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SR 03-09-2021 7A City Council Report City Council Meeting: March 9, 2021 Agenda Item: 7.A 1 of 9 To: Mayor and City Council From: David Martin, Director, City Planning Subject: Introduction and Adoption of an Emergency Interim Zoning Ordinance to Establish Temporary Land Use Restrictions Prohibiting Non-Residential Development Citywide Pending Completion of the Housing Element Update Recommended Action Staff recommends that the City Council introduce and adopt an Emergency Interim Zoning Ordinance temporarily prohibiting, with some exceptions, non-residential development citywide and single-unit dwellings in commercial zones. Summary On January 12, 2021, City Council directed staff to return with proposed emergency interim zoning regulations to: 1) prohibit 100% non-residential projects of greater than 7,500 square feet (sf) in the Industrial Conservation (“IC”) District with possible consideration for exceptions such as schools; 2) prohibit single-unit dwellings in any non-residential zone; and 3) impose additional restrictions to ensure that potential housing development sites are preserved pending the completion of the Suitable Sites Analysis and 6th Cycle Housing Element Update. The Housing Element is required to include a Suitable Sites Inventory (“SSI”), which is a listing of sites throughout the city that hold realistic potential for housing development based on a jurisdiction’s Regional Housing Needs Allocation (“RHNA”) number. Staff is in the process of preparing a draft SSI for the 6th Cycle Housing Element. However, in recent years, staff has seen an uptick in applications submitted for non-residential development on potential housing sites in the city’s commercial districts – largely consisting of office space. The largest amount of office space has been proposed in the Bergamot Area Plan (“BAP”) area, the Hospital Mixed Use (“HMU”) zone, and the Industrial Conservation (“IC”) zone. The City’s adopted growth strategy in the Land Use and Circulation Element (“LUCE”) contemplates housing production along the 7.A Packet Pg. 213 2 of 9 commercial boulevards, which have greatest access to transportation systems. The LUCE also identifies housing as a permitted use throughout the city with the one exception being the IC Zone. As parcels are turned over, applicants have increasingly chosen to pursue non-residential projects instead of housing projects. There is growing concern that as this trend continues in the context of the Housing Element Update, the City will be precluded from the opportunity to plan for the possibility of housing on these parcels. Further, even though the IC Zone has not been an area that has traditionally accommodated housing; its proximity to the Expo Line, aging building stock, and availability of larger parcels makes it an area that should be evaluated for housing potential as part of the Housing Element Update. In addition to receiving a number of applications for non-residential development on commercial boulevards in recent years, staff has also received recent inquiries for single-unit dwellings in commercial zones on the boulevards. While the Zoning Ordinance has permitted single-unit dwellings in commercial zones for decades, this allowance does not maximize the housing potential for the limited number of potential housing sites and therefore, is being re-evaluated in light of the City’s RHNA for the 6th Cycle housing element. Given the very large RHNA allocation, and in order to preserve the opportunity to plan for housing on as many available sites as possible, staff recommends interim zoning regulations to temporarily suspend new single-unit dwellings in commercial zones and new non-residential construction citywide with the following exceptions: • Attached and free-standing additions to existing buildings no larger than the floor area of the existing building • Changes of use in existing buildings • Industrial Conservation zone 500 feet from the I-10 freeway • Bayside Conservation zone (Promenade and 2nd & 4th Streets) • Schools including facilities operated by the school 7.A Packet Pg. 214 3 of 9 These exceptions balance the need to temporarily curtail single-unit dwellings and non- residential development on potential housing sites with continuing support for economic recovery efforts that have included greater flexibility in changes of use. They also acknowledge that the areas closest to the I-10 freeway are unlikely to be ideal locations for housing. The exemption for schools addresses the fundraising challenges and construction timelines that are unique to schools. As critical infrastructure, school facilities are complementary to the production of the housing, are generally already located on property owned by a school, and therefore are unlikely to be realistic housing production sites. Background Every eight years, California cities are required to update their Housing Elements. For the 2021-2029 planning period (also referred to as the 6th Cycle Housing Element), Santa Monica received an allocation to plan for 8,873 housing units of which approximately 70% are affordable housing units. This represents approximately a five- times increase over the Regional Housing Needs Allocation (“RHNA”) in the current cycle (2013-2021). Santa Monica’s RHNA allocation is within the context of a declared statewide housing crisis. The significant focus on affordable housing reflects the housing needs of the community in light of high housing costs and residents and workers increasingly unable to afford housing in Santa Monica. The LUCE was adopted in 2010 with a growth strategy that focused new housing development in areas with the greatest access to high frequency transportation systems – the commercial boulevards and the areas surrounding the Expo Light Rail stations – Downtown, Bergamot, and Memorial Park. As a counterbalance, the LUCE also established the IC land use designation, which was intended to conserve small light industrial and service/commercial uses that have traditionally populated the area and formed part of Santa Monica’s employment base. The IC district also was intended to support existing and new creative businesses reliant on the affordable workspace created from adaptive reuse of former industrial buildings. This vision was carried through the 2015 zoning ordinance update that prohibited housing out of concern that introducing residential uses would have the potential to increase real estate speculation 7.A Packet Pg. 215 4 of 9 thereby displacing the creative industries and small-scale industrial uses supported by affordable workspace. The Zoning Ordinance has also allowed for single-unit dwellings in all zones for decades. There continue to be very limited pockets where single-unit dwellings exist in commercial zones in the city, derived from the city’s early settlement patterns. Based on assessor data, there are currently approximately 232 parcels with single-unit dwellings in commercial zones. Discussion Limited Land Area Available for Housing Projects The LUCE growth strategy that focused development opportunities