Loading...
HomeMy WebLinkAbout24 - Newport Coast Annexation and Development Agreement Extension (PA2015-165) - Newport Coast and Newport Ridge - CorrespondenceReceived After Agenda Printed November 22, 2016 Item No. 24 November 22, 2016, Council Agenda Item Comments The following comments on an item on the Newport Beach City Council agenda are submitted by: Jim Mosher ( iimmosher(@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item 24. Newport Coast Annexation and Development Agreement Extension (PA2015-165) — Newport Coast and Newport Ridge This is a request from the Irvine Company ("IC") to extend for another 15 years the shadowy rules governing future development in the Newport Coast annexation area. From the staff report it would appear IC is making a mysteriously generous new offer to pay the City more than $74 million to do something it apparently claims it could currently could do without paying the City anything (and apparently without any new agreement), namely convert 1,042 unbuilt hotel room entitlements into residential construction at a CPI -adjusted $71,100 each. Why is IC being so generous? And what could be wrong with this? The fact that the answers to those questions are not obvious from the staff report makes this worrisome on many levels. A few of my concerns follow. 1. The staff report is wholly inadequate to make a decision about the extension The planning authority over the City's Newport Coast annexation area is extremely, and probably unnecessarily, complex, involving overlapping agreements and jurisdictions, with much under County control, but much within that subject to Coastal Commission restrictions, and some (apparently) under City control The confusion regarding Measure Y in 2014 was just one manifestation of the uncertainty regarding what the present rules governing the annexation area may be, and the limits on its future development potential. As an example, Ms. Shawna Schaffner, speaking on behalf of IC to the Planning Commission on October 6th, spoke of IC's separate Development Agreement with the County in the past tense, yet the Cooperative Agreement referenced in the present staff report not only speaks of the County DA in the present tense, but gives it perpetual primacy over the City's DA. Does such an agreement continue to exist? What does it say? What are the City's options and the pros and cons of each? The staff report appears to recommend a continuation of this confusing state of affairs without shedding any light on the multiple questions about it. I suggested to the Planning Commission that it is irresponsible to make changes to either the Development Agreement or City's General Plan without a frank and comprehensive public discussion about the status of Newport Coast, including open-ended input from the County and Coastal Commission. I make that same assertion to the Council. At a minimum, an explanation of how the various agreements and jurisdictions interact, how they relate to the current General Plan, how much territory has been turned over to the City November 22, 2016, Council Item 24 Comments - Jim Mosher Page 2 of 6 by the County, how much is no longer owned by IC and therefore not subject to the DA, etc., and a clearer explanation of the alternatives available, would have been helpful. Instead of shedding further light, the staff report (which doesn't even explain who one of the proposed signatories -- the "Irvine Community Development Company" -- is, and how they are related to IC) appears to ask the Council to rely, in large part, on the Planning Commission's recommendation of approval from October 6`h. It fails to note that the Commission: • heard this at the end of a very long meeting, • expressed considerable doubt and skepticism about what was being presented to it and concern about their lack of understanding of how planning works in the annexation area, • noted the existing Agreement did not appear to have anticipated any need for extensions and made no provision for them, • expressed concern about knowing what public benefit the Agreement would confer, • were told nothing about IC's purported ability to convert hotel allotments into residential entitlements, • and gave the matter at best perfunctory attention, being unsure of their role with respect to development agreements in general. 2. The requested action relies on 15 to 40 years old CEQA analysis. The threshold recommendation (staff report recommendation b) is for the Council to "Find that all significant environmental concerns for the proposed project have been addressed in the previously prepared environmental documents certified by the County of Orange and described in Exhibit C of the Agreement." Exhibit C is a list of environmental analyses performed between 15 and 40 years ago. Nothing is offered in support of the contention that these are still relevant or that nothing has changed in 40 years. This is especially troubling in view of there being no explanation at all of where the new development being vested by the proposed DA would go or what it would look like. 3. IC's fundamental premise for the request is fundamentally flawed The few Annual Monitoring Review statements that IC has provided to the City over the years have consistently indicated that build out under the existing DA was expected by 2015. IC now contends that it is entitled to a continued protection of its rights because the City has failed, for 15 years, to produce a promised new Local Coastal Program for Newport Coast. Page 24-5 of the current staff report refutes that contention. Hence what IC claims to have been its primary justification for expecting an extension has vanished. Yet