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HomeMy WebLinkAbout04/03/2020 - Special MeetingCITY OF NEWPORT BEACH City Council Minutes Special Meeting April 3, 2020 I. CALL THE MEETING TO ORDER II. ROLL CALL - 4:00 p.m. Present: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield (telephonically), Council Member Jeff Herdman (telephonically) Absent: Council Member Kevin Muldoon (excused) Invocation — Council Member Brenner Pledge of Allegiance — Mayor O'Neill Mayor O'Neill explained the process for the meeting pursuant to the public health orders and announced that public comments will be heard at the end of meeting. III. PUBLIC COMMENTS — moved to the end of the meeting Jim Mosher commended Council for allowing public comments live and in real time, and for not hiding behind closed doors, noting that neighboring cities have banned public attendance and participation at meetings. He stated that a contentious issue is scheduled for the next Council meeting and believed Council should allow the public to practice social distancing in the Council Chambers rather than the Community Room. Carmen Rawson asked that Council consider closing public restrooms and beaches since people are supposed to walk near their homes. IV. CURRENT BUSINESS 1. Emergency Ordinance No. 2020-001: Prohibiting the Issuance of Any New Short -Term Lodging Permit and/or the Rental of a Lodging Unit for a Short -Term, to Any Person, Except a Medical Professional or Emergency Responder [100-20201 Mayor O'Neill indicated there will be no staff presentation and noted that Council received extensive communications about the subject. He thanked everyone for their input, reported that emails relative to this issue were almost 50-50 in support and opposition, and displayed a printout of the emails received. In response to Mayor O'Neill's questions, City Attorney Harp advised that the proposed ordinance prohibits the issuance of new permits for short-term lodging for the duration of the emergency and makes it unlawful to rent, advertise, or enter into an agreement for any lodging unit for less than 30 days. He reported that the only exceptions would be rentals to a medical professional or an emergency responder, and anyone currently occupying a short-term lodging unit would have until April 10, 2020 to end their tenancy. He noted that the proposed ordinance would be effective immediately and remain in effect until 1) the state of emergency is terminated by a proclamation of the Governor, 2) the local emergency is terminated by Council, or 3) the emergency ordinance is repealed in whole or in part by Council. Council Member Brenner expressed concern about new people coming into the community for occupancy and questioned whether people should be forced to leave on April 9. Volume 64 - Page 349 City of Newport Beach Special Meeting April 3, 2020 Barry Saywitz understood the desire for the ordinance, cautioned Council regarding the financial impacts on the community, indicated operators are already operating at 5% occupancy from what they were previously, noted the only people renting from the operators are from Southern California, not people from other countries or states, discussed the financial impacts on mom-and-pop and short-term operators, noted their attempts to get to the summer months to make money, expressed concern relative to future bookings if the ordinance did not have a deadline, and proposed limiting the number of people per unit to six or less or the term to 15 days. Heidi Nielson indicated her business, Doyle's Beach and Boardwalk, is zoned for RMF, has no single- family homes around it, and is located in a commercial district. She stated she wanted to partner with the City, noted she pays bed taxes and property taxes, discussed her policies during the current situation, expressed concern about how the ordinance would affect her business, and questioned the upside for herself to pay taxes and whether the Lido House Hotel will be closed. Connie Adnoff believed trying to provide housing for first responders and medical staff is noble but expressed concern that their homes will then have the virus, stated she did not see first responders and medical staff as the short-term rental demographic, inquired about enforcement for those doing one- night rentals and for not following the emergency ordinance, believed renters are coming to Newport Beach to quarantine, and questioned the difference between short and long-term rentals. Colleen Howes expressed disappointment that Council is not trying to work with them and would rather ban short-term rentals, explained the need for short-term rentals, did not believe anyone is going to rent for 30 days, indicated the demographics of short-term rentals have changed since the pandemic, stated Council should not decide who she can rent to, believed the City is addressing the pandemic responsibly, but implementing the ordinance is not going to affect the spread of the virus, and asked if violators would be arrested. Zill Amshamluka discussed her current renters and the condition of her homes, and requested the City work with them to not put a huge burden on landlords during these difficult times. Shannon Horan, Abrams Coastal Property, believed this meeting was called to appease some constituents, the City is in an economic recession, and the decision to ban short-term rentals will have a further impact on the economy; indicated