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HomeMy WebLinkAbout20200220_HO_Staff ReportCITY OF NEWPORT BEACH HEARING OFFICER STAFF REPORT February 20, 2020 Agenda Item No. 1 SUBJECT: Balboa Realty Abatement Period Extension (PA2019-186) SITE LOCATION: 813 East Balboa Boulevard APPLICANT: Balboa Realty OWNERS: Alex Batley, Aaron Batley, and Arthur Dorr PLANNER: Patrick Achis, Planning Technician pachis@newportbeachca.gov, 949-644-3237 PROJECT SUMMARY Request for extension of the required Abatement Period specified by Newport Beach Municipal Code (NBMC) Section 20.38.100 (Abatement Periods). The property is located in the Two-Unit Residential (R-2) Zoning District and is developed with an existing 2,613- square-foot nonresidential building. The previously approved abatement extension authorizes nonresidential uses to remain until November 30, 2021. The property owner intends to remodel and reinvest in the existing building and requests to allow the existing nonresidential use to continue to November 30, 2031, without abatement. RECOMMENDATION 1)Conduct a public hearing; 2)Find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, because it has no potential to have a significant effect on the environment; and 3)Adopt Resolution No. HO2020-001 for the property located at 813 East Balboa Boulevard, approving the Abatement Period Extension for an additional ten years to November 30, 2031(Attachment No. HO 1). 1 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 2 VICINITY MAP GENERAL PLAN ZONING LOCATION GENERAL PLAN ZONING CURRENT USE ON-SITE RT (Two-Unit Residential) R-2 (Two-Unit Residential)Nonresidential NORTH AND WEST MU-V (Mixed Use Vertical) MU-V (Mixed Use Vertical) Public Facility (OCSD A Street Pump Station) and Restaurant (Cruisers Pizza Bar Grill), respectively EAST AND SOUTH RT R-2 Residential Subject Site 813 E. Balboa Blvd Cruisers Pizza Bar and Grill Restaurants and Retail Residential Buildings Residential Buildings OCSD A Street Pump Station 813 E. Balboa Blvd. Balboa Realty Property Existing Site of Balboa Realty (709 E Balboa Blvd) 2 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 3 INTRODUCTION Project Setting The subject property is located on the southerly side of East Balboa Boulevard, between A Street and Main Street, on the Balboa Peninsula. Its size and orientation with alley access is characteristic of nearby lots along this mixed-use corridor of Balboa Village. Balboa Village embraces a robust mixture of residential and commercial uses as a favored visitor destination. At present an existing 2,613-square-foot, single-story, commercial building without off-street parking occupies the site. Project Description Whereas the property is located in the Two-Unit Residential (R-2) Zoning District, Balboa Realty requests an abatement period extension for the nonconforming nonresidential use in the existing commercial building. The previously approved abatement extension authorizes nonresidential uses to remain until November 30, 2021. The property owner intends to remodel and reinvest in the existing building and requests to allow the existing nonresidential use to continue to November 30, 2031, without abatement. Background Available City archives and applicant-submitted materials date original construction of the subject nonresidential building to late 1946. Over the years, the building has experienced several tenant improvements and seismic upgrades. Most recent modifications were for a day spa that ceased operation in 2011; the space has been mostly vacant since. The current property owners purchased the property in July 2019, for the anticipated relocation of their real estate office (Balboa Realty). The following details the chronology of land use and zoning designations for the property: On November 9, 1992, the City Council adopted Ordinance No. 92 -45, which made zoning district changes citywide and transitioned the zoning of the subject property and the adjacent properties from the C-1 (Commercial) District to the RSC-R (Retail and Service Commercial-Residential, mixed-use) District. On September 12, 1994, the City Council adopted Ordinance No. 94-44, which changed the zoning of the subject property and the adjacent properties from the RSC-R (Retail and Service Commercial-Residential) District to the SP-8 (RSC) (Retail and Service Commercial) District. This ordinance created the Central Balboa Specific Plan Area and included several properties within the Central Balboa vicinity. In the case of the subject property, the change in designation allowed for commercial use of the property, and eliminated the residential component and the ability to construct a mixed -use project. 