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HomeMy WebLinkAboutCendant Car RentalCITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT Agenda Item No. 3 November 18, 2004 TO: PLANNING COMMISSION FROM: Sharon Wood, Assistant City Manager 644 -3222, swood @city.newport- beach.ca.us SUBJECT: Use Determination for Offices and Vehicle Rental Facility 2101 Dove Street APPLICANT NAME: Cendant Car Rental Group ISSUE: Is the suggested use of the property principally office, with the vehicle rental use qualifying as ancillary? RECOMMENDATION: Determine that the suggested office use would be the principal use, and the vehicle rental use would be ancillary. DISCUSSION: Backaround: The subject property is in the Administrative, Professional and Financial (APF) District. The Zoning Code states that this district "[p]rovides areas which are predominantly offices, but which also accommodate support retail and service uses." Business and professional offices are permitted uses in the APF District, and vehicle /equipment rentals are permitted as an ancillary use with a use permit. An ancillary use is defined as "[a) use that is clearly incidental to and customarily found in connection with the principal use; is subordinate in area, extent, or purpose to the principal use served; contributes to the comfort, convenience, or necessity of the operation, employees or customers of the principal use served." Cendant Car Rental Group is considering relocating their Avis facility from 848 Dove Street to 2101 Dove Street (See Attachment 1 for site locations). The existing facility is used for rental car washing, refueling and storage. The property at 2101 Dove Street is Use Determination for Office Use and Vehicle Rental Facility November 18, 2004 Page 2 larger, has an existing building, and could accommodate more operations. Therefore, Cendant is considering relocating office functions to this site, as well as the vehicle rental functions. Before proceeding with more detailed plans and filing a use permit application, Cendant has asked whether the City would consider their office use to be the principal use, which would make the car rental use eligible for a use permit as an ancillary use. The Planning Commission made a similar use determination in 1998, when Brabus North America was considering a site in the APF District for its North American headquarters as well as a showroom, retail sales area, storage and shop. Only the headquarters office use is permitted in the District; retail sales are permitted as an accessory use with a use permit; and vehicle sales and repair uses are permitted with a use permit as ancillary uses. The office use for Brabus accounted for only 20% of the floor area. However, the Planning Commission found office to be the principal use because 63% of revenues would come from wholesale sales to Mercedes Benz dealers, generated by the office use. The staff report and minutes for that Commission determination are attached. Analysis: Cendant operates both Avis and Budget car rental operations, and would locate offices for the following functions of both companies in the existing building at 2101 Dove Street: • Southern California Regional Sales Vice President and staff (some staff to be relocated from LAX) • Orange County District Manager and support staff • Orange County Fleet Distribution Manager and support staff • Southern California Wholesale Manager • Local operation managers In addition, they would install four maintenance bays inside the building, and 2 wash racks and a 12- position fuel facility outside. Finally, cars would be stored at this location. The office uses, which are permitted, would occupy about 30% of the building floor area, and a lesser portion of the site area. From this point of view, staff would not consider office to be the principal use of the property. However, Cendant's actual and forecast sales figures for 2004 show that nearly $52 million would be generated by the regional sales staff, who manage corporate accounts. Approximately $46.5 million would be generated by wholesale staff who manage the sale of used vehicles. By contrast, the John Wayne Airport sales other than corporate Use Determination for Office Use and Vehicle Rental Facility November 18, 2004 Page 3 accounts generate approximately $32 million per year, and the retail business that would occur at the Dove Street facility would generate about $1 million per year. These sales figures lead staff to conclude that approximately two- thirds of Cendant's revenue from a new facility at 2101 Dove Street would be due to the offices on site, and only one -third of revenues would be attributable to the vehicle rental facilities. Cendant indicates that it is customary in the car rental business