spring reservations have been canceled and summer reservations are being canceled; believed there would be irreversible damage to businesses and homeowners that expect the income; and stated renters are expected to follow the COVID-19 guidelines. Craig Batley indicated Burr White Realty has canceled 70 reservations so far, questioned why hotels are allowed to have guests, took issue with singling out short-term lodgings at this time, expressed concern that the ordinance has no end date, asked whether he can book reservations for the rest of the year, suggested that Council only ban one, two or three -night stays, believed the impact of the few people coming into the City for short-term lodging is minimal, expressed the opinion that the ordinance is unfair and rushed, and believed the City should rethink the ordinance and require all incoming guests to receive the State's guidelines relative to safety. Jeff Bosson, Sea Breeze Vacation Rentals and California Vacation Rental Association, agreed with Mr. Batley's comments, expressed concern about the different treatment between vacation rentals and hotels, noted public access to Newport Beach or hotels are not closed, suggested vacation rental operators be given the option to self -regulate or block out rentals for the first two weeks of April, believed the ordinance would result in lawsuits, and stated once Newport Beach announces vacation rentals have been banned, summer renters will start canceling. Russell Adnoff, Beach View Realty, expressed opposition to switching short-term lodging permits to 31 or more nights because it is not an ideal demographic, stated people looking for furnished rentals typically do not have their feet on the ground and are not welcome in the community, but operators will not have a choice but to rent to them, believed the City should welcome guests even during bad times, and took issue with hotels not being considered the same as vacation rentals. Volume 64 - Page 350 City of Newport Beach Special Meeting April 3, 2020 Kevin Drucell advised that he was on pace to pay the City $5,000 in Transient Occupancy Tax this year, but the ordinance would be a blow to short-term rentals and the restaurant industry, discussed the value of the rental industry, believed the ordinance would impact people who live paycheck -to - paycheck, stated renters feel his cottage is safer than a hotel and provides a change of scenery, noted social distancing is possible in a short-term rental, but not in a hotel, stated there is no scientific proof that staying in short-term lodging has enabled the spread of the virus, and believed the City could eliminate one or two -night rentals and develop an industry task force to come up with solutions and ideas other than a ban. Carmen Rawson expressed support for prohibiting new permits, but not prohibiting short-term lodging activities for those that already have a permit since owners and businesses are already in economic trouble, suggested the City work with operators so that the few short-term guests can help the economy, stated that residents, not short-term lodgers, are overcrowding the streets, believed some visitors are afraid to visit Newport Beach because it is a hotspot for COVID-19, suggested the Council not hinder the few opportunities for people to come to Newport Beach, indicated the City is not stopping people from coming to Newport Beach from other places, and took issue that they cannot advertise units for the fall and next year. Jim Mosher expressed concern regarding Sections 2 and 3 of the ordinance because they do not appear to be necessary emergency measures, believed owners/operators have raised valid points about short- term lodgings serving a valid function for people needing to shelter or be isolated, and expressed the opinion that the exception for medical personnel and first responders is too narrow. Ken Rawson indicated there are a number of reasons why Newport Beach has such a high number of COVID-19 cases, thanked Council for closing the boardwalk, but took issue that the City is not limiting the number of people who come to the Peninsula, believed residents on the Peninsula want stronger actions, reported that he only rents to families, asked Council to accelerate and formalize the short- term lodging rules and to establish a three to four -night minimum, and stated the short-term lodging industry needs the City to provide and enforce a fined end date and a maximum occupancy. In response to Mayor O'Neill's questions, City Attorney Harp explained that the ordinance does not have a specific deadline because the date the Governor will lift the state of emergency is unknown, Council may schedule a review of the ordinance at its May 12 City Council meeting, the emergency ordinance can be effective through May 20, the intent of the ordinance is to ban the occupancy of short- term lodging while the ordinance is in effect, operators are allowed to advertise lodgings for some date in the future but if that future date conflicts with the emergency ordinance, the operator will be in violation of the ordinance, language can be added to the ordinance to clarify that operators can advertise or enter into agreements to book lodgings outside the emergency, violation of the ordinance would be a misdemeanor or an administrative fine, Council may impose a four -night minimum stay, and the State and the Alcohol Beverage Control (ABC) Board allowed the sale of alcohol for off-site consumption. Council Member Dixon discussed the regular ordinance process, the health and financial crisis in the country, Federal and State orders to stay at home, the average and current beach attendance, natural market forces that have diminished business by 90-95%, and the need to continue to discourage visitors and to protect businesses and the health and safety of residents. She suggested Council establish limitations on short-term lodging, particularly one, two and three -night rentals, and on the number of occupants, conduct enforcement but not arrests, and encourage rental companies to operate in a safe and helpful manner. She proposed limiting short-term rentals during the defined period of the Governor's Order to help the City stay safe while supporting residents and neighbors. Mayor O'Neill noted the need to follow guidelines and orders from public health agencies and its experts, State and County orders and guidelines, changes in the City in response to orders and guidelines, the closure of City facilities and amenities, the monitoring of the community for social distancing to decrease the spread of the virus, and the need to amplify the message that it is safer to stay at home. He discussed current guidelines, City efforts to keep people safe and follow expert advice, Volume 64 - Page 351 City of Newport Beach Special Meeting April 3, 2020 concerns from residents about short-term lodging, the need for Council to talk about something that is not covered by the State or County, methods to keep people safe and to stop the spread of the virus, and the effects of doing this. He believed the City should not allow one and two -night stays and enforcement could include fines and the revocation of permits. Mayor Pro Tem Avery indicated Council Members are concerned about doing the right thing for residents and businesses and are conscious of not wanting to overstep. He emphasized that the Council's and the City's first responsibility is to the safety of all the residents, noted this is the most significant health emergency in 100 years, and the peak will not occur until possibly mid-May. He. stated Council wants to do what it can to send the message to please stay home and to give it another month, believed that vacation rentals are for a different time, and this is not that time. He indicated that, by limiting rentals, Council is sending a message that it cannot be business as usual. He noted that there is no one that has not been hurt by the emergency, he wanted everyone to work together as Council works toward a solution that is, on its face, less onerous and takes in the suggestions of the speakers. He emphasized that the message is to stay in your homes and recreate near your homes, and not to encourage people to travel to Newport Beach; and the need to provide some relief for businesses, if possible. He pointed out that Council is not banning short-term rentals for the long term because it does not know when the emergency will end. He concurred with setting an end date so people can plan activities for when the emergency is lifted. Council Member Brenner agreed with everyone's comments and advised that these are short-term measures, expressed concern that if the' City allows more visitors to come to Newport Beach, we are penalizing other businesses and the whole community, stated that people all over the community are concerned about losing lives, loved ones, and freedoms, noted that a study indicated that the ocean breeze can carry particulates further than 6 feet, assured everyone that Council is not trying to penalize anybody, but is trying to protect everyone, and suggested an end date be established, but for right now, Council needs to take drastic measures to ensure people feel safe. Council Member Herdman noted there were a million cases of Coronavirus globally, people are encouraged to wear masks, a national stay at home order may be issued, California is two weeks away from seeing the same number of cases as New York City, and Council needs to close everything that creates social interaction in the City and to limit the spread of the virus. Council Member Duffield supported a minimum four -night stay and an end date, and encouraged businesses to seek relief offered by the Federal government. Mayor O'Neill advised that he has reached out to the City's State Senator and County Supervisor and asked them to follow up with health agencies to find out if there is anything else Newport Beach should be doing differently. Council Member Dixon implored property management companies not to market a four -night minimum stay if Council revised the proposed ordinance, and discouraged operators from taking a four -night minimum as a possible incentive to open rentals. Mayor O'Neill reiterated suggested revisions to the ordinance to establish a four -night minimum, visitors in place now can remain, allow the exemption for healthcare and first responders, and set an end date of May 20 with a review during the May 12 City Council meeting. City Attorney Harp preferred to leave the ordinance in effect for the duration of the emergency and to add language for rentals and acceptance of bookings that do not occur while the emergency is in effect. He expressed concern that, if the ordinance contains an end date, it would not be effective until after that date. He suggested that, if the emergency is