HomeMy WebLinkAbout3.0_Appeal of Interpretation Allowing Accessory Residential within Resort Hotels_PA2021-096
CITY OF NEWPORT BEACH
PLANNING COMMISSION STAFF REPORT
July 8, 2021
Agenda Item No. 3
SUBJECT: Appeal of Interpretation Allowing Accessory Residential within Resort
Hotels (PA2021-096)
▪ Director’s Determination No. DD2021-001
SITE LOCATION: Various Resort Hotel Properties
APPLICANT: City of Newport Beach
PLANNER: Jaime Murillo, Principal Planner
949-644-3209, jmurillo@newportbeachca.gov
SUMMARY
On April 30, 2021, the Community Development Director issued Director’s Determination
No. DD2021-001 interpreting that residential uses are allowable as an accessory use to
resort hotels under certain parameters. In issuing the Director’s Determination, the
Community Development Director was acting in accordance with the direction given by
the City Council in City Council Policy K-4 (Reducing the Barriers to the Creation of
Housing). On May 14, 2021, an appeal of the determination was filed by Stop Polluting
Our Newport (“SPON”).
Based upon the facts and evidence set forth in this staff report and the attached
resolution, staff recommends that the Planning Commission deny SPON’s appeal and
uphold Director’s Determination No. DD2021-001, and the associated findings.
RECOMMENDATION
a) Conduct a de novo public hearing;
b) Find this Director’s Determination is exempt from the California Environmental Quality
Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or
reasonably foreseeable indirect physical change in the environment) and 15060(c)(3)
(the activity is not a project as defined in Section 15378) of the CEQA Guidelines,
California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly. This
Director’s Determination is also exempt pursuant to CEQA Guidelines Section
15061(b)(3), the general rule common sense exemption that CEQA applies only when
there is the potential for causing a significant effect on the environment; and
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c) Adopt Resolution No. PC2021-016 denying an appeal and upholding the Community
Development Director’s Determination No. DD2021-001, and associated findings
(Attachment No. PC 1).
BACKGROUND
Council Policy K-4 (Reducing the Barriers to the Creation of Housing)
At the March 9, 2021 City Council meeting, the City Council adopted Resolution No. 2021-
18 (Attachment No. PC 2) adding City Council Policy K-4 (Reducing the Barriers to the
Creation of Housing). Council Policy K-4 recognizes that the City has several major
constraints on existing lands that severely limit or totally restrict the City’s ability to
accommodate growth to the extent identified in the 6th Cycle Regional Housing Needs
Allocation (“RHNA”). As a result, new and flexible land use and zoning regulations and
strategies should be developed in order to reasonably and practically accommodate this
ambitious State housing mandate while protecting the character and maintaining a quality
of life that makes Newport Beach a special place to live, work, and visit.
Council Policy K-4 directs City staff to develop, modify as necessary, and aggressively
implement various strategies designed to accelerate housing production consistent with
the policy, including encouraging and incentivizing the development of mixed-use hotels.
The goals of Council Policy K-4 include 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. Such interpretation would allow for residential units to 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.
Need for Interpretation
Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan)
of the Newport Beach Municipal Code (“NBMC”) define “hotel” as 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 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.
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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.
Director’s Determination No. DD2021-001 (Interpreting Accessory Residential as an
Allowed Use within Resort Hotels)
On April 30, 2021, the Community Development Director issued Director’s Determination
No. DD2021-001 (Attachment No. PC 3) consistent with direction provided in Council
Policy K-4. In summary, the determination would allow residential as an accessory use to
resort hotels subject to the following:
• Applicable only to resort hotels, a self-contained destination that provides for all
travel accommodation needs in one location, including but not limited to restaurants,
bars, shopping, and recreational facilities.
• Must be located outside the appeal area identified in California Public Resources
Code Section 30603(a) as generally depicted on the Post-LCP Certification Permit
and Appeal Jurisdiction Map.
• Approved hotel rooms may be converted to residential units but only on a one-for-
one basis.
• The residential use shall at all times be accessory to the hotel use, and the residential
units shall comprise no more than 30 percent of the approved hotel rooms.
• The residential units may be located within a repurposed hotel or in a new residential
structure.
• A property owner that desires to have an accessory residential use at their hotel shall
process a conditional use permit and coastal development permit (if applicable). In
reviewing said permits, the review authority shall ensure adequate parking is
provided to accommodate the residential units through surplus parking, shared
parking, or the adoption of a parking management plan.
• 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.
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May 6, 2021 Planning Commission Review
At the May 6, 2021 Planning Commission meeting, staff presented an overview of
Director’s Determination No. DD2021-001 for receipt and file. The staff report for the item
included a detailed overview of the determination, including background, authority for the
determination, and applicability. The staff report is included as Attachment No. PC 4 for
reference.
DISCUSSION
Appeal
On May 14, 2021, SPON filed an appeal (Attachment No. PC 5) of the Director’s
Determination alleging that the determination improperly converts General Plan-approved
hotel allocations into General Plan-approved dwelling unit allocations without Greenlight
(Charter Section 423) tracking, in alleged contravention of Council Policy A-18 (Protection
from Traffic and Density). The appeal also states that the determination adds the potential
for some 250 new dwelling units to the General Plan Statistical Area L1, which would
require voter approval if processed as a General Plan Amendment. Lastly, the appeal
indicates that staff should not be able to do what the City Council could not do without
voter approval.
Staff Response to Appeal
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.
Authority for Interpretation Vested in the City Council
The City Council has the inherent authority to adopt policies and regulations subject to
applicable laws, the State Constitution, and the City Charter. This authority includes
interpreting the General Plan and any policy or regulations promulgated to implement it.
The City Council adopted City Council Policy K-4 that specifically allows for the
conversion of up to 30 percent of their approved hotel rooms into residential units on a
one-for-one basis. Council Policy K-4 deems the limited conversion to be an accessory
use to the principal use of a hotel and finds the accessory residential use at hotels
consistent with the General Plan, Zoning Code, and Local Coastal Plan Program land use
and zoning designations. The Director’s Determination was issued by the Community
Development Director in furtherance of this policy and it includes additional detail for the
implementation that is consistent with Council Policy K-4.
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Director’s Determination No. DD2021-001 is consistent with prior determinations, which
allowed for unlisted uses within the City’s zoning districts. For example, in 2017, the
Community Development Director issued Director’s Determination No. DD2017-002
(PA2017-207), which allowed Fire Station No. 2 within the Visitor Serving Commercial (CV)
Zoning District. This 2017 determination is similar to the determination under appeal
because: 1) the determination concerned property located in the Coastal Zone; 2) the
determination occurred post-LCP certification; and 3) the determination added a use that
was not previously listed as an allowable use. In other words, the City Council is within their
authority to interpret Charter Section 423, which requires voter approval of General Plan
Amendments defined as “major” amendments. Council Policy K-4 and Director’s
Interpretation No. DD2021-001 are not General Plan Amendments, and therefore,
Charter Section 423 is not applicable.
City Council Policy A-18 (Attachment No. PC 6) was adopted to implement Charter
Section 423. It only provides guidance for the processing of General Plan Amendment
applications to determine when a vote of the electorate is required pursuant to Charter
Section 423. The matter at hand is not a General Plan Amendment application; therefore,
Charter Section 423 and City Council Policy A-18 are not applicable.
Authority for Interpretation and Compliance with General Plan and Local Coastal Program
Title 20 (Planning and Zoning) of the NBMC is intended to carry out the policies of the City
of Newport Beach General Plan. Section 20.10.030 (Authority—Relationship to General
Plan) of the NBMC states that the Zoning Code is the primary tool used by the City to carry
out the goals, objectives, and policies of the General Plan. It is intended that all provisions
of the Zoning Code be consistent with the General Plan and that any development, land
use, or subdivision approved in compliance with these regulations will also be consistent
with the General Plan. Section 20.12.020 (Rules of Interpretation) of the NBMC clearly
authorizes the Community Development Director to interpret the meaning of provisions of
the Zoning Code.
Similarly, Title 21 (Local Coastal Program Implementation Plan) of the NBMC is intended to
carry out the policies of the City of Newport Beach Coastal Land Use Plan and Coastal Act
of 1976. Section 21.10.030 (Authority—Relationship to Coastal Land Use Plan) of the
NBMC states that the Local Coastal Program Implementation Plan is the primary tool used
by the City to carry out the goals, objectives, and policies of the Coastal Land Use Plan. It
is intended that all provisions of the Local Coastal Program Implementation Plan be
consistent with the Coastal Land Use Plan and that any development, land use, or
subdivision approved in compliance with these regulations will also be consistent with the
Coastal Land Use Plan, and that if any proposed development is located between the first
public road and the sea or shoreline of any body of water located within the coastal zone,
any approved development must be in conformity with the public access and recreation
policies of Chapter 3 of the Coastal Act. Director’s Determination No. DD2021-001 does not
impact any properties located within the first public road and the sea or shoreline of any
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body of water. Section 21.12.020 (Rules of Interpretation) of the NBMC clearly authorizes
the Community Development Director to interpret the meaning of provisions of the
Implementation Plan.
Since both Title 20 and Title 21 clearly grant the Director with the authority to interpret the
meaning of provisions of the Codes, including definitions, a General Plan Amendment and
Local Coastal Program Amendment are not needed. The draft resolution (Attachment No.
PC 1) includes facts in support of the required findings for the determination.
Primary Land Use Remains Unchanged
The Director’s Determination does not change the primary land uses of a zoning district.
Rather, the Director’s Determination only permits residential dwellings as an accessory use
to the primary use of the site as a resort hotel. The Director’s Determination contains
regulations and restrictions to ensure the allowance of residential accessory units within a
hotel property does not change the primary land use and underlying characteristics within
the applicable zoning districts. To ensure the residential use remains accessory, the
Director’s Determination, consistent with Council Policy K-4, establishes the following
parameters:
• Applicability only to resort hotels- Resort hotels are self-contained destinations that
provide for all travel accommodation needs in one location, including but not limited
to restaurants, bars, shopping, and recreational facilities. The trend in the hotel
industry is to also locate limited residential uses at a hotel property to create resort
amenities that can be shared by residents, visitors, and tourists alike. Therefore,
mixed-use hotels are a form of accommodation that affords buyers with access to
the full range of services, facilities, and amenities provided by the hotel.
• One-for-One Allowance- Approved hotel rooms will be allowed to convert to
residential uses on a one-for-one basis to ensure the accessory residential use
does not involve a greater level of activity, population density, traffic generation,
parking, dust, odor, noise, or similar impacts.
• Maximum Percentage of Development- The conversion of hotel rooms to
residential uses will be limited to no more than 30 percent of the total number of
approved hotel rooms. This restriction will further ensure that residential uses
remain an accessory use to the hotel and do not change the primary use of the
property from hotel to residential.
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Accessory Residential Units
Of the twenty-two (22) hotels in the City, only four (4) meet the parameters of being a resort
hotel located outside the Coastal Commission Appeal Jurisdiction area, and three (3) hotels
are located outside the coastal zone. The following table lists the four hotels that Policy K-4
and the Director’s Determination apply to.
Table 1. Applicable Resort Hotel Properties in the City & Potential Yield
Hotel Name Location
Approved
Hotel
Rooms
Maximum
Accessory
Residential
Renaissance Newport Beach 4500 MacArthur Blvd. 471 141
Fashion Island Hotel 690 Newport Center Dr. 295 88
Hyatt Regency John Wayne
Airport
4545 MacArthur Blvd. 349 104
Newport Beach Marriott 900 Newport Center Dr. 532 159
Maximum Accessory Units 492
The appeal suggests that since the potential dwelling unit yield could exceed 100 units,
which is the threshold requiring a vote of the electorate of an approved General Plan
Amendment pursuant to Charter Section 423, the interpretation is invalid. As noted
previously, the City Council has the authority to determine the meaning of the General Plan
consistent with applicable laws including the City Charter. The General Plan and the 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.
The purpose of Charter Section 423 is to give the electorate the ability to vote to either
confirm or deny a City Council-approved General Plan Amendment that significantly
generates traffic resulting from increases in residential density or non-residential intensity
measured through a variety of metrics. The traffic generation associated with a residential
use is comparable to the traffic generation for a resort hotel use. According to the Institute
of Transportation Engineers Trip Generation Manual (10th Edition), a Multi-Family
Housing Mid-Rise (3 to 10 levels) development (ITE Code 221) would generate 0.36 and
0.44 average AM and PM weekday peak hour trips per dwelling unit. A Resort Hotel (ITE
Code 330) would generate 0.32 and 0.41 average AM and PM weekday peak hour trips
per room. The published ITE trip rates are generally for stand-alone development (e.g.
stand-alone hotel or multi-family housing buildings); however, the reality is accessory
residential dwelling units will have lower rates due to the additional on-site amenities
provided. Therefore, following conversion of a hotel room to a residential unit, the
anticipated traffic generation would be similar or lower. Based on the similar or lower
vehicular trips associated with accessory residential uses, levels of odor, dust, noise, or
similar impacts at a hotel property with accessory residential uses will be similar or less.
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As previously mentioned, the conversion of existing hotel units to accessory residential
units in compliance with Council Policy K-4 and the Director’s Determination would not
require a General Plan Amendment. Charter Section 423 and Council Policy A-18 are
only applicable to General Plan Amendments and not conversions. Notwithstanding, the
Director’s Determination limits the conversion of hotel rooms to residential uses on a one-
for-one basis and to no more than 30 percent of the total number of approved hotel rooms.
These limitations ensure the primary use is maintained and that the community would
remain protected from potential increases in traffic, consistent with the purposes of
Charter Section 423 and Council Policy A-18.
Concerns with Community Review of a Project
To ensure the public has an opportunity to participate in any review of potential development
taking advantage of the Director’s Determination, a required parameter is that a property
owner shall, at a minimum, process a conditional use permit and coastal development permit
(if applicable). These permits would require review and approval by the Planning
Commission at a noticed public hearing. In reviewing said applications, the Planning
Commission, and City Council on appeal, would ensure site suitability, development
compatibility, and the appropriateness of the operational characteristics, including parking.
For projects in the coastal zone, the required coastal development permit would ensure a
project is reviewed for consistency with the City’s Local Costal Program and protection of
coastal resources and public access.
Summary
Staff believes the appeal is not supported by the facts and should be denied. The City
Council and the Community Development Director have the authority to make the
interpretations provided in Council Policy K-4 under the City Charter, Municipal Code,
LCP and General Plan, and Director’s Determination No. DD2021-001 is consistent
Council Policy K-4. Additionally, the determination interprets existing sections in the
General Plan, and does not amend the General Plan. Therefore, the determination does
not violate City Charter Section 423 and City Council Policy A-18 because they are only
applicable when there is a General Plan Amendment.
Alternatives
If the Planning Commission believes that there are insufficient facts to support the findings
for the determination, the Planning Commission may reverse the Director’s Determination
and provide facts in support of the reasons for the action on the appeal.
Environmental Review
This Director’s Determination is not subject to the California Environmental Quality Act in
accordance with Section 21065 of the California Public Resources Code (“CEQA”) and
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Sections 15060 (c)(2), 15060 (c)(3), and 15378 of the California Code of Regulations Title
14, Division 6, Chapter 3 (“CEQA Guidelines”). The Director’s Determination is also
exempt pursuant to CEQA Guidelines Section 15061(b)(3), the general rule that CEQA
applies only when there is the potential for causing a significant effect on the environment.