in the limited areas of Downtown, Bergamot and the boulevards represents approximately 12% of the city’s total land area. As a first step in preparing the SSI analysis, a preliminary sites analysis has been conducted to filter out parcels that would not likely be potential housing sites based on the following criteria: • Parcels with existing Landmarks or Historic Resources • Parcels that are under construction, have recently completed projects, approved entitlements, and pending entitlement for commercial uses only • Parcels that have unique land uses such as hospitals, cemetery, schools, parks, churches/religious facilities, utilities, government offices, libraries, police/fire stations, transportation infrastructure/Metro Expo LRT and airport • Parcels developed with affordable housing and condos • Parcels with newer buildings developed post 1980 Once the filters were applied, parcels were prioritized for their likelihood to produce housing resulting in an even smaller subset of parcels representing approximately 3% of the city’s total land area identified as potentially having the highest housing potential. Overview of Approved and Pending Non-Residential Projects 7.A Packet Pg. 216 5 of 9 In recent years, staff has received applications for non-residential development on possible housing sites - predominantly consisting of 319,000 square feet of total office space, all of which are currently pending. The largest amount of office space has been proposed in the Bergamot area, the Hospital Mixed Use zone, and the Industrial Conservation zone. Other pending non-residential projects include a Downtown hotel and electric vehicle charging facility on two surface parking lots. As a point of reference, in the past five years, 11 projects consisting of approximately 184,000 square feet of non-residential uses has been approved including 99,000 square feet of office, 36,000 square feet of retail, and 49,000 square feet of other uses ranging from daycare to auto dealerships. The majority of these projects (6 of 11) have largely consisted of additions to existing buildings in the Downtown area. These development trends are supported by an analysis conducted by HR&A Advisors in 2019 studying the likelihood that an applicant would choose to pursue a housing development based on the City’s existing development standards and inclusionary housing requirements. The analysis demonstrated that at current inclusionary housing levels for Tier 2 projects on the boulevards (i.e. minimum 15% Very Low Income), housing projects were less likely than commercial projects to proceed due to lower height and FAR (resulting in fewer units) and lower rents. The results of the study are consistent with the recent trends toward applications being filed for non-residential development instead of housing projects on the boulevards, particularly in areas where there is no distinction in height and FAR between housing projects and commercial development. Proposed Temporary Prohibition on Non-Residential Development The combination of Santa Monica’s very large RHNA allocation of 8,873 units and with only 3% of the City’s total land area available as the highest potential for housing, the turnover of even a handful of sites to non-residential development instead of housing projects would greatly impact the City’s ability to have sufficient sites for the SSI and would very likely hamper future Housing Element updates. As a result, a temporary prohibition on non-residential development is proposed to ensure that the Housing Element Update has the opportunity to evaluate all available areas of the city for 7.A Packet Pg. 217 6 of 9 housing potential. This would not implicate housing projects meeting the definition of a housing development project in the Housing Accountability Act. In order to ensure that potential housing sites are also not underdeveloped, it is also proposed that single-unit dwellings be temporarily prohibited in all commercial zones. Staff also considered a temporary prohibition on single-unit dwellings in multi-unit zones. The purpose of the proposed ordinance is to retain the opportunity to plan for sites with housing potential for the SSI and therefore, multi-unit residential neighborhoods are not being prioritized (relative to commercial zones) due to concerns regarding displacement of existing tenants. However, as a matter of policy, the continued inclusion of single-unit dwellings as a permitted use in multi-unit zones will be evaluated as part of the 6th Cycle Housing Element update. Exceptions to Proposed Ordinance In order to ensure that there continues to be support for economic recovery efforts from the impacts of COVID-19, it is proposed that the ordinance not apply to: • Attached and free-standing additions to existing buildings no larger than the floor area of the existing building • Changes of use in existing buildings • Schools including facilities owned and operated by the school • Industrial Conservation zone 500 feet from the I-10 freeway • Bayside Conservation zone (Promenade and 2nd & 4th Streets) This would allow continued maintenance and investment in existing commercial buildings that are unlikely to be housing sites while also ensuring that the flexibility in changes of use afforded by Interim Zoning Ordinance Nos. 2657 (citywide economic recovery IZO) and 2658 (Promenade economic recovery IZO) remain to support tenanting of vacancies throughout the city. The exceptions also clarify that building additions cannot exceed the floor area of the existing building. 7.A Packet Pg. 218 7 of 9 A further exception is proposed for the Industrial Conservation zone for parcels entirely within 500 feet of the I-10 freeway. This would exempt 125 parcels (out of total 201 total parcels in the IC zone) in an area that has historically not seen development activity and would be unlikely to have significant turnover. Figure 1: Map showing parcels in IC Zone exempted from proposed IZO In addition, the proposed interim zoning regulations would not affect the Bergamot Area Plan (BAP) area. Because the land use regulations for the BAP are contained in the plan, rather than the Zoning Ordinance, and any changes to that area would require an amendment to the BAP. Since the adoption of the BAP, very little development activity has occurred in the Bergamot area and therefore, staff does not believe that potential housing sites are at risk of turnover in this area over the next eight months. However, per Council’s direction, staff will continue to examine potential amendments to the BAP to encourage housing production as part of the 6th Cycle Housing Element Update. 