the claimed urgency has not. November 22, 2016, Council Item 24 Comments - Jim Mosher Page 3 of 6 4. The negotiation appears to have been materially misrepresented to the public Although City staff now says the City has no obligation to produce a new LCP for Newport Coast, and presumably no intention of creating one, at the October 6th Planning Commission hearing (see 4:05 in the SPON video), staff actually confirmed IC's erroneous claims about this (although suggesting it was somehow "a separate issue"). This certainly clouded the discussion. More seriously, City staff told the Commission on October 6th that they could provide no details about the possible public benefits of the proposed extension because they were being negotiated between IC and Council representatives (who they believed to be Mayor Dixon and Council member Selich), and staff was not privy to the content of those discussions (see 3:48 and 4:02 in the SPON video). Yet the present report tells us that City staff is proposing the public benefit. Something clearly doesn't add up. 5. IC and the City have failed to abide by the terms of the existing Agreement Section 6.1 of the existing Development Agreement (see page 24-41 of the present staff report) requires the City to request from IC for public review an Annual Monitoring Review statement describing the evolving status of the annexation area. To the best of my knowledge, the status of the Newport Coast (Coastal Zone) portion of the DA has not been publicly reviewed since September 10, 2013, when it was Item 18 on the City Council agenda (consisting of a cursory update to a previous review for the period ending December 31, 2011), and the status of the Newport Ridge (non Coastal Zone) portion has not been publicly reviewed a single time during the entire 15 year life of the existing DA. Moreover, the little information revealed in those reports seems inconsistent with the numbers presented in the present staff report. For example, Table 2 on page 24-3 reports 422 residential units remaining to be built in the Newport Coast LCP segment, yet the 2013 Review (handwritten page 14) refers to "approximately 189 residential units for which building permits have not been issued," although the document cited for that number appears to indicate 219. Does anyone know what the real number is? As to the Newport Ridge area, since no Annual Review has ever been conducted it is impossible for the public to know if the numbers presented in Table 1 on page 24-2 are accurate, or not. This is particularly worrisome because in connection with Measure Y in 2014, City staff was unable to show where or what the alleged 363 unbuilt residential units exist in the City's current General Plan. Vesting a right to build them without anyone asking what they are or where they would go seems unconscionable. November 22, 2016, Council Item 24 Comments - Jim Mosher Page 4 of 6 6. The requested Agreement appears inconsistent with the LCP The "Funding Requirements" section on page 24-2 of the present staff report says the conversion of hotel units into residential dwelling units (the primary thing a public benefit is being offered for) is "allowed by the Newport Coast LCP." I am unable to find anything in the Coastal Commission certified Newport Coast LCP suggesting that is allowed. On the contrary, the LCP sets very clear and separate maxima on the allowable number of dwellings and visitor serving accommodations. Given the Commission's strong preference for visitor serving accommodations over residences, it seems extremely unlikely such a provision would exist, or be allowed without amendment to the LCP. Instead, this seems to refer to a provision slipped into the City's General Plan by City Council Resolution 2000-88, a month before voters enacted Greenlight (Charter Section 423) which would severely restrict such conversions. But if the conversions are inconsistent with the LCP, the significance of a long -ago General Plan provision is unclear, and certainly not clarified by the present staff report. Beyond that, the staff report and the proposed Agreement (as did a letter from the County provided to the Planning Commission as part of their agenda Item 6 on October 6`h) casually toss around the word "hotel unit" as if it is the same as "accommodation" in the LCP, even though the LCP makes a distinction between the two. 7. The benefit to the public, beyond money, is not explained I am unable to find anything in the staff report explaining why, aside from the money, it is in the City's interest to grant IC this extension. On the contrary, the report cryptically suggests, but without further explanation, that if the existing DA is allowed to end, as it was expected to, control over planning in the annexation area would pass to the City, getting the County out of the picture entirely. To me, the clarity that would bring seems a major public benefit, possibly outweighing the money. 