While this Director’s Determination would result in an interpretation that allows residential
uses as an accessory use to resort hotels, it does not authorize new development that
would directly result in physical change to the environment.
Public Notice
Notice of this hearing was published in the Daily Pilot, mailed to local agencies, persons
requesting notice, and the California Coastal Commission consistent with the provisions
of the Municipal Code. Additionally, the item appeared on the agenda for this meeting,
which was posted at City Hall and on the City website.
Prepared by: Submitted by:
ATTACHMENTS
PC 1 Draft Resolution No. PC2021-016
PC 2 Council Policy K-4
PC 3 Director’s Determination No. DD2021-001
PC 4 May 6, 2021, Planning Commission Staff Report
PC 5 Appeal filed by SPON
PC 6 Council Policy A-18 and Charter Section 423
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Attachment No. PC 1
Resolution No. 2021-016
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RESOLUTION NO. PC2021-016
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, DENYING AN APPEAL
AND UPHOLDING THE COMMUNITY DEVELOPMENT
DIRECTOR’S DETERMINATION NO. DD2021-001, AND
ASSOCIATED FINDINGS, INTREPRETING ACCESSORY
RESIDENTIAL AS AN ALLOWED USE WITHIN RESORT HOTELS
(PA2021-096)
THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS
FOLLOWS:
SECTION 1. STATEMENT OF FACTS.
1. At the February 9, 2021 City Council Study Session related to the Housing Element
Update, the City Council provided staff direction to develop a new Council policy and
amend the City of Newport Beach’s (“City”) land use and zoning codes related to housing
opportunities.
2. At the March 9, 2021 City Council meeting, the City Council adopted Resolution No. 2021-
18 adding City Council Policy K-4 (Reducing the Barriers to the Creation of Housing).
3. Council Policy K-4 recognizes that the City has several major constraints on existing
lands that severely limit or totally restrict the City’s ability to accommodate growth to the
extent identified in the Sixth Cycle Regional Housing Needs Allocation (“RHNA”). As a
result, new and flexible land use and zoning regulations and strategies should be
developed in order to reasonably and practically accommodate this ambitious State
housing mandate while protecting the character and maintaining a quality of life that
makes Newport Beach a special place to live, work, and visit.
4. Council Policy K-4 directs City staff to develop, modify as necessary, and aggressively
implement various strategies and action plans that are designed to accelerate housing
production consistent with the policy, including encouraging and incentivizing the
development of mixed-use hotels.
5. The goals of Council Policy K-4 include 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, 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.
Such an interpretation would allow for residential units to be deemed an accessory use
to the principal use of a hotel and find that such residential uses are consistent with the
hotel’s underlying General Plan, Coastal Land Use Plan and NBMC land use and zoning
designations.
6. Mixed-use hotels are an established trend in the hospitality industry that incorporate
hotel-branded residential units as an accessory use located within a resort hotel
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complex where residents enjoy access to the full range of services, facilities, and
amenities provided by the hotel operator or brand. These hotel-residential uses cannot
exist without the hotel’s services, facilities, and amenities.
7. There are currently twenty-two (22) hotels in the City, of which ten (10) hotels qualify as a
resort hotel, a self-contained destination that provides for all travel accommodation needs
in one location, including but not limited to restaurants, bars, shopping, and recreational
facilities.
8. Of the ten (10) resort hotels in the City, one (1) hotel is located in the coastal zone, but
completely outside the Coastal Commission Appeal Jurisdiction area, and three (3) hotels
are located outside the coastal zone. Therefore, the following four (4) hotels meet the
criteria of a resort hotel located outside the Coastal Commission Appeal Jurisdiction:
a. The Renaissance Newport Beach located at 4500 MacArthur Boulevard
(“Renaissance”) is designated MU-H2 (Mixed-Use Horizontal) by the General Plan
Land Use Element and is located within the Koll Center Planned Community (PC15)
Zoning District. Hotels are an allowed use, subject to a conditional use permit. The
Renaissance is not located within the coastal zone.
b. The Hyatt Regency John Wayne Airport located at 4545 MacArthur Boulevard
(“Hyatt”) is designated MU-H2 (Mixed-Use Horizontal) by the General Plan Land
Use Element and is located within Hotel Site 1 of the Newport Place Planned
Community (PC11) Zoning District. Hotels are an allowed use, subject to a
conditional use permit. The Hyatt is not located within the coastal zone.
c. The Fashion Island Hotel located at 690 Newport Center Drive (“Fashion Island
Hotel”) is designated MU-H3 (Mixed-Use Horizontal) by the General Plan Land Use
Element and is located within Block 600 Subarea of the North Newport Center
Planned Community (PC56) Zoning District. Hotels are an allowed use, subject to
a conditional use permit. The Fashion Island Hotel is not located within the coastal
zone.
d. The Newport Beach Marriott located at 900 Newport Center (“Marriott”) is
designated CV (Visitor Serving Commercial) by the General Plan Land Use
Element and is located within the Commercial Visitor-Serving Zoning District. Hotels
are an allowed use, subject to a conditional use permit. The Marriott is located within
the coastal zone. The Coastal Land Use Plan category is CV-B (Visitor Serving
Commercial) and is located within the CV (Commercial Visitor-Serving) Coastal
Zoning District. Hotels are allowed subject to a conditional use permit and coastal
development permit.
9. Title 20 (Planning and Zoning) of the NBMC (“Title 20” or “Zoning Code”) is intended to
carry out the policies of the City of Newport Beach General Plan. Section 20.10.030
(Authority—Relationship to General Plan) of the NBMC, states that the Zoning Code is
the primary tool used by the City to carry out the goals, objectives, and policies of the
General Plan. It is intended that all provisions of the Zoning Code be consistent with the
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General Plan and that any development, land use, or subdivision approved in compliance
with these regulations will also be consistent with the General Plan.
10. The PC11, PC15, and PC56 Planned Community Development Plans state that the
requirements of the Zoning Code shall apply, unless otherwise stated.
11. Section 20.12.020 (Rules of Interpretation) of the NBMC authorizes the Community
Development Director to interpret the meaning of provisions of the Zoning Code.
12. Title 21 (Local Coastal Program Implementation Plan) of the NBMC is intended to carry
out the policies of the City of Newport Beach Coastal Land Use Plan and Coastal Act of
1976. Section 21.10.030 (Authority—Relationship to Coastal Land Use Plan) of the
NBMC states that the Local Coastal Program Implementation Plan is the primary tool used
by the City to carry out the goals, objectives, and policies of the Coastal Land Use Plan. It
is intended that all provisions of the Local Coastal Program Implementation Plan be
consistent with the Coastal Land Use Plan and that any development, land use, or
subdivision approved in compliance with these regulations will also be consistent with the
Coastal Land Use Plan, and that if any proposed development is located between the first
public road and the sea or shoreline of any body of water located within the coastal zone,
any approved development must be in conformity with the public access and recreation
policies of Chapter 3 of the Coastal Act. This determination does not impact any properties
located within the first public road and the sea or shoreline of any body of water.
13. Section 21.12.020 (Rules of Interpretation) of the NBMC authorizes the Community
Development Director to interpret the meaning of provisions of the Implementation Plan.
14. Both Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation
Plan) define “hotel” as 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 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.
15. Neither Title 20 (Planning and Zoning) nor Title 21 (Local Coastal Program Implementation
Plan) list residential uses as part of the definition of “hotel.” Both Title 20 and Title 21
definitions of “hotel” are out of date and do 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.
16. On April 30, 2021, consistent with City Council’s direction provided in Council Policy K-4,
the Community Development Director issued Director’s Determination No. DD2021-001
interpreting accessory residential as an allowed use within resort hotels.
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17. On May 14, 2021, Stop Polluting Our Newport (“SPON”) filed an appeal of the Director’s
Determination No. DD2021-001 alleging that the determination improperly converts
General Plan-approved hotel allocations into General Plan-approved dwelling unit
allocations without Greenlight (Charter Section 423) tracking, in alleged contravention
of Council Policy A-18. The appeal also states that the determination adds the potential
for some 250 new dwelling units to the General Plan Statistical Area L1, which would
require voter approval if processed as a General Plan Amendment.
18. A de novo public hearing was held on July 8, 2021, in the Council Chambers located at
100 Civic Center Drive, Newport Beach. A notice of time, place and purpose of the
hearing was given in accordance with California Government Code Section 54950 et
seq. (“Ralph M. Brown Act”) and Chapters 20.62 and 21.62 (Public Hearings) of the
Newport Beach Municipal Code. Evidence, both written and oral, was presented to, and
considered by, the Planning Commission at this hearing.
SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
This Director’s Determination is not subject to the California Environmental Quality Act in
accordance with Section 21065 of the California Public Resources Code (“CEQA”) and Sections
15060(c)(2), 15060(c)(3), and 15378 of the California Code of Regulations Title 14, Division 6,
Chapter 3 (“CEQA Guidelines”). The Director’s Determination is also exempt pursuant to CEQA
Guidelines Section 15061(b)(3), the common sense exemption that CEQA applies only when
there is the potential for causing a significant effect on the environment. Specifically, the
determination is for the purpose of interpreting the Zoning Code and Local Coastal Program
Implementation Plan. This action will not change the existing land use designations, will not
increase intensity of use, and will not authorize new development that would directly result in
physical change to the environment.
SECTION 3. REQUIRED FINDINGS.
Planning and Zoning (Title 20) Interpretation
In accordance with Section 20.12.020(E) (Rules of Interpretation – Unlisted Uses of Land) of
the NBMC, the Director, and the Planning Commission on appeal, may determine that a
proposed land use that is not listed in Part 2 of this title (Zoning Districts, Allowable Land Uses,
and Zoning District Standards) may be allowed if the following findings can be made:
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 zoning district;
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Facts in Support of Finding:
1. The allowance of residential accessory units within a hotel will be regulated to ensure
the underlying characteristics and activities remain equivalent to the listed hotel use
within the applicable CV (Commercial Visitor-Serving) Coastal Zoning District or PC
(Planned Community) Zoning District.
2. Approved hotel rooms will be allowed to convert to residential uses on a one-for-one
basis to ensure the accessory residential use does not involve a greater level of activity,
population density, traffic generation, parking, dust, odor, noise, or similar impacts than
the other uses listed within the applicable CV (Commercial Visitor-Serving) Coastal
Zoning District or PC (Planned Community) Zoning District.
3. The conversion of hotel rooms to residential uses will be limited to no more than 30
percent of the total number of approved hotel rooms. This restriction will further ensure
that residential uses remain an accessory use to the hotel and do not change the primary
use of the property from hotel to residential.
4. The traffic generation associated with a residential use is similar or less than the traffic
generation for a resort hotel use. According to the Institute of Transportation Engineers
Trip Generation Manual (10th Edition), a Multi-Family Housing Mid-Rise (three [3] to ten
[10] levels) development (ITE Code 221) would generate 0.36 and 0.44 average AM and
PM weekday peak hour trips per dwelling unit. A Resort Hotel (ITE Code 330) would
generate 0.32 and 0.41 average AM and PM weekday peak hour trips per room. The
published ITE trip rates are generally for stand-alone development (e.g. stand-alone
hotel or multi-family housing buildings); however, the reality is accessory residential
dwelling units will have lower rates due to the additional on-site amenities provided.
Therefore, following conversion of a hotel room to a residential unit, the anticipated traffic
generation will be similar or lower.
5. Pursuant to Council Policy K-3 (Implementation Procedures for the California
Environmental Quality Act) and in compliance with Senate Bill 743, the conversion of a
resort hotel room to a residential unit is considered to be less than significant impact on
transportation/traffic and no further vehicle miles traveled (“VMT”) analysis is required
since all trips associated with such conversion have already been accounted for as
approved hotel rooms. As a result, conversions are expected to fall below the adopted
land use screening threshold of 300 or less daily trips. For ITE Code 330, there is no
listed daily trip rate; however, the City Traffic Phasing Ordinance states that if there is
not an applicable rate, the City Traffic Engineer may, in the exercise of his/her
professional judgement, authorize the use of trip generation rates in San Diego
Association of Government’s (SANDAG) Traffic Generators or on the basis of actual site
counts. The SANDAG daily trip rate for Resort Hotel is eight (8) daily trips per room. The
SANDAG daily trip rate for Multi-Family Condominium is also eight (8) daily trips per
unit. Therefore, the conversion of a resort hotel room to a residential unit would result in
same or lower daily trips, and below the screening threshold of 300 daily trips requiring
VMT analysis.
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6. Based on the similar vehicular trips associated with accessory residential uses, levels
of odor, dust, noise, or similar impacts at a hotel property with accessory residential
uses is expected to be similar or less.
7. Mixed-use hotels are a form of accommodation that affords buyers with access to the
full range of services, facilities, and amenities provided by the hotel.
8. The definition of hotel allows related accessory uses such as conference rooms and
meeting rooms, restaurants, bars, and recreational facilities that can generate additional
parking demand substantially higher than residential parking rates. The conversion of hotel
rooms to residential units would constitute an amendment to the conditional use permit. In
reviewing such amendments, approval of the conditional use permit would require
ensuring adequate parking is provided to accommodate the residential units through
surplus parking, shared parking, or the adoption of a parking management plan.
Finding:
B. The proposed use will meet the purpose/intent of the zoning district that is applied to the
location of the use;
Facts in Support of Finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District is intended to provide for
areas appropriate for accommodations, goods, and services intended to primarily serve
visitors to the City. Hotels are allowed in the CV (Commercial Visitor-Serving) Coastal
Zoning District subject to obtaining a conditional use permit pursuant to Section
20.20.020 of the NBMC. A hotel with an accessory residential use that is limited to no
more than 30 percent of the approved hotel rooms will primarily serve visitors to the City.
2. The resort hotels located within PC11, PC15, and PC56 are located within the MU-H
(Mixed-Use Horizontal) land use category of the General Plan. The MU-H designations
are intended to provide for the development of areas for a horizontally distributed mix of
uses, which may include general or neighborhood commercial, commercial offices,
multi-family residential, visitor-serving and marine-related uses, and/or buildings that
vertically integrate residential with commercial uses. The hotel-branded units are
consistent with the MU-H designations as residential units are clearly allowed, and a
hotel with an accessory residential use that is limited to no more than 30 percent of the
approved hotel rooms will primarily serve visitors to the City.
3. Mixed-use hotels are common practice within the hotel industry and provide visitor
serving amenities and services consistent with the CV (Commercial Visitor-Serving)
Coastal Zoning District and PC (Planned Community) Zoning District.
4. Fact in Support of Finding A.7 is hereby incorporated.
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Finding:
C. The proposed use will be consistent with the goals, objectives, and policies of the General
Plan, or any applicable specific plan;
Facts in Support of Finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District General Plan land use
designation is intended to provide for areas appropriate for accommodations, goods,
and services intended to serve primary visitors to the City. By limiting residential uses
to an accessory use at a hotel property, the primary purpose of the hotel meets the
goals, objectives and policies of the General Plan, or any applicable specific plan.
