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HomeMy WebLinkAboutHO2020-001 APPROVING AN ADDITIONAL TEN-YEAR ABATEMENT PERIOD EXTENSION FOR THE PROPERTY LOCATED AT 813 EAST BALBOA BLVDRESOLUTION NO. HO2020-001 A RESOLUTION OF THE HEARING OFFICER OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING AN ADDITIONAL TEN-YEAR ABATEMENT PERIOD EXTENSION FOR THE PROPERTY LOCATED AT 813 EAST BALBOA BOULEVARD {PA2019-186) THE HEARING OFFICER OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS FOLLOWS: SECTION 1. STATEMENT OF FACTS. 1. An application was filed by Balboa Realty (Applicant); on behalf of Alex Batley, Aaron Batley, and Arthur Dorr (Owners); requesting approval of an abatement period extension of 10 years in addition to a previous extension until November 30, 2031, with respect to property located at 813 East Balboa Boulevard, and legally described as Lot 7, Block 12, Balboa Tract (Property). 2. Newport Beach Municipal Code (NBMC) Section 20.38.100 (Abatement Periods) requires nonconforming nonresidential uses in residential zoning districts to be abated and terminated upon a specified period of time unless that period of time is extended by a resolution from a Hearing Officer after a noticed public hearing to allow the property owner to amortize the owner's investment in the nonconforming property or to avoid an unconstitutional taking of property. 3. The Applicant proposes an extension of the required abatement period specified by NBMC Section 20.38.100 (Abatement Periods). Since 1946, the site has been improved with a single-story nonresidential building and use. The Applicant intends to invest in the existing building through interior and exterior modifications and improvements to support a commercial office use of the premises. The Applicant requests to allow the existing nonresidential use to continue for an additional ten year period until November 30, 2031, without abatement. 4. The Property is designated Two-Unit Residential by the General Plan (RT) Land Use Element and is located within the Two-Unit Residential Zoning District (R-2). The zoning designation was requested by a prior owner, but no residential use of the property has occurred at any time on the premises. 5. The Property is located within the coastal zone. Pursuant to NBMC Subsection 21.52.035(C)(2)(g), (Other Existing Structures), the subject tenant improvement is exempt from a coastal development permit as the interior remodel and exterior fa9ade work do not involve an actual or potential risk of substantial adverse environmental impact. The proposed nonresidential use is of commensurate intensity with that existing on the site and the improvements do not change the intensity of use of the structure which has always been a nonresidential use. Hearing Officer Resolution No. HO2020-001 Page 2 of 7 6. A properly noticed public hearing was held on February 20, 2020, in the Balboa Conference Room (Bay 28 -Second Floor) located in the Newport Beach City Hall located at 100 Civic Center Drive, Newport Beach. Evidence, both written and oral, including a written staff report was presented and considered at this hearing by the Hearing Officer, William B. Conners. Testimony from two members of the public was delivered and information presented which has been considered by the Hearing Officer in making this decision. SECTION 2. CAL1FORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION. 1. This project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. 2. Class 1 exempts the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. In this case, extension of the abatement period would allow the remodel of an existing single-story commercial structure to accommodate an office use. SECTION 3. REQUIRED FINDINGS. In accordance with NBMC Subsection 20.38.1 00(C)(4 )(c) (Extension of Abatement Period) the following findings and facts in support of such findings are set forth: Finding: 1. Is the length of the abatement period appropriate considering the owner's investment in the use? Fact in Support of Finding: 01-25-19 A. Yes. The structure is rather old and in visually unattractive. It was recently purchased for $1.2 million by Applicants who propose an additional investment of approximately $300,000 to $500,000 more to refurbish the property and establish an office. Improvements include structural reinforcement, accessibility compliance, upgrades to the heating, ventilation and air conditioning (HVAC) and mechanical, electrical and plumbing (MEP) systems. The amortization period of that requested is reasonable to financially support an investment of this level. B. The existing remaining abatement period of one year nine months is insufficient to allow amortization of the costs of improvement given the condition of the existing building and proposed renovations, including improvements for structural reinforcement, accessibility compliance, upgrades to the HVAC and MEP systems. Granting the Hearing Officer Resolution No. HO2020-001 Page 3 of 7 extension would leave eleven and a half years to make use of the existing structure on the site without any potential required abatement of the nonconforming use. C. Based on the information