3 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 4 On August 12, 2003, the City Council adopted Ordinance No. 2003-14 that changed the zoning designation of the subject property from the SP-8 (RSC) District to the SP-8 (R-2) (Two-Unit Residential) District. This ordinance changed the land use designation from commercial to residential and rendered the property nonconforming since the building was occupied by a nonresidential use. On July 25, 2006, the Newport Beach City Council adopted Resolution No, 2006 -76 approving a comprehensive update to the Newport Beach General Plan ("General Plan Update"). On January 28, 2008, the City Council adopted Ordinance No, 2008 -05 that, in addition to other Zoning Code changes, established the maximum time period for the abatement and termination of nonconforming uses in residential districts. However, determinations of nonconformity could not be made until the finalization of the City's Local Coastal Plan (LCP), which occurred on July 14, 2009, and the subsequent Zoning Code Update which was effective November 25, 2010. On October 25, 2010, the City Council adopted a Comprehensive Update to the Zoning Code (Newport Beach Municipal Code Title 20) bringing consistency between the Zoning Code and the Land Use Element of the General Plan . The Zoning Code Update also eliminated all of the Specific Plans Areas, with the exception of Santa Ana Heights (SP- 7). The subject property was re-designated from the SP-8 (R2) District to the equivalent basic R-2 District. The result of that action rendered several properties nonconforming, including existing commercial uses located within residential districts, which in accordance with Ordinance No, 2008-05, became subject to abatement in accordance with the following Section of NBMC Chapter 20.38 (Nonconforming Uses and Structures): 20.38.100 (Abatement Period). C. Residential zoning districts involving a structure, In residential zoning districts or in an area where residential uses are allowed in planned community districts or specific plan districts, a nonconforming use of land involving a structure shall be discontinued as follows: 1.Abatement period, A nonconforming use of land involving a structure in residential zoning district shall be discontinued on the earliest date as follows: a.Within one year; or b.Upon the expiration of the term of a lease on the property, Any lease shall be the last lease entered into for the subject property prior to December 7, 2007; or c.Upon the expiration of a current operating license that is required by State law. 4 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 5 On November 30, 2011, the Hearing Officer a pproved an Abatement Period Extension (PA2011-079) allowing the nonresidential use to continue without abatement until November, 30, 2021. This approval amortized the investment of the improvements at the time for subject property. Balboa Realty acquired the site in July 2019, and now seeks to renovate the existing nonresidential building and modify the exterior fa çade. Project implementation would invest $250,000 to $300,000, including improvements for structural reinforcement, accessibility compliance, upgrades to the heating, ventilation and air conditioning (HVAC) and mechanical, electrical and plumbing (MEP) systems. DISCUSSION General Plan The Land Use Element chapter of the General Plan provides a breadth of guidance envisioning the city’s ultimate pattern of development at build-out. This chapter designates the subject site under the Two-Unit Residential (RT) Land Use Category. Continuation of legally established structures and uses is ordinarily permissible under the General Plan. No language exists within the General Plan to see to abate nonconforming uses. Instead, it is the Zoning Code that structures and implements procedures regulating abatement of nonconforming uses. General Plan Policy LU 6.13.3 promotes the re-use of isolated commercial properties on Balboa Boulevard as identified in Area C of Figure LU20, on the subsequent page. However, the subject site is not one of these three identified properties out of the Village Core that the General Plan directly names to undergo residential transition. Figure LU20 also illustrates the immediate border between subject property and the Village Core. General Plan Policy LU 6.13.1 guides the Village Core to prioritize uses that “encourage local- and visitor-serving retail commercial and mixed-use buildings that integrate residential with ground-level retail or office uses on properties.” While the subject site is not in the Village Core, its ground-level noncommercial proposal coheres with the neighboring mixed-uses. In this way, the request of a nonresidential