2. The MU-H (Mixed-Use Horizontal) designations are intended to provide for the
development of areas for a horizontally distributed mix of uses, which may include
general or neighborhood commercial, commercial offices, multi-family residential,
visitor-serving and marine-related uses, and/or buildings that vertically integrate
residential with commercial uses. Mixed-use hotels are consistent with the MU-H
designations as residential units are clearly allowed, and a hotel with an accessory
residential use that is limited to no more than 30 percent of the approved hotel rooms
will primarily serve visitors to the City.
3. The trend in the hotel industry is to locate limited residential uses at a hotel property to
create resort amenities that can be shared by residents, visitors, and tourists alike.
4. This interpretation implements Land Use Element Policy LU 2.3 (Range of Residential
Choices) by providing new opportunities for the development of residential units in
response to community and regional needs for housing.
5. This interpretation implements Land Use Element Policy LU 3.2 (Growth and Change)
which encourages enhancement of existing neighborhoods, districts, and corridors,
allowing for re-use and infill with uses that are complementary in type, form, scale, and
character. Changes in use and/or density/intensity should only be considered in those
areas that are economically underperforming, are necessary to accommodate the City’s
share of regional population growth, improve the relationship and reduce commuting
distance between home and jobs, or enhance the values that distinguish Newport Beach
as a special place to live for its residents. The hotel industry has been one of the hardest
hit industries due to the COVID-19 pandemic and for some hotels, a full recovery of the
industry is not anticipated for many years. Mixed-use hotels provide an opportunity to
revitalize older and/or underperforming hotels to maintain their competitive standing by
creating multiple revenue streams that can support improvements to the property
enhancing the visitor experience. Economies of scale created by shared facilities,
amenities, and services add additional benefit to mixed-use hotel developments. This
cross pollination of business benefits both the hotel and the resident. It may also
increase occupancy rates at the resort by creating increased synergy between uses and
social gathering opportunities, boosting transient occupancy taxes while providing in-fill
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housing opportunities to partially assist the City in meeting its RHNA obligation in highly
desirable and built-out areas.
Finding:
D. The proposed use is not listed as allowable in another zoning district;
Fact in Support of Finding:
1. Hotels with an accessory residential use are not listed as allowable in any other zoning
district. Stand-alone residential uses, which are allowable in another zoning district,
would not be permitted under this interpretation.
Finding:
E. The proposed use is not a prohibited or illegal use.
Fact in Support of Finding:
1. Hotels with an accessory residential use are neither a prohibited or an illegal use.
Local Coastal Program Implementation Plan (Title 21) Interpretation
In accordance with Section 21.12.020(E) (Rules of Interpretation – Unlisted Uses of Land) of
the NBMC, the Director, and Planning Commission on appeal, may determine that a proposed
land use that is not listed in Part 2 of this title (Coastal Zoning Districts, Allowable Land Uses,
and Coastal Zoning District Standards) may be allowed if the following findings can be made:
Finding:
F. The characteristics of, and activities associated with, the proposed use are equivalent to
those of one or more of the uses listed in the coastal 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;
Facts in Support of Finding:
1. The allowance of residential accessory units within a hotel will be regulated to ensure
the underlying characteristics and activities remain equivalent to the listed hotel use
within the applicable CV (Commercial Visitor-Serving) Coastal Zoning District.
2. Approved hotel rooms will be allowed to convert to residential uses on a one-for-one
basis to ensure the accessory residential use does not involve a greater level of activity,
population density, traffic generation, parking, dust, odor, noise, or similar impacts than
the other uses listed within the applicable CV (Commercial Visitor-Serving) Coastal
Zoning District.
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3. The conversion of hotel rooms to residential units would constitute a major change in hotel
operations requiring a coastal development permit. The coastal development permit review
will require adequate parking be provided to accommodate the residential units through
surplus parking, shared parking, or the adoption of a parking management plan, and to
ensure the protection of lower-cost visitor accommodations.
4. Facts in Support of Finding A.3 through A.8 are hereby incorporated by reference.
Finding:
G. The proposed use will meet the purpose/intent of the coastal zoning district that is applied
to the location of the use;
Facts in Support of Finding:
1. The CV (Commercial Visitor-Serving) Zoning District is intended to provide for areas
appropriate for accommodations, goods, and services intended to primarily serve
visitors to the City. A hotel with an accessory residential use that is limited to no more
than 30 percent of the approved hotel rooms will primarily serve visitors to the City.
2. Mixed-use hotels are common practice within the hotel industry and provide visitor
serving amenities and services consistent with the CV (Commercial Visitor-Serving)
Coastal Zoning District.
Finding:
H. The proposed use will be consistent with the goals, objectives, and policies of the Coastal
Land Use Plan;
Facts in Support of Finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District Coastal Land Use Plan
designation is intended to provide for areas appropriate for accommodations, goods,
and services intended to serve primary visitors to the City. By limiting residential uses
to an accessory use at a hotel property, the primary purpose of the hotel meets the
goals, objectives and policies of the Coastal Land Use Plan that prioritize visitor-serving
commercial recreational facilities designed to enhance public opportunities for coastal
recreation over other uses.
2. The trend in the hotel industry is to locate limited residential uses at a hotel property to
create resort amenities that can be shared by residents, visitors, and tourists alike.
3. This interpretation would restrict its applicability to hotel properties located outside of the
appeal areas identified in the California Public Resources Code Section 30603(a) as
generally depicted on the Post-LCP Certification Permit and Appeal Jurisdiction Map.
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This applicability restriction ensures that coastal access and coastal-dependent uses
are not impacted.
4. Any development would be required to adhere to all LCP goals and policies including
those related to public access and resource protection, and the protection of lower-cost
visitor accommodations.
Finding:
I. The proposed use is not listed as allowable in another coastal zoning district; and
Fact in Support of Finding:
1. Hotels with an accessory residential use are not listed as allowable in another coastal
zoning district. Separate or stand-alone residential uses operating as primary land uses,
which are allowable in another coastal zoning district, would not be permitted under this
interpretation.
Finding:
J. The proposed use is not a prohibited or illegal use.
Fact in Support of Finding:
1. Hotels with an accessory residential use are neither a prohibited or an illegal use.
SECTION 4. DECISION.
NOW, THEREFORE, BE IT RESOLVED:
1. The Planning Commission of the City of Newport Beach hereby finds this Director’s
Determination is not subject to the California Environmental Quality Act (“CEQA”)
pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably
foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is
not a project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in
physical change to the environment, directly or indirectly. The Director’s Determination
is also exempt pursuant to CEQA Guidelines Section 15061(b)(3), the general rule
common sense exemption that CEQA applies only when there is the potential for causing
a significant effect on the environment. Specifically, the determination is for the purpose
of interpreting the Zoning Code and Local Coastal Program Implementation Plan. This
action will not change the existing land use designations, will not increase intensity of
use, and will not authorize new development that would directly result in physical change
to the environment.
2. The Planning Commission of the City of Newport Beach has considered the reasons cited
in the appeal and finds that Director’s Determination No. DD2021-001 interpreting that
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residential uses are permitted as an accessory use to hotels is authorized pursuant to
Director’s authority granted in NBMC Sections 20.12.020 and 21.12.020. The Planning
Commission finds that the determination is consistent with City Council Policy K-4. The
restrictions described in Section 3 below will further ensure that residential uses remain
an accessory use to the hotel, do not increase the level of activity on a site, and do not
change the primary use of the property from hotel to residential. As such, an amendment
to the General Plan and Local Coastal Plan to change the land use designations or
increase the development limits is not required, and the determination does not violate
City Charter Section 423 and/or City Council Policy A-18.
3. The Planning Commission of the City of Newport Beach hereby denies the appeal and
upholds the Director’s Determination No. DD2021-001 interpreting that residential uses
are permitted as an accessory use to hotels subject to the following:
a. This interpretation shall only apply to resort hotels, a self-contained destination
that provides for all travel accommodation needs in one location, including but not
limited to restaurants, bars, shopping, and recreational facilities. Residents shall
enjoy access to the full range of services, facilities, and amenities provided by
the hotel operator or brand.
b. The hotel property relying upon this interpretation shall be located outside the
appeal area identified in California Public Resources Code Section 30603(a) as
generally depicted on the Post-LCP Certification Permit and Appeal Jurisdiction
Map.
c. Approved hotel rooms may be converted to residential units but only on a one-for-
one basis.
d. The residential use shall at all times be accessory to the hotel use, and the
residential units shall comprise no more than 30 percent of the approved hotel
rooms.
e. The residential units may be located within a repurposed hotel or in a new
residential structure.
f. A property owner that desires to have an accessory residential use at their hotel
shall process a conditional use permit and coastal development permit (if
applicable). In reviewing said permits, the review authority shall ensure adequate
parking is provided to accommodate the residential units through surplus parking,
shared parking, or the adoption of a parking management plan.
g. 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.
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4. This resolution shall become final and effective 14 days following the date this resolution
was adopted unless within such time an appeal is filed with the City Clerk in accordance
with the provisions of Title 20 and Title 21 of the Newport Beach Municipal Code.
PASSED, APPROVED, AND ADOPTED THIS 8TH DAY OF JULY, 2021.
AYES:
NOES:
ABSTAIN:
ABSENT:
BY:_________________________
Erik Weigand, Chairman
BY:_________________________
Lauren Kleiman, Secretary
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Attachment No. PC 2
Council Policy K-4
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K-4
Reducing the Barriers to the Creation of Housing
Background
The State of California has declared that the lack of housing is a critical problem that
threatens the economic, environmental, and social quality of life in California. The
consequences of the housing crisis include the lack of housing to support employment growth, imbalance in jobs and housing, reduced mobility, urban sprawl, excessive commutes, and air quality deterioration. While the causes of this crisis are multiple and complex, the State attributes the underlying cause to insufficient housing supply.
On October 15, 2019, the California Department of Housing and Community
Development (HCD) issued a Regional Housing Needs Assessment (RHNA) for the Southern California Association of Governments (SCAG) region of 1,341,827 units that each jurisdiction within the region must plan for in the 2021-2029 Planning Permit (Sixth Cycle). As required under State law, SCAG developed a RHNA Allocation Methodology
to reallocate the regional determination to each of the 197 jurisdictions in the region,
including Newport Beach.
The City of Newport Beach worked diligently for many months in partnership with other member jurisdictions and stakeholders throughout the RHNA Allocation Methodology development process to provide comments and recommendations to achieve a RHNA
allocation that is fair, equitable and in consideration of the unique circumstances and local
planning factors inherent in our community. Despite this process and a City-initiated RHNA appeal, the final adopted RHNA methodology resulted in an allocation of 4,845 units for the City.
The City has successfully obtained and maintained HCD certification of its Housing
Element for both the Fourth Cycle (2008-2014) Planning Period with a RHNA Allocation
of 1,769 units and the Fifth Cycle (2014-2021) Planning Period with a RHNA Allocation of 5 units. Despite a low Fifth Cycle RHNA Allocation, the City maintained its commitment to housing programs intended to reduce the barriers to the development of affordable housing, including preserving the Residential Overlay within the Newport Place Planned
Community. During the first six years of the Fifth Cycle Planning Period, the City has
permitted over 1,768 new units, including 95 lower income units. In addition, the City has approved entitlements for housing development projects totaling another 662 multi-unit residential units in the Airport Area, including 13 very low- and 78 low-income units. The Newport Airport Village Planned Community was also adopted creating the opportunity
for another 444 residential units that would include a minimum affordable housing
component consisting of at least 5 percent very low-income units or 10 percent low income units. Lastly, the City has committed approximately $2 million to fund the
27
acquisition and rehabilitation of the Cove permanent supportive housing project a 12-unit apartment complex for homeless veterans and low-income seniors that opened in 2018.
Despite an immensely difficult-to-attain Sixth Cycle RHNA Allocation, the City remains
committed to addressing the housing crisis by developing a timely and compliant Housing
Element and continuing to support the production of housing for all income levels.
Policy Recognizing that the City has several major constraints on existing lands that severely
limit or totally restrict the City’s ability to accommodate growth to the extent identified in
the Sixth Cycle RHNA Allocation, it shall be the policy of the City Council to consider new
and flexible land use and zoning regulations and strategies in order to reasonably and
practically accommodate this ambitious State housing mandate while protecting the
character and maintaining a quality of life that makes Newport Beach a special place to
live, work, and visit.
The City Council therefore directs City staff and the Newport Beach Planning Commission
to develop, modify as necessary, and aggressively implement strategies and action plans
that are designed to accelerate housing production consistent with this policy as
described in the following sections:
Production of Accessory Dwelling Units
The Legislature approved, and the Governor signed SB 13 (Chapter 653, Statutes of
2019), AB 68 (Chapter 655, Statutes of 2019), and AB 881 (Chapter 659, Statutes of
2019) into law that, among other things, amended Government Code sections 65852.2
and 65852.22 to further impose new limits on the City’s ability to regulate ADUs and Junior
Accessory Dwelling Units (JADUs). The Legislature’s intent was to reduce regulatory
barriers and costs, streamline the approval process, and expand the potential capacity
for ADUs.
Although the City has revised its ADU regulations to comply with the minimum
requirements of State law, further encouraging the development ADUs is an important
strategy to accommodate future growth in combination with other strategies to meet the
RHNA Allocation. HCD allows ADUs to meet a portion of the City’s RHNA based on trends
in past production and more aggressive production estimates based on the adoption of
production programs. Encouraging ADUs allows for the dispersing of density throughout
the City and avoids the need for excessive rezoning and high infrastructure costs
associated with new high-density developments. Because ADUs tend to be relatively
small with modest amenities, they provide more affordable housing options for select
groups, such as students, seniors, caretakers, and people with disabilities.
Therefore, to further encourage and incentivize the development of ADUs, the City should
pursue the following:
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1. Interpret ambiguities in code provisions regulating ADUs in a manner that
accommodates and maximizes production.
2. Direct staff and the Planning Commission to review and recommend code changes
that reduce regulatory barriers, streamline the approval process, and expand
potential capacity of ADUs beyond minimum State law requirements.
3. Publicize incentives for construction of ADUs with a systematic approach utilizing
all forms of media and outreach.
4. Prepare and maintain a user-friendly website committed to information related to
codes, processes, and incentives pertaining to the development of ADUs and
JADUs in the City.
5. Develop and administer a program that includes waiving all permit and City fees
for property owners of unpermitted units when they agree to bring units into
compliance with current building and fire codes to ensure the safety of occupants
and structures.
6. Develop permit-ready standard plans to permit new ADU construction to minimize
design costs, expedite permit processing, and provide development certainty for
property owners.
Planning Commission Review and Recommendations for Mixed-Use Designations
As part of the 2006 Comprehensive General Plan Update and 2010 Zoning Code Update,
new mixed-use housing opportunity zones were created throughout the City as a strategy
to enhance and revitalize underperforming and underutilized properties. These areas
included the Airport Area, Dover/Westcliff, Newport Center, Mariners Mile, and portions
of the Balboa Peninsula. The Airport Area and Newport Center have proven the most
successful with several approved and constructed mixed-use developments, such as
Uptown Newport and Villas Fashion Island. The Balboa Peninsula has had some limited
success while Dover/Westcliff and Mariners’ Mile have not proven successful to-date.
