HomeMy WebLinkAboutPA2021-096_20200824_CC Appeal_ CorrespondenceSTATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, Governor
CALIFORNIA COASTAL COMMISSION
South Coast Area Office
301 Ocean Blvd. #301
Long Beach, CA 90802
(562) 590-5071
Date: August 20, 2021
Re: Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels)
To: The Honorable Newport Beach City Council
On August 16, 2021, Coastal Commission staff received a Notice of Public Hearing for the referenced
item on the City Council’s agenda of August 24, 2021.
The Coastal Commission supports State goals of increasing housing supply and reducing application
processing time in existing developed areas like coastal Newport Beach. City Council Policy K-4
Reducing the Barriers to the Creation of Housing appears to support those goals and the City Council
and staff have recognized that increasing housing supply will require changes in land use regulation.
The staff report for the referenced item references Policy K-4 in support of the Development Director’s
determination that resort hotels may allocate up to 30% of their capacity to housing, subject to other
specific requirements identified and reviewed by the Development Director. This determination,
however, is not supported by the plain language of the Local Coastal Program (LCP) copied on page 3
of the staff report for this item, which defines hotel use:
An establishment that provides guest rooms or suites for a fee to transient guests for sleeping
purposes. Access to units is primarily from interior lobbies, courts, or halls. Related accessory uses
[emphasis added] may include conference rooms and meeting rooms, restaurants, bars, and
recreational facilities. Guest rooms may or may not contain kitchen facilities for food preparation.
Hotels with kitchen facilities are commonly known as extended stay hotels. A hotel operates subject to
taxation under California Revenue and Taxation Code Section 7280.
Moreover, the LCP includes a Land Use Map which identifies development that may be authorized
subject to a coastal development permit in specific areas. Land Use Policy 2.1.1-1 includes a table that
identifies where hotels may be authorized (and prioritized) and where housing may be authorized.
The staff report notes that the definition of hotel is “out of date and does not reflect current industry
practice.” That may be accurate, and there may be an opportunity to support housing in some existing
hotels and areas designated for hotel use, subject to a review and mitigation through a coastal
development permit as noted in the staff report for this item. However, the Community Development
Director does not have the authority to change land uses or interpret the LCP differently from the plain
language and designated uses. The appropriate process for changes to land use regulation in the coastal
zone is an LCP amendment, which may be initiated by the City Council subject to certification by the
Coastal Commission.
To conclude, the Development Director’s Determination must not be applied in the coastal zone
because the action requires an LCP amendment.
Coastal Commission staff are available to discuss the LCP amendment process and other matters
related to the provision of housing in the coastal zone. As noted in this letter, the Coastal Commission
supports State and City goals of increasing housing in existing developed areas.
Received After Agenda Printed
August 24, 2021
Item No. 21
Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels)
If the City disagrees with this direction and the legal process for regulating land use in the coastal
zone, we can schedule a Dispute Resolution hearing before the Coastal Commission consistent with
Section 21.50.050(B)(4) of the LCP.
Thank you for your cooperation and patience in this matter.
Zach Rehm
District Supervisor, CCC
cc: Jaime Murillo, Principal Planner, City of Newport Beach
Karl Schwing, Deputy Director, CCC
Hermosa Beach Office Phone: (310) 798-2400 San Diego Office Phone: (858) 999-0070 Phone: (619) 940-4522
Chatten-Brown, Carstens & Minteer LLP
2200 Pacific Coast Highway, Suite 318
Hermosa Beach, CA 90254 www.cbcearthlaw.com
Michelle Black
Email Address:
mnb@cbcearthlaw.com
Direct Dial:
310-798-2400 Ext. 5
August 18, 2021
By U.S. Mail and Email: jmurillo@newportbeachca.gov
sjurjis@newportbeachca.gov
citycouncil@newportbeachca.gov
City Council
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Re: Appeal of Project No. PA2021-096 and Activity No. DD2021-01 Director’s Determination Interpreting Accessory Residential as Allowed Use within Resort Hotels; Appealed from July 8, 2021 Planning Commission Meeting (Agenda Item #VIII, Public Hearing Item #3)
Honorable Councilmembers,
These comments are submitted on behalf of Stop Polluting Our Newport (SPON)
in connection with its continued appeal of the Community Development Director’s April
30, 2021 issuance of a determination that residential uses are allowable as an accessory
use to resort hotels (“Director’s Determination” or “Interpretation”). The Director’s
Interpretation allows 250 new dwelling units, not previously allowed by the General Plan,
in both the Airport and Newport Center Areas without first holding a vote of the people
as required by City Charter section 423. Although SPON takes no position on the
propriety of converting hotel rooms to dwelling units, it does take issue with the City’s failure to comply with its own charter. The City’s local coastal program prohibits the conversion of much-needed hotel rooms in the entire coastal zone, not just the appealable area, so the Interpretation’s proposed exclusion of hotels in the Coastal Zone’s appealable area does not save it from violating the Coastal Act. Finally, the City has already begun a General Plan update process designed to meet the Regional Housing Needs Allocation (RHNA). City actions to incentivize the creation of housing can and should occur as part of this ongoing process.
August 24, 2021
Item No. 21
City Council City of Newport Beach August 18, 2021 Page 2
At the July 8, 2021 Planning Commission meeting, several Planning
Commissioners stated that they were bound by the City Council’s March 2021 adoption
of Policy K-4. These Commissioners believed it was the Council that would need to act
to incorporate the Director’s Determination into the City’s ongoing General Planning and
Housing Element Update processes, or pursue another avenue, to avoid the legal concerns
raised by SPON. Accordingly, SPON urges the Council to reconsider adoption of this
Interpretation outside of the City’s normal planning processes. I. Conversion of Hotel Rooms Into Dwelling Units Requires a General Plan Amendment. The Director’s Determination claims to implement City Council Policy K-4 (Reducing the Barriers to the Creation of Housing), which the City Council adopted on March 9, 2021 to address the 6th Cycle Regional Housing Needs Allocation (RHNA). The Policy calls for “interpreting ambiguities in the City’s General Plan, Coastal Land Use Plan, Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code (“NBMC”) to allow hotels and motels, located outside of the Coastal Commission Appeal Jurisdiction, to convert up to 30 percent of their approved hotel rooms into residential units on a one-for-one basis.”
(Staff Report, p. 3.) Under this interpretation, “residential units [could] be deemed an
accessory use to the principal use of a hotel and find that such residential uses are
consistent with the hotel’s and motel’s underlying General Plan, Zoning Code, and Local
Coastal Plan Program land use and zoning designations.” (Ibid.)
The Planning Department claims that this is permissible because:
Title 20 and Title 21 include a definition of hotel that is out of date and does not reflect current industry practice. Specifically, the definition of ‘hotel’ has not been updated to designate residential uses as an accessory use, which has become common practice for destination resort hotels (mixed-use hotels). While the definition of a hotel does not prohibit residential uses, a Director’s Determination is necessary to fill the gap between contemporary practice and the exact wording of Title 20 and Title 21. (Staff Report, p. 4.)
In reality, the definitions of hotel in Titles 20 and 21 do prohibit residential use.
As the Staff Report reprints for convenience, “hotel” is defined as:
City Council City of Newport Beach August 18, 2021 Page 3
[A]n establishment that provides guest rooms or suites for a fee to transient guests
for sleeping purposes. Access to units is primarily from interior lobbies, courts, or
halls. Related accessory uses may include conference rooms and meeting rooms,
restaurants, bars, and recreational facilities. Guest rooms may or may not contain
kitchen facilities for food preparation. Hotels with kitchen facilities are commonly
known as extended stay hotels. A hotel operates subject to taxation under
California Revenue and Taxation Code Section 7280. (Staff Report, p. 3, emphasis added.) Permanent residents are not “transient guests.” They are the exact opposite of transient. Thus, the Director’s action is more than a mere reinterpretation; it changes the definition of “hotel” as used in the City’s General Plan, Coastal Land Use Plan, Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code (“NBMC”). By allowing permanent residents where only transient guests have been permitted in the past, the Director’s Determination essentially rewrites all of the land use plans and allowable uses for areas that contain hotels and motels. If, in fact, standard hotel practice has changed such that there is a “gap between contemporary practice and the exact wording” of the Code, this gap should be filled by amending the code, through the City’s standard
planning, administrative, and review processes.
The General Plan’s definitions, with which Title 20 must be consistent, are
similarly enlightening. There, a “hotel” is:
Hotel - A facility in which guest rooms or suites are offered to the general public
for lodging with or without meals and for compensation, and where no provisions
is made for cooking in any individual guest room or suite. This may be contrasted with the General Plan definition of a “dwelling unit”: Dwelling Unit—One or more rooms, designed, occupied or intended for occupancy as separate living quarters, with cooking, sleeping and sanitary facilities provided within the unit for the exclusive use of a single family maintaining a household. These are the definitions that voters relied on in 2006 when voting to approve hotel rooms. It is inconceivable that those voters intended to grant permission to build 30
percent of these hotel rooms as dwelling units without a further vote.
