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HomeMy WebLinkAbout05-24-2023_HO_Minutes Page 1 of 8 NEWPORT BEACH HEARING OFFICER MINUTES 100 CIVIC CENTER DRIVE, NEWPORT BEACH CORONA DEL MAR CONFERENCE ROOM (BAY E-1st FLOOR) WEDNESDAY, MAY 24, 2023 REGULAR MEETING – 9:00 A.M. I. CALL TO ORDER – The meeting was called to order at 9:06 a.m. Present Steven Graham, Hearing Officer Staff Present: Tonee Thai, Chief Building Official II. PUBLIC HEARING ITEMS ITEM NO. 1 Three-Year Construction Limit Extension (X2018-0411, XR2023-0602) Site Location: 3235 Ocean Blvd Project Summary Request for an extension of a three-year construction limit for Building Permit No. X2018-0411, XR2023-0602, and related permits outlined in Newport Beach Municipal Code (NBMC) Section 15.02.095 (Administrative Code - Addition of Sections 105.3.3, 105.3.4, and 105.3.5). The scope of work for the permit is for a new single-family dwelling with an attached garage, mechanical room, and detached garage. Recommended Action 1) Conduct a public hearing; 2) Find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, because this project has no potential to have a significant effect on the environment; 3) The hearing officer may grant, or conditionally grant, up to a 180-calendar day extension, per application for extension, if the officer finds special circumstances warrant an extension of time or the failure to meet the time limit was caused by circumstances beyond the property owner, applicant, or the contractor’s control. If the officer makes the findings to grant an extension, then the officer shall consider whether conditions are necessary to ensure the timely completion of the project in a manner that limits impacts to the surrounding property owners. The hearing officer shall deny the application if they cannot make the findings set forth in Newport Beach Municipal Code Section 15.02.095 (Addition of Sections 105.3.3, 105.3.4, and 105.3.5). The following people announced their attendance: Tonee Thai, Chief Building Official for the City of Newport Beach Karem Abdelaal, Project Manager Chris Letourneau, Letourneau Architecture MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 2 of 8 Scott Wallace, Structural Engineer Chief Building Official Thai stated that the project started with a permit on February 12, 2018. Subsequent permits were issued due to a change of the contractor and permit expirations. The first inspection of the project took place on March 3, 2018, and the last inspection was conducted on April 11, 2023. Chief Building Official Thai stated that a one-year extension, which expires on June 1, 2023, was granted based on the project size and owner hardship related to contractor issues/replacement contractors and pending litigation. Hearing Officer Graham took into the administrative record the Administrative Staff Report submitted by the City. Chief Building Official Thai clarified that staff has no recommendation regarding whether Hearing Officer Graham should approve the requested extension. Hearing Officer Graham announced that public notice was issued consistent with the requirements of the NBMC and noted in his possession the application from the applicant, a hearing receipt, and additional documentation. The property owner is Sadek El Sewedy. Mr. Abdelaal testified that he started working on the project in May 2020. He stated the prior contractor committed fraud. Inspections revealed safety issues that caused delays beginning in 2022. Mr. Abdelaal stated that as a result of the previous contractor’s fraud, Mr. El Sewedy hired a new team of professionals to assist and audit the entire project. Mr. Letourneau stated that the applicant contacted him about six to nine months ago to look at the project with fresh eyes. He stated he was hired to identify issues with the project and provide a course forward. Mr. Letourneau testified that he was made aware of a partner embezzling money from many of the applicant’s Newport Beach properties. Mr. Letourneau testified, finding substantial structural issues with the retaining walls, and indicated that the structural issues are life and safety issues. He further testified that there is now a new building design and that additional time is needed because the retaining walls need to be retrofitted. Mr. Wallace testified that the applicant contracted him to perform a structural audit, look at the project plans, and discuss the possibility of retrofitting the retaining walls. Mr. Wallace testified that various items were not to Code and that those items must be brought up to Code. Mr. Wallance identified that the 22-foot retaining wall as the most critical item. He commented that the project is vastly under- designed, and the problem is rooted in the design. He summarized the design deficiencies and the consequential life safety factors and indicated that a preliminary retaining wall system design has been prepared but has not been submitted to the City. Chief Building Official Thai confirmed that the original retaining wall plan was submitted to the City in 2018. He further added that in-house staff conducts structural engineer reviews and utilizes consultants when the workload is not manageable. Chief Building Official Thai testified that plan approval is based on NBMC minimum standards. Mr. Letourneau testified the plan check process went through six rounds and was sent out to a consultant. He stated that the project should have never been approved as per the plan check engineer and asked for feedback from City staff regarding the current retaining wall to compare to Mr. Wallace’s design. Mr. Letourneau stated the retaining wall is the biggest issue that needs to be resolved. He stated the project is about fifty percent complete, and the retrofitted retaining wall triggers a renovation of the existing building using his proposed design. In response to Hearing Officer Graham’s concern about substantial project design changes, Mr. Letourneau testified that the project is designed and ready to go. He stated he is working with Chief MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 