7.A Packet Pg. 219 8 of 9 Applicability of Proposed Ordinance Staff proposes that the ordinance apply only to applications submitted after January 12, 2021, which is the date that Council first gave direction to staff to prepare emergency zoning regulations. This is consistent with the approach the City has taken with respect to previous interim zoning regulations. Staff considered a broader applicability to projects that were pending as of January 12, 2021, however, most of these projects have been in process for years and would likely continue to proceed as non-residential projects. When staff first formulated the filters for the preliminary SSI, these sites were filtered out for that reason. The purpose of the ordinance is to provide the opportunity to plan for high potential housing sites, and it is not clear that capturing pending projects would align with that goal. It is more likely, given the amount of time these projects have been in process, that the proposed interim zoning regulations would only have the effect of temporarily delaying one or more of these projects, rather than incentivizing the property owner to instead convert the site into a housing project. Planning Commission Action The Planning Commission discussed the proposed ordinance at their February 17, 2021 meeting and voted 5-1 to recommend that the Council adopt the proposed interim ordinance. As part of their deliberations, the Commission held an extensive discussion on whether housing should be a permitted use in the IC Zone due to its proximity to the freeway and resultant environmental justice issues. The Commission also noted that the restrictions on non-residential development should be temporary and used for the intended purpose of commitments to incentive housing production in the Housing Element Update. Environmental Analysis The proposed IZO is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines (common sense exemption). Based on the evidence in the record, it can be 7.A Packet Pg. 220 9 of 9 seen with certainty that there is no possibility that the proposed changes may have a significant effect on the environment. The proposed ordinance temporarily restricts new non-residential development and single-unit dwellings in commercial zones citywide, and would not result in any changes to current development standards, which were subject to environmental review at the time of adoption. Changes of use and building additions may still continue for non-residential development, subject to current land use regulations and development standards, and their own individual environmental analysis. Therefore, the proposed IZO would not have an indirect or direct adverse change on the environment and no further environmental review under CEQA is required. Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Jing Yeo, Planning Manager Approved Forwarded to Council Attachments: A. Proposed Emergency IZO B. Written Comments 7.A Packet Pg. 221 1 City Council Meeting: March 9, 2021 Santa Monica, California ORDINANCE NUMBER _____ (CCS) (City Council Series) AN EMERGENCY INTERIM ZONING ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO TEMPORARILY PROHIBIT NON-RESIDENTIAL USES CITYWIDE AND SINGLE-UNIT DWELLINGS IN COMMERCIAL ZONES TO PRESERVE POTENTIAL HOUSING SITES IN PREPARATION OF THE 6TH CYCLE HOUSING ELEMENT WHEREAS, the State is experiencing a housing supply crisis, with housing demand far outstripping supply; and WHEREAS, in 2018, California ranked 49th out of the 50 states in housing units per capita; and WHEREAS, the housing crisis has particularly exacerbated the need for affordable homes at prices below market rates; and WHEREAS, the housing crisis has resulted in increased poverty and homelessness, especially first-time homelessness, forced lower income residents into crowded and unsafe housing in urban areas, and forced families into lower cost new housing in greenfields at the urban-rural interface with longer commute times and a higher exposure to fire hazard; and WHEREAS, California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Governor has called for 3.5 million new homes to be built over 7 years; and 7.A.a Packet Pg. 222 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 2 WHEREAS, the City is in the process of updating the Housing Element to its General Plan for the 6th Cycle, covering the period from 2021 to 2029; and WHEREAS, the City has received a Regional Housing Needs Assessment (“RHNA”) allocation for the 6th Cycle Housing Element of approximately 8,895 housing units, with approximately 70 percent allocated as affordable housing; and WHEREAS, this RHNA allocation will require the City to permit approximately 1,000 housing units annually between 2021 and 2029, 700 of which are required to be affordable housing, representing an increase of approximately five times over the City’s RHNA allocation for the 5th Cycle Housing Element (2013-2021); and WHEREAS, on July 6, 2010, the City Council adopted the Land Use and Circulation Element of the City’s General Plan (“LUCE”) which designates the proposed general distribution, location, and extent of land uses within the City; and WHEREAS, the LUCE was adopted after an extensive planning process and addresses neighborhood conservation and enhancement; integrated land use and transportation; proactive congestion management; complete neighborhoods with increased open space; community benefits; quality urban character and form; preservation of historic resources; and growth management; and WHEREAS, the LUCE sets forth a strategy that focuses new housing development in areas with the greatest access to high frequency transportation systems – the commercial boulevards and the areas surrounding the Expo Light Rail stations – Downtown, Bergamot, and Memorial Park; and 7.A.a Packet Pg. 223 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 3 WHEREAS, the LUCE strategy for housing development was implemented through the City’s new Zoning Ordinance, Chapters 9.01 through 9.52 of Article 9 of the Santa Monica Municipal Code (“Zoning Ordinance”), which became effective on July 24, 2015, and the Downtown Community Plan (“DCP”), which was adopted on July 25, 2017; and WHEREAS, the LUCE also established the Industrial Conservation (“IC”) land use designation, which was intended to conserve small light industrial and service/commercial uses that have traditionally populated the IC District and formed part of Santa Monica’s employment base and to support existing and new creative businesses reliant on the affordable workspace created from adaptive reuse of former industrial buildings; and WHEREAS, the Zoning Ordinance, consistent with the LUCE’s vision for the IC land use designation, prohibits housing in the IC District, in part out of concern that introducing residential uses could have the potential to increase real estate speculation, thereby displacing the creative industries and small-scale industrial uses supported by affordable workspace; and WHEREAS, the LUCE’s strategy for housing development, along with the exclusion of housing in the IC District, results in approximately 12 percent of the City’s total land area being available for residential growth, all of which is zoned to allow both commercial and residential uses; and WHEREAS, the City has recently developed a preliminary Suitable Sites Inventory (“SSI”) analysis as part of the 6th Cycle Housing Element update that prioritizes parcels for their likelihood to produce housing; and 7.A.a Packet Pg. 224 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 4 WHEREAS, the preliminary SSI analysis has resulted in an