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CC- PUBLIC HEARING- Adoption of a Resolution Approving Density Bonuses and Other Bonus Incentives and Tentative Tract Map (P2015-0127-DOBI and TTM) for a Proposed Five-Story Mixed Use Project Consisting of 37 Multi-Family Residential Dwelling Units, Three of which will be Very Low Income Affordable Units, Above 7,206 Square Feet of Ground Floor Retail Commercial Space with Surface and Subterranean Parking Including Tandem Parking Spaces at 12803 Washington Boulevard.
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Meeting Date: 09/12/2016
Contact Person/Dept: Jose Mendivil, CDD Phone Number: (310) 253-5757
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [X] Action Item: []
Attachments: Yes [X] No []
Commission Action Required: Yes [X] No [] Date: 07/27/16
Commission Name: Planning Commission
Public Notification: (E-Mail) Meetings and Agendas - City Council (08/22/16; and 09/07/16); Mailed to all the property owners and occupants within a 500 foot radius extended to the end of the block; Sign Posted on the subject property on August 22, 2016; Posted on the City’s website on August 22, 2016.
Department Approval: Sol Blumenfeld, Director of Community Development (08/17/16)
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RECOMMENDATION:
Staff recommends the City Council adopt a resolution approving Density Bonuses and Other Bonus Incentives and Tentative Tract Map (P2015-0127-DOBI and TTM), subject to the Planning Commission Conditions of Approval referenced in the proposed resolution (Attachment No. 1) in order to allow construction of three affordable dwelling units and subdivision for airspace units for the Project Site located at 12803 Washington Boulevard.
PROCEDURE:
1. The Mayor seeks motion to receive and file the affidavit of mailing and posting of public notice.
2. The Mayor calls on staff for a brief staff report and City Council poses questions to staff as desired.
3. The Mayor seeks a motion to declare the public hearing open, providing the applicant the first opportunity to speak, followed by the general public.
4. The Mayor seeks a motion to close the public hearing after all testimony has been presented.
5. The City Council discusses the matter and arrives at its decision.
BACKGROUND:
Request
On October 28, 2015, an application was submitted by Axis Mundi RE II, LLC (the “Applicant”) for a Site Plan Review and Administrative Use Permit for a mixed use project consisting of 27 multi-family residential dwelling units above 7,293 square feet of ground floor retail commercial space with surface and subterranean parking at 12803 Washington Boulevard (the “Site”). This proposal included a density increase from 35 dwelling units per acre (or 19 units) to 50 dwelling units per acre (or 27 units) through the community benefits provisions of the Mixed Use Ordinance (“Community Benefits”). The Applicant proposed to provide 21 public parking spaces on the Site as the proposed community benefit.
At the time of the application submittal, the Applicant was considering adding an affordable housing component to the project under SB 1818 (State Density Bonus Law) which would increase the density to 37 dwelling units in return for covenanting three units for very low income households. This change is based on a 35% density increase from the 27 base density units that incorporates the Community Benefits increase. On March 23, 2016, the Applicant submitted a revised application summarized as follows (Project):
• 56-foot high, five-story mixed use project;
• Four stories containing 37 dwellings units;
• A ground level containing 7,206 square feet of commercial space;
• 21 public metered parking and 13 commercial parking spaces at the ground level;
• 70 residential tandem, nine commercial, three handicapped & two extra parking spaces in the subterranean level.
• Total parking count of 118 parking spaces
The project requires approval of a:
• Site Plan Review: To build residential units exceeding nine units and commercial area exceeding 4,999 square feet (approved by the Planning Commission on July 27, 2016);
• Density Bonuses and Other Bonus Incentives (DOBI): To allow a density increase of 35% from the base of 27 units allowed to 37 units in return for three covenanted very low income units among the 37 units proposed to be constructed as per State Density Bonus Law (on July 27, 2016, Planning Commission recommended to the City Council approval of the DOBI);
• Administrative Use Permit: To stripe 36 pairs of tandem parking spaces (approved by the Planning Commission on July 27, 2016); and,
• Tentative Tract Map (TTM): To subdivide the site into airspace commercial and residential properties (on July 27, 2016, Planning Commission recommended to the City Council approval of the TTM).