While the proposed Interpretation applies only to resort hotels outside of the
Coastal Commission’s appeal jurisdiction, it sets a precedent that redefines hotels and
City Council City of Newport Beach August 18, 2021 Page 4
motels as residential throughout the City without the review, analysis, or election
required by the City Charter, California Environmental Quality Act, and Coastal Act.
Given that the General Plan limit for Newport Center hotel rooms is 827 rooms
and that the limit for the Airport Area is 820 rooms, the conversion of 30 percent of these
rooms to residential uses could add close to 250 residences to each area.
Recognizing the gravity of this redefinition, the Planning Department has declined this interpretation in the past. Specifically, in 2011, the now Deputy Director determined that allowing conversions of other uses in hotels and motels would require a General Plan Amendment as well as a Local Coastal Program Amendment. (Attachment 1). While entitlements could be moved within the City, they could not be redefined. On February 9, 2021, Community Development Department Director Jurjis stated that repurposing underutilized hotel space as residences would require amendment of the City’s General Plan and Local Coastal Program. (Attachment 2.) The Department believed this type of action required a General Plan Amendment in 2011 and again in February of this year. The same action requires a General Plan Amendment now.
Moreover, in 2006, a similar interpretation was requested by the Irvine Company.
The City explicitly rejected the transfer or conversion of hotel uses to residential uses at
that time. (Attachments 3 and Link 4.)
The City must respect the integrity of its planning documents. Newport Beach’s
General Plan is the constitution for future developments. (DeVita v. County of Napa
(1995) 9 Cal.4th 763, 773.) The Director’s Determination sets a dangerous precedent for
redefining long-established land uses on a whim, thereby eviscerating the primacy of the City’s Charter, Code, and General Plan elements. If the City permits this Interpretation to “fill a gap” between what it wishes to do and what the Code allows, it will be much more difficult for the City to justify later requests for “interpretations” that the City does not wish to grant. This erodes the predictability of land use decisions on which orderly development and investment in the City are based. Moreover, if the Director may “interpret” a word in the Code to mean its exact opposite, there is no end to this authority. The City’s well-thought-out plans, created with extensive public participation and comprehensive planning, are essentially meaningless. Further, by ostensibly applying this redefinition to only four sites in the City, the Interpretation smacks of spot-zoning, the “very antithesis” of organized land use planning. (Citizens of Goleta Valley
v. Board of Supervisors (1990) 52 Cal.3d 553, 572 -573.)
Conveniently, the City is already in the process of updating its General Plan and
Housing Element to meet the 6th Cycle RHNA. If the City wishes to add residential uses
City Council City of Newport Beach August 18, 2021 Page 5
to its hotel land uses, there is no reason it cannot do so as part of that ongoing,
comprehensive process. Consideration of this redefinition as part of the Housing
Element and General Plan updates and the upcoming Land Use Element revision would
ensure that the policy is stronger, clearer, and focused on the provision of affordable
housing.
II. The Director’s Determination Adds More Than 100 Dwelling Units and Triggers the Greenlight Provisions of City Charter Section 423. The City’s Greenlight Initiative, Section 423 of the City Charter, requires a public vote whenever, over 10 years, the dwelling unit limit for a statistical area has been raised by more than 100 units over the limit last approved by voters in the General Plan. Dwelling unit entitlements are required to stay within the General Plan limit, so Greenlight makes the reasonable assumption that adding units above that limit will requires a General Plan amendment. As discussed above, until recently, the City Planning Director has maintained that conversions of hotel rooms to other uses would require an amendment to the General Plan. The General Plan currently limits Newport
Center to 827 hotel rooms. The Airport Area is currently limited to 820 hotel rooms.
The Director’s Interpretation would permit the conversion of approximately 250 rooms
into previously unplanned residences in each area. In Newport Center, 248 new rooms
would trigger the Greenlight Initiative’s requirement of a public vote, as Greenlight
Tracking shows the Council has authority to add only 28 new residential units without a
vote. Interestingly, on August 19, 2021, the Planning Commission will consider approval
of a 28-unit condominium complex nearby. If the condominium complex is approved by
the City Council (as early as August 24, 2021), there would be zero remaining residential in Newport Center absent a Greenlight Initiative vote. In the Airport Area, the conversion would be subject to Greenlight tracking, and potentially to a public vote. The July 8 Planning Commission Staff Report attempts to ignore the applicability of the Greenlight Initiative and City Charter completely. (Staff Report, pp. 4-5.) The Staff Report claims that the City Council vested the Director with the authority to make the interpretation permitting residential uses accessory to hotel uses. However, the City Charter specifically limits the City Council and the City’s officers to actions permitted by that Charter. (Section 200.) Nothing in the Charter permits the City to ignore Charter Section 423.
On the contrary, the City Charter of Newport Beach has provided residents the
ability to limit the authority of the City Council. Residents have limited how much the
City Council can increase development within certain areas, and the Council is bound to
City Council City of Newport Beach August 18, 2021 Page 6
honor those limits. In 2006, City voters approved defined numbers of hotel rooms at
each of the anomaly sites that would be affected by the Director’s Determination. While
the Greenlight Initiative grants the Council some latitude to increase development limits,
it does not grant that authority to the Director.
The Staff Report fails to point to anything in the Charter that permits the City to
reinterpret a word to mean its opposite in the name of ambiguity. There is no ambiguity in the City’s existing definitions of hotel. Nor is there any ambiguity that allows a “Transient guest” to become a “permanent resident” through interpretation alone. Basic tenets of statutory interpretation require starting “with the language of each statute, giving the words their usual and ordinary meaning, and construe the statutory language in the context of the statute as a whole and the overall statutory scheme, giving significance to every word, phrase, sentence, and part of an act.” (Lincoln Place Tenants Assn. v. City of Los Angeles (2007) 155 Cal.App.4th 425, 440–441.) The Staff Report opines, “The General Plan and City Charter do not provide limits on the scope of an interpretation nor do they provide any specific provisions contrary to Council Policy K-4 or the Director’s Determination.” (Staff Report, p. 8.) Case law provides that interpretations should “endeavor to promote rather than defeat the statute's general purpose, and avoid a
construction that would lead to absurd consequences.” (Ibid.) The Interpretation leads to
an absurd result and cannot be upheld.
It is clear that the City seeks a change in the definition of “hotel” in its land use
planning to allow residential uses in certain circumstances. SPON has no position on the
propriety of this goal. But, if the City desires to make this change, it should do so
through its normal planning channels.
The Staff Report also relies on the fact that because the Director’s Determination was intended to implement Council Policy K-4, which is not a General Plan amendment, the Greenlight Initiative does not apply. (Staff Report, p. 6.) It is true that Council Policy K-4 and the Director’s Determination are not General Plan Amendments, but SPON’s central argument is that the changes made by these enactments required General Plan Amendments. The Planning Director previously agreed. Instead, it appears that the enactments may have occurred outside of the General Plan Amendment context precisely to avoid the requirements of the Greenlight Initiative. The fire station example cited in the Staff Report is not 100 units of residential use and is irrelevant here.
Accordingly, the City’s acceptance of the Director’s Determination, without full
consideration of the implications of the Greenlight Initiative and the initiation of a vote of
the people regarding the authorization of new Newport Center residential units beyond
the current allowance, violates the City Charter which the City’s departments and officers
City Council City of Newport Beach August 18, 2021 Page 7
are bound to uphold. Charter Section 200 provides, “The City shall have the power to
make and enforce all laws, rules and regulations in respect to municipal affairs, subject
only to such restrictions and limitations as may be provided in this Charter or in the
Constitution of the State of California.” The Director’s Determination exceeds the City’s
Charter authority.
III. The City’s Local Coastal Program Does Not Permit the Conversion of Hotel Rooms into Dwelling Units. As enshrined in Article X, Section 4 of the California Constitution and Coastal Act section 30210, the City must provide the public “maximum access” to coastal resources. Coastal Act sections 30222, 30213 and others protect the City’s stock of coastal zone hotel rooms. Section 30222 explicitly prioritizes hotel uses over residential uses in the coastal zone, stating, “The use of private lands suitable for visitor-serving commercial recreational facilities designed to enhance public opportunities for coastal recreation shall have priority over private residential…” Specifically, the City’s Local Coastal Program Implementation Plan outright prohibits the conversion of hotel rooms existing on or
before July 14, 2009 to other uses. (See 21.48.025D.)