even smaller subset of parcels, representing approximately three percent of the city’s total land area, being identified as potentially having the highest housing potential; and WHEREAS, in the past five years, the City has approved 11 projects consisting of approximately 184,000 square feet of non-residential uses; and WHEREAS, in addition, the City has received applications for non- residential development on possible housing sites, predominantly consisting of 319,000 square feet of total office space, but also including a hotel use and electric vehicle charging facility on two surface parking lots; and WHEREAS, these recent development trends favoring commercial development over residential in areas targeted by the LUCE for residential growth are supported by preliminary findings for a feasibility analysis conducted by for the City in 2019 which studied the likelihood that an applicant would choose to pursue a housing development based on the City’s existing development standards and inclusionary housing requirements and demonstrated that housing projects were less likely than commercial projects to proceed; and WHEREAS, the City currently permits single-unit dwellings in commercial areas, even on parcels that could support more housing development potential; and WHEREAS, the BC (Promenade) and BC (2nd & 4th Streets) Districts, which include the areas surrounding the Third Street Promenade Area, are considered the pedestrian and economic heart of the City due to their vibrant urban 7.A.a Packet Pg. 225 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 5 atmosphere supported by a broad mix of building types, office space, entertainment, retail, restaurants, cafes, salons and exercise studios; and WHEREAS, the area within the IC District and 500 feet of the I-10 freeway has not historically seen development, and may not be suitable for housing due to its proximity to the freeway and because it may require extensive environmental remediation, which raises environmental and social justice concerns; and WHEREAS, schools are an essential component of a balanced community, and must be allowed to establish and expand during times of residential growth; and WHEREAS, the economic impacts of the COVID-19 closures of and limitations on businesses have been devastating to the local Santa Monica economy; and WHEREAS, on May 12, 2020, the City Council adopted Emergency Interim Zoning Ordinance Number 2637 (CCS) (“Interim Zoning Ordinance 2637”), which established interim zoning regulations to provide immediate relief and regulatory certainty for businesses Citywide that may have interest in looking ahead to make plans for re-opening by taking initial steps towards economic recovery that included: modifying alcohol exemption conditions in order to streamline process for alcohol service and provide flexibility in operations for eating establishments; relaxing standards related to legal, nonconforming retail and restaurant uses; relaxing requirements to provide additional parking and new loading spaces for changes of use in existing tenant spaces; eliminating the requirement for Conditional Use Permits for restaurants only due to size; and removing the 7.A.a Packet Pg. 226 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 6 inflexibility caused by a cap of no more than 5 persons allowed for small yoga studios and gyms; and WHEREAS, on May 12, 2020, the City Council adopted Emergency Interim Zoning Ordinance Number 2636 (CCS) (“Interim Zoning Ordinance 2636”), establishing interim zoning regulations for the economic recovery of those portions of the BC (Promenade) District bounded by Second Street to the west, Broadway to the south, 4th Street to the east and Wilshire Boulevard to the north, including the Third Street Promenade (the “Third Street Promenade Area”) which established interim zoning regulations to provide immediate relief and regulatory certainty for businesses in the Third Street Promenade area that may have interest in looking ahead to make plans for re-opening by taking initial steps towards economic recovery that included: minor modifications to land use regulations to provide additional business opportunities and increased flexibility for existing businesses; eliminating the requirement of a Conditional Use Permit for the conversion of eating and drinking establishments to other uses; easing standards related to legal, nonconforming restaurant and retail uses; relaxing Alcohol Exemption conditions and processes; and allowing for alternate compliance with loading standards; and WHEREAS, on November 10, 2020, the City Council adopted Emergency Interim Zoning Ordinance Numbers 2657 (CCS) and 2658 (CCS) to extend the emergency interim zoning regulations adopted by Emergency Interim Zoning Ordinance Numbers 2636 and 2637 and make other minor changes to further encourage economic recovery; and 7.A.a Packet Pg. 227 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 7 WHEREAS, allowing additions to and changes of uses in existing structures will support continued maintenance and investment in existing commercial buildings that are unlikely to be housing sites while also ensuring that the flexibility in changes of use afforded by Interim Zoning Ordinance Numbers 2657 and 2658 remains to support tenanting of vacancies throughout the City; and WHEREAS, the City Council finds and declares that a current and immediate threat to the public health, safety, and welfare exists due to the State’s ongoing and unprecedented housing crisis, which has resulted in the City’s very large RHNA allocation of 8,895 units, and with only three percent of the City’s total land area available as the highest potential for housing, the approval of additional subdivisions, use permits, variances, building permits, or any other applicable entitlement on even one of the sites with housing potential would result in that threat to public health, safety, or welfare because the loss of a suitable site to non- residential development or underproduction of housing units would jeopardize the City’s ability to have sufficient sites for the SSI, adopt a Housing Element compliant with State law requirements, and plan for the production of 8,895 units over the next eight years. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Effect on Previously Approved Projects and Projects in Process. The following projects that would otherwise be affected by the temporary prohibitions set forth in this Interim Zoning Ordinance shall not be subject to this Interim Zoning Ordinance: 7.A.a Packet Pg. 228 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 8 (a) Previously Approved Development. The erection, construction, enlargement, demolition, moving, conversion of, and excavation and grading for any building or structure, or establishment of use, for which a valid planning entitlement or permit or building permit, including plan check, was issued prior to January 12, 2021 and which does not subsequently expire. A permit or entitlement that does not contain an express limit on the time for exercising the permit shall be deemed valid only if a building permit, including plan check, is obtained by January 12, 2021. (b) Applications for Projects in Progress. Any application for a planning entitlement or permit or building permit, including plan check, determined complete on or before January 12, 2021. SECTION 2. Temporary Prohibition on Non-residential Uses. (a) Temporary prohibition. Notwithstanding anything to the contrary in the land use regulations set forth in Santa Monica Municipal Code Sections 9.07.020, 9.08.020, 9.09.080, 9.10.040, 9.11.020, 9.13.020, 9.14.020, or 9.15.020, and subject to the exceptions set forth in paragraph (b), Non-Residential Use Classifications, as listed in 9.51.030, are prohibited in all Districts in the City. (b) Exceptions. The temporary prohibition set forth in paragraph (a) shall not apply to the following: (1) Parcels located within: (A) The BC (Promenade) District; (B) The BC (2nd & 4th Streets) District; and 7.A.a Packet Pg. 229 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 9 (C) The Industrial Conservation District that have boundaries located entirely within 500 feet of the I-10 Freeway, as more fully depicted in Exhibit A, attached hereto, and incorporated herein by reference. (2) Schools, as defined by Santa Monica Municipal Code Section 9.51.030(A)(11), including expansions and additions to schools and facilities operated by schools. (3) Projects consisting of: (A) A Change of use in an existing structure. (B) An attached addition to an existing structure, or a free- standing addition on a parcel with an existing structure, that is no larger than the floor area of the existing structure. SECTION 3. Temporary Prohibition on Single-Unit Dwellings in Nonresidential Districts. Notwithstanding anything to the contrary in the land use regulations set forth in Santa Monica Municipal Code Sections 9.10.040, 9.11.020, 9.13.020, 9.14.020, or 9.15.020, single-unit dwellings, as defined by Santa Monica Municipal Code Section 9.51.020(A)(1)(a), are prohibited in all Nonresidential Districts in the City. SECTION 4. Any provision of the Santa Monica Municipal Code or any appendix thereto inconsistent with the provisions of this Emergency Interim Zoning Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Emergency Interim Zoning Ordinance. 7.A.a Packet Pg. 230 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 10 SECTION 5. If any section, subsection, sentence, clause, or phrase of this Emergency Interim Zoning Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Emergency Interim Zoning Ordinance. The City Council hereby declares that it would have passed this Emergency Interim Zoning Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. The Mayor shall sign and the City Clerk shall attest to the passage of this Emergency Interim Zoning Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Emergency Interim Zoning Ordinance shall become effective immediately upon adoption. SECTION 7. This Emergency Interim Zoning Ordinance shall be of no further force or effect after April 23, 2021 unless it is otherwise extended pursuant to California Government Code Section 65858. APPROVED AS TO FORM: _________________________ GEORGE S. CARDONA Interim City Attorney 7.A.a Packet Pg. 231 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 11 Exhibit A Parcels within Industrial Conservation District that Have Boundaries Located Entirely within 500 Feet of the I-10 Freeway [Behind this page] 7.A.a Packet Pg. 232 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing 7.A.a Packet Pg. 233 Attachment: Proposed Emergency IZO (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing March 5, 2021 City Council City of Santa Monica 1685 Main St Santa Monica, CA 90401 RE: Proposed moratorium on commercial development Dear Mayor Himmelrich and Council Members: The Santa Monica Chamber of Commerce has been consistent with our support for additional housing development and have supported policies and projects to increase the supply for residents and workers in our community. This is why we do understand and appreciate the need to preserve housing opportunities during the preparation of the Housing Element given the six cycle’s 8,800 new unit RHNA state mandate. However, we have serious concerns that the proposed moratorium on nearly all commercial projects across the City is overly broad and could result in unintended consequences. Our concerns include: The very broad and sweeping moratorium, as currently drafted, sends a strong anti-business signal that could create discouragement and disincentive for businesses to come to Santa Monica – at a time when we need more economic development now more than ever. For this reason, the City Council should be clear that any moratorium must be temporary and expire when the Housing Element process concludes. We would vigorously oppose any effort to extend the moratorium beyond adoption of the Housing Element and/or to make it permanent. Any temporary moratorium must then be only enacted if it is used aggressively and ambitiously to rezone properties throughout the City, particularly along the commercial boulevards, for increased housing production above and beyond the city’s current restrictive zoning regulations. This is the only possible justification for something as dramatic and sweeping as a temporary commercial development moratorium. Any temporary moratorium must include exceptions including: •Additions to existing commercial buildings; •Changes of use within existing commercial buildings •Commercial projects proposed along the entire Third Street Promenade; •Any site within 500 feet of the freeway where the California Air Resources Board (CARB) generally recommends against siting new residential development; •For private schools; •For non-profit uses; and •For auto dealerships which are a critical tax generating use for the City and are already subject to a discretionary Conditional Use Permit process. We appreciate that the City must be creative and open to all solutions that increase housing but we also caution taking any action that would further harm Item 7.A 03/09/21 1 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 234 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) our already fragile businesses that are vital to providing jobs, attracting tourists, and generating revenue for the City. Thank you, Laurel Rosen, President/CEO Item 7.A 03/09/21 2 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 235 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) (310) 451-3669 March 8, 2021 VIA E-MAIL Santa Monica City Council 1685 Main Street, Room 102 Santa Monica, CA 90401 Re: Agenda Item 7-A Emergency Interim Zoning Ordinance temporarily prohibiting, with some exceptions, non-residential uses citywide and single-unit dwellings in commercial zones Hearing Date: March 9, 2021 Dear Councilmembers: As many of you know, my law firm represent a wide variety of clients in their pursuit of land use entitlements, including but not limited to preservation projects. This letter is not submitted on behalf of any particular client or clients. I am writing with respect to the emergency IZO that has been prepared for your hearing