3 of 8 Building Official Thai for an expedited approval process and will need substantially more time for the project. Hearing Officer Graham questioned the adverse effects of denying the extension and expressed concern about granting an extension that an applicant does not have a reasonable chance to meet. Mr. Letourneau testified that the project could be close to being done in two years and acknowledged the owner, neighbors, and contractor positions. Mr. Letourneau testified that if the permit expires, the process to obtain new permits and the involvement of the California Coastal Commission will take longer than the requested two years needed to complete the project. Mr. Letourneau stated that the quickest way to complete this project is to grant the extension. Hearing Officer Graham acknowledged the interests of the neighboring property owners. He also expressed concern for the project time gaps. Mr. Abdelaal explained that the project was moving along smoothly until September 2021, when it became known that a contractor had committed fraud, at which point all the work on the project stopped, and COVID-19 hit. Mr. Letourneau explained the embezzlement activities related to the fraud. Mr. Abdelaal indicated that the Newport Beach properties owned by Mr. El Sewedy are investments. Mr. Abdelaal explained that Mr. El Sewedy has a large business and real estate dealings in Egypt and described Mr. El Sewedy as a savvy businessperson. He further stated that Mr. El Sewedy is interested in finishing the project. Hearing Officer Graham noted that many hearing cases have similar background issues. Hearing Officer Graham stated he expects Newport Beach owners to take responsibility for their properties and projects, and even though sometimes hired professionals do not perform as expected, he still expects a level of owner diligence. Mr. Abdelaal clarified that he started managing the project in 2022 after the fraud incident. He testified that work at the project site continued until June 2021. Mr. Abdelaal testified that Mr. El Sewedy could not come to the United States to view the project due to the COVID-19 pandemic. Mr. Abdelaal testified that about fifteen to sixteen million dollars had been spent on the project so far. Mr. Abdelaal anticipated and estimated budget to complete the project is approximately ten million dollars. Lastly, Mr. Abdelaal expressed an interest in the shortest and best way to finish the project as soon as possible. Building Official Thai noted that the ordinance prevents staff from issuing a new permit to reset the three-year construction time limit, and permit extension denial by the Hearing Officer would lead to City enforcement. Hearing Officer Graham explained that if the permit extension is denied, the project site will shut down, and work will cease, Mr. El Sewedy could sew the City, and the City will use enforcement to remove the construction or enter into a settlement agreement through the City Attorney’s office to allow construction to continue with an expired permit as a potential off-ramp to litigation. Public comments: David Wagner of 3225 Ocean Blvd. testified that project workers trespassed on his property in May 2020. He further testified that in June 2020, he witnessed construction workers start a fire that caused hundreds and thousands of dollars in damage to his property. He testified that little to no progress has been made at the project site. Additionally, he claims there was a drainage issue that caused a MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 4 of 8 mudslide. He stated that the applicant has had eight years to complete the project, but almost nothing is being done. Bruce Larson of 3024 Breakers Drive expressed concern about the construction timing, shared his career construction experience, noted unknown underground obstacles, and thought the project should be removed. DeWitte MacDonald of 211 Marguerite Avenue is a general contractor by trade who testified that the project site is in deplorable condition. He stated he had seen a ton of trash and debris at the project site. Charles Allen, a Corona del Mar resident and a retired construction contractor, reviewed the project timeline, opposed the extension, and expressed doubt that the work could be completed in the projected time frame. Mark Luer, representing his mother’s property at 3301 Ocean Blvd., recounted project activity, including contractor activity that came onto his mother’s property and suggested that Hearing Officer Graham impose conditions on the extension in light of the applicant’s disregard for the neighbors. Mr. Wagner stated he researched the new general contractor. He testified that the new contractor is listed as a television sales and service contractor named New Vision Construction. He expressed his shock by this choice in light of the applicant’s bad experience with his previous contractor of choice. Mr. Abdelaal acknowledged the public comments and said they were “on point.” He indicated that for these reasons, a new team was hired. Mr. Abdelaal thought Mr. El Sewedy would fight back if the extension was denied and relayed that he is trying to push to the finish line as soon as possible. He also stated he has been at the project site every day since May. Building Official Thai reiterated that the ordinance prohibits issuing a new permit to reset the three- year construction time extension, and the Hearing Officer is authorized to grant up to 180 days two times before the matter goes to the City Council as per NBMC Section 15.02.095. Hearing Officer Graham noted that he is required to make a finding that special circumstances warrant an extension of time or explain the failure to meet the time limit beyond the control of the property owner, applicant, or contractor. Action: The matter was taken under submission by Hearing Officer Graham, no decision was rendered, and a written hearing order will be issued in 10 calendar days from the hearing, which will be a public hearing document and issued to the owner and staff and available