use is conducive to the aspirations of LU 6.13.1 for this area. 5 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 6 General Plan Policy LU 6.13.4 calls for “the completion of enhancements to Balboa Village’s streetscapes to enhance the area’s visual quality and character as a pedestrian - oriented environment.” Proposed design aesthetics of the project amplify the streetscape’s attractiveness. New window walls crowned by a brick panel with wood siding would update and refresh the existing outworn exterior façade. Replacement of the existing unscreened HVAC systems on the rooftop would be newly invisible behind a color-corresponding screen wall that reinforces overall building articulation. The subject 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 façade 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 and the improvements do not change the intensity of use of the structure. Subject Site 813 E. Balboa Blvd 6 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 7 Zoning Code The subject property is zoned Two-Unit Residential (R-2). Conforming the subject property to the R-2 standards requires the abatement of the nonresidential use. However, the Zoning Code provides a procedure to extend the abatement period if certain findings can be made. The approval authority for the extension is the Hearing Officer in accordance with the provisions of NBMC Subsection 20.38.100(C)(4)(b) (Hearing Officer Hearing and Action). The Hearing Officer is also required to conduct a public hearing on the request in compliance with NBMC Chapter 20.62 (Public Hearings). Findings and Considerations In accordance with the provisions of NBMC Chapter 20.38, the Hearing Officer, by resolution, shall approve, conditionally approve, or deny the request for an extension to the abatement period. The resolution shall include findings of fact; evidence presented of economic hardship arising from the abatement proceedings; the nonconformity's impact on the community; and other factors that may affect the length of the abatement period required to avoid an unconstitutional taking. In accordance with the provisions of Subsection 20.38.100(C)(4)(c), the Hearing Officer in reviewing an application for an extension to the abatement period shall consider the following: 1.Length of the abatement period in relation to the owner's investment in the use; 2.Length of time the use was operating prior to the date of nonconformity; 3.Suitability of the structure for an alternative use; 4.Harm to the public if the use remains beyond the abatement period; and 5.Cost and feasibility of relocating the use to another site. The applicant has submitted information in support of the request (Attachment No. HO 3). Staff has reviewed this information and, where applicable, has summarized it below to address the findings and considerations that the Hearing Officer may use in making his determination. 1.Length of the abatement period in relation to the owner's investment in the use; The current property owners purchased the building in July 2019, for $1.2 million to relocate their real estate office and expects to invest $250,000 to $300,000 more for needed improvements. Vacancy in the subject building has persisted in past years despite active efforts of the previous owner to sell the property or find a viable tenant. The next-door parking lot and restaurant bar to the site compromise the property’s value and appeal to residential prospects. Undesirable for residential use, the site is 7 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 8 fit to continue commercial activity as an office. The requested length of the abatement period is to proportional to the amortization period of the available loan to Balboa Realty, which is ten years (until November 30, 2031). 2.Length of time the use was operating prior to the date of nonconformity; First constructed in 1946, the subject building has only engaged nonresidential uses. Historically speaking, Balboa Village had a much larger footprint and had mostly commercial zoning only. During the early 1990s, Balboa Village experienced several zoning changes, yet the subject property always retained a form of nonresidential use. In a 2003 City ordinance, the subject site transitioned to the residential R-2 designation and the nonresidential use was rendered nonconforming. Prior to nonconformity, the site enjoyed uninterrupted commercial operation for 57 years. In 2011, a 10-year abatement extension was granted for the property to retain the commercial use through 2021. From Adams to A Street, all southerly properties on Balboa Boulevard are Mixed Use (MU-V), except 813 and neighboring 815 East Balboa Boulevard. 