanie Venegas Subject:FW: DCP Council‐    Please see the email below regarding the DCP.     Thank you,   Estefania    From: Michele Perrone [mailto:micheleperrone@me.com]   Sent: Tuesday, July 25, 2017 3:36 PM  To: Rick Cole <Rick.Cole@SMGOV.NET>; Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Council Mailbox  <Council.Mailbox@SMGOV.NET>  Cc: Jing Yeo <Jing.Yeo@SMGOV.NET>; Peter James <Peter.James@SMGOV.NET>; Council Mailbox  <Council.Mailbox@SMGOV.NET>; David Martin <David.Martin@SMGOV.NET>  Subject: Re: DCP  Rick, Thank you for your response. Sadly, I have been to about 3-4 public meetings since the survey. At each one I specifically remember Peter James stating that the 56%/44% was the equivalent of a 50/50 opinion. If you don’t believe me I will dig it out of the video. I was sitting with others who heard the same. Your staff represent you and your are responsible for what they state. As well, in your recent statements to LA Times your tone was that certain types of development were good, regardless of public opinion. I disagree. And the fact that staff recommended to council to continue with DAs on these opportunity sites even after the Planning Commission recommended against it, is evidence of ignoring us. I do appreciate your lengthy, thoughtful response. I have come to care about the future of this (now unrecognizable) city, where I have spent the last 27 years. But, if it gets any worse, it will be beyond repair. Height brings density and we can’t afford it. We need that park at 4th/5th and Arizona and we need downtown to breath; For the air to flow and for our city not to give into this never ending chase to fund pensions. It’s becoming impossible to afford and impossible to move about. Thanks for your time. Michele On Jul 25, 2017, at 3:07 PM, Rick Cole <Rick.Cole@SMGOV.NET> wrote: 2 Michelle:     I don't believe that I have personally characterized the results of the survey in the way you suggest ‐‐ nor do I believe it  to be true that “56% of people who do not want the height is the equivalent of a 50/50 divide on opinion.”     I think the Planning staff have said that the online & workshop survey is not scientific enough to show either a precise  breakdown of community opinion or a clear consensus on this issue.  We have consistently reported that the survey  results show that a majority of respondents to the survey do not support increased height on the Established Large  Sites.  The purpose of the survey, however, was not scientifically assess voter attitudes – it was to ask a wide range of  detailed questions of workshop participants and online respondents that would help inform the planners in preparing a  comprehensive plan for Downtown Santa Monica.      I understand your comparison with LV which also shows a divided community, but there is a huge difference between an  online/workshop survey with fewer than 500 responses from self‐identified residents and a certified municipal election  in which 44,281 ballots were officially counted on the LV measure.     I think we can say with reasonable certainty that a majority of Santa Monica voters did not support LV after a vigorous  campaign by both sides.  What Planning staff has said is that a majority of the survey respondents did not support  increased heights, but we can't say that is an accurate reflection of a majority of voters.     Importantly, under the California Constitution and the Santa Monica City Charter (both approved by voters) the Council  can be overruled by the people's right to initiative, subject only to judicial review on constitutionality.  But frustrating as  it may be to active citizens, the City Council makes the laws taking into account more than results of online surveys  sponsored by the City government.  In fact, letters from citizens like you make a difference as well.  A compelling  argument also has weight with elected decision‐makers.     Cordially,     Rick Cole  City Manager        ‐‐‐‐‐Original Message‐‐‐‐‐  From: Michele Perrone [mailto:micheleperrone@me.com]   Sent: Tuesday, July 25, 2017 1:45 PM  To: Clerk Mailbox <Clerk.Mailbox@SMGOV.NET>; Council Mailbox <Council.Mailbox@SMGOV.NET>; Rick Cole  <Rick.Cole@SMGOV.NET>  Subject: DCP     Honorable Mayor Winterer and City Council Members,     At each meeting I have been to I hear City Manager Cole and staff state that the 56% of people who do not want the  height is the equivalent of a 50/50 divide on opinion. 56%/44% is what the vote on LV was, yet you stated that the  majority of people didn’t want the limitations in that measure. Now you are hanging your hats on the same ration being  a 50/50 opinion? Come on! It doesn’t make sense.     It is frustrating as a citizen to continually participate and watch each time as the majority of citizens are ignored. Why do  you spend the money if you are not going to give people what they want. It is not a 50/50 decision and you know it.     I am writing to ask for the following:     1)  Change your vote to restrict all heights to 85’, including in opportunity sites.  3    2)  4th/5th and Arizona must be a park. There is no park space to speak of in this downtown area. Now that downtown  has and is expanding to Lincoln Blvd it requires another park in the center. DON’T LOSE THIS OPPORTUNITY! THIS IS  YOUR OPPORTUNITY AT THIS SITE! PLEASE.        