in City Clerk’s office. Hearing Officer Graham indicated that he may include conditions in a 180-day grant extension to ensure the project is completed in a timely manner, limits impact on surrounding property, and considers the comments shared by members of the public. III. HEARING CLOSED The hearing was closed at 10:25 a.m. MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 5 of 8 ITEM NO. 2 Three-Year Construction Limit Extension (X2018-2867, XR2023-0414) at 10:33 a.m. Site Location: 121 45th Street Hearing Officer Graham introduced the matter of an expired three-year construction limit extension as per NBMC 15.02.095. Building Official Thai noted the project scope of work to add 246 square feet, remodel 1,961 square feet, and add an 89 square feet deck to an existing single-family home. He detailed the permit and inspection history and indicated that City staff does not have a recommendation. Tyler Parks, property owner/builder, asked for a reasonable extension to bring the project to completion, noted the project started five years ago as an investment acquisition, he is a 53-year resident of Newport Beach, and is not a home flipper nor ever applied for short term lodging permits (STL). Mr. Parks shared the challenges that led to exceeding the permit period starting with a June 2019 ordinance that prohibited Saturday work, labor and income loss during COVID, personal financing, water line and meter replacements, utility undergrounding, and hyperinflation of construction materials and financing. He thought the project is taking too long, noted the impacts of being a small contractor and a cease to work when the permits expired, a commitment to maintaining the construction fencing, on-site restrooms, weeding, and trash collection, noted a plan for completion with 90 percent of the structural framing done, assistance needed from the City to drive the project in, working on rebidding projects (i.e., stucco), pride in his work and being a good neighbor, and humility and embarrassment by the project view. In closing, he asked for an opportunity to get the project to completion which he believed he is in position to do. Hearing Officer Graham read into the record a public comment by Yolanda King who challenged the extension and requested an immediate project completion in fairness to the neighbors. Mr. Parks thought the comments were fair. Hearing Officer Graham noted a record of 95%completion on rough framing dating back to April 11, 2022 on the original application, the last inspection on May 24, 2022, and concern for the same project status today. In response to Hearing Officer Graham’s concern, Mr. Parks reviewed the permit expiration in 2022, the new permit in February 2022, and project financing for the improvement balance. Hearing Officer Graham reviewed the permit history and questioned if no work was done because the City did not grant an extension until 2023. While Mr. Park concurred, he did not want to imply that the City held him up from renewing the permit. Building Official Thai clarified that the original permit expired due to inactivity which led to the permit renewal, last inspection was in May 2022, the three-year extension was based on financial hardships findings, and the extension history is in Attachment 3. Mr. Parks noted a “sharp runway” to the extension date. Building Official Thai noted the application process and timeline and that applicants can continue to work with active permits and cease during an application review of an expired permit. MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 6 of 8 Mr. Parks noted that he did not work on the project during the application review process to follow the rules and address finances, he rebid the remaining project scope to identify his financial obligations, pricing has come down, he hired Paris Construction for project management, and he will be on the job site daily. He stated that he manages other properties, reviewed his background in industrial development, he has changed his approach with residential construction, and implications from COVID impacted his personal finances and opportunities to walk away from the company or go back to a big company. Hearing Officer Graham relayed the findings needed to grant an extension include finding special circumstances that are beyond the owner’s control and conditions of approval that will ensure project completion timeliness and a limited impact to surrounding property owners. He noted the exterior visual impact and historical street views from google maps and asked Mr. Parks what conditions can be imposed that will get the project done in a timely manner, eye sore reduced, and exterior complete and requested a time frame from the owner so an inspection can take place of the exterior. Mr. Parks suggested setting a benchmark for the stucco component, reviewed a critical path and contractor bids for work to begin work in three weeks, and mentioned structural issues to address. Hearing Officer Graham questioned if the structural issues are needed or wanted. Steve Lane relayed that the sheer needs to be approved before moving forward with the exterior wrap and explained the process leading up to the stucco application. Mr. Parks noted that the sheer has been applied and partially inspected. With a head nod by all parties, it was agreed that step one is to complete the sheer walls. When Mr. Parks asked the City to review the nail space, Building Official Thai stated that City inspectors do not render opinions for fixes and review the projects for a pass or fail status, noted remedies that go through the project structural engineer, and suggested the inspection be called for after the fixes are complete. Hearing Officer Graham outlined step one for the structural engineer to complete a project walk to identify areas needing to be fixed and step two to complete the sheer and inspection. He proposed monthly check-ins by email and granted four weeks from the day the order is sent to Mr. Parks by the City to get the sheer completed and inspected. He stated that the permit