The City is already losing hotel rooms and increasing the rates for those that
remain. For example, the Newport Beach Marriott & Spa’s renovations are currently
removing 100 rooms. (See, https://www.stunewsnewport.com/index.php/archives/front-
page-archive/11733-tourism-looks-and-feels-good-073021.) The hotel plans to offer the
rooms that remain post-renovation at a higher rate. In the meantime, as construction
continues, the hotel has only 300 of its 515 rooms available to coastal visitors this summer. The City’s authorization of additional conversions will only heighten the conflicts with the Coastal Act. The Director’s Determination attempts to avoid the Coastal Act by limiting the affected properties to resorts outside of the Coastal Commission’s appellate jurisdiction. Although outside of the reach of an appeal, the Newport Beach Marriot remains located within the coastal zone, and its rooms remain subject to the protection provided by the LCP Implementation Plan. Yet, the Director’s Determination permits conversion of these hotel rooms to residential uses in violation of the Implementation Plan. The City is not even permitted to make this Determination without first applying for a Local Coastal
Program Amendment and obtaining subsequent certification by the California Coastal
Commission. As proposed, the Director’s Determination with respect to the Newport
Beach Marriot violates the Coastal Act in addition to the City’s LCP and Title 21.
City Council City of Newport Beach August 18, 2021 Page 8
IV. Regardless of Whether the Director’s Determination Entitles Additional
Units Today, it Creates a New Possibility of Residential Units that Did Not
Previously Exist.
At the July Planning Commission meeting, City staff instructed Planning
Commissioners that the Director’s Determination did not actually create new residential and was “not a project” because a future process would be required to convert hotel rooms into residential units. While it is correct that the Director’s Determination, by itself, does not entitle these new residential units, the Director’s Determination opens the door for the future addition of residential units that are not currently allowed. Put another way, but for the Director’s Determination, the estimated 250 new residential units in the Airport and Newport Center Areas are prohibited. Thus, this is a change, akin to a General Plan amendment, that requires consideration through the City’s normal land use planning processes. A General Plan amendment is a “project” for purposes of land use planning statutes such as the California Environmental Quality Act.
V. The City Cannot Make the Findings for the Director’s Determination
Required By Title 20 and Title 21 of the City’s Municipal Code.
Even if the Director’s Interpretation is lawful, which SPON disputes, the City
cannot make the findings required for approval. NBMC 20.12.020E requires several
findings to be made and supported by substantial evidence before the Director may allow
a land use that is not explicitly listed in the Code. The City lacks substantial evidence in
support of several findings required to add residential uses as an accessory to hotel uses. For example, the Director must find that “the characteristics of, and activities associated with, the proposed use are equivalent to those of one or more of the [allowed uses], and will not involve a greater level of … parking…than the uses listed in the zoning district.” (Finding A.) Without support, the Staff Report claims that hotel accessory uses such as conference rooms generate parking demand “substantially higher” than residential parking rates. Yet, most families that are traveling share a single rental car – if they rent one at all. A family that lives in a condominium unit is likely to have several vehicles – likely two or three. Claiming that a future CUP amendment process will ensure enough parking through “surplus parking, shared parking, or the adoption of a
parking management plan,” without any specific requirements, does not provide
substantial evidence that parking will not be impacted. This finding cannot be made.
City Council City of Newport Beach August 18, 2021 Page 9
By redefining “hotel” to include permanent residents, the Interpretation also does
not support the goals, objectives, and policies of the General Plan and existing Local
Coastal Program. (Finding C.) Residential uses are listed as allowable in other zoning
districts, and therefore the City cannot support the finding that “The proposed use is not
listed as allowable in another zoning district.” (Finding D.) Finding E, that the proposed
use is not prohibited, cannot be made because “hotel” is defined as permitting “transient”
residents only. Permanent residents are not transient. They are the opposite of transient. Regarding the Local Coastal Program, Coastal Act sections 30222 and 30123 require the protection of visitor-serving accommodations. More explicitly, the LCP prohibits the conversion of hotel rooms to other uses. The conversion of over a hundred hotel rooms, as the City addresses an overall loss of hotel rooms in the Coastal Zone, counters this purpose of the LCP and the Act and violates the Coastal Act. Conclusion Thank you for your consideration of these comments. By effectively allowing a staff member to amend the City’s General Plan without a vote of the people, or any
environmental review of the addition of 247 dwelling units to statistical area L1, the
Director’s Determination violates the Greenlight provisions of the City Charter, CEQA,
and the California Coastal Act. Perhaps more importantly, the Director’s Determination
is improperly siloed from an already-ongoing General Plan update process focused on
increasing housing availability in the City. For example, there is no reason to expect that
residences provided in resort hotels will serve people in need of affordable housing.
Segmentation of these processes is both inefficient and jeopardizes the coherence of the
City’s housing strategy going forward. The City cannot endorse reinterpretations of words such that they mean their opposites. SPON urges the City to accept its appeal, reject the Director’s Determination, and pursue any necessary changes to the City’s governing documents and policies through established planning processes. Such a change could include incorporating the policies behind the Director’s Determination into the General Plan update. Sincerely,
Michelle Black, on behalf of SPON
City Council City of Newport Beach August 18, 2021 Page 10
Attachments:
1. November 9, 2011 Staff Report from Deputy Director Campbell, available at
https://ecms.newportbeachca.gov/Web/0/doc/76363/Page480.aspx
2. Slide 9, February 9, 2021 City Council Study Session, available at
https://ecms.newportbeachca.gov/Web/0/doc/2662725/Page9.aspx; accompanying
video of Director Jurjis available at https://www.youtube.com/watch?v=g-
ME_4aGOa0&t=1700s
3. June 27, 2006 Staff Report, Item 33, p. 3, available at
https://ecms.newportbeachca.gov/Web/DocView.aspx?dbid=0&id=71656&page=
3&cr=1
4. Link to June 27, 2006 City Council Meeting. Relevant discussion begins around minute 3:59:00, available at http://newportbeach.granicus.com/MediaPlayer.php?publish_id=904a2417-7379-11e5-8170-f04da2064c47
Attachment 1
City of Newport Beach
Community Development Department
Planning Division
Memorandum
To: Planning Commission
From: James Campbell, Principal Planner w b
Date: November 9, 2011
Re: Newport Beach Country Club — Golf Realty Fund Application
Conversion of Tennis Courts to Hotel Rooms
General Plan Consistency Determination
During the October 20, 2011, hearing on the project, the owner of the Marriott Hotel
property, Host Hotels and Resorts ( "Host "), proposed a "use conversion solution' as an
alternative to the applicant's request for a transfer of development intensity. The alternative
approach is based upon the assumption that the eliminated tennis courts' have a
development intensity that can be converted to hotel rooms or building floor area. Host
asserts that sufficient traffic capacity exists, that there is no limit to the number of hotel
rooms in Statistical Area L1 (Newport Center), the conversion would not set a precedent, and
there is no apparent constraint on conversion to a building (floor area). Although traffic is not
an issue, staff does not believe the conversion of tennis courts to building floor area is
consistent with the General Plan, the basis of staff's conclusion is described below.
Traffic
The applicant's proposed 27 -room hotel generates fewer average daily trips and peak hour
trips than the traffic trips attributable to the 17 tennis courts that would be eliminated'. The
net effect is an overall reduction of trips and the avoidance of any significant traffic impact2.
Staff concurs that the conversion of tennis courts to hotel rooms would not create a traffic
impact and no mitigation would be necessary.
1 Traffic and Parking Analysis for Newport Beach County Club, Clubhouse Improvement and Tennis
Improvement project, Kimly -Horn and Associates, August 2009.
z Initial Study /Mitigated Negative Declaration for the Newport Beach County Club (PA2005 -140), Keeton
Kreitzer Consulting, September 2010.
1
451
November 9, 2011
Hotel Limit within Statistical Area L1 (Newport Center)
Host states that there is no overall General Plan limit to hotel rooms within Newport Center;
however, staff believes that this assertion is only partially correct, because the construction of
any new hotel rooms must be consistent with the overall non - residential development
intensity established for Newport Center. There are two sites within Newport Center that
have a specific allocation for hotel rooms; the Marriot Hotel property and the Island Hotel
property. The MU -H3 land use category also provides an additional 65 rooms. Despite these
specific allocations, other commercial sites within Newport Center are allowed to construct
hotels provided the zoning or planned community development regulations permit hotels and
the property has building floor area that is sufficient to accommodate the proposed hotel.
Precedent
The project site is within Anomaly Location #46, which specifically calls out a limit of 24 tennis
courts and 3,725 square feet of building area. Staff believes the proposed conversion would
set a precedent for other property since the conversion would create building floor area that
is not provided in this Anomaly Location by the Land Use Element, as discussed further below.