Hope you read this.     Sincerely,     Michele Perrone  1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 4:51 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:Stephanie Venegas; councilmtgitems; Clerk Mailbox Subject:FW: Buy the old post office and make it part of the new DCP Council‐    Please see the email below regarding DCP.     Thanks,   Estefania    From: Richard Orton [mailto:laxlon@aol.com]   Sent: Tuesday, July 25, 2017 3:59 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>  Subject: Buy the old post office and make it part of the new DCP  Council, Please give us a park at 4th/5th/Arizona, the residents should be given something out of this proposed plan. In the article in the Times this weekend about the new DCP, Rick Cole talked about this plan being a synthesis of different points of view. But frankly I can't see any concessions to residents, only to the developers. They get:  More density  More height  Reduced parking requirements So please give us:  The park, this is my concept for a small craftsman building which would divide the park into 3 outdoor spaces. 2   Because:  It will increase the property values of all the property in the area.  It will be a great place to build condos that overlook it.  It will provide white space in the middle of a dense downtown.  There will be parking underneath One more thing:  Buy the Post Office back, make that part of the plan. It is clear now we can't trust outside forces to be good stewards of that precious building. Thank you for your attention. Richard Orton Ocean Park 1 Vernice Hankins From:Estefania Zavala on behalf of Council Mailbox Sent:Tuesday, July 25, 2017 4:50 PM To:Ted Winterer; Terry O’Day; Tony Vazquez; Sue Himmelrich; Gleam Davis; Pam OConnor; Councilmember Kevin McKeown Cc:Stephanie Venegas; Clerk Mailbox; councilmtgitems Subject:FW: Agenda Item No. 7b Ordinance on DCP on July 25, 2017 Council Meeting Council‐  Please see the email below regarding DCP.   Thanks,   Estefania  ‐‐‐‐‐Original Message‐‐‐‐‐  From: Kathy Knight [mailto:kathyknight66@gmail.com]   Sent: Tuesday, July 25, 2017 4:14 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>  Subject: Agenda Item No. 7b Ordinance on DCP on July 25, 2017 Council Meeting  July 25, 2017  Dear Council Members ‐  PLEASE VOTE NO on Agenda Item No. 7b.   It is TOTALLY INSANE to increase the downtown density of our city by 73%.   WE are already one of the most densely populated cities in LA County.    You are creating a major safety issue for our residents.   A close friend of mine had a heart attack yesterday and had to be rushed to the emergency room at a local hospital.    They performed surgery immediately on his heart, and the doctor said if a few minutes more had passed, he would have  died.    But traffic is getting so bad in our city that emergency vehicles cannot guarantee that they will be able to get to a  location in time.  The horrible gridlock traffic in the central district is creating a situation where they cannot get through fast enough.  How many people do you want to take responsibility for that are not helped fast enough due to increasing our traffic?  I do not believe that the 73% increased residents, and their family and friends who visit them, in downtown Santa  Monica will not drive any cars.  Please vote NO on Agenda Item No. 7b, and work towards making our City safe for our residents.  Thank you,  Kathy Knight  30 year resident of Sunset Park  2 (310) 613‐1175  kathyknight66@gmail.com   Downtown Community Plan City Council July 25, 2017 1 Staff Report Clarifications For Consistency with Council Direction u Addenda #25 –Policy CCP1.6B u Explore establishing a preference for Santa Monica workers and residents in market rate Downtown housing units provided that this preference does not result in any unintended discriminatory and other legally adverse impacts u Addenda #39 and #43 to clarify purpose of HRI 6L status u Neighborhood Conservation Overlay District (NCOD): The NCOD is a zoning tool for a specific geographic area that can be used tomaintain existing character. The NCOD will expand upon special consideration given to properties listed on the Historic Resources Inventory under category 6L, which are properties not considered eligible for future designation but which may still contribute to the character of the district because of extant materials, building elements, proportions, or scale. u Action HP1.2A Use the HRI as a planning tool to ensure consideration is given to a property’s historic potential and contribution to the historic character of Downtown when any new development involving a historic resource, or involving those with a 6L status, which are properties not considered eligible for future designation but which may still contribute to the character of the district because of exant materials, building elements, proportions, or scale to ensure appropriate efforts towards designation, protection or adaptive reuse are made. u Exhibit A to Zoning Ordinance Amendments u Page 56 [Section 9.10.070(D)(1)(b)(i)] –correct typo for applicability of