to have one location serve several uses; in fact, Cendant does not lease office space alone without the possibility of conducting other functions such as light vehicle maintenance and storage on the same site. The Code's definition of an ancillary use does not limit consideration to physical aspects such as the amount of building or site area occupied by the ancillary use. In this case, the majority of revenue generated by the business would come from the office use, although the majority of physical space would be occupied by the vehicle rental use. Staff believes that the use of the property as Cendant has described it could qualify as principally office, and the vehicle rental aspect could qualify as ancillary and. therefore be eligible for consideration of a use permit. Environmental Review: A use determination is not a project as defined by CEQA, so no environmental review is required. Should the Planning Commission determine that the vehicle rental use as described would be ancillary to the principal office use, Cendant would need to apply for a use permit, which would require environmental review. Submitted by: pa-�-(Aia � Sharon Wood Assistant City Manager Attachments: 1. Site Map 2. Planning Commission Staff Report, November 5, 1998 3. Planning Commission Minutes, November 5, 1998 A ?Ew?agr CITY OF NEWPORT BEACH Hearing Date: November 5, 1998 COMMUNITY AND ECONOMIC Agenda Item No.: 6 I DEVELOPMENT C4S /iORH� PLANNING DEPARTMENT Staff Person: Sharon Wood 3300 NEWPORT BOULEVARD 644 -3222 NEWPORT BEACH, CA 92658 (949) 644 -3200; FAX (949) 644 -3250 REPORT TO THE PLANNING COMMISSION SUBJECT: Interpretation of Zoning Code Regarding Appropriateness of Use Permit. for Custom Car Service in the APF District SUGGESTED ACTION: Determine whether the use qualifies as accessory and ancillary to the principal use, and is an appropriate use to be considered for a use permit. Background Staff has received the attached inquiry regarding a potential use on property located on Campus Drive in the APF District. It is unclear to staff whether this is an appropriate use to be considered for a use permit, and the applicant is requesting a determination from the Planning Commission before filing a use permit application. If the Commission determines that a use permit is appropriate for this type of business in the APF District, an application would have to be filed and the merits of the particular case considered by the Commission before a use permit could be approved. The proposed user is Brabus North America, which distributes and sells upgraded wheels and other specialty products for Mercedes Benz automobiles, and also modifies autos With custom upholstery, equipment and engines. The site at 4040 Campus Drive is intended to serve as the company's North American headquarters as well as to accommodate a showroom, retail sales area, storage, and shop for approximately six automobiles. The shop area is intended for both interior and engine modifications. Business and professional offices are permitted uses in the APF District, warehousing and storage are permitted with a use permit, vehicle /equipment sales and repair are permitted as ancillary uses with a use permit, and retail sales are permitted as an accessory use. Ancillary and accessory uses are defined as follows in the Zoning Code. Accessory use: A use that is appropriate, subordinate, and customarily incidental to the main use of the site and which is located on the same site as the main use. Ancillary use: A use that is clearly incidental to and customarily found in connection with the principal use; is subordinate to and serves the principal use; is subordinate in area, extent, or purpose to the principal use served; contributes to the comfort, convenience, or necessity of the 5 operation, employees, or customers of the principal use served. An ancillary use may be located on a property separate from the principal use. Analysis Based on a conceptual floor plan for the business, 25% of the building will be used for retail sales, 20% for office, 15% for storage, and 40% for the shop. The permitted office use accounts for a small portion of the floor area, while the uses that may be allowed as accessory or ancillary would occupy the majority of the building. Because of this distribution of building area, staff was concerned about classifying the uses other than office as accessory or ancillary. Brabus also has provided the attached annual revenue estimates by category of business. The estimates show that the majority of revenues ($12 million, or 63 %) come from wholesale sales to Mercedes Benz dealers, while only 37% of revenues ($7 million) come from retail sales. On this basis, staff believes there may be justification to find that the