No Constraint to Conversion of Tennis Courts to Floor Area
Staff disagrees with Host's assertion that there is no constraint to converting tennis courts to
hotel rooms or building floor area. General Plan Land Use Element Policy LU4.1 establishes
maximum development intensities3 through the Land Use Maps (Figures LU1 through LUIS),
specific land use categories (Table LU1), and the Anomaly Table (LU2). Development of the
project must be consistent with the site's land use classification and may not exceed
applicable development intensity limits.° However, Policies LU4.3 and 6.14.3 allow for
transfers of development intensity from one site to another within a Statistical Area provided
the intent of the General Plan is maintained and there are no traffic impacts as a result. In the
simplest terms, a recipient site may exceed its specified development intensity limit to the
extent that the donor site is reduced to ensure that the total development intensity of the
3 Development intensity identified by Policy LU4.1 are maximum limits for development and cannot be
considered an "entitlement" until a vested right is conveyed either through a Development Agreement or
entitlement approval and construction. Development is subject to other applicable policies of the General
Plan and Municipal Code as well as other applicable government regulations.
LU4.1 establishes maximum non - residential development intensities in five (5) ways; 1) floor area, 2)
floor area ratios, 3) hotel rooms, 4) theater seats, and 5) tennis courts.
4152
November 9, 2011
larger Statistical Area is not exceeded. Statistical Area Li represents Newport Center and
includes the project site.
The Tennis Club portion of the project site is classified "MU- 1-13 /1311" by the Land Use Maps.
The dual classification allows uses and development limits specified by both the MU -H3 and
PR classifications. The MU -H3 classification allows for the horizontal intermixing of regional
commercial office, hotel, multi - family residential and ancillary commercial uses. Within the
project site, residential uses may be developed as single family units, but must be allocated to
the Anomaly Location through the approval of a Site Development Plan or Development
Agreement. A maximum of 65 hotel rooms and 450 residential units are allocated to the
various properties designated MU -H3 within Newport Center in addition to those
development intensities specified in Table LU2 5. The PR designation applies to land used or
proposed for active public or private recreational use. Permitted uses include parks (both
active and passive), golf courses, marina support facilities, aquatic facilities, tennis clubs and
courts, private recreation, and similar facilities. There is no applicable maximum density or
intensity limit of for public uses. Private uses in this category may include incidental buildings,
such as maintenance equipment sheds, supply storage, and restrooms, not included in
determining intensity limits. For golf courses, these uses may also include support facilities for
grounds maintenance employees. "Other types of buildings and developments are limited as
specified in Table LU2."
Table LU2 establishes two maximum development limits for the project site (Anomaly
Location #46):
1) 3,725 gross floor area (GFA) and
2) 24 tennis courts.
These development limits reflect the existing "built" condition of the Newport Beach Tennis
Club.
Conclusion
In summary, staff believes the proposal to convert eliminated tennis courts to hotel rooms or
building floor area does not create a traffic impact; however the proposed conversion does
5 The 65 hotel rooms and 430 residential units were entitled to the Irvine Company with the adoption of
Development Agreement No. DA2007 -002 and allocated within the North Newport Planned Community,
and therefore, zero hotel rooms and 20 residential units remain for entitlement to any property classified
MU-1-13.
Cl
4153
November 9, 2011
increase development intensity above the limit established by the General Plan for Anomaly
Location #46. The proposed 3,725 GFA tennis clubhouse is expressly allowed in Table LU2 and
the proposed 5- single family homes are expressly allowed by the MU -H3 land use category
provided in Table LU -1 of the General Plan. The General Plan allows the proposed transfer of
27 hotel rooms through approval of a transfer of development intensity, and the applicant
has duly filed such an application
Staff believes that the only other appropriate alternative to allow the 27 hotel rooms to be
constructed in Anomaly Location #46 is through the review and approval of a General Plan
1uM.u-
4
IM-11
Attachment 2
Land Uses - COVID & RHNA
Some owners have reached out to staff discussing
repositioning their properties.
2. Underperforming uses such as Office & Hotel
3. Recovery time for some uses is long -
When will once vacancy return to preCOVID?
When will international tourism fully recover?
4. The City has an immediate need for housing
opportunity sites
Initiate a General Plan Amendment ? 1•A
Attachment 3
General Plan Update
June 27, 2006
Page 3
This approach raises the question of whether a maximum of four residential villages is
appropriate. Ideas that were considered included deleting the maximum number of
villages, but adding a minimum village size of 10 acres, adding a fifth village that would
encompass the Koll residential opportunity sites, maintaining the current maximum of
four, or reducing the maximum number of villages. Staff will be working with the
property owners and the consultant team on both of these issues.
Newport Center Hotel Room Conversion Policy
The Planning Commission, during their discussion on the proposed policy relating to
conversion of future hotel rooms to residential entitlement in Newport Center,
recommended that Development Agreements be required for such conversions. The
purpose would be to consider the potential loss of Transient Occupancy Tax (TOT) that
would result from such a conversion, and to require some form of revenue replacement,
if appropriate. The new language is shown underlined below.
LU Conversion of Hotel Rooms
Consider the conversion of hotel entitlement to residential entitlement when it is
demonstrated that no additional vehicle trips will result from the conversion.
Hotel rooms existing at the time of adoption of this plan may not be converted
to residential use. Require the execution of Development Agreements for the
conversion of hotel rooms to residential entitlement to define the public benefits
to be provided by the developer in exchange for any loss of revenue resulting
from the conversion.
West Newport Residential (Seashore /Oceanfront)
Staff has been contacted by some property owners who oppose changing the
designation of existing R -2 properties to R -1. Additionally, the Planning Commission
had two persons testify at the June 22nd meeting expressing strong opposition to this
possibility.
Harbor Day School
The Planning Commission reviewed the request to increase the permitted floor area
ratio for this property, concluding that the increase was appropriate so long as adequate
parking and on -site circulation was provided. These issues can be addressed in
subsequent Use Permit amendments which would be required for additional
development at the school.
Land Use Categories Table and Map
The Planning Commission reviewed the proposed land use category system and map
presented to Council in the main report prepared for this meeting. The Commission paid
August 24, 2021, City Council Agenda Item 21 Comments
The following comments on an item on the Newport Beach City Council agenda are submitted by:
Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229)
Item 21. Resolution No. 2021-78: Appeal of Director’s Determination
No. DD2021-001 Interpreting Accessory Residential as an Allowed Use
within Resort Hotels (PA2021-096)
Summary
I fully support SPON’s position as expressed in their appeal and the Chatten-Brown letters.
1. City staff’s new assertion that “on appeal, the issue before the City Council is limited to
whether the Director’s Determination is consistent with Council Policy K-4” has no basis I
am aware of in the City’s codes. It is it flatly contradicted by NBMC Secs.
20.64.030.C.3.b and 21.64.030.C.3.b, and seems intended solely to deflect serious
discussion by the Council of whether Policy K-4 is itself flawed, as well as consideration
of most of the points raised in the SPON appeal.
2. The “Mixed-Use Resort Opportunities” section of Policy K-4 is flawed. It improperly
delegates to a City employee legislative functions reserved to the City Council, including
imposing detailed new land use policies, and, most importantly, adding to the City’s
planning an authorization for 492 new residential dwelling units never before
contemplated in its General Plan. The Policy K-4 delegation is apparently, but
incorrectly, thought to allow the City to avoid with impunity the normal legislative process
for land use changes which would, before the same changes could go into effect, require
discussion and debate at noticed public hearings before the Planning Commission,
Airport Land Use Commission and City Council, not to mention, if ultimately approved by
the Council, Greenlight tracking and a public vote to authorize the 492 new dwellings.
3. Staff neglects to remind the Council that each of the four hotel properties benefiting from
the Director’s Determination is an “Anomaly Location” in the Land Use Element of our
City’s General Plan. The overall limits on the amount of development allowed at those
locations, both residential and non-residential, is set in Tables LU1 and LU2 of the
General Plan. Those limits cannot be altered by any interpretation of the Zoning Code,
since it is required to follow the General Plan. In the General Plan limits, hotel rooms (a
non-residential use) and dwelling units (a residential use) are, and always have been,
separate and distinct. The suggestion that, through Policy K-4 or through a Director’s
interpretation, the General Plan approval of hotel rooms can be regarded as General
Plan approval of an equivalent number of dwelling units is wholly inconsistent with the
definition of those terms in the current General Plan.
4. One of the four hotel properties benefiting from the Director’s Determination, the
Newport Beach Marriott at 900 Newport Center Dr., has a Visitor Serving Commercial
(CV) General Plan and Coastal Land Use Plan designation, implemented by being in a
zoning district of the same name. The suggestion that residential dwelling units are a
Received After Agenda Printed
August 24, 2021
Item No. 21
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 2 of 15
currently allowed use on this property ignores the fundamental distinction in our system
of zoning between Residential, Commercial, and Mixed Use districts. Residential uses
are not currently allowed in the Commercial districts. CV is a species of a Commercial
district. Even more specifically, the CV district is reserved for commercial uses that
primarily serve visitors. Dwelling units of the sort contemplated in the Director’s
Determination are not a commercial use built to primarily serve visitors. That should be
the end of the story for the Newport Beach Marriott. Although dwelling units could be
made allowable in CV districts by changes to the General Plan and Zoning through the
normal legislative process, they cannot be made so by a single City employee’s
“interpretation” that the existing words mean something different than they plainly say.