3.Suitability of the structure for an alternative use; The existing structure only affords minimal allowance for residential transition. Converting the structure to residential uses would require an extensive remodel to comply with zoning and building codes. Balboa Realty estimates remodeling costs to be roughly $400,000 to $500,000, based on current remodel construction costs. More sensible is a complete demolition and a ground-up redevelopment, but this is estimated at $1.5 million. Both scenarios are not economically feasible based on the current sales price for the existing structure/land and the future values of the new construction. The existing single story building shows evidence of earthquake retrofitting with over $600,000 of recent improvements for commercial use. 4.Harm to the public if the use remains beyond the abatement period; and No public harm would occur as a result of the abatement period extension for Balboa Realty. Balboa Realty operates a multipurpose real estate operation, inclusive of sale, property management, and vacation rentals business. Since operation commenced in 2007, Balboa Realty has provided a valuable service to local residents and the public. The current location of Balboa Realty is one block east of the proposed site at 709 East Balboa Boulevard and has not been the subject of any concern. 5.Cost and feasibility of relocating the use to another site. Balboa Peninsula lacks land availability for nonresidential uses, and a structure of reasonable size to relocate the operation is difficult to find, particularly in Balboa 8 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 9 Village. The subject site and structure is one of the few in the area meeting the business’ needs, and practically the only site in Balboa Village. Balboa Realty would suffer extreme monetary detriment and a loss of its brand if it relocated out of Balboa Village. Acquiring 813 East Balboa for use as office space would fit the site usage well as the area experiences very little walk-by pedestrian traffic for retail purposes, expect in the summertime around Memorial Day to Labor Day. Commercial office space makes the most sense for long-term viability at this location. The former tenant who applied for the 2011 abatement and upgraded the building remained at this location for less than one year. The structure has been mostly vacant ever since. ALTERNATIVES 1. The Hearing Officer may deny the Abatement Extension request (Attachment No. HO 2). ENVIRONMENTAL REVIEW 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. 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 tha t 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. PUBLIC NOTICE Notice of this hearing was published in the Daily Pilot, mailed to property owners within 300 feet of the property and posted at the site a minimum of 10 days in advance of this hearing consistent with the Municipal Code. Additionally, the item appeared upon the agenda for this meeting which was posted at City Hall and on the City website. APPEAL PERIOD An appeal or call for review may be filed to the Planning Commission within 14 days following the date of action. For additional information on filing an appeal, contact the Planning Division at 949-644-3200. 9 Balboa Realty Abatement Extension 813 East Balboa Boulevard Hearing Officer, February 20, 2020 Page 10 Prepared by: Submitted by: BMZ/pda ATTACHMENTS HO 1 Draft Resolution Approving the Abatement Extension Request HO 2 Draft Resolution Denying the Abatement Extension Request HO 3 Applicant’s Extension Application and Supporting Information HO 4 Project Plans 01/12/18 10 Attachment No. HO 1 Draft Resolution Approving the Abatement Extension Request 11 RESOLUTION 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 the 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 reinvest in the existing building through interior and exterior modifications and improvements. The Applicant requests to allow the existing nonresidential use to continue to 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). 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 façade 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 and the improvements do not change the intensity of use of the structure. 6.A properly noticed public hearing was held on February 20, 2020, in the Balboa Conference Room (Bay 2B – Second Floor) 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. 