office use related to the wholesale activity and the North American headquarters is the principal use, and the other uses are accessory or ancillary to the office use. Staff also believes the retail sales and shop uses meet the Code definitions of accessory or ancillary uses. It is customary for a wholesale business and a company headquarters to conduct some retail sales as a subordinate activity, and retail sales could be determined to be an accessory use for this business. A typical transaction involves the delivery of a new vehicle from a Mercedes Benz dealer to Brabus for equipment installation and/or engine modification after the customer has worked with the Brabus office staff to make selections. Therefore, the shop activities would be incidental and subordinate to the office use and would contribute to the convenience of Brabus' customers, and could be determined to be ancillary uses. Submitted by: SHARON Z. WOOD Assistant City Manager /s/ Sharon Z. wood Attachments Page 2 City of Newport Beach Planning Commission Minutes November 5, 1998 INDEX Publ comment was opened and then closed. Motion wa ade by Commissioner Gifford to adopt Resolution Number 1480, recommendin the City Council approval of Amendment 881. Ayes: Fuller, As Selich, Gifford, Adam, Noes: None ° Absent: Ridgeway, Kranzl Abstain : None Yi SUBJECT: Revised Sheet Name f ' Bonita Canyon Planned Item No. 5 Community Area (Final Tract 15478). FT No. 15478 Public Comment was opened and closed. n Motion was made by Commissioner Gifford to adopt Resolution Nur`i'ibpr 1481, changing street name "Seabridge" to Seabluff " in the Bonita Canyon Planned Community Area (Final Tract No. 15478). Ayes: Fuller, Ashley, Selich, Gifford, Adams Noes: None Absent Ridgeway, Kranzley Abstain: None YYY �..�_. .1.»,...n. nv... ....v�r2 •�mzwvf. W^YM.Ma:. boa' AMItL: +4%WErA'aM:. ^nM411'.WXn6!YsM' 8\ 'W.::"'V . '"- ;E+_,'T. SUBJECT Interpretation of Zoning Code Regarding Appropriateness of Use Permit for Custom Car Service in the APF District Determine whether the use qualifies as accessory and ancillary to the principal use, and is an appropriate use to be considered for a use permit. Public comment was opened. Greg Watkins, representing the owner of Brabus Automotive presented catalogues to Commission. He stated that Brabus is an automotive company that specializes in customizing Mercedes Benz automobiles. This project wilf be the North America headquarters resulting in approximately 20 million dollars worth of business during their first year. The location of the show room on Campus Drive is across the airport and would be used by their customers for transportation. The shop area is intended for both interior and engine modifications. Item No. 6 Discussion only 1 City of Newport Beach Planning Commission Minutes November 5, 1998 Assistant City Manager Sharon Wood, at Commission Inquiry, noted Tnat this is not a public hearing as there Is not a use permit application. Staff is asking for a determination whether this kind of use qualifies as something that could apply for a use permit. Public comment was closed. Commissioner Adams noted that he as comfortable with this use. Chairperson Selich added he is also comfortable with this type of use and that he knows about this company and its worldwide reputation. Motion was made by Commissioner Gifford that the Commission determine that the use qualifies as accessory and ancillary to the principal use, and is an appropriate use to be considered for a use permit. Ayes: Fuller, Ashley, Sellch, Gifford, Adams Noes: None Absent: Ridgeway, Kranzley Abstain: None .. • t k ter. ' a.) %Oir Council Follow -up - Oral report by the Assistant City Manager regng City Council actions related to planning - Mrs. Wood reported hat General Plan 98-3 was initiated. b.) Oral report fro fanning Commission's representative to the Economic Development C )M�nittee - Chairperson Selich reported that the subcommittees are cs 11; rkfng on the issues in their area of interest. c.) Matters which a Planning 6W. issioner would like staff to report on at a subsequent meeting - Chairperson Selich introduced a petition signed by Corona del Mar residents regarding the issue of new construction that is three stories hibly„_ He presented Commission members with copies of photos and thbkpetition. Following a brief discussion, Commission requested staff to Ming this matter back on agenda for discussion.:: d.) Matters which a Planning Commissioner may wish to Pb e on a future agenda for action and staff report - Commissioner Fuller ed about the December 10th meeting and noted the night for the istmas gathering as the 17th to be held at Commissioner Selich's home. e.) Requests for excused absences - none. INDEX Additional Business P