The required findings for such an interpretation simply can’t be made.
5.The other three hotel properties benefiting from the Director’s Determination already
have a “mixed use” designation in the General Plan. If as the result of a new business
model the owners want to add residential units to their properties, in any proportion, they
do not need a Director’s Determination that if the residential units are less than 30% of
the “approved hotel rooms” they are an accessory use. What they need is the normal
legislative authorization to build dwellings on their property. In the case of the Fashion
Island Hotel, as an example, it takes more than an “interpretation” of existing code.
Although Table 1 of the North Newport Center Planned Community text (PC-56) says
residential units are permitted in the Block 600 subarea, Table 2 sets the current
development limits for the entirety of Block 600 at 295 hotel rooms, 0 residential units, 0
movie theater seats, 0 sq.ft. of regional commercial and 1,353,399 sq.ft. of
office/commercial. As Table 2 explains, those limits can be changed, but only through
“the transfer of development rights provision described in Sections II.C and IV.C herein.”
Any residential units on a Block 600 property, whether accessory or not, would,
therefore, need to be authorized by such a transfer approved by the City Council, and
subject to the provision (page 13 of PC-56) that “Residential use may be relocated,
but may not be converted to or from another use.”
6.The examples cited by staff of previous instances in which General Plan land use
designations and limits were changed without amending the General Plan are hardly
good precedent. They should be viewed not with pride, but rather as embarrassing
episodes in which the City got away with something it should not have done, with the
result being protected only by a statute of limitations on land use entitlement challenges.
7.Even if this new Director’s Determination were a legitimate exercise of a City employee’s
powers, because it was created without the normal public review process it is poorly-
written policy and, at the very least, should be rethought and modified.
Details
Consistency with Council Policy K-4 is Not the Only Issue
The staff report and proposed resolution of denial make for the first time the assertion that “on
appeal, the issue before the City Council is limited to whether the Director’s Determination is
consistent with Council Policy K-4.”
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 3 of 15
This is flatly contradicted by NBMC Secs. 20.64.030.C.3.b and 21.64.030.C.3.b, which say:
“The review authority is not bound by the decision that has been appealed or called for review
or limited to the issues raised on appeal,” promising a very broad scope to appeal hearings.
SPON has alleged, among other things, that the Determination is inconsistent with the City
Charter and other existing Council policies and that Policy K-4 improperly directed City staff “to
do what the City Council could not do without voter approval.”
It is completely unclear why staff feels the validity of Policy K-4 cannot be questioned on appeal,
let alone the substance of the Determination cannot be questioned, but only if the Determination
is consistent with Policy K-4. Staff appears to be trying to preemptively limit what the Council
can discuss on appeal, in violation of the above-cited codes.
Obviously, if Policy K-4 provides improper direction to staff, then issuing a Determination
consistent with that improper direction does not make the Determination valid.
As to the issues that have been raised during the appeal, the present staff report mentions and
comments extensively on the letter received by the Planning Commission from Chatten-Brown
in connection with the Commission’s appeal hearing on July 8. It does not mention that I, too,
participated in that hearing and submitted six pages of comments that can be found starting on
page 88 of the archived agenda packet. Apparently, those are not worthy of response since,
according to staff, the only issue now is whether the Determination is consistent with Policy K-1,
which policy staff apparently feels erases all previously-enacted but inconsistent legislation.
This latter conclusion seems to be based, in part, on staff’s assertion that “Council Policy K-4
was not appealed or challenged by the appellants or any other party” at the time of its adoption
on March 9. That, like much of the present staff report, is, at best, a half-truth. I, for one,
questioned the City’s authority to create new dwelling unit allocations through conversion of
existing hotel room allocations, without Greenlight tracking, both orally and in writing when
Policy K-4 was on the Council’s March 9 consent calendar.
The Part of Policy K-4 Relied Upon Provides Invalid Direction
The exact meaning of the “Mixed-Use Resort Opportunities” section of Policy K-4 is difficult to
decipher, but as interpreted by staff it seems to be taken as an order to the Director to, through
“interpretation,” promulgate detailed new land use policies that would normally be the result of
an extended land use policy procedure involving debate and discussion at noticed public
hearings before the Planning Commission and ultimately the Council, as well as possibly the
Airport Land Use Commission and Coastal Commission.
Staff believes it has been ordered to declare through “interpretation” such things as that “30%”
(as opposed to some other percentage) of “approved hotel rooms” can be regarded as dwelling
unit allocations, that taking advantage of this option requires a Development Agreement and
more. These are new land use policies. They are not things that can be deduced with any
certainty by interpretation of the existing. In fact, they are inconsistent with the provision in
Sections 20.12.020.E.2 and 21.12.020.E.2 that when the Director determines an unlisted use is
equivalent to a listed one, the permitting requirements shall be the same as for the existing use
that has been identified as equivalent. No existing listed use is subject to these restrictions.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 4 of 15
At least as importantly, if Policy K-4 is interpreted, as staff seems to interpret it, to direct the
30% to be achieved not with dwelling units already allocated in the General Plan, but rather as
new units created by the Determination (245 at Airport Area hotels and 247 at Newport Center
ones), then it violates the City Charter, as well as well as the planning codes.
As explained below, overarching development limits are set in the General Plan. Section
20.10.030.B of the Zoning Code requires that code to be consistent with the General Plan. So,
whether staff and the Council choose to call Policy K-4 and the resulting “interpretation” a
General Plan amendment, or not, to maintain the required consistency they must be effectively
increasing the limits in the General Plan. But as explained in the Chatten-Brown letter, Section
423 (Greenlight) of the Charter limits the City’s authority to increase those limits to at most 100
units in a statistical area over 10 years. Neither the Council nor most certainly an individual can
increase the limits by these amounts (245 and 247) without a public vote.
But the staff report completely sidesteps this issue by misstating the Section 423 analysis that
would be required if the Council itself were to incorporate the identical land use changes into the
General Plan. Ironically, as Item 16 on the present agenda, will be receiving a report on actions
at the August 19 Planning Commission meeting. Its Items 4 and 5 provided the Section 423
analysis needed for the General Plan amendment necessary to convert a car wash to
residential and to convert a residentially-designated parcel to educational office use. In both
cases, as required by Section 423 and its implementing Council Policy A-18, separate tracking
thresholds were considered for increases in non-residential floor area (intensity), traffic and
dwelling units (density), any one of which can trigger the need for voter approval. There is no
tradeoff for decreases in one threshold against increases in another. And, indeed, there is no
credit for decreases in any of them. Also, PC Item 5 notes that authorizing the office increase
without voter approval has to wait until September when floor area increases in the same
statistical area authorized 10 years earlier will fall off the tracking.
Here, however, staff misleads the Council by implying there is only one Greenlight threshold
(traffic), and asserting (page 21-10) that as long as there is “no increase in trips,” the
Determination is “consistent with the purposes of Charter Section 423 and Council Policy A-18.”
In fact, at the July 8 Planning Commission appeal hearing, Director Jurjis made the incredible
statement (see video at 14:13) that even if the Council incorporated the new provisions of Policy
K-4 and his Determination following it into the General Plan through the normal amendment
process it would not trip any of the Section 423 (“Protection from Traffic and Density”)
thresholds because, he said, Section 423 comes into play only if, as an alternative to increasing
traffic, the amendment “significantly increases allowed density or intensity,” and in his view
replacing hotel rooms with dwelling units did not significantly increase density.
This interpretation required completely ignoring the immediately following sentence of Section
423, which defines “Significantly increases” as meaning adding “over 100 dwelling units
(density).” No matter what prior changes may have been made to the General Plan adding 247
or 245 dwelling units to a statistical area, as the Determination claims to do, “significantly
increases” density and would, if processed as a General Plan amendment, require voter
approval under the plain language of Section 423.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 5 of 15
Development Limits are Set in the Land Use Plan, Not in the Zoning
The central thread of City staff’s argument that Charter Section 423 is inapplicable to the
Director’s Determination is that it is not a General Plan amendment.
In making this argument, staff neglects to remind the Council that the overall limits on the
amount of development allowed on each of the four hotel properties benefiting from the
Director’s Determination, both residential and non-residential, is set in Tables LU1 and LU2 of
the Land Use Element of our City’s General Plan. More specifically, they are in “Anomaly
Locations” where the maximum number of hotel rooms is clearly specified. Those limits cannot
be altered by any interpretation of the Zoning Code, since the latter is required to implement the
General Plan. And in the General Plan limits, hotel rooms (a non-residential use) and dwelling
units (a residential use) are, and always have been, separate and distinct.