Transportation Impact Fee to commercial projects u “Tier 2 and Tier 3 less than 75,000 30,000 square feet –Projects shall pay…” u 201 Wilshire u Staff report erroneously states that recommended change would apply to Miramar property u Miramar is in Ocean Transition zone and therefore change would not apply to Miramar property. Downtown Community Plan | City Council | July 25, 2017 2 Final EIR Errata Clarifications u Errata Page 9 for Change Nos. 243 and 244: incorrectly references 101 Santa Monica Blvd as the Miramar Site u The overlay district would establish a maximum FAR of 3.0 for 1133 Ocean Av e, 4.0 for Miramar 101 Santa Monica Boulevard, 3.5 for 4th/5th and Arizona, with heights up to 130’for all three established large sites. u Errata Page 18 for EIR-5: incorrect reference to the height of the existing Ocean Tower u Nevertheless, this height would be slightly lower than the existing height of the 143-foot tall Palisades Tower 105-foot tall Ocean Tower with 135-foot tall elevator tower extension that is currently on the property. Downtown Community Plan | City Council | July 25, 2017 3 Affordable Lodging u NEW Po licy CCP2.3: Support Downtown’s role as a visitor destination by encouraging uses that appeal to both locals and tourists, including food, retail, entertainment and overnight accommodations. u NEW Action CCP2.3A Evaluate regulatory incentives to establish a broader base of affordable overnight accommodations Downtown. u Lead Agency: PCD, HED u Ti meframe: Mid-Te rm u Included in #26 and #27 of Exhibit B of DCP Re solution Downtown Community Plan | City Council | July 25, 2017 4 Boys & Girls Club u Address process for future redevelopment of Boys and Girls Club u ADD DCP SECTION 9.10.050.D.Notwithstanding Section 9.10.050, a Development Review Pe rmit shall be required for any new non-profit youth-serving community assembly facility replacing an existing legally-established non-profit, youth-serving community assembly facility or expansion of an existing facility if such replacement building or expansion exceeds 35,000 square feet within Tier 1 limits and is located on land occupied by the non-profit youth-serving community assembly use as of July 25, 2017 u NEW Po licy CCP2.4 Support the expansion and enhancement of community and social services that contribute to the wellbeing of residents, including youth and families, seniors, persons with disabilities, individuals experiencing homelessness and members of our most vulnerable populations. u NEW Action CCP2.4A Collaborate with the Santa Monica Boys and Girls Club to identify and resolve obstacles to the renovation of their facilities on Lincoln Boulevard. u Lead Agencies: CCS, PCD u Ti meframe: Mid-Te rm u Included in #28, #29, and #207 of Exhibit B of DCP Resolution Downtown Community Plan | City Council | July 25, 2017 5 201 Wilshire u Allow increased height and/or FAR for Wilshire Transition parcels that: u a) Front on Wilshire Boulevard u b) Are not located adjacent to a residential district; and u c) Have a LUCE designation of Downtown Core. u Consistent with Council direction to provide substantial process incentive for housing projects u Staff Recommendation u Incentivize housing u Allow height up to 60’and FAR of 2.75 for housing projects u Wo uld change #208 and #212 of Exhibit B of DCP Re solution WT Height FA R Ti er 2 40’1.75 Ti er 2 –with housing 50’60’2.25 2.75 Residential Neighborhood LUCE Downtown Core DCP Wilshire Transition DCP Ocean Transition Areas of Overlap 201 Wilshire Parcel Downtown Community Plan | City Council | July 25, 2017 6 2ND STREET C A L I F O R N I A A V E Development Process Thresholds u Clarification of Council direction on process thresholds for Ti er 3 housing projects between 75,000 –90,000 sf u Wo uld change #180 and #242 of Exhibit B of DCP Re solution u Change applicability of project requirements to Tier 3 projects less than 90,000 sf Ty pe of Pe rmit Process Threshold Administrative Approval Up to 75,000 sf Development Review Pe rmit Ti er 2 –greater than 75,000 sf Ti er 3 –between 75,000-90,000 sf Development Agreement Ti er 3 –greater than 90,000 sf Downtown Community Plan | City Council | July 25, 2017 7 Modulation for Corner Single Lots u Address concern raised regarding how modulation standards apply to corner lots of less than 50’width and potential loss of housing units u Based on buildout analysis –would likely affect a couple of parcels u Add DCP Sections 9.10.060(C)(2)(d) and (C)(3)(c) and (C)(4)(b) u All corner lots with a lot width of 50 feet or less are permitted to measure stepbacks from the property line instead of building frontage line above the ground floor provided that: u A m inimum ground floor height of 16 feet is provided u No architectural structure, form or feature including, but not limited to, columns, piers, and wing walls shall occupy the ground floor setback area u Wo uld add to Exhibit B of DCP Re solution Downtown Community Plan | City Council | July 25, 2017 8 REFERENCE:    Resolutions No. 11059  (CCS)     ‐   Resolution No. 11063  (CCS)    REFERENCE: The Downtown Community Plan Project Final Environmental Impact Report Vol. 1 & Vol. 2 Are file in the oversized area under 405-004