Despite the housing opportunity that has been created on several properties in these
areas, a majority of these sites remain underutilized with a single, non-residential use,
such as retail or office. It is evident the City’s existing development standards (e.g.,
setbacks, height, density, parking, dedications, etc.) related to mixed-use development
may create constraints to the redevelopment of these properties. Therefore, to ensure
that mixed-use opportunities envisioned by the 2006 General Plan redevelop to their full
potential, the City should pursue the following:
1. Direct staff and the Planning Commission to review annually the established
mixed-use zones in the City and recommend code changes or policy ideas to the
City Council that reduce regulatory barriers and incentivize mixed-use residential
development.
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Mixed-Use Resort Opportunities
Mixed-use resorts are an established trend in the hospitality industry that incorporate hotel-branded residential units as an accessory use located within a resort hotel complex
where residents enjoy access to the full range of services, facilities, and amenities
provided by the hotel operator or brand. The residential use cannot exist without the hotel’s services, facilities, and amenities.
The hotel industry has been one of the hardest hit industries due to the COVID-19
pandemic and a full recovery of the industry is not anticipated for many years. Mixed-use
resorts provide an opportunity to revitalize older or underperforming hotels and maintain
their competitive standing by creating multiple revenue streams.
Economies of scale created by shared facilities, amenities, and services add additional
benefit to mixed-use resort developments. This cross pollination of business benefits both
the hotel and the resident. It may also increase occupancy rates at the resort by creating
increased synergy between uses and social gathering opportunities, boosting transient
occupancy taxes while providing in-fill housing opportunities to partially assist the City in
meeting its RHNA obligation in highly desirable and built-out areas. Incorporating
residences also helps to off-set cyclical variations in hotel occupancy rates that can, for
instance, result in seasonal decreases in revenue for the hotel’s food and beverage
offerings.
Therefore, to further encourage and incentivize the development of mixed-use hotels, the
City should pursue the following:
1. Issue interpretations that interpret ambiguities in General Plan, Zoning Code,
and/or Local Coastal Plan Program provisions to allow hotels and motels, located
outside of the Coastal Commission Appeal Areas, to convert up to thirty percent
(30%) of their permitted hotel and motel rooms into residential units on a one-for-
one basis. Such interpretation would allow for residential units to 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.
2. The residential units may be allowed in repurposed hotel and motel rooms and/or
in new residential structures, subject to the City’s project approval process (e.g.,
Site Development Review) and including, as appropriate, review under the
California Environmental Quality Act.
3. Consider establishing parking programs (e.g., shared parking) and/or reduced
residential parking requirements that mitigate the need for any additional parking
due to the conversion to residential use.
4. Consider fiscal impact analysis to disclose and mitigate any reduction in transient
occupancy tax due to the conversion.
30
5. Consider increasing the flexibility in use of transfer of development rights to allow
for transfer of unbuilt residential units to hotel sites.
6. Require property owners converting permitted hotel and motel rooms into
residential units to mitigate impacts as a result of the conversion including, but not
limited to, creating affordable housing units either in the project itself or through a
contribution of in-lieu fees.
Adopted K-4 – 03-09-2021
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Attachment No. PC 3
Director’s Determination No. DD2021-001
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Community Development Department
CITY OF NEWPORT BEACH
COMMUNITY DEVELOPMENT DEPARTMENT
100 Civic Center Drive
Newport Beach, California 92660
949 644-3200
newportbeachca.gov/communitydevelopment
Director’s Determination
To: Planning Division, Community Development Department
From: Seimone Jurjis, Community Development Director
Date: April 30, 2021
Re: Director’s Determination No. DD2021-01 Interpreting Accessory
Residential as an Allowed Use within Resort Hotels (PA2021-096)
Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation
Plan) of the Newport Beach Municipal Code (“NBMC”) define “hotel” as 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 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.
Neither Title 20 (Planning and Zoning) nor Title 21 (Local Coastal Program
Implementation Plan) list residential uses as part of the definition of “hotel”. Both Title
20 and Title 21 definitions of “hotel” are out of date and do 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.
Sections 20.12.020 and 21.12.020 (Rules of Interpretation) of the NBMC authorize
the Community Development Director to interpret the meaning of provisions of the
Zoning Code and Local Coastal Program Implementation Plan.
Background
Council Policy K-4 (Reducing the Barriers to the Creation of Housing)
At the March 9, 2021 City Council meeting, the City Council adopted Resolution No.
2021-18 adding City Council Policy K-4 (Reducing the Barriers to the Creation of
Housing). Council Policy K-4 recognizes that the City has several major constraints
35
2
on existing lands that severely limit or totally restrict the City’s ability to
accommodate growth to the extent identified in the Sixth Cycle Regional Housing
Needs Allocation (“RHNA”). As a result, new and flexible land use and zoning
regulations and strategies should be developed in order to reasonably and
practically accommodate this ambitious State housing mandate while protecting
the character and maintaining a quality of life that makes Newport Beach a special
place to live, work, and visit.
Council Policy K-4 directs City staff to develop, modify as necessary, and
aggressively implement various strategies and action plans that are designed to
accelerate housing production consistent with the policy, including encouraging
and incentivizing the development of mixed-use hotels. Council Policy K-4’s goals
include interpreting ambiguities in the City of Newport Beach General Plan, Coastal
Land Use Plan, and Titles 20 (Planning and Zoning) and 21 (Local Coastal
Program Implementation Plan) of the Newport Beach Municipal Code (“NBMC”) to
allow hotels, located outside of the Coastal Commission Appeal Jurisdiction, to
convert up to thirty percent (30%) of their approved hotel rooms into residential
units on a one-for-one basis. Such an interpretation would allow for residential
units to be deemed an accessory use to the principal use of a hotel and find that
such residential uses are consistent with the hotel’s underlying General Plan,
Coastal Land Use Plan and municipal code land use and zoning designations.
Applicable Resort Hotels
Mixed-use hotels are an established trend in the hospitality industry that
incorporate hotel-branded residential units as an accessory use located within a
resort hotel complex where residents enjoy access to the full range of services,
facilities, and amenities provided by the hotel operator or brand. These hotel-
residential uses cannot exist without the hotel’s services, facilities, and amenities.
There are currently twenty-two (22) hotels in the City, of which ten (10) hotels qualify
as a resort hotel, a self-contained destination that provides for all travel
accommodation needs in one location, including but not limited to restaurants, bars,
shopping, and recreational facilities (Attachment A). Of the ten (10) resort hotels in
the City, one (1) hotel is located in the coastal zone, but completely outside the
Coastal Commission Appeal Jurisdiction area, and three (3) hotels are located
outside the coastal zone.
Table 1. Applicable Resort Hotel Properties in the City
Map
ID
Hotel Name Location General Plan Local Coastal
Program
Zoning
1 Renaissance
Newport Beach
4500 MacArthur Blvd. Mixed-Use
Horizontal
(MU-H2)
N/A- Outside Coastal
Zone
Koll Center Planned
Community (PC15)
2 Fashion Island
Hotel
690 Newport Center Dr. MU-H3 N/A- Outside Coastal
Zone
North Newport
Center Planned
Community (PC56)
3 Hyatt Regency
John Wayne
Airport
4545 MacArthur Blvd. MU-H2 N/A- Outside Coastal
Zone
Newport Place
Planned Community
(PC11)
4 Newport Beach
Marriot
900 Newport Center Dr. Visitor Serving
Commercial
(CV)
Commercial Visitor-
Serving (CV-B) / Visitor
Serving Commercial
(CV)
Commercial Visitor-
Serving (CV)
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Planning and Zoning (Title 20) Interpretation
Pursuant to Section 20.12.020E (Rules of Interpretation – Unlisted Uses of Land)
of the NBMC, the Director may determine that a proposed land use that is not listed
in Part 2 of this title (Zoning Districts, Allowable Land Uses, and Zoning District
Standards) may be allowed if the following findings can be made:
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 zoning district;
Facts in Support of finding:
1. The allowance of residential accessory units within a hotel will be regulated
to ensure the underlying characteristics and activities remain equivalent to
the listed hotel use within the applicable CV (Commercial Visitor-Serving)
Coastal Zoning District or PC (Planned Community) Zoning District.
2. Approved hotel rooms will be allowed to convert to residential uses on a
one-for-one basis to ensure the accessory residential use does not involve
a greater level of activity, population density, traffic generation, parking,
dust, odor, noise, or similar impacts than the other uses listed within the
applicable CV (Commercial Visitor-Serving) Coastal Zoning District or PC
(Planned Community) Zoning District.
3. The conversion of hotel rooms to residential uses will be limited to no more
than 30 percent of the total number of approved hotel rooms. This restriction
will further ensure that residential uses remain an accessory use to the hotel
and do not change the primary use of the property from hotel to residential.
4. The traffic generation associated with a residential use is comparable to the
traffic generation for a resort hotel use. According to the Institute of
Transportation Engineers Trip Generation Manual (10th Edition), a Multi-
Family Housing Mid-Rise (3-10 levels) development (ITE Code 221) would
generate 0.36 and 0.44 average AM and PM weekday peak hour trips per
dwelling unit. A Resort Hotel (ITE Code 330) would generate 0.32 and 0.41
average AM and PM weekday peak hour trips per room. The published ITE
trip rates are generally for stand-alone development (e.g. stand-alone hotel
or multi-family housing buildings); however, the reality is accessory
residential dwelling units would likely have lower rates due to the additional
on-site amenities provided. Therefore, following conversion of a hotel room
to a residential unit, the anticipated traffic generation will be similar or lower.
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4
5. Pursuant to Council Policy K-3 and in compliance with Senate Bill 743, the
conversion of a resort hotel room to a residential unit is considered to be
less than significant impact on transportation/traffic and no further vehicle
miles traveled (VMT) analysis is required since all trips associated with such
conversion have already been accounted for as approved hotel rooms. As
a result, conversions are expected to fall below the adopted land use
screening threshold of 300 or less daily trips. For ITE Code 330, there is no
listed daily trip rate; however, the City Traffic Phasing Ordinance states that
if there is not an applicable rate, the City Traffic Engineer may, in the
exercise of his/her professional judgement, authorize the use of trip
generation rates in San Diego Association of Government’s (SANDAG)
Traffic Generators or on the basis of actual site counts. The SANDAG daily
trip rate for Resort Hotel is eight daily trips per room. The SANDAG daily
trip rate for Multi-Family Condominium is also eight daily trips per unit.
Therefore, the conversion of a resort hotel room to a residential unit would
result in same or lower daily trips, and below the screening threshold of 300
daily trips requiring VMT analysis.
6. Based on the similar vehicular trips associated with accessory residential
uses, levels of odor, dust, noise, or similar impacts at a hotel property with
accessory residential uses is expected to be similar or less.
7. Mixed-use hotels are a form of accommodation that affords buyers with
access to the full range of services, facilities, and amenities provided by the
hotel.
8. The definition of hotel allows related accessory uses such as conference
rooms and meeting rooms, restaurants, bars, and recreational facilities that
can generate additional parking demand substantially higher than residential
parking rates. The conversion of hotel rooms to residential units would
constitute an amendment to the conditional use permit. In reviewing such
amendments, approval of the conditional use permit would require ensuring
adequate parking is provided to accommodate the residential units through
surplus parking, shared parking, or the adoption of a parking management
plan.
Finding:
B. The proposed use will meet the purpose/intent of the zoning district that is
applied to the location of the use;
Facts in Support of finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District is intended to
provide for areas appropriate for accommodations, goods, and services
intended to primarily serve visitors to the City. Hotels are allowed in the CV
(Commercial Visitor-Serving) Coastal Zoning District subject to obtaining a
conditional use permit pursuant to Section 20.20.020 of the NBMC. A hotel
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with an accessory residential use that is limited to no more than 30 percent
of the approved hotel rooms will primarily serve visitors to the City.
2. The resort hotels located within PC11, PC15, and PC56 are located within the
MU-H (Mixed-Use Horizontal) land use category of the General Plan. The
MU-H designations are intended to provide for the development of areas for
a horizontally distributed mix of uses, which may include general or
neighborhood commercial, commercial offices, multi-family residential,
visitor-serving and marine-related uses, and/or buildings that vertically
integrate residential with commercial uses. The hotel-branded units are
consistent with the MU-H designations as residential units are clearly
allowed, and a hotel with an accessory residential use that is limited to no
more than 30 percent of the approved hotel rooms will primarily serve
visitors to the City.
3. Mixed-use hotels are common practice within the hotel industry and provide
visitor serving amenities and services consistent with the CV (Commercial
Visitor-Serving) Coastal Zoning District and PC (Planned Community)
Zoning District.
4. Fact in Support of Finding A.7 is hereby incorporated.
Finding:
C. The proposed use will be consistent with the goals, objectives, and policies of
the General Plan, or any applicable specific plan;
Facts in Support of finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District General Plan
land use designation is intended to provide for areas appropriate for
accommodations, goods, and services intended to serve primary visitors to
the City. By limiting residential uses to an accessory use at a hotel property,
the primary purpose of the hotel meets the goals, objectives and policies of
the General Plan, or any applicable specific plan.
2. The MU-H (Mixed-Use Horizontal) designations are intended to provide for
the development of areas for a horizontally distributed mix of uses, which
may include general or neighborhood commercial, commercial offices,
multi-family residential, visitor-serving and marine-related uses, and/or
buildings that vertically integrate residential with commercial uses. Mixed-
use hotels are consistent with the MU-H designations as residential units
are clearly allowed, and a hotel with an accessory residential use that is
limited to no more than 30 percent of the approved hotel rooms will primarily
serve visitors to the City.
3. The trend in the hotel industry is to locate limited residential uses at a hotel
property to create resort amenities that can be shared by residents, visitors,
and tourists alike.
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6
4. This interpretation implements Land Use Element Policy LU 2.3 (Range of
Residential Choices) by providing new opportunities for the development of
residential units in response to community and regional needs for housing.
5. This interpretation implements Land Use Element Policy LU 3.2 (Growth
and Change) which encourages enhancement of existing neighborhoods,
districts, and corridors, allowing for re-use and infill with uses that are
complementary in type, form, scale, and character. Changes in use and/or
density/intensity should only be considered in those areas that are
economically underperforming, are necessary to accommodate the City’s
share of regional population growth, improve the relationship and reduce
commuting distance between home and jobs, or enhance the values that
distinguish Newport Beach as a special place to live for its residents. The
hotel industry has been one of the hardest hit industries due to the COVID-
19 pandemic and for some hotels, a full recovery of the industry is not
anticipated for many years. Mixed-use hotels provide an opportunity to
revitalize older and/or underperforming hotels to maintain their competitive
standing by creating multiple revenue streams that can support
improvements to the property enhancing the visitor experience. Economies
of scale created by shared facilities, amenities, and services add additional
benefit to mixed-use hotel developments. This cross pollination of business
benefits both the hotel and the resident. It may also increase occupancy
rates at the resort by creating increased synergy between uses and social
gathering opportunities, boosting transient occupancy taxes while providing
in-fill housing opportunities to partially assist the City in meeting its RHNA
obligation in highly desirable and built-out areas.