In particular, as pointed out in the most recent Chatten-Brown letter, when Tables LU1 and LU2
were put to voters for their approval in 2006, the Glossary of the accompanying General Plan
defined “hotel rooms” and “dwelling units” as distinctly different animals: the former are
prohibited from having cooking facilities in the individual units, while the latter are required to
have them.1
So, it is inconceivable that when the current General Plan shows an approved number of hotel
rooms that there could have been any understanding the voters were equally giving their
approval for 30% -- or any percent – of them to be built as dwelling units.
The distinction between and non-interchangeability of residential and non-residential
development limits is more explicitly articulated in Council Policy A-18 (“Guidelines for
Implementing Charter Section 423”). The current staff report suggests (page 21-10) that since
the Council is free to change the policies it adopts, if there are any inconsistencies between
them, then Policy K-4 supersedes Policy A-18 (“the City Council has the authority to amend or
revoke a City Council policy”). This, again, is misdirection. Policy A-18 contains on page 13 a
copy of the 2000 ballot measure that “encouraged” it to be written. Its original text was
hammered out after extensive consultation with the Measure S proponents, and it can be
amended only through a special public hearing process. Policy K-4 was not subject to any
public hearing or debate and it did not purport to modify Policy A-18.
Because the City’s development limits are set in its General Plan, and since the General Plan
controls the Zoning Code, it is disingenuous to suggest the limits can be changed without
amending the General Plan.
1 There is an obvious disconnect between the definition of “hotel” in the General Plan Glossary (“A facility
in which guest rooms or suites are offered to the general public for lodging with or without meals and for
compensation, and where no provisions is made for cooking in any individual guest room or suite”)
and that in the Zoning Code Section 20.70.020 (which says “Guest rooms may or may not contain
kitchen facilities for food preparation”). This is not an “ambiguity” that the Director can resolve in favor of
the latter definition, because the Zoning Code clearly and unambiguously instructs him that in cases of
discrepancy the General Plan controls (NBMC Sec. 20.10.030.B). It is a conflict that needs to be resolved
through the normal process of legislative amendment to bring the various planning regulations into
harmony with the people’s wishes.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 6 of 15
For the Newport Beach Marriott, the Findings Necessary to Add Housing to
a CV District Cannot be Made
Application of the Director’s Determination to the Newport Beach Marriott at 900 Newport
Center Dr. is exceptionally problematic because of its Visitor Serving Commercial (CV) General
Plan and Coastal Land Use Plan designation, implemented by being in a zoning district of the
same name. The City’s planning and zoning system makes a fundamental distinction between
Residential, Commercial, and Mixed Use districts (General Plan Land Use Element Table LU1,
Coastal Land Use Plan Policy 2.1.1-1 and NBMC Sections 20.14.020 and 21.14.020).
Residential uses are not currently listed as an allowed use in the Commercial districts (if they
were, they would be Mixed Use districts), of which the CV district is a kind. Even more
specifically, the CV district is reserved in the LUE, the CLUP and the NBMC for commercial
uses that are “intended to serve primarily visitors to the City” (Sections 20.20.010 and
21.20.010). Dwelling units of the sort contemplated in the Director’s Determination are not built
to primarily serve visitors. Changes in allowed uses can be made through the normal legislative
process. But the Director is not a legislator, and his authority to add currently unlisted uses to a
district is extremely limited by Sections 20.12.020.E and 21.12.020.E (“Rules of Interpretation -
Unlisted Uses of Land”).
Those sections require him to make all of five findings. The staff report attempts to lull the
Council and public into a sense the Determination is valid by marshaling a few facts that seem
consistent with each required finding. However, consistencies are irrelevant, for it can be a
single inconsistency that makes the finding impossible to make, and thereby prevents the
unlisted use from being allowed in a district.
In this case, the following inconsistencies render three of the required findings impossible to
make no matter how many consistent facts can be marshaled in their defense:
Required Finding “a”: “The characteristics of, and activities associated with, the proposed use
are equivalent to those of one or more of the uses listed in the zoning district as allowable, and
will not involve a greater level of activity, population density, intensity, traffic generation, parking,
dust, odor, noise, or similar impacts than the uses listed in the coastal zoning district.”
1. The proposed use is a dwelling unit.
2. The staff report cites none of the currently listed CV uses that it claims a dwelling unit is
equivalent to. And it cannot, for all the uses listed primarily serve visitors, which a
dwelling unit does not.
3. Adding dwelling units to a district where they are not currently a listed use will also
arguably increase “population density” if that means persons living on as opposed to
visiting a unit of land.
4. As a result of both these inconsistencies, this finding cannot be made.
Required Finding “b”: “The proposed use will meet the purpose/intent of the zoning district
that is applied to the location of the use.”
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 7 of 15
1. The purpose/intent of the CV zoning district is to “provide for areas appropriate for
accommodations, goods, and services intended to serve primarily visitors to the City.”
2. Dwelling units are not intended to serve primarily visitors to the City.
3. This finding cannot be made.
Required Finding “d”: “The proposed use is not listed as allowable in another zoning district.”
1. Dwelling units are listed as an allowable use in many other zoning districts.
2. This is a finding that can most definitely not be made.
While dwelling units could be made allowable in CV districts by changes to the General Plan
and Zoning through the normal legislative process, these existing rules, adopted through those
processes, deprive the Director of the authority to add dwellings units to the CV district on his
own through “interpretation,” whether the Council orders the interpretation, or not. The Council’s
adoption of Policy K-4 does not override the City’s existing ordinances.
For the Other Three Hotels, Housing is Already an Allowed Use, but
Legislative Amendments May be Needed Before Housing Can Be Entitled
on Specific Parcels
The situation is different for the other three hotel properties benefiting from the Director’s
Determination. They already have a “mixed use” designation in the General Plan and Zoning
Code. If as the result of a new business model the owners want to add residential units to their
properties, they do not need a Director’s Determination that if the residential units are less than
30% of the “approved hotel rooms” they are an accessory use.
What they need is for enough residential units to be available in the General Plan and Zoning
Code to meet the number they wish to build.
Since the Director has no known authority to add units, that may not be as simple as his saying
it’s OK to convert 30% of their “approved rooms
In the case of the Fashion Island Hotel, for example, it takes more than an “interpretation” of
existing code, and more than a conditional use permit to add residential units to the property.
Table 1 of the North Newport Center Planned Community (PC-56) says residential units are
permitted in the Block 600 subarea where the hotel is located, but Table 2 sets the current
development limits for the entirety of Block 600 at 295 hotel rooms, 0 residential units, 0 movie
theater seats, 0 sq.ft. of regional commercial and 1,353,399 sq.ft. of office/commercial. As Table
2 explains, those limits can be changed, but only through “the transfer of development rights
provision described in Sections II.C and IV.C herein.” Any residential units on a Block 600
property, whether accessory or not, would, therefore, need to be authorized by a transfer
approved by the City Council, and subject to the provision (page 13 of PC-56) that “Residential
use may be relocated, but may not be converted to or from another use.”
This is the law for the block. It says the hotel room allocations cannot be converted to
residential use entitlements, even with a transfer. That would take a General Plan and Planned
Community text amendment.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 8 of 15
Since this is the existing law duly adopted following the City’s prescribed legislative process, it is
very hard to see how City staff could believe a new Council policy adopted without discussion
on the consent calendar can authorize a City employee to ignore that law and proclaim the
acceptance of 30% conversions to be the new law.
Previous Examples of Land Use Conversion without a General Plan
Amendment are Not Good Precedent
The staff cites, with apparent pride, several instances in which the City approved development
at variance with the General Plan without bothering to amend the Plan and was not immediately
challenged for doing so. The logic seems much like saying that if a motorist has exceeded the
speed limit in the past without getting a ticket, he or she should be exempt from getting a ticket
in the future even if they speed again. Unless one accepts such logic, none of the previous
examples of ignoring the General Plan provide justification for doing so again, now or in the
future.
On page 21-9, the staff report mentions:
1. Ordinance No. 2012-2, approving the conversion of 17 tennis courts to 27 hotel rooms
without a General Plan Amendment.
2. Ordinance No. 2012-19, approving the transfer and conversion of 79 hotel rooms at the
Newport Beach Marriott to 79 residential units at Villas Fashion Island without a General
Plan Amendment.
3. Director’s Determination No. DD2017-002 (PA2017-207), allowing Fire Station No. 2 to
be built in the Visitor Serving Commercial (CV) Zoning District without a General Plan
Amendment.
The first two examples are highly problematic and have been frequently criticized by SPON.
In the first, tennis courts have no floor area while Policy A-18 assigns 1,000 sq.ft. of floor area to
hotel rooms. Hence, this conversion, while ostensibly traffic neutral, added 27,000 sq.ft. of non-
residential floor area without any Charter Section 423 counting of it.