12 Hearing Officer Resolution No. HO2020-001 Page 2 of 6 01-25-19 SECTION 2. CALIFORNIA 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, licen sing, 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 20.38.100(C)(4)(c) (Findings and Considerations) the following findings and facts in support of such findings are set forth: Finding: A.Is the length of the abatement period appropriate considering the owner's investment in the use? Fact in Support of Finding: 1.Yes. The structure is rather old and in need of visual refreshing. It was recently purchased for $1.2 million and the Applicant proposes an additional investment of approximately $300,000 to $500,000 million more to 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 necessary to financially support an investment of this level. 2.The existing abatement period of one year nine months is insufficient 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 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. 3.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. 4.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 pro posed 13 Hearing Officer Resolution No. HO2020-001 Page 3 of 6 01-25-19 building improvements and secure financing of the property that is likely to be impossible if a potential abatement of current uses is imminent. Finding: B.Does the length of time the use was operating prior to the date of nonconformity justify the extension of the abatement period beyond that specified by Code? Fact in Support of Finding: 1.Yes. The property has been used as for nonresidential purposes since 1946. There is no evidence of any negative impact to the surrounding areas and in the context of surrounding uses, and integrates into the mixed-use neighborhood. 2.The property became nonconforming in 2003, 17 years ago, when the City Council adopted Ordinance No. 2003-14. 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. 3.The substantial period of time 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: C.Would the existing structure be suitable for an alternative use? Fact in Support of Finding: 1.No. Transitioning the nonresidential structure for residential use is expected to necessitate total demolition or unreasonably high costs of converting the existing nonresidential building to residential dwelling units. 2.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 a psychic 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. 14 Hearing Officer Resolution No. HO2020-001 Page 4 of 6 01-25-19 Finding: D.Would remaining at this site beyond the abatement period result in any public harm? Fact in Support of Finding: 1.No. 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. 2.The property is in an area that includes a mix of mixed-use 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. 3.See Fact in Support of Finding B.2. 4.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: E.Would relocation of the facility to another site be overly costly and infeasible? 1.Yes. This building and underlying land cost almost $1.2 million to purchase. The Applicant explained there is no evidence that there are 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. 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 15 Hearing Officer Resolution No. HO2020-001 Page 5 of 6 01-25-19 to residential would prove unfair for the Applicant to bear in the remaining extension time; and 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. 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. 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. PASSED, APPROVED, AND ADOPTED THIS 20TH DAY OF FEBRUARY, 2020. BY: ________________________________ William B. Conners, Municipal Law Consultant Hearing Officer for the City of Newport Beach 16 Hearing Officer Resolution No. HO2020-001 Page 6 of 6 01-25-19 EXHIBIT “A” CONDITION 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. 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 p rior to issuance of the 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 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. 17 Attachment No. HO 2 Draft Resolution Denying the Abatement Extension Request 18 RESOLUTION NO. HO2020-001 A RESOLUTION OF THE HEARING OFFICER OF THE CITY OF NEWPORT BEACH, CALIFORNIA, DENYING 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 the 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 reinvest in the existing building through interior and exterior modifications and improvements. The Applicant requests to allow the existing nonresidential use to continue to 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). 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 façade 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 and the improvements do not change the intensity of use of the structure. 6.A properly noticed public hearing was held on February 20, 2020, in the Balboa Conference Room (Bay 2B – Second Floor) 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. 