Finding:
D. The proposed use is not listed as allowable in another zoning district;
Fact in Support of finding:
1. Hotels with an accessory residential use are not listed as allowable in
another zoning district, Stand-alone residential uses, which are allowable in
another zoning district, would not be permitted under this interpretation.
Finding:
E. The proposed use is not a prohibited or illegal use.
Fact in Support of finding:
1. Hotels with an accessory residential use are neither a prohibited or an illegal
use.
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Local Coastal Program Implementation Plan (Title 21) Interpretation
Pursuant to NBMC Section 21.12.020(E) (Rules of Interpretation – Unlisted Uses
of Land) of the NBMC, the Director may determine that a proposed land use that
is not listed in Part 2 of this title (Coastal Zoning Districts, Allowable Land Uses,
and Coastal Zoning District Standards) may be allowed if the following findings can
be made:
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 coastal 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;
Facts in Support of finding:
1. The allowance of residential accessory units within a hotel will be regulated
to ensure the underlying characteristics and activities remain equivalent to
the listed hotel use within the applicable CV (Commercial Visitor-Serving)
Coastal Zoning District.
2. Approved hotel rooms will be allowed to convert to residential uses on a
one-for-one basis to ensure the accessory residential use does not involve
a greater level of activity, population density, traffic generation, parking,
dust, odor, noise, or similar impacts than the other uses listed within the
applicable CV (Commercial Visitor-Serving) Coastal Zoning District.
3. The conversion of hotel room to residential units would constitute a major
change in hotel operations requiring a coastal development permit. The
coastal development permit review will require adequate parking be provided
to accommodate the residential units through surplus parking, shared parking,
or the adoption of a parking management plan, and to ensure the protection
of lower-coast visitor accommodations.
4. Facts in Support of Finding A.3 through A.8 are hereby incorporated by
reference.
Finding:
B. The proposed use will meet the purpose/intent of the coastal zoning district that
is applied to the location of the use;
Facts in Support of finding:
1. The CV (Commercial Visitor-Serving) Zoning District is intended to provide
for areas appropriate for accommodations, goods, and services intended to
41
8
primarily serve visitors to the City. A hotel with an accessory residential use
that is limited to no more than 30 percent of the approved hotel rooms will
primarily serve visitors to the City.
2. Mixed-use hotels are common practice within the hotel industry and provide
visitor serving amenities and services consistent with the CV (Commercial
Visitor-Serving) Coastal Zoning District.
Finding:
C. The proposed use will be consistent with the goals, objectives, and policies of
the Coastal Land Use Plan;
Facts in Support of finding:
1. The CV (Commercial Visitor-Serving) Coastal Zoning District Coastal Land
Use Plan designation is intended to provide for areas appropriate for
accommodations, goods, and services intended to serve primary visitors to
the City. By limiting residential uses to an accessory use at a hotel property,
the primary purpose of the hotel meets the goals, objectives and policies of
the Coastal Land Use Plan that prioritize visitor-serving commercial
recreational facilities designed to enhance public opportunities for coastal
recreation over other uses.
2. The trend in the hotel industry is to locate limited residential uses at a hotel
property to create resort amenities that can be shared by residents, visitors,
and tourists alike.
3. This interpretation would restrict its applicability to hotel properties located
outside of the appeal areas identified in the California Public Resources
code Section 30603(a) as generally depicted on the Post-LCP Certification
Permit and Appeal Jurisdiction Map. This applicability restriction ensures
that coastal access and coastal dependent uses are not impacted.
4. Any development would be required to adhere to all LCP goals and policies
including those related to public access and resource protection, and the
protection of lower-cost visitor accommodations.
Finding:
D. The proposed use is not listed as allowable in another coastal zoning district;
and
Fact in Support of finding:
1. Hotels with an accessory residential use are not listed as allowable in
another coastal zoning district. Separate or stand-alone residential uses
operating as primary land uses, which are allowable in another coastal
zoning district, would not be permitted under this interpretation.
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9
Finding:
E. The proposed use is not a prohibited or illegal use.
Fact in Support of finding:
1. Hotels with an accessory residential use are neither a prohibited or an illegal
use.
Directors Determination
The Community Development Director of the City of Newport Beach hereby
determines that residential uses are permitted as an accessory use to hotels subject
to the following:
a. This interpretation shall only apply to resort hotels, a self-contained
destination that provides for all travel accommodation needs in one location,
including but not limited to restaurants, bars, shopping, and recreational
facilities. Residents shall enjoy access to the full range of services,
facilities, and amenities provided by the hotel operator or brand.
b. The hotel property relying upon this interpretation shall be located outside the
appeal area identified in California Public Resources Code Section 30603(a)
as generally depicted on the Post-LCP Certification Permit and Appeal
Jurisdiction Map.
c. Approved hotel rooms may be converted to residential units but only on a
one-for-one basis.
d. The residential use shall at all times be accessory to the hotel use, and the
residential units shall comprise no more than 30 percent of the approved
hotel rooms.
e. The residential units may be located within a repurposed hotel or in a new
residential structure.
f. A property owner that desires to have an accessory residential use at their
hotel shall process a conditional use permit and coastal development permit
(if applicable). In reviewing said permits, the review authority shall ensure
adequate parking is provided to accommodate the residential units through
surplus parking, shared parking, or the adoption of a parking management
plan.
g. 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.
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Please note that a call for review or appeal may be filed within 14 days following
the date of this determination.
Attachments:
A – Hotel Map and List
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ATTACHMENT A
Hotel Map and List
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PA2021_096_Hotel_Exhibit_March_2021.mxd
0 6,9003,450
FeetI
City of Newport BeachGIS DivisionApril 23, 2021
Qualifying Resort Hotels Determination No. DD2021-001 (PA2021-096)
Legend
LCP Appeal Area
Coastal Zone Boundary
City Boundary
Eligible hotels; resort qualities and located outside Coastal Commission Appeal Area
Non-eligible hotels; non-resort or located in Coastal Commission Appeal Area
47
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Tag Name of Establishment Address GP Zoning Coastal land
Use and Zoning
Appeal Area Resort Qualities Eligible for
Interpretation
Non-Appeal Area
Resort Qualities
1 Renaissance Newport Beach 4500 MacArthur Blvd MU-H2 PC-15 (Office Site A) -- -- Yes Yes
2 Fashion Island Hotel 690 Newport Center Drive MU-H3 PC-56 -- -- Yes Yes
3 Hyatt Regency John Wayne Airport 4545 MacArthur Blvd MU-H2 PC11 (Hotel Site 1) -- -- Yes Yes
4 Newport Beach Marriot 900 Newport Center Dr CV CV CV-B/CV No Yes Yes
5 Lido House 3300 Newport Boulevard CV-LV CV-LV CV-LV Bisected Yes No
6 Newport Dunes 1131 Back Bay Drive PR PC48 PR/PC48 Yes No No
7 Balboa Bay Resort 1221 West Coast Highway CV PC45 (Resort) CV-B/PC45 Yes Yes No
8 Newport Beach Marriot Bayview 500 Bayview Circle CV PC32 CV-A/PC-32 Bisected Yes No
9 The Resort at Pelican Hill 22701 Pelican Hill Rd CV PC52 (PA13C-
Tourist Commercial)
PC52 Bisected Yes No
10 Hyatt Regency Newport Beach 1107 Jamboree Rd CV CV CV-B/CV Bisected
Yes No
11 Balboa Inn 105 Main St. CV CV CV-B/CV Yes Yes No
12 Bay Shores Peninsula Hotel 1800 West Balboa Blvd. CV CV CV-A/CV Yes No No
13 Little Inn By The Bay 2627 Newport Blvd. CV CV CV-A/CV Bisected No No
14 Newport Channel Inn 6100 West Coast Highway CV CV CV-A/CV No No No
15 Hotel Solarena 6208 West Coast Highway CV CV CV-A/CV No No No
16 Holiday Inn Express 2300 West Coast Highway CV CV CV-A/CV Bisected.
No No
17 Pine Knot 6302 West Coast Highway CV CV CV-A/CV No No No
18 Marriot’s Newport Coast Villas 23000 Newport Coast Dr CV PC52 (PA13C-
Tourist Commercial)
PC52 Bisected No No
19 Doryman’s Inn 2102 West Ocean Front CV CV CV-B/CV Yes No No
20 Crystal Cove Beach Cottages 35 Crystal Cove OS PC52 (PA17) PC52 (PA17) Yes No No
21 Extended Stay America OC John Wayne Airport 4881 Birch Street CG PC15 (Retail and
Service Site 1)
__ __ No No
22 The Newport Beach Hotel A Four Sisters Inn 2306 W Oceanfront CV CV CV-B/CV Yes No No
49
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Attachment No. PC 4
May 6, 2021, Planning Commission
Staff Report
51
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CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT May 6, 2021 Agenda Item No. 6
SUBJECT: Interpreting Accessory Residential as an Allowed Use within Resort
Hotels (PA2021-096)
Director’s Determination No. DD2021-01 SITE LOCATION: Various Resort Hotel Properties
APPLICANT: City of Newport Beach
PLANNER: Jaime Murillo, Principal Planner 949-644-3209 jmurillo@newportbeachca.gov
PROJECT SUMMARY
The Community Development Director has issued a determination that residential uses
are allowable as an accessory use to resort hotels under certain parameters. This
determination is consistent with City Council Policy K-4 (Reducing the Barriers to the Creation of Housing).
RECOMMENDATION
Receive and file Director’s Determination No. DD2021-01 (Attachment No. PC 1).
BACKGROUND
Council Policy K-4 (Reducing the Barriers to the Creation of Housing)
At the March 9, 2021 City Council meeting, the City Council adopted Resolution No. 2021-18 (Attachment No. PC 2) adding City Council Policy K-4 (Reducing the Barriers to the Creation of Housing). Council Policy K-4 recognizes that the City has several major
constraints on existing lands that severely limit or totally restrict the City’s ability to
accommodate growth to the extent identified in the 6th Cycle Regional Housing Needs Allocation (“RHNA”). As a result, new and flexible land use and zoning regulations and strategies should be developed in order to reasonably and practically accommodate this ambitious State housing mandate while protecting the character and maintaining a quality
of life that makes Newport Beach a special place to live, work, and visit.
Council Policy K-4 directs City staff to develop, modify as necessary, and aggressively implement various strategies and action plans that are designed to accelerate housing production consistent with the policy, including encouraging and incentivizing the
development of mixed-use hotels. Mixed-use hotels are an established trend in the
hospitality industry that incorporate hotel-branded residential units as an accessory use
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Interpreting Accessory Residential as an Allowed Use within Resort Hotels (PA2021-096) Planning Commission, May 6, 2021 Page 2
located within a resort hotel complex where residents enjoy access to the full range of services, facilities, and amenities provided by the hotel operator or brand. These hotel-residential uses cannot exist without the hotel’s services, facilities, and amenities.
Council Policy K-4’s goals include interpreting ambiguities in the City of Newport Beach General Plan, Coastal Land Use Plan, and Titles 20 (Planning and Zoning) and 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 thirty percent (30%) of their approved hotel rooms into
residential units on a one-for-one basis. Such an interpretation would allow for residential units to be deemed an accessory use to the principal use of a hotel and find that such residential uses are consistent with the hotel’s underlying General Plan, Coastal Land Use Plan and municipal code land use and zoning designations.
DISCUSSION
Need for Interpretation
Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan)
of the Newport Beach Municipal Code (“NBMC”) define “hotel” as 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 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.
Neither Title 20 (Planning and Zoning) nor Title 21 (Local Coastal Program Implementation Plan) list residential uses as part of the definition of “hotel”. Both Title 20 and Title 21
definitions of “hotel” are out of date and do 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 Titles
20 and Title 21.
Authority for Interpretation
Sections 20.12.020 and 21.12.020 (Rules of Interpretation) of the NBMC authorize the
Community Development Director to interpret the meaning of provisions of the Zoning Code
and Local Coastal Program Implementation Plan. The attached Director’s Determination is intended to implement City Council direction provided in Council Policy K-4 and includes facts in supporting of required findings under NBMC Sections 20.12.020.E and 21.12.020.E.
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Interpreting Accessory Residential as an Allowed Use within Resort Hotels (PA2021-096) Planning Commission, May 6, 2021 Page 3
Summary of Determination
Residential uses would be permitted as an accessory use to hotels subject to the following:
•Applicable only to resort hotels, a self-contained destination that provides for alltravel accommodation needs in one location, including but not limited to restaurants,bars, shopping, and recreational facilities.
•Must be located outside the appeal area identified in California Public ResourcesCode Section 30603(a) as generally depicted on the Post-LCP Certification Permitand Appeal Jurisdiction Map.
•Approved hotel rooms may be converted to residential units but only on a one-for-one basis.
•The residential use shall at all times be accessory to the hotel use, and the residentialunits shall comprise no more than 30 percent of the approved hotel rooms.
•The residential units may be located within a repurposed hotel or in a new residentialstructure.
•A property owner that desires to have an accessory residential use at their hotel shall
process a conditional use permit and coastal development permit (if applicable). In
reviewing said permits, the review authority shall ensure adequate parking isprovided to accommodate the residential units through surplus parking, sharedparking, or the adoption of a parking management plan.
•Potential impacts to public access, affordable housing, and the loss of transientoccupancy tax must be mitigated by entering into a Development Agreement with theCity or by some other means deemed appropriate.
Applicability
There are currently twenty-two (22) hotels in the City, of which ten (10) hotels qualify as a resort hotel (see Attachment A of Director’s Determination). Of the ten (10) resort hotels in the City, one (1) hotel is located in the coastal zone, but completely outside the Coastal
Commission Appeal Jurisdiction area, and three (3) hotels are located outside the coastal
zone. Therefore, this interpretation would apply to the following four resort hotel properties in the City:
55
Interpreting Accessory Residential as an Allowed Use within Resort Hotels (PA2021-096) Planning Commission, May 6, 2021 Page 4
Table 1. Applicable Resort Hotel Properties in the City
Map ID Hotel Name Location General Plan Local Coastal Program Zoning
1 Renaissance Newport Beach 4500 MacArthur Blvd. Mixed-Use Horizontal (MU-H2)
N/A- Outside Coastal Zone Koll Center Planned Community (PC15)
2 Fashion Island Hotel 690 Newport Center Dr. MU-H3 N/A- Outside Coastal Zone North Newport Center Planned Community (PC56) 3 Hyatt Regency John Wayne Airport
4545 MacArthur Blvd. MU-H2 N/A- Outside Coastal Zone Newport Place Planned Community (PC11) 4 Newport Beach Marriot 900 Newport Center Dr. Visitor Serving Commercial (CV)
Commercial Visitor-Serving (CV-B) / Visitor Serving Commercial (CV)
Commercial Visitor-Serving (CV)
Appeals or Call for Review
Pursuant to NBMC Sections 20.64.030 and 21.64.030, within 14 days following the date of the Director’s Determination, any interested party may file an appeal to the Planning Commission. Alternatively, any member of the Planning Commission may call this item for review and bring the determination in front of the entire Commission for review at a
future meeting. The Commission may choose to repeal or modify the determination at
that time. The appeal or call for review deadline is Friday, May 14, 2021.