submitted, an extension of an additional ten years for the abatement of the current uses is necessary to avoid the resultant economic hardship which might lead to the property remaining in its somewhat dilapidated condition. D. The abatement extension of an additional ten years is appropriate in this case since it will afford the property owner the ability to amortize the value of the proposed building improvements and secure financing of the property that is likely to be impossible if a potential abatement of current uses is imminent. Finding: 2. Does the length of time the use was operating prior to the date of nonconformity justify the extension of the abatement period beyond the code specified one year? Fact in Support of Finding: A. Yes. The property has been used for nonresidential purposes since it was constructed in 1946. There is no evidence of any negative impact to the surrounding areas, and in the context of surrounding uses it integrates into the commercial and mixed-use neighborhood. B. The property became nonconforming in 2003, 17 years ago, when the City Council adopted Ordinance No. 2003-14 rezoning it to the current residential use. The existing structure and use conformed to the Land Use Element of the General Plan for 57 years prior to this, and was not subject to abatement until 2008. At all relevant times, the commercial use has been compatible with the surrounding land uses and there is no evidence of any nuisance arising from such use. C. The substantial period of commercial use without noted problems underscores a high probability of continued successful integration into the surrounding environs, supporting the extension sought. Balboa Realty currently operates one block east of the site and has not been the subject of any concern. Finding: 3. Would the existing structure be suitable for an alternative use? Fact in Support of Finding: 01-25-19 A. No. Transitioning the nonresidential structure for residential use would necessitate total demolition or unreasonably high costs of converting the existing nonresidential building to residential dwelling units. Hearing Officer Resolution No. HO2020-001 Page 4 of 7 B. It is conceivable that the building could be modified to accommodate other nonresidential uses, but not within reasonably justifiable parameters. The existing building is currently vacant and was last occupied by an entertainment business. Conversion to a residential use would require demolishing and building new or major renovation with significant structural and seismic alterations to provide adequate living areas and residential garages. The current building has no lot line setbacks, and could have major issues with respect to windows, doors, or other openings on the exterior of the building. Finding: 4. Would remaining at this site beyond the abatement period result in any public harm? Fact in Support of Finding: A. No. One member of the public opined that failing to conform to existing zoning harms the general public. There was no evidence offered in support of that contention, and in fact the building has existed as nonconforming since 2003 without any incident or complaint with respect to its continued nonresidential uses. There is no evidence that extending the nonconforming use has or will result in any negative impact or harm to the public. There is no evidence that the continued nonresidential use will result in any negative change whatsoever. In fact, the continued delay of abatement will result in extension of the commercial use, but with improvements to the exterior of the building in a way that will benefit surrounding properties that look upon this site. B. The property is in an area that includes a mix of mixed-use commercial and residential uses, including Cruisers Pizza Bar and Grill, retail, and the OCSD A Street Pump Station. The continued commercial use of the subject property is compatible with the surrounding uses and will not have any negative impact or pose harm on the neighboring residential and nonresidential uses in the vicinity. C. See Fact in Support of Finding 2.B. D. The existing nonresidential building has not posed a negative impact on the neighboring uses and the proposed upgrades will enhance the site and surrounding neighborhood. Finding: 5. Would relocation of the facility to another site be overly costly and infeasible? 01-25-19 1. Yes. This building and underlying land cost almost $1.2 million to purchase. The Applicant explained there is no evidence of other suitable properties for sale within this specific area of Newport Beach, This would be especially difficult to accomplish within the remaining existing abatement period. Hearing Officer Resolution No. HO2020-001 Page 5 of 7 2. The relocation of the proposed use is difficult since there are no commercial buildings of comparable size in the Balboa Village area to accommodate the occupant's needs. Balboa Village is part of Balboa Realty's brand identity, having operated in this area for over ten years just one block east of the subject site. 3. The property owner's investment with the purchase of the property would result in a substantial loss of revenue to the property owner if the existing building could not continue to be used for nonresidential purposes. As noted above, it would be extremely costly to convert this existing structure to residential use, probably requiring demolition and reconstruction. This would be an unreasonable expenditure to expect the owner to shoulder. 