19 Hearing Officer Resolution No. HO2020-001 Page 2 of 2 01-25-19 SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION. 1.Pursuant to Section 15270 of the California Environmental Quality Act (CEQA) Guidelines, projects which a public agency rejects or disapproves are not subject to CEQA review. SECTION 3. REQUIRED FINDINGS. In accordance with NBMC Subsection 20.38.100(C)(4)(c) (Findings and Considerations), required findings must be made in order to approve the Abatement Extension. In this case, the Hearing Officer was unable to make the required findings based upon the following: NOW, THEREFORE, BE IT RESOLVED: 1.The Hearing Officer of the City of Newport Beach hereby denies Abatement Extension No. PA2019-186, subject to the conditions set forth in Exhibit A, which is attached hereto and incorporated by reference. 2.This action shall become final and effective fourteen 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 NBMC Title 20 Planning and Zoning. PASSED, APPROVED, AND ADOPTED THIS 20th DAY OF FEBRUAY, 2020. ___________________________________ Hearing Officer, William B. Conners 20 Attachment No. HO 3 Applicant’s Extension Application and Supporting Information 21 Extension of Abatement Period Property Address: 813 E. Balboa Blvd., Newport Beach, CA Please find below an answer to the questions posed on the Newport Beach City Extension of Abatement Period Information Sheet. 1 . What is the length of the requested extension of the abatement period? We are seeking an additional extension of 1 O years (previously granted 10 years from 2011-2021) and keeping in conjunction with the historical use of the property as well as the future plans of the Balboa village. Despite the rezoning over the years, the current improvements were built for and continue to be used as a commercial property. 2. What is the length of the abatement period in relation to the owner's investment in the use? The structure was built in 1946 for commercial use, with over $600,0000 from the last renovation, the building was just purchased for $1,120,000 and will need further improvements currently estimated around $250,000 -$300,000. The building has sat vacant due both to an ongoing effort to sell the building, and extreme difficulty in finding a viable tenant. With the property currently located inside the Balboa Village commercial "Village Zone" (west of A street) and being immediately adjacent to a parking lot and bar, the value of the property is severely impacted for prospective future residential usage. This makes the continuation of commercial usage for this space ideal for the site for the foreseeable future. We are planning on moving our company, Balboa Realty to this space due to space constraints in our current location. The requested length of the abatement period is to match the amoritization period of the available loan to the applicants and potential purchasers of the property, Balboa Realty. 3. How long was the use operating prior to the date of nonconformity? Built in 1946 after the end of World War 11, 813 E Balboa was built for commercial use as the Balboa Village had a much larger footprint and had mostly commercial zoning only. In the early 1990's it went through several zoning changes, always retaining some form of commercial zoning. In 2003, the property was rezoned to R-2 residential. That is 57 years of commercial operation prior to the date of nonconformity (1946-2003). The building continued to be used for commercial purposes after being rezoned, and with the granting of a 10 year commercial abatement in 2011, the property continues to be operated commercially through 2021. From Adams to A street, all property along Balboa boulevard is commercial non-conforming or Mixed Use (MU-V) except 813 and 815 E Balboa. See attached Zoning Map. 4. What is the suitability of the structure for an alternative use? PA2019-186 22 The existing structure is a single story building showing evidence of earthquake retrofitting with over $600,000 of recent improvements for commercial usage. To convert to residential would require extensive remodeling costs to comply with building codes and suitability for occupancy. We estimate based on current remodel construction costs that to convert the existing structure for alternative use would cost roughly $400 - 500,000. At that cost it would maybe make more sense to do a complete demolition and a ground-up rebuild but we estimate this cost at roughly $1.5M. Both scenarios are not economically feasible based on the current sales price for the existing structure/land and the future values of the riew construction. 