on March 9. The stated purpose of the IZO is to temporarily curtail single-unit dwellings and non-residential development of potential housing sites while the City prepares the 6th Cycle Housing Element’s Suitable Site Inventory (“SSI”): WHEREAS, the City Council finds and declares that a current and immediate threat to the public health, safety, and welfare exists . . . because the loss of a suitable site to nonresidential development or underproduction of housing units would jeopardize the City’s ability to have sufficient sites for the SSI . . . . On page 4 of the Staff Report, there is a list of parcels that will be “filtered out” of the SSI analysis because they are unlikely candidates for housing: As a first step in preparing the SSI analysis, a preliminary sites analysis has been conducted to filter out parcels that would not likely be potential housing sites based on the following criteria: kutcher@hlkklaw.com Item 7.A 03/09/21 3 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 236 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) Santa Monica City Council March 6, 2021 Page 2 • Parcels with existing Landmarks or Historic Resources • Parcels that are under construction, have recently completed projects, approved entitlements, and pending entitlement for commercial uses only • Parcels that have unique land uses such as hospitals, cemetery, schools, parks, churches/religious facilities, utilities, government offices, libraries, police/fire stations, transportation infrastructure/Metro Expo LRT and airport • Parcels developed with affordable housing and condos • Parcels with newer buildings developed post 1980. It is therefore puzzling why all of these categories are not included as exemptions from the temporary non-residential moratorium. For example, the draft IZO does not include an exemption for Landmarks or Historic Resources; although schools are to be exempt, the IZO does not include an exemption for hospitals, cemetery, parks, churches/religious facilities, utilities, government offices, libraries, police/fire stations, transportation infrastructure/Metro Expo LRT and airport; it also does not include an exemption for properties that are developed with affordable housing; it does not include an exemption for properties developed with for-sale condominium units; and it does not include an exemption for properties with newer buildings developed since 1980. No explanation is provided for these missing exemptions. These are glaring omissions. They place the IZO at risk of legal challenge on the basis that it is overbroad on its face. Furthermore, we question why the draft IZO would impose a prohibition on non- residential uses rather than on new development containing non-residential uses exceeding one-third of a project’s overall floor area. In this regard, page 2 of the Staff Report states that Staff recommends suspending “new non-residential construction citywide” (emphasis added) subject to certain limited exceptions; but the proposed IZO is inartfully drafted to prohibit non-residential uses (rather than focusing on new construction for such uses), which may have unintended consequences for existing businesses, nonprofits and building owners because of the City’s legal, nonconforming use provisions. (See SMMC § 9.25.050.) Moreover, page 6 of the Staff Report states that the draft IZO “would not implicate housing projects meeting the definition of a Item 7.A 03/09/21 4 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 237 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) Santa Monica City Council March 6, 2021 Page 3 housing development project in the Housing Accountability Act,”1 but the draft IZO fails to address this exception. Accordingly, we suggest that the draft IZO should be modified to prohibit new construction of non-residential uses subject to certain exceptions and should add in the missing exemptions identified in this letter. In closing, let there be no mistake, we do not support the concept of a commercial building moratorium. Such a measure is particularly inappropriate in this time of ongoing economic crisis and significant unemployment. Very truly yours, Kenneth L. Kutcher KLK:sna cc: David Martin Jing Yeo Lane Dilg George Cardona F:\WPDATA\7000\Cor\CC 2021.03.08 (comm prohibition).docx 1 “‘Housing development project’ means a use consisting of any of the following: (A) Residential units only. (B) Mixed-use developments consisting of residential and nonresidential uses with at least two-thirds of the square footage designated for residential use. (C) Transitional housing or supportive housing.” (Gov’t Code § 65589.5(h)(2)(B).) Item 7.A 03/09/21 5 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 238 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) March 8, 2021 VIA E-MAIL Santa Monica City Council 1685 Main Street, Room 102 Santa Monica, CA 90401 Re: City Council March 9th Agenda Item 7-A: Auto dealers and the proposed Emergency Interim Zoning Ordinance prohibiting non-residential uses citywide Dear Councilmembers: I am writing as the chair of the Santa Monica Auto Dealers Association (“SMADA”), a committee of the Santa Monica Chamber of Commerce. SMADA represents auto dealers who sell, lease and service predominantly new automobiles and owners of property currently leased to auto dealers. I own the Lexus, Toyota, Subaru, Honda and Volkswagen franchises in Santa Monica and well as other property that is leased to automobile dealers in Santa Monica. As explained below, SMADA and its members request that any moratorium on non-residential uses/development exempt automobile dealership uses/development on Santa Monica Boulevard between Lincoln and 20th Street (“auto row”) and the other limited sites currently in automobile dealership use. Santa Monica’s automobile dealer industry provides well-paying local jobs, convenient services for Santa Monica residents, and generates significant revenue for the City. Almost many other industries that produce significant sales tax in Santa Monica faced sharp declines in sales/sales tax as a result of the COVID-19 pandemic (i.e. restaurant/hotel and general consumer goods), “auto sales have been stronger than expected”. (January 26, 2021 City Council Staff Report, p. 11.) Further, from a land use/planning perspective, auto dealers are a relatively low peak hour traffic generator. Auto dealers (and owners of property leased to auto dealers) have worked cooperatively with the City for over 25 years with respect to tailored zoning standards and regulations that facilitate reasonable auto dealer operations and expansion.1 Many 1 SMADA formed in the mid-1990s to address City zoning impediments facing auto dealers. At the City’s request, SMADA retained Paul Silvern of HR&A Advisors to document the problems facing our industry and propose solutions. HR&A issued its report in January 2001 which led to a robust public process and the adoption of the 2006 Interim Automobile Dealership Ordinance. SMADA also played an active role in the 2010 LUCE and 2015 Zoning Ordinance update processes which resulted in many industry-specific standards and