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HomeMy WebLinkAboutPA2021-296_20220524_Coastal Commission Staff Comments Page 1 of 4 STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, Governor CALIFORNIA COASTAL COMMISSION South Coast Area Office 301 E Ocean Blvd., Suite 300 Long Beach, CA 90802 (562) 590-5071 Date: May 24, 2022 Re: Coastal Development Permit Application CD2021-077 (Ritz Carlton Residences) & Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels) To: The Honorable Newport Beach City Council Coastal Commission staff have reviewed your staff’s letters dated August 21, 2021 and May 12, 2022 regarding the City’s pending authorization of conversion of 159 hotel units to residential units on the “Marriott Hotel” parcel, which is designated Visitor Serving Commercial (CV) in both components of the certified Local Coastal Program (LCP), Chapter 21 of the zoning code and coastal land use plan. Coastal Commission staff previously provided the City with letters dated August 20, 2021 and May 10, 2022, noting that 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. Moreover, Coastal Commission staff previously referenced several coastal development permits (CDPs) approved by the Coastal Commission which authorized development on the site. In its most recent response, the City staff noted that CDP 5-07- 085 was distinct from the hotel development, and only authorized the adjacent “Meridian Project”, which was a 100% residential project. However, even if that development would not be affected by the proposed development subject to a City-issued CDP (and thus that permit would not need to be amended) that permit is illustrative of the required process for new residential development on a site designated for Visitor Serving Commercial uses. As noted in our previous letters, an LCP Amendment was requested by the City and approved by the Commission in 2007 (NPB-MAJ-1-06, Part A), in conjunction with CDP 5-07-085, submitted by the property owner. The LCP Amendment was approved by the Coastal Commission and changed the land use designation of a 4.25-acre area (occupied by tennis courts) at the Marriott Hotel from Visitor Serving Commercial to Medium Density Residential. The Commission approved the permit application for the physical housing development after approving the LCP Amendment to change the land use. The City staff’s most recent response letter also referenced “the 1983 CDP for the Marriott Hotel (5- 83-139 & 5-83-139A), which currently regulates the site.” 1 This is an important reference because the Coastal Commission-issued CDP authorizes the existing Marriott Hotel and existing hotel rooms on the site which would be materially changed by the subject proposal to demolish 159 of the hotel rooms and construct 159 residential units. The City staff note: “the 1983 CDP does not include any language or condition requiring a future project to amend the 1983 CDP or to submit to California Coastal Commission jurisdiction. The suggestion that the California Coastal Commission has some type of 1 The Commission also approved Coastal Development Permit 5-89-1006 and possibly earlier permits, as the hotel site appears to have been developed in the mid 1970s. Commission staff have ordered those records from archives to determine whether they authorized development that would be affected by the proposed development. Coastal Development Permit Application CD2021-077 (Ritz Carlton Residences) & Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels) Page 2 of 4 permitting jurisdiction over this Project is not supported by the existing CDP, statutes, case law and deviates from your prior practice.” This interpretation is wrong because the proposed project would change the development on the site that was authorized by a Coastal Commission issued permit and would change what could be built in certain areas and what sort of use could made of those areas. While the City has jurisdiction to approve new development within its LCP jurisdiction, it does not have jurisdiction to authorize development that would effectively amend a Commission-issued CDP. The applicant's representative erroneously claimed at the Planning Commission’s May 12, 2022 hearing that any other CDPs affecting the property had passed oversight of compliance with the CDPs and interpretation of them, from the Commission to the City upon full certification of its LCP. That is not accurate and is not supported by the case cited in the City staff’s letter of the same date. The Sweetwater/Edge case is not only unpublished, but also does not address an argument that the project at issue was appropriately characterized as an amendment to a prior Commission CDP. The issue in that case was whether the Commission retained jurisdiction over a permit application when the application was submitted prior to LCP certification, but then the LCP was certified, and the proposed project was modified. Because the Commission had not yet acted on that application, it had not yet established a regulator-permittee relationship with respect to the subject development. Once such a relationship is developed, LCP certification does not undo that relationship. Hence the Coastal Act provision allowing the Commission to continue to enforce its own permits regardless of LCP status (see Pub. Res. Code § 30810(a)(2)) and the longstanding Commission practice of retaining jurisdiction over amendments to Commission permits. Moreover, even if the City did have jurisdiction to authorize development which would be inconsistent with a previously-issued CDP, the proposed development is not consistent with the certified LCP, as previously implemented by both the Commission and the City. The LCP strongly restricts limited use overnight visitor accommodations (LUOVA), such as condominium-hotels, or ancillary residential uses such as the proposed project, within traditional overnight hotel visitor accommodations. LUP Table 2.1.1-1, Visitor Serving Commercial – CV provides “for accommodations (e.g. hotels, motels, hostels), goods, and services intended to primarily serve visitors to the City of Newport Beach. Limited Use Overnight Visitor Accommodations (e.g. time shares, fractionals, condominium-hotels) are an allowed use when provided together with traditional overnight, hotel visitor accommodations. Furthermore, any permitted LUOVA shall be subject to specific restrictions on the quantity, duration of owner use of such facilities, management of the accommodations as part of the hotel facility and an allowance for transient overnight use by the general public when not owner occupied. All of these requirements shall be further defined in the implementing regulations for this land use plan (when such regulations are certified) and through the coastal development permit process.” In 2017, when the Coastal Commission certified the zoning code (Chapter 21) as the implementation plan of the Local Coastal Program, the Commission modified the City’s proposed language relative to limited use overnight visitor accommodations. Section 21.48.025(D) provides: “Conversion to LUOVA Prohibited. The conversion of any hotel or motel unit or similar visitor accommodation for which a certificate of occupancy has been issued on or before July 