In the second, no authority at all was cited for converting non-residential allocations (hotel
rooms) to residential ones. Nonetheless, 79 dwelling units were added to the Newport Center
statistical with no Section 423 counting, and hence without the required impact on the allowed
magnitude of subsequent increases. This came back to haunt the City in 2016 when a lawsuit
was filed over the Council’s Museum House approval, which added 100 units without counting
the previous 79, but the lawsuit was abandoned when the project approval was rescinded.
Additionally, the City has continuing trouble remembering these changes in General Plan
development limits made without formally amending the limits listed in the Plan. In an attempt to
be “transparent,” it has posted a set of Transfer of Development Tracking Tables, but they are
not reliable.
For example, although staff seems to recall that at Anomaly 46, the Tennis Club at Newport
Center, 27,000 square feet of hotel rooms were added to the General Plan limits while 17 of the
24 tennis courts were eliminated, no TOD Tracking Table has been posted and Table LU2 of
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 9 of 15
the unamended General Plan Land Use Element naturally continues to inform readers that 24
tennis courts and no hotel rooms are allowed there. Similarly, the table for Anomaly 48, until
very recently, said the allocation of 524 dwelling units at Villas Fashion Island was created, in
part, by converting 94 hotel room allocations. But as the Council resolution cited indicated, the
actual number was the 79 cited above, with the other 15 being drawn from a floating allocation
of dwelling units approved by voters in 2006.
At best, the practice of changing the General Plan limits without taking the trouble to update the
limits listed in its Table LU2 by formal amendment is extremely confusing to readers. At worst, it
allows changes to the limits to be made without the required Section 423 accounting.
The final example of prior land use conversions without General Plan amendments, Fire Station
No. 2, like the first two, could and should have been challenged, as well, since the findings for
adding an unlisted use to the CV district (cited earlier) could not be made: fire stations are not a
use intended to primarily serve visitors and they are a use listed in other districts. Had the
normal legislative process of changing the LCP designation of the parcel to Public Facility (PF),
there would have been stronger oversight (including by the CCC in reviewing the amendment
request) of whether the loss of visitor serving amenities was adequately mitigated. In addition,
public facilities are not exempted from Charter Section 423, yet through this improper process
the development limit for the fire station parcel, like the one on which the new Civic Center sits,
has not been clearly defined.
Even if Valid, the Determination Sets Poorly-Vetted Policy
If the Council were to accept staff’s recommendation and adopt the proposed Resolution No.
2021-78 upholding the Director’s Determination and denying the SPON appeals, it appears the
Determination would stand, subject to the redundant “conditions” in Section 2 of the resolution.
In part because Policy K-4 and the resulting Determination were privately developed without
public discussion or debate, the result would be poor policy.
Not only has no explanation whatsoever been provided for why 30% (and not some other
percent) is a reasonable number for conversions, but most glaringly, although the Director was
directed to resolve ambiguities in the existing regulations, the resulting Subsections 3 and 4
(“Approved hotel rooms may be converted to residential units but only on a one-for-one basis”
and “the residential units shall comprise no more than 30 percent of the approved hotel rooms”)
are themselves completely ambiguous as to what “approved hotel rooms” mean and as to
whether the conversions are allowed as a matter of right or only if enough unbuilt dwelling unit
allocations exist within the statistical areas to support them. The most reasonable interpretation
of “approved hotel rooms” would seem to be “existing built rooms,” but from the numbers quoted
in Table 1 of the staff report (page 21-10) it appears the Director is referring to the “maximum
number of rooms allocated” to the anomaly in Table LU2 of the General Plan Land Use Element
as modified by the Planning Division’s Transfer of Development Tracking Tables.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 10 of 15
It is likewise unclear if the 30% rule is intended to be applied before or after the conversion,2 or
what mechanism an owner would follow to seek a deviation from the rule.
For the three hotels on mixed use parcels, where both hotel rooms and residences are currently
allowed and there is currently no restriction on the ratio between them, it is additionally unclear if
the Director’s 30% rule is intended to impose a new restraint on them.
Does the Council intend the 30% limit to apply to hotels on mixed-use parcels?
Would it be too much to ask for clarity in public policy? Or do we need further Director’s
Determinations of the meaning of Director’s Determinations (none of which are posted in any
conspicuous and easily-discoverable place)?
The meaning of parts of Subsection 7 (“Potential impacts to public access, affordable housing,
and the loss of transient occupancy tax must be mitigated by entering into a Development
Agreement with the City or by some other means deemed appropriate”) is likewise unclear. It is
obvious that the loss of hotel rooms will result in the loss of transient occupancy tax. But since
hotel rooms are not currently regarded as housing, it is unclear that the loss of a hotel room has
any impact at all on affordable housing. So exactly what is the impact to be mitigated?
Had a policy for hotel room conversion been vetted through the normal, formal process for
enacting land use regulation it could have been a vehicle not only for resort hotel owners to
embrace a new business model, but for the City to meet its looming affordable housing
obligations.
Bypassing the process with a Council-directed Director’s Determination is not only
presumptively illegal, it has produced a poor result.
Summary
I completely support SPON’s appeal and their position, as expressed in the Chatten-Brown
letters.
The “Mixed-Use Resort Opportunities” section of Council Policy K-4 and the resulting Director’s
Determination is an improper deferral of the legislative process to an administrative staff person.
It is especially improper in the context of land use planning where there is a well-established,
codified (in some cases statewide) and time-tested procedure for making changes, involving
multiple noticed public hearings, and in some cases mandatory review by outside agencies
including the Airport Land Use Commission and the California Coastal Commission. It cannot be
bypassed by Council direction to do something different.
2 If the intent is to apply the rule before conversion, then a 100 room hotel could convert 30 rooms to
dwellings, and the resulting complex would have 70 hotel rooms and 30 dwellings, so the dwellings would
be 43% of the finally built hotel rooms. If “approved rooms” means General Plan allocated ones, rather
than actual built rooms, then the ratio of dwellings to rooms could be still higher. In fact, if the General
Plan allocation were 100 hotel rooms, the Determination would allow 30 dwellings to be built on the
property with no clear obligation as to how many hotel rooms are necessary for the dwellings to be
regarded as “accessory” to the hotel use.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 11 of 15
City staff may well be right in urging Council to allow for residential uses on hotel properties. But
the regulations for allowing that need to be vetted through the normal process.
In the present case, the ongoing General Plan Update process, including the revision of the
Housing Element, provides a convenient and far more proper path for pursuing the role of hotel
to residential conversions.
Additional Comments on the Staff Report
Page 21-2 (Policy K-4): The staff report misrepresents the stated purpose of the “Mixed-Use
Resort Opportunities” section of Council Policy K-4 (see the copy of it on page 21-45).
According to Policy K-4 itself, the motivation for that section is almost entirely economic and
intended to assist hotels in recovering from the COVID-19 downturn. Assisting the City in
meeting its RHNA obligations, although the main thrust of the overall policy, is at most an
afterthought in this section. As it should be, for although hotel conversions could be required to
produce affordable units, the direction given to the Director and his resulting Determination will
likely produce only more high-priced “resort living” units which is not something the City needs
to meet its RHNA quotas.
Page 21-3 (Need for Interpretation): As pointed out in the letters from both Chatten-Brown and
Coastal Commission staff, no one, myself included, questions the need to revisit the City’s
definition of “hotel.” However, changes in definitions are not effectuated by posting a Director’s
tortured new “interpretation” of the existing language. They are effectuated by the normal
legislative process of formally, publicly, and hopefully thoughtfully amending the definition.
The need in this case is particularly acute because, although it may not have been recognized
until now, the definition cited on page 21-3 not only may not match current industry practice, it
does not match the definition in the General Plan, which it is required to implement.
Page 21-3 (Director’s Determination No. DD2021-001): Implementing land use policy through
Director’s Determinations is particularly problematic since the City has no mechanism for
making them public in any systematic way. The existence of the present Determination became
known to the public only when it was voluntarily added to the May 6 Planning Commission
agenda as a “receive and file” item. It could well have not been known of until the appeal period
had expired. The public has little way of knowing what other Determinations and Interpretations
may have been issued by the present or past Directors or when they could have been appealed.
Yet the City staff (and the Council?) appears to wish them to be now be treated as governing
and unchallengeable law.
Page 21-5 (Staff Response to Chatten-Brown Comments): The staff report correctly states
“The central argument of the appeal is the belief that hotel room allocations provided in the
General Plan cannot be converted to dwelling unit allocations without an amendment to the
General Plan Land Use Element, and if an amendment application were processed, a vote
of the electorate would be required.”
The paragraph following that seems to be staff’s response to the highlighted phrase, but it is no
response at all. Instead, it deflects the conversation into an irrelevant tautology, repeating the
mantra that the Determination is not a General Plan amendment.