regulations for auto dealerships. SANTA MONICA AUTO DEALERS ASSOCIATION Item 7.A 03/09/21 6 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 239 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) auto dealers, including myself, have made significant investments in the City based on the City’s direction as to the appropriate location for auto dealership uses. During the City’s adoption of its Land Use and Circulation Element of its General Plan in 2010 and its Zoning Ordinance Update in 2015, the City recognized the importance of the auto dealers and encouraged us to expand our dealerships and invest in our facilities based on the City’s urban auto dealership standards. I’ve enclosed an attachment with relevant policies from the City’s General Plan. These processes also resulted in the City drastically reducing the land available for auto dealership uses. Auto dealers have respected the City’s geographic limitations/constraints for automobile dealership uses and have focused on investing (significantly) in facilities already in auto dealership use and/or on “auto row”. For example, the MINI of Santa Monica dealership at 1402 Santa Monica Boulevard, the Subaru dealership at 1229 Santa Monica Boulevard, and the Lexus showroom at 150 Santa Monica Boulevard. We respectfully request that the City carve out Santa Monica Boulevard between Lincoln and 20th Street (“auto row”) and the other limited sites currently in automobile dealership use from the draft IZO in order to encourage and allow for further automobile dealership investment in Santa Monica. Alternatively, at a minimum, we request that the draft IZO’s exemption for additions to existing buildings be revised to eliminate the limitation that the addition is no larger than the floor area of the existing structure.2 Automobile dealerships that are in need of upgrade/investment are generally the suburban style model with small existing buildings and the remainder of the site as surface parking/inventory storage. Thus, limiting the addition to the size of the existing building is uniquely constraining for automobile dealerships compared with other uses. Given the City’s current economic situation, the industry’s importance in terms of source of jobs, services, and City revenues, the limited land area for automobile dealerships, and the investment that automobile dealers have made in the City in accordance with City’s General Plan, we ask the City Council to exempt automobile dealership uses on auto row and existing automobile dealer sites from any moratorium on non-residential uses/development. Sincerely, Mike Sullivan , Chair SMADA 2 For example, revise draft IZO Section 2(b)(3)(B) to read: An attached addition to an existing structure, or a free-standing addition on a parcel with an existing structure, that is no larger than the floor area of the existing structure; provided however that expansions to auto dealerships existing as of July 6, 2010 shall not be limited to the floor area of the existing structure. Item 7.A 03/09/21 7 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 240 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) cc: Lane Dilg David Martin Jing Yeo Steve Mizokami SMADA Members Item 7.A 03/09/21 8 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 241 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) THE LUCE & AUTOMOBILE DEALERSHIPS • “The automotive/service group is a major component of the City’s retail base. The LUCE supports their continued viability, as well as a new urban form for auto showrooms [emphasis added].” (LUCE, p. 3.4-11) • Policy E8.3: “Allow automobile dealers to reasonably expand in their current locations and otherwise respond to likely global changes in the automobile industry as long as their redevelopment is in the urban auto dealership format and incorporates mitigations to reduce any negative impacts on the surrounding residential and nonresidential uses. The expansion may occur on existing parcels used for automobile dealerships and on adjacent or proximate parcels.” (LUCE, p. 3.4-22) • “Auto dealers that do not expand are encouraged to transform their dealerships into the urban auto dealership format which contributes to Santa Monica’s urban form with multi-story buildings built to the street and parking in structures at the rear or underground.” (LUCE, p. 2.1-32) • “New and revitalized dealerships are encouraged to build showrooms adjacent to the boulevard sidewalk using the urban format, locating new car inventory, customer parking, and service facilities in multi-story facilities to the rear of the retail showroom or below grade.” (LUCE, p. 2.1- 37) • Goal E8: “Allow for the expansion and improved performance of automobile dealers in Santa Monica, recognizing their contribution to the local economy and the revenue base of the General Fund.” (LUCE, p. 3.4-22) • Policy E8.6: “Encourage dealerships to provide on site automobile storage in above-grade structures or subterranean parking facilities. To this end, the City will consider allowing intrusions into the public rights-of-way for underground parking and storage facilities.” (LUCE, p 3.4-22) • “Subject to a discretionary review process, projects that provide community benefits may request a height up to 35 feet and 1.5 FAR. However, when design standards are adopted for the urban auto dealer format, a ministerial process may be allowed.” (LUCE 2.1-38) Item 7.A 03/09/21 9 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 242 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) March 5, 2021 City Council City of Santa Monica 1685 Main St Santa Monica, CA 90401 RE: Proposed moratorium on commercial development Dear Mayor Himmelrich and Council Members: The Santa Monica Chamber of Commerce has been consistent with our support for additional housing development and have supported policies and projects to increase the supply for residents and workers in our community. This is why we do understand and appreciate the need to preserve housing opportunities during the preparation of the Housing Element given the six cycle’s 8,800 new unit RHNA state mandate. However, we have serious concerns that the proposed moratorium on nearly all commercial projects across the City is overly broad and could result in unintended consequences. Our concerns include: The very broad and sweeping moratorium, as currently drafted, sends a strong anti-business signal that could create discouragement and disincentive for businesses to come to Santa Monica – at a time when we need more economic development now more than ever. For this reason, the City Council should be clear that any moratorium must be temporary and expire when the Housing Element process concludes. We would vigorously oppose any effort to extend the moratorium beyond adoption of the Housing Element and/or to make it permanent. Any temporary moratorium must then be only enacted if it is used aggressively and ambitiously to rezone properties throughout the City, particularly along the commercial boulevards, for increased housing production above and beyond the city’s current restrictive zoning regulations. This