8. The basis of the monetary benefit is not explained If City staff is indeed the one suggesting to the City Council the appropriate monetary benefit it would seem incumbent upon them to explain how the numbers were arrived out. I am unable to find in the report any rationale whatsoever for why $71,100 per hotel unit to residence conversion and $10,000 per hotel unit construction have been selected as appropriate public benefits. Why are they not $20,000 or $120,000? What is the reasoning? Is this based on some kind of economic study? I haven't a clue. 9. No benefit is being asked for vesting "normal" residential construction rights Equally troublesome, the proposed Agreement appears intended to lock in entitlements for residential construction unrelated to the hotel (visitor accommodation?) allotments, but offers no public benefit at all for conferring that right on IC? What is the rationale for that? And is it even legal? November 22, 2016, Council Item 24 Comments - Jim Mosher Page 5 of 6 10. The status of other agreements protected by the requested agreement is not explained See Items 1 and 5, above. At least in my mind it is completely unclear what other agreements IC has with the County and Coastal Commission, what their status is and how they impinge on the City's authority with or without a new DA. Again, it seems irresponsible to enter into anything without a comprehensive understanding of this. My guess is that under the proposed Agreement, staff expects the City to receive payments for conversions and construction authorized by the County, with little or no input from Newport Beach residents. But I have no real idea, if that is correct or not. 11. The relationship to recently requested General Plan amendments is not explained On October 6t", City staff asked the Planning Commission (as agenda Item 6) to affirm certain administrative "corrections" to the voter -approved Land Use Tables of the 2006 General Plan. Since the present staff report explains so little, is perhaps unsurprising that it provides no explanation of what relevance, if any, that action has to the present request. If agreed to as an extension before January 1, 2017, does the present proposal lock in a right to what is allowed under the "corrected" General Plan or to some earlier General Plan? Does it matter if the General Plan is inconsistent with the LCP? For the "corrected" one certainly is: It defines "anomalies" whose mapped geographic extents differ from those of the corresponding "planning areas" in the LCP (for example, the Pelican Hill Golf Clubhouse appears to be outside City Anomaly 60 even though its development is intended to be limited as part of the otherwise corresponding Planning Area 13 in the LCP). • It assigns a limit of 2,150 "hotel rooms" to the mapped area when the LCP clearly limits the visitor serving accommodations to 1,950. • It assigns a development limit of 2,960,000 square feet when the corresponding figure in the LCP is 2,660,000. 12. This appears to be nothing more than another City supported effort to make another end run around Greenlight Given the revelation with this staff report of some deeply -hidden right to convert hotel room allocations to residential construction entitlements, and the sudden urgency of getting this adopted in time for the old DA to be "extended" before it expires on January 1" (as opposed to negotiating a new agreement for land that could possibly be placed entirely under City control), it appears this is nothing more than another attempt to assist IC in making an end run around the citizens' Greenlight initiative. This time by "vesting" what will apparently be November 22, 2016, Council Item 24 Comments - Jim Mosher Page 6 of 6 claimed to be a pre-Greenlight conversion right, and this time on the flimsy (and it turns out erroneous) excuse that the City failed to perform its obligation to produce a new LCP during the first 15 years IC has already had to enjoy that right. As the City Council knows, a significant portion of the Newport Beach public is already incensed by City staff enabling IC to add 79 dwelling units to Newport Center in 2012 by means of scheme that purportedly avoids counting them toward the Greenlight limit for the statistical area. As City staff knows, hotel to residential conversions are supposed to count toward the Greenlight totals. The staff report does not explain if the conversions contemplated under this DA would be counted toward Greenlight or not, or how the conversions could be made consistent with the LCP. But considering the public has already been burned by 79 illicit conversions, if this is indeed a scheme to use some sort of purported legal loophole to enable 1,042 more non- Greenlight-counted conversions, the political fallout could be extreme. The Council may therefore wish to be cautious about adopting staff's recommendation: it may be hard to convince your constituents that a payment of $71,100 per unit is sufficient to not be counted toward Greenlight. The people's Charter certainly makes no mention of that. 13. The Agreement contains errors As to its substance, I believe Clause 9 of the Recitals (staff report, page 24-16) cites the incorrect dates of hearing and adoption. And Clause 1 of the proposed Agreement refers to "Sections 2.2 and 2.3" of the existing Agreement. I find this curious because the existing Agreement has no Section 2.3, at least that I can find, and because it would certainly seem of interest what properties have been extinguished from the Development Agreement because they are no longer owned by TIC or a TIC affiliate. Is anyone going to ask? It would certainly sound like pursuant to Sections 2.2.2 and 2.2.3 of the existing DA, much of the developable portions of the annexation area are no longer part of the DA — which brings into question the meaning of much of the data provided in Tables 1 and 2 of the staff report, and what the amended DA applies to. Based on this small sampling in the first two paragraphs above, I would suspect other clauses in the proposed amendment (and the original Agreement) contain errors. In summary, I believe the Council should reject this proposal. If a development agreement is warranted at all, it should be negotiated after the present one has expired and the steps have been taken for the City to assume complete control over the area, as the staff report implies is possible.