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 12 of 15
Assuming the Director is promulgating a new land use policy that, as indicated in Table 1 on
page 2-10, adds 245 dwelling units to the Airport Area and 247 dwelling units to Newport
Center, not previously recognized in those statistical areas, it is indisputable that if the policy
proclaiming those increases were added to the General Plan by the Council through the normal
process of a General Plan amendment, it would require voter approval.
Page 21-5 (Authority for Interpretation Vested in the City Council): As pointed out in the
Chatten-Brown letter, the Council’s authority derives from City Charter Sections 200 and 405.
Section 405 specifically limits the Council’s powers and makes them subservient to the other
provisions of the Charter. The Council does not have the authority to make or interpret policies
in ways inconsistent with Section 423, which, since 2000, has required voter approval of certain
increases in the development limits stated in the General Plan. If the Council has a sincere wish
to evade that provision it would first have to attempt to enact an ordinance stating that the
Zoning Code, over which it has control, does not have to respect the General Plan development
limits. But the present Council-enacted Zoning Code says the opposite: that the General Plan,
and therefore Section 423, prevails.
Page 21-6 (Authority for Interpretation in Title 20 and Compliance with General Plan):
After making a sweeping claim for powers of the City Council, this section at first seems to
acknowledge the limitations called out in the Chatten-Brown letter, but then mysteriously
negates its own acknowledgements by suggesting an interpretation inconsistent with the
General Plan, including the General Plan limits, is valid if the Director makes the findings
dictated in the Council-enacted Zoning Code. The logic of this is inscrutable, but in any event,
as pointed out above, the findings to add dwelling units as an unlisted use cannot be made for
the Newport Beach Marriott and is not needed for the other three hotels that are the subject of
the Determination (since housing is already a listed use there).
Page 21-6 (Authority for Interpretation in Title 21 and Compliance with Local Coastal
Program): The logic is, again, inscrutable by which the LCP’s prohibition on conversion of hotel
rooms to limited use accommodations would not, to any reasonable person, imply a prohibition
on conversion of hotel rooms to permanent use accommodations, as well.
Staff reverts to its dubious argument that if something is not explicitly prohibited in the codes it
must be allowed. But that is not the normal reading of land use codes. Prohibited uses are not
normally explicitly and exhaustively listed. For example, the tables for allowed uses in the
commercial districts do not include any rows from dwelling units because it is understood they
are not an allowed use and it would be impossible to have a row from every other possible use
that is not allowed. In fact, the listing in one district means they are not allowed in another.
In any event, the recent letter from California Coastal Commission staff would seem to define
the limits of the Director’s authority to interpret the LCP. CCC staff believes a properly-
processed LCP amendment is necessary to allow the conversion of hotel rooms into dwelling
units as a new use in the CV district.
Page 21-7 (Primary Hotel Land Use Remains Unchanged): City staff claims that the
Determination is identifying dwelling units as a valid new and consistent “accessory use” for a
“hotel” and that the Chatten-Brown letter’s pointing out that hotel rooms are rented “to transient
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 13 of 15
guests for sleeping purposes” in the code’s existing definition of “hotel” is both irrelevant and
illogical.
I believe it is City staff that is missing the point of the following sentence in the definition (slightly
misquoted on page 21-6), which says “Related accessory uses may include conference and
meeting rooms, restaurants, bars, and recreational facilities.”
To any reasonable person, the primary purpose of the listed accessory uses (conference and
meeting rooms, restaurants, bars, and recreational facilities) is to serve the transient guests who
have rented a room. While this code definition does not explicitly exclude dwelling units, a
dwelling unit on a hotel site is not at all intended to serve the transient guests renting
rooms, so it is not at all a similar accessory use.
As pointed out previously, staff has completely failed to identify exactly what currently listed use
in the CV district (accessory to a hotel or otherwise) a dwelling unit is “equivalent” to, even
though that is a required finding to add an unlisted use, and the permitting and review
requirements would default to those for that existing listed use.
The staff report goes on to assure the Council the CV parcel as a whole will remain “primarily
visitor serving” and that dwelling units are not much different from hotel rooms. But as pointed
out previously, that is not the standard. To be allowed on a CV parcel, each individual use, not
just a majority of them, must primarily serve visitors. The two are not the same.
Staff’s discussion on this page also fails to advise Council of the last sentence of the code
definition, which says “A hotel operates subject to taxation under Revenue and Taxation Code
Section 7280.” Hotels operating under that state code are limited to transient guests staying 30
days or less. The staff report implies this (misquoted as “less than 30 days”) is merely
“tradition.”
Page 21-9 (Consistency with Prior Determinations and Interpretations): As pointed out
previously, getting away with speeding in the past does not give one a permanent “Get Out of
Jail Free” pass.
Page 21-10 (Charter Section 423 Thresholds for a Vote): Staff needs to clarify if the number
of “Approved Hotel Rooms” listed in Table 1 represent the existing approved rooms on the sites,
the theoretically possible number of rooms “approved” in the General Plan, or something
different.
For example, as mentioned in the most recent Chatten-Brown letter, an article by Gary Sherwin
of Visit Newport Beach says that the Newport Beach Marriott is currently undergoing extensive
renovations (apparently without benefit of a Coastal Development Permit) as a result of which
“When completed later this year, it will have about 100 fewer rooms.” Will that affect the number
of “approved hotel rooms” or the allowable number of dwellings that can be built on the site?
Page 21-11 (Concerns with Community Review of a Project): Setting aside the problem that
the Director is not empowered to promulgate new land use policy, promises of “don’t worry,
you’ll get a chance to weigh in on this later” are typically specious.
If the Director’s Determination is allowed to stand, he will, at future hearings, have unilaterally
taken off the table the question of whether dwelling units should be allowed on a hotel site and
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 14 of 15
in what proportions. Those questions will have now been resolved and cannot be argued as
long as they meet the Director’s standards. At the very least, the burden of proof will have been
shifted decisively onto those who may have concerns about the wisdom of projects following his
policies.
Page 21-11 (Request to Delay and Incorporate in On-Going General Plan Update
Process): Neither City staff nor the Council has ever explained what is so urgent about
authorizing hotel conversions that this one matter, above all others, has to be pushed ahead of
the ongoing Housing Element and General Plan updates, with the Zoning amendments to follow
them.
No hotel site owner has come forward publicly with a proposal to building dwelling units on their
parcel. The Newport Beach Marriott is currently undergoing expensive renovations. It seems
unlikely they would want to instantly tear them down to rebuild with dwelling units. The other
three hotels already have permission to add housing, although for the Fashion Island Hotel
there are only 28 General Plan authorized but unused dwelling unit allocations in the Newport
Center statistical area. And those have been requested by the Residences at Newport Center
project reviewed at the August 19 Planning Commission meeting and tentatively scheduled to
come to the Council on September 28. If that is approved, the Council’s Charter Section 423
authority to add housing to Newport Center without voter approval will be limited to five or six
more units for the next several years.
Given this lack of urgency, SPON’s request to include the hotel conversions in the Housing
Element update process seems entirely reasonable to me. Indeed, the draft submitted to HCD
on August 13 seems to do so.
New Policy Action 4I (“Establish Mixed-Use Resort Opportunities”) on page 4-17 of the August
13 draft Housing Element seems to incorporate the Policy K-4 directives, but strangely implies a
Director’s Determination or more formal policies is something that might be forthcoming “within
24 months of Housing Element Adoption,” not something that has already happened.
As to whether the resort hotels have been identified as housing opportunity sites for the 6th
RHNA Cycle, as best I can tell from Appendix B:
The Newport Beach Marriott is Site 188, identified as 9.54 acres suitable for 476 units:
157 low/very low, 33 moderate and 285 units above moderate income
The Fashion Island Hotel is Site 204, 5.37 acres suitable for 268 units: 88 low/very low,
19 moderate and 160 units above moderate income
The Hyatt Regency John Wayne Airport is Site 70, 6.32 acres suitable for 315 units: 104
low/very low, 22 moderate and 189 above moderate income3
The Renaissance Newport Beach is not identified as a housing opportunity site at all
3 Curiously, the site description does not mention an existing hotel, but says, instead “This parcel contains
office space for a manufacturing company and is identified as a site for potential housing.”
August 24, 2021, City Council Item 21 comments - Jim Mosher Page 15 of 15
Aside from the Renaissance Newport Beach, where no housing is envisioned, the long-range
plan seems to be to expect total rebuild of the other three hotel sites as residential, and
not the vision of resort hotels remaining with accessory resort residential living seen by Policy K-
4, the Director or the proposed Housing Element Policy Action 4I.
It is not clear to me how this disconnect has arisen, but there certainly seems to be a
disconnect.
Page 21-11 (Summary): I disagree completely with City staff’s conclusions regarding the merit
of the appeal. I believe the appeal should be granted and the Director’s Determination nullified.