is the only possible justification for something as dramatic and sweeping as a temporary commercial development moratorium. Any temporary moratorium must include exceptions including: •Additions to existing commercial buildings; •Changes of use within existing commercial buildings •Commercial projects proposed along the entire Third Street Promenade; •Any site within 500 feet of the freeway where the California Air Resources Board (CARB) generally recommends against siting new residential development; •For private schools; •For non-profit uses; and •For auto dealerships which are a critical tax generating use for the City and are already subject to a discretionary Conditional Use Permit process. We appreciate that the City must be creative and open to all solutions that increase housing but we also caution taking any action that would further harm Item 7.A 03/09/21 10 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 243 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) our already fragile businesses that are vital to providing jobs, attracting tourists, and generating revenue for the City. Thank you, Laurel Rosen, President/CEO Item 7.A 03/09/21 11 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 244 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) March 8, 2021 Dear Mayor Himmelrich and City Council Members, I write in regard to the proposed Emergency Interim Zoning Ordinance and the impact it will have on Santa Monica automobile dealerships. Our family, through Four generations, has served the City of Santa Monica and the local automobile industry for the past 100-years. During this time, we have worked cooperatively with the City on zoning regulations that allow automobile dealerships to continue and to upgrade their facilities in Santa Monica. The Council’s proposed moratorium which states, in relevant part, that future construction “should be limited to the floor area of the existing structure” will place severe constraints on the auto dealers of Santa Monica. Although your proposal is well-intended, it does not fit the auto dealership model and will create extreme hardship for automobile dealers who have provided support to the community for many, many years. My brothers and I were born and raised in Santa Monica. We have always taken great pride in providing service to local residents, while supplying a significant income base for the City through sales tax revenues. . The proposed Emergency Interim Zoning Ordinance will place insurmountable burdens on auto dealers, especially those who have not made alterations to their facilities in decades. . Many of the current dealerships were built long ago and will need to expand facilities to accommodate environmental and future code changes. Hybrids and electric vehicles will absolutely necessitate future facility development. Currently, many dealerships use much of their land to park cars. This land will be needed to upgrade and provide the necessary infrastructure to meet the demands of modern, energy efficient automobiles. It would be wise to exclude auto dealers from your moratorium as they would be unduly burdened by the restrictions imposed. Space requirements for auto dealers are substantially different from those of other retailers. I sincerely, and respectfully, ask you to please consider excluding the automobile dealerships from the proposed moratorium. Thank you for the opportunity to bring these issues to your attention. Warmest regards, Claude R. Short, LLC Dee Menzies, Member Item 7.A 03/09/21 12 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 245 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) March 8, 2021 Santa Monica City Council 1685 Main Street Santa Monica, CA 90401 RE: Santa Monica City Council Agenda Item 7A Emergency Interim Zoning Ordinance Dear Santa Monica City Council Members, I am writing on behalf of Tesla to provide comments on agenda item 7A on the March 9, 2021 Santa Monica City Council meeting regarding the Emergency Interim Zoning Ordinance (IZO). Tesla’s mission is to accelerate the world’s transition to sustainable energy. As part of this mission, Tesla builds electric vehicle (EV) charging stations to support EV drivers and reduce range anxiety. Public EV fast charging stations are particularly important for renters, apartment dwellers, and garage orphans who are typically unable to reliably charge at home. With a majority of Santa Monicans living in multi- unit dwellings, more EV fast charging stations are needed to support the growing number of Santa Monica EV drivers and meet the city’s goal of 1,000 EV chargers by 2025.1 Tesla has been working closely with Santa Monica planning staff since September 17, 2020 on a large Tesla EV fast charging station that includes solar energy and battery storage within the Mid-City neighborhood. On March 3, 2021 the Santa Monica Planning Commission approved Tesla’s Conditional Use Permit on the commercially zoned property. Construction is planned to begin mid-summer 2021 and the first phase of the project should start serving Santa Monica EV drivers by the end of this summer. City planning staff recommend in their IZO staff report that it should only apply to applications submitted after January 12, 2021. Tesla urges the City Council to ensure that the IZO is not retroactively applied to projects already fully or partially in process with the city. Additionally, given Santa Monica’s EV goals and need for more fast charging stations, Tesla recommends that EV charging stations be added as an exception to the IZO, as the ordinance could inadvertently stall crucial new EV charging stations needed in Santa Monica and prevent the city from meeting its EV goals. Tesla appreciates the opportunity to provide comments. Sincerely, Noelani Derrickson Policy Advisor Tesla 1 Santa Monica Electric Vehicle Action Plan Item 7.A 03/09/21 13 of 13 Item 7.A 03/09/21 7.A.b Packet Pg. 246 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m)) 1 Vernice Hankins From:Scott Wolfe <scott.a.wolfe@gmail.com> Sent:Tuesday, March 9, 2021 12:31 PM To:councilmtgitems Cc:Gleam Davis; Kristin McCowan; Phil Brock; Sue Himmelrich; Oscar de la Torre; Councilmember Kevin McKeown; Christine Parra Subject:Council Meeting 2021/03/09 - Public Comment for Item 7.A EXTERNAL      Dear Councilmembers,    Thank you for reviewing the Adoption of an Emergency Interim Zoning Ordinance to Establish Temporary Land Use Restrictions.    I am writing this Public Comment in support of the ordinance. We are at a severe shortage of housing in Santa Monica. It was frustrating listening to the Planning Board last week where the city was issuing a permit for a Tesla Charging station. It was land that could have been used for housing. But because a property owner was sitting on it and waiting for a big payoff from commercial development, it had to go to an inequitable charging station used for privileged Tesla owners only.    Thank You,  Scott Wolfe  Sunset Park Resident    7.A.b Packet Pg. 247 Attachment: Written Comments (4432 : Emergency IZO to Establish Temporary Land Use Restriction to retain potential housing sites(90m))