Environmental Review
This determination is not a project subject to the California Environmental Quality Act in
accordance with Section 21065 of the California Public Resources Code (“CEQA”) and Sections 15060 (c)(2), 15060 (c)(3), and 15378 of the California Code of Regulations Title 14, Division 6, Chapter 3 (“CEQA Guidelines”). The proposed action is also exempt pursuant to CEQA Guidelines Section 15061(b)(3), the general rule that CEQA applies only
to projects, which have the potential for causing a significant effect on the environment.
While this determination would result in an interpretation that allows residential uses as an accessory use to resort hotels, it does not authorize new development that would directly result in physical change to the environment.
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Interpreting Accessory Residential as an Allowed Use within Resort Hotels (PA2021-096) Planning Commission, May 6, 2021 Page 5
Public Notice
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the Planning Commission considers the item).
Prepared by: Submitted by:
ATTACHMENTS
PC 1 Director’s Determination No. DD2021-01
PC 2 Council Policy K-4
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Attachment No. PC 5
Appeal filed by SPON
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61
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Attachment No. PC 6
Council Policy A-18 and
Charter Section 423
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A-18
1
GUIDELINES FOR IMPLEMENTING CHARTER SECTION 423
Introduction
On November 7, 2000, the Newport Beach electorate approved Measure S (Exhibit A).
Measure S amended the Newport Beach City Charter by adding Section 423. In general
terms, Section 423 requires voter approval of certain amendments of the Newport Beach
General Plan (General Plan). Measure S “encourages” the City Council to adopt
implementing guidelines that are consistent with its purpose and intent. The City Council
has, consistent with Measure S, conducted a series of public meetings to receive input
from the public on Measure S and these Guidelines. The City Council has determined,
based on staff analysis and public input, that these Guidelines are consistent with the
express purpose of Measure S.
On November 6, 2006, the Newport Beach electorate approved Measure V, a
comprehensive update and amendment of the General Plan Land Use Element. The Land
Use Element approved by Measure V presents land use entitlement information in new
tables and maps, and regulates non-residential entitlement by floor area ratio (FAR)
differently than the Land Use Element that was in effect when Measure S was approved.
The City Council has determined, based on staff analysis and public input, that these
Guidelines, as amended for consistency with the 2006 Land Use Element, are consistent
with the purpose of Measure S.
Definitions
The definitions and terms in this section are intended to be consistent with the purpose
and intent of Measure S. Certain definitions and terms are intended to generally conform
to the definitions in, and terminology of, the most current edition of “Trip Generation,” a
multi-volume publication of the Institute of Transportation Engineers (ITE Manual). The
ITE Manual is the primary reference used by transportation professionals seeking trip
generation information. Measure S requires use of the ITE Manual as a basis for
calculating the Peak Hour Trips generated by a use permitted by an Amendment.
A. Allowed and Proposed Use. The term “allowed use” means any land use(s)
permitted by the General Plan on property or in an area. An allowed use may be
defined in terms of a residential use and/or a non-residential use generally
applicable to an area or property or a particular land use applicable to specific
parcel. A “proposed use” is a land use that would be permitted after an
Amendment is approved.
B. Amendment. The word “Amendment” means any proposed amendment of the
General Plan that is first considered and/or approved by the City Council
subsequent to December 15, 2000 and that increases the number of peak hour trips,
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(traffic,) floor area (intensity) or dwelling units (density) when compared to the
General Plan prior to approval. In all cases an Amendment shall state the proposed
entitlement in density and/or intensity and, in the case of intensity, the category of
non-residential use.
C. Approval. The word ”approve” (and any variations such as approved or approval)
means, in the context of the City Council’s decision on an Amendment, that four
members of the City Council have, after the City has complied with the
“mandatory procedures” described in Section A under Procedures, voted
affirmatively to adopt a resolution that contains the text of a proposed
Amendment. In the context of the voters’ decision on an Amendment, the word
”approve” (and any variations such as approved or approval) means that a
majority of those voting in the election have voted in favor of the Amendment.
D. Dwelling Unit. The term “dwelling unit” means “dwelling unit” as defined in
Section 20.03.030 of the Newport Beach Municipal Code (Code).
E. Entitlement. The word “entitlement” means the maximum amount of floor area or
dwelling units authorized by the General Plan for each allowed use on any
property and/or in any area. The term entitlement when preceded by the word
“proposed” shall mean the entitlement requested by an Amendment. Proposed
Amendments for parcels or areas entitled for special uses shall, when considered
by the Planning Commission and City Council and when submitted to the voters,
describe the proposed entitlement in both floor area and the appropriate unit of
measurement for that special use as utilized in the Trip Rate Table.
F. Floor Area. The term “floor area” shall be defined as follows (taken from Section
20.03.030 of the Code - “Floor area, gross”):
“The total enclosed area of all floors of a building measured to the outside face of
the structural members in exterior walls, and including halls, stairways, elevator
shafts at each floor level, service and mechanical equipment rooms, and basement
or attic areas having a height of more than seven feet.”
G. Non-residential Use. The term non-residential use means any land use other than a
residential use that is authorized by the General Plan and that generates any peak
hour trips. The term non-residential use includes the land uses specified in
Sections 20.05.040 (public and semi-public), 20.05.050 (commercial), 20.05.060
(industrial) and 20.05.070 (agriculture) of the Zoning Code. For the purposes of
these Guidelines, and specifically the Trip Rate Table, the non-residential use
categories are: (1) “Commercial” (which includes the General Plan designations of
“Neighborhood Commercial”, “Corridor Commercial”, “General Commercial”,
“Visitor Serving Commercial”“Recreational and Marine Commercial” and
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“Regional Commercial”); (2) “Commercial Office” (which includes the General
Plan designations of “General Commercial Office”, “Medical Commercial Office”
and “Regional Commercial Office”); (3) “General Industrial”;(4) “Airport Office
and Supporting”(5) the non-residential portions of “Mixed Use” categories; and
(6) “Public, Semi Public & Institutional” (which includes the General Plan
designations of “Public Facilities”, “Private Institutions”, “Open Space”, “Parks and
Recreation” and “Tidelands and Submerged Lands”).
H. Peak Hour Trips. The term “peak hour trips” means the number of vehicle trips
equal to the applicable peak hour trip rate specified in the Trip Rate Table (Exhibit
B) for any allowed use or proposed use multiplied by the entitlement (using the
appropriate quantity of the relevant “unit” of measurement specified in the Trip
Rate Table). When these Guidelines require a statement or calculation of peak hour
trips, the morning and evening peak hour trips shall each be provided and listed
separately. Exhibit B shall be updated annually or as often as ITE revises the Trip
Rate Table, and this update shall not be considered an amendment to this policy.
I. Peak Hour Trip Rate. The term “peak hour trip rate” means the morning and
evening average weekday rate during the peak hour of the adjacent street traffic for
an allowed use and proposed use (as specified in the Trip Rate Table and as
derived from the ITE Manual). In the event the Trip Rate Table does not contain a
peak hour trip rate for an allowed use or a proposed use, the peak hour trip rate
shall be based on the morning and evening weekday average peak hour trip rate
for the most comparable land use in the Trip Rate Table. The most comparable
land use in the Trip Rate Table shall be determined by the City Council based on
recommendation of the Planning Director and the Transportation and
Development Services Manager (Traffic Engineer). The morning and evening peak
hour trip rates shall be listed separately.
J. Prior Amendment. The term “Prior Amendment” means an Amendment that:
1. Affects property or an area within the same statistical area as an
Amendment that is being considered by the Planning Commission and/or
City Council; and
2. Was approved by the City Council after December 15, 2000; and
3. Was approved within ten years prior to the date the City Council approved
the Amendment being evaluated pursuant to Section 423 and these
Guidelines; and
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4. Was determined by the City Council, or by a final judgment of a court of
competent jurisdiction, not to require voter approval pursuant to Section 423
and these Guidelines.
K. Residential Use. The term “residential use” means General Plan entitlement that is
stated in terms of dwelling units.
L. Statistical Area. The term “statistical area” shall mean one of the statistical areas
identified (on Figure LU3)) in the Land Use Element of the General Plan approved
by the City Council on July 25, 2006 (Exhibit C). The term statistical area also
means any new statistical area(s) established for property annexed to the City
subsequent to July 25, 2006 and in such event Exhibit C shall be modified to depict
any new statistical area(s).
Methodology
Section 423 requires voter approval of any major amendment to the Newport Beach
General Plan. According to Section 423, a “major amendment” is one that significantly
increases traffic, intensity or density of allowed and proposed uses. This Section describes
the methodology and assumptions to be used for purposes of calculating the traffic
(maximum peak hour trips), intensity (floor area) and density (dwelling units) of allowed
uses and proposed uses.
A. Traffic/Peak Hour Trips. The purpose of this Section is to assist the City Council,
Planning Commission, staff, the public and property owners in understanding and
calculating the traffic generated by allowed and proposed uses. Section 423
specifies that the term “significantly increases” means “over 100 peak hour trips.”
Measure S and Section 423 do not define the terms “allowed uses” and “maximum
amount of traffic” and they do not specify a method of calculating any increase in
the maximum traffic resulting from an Amendment. The General Plan contains
non-residential use categories that authorize a wide range of land uses with
variations in trip generation rates that make infeasible the use of the highest peak
hour trip rate of any allowed use. Accordingly, for property or geographical areas
for which entitlement is specified in terms of one or more non-residential use
category, the peak hour trip rate specified in the Trip Rate Table represents a blend
of the ITE trip rates for the most prevalent uses within each category. The City
Council has determined that the methodology and assumptions in these Guidelines
represent the most reasonable method of determining the amount of traffic that is
allowed under the existing General Plan and the increase in peak hour trips
resulting from an Amendment. The following methodology shall be used for
calculating the peak hour trips of an allowed use and the increase, if any, in the
peak hour trips resulting from a proposed use if an Amendment is approved:
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1. Allowed Use. The peak hour trips that an allowed use could generate shall
be calculated by multiplying the entitlement for the property or area by the
morning and evening peak hour trip rate for the allowed use as specified in
the Trip Rate Table. If the allowed use is designated in terms of one or more
non-residential use category, the peak hour trip rate from the Trip Rate
Table for the applicable non-residential use category shall be used. If the
allowed use or uses are designated in terms of one or more specific land
uses, the peak hour trip rate from the Trip Rate Table for each specific use
shall be used in proportion to the amount of entitlement for each specific
use.
2. Proposed Use. The peak hour trips that a proposed use could generate shall
be calculated using the methodology specified in Subsection 1.
3. The increase, if any, in peak hour trips resulting from an Amendment shall
be calculated by subtracting the morning and evening peak hour trips
determined pursuant to Subsection 1 from the morning and evening peak
hour trips, respectively, determined pursuant to Subsection 2.
B. Intensity/Floor Area. The purpose of this Section is to assist the City Council,
Planning Commission, staff, the public and property owners in understanding and
calculating the "intensity of allowed uses" (allowed intensity) permitted by the
General Plan for any parcel or area that is designated, or proposed to be designated
for Non-Residential Uses and the allowed intensity resulting from approval of an
Amendment (proposed intensity). The Land Use Element, with the exception of
those special land uses described in Subsection 2, employs the following methods
of specifying allowed intensity: (a) allocating a specific amount of floor area
(specific floor area allocation); or (b) assigning a floor area ratio (floor area ratio),
with the allowed intensity calculated by multiplying the applicable floor area ratio
(“FAR”) by the gross land area of the parcel,.
1. Methodology. Except for “special uses” covered in subsections 2 and 3, the
increase in intensity resulting from approval of an Amendment shall be
calculated by subtracting the allowed intensity from the proposed intensity.
Both allowed and proposed intensity shall be calculated as follows:(i) the
specific floor area allocation; or (ii) the applicable FAR multiplied by the
gross land area.
2. Special Uses. The Land Use Element has historically entitled land uses on
the basis of the most common "unit of measurement" utilized in the ITE
Manual for calculating the peak hour traffic generated by that land use. The
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use of the appropriate "unit of measurement" ensures that the Land Use and
Circulation Elements are, as required by State law, properly correlated. Floor
area is the most common unit of measurement in the ITE Manual but a
different metric is used to measure peak hour trips in the case of certain land
uses such as hotels (rooms) and theatres (seats) because those metrics better
reflect the traffic generation characteristics of those uses. Consistent with
the ITE Manual, the City has historically entitled some large hotels in terms
of rooms and two large theaters in terms of seats. The City has, in Table
LU2 Anomaly Locations, either assigned 1,000 square feet of floor area for
each hotel room or indicated the number of hotel rooms allowed on the site.
Table LU2 also indicates the number of theater seats allowed on certain sites,
while the intensity limit for other sites where theaters are allowed is
indicated in Table LU1 Land Use Plan Categories. For the purposes of this
policy, the rate of 1,000 square feet per hotel room and 15 square feet per
theater seat shall be used.
3. Special Uses/Methodology. The "allowed intensity" of a parcel or area that
is entitled using hotel rooms or theater seats as a unit of measurement shall
be calculated on the basis of 1,000 square feet per hotel room or 15 square
feet per theater seat. The “allowed intensity” of a parcel or area that is
entitled in a unit of measurement other than floor area, hotel rooms or
theater seats shall be calculated on the basis of the greater of the floor area
specified in the “Density/Intensity” column of Table LU1 Land Use Plan
Categories or Table LU2 Anomaly Locations, or the amount of floor area of
the allowed uses existing on the parcel at the time the application for the
Amendment is filed.
C. Density/Dwelling Units. The dwelling units authorized in the General Plan for
property or an area before and after an Amendment shall be determined on the
basis of the maximum number of Dwelling Units allowed on the property or area
before and after the Amendment.
D. Trip Rate Table. The Trip Rate Table contains the morning and evening average
weekday peak hour trip rate for each land use specified in the ITE Manual. The
information in the Trip Rate Table is based on the vehicle trip rates and related data
in the ITE Manual. The term “unit” in the Trip Rate Table refers to the “unit of
measurement” or “independent variable” that was used in the trip generation
studies that form the basis of the trip rates reflected in the ITE Manual.
E. Entitlement Table. The Entitlement Table shall describe, by Statistical Area, the
peak hour trip (traffic), floor area (intensity) and dwelling unit (density) increases,
if any, of each Amendment approved by the City Council subsequent to December
15, 2000. The Entitlement Table shall not include any Amendment approved by the
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voters and an Amendment shall be removed from the Entitlement Table ten (10)
years after approval by the City Council.
F. Multiple Amendments. The City Council may have occasion to approve more than
one Amendment affecting the same Statistical Area at the same meeting. In such
event, the Amendments shall be deemed approved in the following order:
1. The Amendment(s) with the earliest date(s) of initiation or application (for
example GPA 2001-001) shall be deemed approved before an Amendment
with a later date of initiation or application (for example 2002-002).
2. In the event that more than one Amendment was initiated or applied for at
the same time, the Amendments shall be deemed approved in numerical
order (for example GPA 2001-001 would be deemed approved before GPA
2001-002).
G. Change in Land Use Category. In the case of an Amendment that proposes a
change in land use from non-residential to residential or vice versa no floor area
credit shall be given for allowed density (dwelling units) and no density credit shall
be given for allowed intensity (floor area). For example, in the case of a Residential
parcel with an allowed density of 20 dwelling units the allowed intensity is zero
square feet of floor area and in the case of a Non-residential parcel with an allowed
intensity of 100,000 square feet, the allowed density is zero dwelling units.