will expire if an email is not received by Hearing Officer Graham and copied to the Chief Building Official stating the inspection was completed and approved by the deadline. Mr. Parks understood and agreed to the terms. Next, the hearing officer stated that the vapor barrier is to be installed, completed, inspected, and approved within two weeks of the sheer, substantial completion of the exterior stucco, relocation of the restroom to the garage interior so it is not visible from the right-of-way, and installation of all exterior windows and doors and removal of plywood and a rough mechanical inspection and approval is required four weeks after the vapor barrier installation followed by an inspection by the City building department. He stated that check-ins will stop after the inspection by the City, everything needs to be completed by the 180 day deadline, and additional extensions will require a hearing officer meeting and an explanation of what special circumstances prevented the work and was out of the owner’s control. Mr. Parks explained his concerns for safety and space by removing construction fencing while working on the patio and noted other projects on the street. MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 7 of 8 Principal Building Inspector Lane relayed a conflict with what is noted in the City records for rough plumbing, electrical, and mechanical approvals, fire, floor framing, roof involvement, and structural revisions as compared to what Mr. Parks believes to be true. Hearing Officer Graham suggested Mr. Parks meet with the building department to review the approval status in the City’s records. In response to Mr. Parks’ inquiry, Building Official Thai indicated that the City inspector can visit the project site to note outstanding items, but will not remark on fixes. Action: With nothing further from the parties present, the Hearing Officer will issue a written hearing order in 10 days that will conditionally grant the extension subject to the conditions agreed to in the hearing officer meeting, and possible additional standard conditions. The timeliness will be subject to the order issuance date, work can resume once the permit is live, and the building official will be given latitude to extend the set deadlines with no allowance for changes to the overall six-month deadline. ITEM NO. 3 Three-Year Construction Limit Extension (X2018-2870) at 12:56 p.m. Site Location: 1220 West Bay Avenue Hearing Officer Graham indicated that the building permit expired June 30, 2022, an extension was granted by the Building Official as per NBMC 15.02.095, a second request for an extension is presented and findings are required for special circumstances or circumstances beyond the applicant’s control, and conditions of approval must ensure the completion of the project and reduce the impact on the surrounding neighborhood. He reviewed the process and ground rules for the hearing. Principal Building Inspector Lane outlined the scope of work for the permit to construct a new 12,749- square-foot single-family dwelling with a basement and attached 760-square-foot garage and 340- square-foot storage area. He reviewed the building permit history and noted no special circumstances for the delay, consistent progress, and a very complex and substantial build. Keith Mulvaney, representing Gallo Builders and Elias Sabo, indicated that the complexity of the project is more than a three-year build, the project status and changes by the City that added six to seven months of work and inspections, and the project uniqueness. Public comment was received from Julie Coleman who opposed an extension and noted the impact on quality of life for residents. Mr. Mulvaney estimated 30-50 workers on site daily from 7 a.m. to 3:30 p.m. with 25-30 vehicles, noted consideration for resident parking during street sweeping and a good relationship, and stated the project includes parking for three and half cars. Hearing Officer Graham reviewed google map views of the project site and asked the applicant for mitigation suggestions to the parking issues on the block. Mr. Mulvaney stated that contractors have unloaded their tools and parked further away from the site and there is no easy off-site parking solution he can think of. They brainstormed mitigation ideas and the project progression. Hearing Officer Graham relayed that he would think about it and encouraged the applicant to do his best to mitigate the parking issue. Mr. Mulvaney noted a good relationship with parking enforcement. MINUTES OF THE MEETING OF THE NEWPORT BEACH HEARING OFFICER 05/24/2023 Page 8 of 8 Principal Building Inspector Lane noted that parking is a common problem and the number one project complaint, no known complaints for this project, and a three-dimensional walkthrough. Mr. Mulvaney indicated that the project is in the final stages and estimated a completion date of three months or sooner, most of the on-site vehicles are personal vehicles with a handful of construction vehicles one time per week, and other projects on the street. He shared a three-dimensional project walkthrough. Action: Hearing Officer Graham imposed the condition that the owner and those working on behalf of the owner/builder follow the Newport Beach parking ordinances during the extension term and found special circumstances based on the project complexity and house detail. With nothing further from the parties present, he stated that a written hearing order will be issued within 10 days of the hearing that will track the hearing conservation, grant the six-month extension, and may include some standard conditions. He noted that another extension will require an assessment of circumstances. III. PUBLIC COMMENTS ON NON-AGENDA ITEMS None IV. ADJOURNMENT The hearing was adjourned at 1:25 p.m. The agenda for the Hearing Officer was posted on May 18, 2023, at 5:15 p.m. on the digital display board located inside the vestibule of the Council Chambers at 100 Civic Center Drive and on the City’s website on May 18, 2023, at 5:20 p.m. Steven P. Graham, Hearing Officer