4. If the owner were to be required to abate the property to residential use, a taking of the premises without payment of adequate compensation may result. The lack of suitable site alternatives and extremely high costs of converting the existing facility to residential might prove unfair for the Applicant to bear in the remaining extension time. SECTION 4. DECISION. NOW, THEREFORE, BE IT RESOLVED: 1. The Hearing Officer of the City of Newport Beach hereby finds this project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. 2. The Hearing Officer of the City of Newport Beach hereby conditionally grants and approves the requested Abatement Period Extension (PA2019-186) for the subject property located at 813 East Balboa Boulevard, Newport Beach, CA, subject to the findings and considerations set forth above and the condition set forth in Exhibit "A," which is attached hereto and incorporated by reference for a period of 10 additional years until November 30, 2031. 3. This action shall become final and effective 14 days following the date this Resolution was adopted unless within such time the decision is appealed or called for review to the Planning Commission in accordance with the provisions of Title 20, Planning and Zoning, of the NBMC. 4. This Resolution is intended to apply at the conclusion of the extension previously granted by Hearing Officer Resolution No. HO2020-001 (PA2019-186), and is additive to that determination, and does not in any way nullify or void that decision. 5. In reaching this Decision, the opinions and conclusions of members of the public that attended the hearing were expressly studied and analyzed before granting this extension. While the issues were well researched and discussed, they failed to offer any substantial evidence that the current use of the premises has been problematic in any way, or that extension of this use 01-25-19 Hearing Officer Resolution No. HO2020-001 Page 6 of 7 will lead to any such negative issues. After due deliberation, the reasons for extension prevail over counter arguments. PASSED, APPROVED, AND ADOPTED THIS 24rH DAY OF FEBRUARY, 2020. BY: William B. Conners, Municipal Law Consultant Hearing Officer for the City of Newport Beach REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 01-25-19 Hearing Officer Resolution No. HO2020-001 Page 7 of 7 EXHIBIT "A" CONDITIONS OF APPROVAL 1. The development shall be in substantial conformance with the approved site plan, floor plans and building elevations stamped and dated with the date of this approval. (Except as modified by applicable conditions of approval). 2. The abatement extension granted herein shall be conditional upon the Applicant demonstrating an actual intent to construct the improvements to the internal and external portions of the structure by securing appropriate permits and commencing such construction within 12 months of the date of this Resolution, with completion to occur within 24 months after construction commences unless such limits are extended after a reopening and modification of this Decision. It is the intent of this condition that applicant actively commence and continue construction of the improvements to ensure that the extension remains justified based on economic conditions related to such improvements. Should the Applicant fail to comply with this condition of approval, the grant of extension is automatically withdrawn and denied, subject to further review of the matter by a hearing officer at that time. 3. The Applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use may be cause for revocation of this Use Permit. 4. A copy of the Resolution, including conditions of approval set forth in this Exhibit "A", shall be incorporated into the Building Division and field sets of plans prior to issuance of building permits. 5. To the fullest extent permitted by law, applicant shall indemnify, defend and hold harmless City, its City Council, its boards and commissions, officials, officers, employees, and agents including the Hearing Officer, from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to City's approval of Balboa Realty Abatement Extension including, but not limited to, Abatement Extension No. PA2019-186. This indemnification shall include, but not be limited to, damages awarded against the City, if any, costs of suit, attorneys' fees, and other expenses incurred in connection with such claim, action, causes of action, suit or proceeding whether incurred by applicant, City, and/or the parties initiating or bringing such proceeding. The applicant shall indemnify the City for all of City's costs, attorneys' fees, and damages which City incurs in enforcing the indemnification provisions set forth in this condition. The applicant shall pay to the City upon demand any amount owed to the City pursuant to the indemnification requirements prescribed in this condition. 01-25-19