still ongoing on May 12, Council can readopt the ordinance with a future end date. Mayor O'Neill suggested enforcement of a $1,000 fine for a first violation, a one-year, suspension of the permit for a second violation, and the revocation of the permit for a third violation because this is an emergency ordinance. Volume 64 - Page 352 City of Newport Beach Special Meeting April 3, 2020 Mayor Pro Tem Avery believed short-term operators need to do the right thing since City personnel are stretched too thin to strictly enforce the emergency ordinance. Council Member Brenner indicated the issue is people coming and going during the emergency period when the President and the Governor have said to stay home. Council Member Herdman agreed with Council Member Brenner, questioned the length of time a short- term lodging permit would be revoked for a third violation and the purpose of an emergency ordinance if properties will turnover every four nights, and advised that he stopped renting his properties to prevent exposing anyone unnecessarily. Council Member Dixon suggested a 14 -night minimum, which is the isolation period. Council Member Herdman believed visitors should self -isolate at their own homes. Council Member Duffield believed what has been proposed was a good compromise and noted this will not be forever and everyone needs to sacrifice. He questioned allowing the Lido House Hotel to operate, but not short-term lodgings. Council Member Herdman believed Council should close it if it has the authority. Council Member Brenner explained that hotels are located outside of neighborhoods and believed the Governor's order did not require hotels to close. City Attorney Harp understood the hotel industry has checked with the Governor and confirmed that hotels are not closed during the emergency. He indicated there have been questions raised about that, so he placed a call to the Governor's Office yesterday to obtain more clarification. Craig Batley explained that a 14 -night requirement would be a problem because he does not have 14 -night short-term stays, believed there should be an end date so that people can book lodgings for the summer, expressed concern that, once a moratorium is in effect, people booking dates between now and May 20 would be in violation of the ordinance. Barry Saywitz advised that visitors staying one and two nights are booking at the last minute, believed a four -night minimum will eliminate those bookings, operators are desperately trying to rent lodgings by lowering the rental fee, Council can accomplish its goals by eliminating one to three night stays, stated that eliminating the short-term rental market 100% is not going to dramatically make a difference because operators of short-term lodgings and hotels cannot apply for relief from the Federal government since they do not have employees, and stated that operators are trying to ensure the industry does not cave-in so they can resume business. Council Member Herdman suggested short-term lodging operators seek mortgage relief through their mortgage lenders. Motion by Council Member Brenner, seconded by Council Member Herdman, to a) find this action exempt from the California Environmental Quality Act ("CEQA") pursuant to Sections 15269(c) (the activity is necessary to prevent or mitigate an emergency), 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; and b) pursuant to City of Newport Beach Charter Section 412, adopt Emergency Ordinance No. 2020-001, An Ordinance of the City Council of the City of Newport Beach, California, Prohibiting: (1) the Issuance of any New Short -Term Lodging Permit Pursuant to Newport Beach Municipal Code Chapter 5.95; and/or (2) the Rental of a Lodging Unit, for a Period of Thirty (30) Consecutive Days or Less, to Any Person Other than a Medical Professional or Emergency Responder Coming to the City of Newport Beach to Aid with the COVID-19 Outbreak, including the amendments to require a four -night minimum stay, current renters can remain, the ordinance terminates on May 20 with a review for a potential extension or termination on May 12, and enforcement to be a $1,000 fine for the first violation, a one-year suspension of a permit for the second Volume 64 - Page 353 City of Newport Beach Special Meeting April 3, 2020 violation, and revocation of a permit with the inability to reapply for the permit for one year for the third violation. In response to Council Member Herdman's question, Mayor O'Neill clarified that current occupants should leave when their booking ends. Council Member Dixon added that the units cannot be re -rented once the occupants have left. Council Member Brenner suggested the ordinance reflect no new occupants through the time of the emergency and that units can be occupied only once from now to May 20. City Attorney Harp understood the intent is to allow operators to rent units for four consecutive nights. Mayor O'Neill expressed concern that a unit could potentially be rented six times over the next six weeks, but that is not likely to happen because rentals have decreased 95%. Council Member Dixon indicated the only active market is for one-night stays, but Council is eliminating the market demand for short-term rentals in Newport Beach by requiring a four -night minimum until May 20. Mayor O'Neill noted a second option is to prohibit, until the ordinance is lifted, re -renting units once the in-place occupants