Project History
The Project Site is owned by the City. On February 7, 2008, the former Culver City Redevelopment Agency (CCRA) entered into a Disposition and Development Agreement (DDA) with the Applicant for (1) the sale of the former CCRA’s property located at 12803 Washington Boulevard; and (2) the development and construction of a retail/office project on the Site. The developer has modified the project as a mixed use development and the DDA (which is still in effect) has been extended on 10 occasions by mutual agreement.
On April 8, 2016 the City Council approved an Eleventh Implementation Agreement to the DDA allowing:
• A modification to the scope of development to include a mixed-use residential commercial project;
• The application of the density bonus provisions in both the City’s Mixed-Use Ordinance and State Density Bonus Law for the construction of a total of 37 residential units, including three very-low income affordable housing units with 30-year affordability covenants; and,
• Subsurface encroachments beneath the public right-of-way (sidewalks) on Washington Boulevard, and Moore and Meier Streets.
A further revision to the project was submitted on May 18, 2016, with submittal of a Tentative Tract Map to create commercial (at the ground floor) and residential condominium airspace lots.
On July 27, 2016, the Planning Commission, after considering the staff report, the application materials, applicant presentation, and providing an opportunity for public comment, adopted Resolution No. 2016-P009 (Attachment No. 2) approving Site Plan Review (P2015-0127-SPR) and Administrative Use Permit (P2015-0127-AUP) and recommending to the City Council approval of Density Bonuses and Other Bonus Incentives (P2015-0127-DOBI) and Tentative Tract Map (P2015-0127-TTM). No appeals were filed on the SPR and AUP and the Planning Commission decision on those items is final.
Tonight, the City Council is requested to act only on the DOBI and TTM. Please see Attachment Nos. 3 through 8 (Planning Commission Staff Report, Preliminary Development Plans, Tentative Tract Map, Table 1 - Developer Concessions and Density Bonus, Concessions Diagrams, and Planning Commission Minutes) for a detailed review of the Project. It should be noted that all three affordable units are consistent in design, finishes, amenities, and architecture with the rest of the units and will have the same access to common areas and residential parking that the market rate units have. The three affordable units will not be distinguishable from the other units.
ANALYSIS:
The DDA requires the Applicant to construct a high quality mixed use retail/office project and permits administrative changes, including changes to land use, subject to Planning Commission and City Council approval of entitlements. The Applicant has proposed changes to land use from the original entitlements reflected in the DDA in order to construct a mixed used development with affordable housing units, combining State Density Bonus Law and Community Benefits (from the City’s Mixed Use Ordinance). Pursuant to Section 17.400.065 of the Zoning Code, when there is a DDA (or Owner Participation Agreement, Development Agreement or similar agreement) with the City or former CCRA and provisions in the DDA differ from the Mixed Use Development Standards, the provisions of the DDA shall prevail. The Applicant has requested, through the Eleventh Implementation Agreement, a density bonus combining the density incentives described above and relief from a front setback requirement in order to allow balconies and enclosed living areas within the setback.
In addition, the Developer is requesting that the Project’s subterranean parking garage be allowed to encroach beneath the public right-of-way (sidewalks) on Washington Boulevard, and Moore and Meier Streets (see attached). The encroachments into the right-of-way were contemplated in the DDA, but the Developer has subsequently refined the Project design to reduce the amount of encroachment originally allowed. The DDA allowed a cumulative total encroachment of approximately 3,767 square feet, which has been reduced to approximately 3,632 square feet. If approved by the City Council, the encroachments will be memorialized in the Eleventh Implementation Agreement.
The Planning Commission was asked to consider the proposed Project development entitlements pursuant to Chapter 17.540 of the Zoning Code (Site Plan Review Ordinance) and Section17.400.065 of the Zoning Code (Mixed Use Ordinance) and the City Council will consider the proposed density bonus related concessions pursuant to State Density Bonus Law including relief from rear setback and building height requirements (to permit one additional story to a maximum height of 56 feet).