5. Will there be any harm to the public if the use remains beyond the abatement period? No. There would not be any harm to the public for the intended use by Balboa Realty. Balboa Realty operates a sales, property management, and vacation rentals business office providing a valuable service to both local residents and the general public. Balboa Realty does take occasional commercial supply deliveries in the rear alley of its current location at 709 E Balboa and would continue to do so at 813 E Balboa. (one block over) 6. What is the cost and feasibility of relocating the use to another site? Due to the parking and other building restrictions for new commercial development in the City of Newport Beach coupled with the lack of available land on the Balboa Peninsula, commercial space of any reasonable size is virtually non-existent and the Balboa Village is no exception. 813 E Balboa has one of the last structures remaining built for what the Village was originally intended, a Village to serve the public through commercial services. For Balboa Realty to move out of the Balboa Village, it would be extremely monetarily detrimental to its brands. Acquiring 813 East Balboa for use as office space would fit the site usage very well. The main reason for this is that since the City has continuously shrunk the Village Area in the City Master Plan during the last 30 years, 813 E Balboa gets very little walk-by pedestrian traffic for retail purposes. Commercial office space makes the most sense for long term viability at this location. The last tenant who applied for the current abatement and spent all the money on upgrades did not last much longer than a year. The property has been vacant ever since. 7. Is there any other evidence relevant to the determination of whether an extension of the abatement period is required to avoid an unconstitutional taking of property? We have mentioned several points in the answers to the 6 questions above, but since the City Master Plan has the Village limits from A street to Adams, this building is within those limits and should remain commercial due to both the historical and ongoing usage of the property. Frankly, it fits. Balboa Realty has been located in the Balboa Village since 2007 and the business owners have all been born and raised in Newport Beach and lived and worked here for over 40 years. We not only want to find a permanent home where we don't have to pay rent, we would like to fix up 813 East PA2019-186 23 Balboa and USE IT as it has been derelict, ugly and unoccupied property for virtually 20 years now. We have a great desire to help the ongoing effort of revitalization of the Balboa Village come to fruition. We truly believe that 813 E Balboa remaining as a commercial business is in the best interest of the public, the Balboa Village, and the City of Newport Beach and below are a few more supporting facts to bolster this position. 1. 500 E. Balboa and 503 and 505 E. Balboa (recently sold) are slated for redevelopment as mixed use projects that will enhance the look and feel of the village and bring new and better business to the village. The old Casino building at the corner of E Balboa and Main is being refurbished and will be beautiful and bring great business to the village. The structure at 813 E Balboa is best suited for commercial use and Balboa Realty will succeed in this location, continuing to provide quality service to the public for decades to come. This fits in with the City and the Balboa Merchant's vision and desire to revitalize Balboa. 2. A residential development of 813 E Balboa not only does nothing to aid in revitalizing the Balboa Village with potential absentee second-home owners as the likely future buyers of a residential use building, it also removes a commercially zoned and operated property of almost 75 years running. 3. Any residential development would be directly adjacent to the neighboring bar, Cruisers, and their parking lot. Cruisers and its parking lot not only has patrons exiting the bar in the early hours of the morning, but is host to live music, daytime festivals, sports games and their boisterous fans, contest nights, special events, etc. This proximity hurts the current owners and any future owner's investment in the property as a residence. Th is is further evidenced by the years of the property going on and off the market for sale without a purchase and the inability to find a tenant that can succeed at the location without failing within one season. 