have left. If the motion includes the second option, there is no reason to have a four -night minimum. Council Member Dixon stated units that are occupied but scheduled for vacancy in the next few days cannot be re -rented through May 20. If there is a market for four -night minimum stays, the ordinance should permit that. Council Member Brenner believed a four -night minimum would defeat the original purpose of the ordinance. In the past, the one and two -night stays have been the problem. She noted that college students are home or on spring break, and they will create a problem whether they stay for one night or a week. The more people are homebound, the more likely they are to take four days and go to Newport Beach. Rather than telling people to stay home, she indicated that the City is telling them to come and bring their germs for four days. She expressed hope that a temporary ban on short-term rentals will kick start the recovery. Following discussion, Mayor O'Neill restated the motion as if there is a current short-term lodging in place, that lodging can continue until its contractual end, at which point no additional occupancy of short-term lodging for commercial purposes is allowed until May 20 or sooner if one of the three occurrences happen, the only exception is for healthcare workers and first responders, enforcement will be a $1,000 fine for a first violation, a one-year suspension for a second violation, and revocation with an inability to apply for reinstatement for a full year for a third violation. Council Member Brenner clarified that if a rental contract ends and the occupant wants to shelter in place in the unit longer, the renter can do that. The maker of the motion and seconder of the motion concurred with the restated motion Mayor Pro Tem Avery reiterated that the short-term rental industry is 90% down already. Substitute motion by Mayor Pro Tem Avery, seconded by Council Member Dixon, to allow operators one four -night rental until May 20 to give operators some income. Council Member Herdman expressed concern that allowing that would just rotate potential carriers through the City. Council Member Dixon believed it is a fair compromise. She indicated that banning people from the beaches would be the ultimate fix to this problem, but Council is taking incremental measures and recognizes the precarious nature of all businesses in the community. Mayor O'Neill restated the substitute motion that, between today and May 20, a person who holds a short-term lodging permit and has a current renter can allow the renter to stay in place. In addition, the licensee and all permittees would be allowed to rent one more time between now and May 20 for a minimum of four nights. Volume 64 - Page 354 City of Newport Beach Special Meeting April 3, 2020 City Attorney Harp believed it would be very difficult to enforce an ordinance allowing that exception. City Manager Leung noted Transient Occupancy Tax reports come out a month later. Mayor Pro Tem Avery suggested random audits of the reports for enforcement. Council Member Brenner emphasized the purpose of the ordinance is to limit the exposure of the City's residents to the virus. Council Member Dixon proposed limiting occupancy to two people per bedroom. Mayor O'Neill indicated he does not know how the City would enforce this. A friendly amendment was made to the substitute motion to only allow two people per bedroom. Mayor O'Neill recessed the meeting at 6:05 p.m. and reconvened the meeting at 6:17 p.m. with all members of the City Council in attendance, except for Council Member Muldoon. In response to Council questions, Community Development Director Jurjis reported that an inhouse auditor performs spot checks of property owners' books, but the City has no mechanism to cross- reference with the 50 online platforms since they will not share information with the City. He noted that reporting is based on the honor system, the City could require permitholders to list their permit numbers on platforms, but more importantly, the City could require property owners to share platform bookings with the City. If operators do not use a platform and have regular customers, the platform is the only missing link. Council Member Herdman believed Council Members are losing sight of why they called the special meeting, which was to try to prevent the spread of the virus and further deaths. He emphasized that there is no room for compromise during this emergency. Mayor Pro Tem Avery withdrew the substitute motion. City Attorney Harp reviewed a redline version of the proposed ordinance, which incorporated the changes suggested by Council. Mayor O'Neill clarified that the original motion allows a current occupant to stay through the end of the rental agreement, that the ordinance will terminate on May 20 or if one of the three actions occurs sooner, that Council will review the ordinance on May 12, and that the motion includes enforcement mechanisms. Further, there will be no new rentals between now and May 20. With Council Member Muldoon absent, the motion carried 6-0. VI. ADJOURNMENT - 6:32 p.m. The special meeting agenda was posted on the City's website and on the City Hall electronic bulletin board located in the entrance of the City Council Chambers at 100 Civic Center Drive on April 2, 2020, at 3:20 p.m. m Will O'Neill C. Y Mayor J, Leilani I. 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