14, 2009, to a limited use overnight visitor accommodations (LUOVA) shall be prohibited, except as provided in subsection (D)(1) of this subsection.”2 We note that if the Commission prohibited existing hotel rooms from being converted to 2 The only exception is for a specific hotel at 1107 Jamboree Road, for which there are specific provisions on the number of hotel rooms that may be converted and how they are to be managed for transient overnight use by the general public when not occupied by the owner Coastal Development Permit Application CD2021-077 (Ritz Carlton Residences) & Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels) Page 3 of 4 limited use overnight visitor accommodations without an LCP Amendment (which, at the time, the City had argued should be allowable as a use generally consistent with hotels), then certainly the conversion of hotel rooms to full time residential units is not consistent with the land use and requires an LCP Amendment. City staff cite LCP provision 21.12.020(E)(1)(a)-(e) which allegedly gives discretion to the Community Development Director (1) "interpret the LCP in a way that expands the permitted uses, provided certain findings are made," and to (2) "determine that an unlisted land use may be allowed." The City staff’s interpretation of their zoning laws, and even the City’s LCP, is due some deference, but the Coastal Commission interpretation of the LCP is due at least as much, and arguably more, deference. Charles A. Pratt Const. Co. Inc. v. CCC (2008), 162 Cal.App.4th 1068, 1078. The Commission has the “ultimate authority to ensure that coastal development conforms to the policies embodied in the state's Coastal Act.” Id. at 1075. Coastal Act Subsection 30514 states (in subdivision (a)) that LCP amendments are not effective until certified by the Coastal Commission, and (in subdivision (e)) defines LCP amendments by stating: (e) For purposes of this section, “amendment of a certified local coastal program” includes, but is not limited to, any action by a local government that authorizes the use of a parcel of land other than a use that is designated in the certified local coastal program as a permitted use of the parcel. In this case, it does not appear the Community Development Director made adequate findings to support either Determination No. DD2021-01 or approval of the coastal development permit application. The following are responses to the Director’s findings, all of which must be supported in order to satisfy the criteria of Section 21.12.020(E): Finding (A): In Section F(3) (p. 7), the Director states that the conversion to residential rooms would be a major change in hotel operations and would require a CDP. The City does not provide adequate findings that such a conversion would not involve a “greater level of activity, population density, intensity,” parking, or similar impacts. The City simply says such residential units would be regulated and would be converted on a one-to-one basis. Some evidence is provided regarding traffic and parking, and the city posits that “the reality is accessory residential dwelling units would likely have lower rates [of traffic] due to the additional on-site amenities provided.” This statement is not supported by any traffic study. All told, it is difficult to imagine a “major change in hotel operations” that does not result in some greater levels of impacts. Finding (B): The plain language of the zoning code and LCP, also cited in Part C of the Director’s Determination, provides that visitor-serving uses are “intended to provide for areas appropriate for accommodations, goods, and services intended to serve primarily visitors to the City.” (See IP Section 21.20.010(E) for purpose of CV designation.) The Director’s determination and the City staff letters state that a hotel with up to 30% of its rooms used as residential spaces would meet the purpose and intent of the commercial visitor-serving designation, but do not city any evidence to support that statement. The City merely states that mixed-use hotels are a common practice within the hotel industry. Finding (C): The DD states that accessory residential uses within a hotel would be consistent with the goals, objectives, and policies of the LUP, but provides no evidence to support the proposition. The Coastal Development Permit Application CD2021-077 (Ritz Carlton Residences) & Director’s Determination No. DD2021-01 (Accessory Residential Uses Within Resort Hotels) Page 4 of 4 reality is that 159 hotel rooms would be removed from the City’s supply of visitor-serving accommodations. This action does not seem consistent with the LUP, nor does the DD’s determination seem to meet the criteria of Section 21.12.020(E)(1)(c). Finding (D): The DD does not provide justification to interpret the LCP inconsistently in the subject district. The proposed development is the conversion of hotel rooms to residential rooms, and residential rooms would clearly be allowed in other zones. Hotels are also allowed in other zones, in addition to at the subject parcel. What may be proposed through an LCP Amendment request is creation of a new zoning designation for hotels with residential units, if the argument is that this specific land use is not permitted anywhere in the city. When the City submits an LCP Amendment request for the subject site (or for multiple sites in the coastal zone), Coastal Commission staff will also review the permit history for the site(s) in greater detail and identify other issues that need to be analyzed aside from proposed changes in land use (e.g. provision of public access and recreational opportunities, visual resources, water quality) and impacts that may need to be mitigated. Coastal Commission staff remain available to discuss the legally required LCP Amendment and permit amendment processes and other matters related to the provision of housing in the coastal zone, and we prefer this avenue to address this project instead of considering our options to take enforcement action to direct the applicant to refrain from undertaking the project, which, as described herein, is both inconsistent with the LCP and a Commission-issued coastal development permit. Commission staff are also available to consult with the City on their Housing Element obligations and how they may be accomplished while protecting coastal resources and visitor serving overnight accommodations in the coastal zone. The State Housing and Community Development agency is familiar with Coastal Act policies and has a good working relationship with the Coastal Commission staff. As noted in our previous letter, the Coastal Commission supports State and City goals of increasing housing in existing developed areas with the appropriate land use and zoning designations authorized by the Commission. Thank you for your collaboration. Karl Schwing, Deputy Director cc: Newport Beach Marriott Yolanda Summerhill, Assistant City Attorney, City of Newport Beach Seimone Jurjis, Community Development Director, City of Newport Beach Jim Campbell, Deputy Community Development Director, City of Newport Beach Alex Helperin, Assistant Chief Counsel, CCC Claire Wilkens, Attorney, CCC Andrew Willis, Enforcement Manager, CCC Zach Rehm, District Supervisor, CCC