However, traffic (peak hour trip) credit shall be in accordance with the entitlement
multiplied by the appropriate peak hour trip rate.
Procedures
This Section describes procedures to be followed prior to City Council approval of an
Amendment and the submittal of that Amendment to the voters.
A. Mandatory Procedures. The City Council shall not approve an Amendment unless
and until the Planning Commission and City Council have first conducted noticed
public hearings as required by law and prepared and certified any environmental
document that is required by the California Environmental Quality Act (CEQA)
and the CEQA Guidelines. The City Council shall, at the same time the
Amendment is considered and decided, consider and decide any discretionary
land use approval or permit that is related to the Amendment and for which an
application has been submitted.
B. Staff Reports. The Planning Department shall prepare Planning Commission and
City Council staff reports for each Amendment. All Planning Commission and
City Council staff reports on an Amendment shall contain information relevant to
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whether the Amendment, if approved, would require voter approval pursuant to
Section 423. The reports shall include the following information:
1. In the case of an Amendment where the existing and/or proposed use is a
residential use, the number of dwelling units allowed by the General Plan
before and/or after the Amendment;
2. In the case of an Amendment where the existing and/or proposed use is a
non-residential use, the amount of floor area (and relevant unit of
measurement from the Trip Rate Table if different than floor area) allowed
by the General Plan before and/or after the Amendment;
3. In all cases, the number of peak hour trips allowed by the General Plan
before and after the Amendment;
4. A table that identifies each Prior Amendment (see definition in Section (2)J)
including any increase in Peak Hour Trips, Floor Area, and/or Dwelling
Units , and the date on which each Prior Amendment was approved;
5. A table that adds eighty percent (80%) of the increases in peak hour trips,
floor area and dwelling units resulting from Prior Amendments (see
Definitions Section J) to the increases in peak hour trips, floor area and/or
dwelling units (as appropriate) resulting from the Amendment under
consideration.
6. The Entitlement Table referenced under Methodology Section E.
7. Information about the Amendment, any associated project or land use
approval and the environmental analysis that would help the Planning
Commission and City Council make informed recommendations or
decisions on the Amendment and help the public develop informed
opinions about the Amendment.
C. City Council Review. The City Council shall determine at the noticed public
hearing at which any Amendment is approved if, based on the administrative
record for the Amendment including any testimony presented at that hearing, the
Amendment requires voter approval pursuant to Section 423. The City Council
shall submit an Amendment to the voters if:
1. The Amendment modifies the allowed use(s) of the property or area that is
the subject of the Amendment such that the proposed use(s) generate(s)
more than one hundred morning or evening peak hour trips than are
generated by the allowed use(s) before the Amendment; or
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2. The Amendment authorizes an increase in floor area for the property or area
that is the subject of the Amendment that exceeds forty thousand (40,000)
square feet when compared to the General Plan before approval of the
Amendment; or
3. The Amendment authorizes an increase in the number of dwelling units for
the property or area that is the subject of the Amendment that exceeds one
hundred (100) dwelling units when compared to the General Plan before
approval of the Amendment; or
4. The increase in morning or evening peak hour trips, floor area or dwelling
units resulting from the Amendment when added to eighty percent (80%) of
the increases in morning or evening peak hour trips, floor area or dwelling
units resulting from Prior Amendments (see Definitions Section J) exceeds
one or more of the voter approval thresholds in Section 423 as specified in
Subsection 1, 2 or 3.
D. Calling an Election. In the event the City Council determines that the Amendment
requires voter approval, the City Council shall, at the noticed public hearing at
which the Amendment was approved or a subsequent noticed public hearing held
no more than sixty (60) days after making the determination, adopt a resolution
calling an election on the Amendment. The City Council shall schedule the election
on the Amendment at the next regular municipal election (as specified by the City
Charter) or at a special election if the City and the proponent of the Amendment
have entered into a written agreement to share the costs of the special election. The
City Council shall, at the time the election is called, direct the City Attorney to
prepare an impartial analysis of the Amendment. The impartial analysis shall
contain information about the Amendment, any related project or land use
approval, and the environmental analysis conducted of the Amendment that will
help the electorate make an informed decision on the Amendment. In the absence
of an ordinance or Charter provision that establishes a procedure for submittal of
arguments or rebuttals relative to City measures, the City Council shall, at the time
a decision is made to submit an Amendment to the voters, adopt a resolution that
authorizes the filing of arguments and rebuttals in accordance with the general
procedures specified in the Elections Code.
E. Exclusive Method. Effective November 3, 2004, in the absence of a mandatory
duty arising from an initiative petition, referendum petition, court order or other
mandatory legal obligation, Section 423 and the procedures outlined in these
Guidelines represent the sole and exclusive method by which the City Council
considers, approves and submits for voter approval an Amendment that is subject
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to Section 423. The City Council has also determined that nothing in Section 423
prevents the City Council from submitting any matter other than an Amendment
to the voters as an advisory measure.
[Attachment - Exhibit A]
[Attachment - Exhibit B]
[Attachment - Exhibit C]
History
Adopted A-18 – 3-27-2001
Amended A-18 – 6-8-2004
Amended A-18 – 7-13-2004
Amended A-18 – 8-11-2009
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EXHIBIT A
Section 423. Protection from Traffic and Density.
Voter approval is required for any major amendment to the Newport Beach General Plan.
A "major amendment" is one that significantly increases the maximum amount of traffic
that allowed uses could generate, or significantly increases allowed density or intensity.
"Significantly increases" means over 100 peak hour trips (traffic), or over 100 dwelling
units (density), or over 40,000 square feet of floor area (intensity); these thresholds shall
apply to the total of: 1) Increases resulting from the amendment itself, plus 2) Eighty
percent of the increases resulting from other amendments affecting the same
neighborhood and adopted within the preceding ten years. "Other amendments" does not
include those approved by the voters. "Neighborhood" shall mean a Statistical Area as
shown in the Land Use Element of the General Plan, page 89, in effect from 1988 to 1998,
and new Statistical Areas created from time to time for land subsequently annexed to the
City.
"Voter approval is required" means that the amendment shall not take effect unless it has
been submitted to the voters and approved by a majority of those voting on it. Any such
amendment shall be submitted to a public vote as a separate and distinct ballot measure
notwithstanding its approval by the city council at the same time as one or more other
amendments to the City's General Plan. The city council shall set any election required by
this Section for the municipal election next following city council approval of the
amendment, or, by mutual agreement with the applicant for the amendment, may call a
special election for this purpose with the cost of the special election shared by the
applicant and the City as they may agree. In any election required by this Section, the
ballot measure shall be worded such that a YES vote approves the amendment and a NO
vote rejects the amendment; any such election in which the ballot measure is not so
worded shall be void and shall have no effect.
This section shall not apply if state or federal law precludes a vote of the voters on the
amendment.
---------------------------------------------------------------------------------------------------------------------
(End of amendment. But the proposed ballot measure also includes the following
"Second" through "Seventh":)
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Second. Purpose.
It is the purpose of the amendment to give the voters the power to prevent Newport Beach
from becoming a traffic-congested city, by requiring their approval for any change to the
City's General Plan that may significantly increase allowed traffic; and also to make sure
that major changes do not escape scrutiny by being presented piecemeal as a succession of
small changes.
Third. Findings.
1. In planning the growth of their city and protecting its quality of life, a prime
concern of the people of Newport Beach is to avoid congestion and gridlock from
too much traffic.
2. The General Plan guides growth in the City of Newport Beach by designating land
use categories for all lands in the City, and providing limits on the allowed density
and intensity of use for each land use category.
3. The General Plan already provides for additional growth in the City; if all
development allowed by the General Plan were to be built, the traffic generated in
the City would increase by about 20%.
4. The people, whose quality of life is at stake, should have the power to disapprove
any proposed General Plan amendment that may significantly increase traffic
congestion beyond that which could already occur from development under the
General Plan.
Fourth. Implementation.
1. It is the intent of the foregoing amendment to the City Charter of the City of
Newport Beach that, to the maximum extent permitted by law, it apply to all
amendments to the General Plan approved by the Newport Beach city council after
the time of filing of the Notice Of Intent To Circulate Petition, provided that it shall
not apply to any amendment for a development project which has obtained a
"vested right" as of the effective date of the foregoing amendment to the City
Charter. A "vested right" shall have been obtained if:
(a) The project has received final approval of a vesting tentative map. As to
such vesting tentative maps, however, they shall be exempt only to the
extent that development is expressly authorized in the vesting tentative map
itself; or
(b) The project has obtained final approval of a Development Agreement as
authorized by the California Government Code; or
(c) The following criteria are met with respect to the project:
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(i) The project has received a building permit, or where no building
permit is required, its final discretionary approval, and
(ii) Substantial expenditures have been incurred in good faith reliance on
the building permit, or where no building permit is required, the
final discretionary approval for the project; and
(iii) Substantial construction has been performed in good faith reliance on
the building permit, or where no building permit is required, on the
final discretionary approval.
Phased projects shall qualify for vested rights exemptions only on a phase by phase basis
consistent with California law.
2. The city council is encouraged to adopt guidelines to implement the foregoing
amendment to the City Charter of the City of Newport Beach following public
notice and public hearing, provided that any such guidelines shall be consistent
with the amendment and its purposes and findings. Any such guidelines shall be
adopted by not less than six affirmative votes, and may be amended from time to
time by not less than six affirmative votes.
3. The City shall take all steps necessary to defend vigorously any challenge to the
validity of the foregoing amendment to the City Charter of the City of Newport
Beach.
4. Peak hour trip generation rates shall be calculated using the most recent version of
the Trip Generation Manual of the Institute of Transportation Engineers. The city
may fine-tune these rates, but not to less than 95% of the rates in the Manual.
Fifth. Attachment.
Attached to this petition is a copy of page 89 of the Land Use Element of the General Plan,
showing the "Statistical Areas" of the City of Newport Beach.
Sixth. Construction.
Nothing herein shall be construed to make illegal any lawful use presently being made of
any land or to prohibit the development of any land in accordance with the provisions of
the City's General Plan in force at the time of filing of the Notice of Intent to Circulate
Petition.
Seventh. Severability.
If any part of this initiative is declared invalid on its face or as applied to a particular case,
such decision shall not affect the validity of the remaining parts, or their application to
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other cases. It is hereby declared that each part of this initiative would have been adopted
irrespective of the fact that any one or more other parts be declared invalid. "Part" is
generic, including but not limited to: Word, clause, phrase, sentence, paragraph,
subsection, section, and provision.
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Exhibit
B
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80
A-18
17
81
A-18
18
82
A-18
19
83
A-18
20
84
A-18
21
85
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EXHIBIT C
87
July 8, 2021, Planning Commission Item 3 Comments
These comments on a Newport Beach Planning Commission agenda item are submitted by:
Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229).
Item No. 3. APPEAL OF INTERPRETATION ALLOWING ACCESSORY
RESIDENTIAL WITHIN RESORT HOTELS (PA2021-096)
Key Points
Like SPON, I urge the Planning Commission to reverse the April 30 Director’s Determination
and suggest the City Council instead consider hotel room conversion as a potential strategy to
be pursued as part of the broader effort to update the General Plan Housing Element, Land Use
Element and Coastal Land Use Plan in response to the City’s state-mandated Regional Housing
Needs Assessment allocation.
The Director’s Determination, and the Council Policy K-4 from which it flows, may be well-
intentioned, but they are based on flawed assumptions:
To the extent the Determination is needed expand the economic horizons of certain
hotel owners so as to open an avenue for relief from COVID-19 impacts:
o Three of the four hotel sites to which it applies are already designated Mixed Use
in the General Plan and could be accommodated by minor adjustments to the
General Plan.
o The fourth hotel is designated CV in the General and Coastal Land Use Plans.
CV is a subcategory of ““Commercial Districts” in those plan’s fundamental
distinction between “Residential Neighborhoods,” “Commercial Districts and
Corridors,” “Mixed-Use Districts,” and others. The claim that it has always been
the intent of these land use plans to allow certain kinds of mixed use on
properties with a commercial district designation is not an interpretation of
ambiguities; it is a fundamental change to the plan, which, as the Director himself
has acknowledged requires amendments to them.
To the extent the Determination is needed to help the City in meeting its Regional
Housing Needs Assessment allocation for the 6th RHNA Cycle, we have been told the
menu of potential policies for achieving the 4,845 dwelling unit goal don’t need to be
adopted until February 2021, and the implementation of specific policies sufficient to
meet the RHNA does not have to be completed for three years after that. No reason has
been offered for why this particular strategy should be pushed ahead of all others
without the public debate and vetting the others will receive. Common sense indicates
better and more cohesive policy will result if all the options for meeting RHNA are
considered together, not in isolation.
As SPON points out in their appeal document, staff is misunderstanding the fundamental
limits a city charter places on a city’s authority to govern. Newport Beach’s Charter
reasonably assumes that development will be limited by the Council-adopted General
Plan, and it explicitly limits the authority of the Council (and by extension, any entity
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
July 8, 2021, PC agenda Item 3 comments - Jim Mosher Page 2 of 6
under the council) to add dwelling units to that plan without voter approval. In the case of
the two hotels in Newport Center, in 2019 the Council added enough housing to the
General Plan for that statistical area as to already essentially exhaust its authority to add
the possibility of more units to that area before 2029 without voter approval. Yet, this
Determination immediately adds 247 dwelling units that, by its own terms, would not
have been recognized in the General Plan without the Determination. Adding that
number of units to the previously-approved General Plan without voter approval is in
clear conflict with the City Charter. Neither the Council nor City staff have any authority
to do this.
For the two hotels in the Airport Area, I believe there are still voter approved residential
unit allocations unclaimed in the mixed-use areas were the hotels lie, which could be
used for residential construction on those sites. However, from the present staff report, it
appears staff’s interpretation of its Determination is that it adds a new entitlement for 245
dwelling units above and beyond that. This again, is in clear conflict with the limits
Newport Beach voters have, through their Charter, placed on their local government’s
authority to govern.
Even if the numbers were not excessive, the Determination also conflicts with long-
existing City policy and the explicit understanding at the time the General Plan
development limits were last submitted for voter approval in 2006 that voter-approved
hotel room allocations were not interchangeable with dwelling unit allocations. The
dwelling units added by staff need to be counted toward the Greenlight tracking. Staff’s
assertion that only units added by General Plan amendment need to be counted, and
that a “Determination” that the General Plan means something different than it formerly
did is not an “amendment” only points out the inconsistency of their approach.
Even without the City Charter conflict, the Director’s authority to interpret the codes is
limited by those codes, particularly in adding an unlisted use, as is being done here. It is
unclear the findings that must be made in support of an interpretation can be made as
glibly as they are in this interpretation. Particularly in the case of the CV-designated
hotel, that the unlisted use (permanent residences) is not a listed use in other districts.
Should the Planning Commission not be inclined to reject the Determination in whole, its
authority to modify it on appeal is unclear. But the Determination is much in need of
modification:
The Determination describes the eligible hotel properties as having to be “a self-
contained destination that provides for all travel accommodation needs in one location,
including but not limited to restaurants, bars, shopping, and recreational facilities.” It is
not clear if it means all this has to be provided on the hotel property itself, or in the
vicinity of the hotel. If it means on the hotel property, it is not clear how many of the four
hotels would actually provide all of a permanent resident’s shopping needs.