4. Residential Property sold at "land value" on the Balboa Peninsula ranges anywhere from $650 to $950 per square foot depending on location. However, property in the Balboa Village struggles to sell at $400 per square foot. In the case of 813 E. Balboa, the successful rezoning of 813 E Balboa to R-2 did not raise the value of the "land value" to match the $650 to $950 garnered everywhere on the peninsula. This is due to the reasons stated above. Residential values are almost entirely based on location and with the adjacent property being a bar and parking lot, 813 does not command residential prices, but aligns more closely with commercial values. IN CLOSING, Balboa Realty has paid a higher price to the current seller than the most recently recorded commercial sq/ft prices in order to maintain its presence in the Village and provide a necessary and desirable service to the public and the City. Balboa Realty has been in the Village for 12 years and is one of the only commercial uses that can succeed in the Balboa PA2019-186 24 Village (in its current state) as we dent need to rely on walk-by traffic to survive. However, we do provide real estate services to local property owners as well as vacation guests. In fact, Newport Beach Vacation Properties (the vacation brand of Balboa Realty) collects and pays the City over $200,000 in TOT tax every year. Currently there are 3 business licenses located at 709 East Balboa which would move to the 813 E Balboa location. These are: Bungalow Basics (a vacation services company), Balboa Realty and Newport Beach Vacation Properties. Balboa Realty is requesting an extension of the Abatement period for 1 O more years through 2031, in order to protect its substantial investment in the purchase of 813 E Balboa. PA2019-186 25 Attachment No. HO 3 Project Plans 26 A-0TITLE SHEET & MISC. INFORMATIONA - 2.1 EXISTING FLOOR PLANNEWPORT BEACH CA 92661709 E BALBOA BLVDBALBOA REALTYO W N E R:PROJECT DATAARCHITECTURALA - 1 SITE, EGRESS, OCCUPANT, NOTES & GENERAL NOTESSHEET INDEXV I C I N I T Y M A PACDBAS Y M B O L S APPLICABLE CODESBUILDING ANALYSISNUMBER OFBUILDINGCONSTRUCTIONTYPEOCCUPANCYTYPEBUILDING AREAFLOORSSCOPE OF WORK:A - 5 ENLARGED RESTROOMSZONINGSTRUCTURALABBREVIATIONSA - 4.1 2ND FLOOR REFLECTED CLG PLAN & DETAILSS - N GENERAL NOTESS - 1 FOUNDATION & ROOF FRAMING PLANSD-1 FOUNDATION DETAILSOCCUPANT LOAD TABLESEXIST. FRONT SIDE ELEVATION ORANGE COUNTYNEWPORT BEACH, CA 92661813 E BALBOA BLVDPROJECT ADDRESS:BALBOA REALTY1101ABCDCONSULTANTSENGINEER/DESIGNERTOTAL ENGINEERING SOLUTIONS INC.PARKING ANALYSIS:A - 0 TITLE SHEET & MISC. INFORMATION A - 4 1ST FLOOR REFLECTED CLG PLAN & DETAILSMECHANICALM - 1 GENERAL NOTES & SCHEDULESM - 2 1ST FLOOR HVAC MECHANICAL PLANELECTRICALE - 1 GENERAL NOTES & SCHEDULESE - 2 POWER ELECTRICAL PLANT-24 ELEC. COMPLIANCE FORMSA - 5 ENLARGED RESTROOMSA - 3 ELEVATIONS, ROOF PLAN, & SECTIONA - 4 REFLECTED CLG PLAN & DETAILS M - 3 MECH. ROOF PLANE - 3 LIGHTING ELECTRICAL PLANA - 2 PROPOSED FLOOR PLANA - 6 INTERIOR ELEVATIONS & DETAILSTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@BUILDING NUMBERST-24 MECH. COMPLIANCE FORMS11813 E BALBOA AVE2591-2019SD-2 ROOF FRAMING DETAILS1A - 7 GREEN BUILDING NOTES1ABATEMENT PERIOD EXTENSION127 KEYED SITE PLANSPROPOSED SITE PLANSNEAST BALBOA BLVDEAST OCEANFRONT(E) ADJACENT BUILDINGEXITEXITEXIT ROUTE PLANEAST OCEANFRONTEAST BALBOA BLVDSTART POINTSTART POINTPATH OF TRAVEL PLANENTRANCEEAST OCEANFRONTEAST BALBOA BLVDA - 1SITE PLAN, GEN. NOTES, & EGRESSENTRANCES AND EXITSSANITARY FACILITESACCESSIBILITY NOTESOCFA ARCHITECTURAL NOTES INSPECTIONS GENERAL REQUIREMENTS PROJECT-SPECIFIC REQUIREMENTS ASSEMBLY OCCUPANCIEEXTINGUISHING SYSTEMSTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 926611SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@GENERAL NOTESFIRE AUTHORITY NOTES28 KEYED NOTESCLG.FIN.DCCLG.HGT.REMARKSBABASEFLOORROOM NAMERM. NO.WALLSCEILING FINISHINTERIOR PAINTSFLOOR FINISHCONCRETEFLOORING TILESUBSTRATEWALL FINISHCOVE BASE100101102103104105 106107108109 110111113112 114 115 116PROPOSED FLOOR PLANWALL LEGEND100ABCD101ABCD(E) KITCHEN102ABCD(E) RESTROOM 1104ABCD(E) RESTROOM 2107ABCD(N) OFFICE NO.1103ABCD(N) OFFICE NO.2106ABCD(N) MAIN. CLOSET108ABCD(N) OFFICE NO.3109ABCD(N) CONFERENCE ROOM111ABCD(E) HALLWAY 2105ABCD(E) HALLWAY 1112ABCD(N) RECEPTION113ABCD(N) FRONT OFFICES110ABCD114ABCDTRASH ROOMS115ABCD117118119FEDCBA123123FEDCBADOOR SCHEDULEDOOR LEGENDFIBER REINFORCED PANEL(N) HOME STAGINGSTORAGE ROOM 1(N) HOME STAGINGSTORAGE ROOM 2(N) OFFICE SUPPLIESSTORAGE ROOM 3A - 2PROPOPSED & EXISTING FLOOR PLAN21TENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@111121111222222222222229 KEYED NOTESWALL LEGENDEXISTING FLOOR PLANTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 926611SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@A - 2.1EXISTING FIRST FLOOR PLAN1130 RIGHT SIDE ELEVATION K E Y E D N O T E SFRONT ELEVATION REAR ELEVATION TENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@A - 3PROPOSED ELEVATIONS, SECTION & ROOF PLAN1111111111111222231