By arbitrarily excluding from eligibility all hotels that happen to lie within the Coastal
Commission’s appeal area, the Determination excludes, without explanation, a number
of properties where one would think resort living would be most desirable.
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o Beyond that, I am not sure how staff made its determination about the status of
hotel properties in Newport Coast with regard to the appeal area. The
Determination refers to the “Post-LCP Certification Permit and Appeal
Jurisdiction Map,” but the Post LCP Certification Permit and Appeal Jurisdiction
map posted on the City’s LCP website shows Newport Coast as “NOT A PART.”
The Determination uses the term “approved hotel rooms” without explaining what it
means.
o Does this mean currently existing rooms for which the City has issued a
“certificate of occupancy” (or the equivalent for a hotel room)?
o Or does it mean the maximum number of rooms “approved” in the land use plan?
In saying those rooms “may be converted to residential units,” the Determination is
unclear as whether this is predicated on the General Plan already having sufficient
allocation for those units (as may exist in the Airport Area), or this is creating an
allocation for new residential units not previously recognized in the land use plans.
SPON is assuming the latter, but the Determination is not entirely clear.
The last condition, that “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” does not
establish a clear and enforceable public policy.
o The directive from Council, in its own questionably valid Policy K-4, was to
“Require property owners converting permitted hotel and motel rooms into
residential units to mitigate impacts as a result of the conversion including, but
not limited to, creating affordable housing units either in the project itself or
through a contribution of in-lieu fees.”
o The Determination creates no requirement to create affordable housing units
either in the project itself or through a contribution of in-lieu fees. On the contrary,
a hotel owner reading the Determination can easily argue that by converting hotel
rooms to luxury housing to their hotel they are helping solve California’s housing
crisis, but since hotel rooms are not housing, they are not causing any reduction
in (that is, any potential impact to) the City’s affordable housing stock. Therefore,
there is nothing to mitigate and no need to pay an in-lieu fee.
Supporting Information
Determination Not Needed for Three Hotels
As indicated in the Hotel List in Attachment A to the April 30, 2021, Director’s Determination,
three of the eligible hotels are outside the Coastal Zone and already on property with a Mixed
Use General Plan land use designation.
Not only is housing already an allowed use on these properties, but the Renaissance Newport
Beach and Hyatt Regency John Wayne Airport are in the MU-H2 which is eligible for a 2,200
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unit General Plan residential unit overlay, which includes the potential for replacement of
existing commercial square footage with housing. However, as approved by voters in 2006, the
overlay applies only to “replacement of existing office, retail, and/or industrial uses.”
I believe (but am not sure) that enough of the 2,200 units remain unclaimed to accommodate
the up to 245 units contemplated by the Determination. Since it adds no new units, and does not
require voter approval, it is within the City Council’s power to modify the General Plan overlay
description to include existing “hotel room” as well as “office, retail, and/or industrial uses.”
That would seem the better and clearer policy direction.
For the Fashion Island Hotel, with its MU-H3 General Plan designation, housing was originally
possible on the site since the voters in 2006 approved a floating 450 units (and 65 hotel rooms)
over the MU-H3 area. However, those residential units, and more, have been built, so
accomplishing the objective of the Determination would require the Council adding (according to
Table 1 of the current staff report) 88 new units, which exceeds its current authority.
Formally adding the new dwelling unit allocation to the General Plan would, again, be the better
and clearer policy direction, but it would require voter approval.
Newport Beach Marriott Especially Problematic
The applicability of the April 30 Director’s Determination to the Newport Beach Marriott is
especially problematic because of the property’s Visitor Serving Commercial (CV) designation in
both the General and Coastal Land Use Plans.
The Determination does not state in full the description of the CV designation in Table 2.1.1-1 of
the CLUP, which, if it did, would make clear the findings in the Determination cannot be made.
Permanent residential use is not “equivalent” to any of the listed uses for that designation, but it
is an allowed us on land with other designations – both of which disqualify the interpretation.
Moreover, Subsection 21.48.025.D of the LCP Implementation Plan explicitly prohibits the
conversion of existing hotel rooms even to limited use overnight visitor accommodations, let
alone permanent residences.
As a result, extensive changes to the LCP would be required. This is far beyond the scope of a
Director’s interpretation.
City Cannot Ignore Its Charter
The right of the residents of a California city to limit what their city government can do is a power
granted to the voters by Sections 3 and 5 of Article XI of our California Constitution.
A charter, if adopted, is recognized as the supreme law of the city, with which all city actions
must be consistent.
Newport Beach voters exercised their prerogative to adopt a Charter in 1954, and in 2000 they
voted to add Section 423 to it (adopted by Measure S, also known as Greenlight). Section 423
assumes that develop in the City will be limited by its Council-adopted General Plan, and it limits
the number of dwelling units and the amount of non-residential square footage the Council can
add to that Plan over a rolling 10-year period without voter approval.
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Hotel Rooms Are Not Interchangeable with Residential Allocations Under
Greenlight
Voter adoption of Charter Section 423 was followed by mutually-agreed to rules of
interpretation, enshrined in City Council Policy A-18.
Under those rules hotel rooms are regarded as non-residential development and assigned a
value of 1,000 square feet each unless specified otherwise in the General Plan. General Plan
allocations for hotel rooms are not, and never have been, considered interchangeable with
allocations for dwelling units.
Newport Beach voters last approved General Plan land use allocations in what went on the
ballot as Measure V in 2006. In that vote, the four hotel sites that are the subject of the April 30
Determination were identified as planning “anomalies” with a specific maximum number of hotel
rooms assigned to each. Those were approved as hotel rooms, not permanent residences.
The non-interchangeability of the two was explicitly discussed and understood before Measure
V was presented to voters in view of a last minute proposal from The Irvine Company to add to
the General Plan a policy extremely similar to the present Determination. In that proposal, the
policy would have allowed the voter-approved hotel rooms assigned to the Fashion Island Hotel
property to be used, alternatively, as an allocation for residential units (see page 3 of the June
27, 2006, City Council Item 33 staff report for the policy proposal and the video starting at
3:59:00 for its discussion).
The Council concluded that under Greenlight, and recognizing that hotel rooms and dwelling
units are in different Greenlight land use categories, if it were to add the requested policy it
would have to ask voters to approve the potential for hotel rooms and dwelling units.
Wanting to limit the number of dwelling units it was seeking approval for, the Council chose to
reject The Irvine Company’s proffered policy and seek voter approval only for the hotel rooms
(see July 11, 2006, meeting video at 1:46:50).
Now, 15 years later, we are being told by staff that 30% of what voters approved as, and the
Council understood to be, hotel rooms at the Fashion Island Hotel site were actually approved
by voters to be built as permanent dwellings, should the landowner so choose.
That does wash.
Number of New Dwelling Units Added to Those Currently in General Plan
Exceeds City’s Authority to Add
City Charter Section 423 limits the City’s authority to add dwelling units to the General Plan
without voter approval to 100 units per statistical area per 10 years.
Newport Center, in which two of the hotels affected by the Determination are located, is
Statistical Area L1. The Council recently amended the General Plan to make possible the
Vivante Senior Living project in that same statistical area, which according to staff’s own
Greenlight Tracking Table for area L1 has lowered the City’s authority to add additional units,
without voter approval, to 28 (currently being sought by the “car wash” project recently reviewed
by the Commission).
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The 247 dwelling units the April 30 Determination adds to Statistical Area L1 far exceed this
staff-acknowledged limit. City staff argues this limit is inapplicable because they have not
“amended” the General Plan. Yet they have “found” new units in the Plan that voters never
approved.
Similarly, the two hotels affected by the Determination in the Airport Area are in Statistical Area
L4, to which the Council has added no dwelling units in the last ten years. But assuming staff
believes its Determination is creating new units rather than reallocating a part of the 2,200
voters approved in 2006, the number of new units involved – 245 new dwellings – again
exceeds the City’s authority to add to the General Plan.
The pretense that the General Plan can be changed by staff or Council without amending it is
clearly purposeful misdirection intended to evade the City Charter, the supreme law of the City.
This is particularly disturbing because at the February 9, 2021, City Council study session, the
Director himself said he wanted to ask if they were interested in considering hotel room
conversion to residential as an option for meeting RHNA. And he said he needed to ask
because if they did want to pursue hotel conversion, it would take time because it would require
amendments to the General Plan and Local Coastal Program (see video and his Slide 9).
Lack of Clarity as to What Planning Commission Can Do
As best I can tell, neither Title 20 or Title 21 of the Municipal Code empower the Planning
Commission to issue its own interpretation of those codes.
Sections 20.64.030 and the parallel provisions in 21.64.030 do allow the Commission to hear
appeals, such as the present one, of determinations made by the Director.
On appeal, the Commission’s authority over the determination appears to be limited to its ability
to “Affirm, affirm in part, or reverse in whole or in part” the staff action, or, in light of new
evidence, to refer it back for further consideration.
While on earlier pages I suggested some possible modifications to the Determination, of the
options available to the Commission, “reverse in whole” seems the most appropriate.
Since the City Charter more generally empowers the Commission to make recommendations to
the Council regarding amendments to the General Plan, after a public hearing thereon, it would
seem appropriate to accompany with reversal with a recommendation to the Council that they
ask the Commission to pursue hotel room conversion as part of the Housing Element Update
process.
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
From:Cynthia Kellman
To:Murillo, Jaime; Jurjis, Seimone; Planning Commissioners
Cc:Michelle Black
Subject:July 8, 2021 Agenda Item #VIII, Public Hearing Item #3 Appeal of Project No. PA2021-096 and Activity No.DD2021-01 Director"s Determination Interpreting Accessory Residential as Allowed Use within Resort Hotels
Date:Wednesday, July 7, 2021 4:23:56 PM
Attachments:SPON 7-7-21 Final.pdf
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
content is safe.Dear Commissioners,
Attached please find a comment letter from Michelle Black regarding the above-captioned subject.
Please feel free to contact us with any questions or concerns.
Cynthia KellmanCHATTEN-BROWN, CARSTENS & MINTEER2200 Pacific Coast Highway, Ste. 318Hermosa Beach, CA 90254Direct Tel: 323-296-9026Fax: 310-798-2402cpk@cbcearthlaw.comwww.cbcearthlaw.com
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
July 7, 2021
By U.S. Mail and Email: jmurillo@newportbeachca.gov
sjurjis@newportbeachca.gov
planningcommissioners@newportbeachca.gov Planning Commission City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660
Re: July 8, 2021 Agenda Item #VIII, Public Hearing Item #3
Appeal of Project No. PA2021-096 and Activity No. DD2021-01
Director’s Determination Interpreting Accessory Residential as
Allowed Use within Resort Hotels
Honorable Commissioners,
These comments are submitted on behalf of Stop Polluting Our Newport (SPON) in connection with its May 14, 2021 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 approximately 250 new dwelling units 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.
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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: [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.
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(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. 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 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
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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 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 new development would add 100 dwelling units when the change would
require a General Plan amendment. As discussed above, until recently, the City Planning
Director has maintained that conversions of hotel rooms to other uses 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. 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
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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 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 add to those rooms, it does not provide authority to convert those rooms to other uses. 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
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enactments may have occurred outside of the General Plan Amendment context precisely
to avoid the requirements of the Greenlight Initiative. The fire station example 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 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 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.
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IV. 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.
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 Commission 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
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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 already
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. Sincerely, Michelle Black, on behalf of SPON 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
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
Attachment 1
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
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Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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.
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Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
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Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
Attachment 2
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
Attachment 3
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
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
Planning Commission - July 8, 2021 Item No. 3a - Additional Materials Received Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels
Interpreting Accessory
Residential as an Allowed Use
within Resort Hotels
Appeal of Director’s Determination
No. DD 2021-001
Planning
Commission
Public Hearing
July 8, 2021
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Council Policy
K-4
Reducing
Barriers to the
Creation of
Housing
City Council adopted March 9, 2021
Regional Housing Needs Assessment
(RHNA)
Extraordinary allocation= 4,845 units
Need for new/flexible regulations &
strategies
ADUs
Review of mixed-use zoning
Mixed-use resorts hotels
Community Development Department -Planning Division 2
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Council Policy
K-4
Mixed-Use
Resort
Opportunities
COVID-19 impacts to hotel industry
Opportunity to revitalize
older/underperforming hotels
Economies of scale / cross pollination
Issue interpretation to allow accessory
residential:
Deemed accessory to principal hotel use subject
to restrictions
Deemed consistent with GP, ZC, and LCP
Consider fiscal impacts and address affordable
housing
Community Development Department -Planning Division 3
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Director’s
Authority to
Interpret Code
Section 20.12.020(E) & 21.12.020(E)
Gives the Community Development Director
authority to make interpretations of code and
determine if unlisted land uses are allowed.
Community Development Department -Planning Division 4
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Director’s
Determination
DD2021-001
April 30, 2021
1.Applicable to resort hotels outside Coastal Commission appeal area
2.Conversion on a 1 to 1 basis
3.Maximum 30% of approved hotel rooms
4.Within a repurposed hotel or new structure
5.CUP/CDP required
6.Adequate parking to be provided
7.Development Agreement to address public access, affordable housing, loss of TOT
Community Development Department -Planning Division 5
Allows residential uses as an accessory use to a hotel resortPlanning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Stop Polluting
Our Newport
(SPON)
Basis for Appeal
Improperly converts General Plan –
approved hotel allocations into
General Plan-approved dwellings
units without a Greenlight (Charter
Section 423) tracking
If processed as GP Amendment,
potential for over 250 units requiring
voter approval
Community Development Department -Planning Division 6
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Charter Section
423
(excerpt)
Community Development Department -Planning Division 7
No GP Amendment
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Charter Section
423
(excerpt)
Community Development Department -Planning Division 8
No GP Amendment
Trip rates for dwelling units are similar
or less than hotel
Conversions limited on a 1 for 1 basis
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Prior
Approved
Conversions
Newport Beach Country Club
Converted 17 tennis courts into 27 hotel rooms
Approved by the Planning Commission (2011) and Approved by the City Council (2012)
Villas Fashion Island
Transfer and convert 79 hotel rooms to residential units
Planning Commission and City Council Approval (2012)
Community Development Department -Planning Division 9
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Prior
Determinations
New Fire Station No.2 Site
Existing CV Zone
Located in Coastal Zone
Fire Station not a listed use in
CV zone
Directors Determination
allowed an unlisted use in the
CV Zone
Community Development Department -Planning Division 10
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
Recommended
Action
Conduct a public hearing
Find Determination exempt
from CEQA
Adopt resolution denying the
appeal and uphold Director’s
Determination
Community Development Department -Planning Division 11
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)
For more
information
Contact Questions?Jaime Murillo, AICP
949-644-3209
jmurillo@newportbeachca.gov
www.newportbeachca.gov
Community Development Department -Planning Division 12
Planning Commission - July 8, 2021 Item No. 3b - Additional Materials Presented by Staff Appeal of Interpretation Allowing Accessory Residential withing Resort Hotels (PA2021-096)