The Applicant is proposing to provide three (or 11 percent of the total residential units) as very-low income affordable units, which automatically entitles them to receive two development concessions pursuant to State Density Bonus Law. The concessions are:
• Rear setback - Allow balconies and enclosed living areas to encroach in the required 60- degree angle that is measured from the center line of the alley as required by the Mixed Use Ordinance.
• Building height - Allow the maximum building height required by the Mixed Use Ordinance to be increased from 45’ to 56’.
Please see Table 1 (Attachment No. 6) for a summary of the development concessions being considered for the project:
Density and Other Bonus Incentives (DOBI) and Concessions
Culver City Municipal Code (CCMC) Chapter 17.580 - Density and Other Bonus Incentives - requires the City to follow State Density Bonus Law for DOBI applications. Under a DOBI application (and State Density Bonus Law) a developer can increase the base density (by up to 35%) for a housing development provided the development reserves, for 55 years, a certain percentage of the units for moderate to low income households. In addition, a developer can ask for concessions, or relief from development standards such as height, setbacks, and parking if such standards prevent the ability to provide the affordable units within the development. The City cannot deny the concessions request as part of the DOBI if it is clear that such concessions are needed to provide for the project’s affordable housing costs. The number of concessions and the density increase that can be granted are based on a sliding scale of the percentage of units devoted to affordability and the percentage density increase. It is important to note that the density increase and the concessions are provided per State Density Bonus Law as an incentive for developers to provide affordable housing. With the dissolution of redevelopment agencies, several mechanisms that cities once had, including direct funding for construction of affordable housing, have been eliminated. State Density Bonus Law is one method by which market housing developers can provide affordable housing within an otherwise market rate development, even if such housing is only a small percentage of the proposed project.
For purposes of the density bonus calculation, the Project’s base density is 27 dwelling units or 50 dwelling units per acre as established by the Mixed Use Community Benefits process and approved by the City Council on April 8, 2016 when the Council approved the Eleventh Implementation Agreement to the DDA. Based on State Density Bonus Law, an applicant must be granted a 35% density increase if they reserve at least 11% of the total base density units for very low income households. The income categories for affordable housing include extremely low income, very low income, low income, and moderate income. Housing sold or rented at the market rate is considered above moderate. Every year the State of California Housing and Community Development Department (HCD) establishes for every California County, the income level criteria for extremely low income, very low income, low income, and moderate income levels.
The Applicant is requesting a density increase of 35% or 35% X 27 units = 9.45 = 10 units. State Density Bonus Law requires that fractional remainders in density calculations be rounded up resulting in a density increase of 10 units. At least 11% of the 27 units must be made affordable to very low income households or individuals. This equates to 11% X 27 = 2.97 or 3 units. The Project will result in 37 units, with three of the 37 units covenanted for 30 years for very low income individuals or households. The applicant has proposed the project as rental units but is processing a Tentative Tract Map in the event they choose to sell the units. The very low affordability covenant must be maintained for 55 years whether the units are rental or for sale and a project condition is included to ensure conformance with this requirement.
State Density Bonus Law also requires cities to grant up to two concessions or relief from the development standards (such as setbacks, height, and parking) if at least 10% of the base density units are reserved for very low income households. A city can deny concessions if it can be shown that such concessions are not needed in order to provide affordable housing units. The applicant is providing 11.11% very low income units and has asked for height and setback concessions. Outside of the maximum concessions requests an applicant can ask that the residential portion of the project be parked at the State Density Bonus Law parking ratios. The applicant has requested this as discussed below.
Height: The Zoning Code allows building height up to a maximum of 45 feet in the CG Zone for mixed use projects that have a depth of less than 150 feet. The applicant is requesting a height concession to increase the building height to 56 feet. The height is measured from the street grade to the top of the roof deck and does not include the added height from the parapet wall or roof top mechanical equipment.
Setbacks: The CG zone requires a five-foot setback after 15 feet of height along street frontages and a setback of 10 feet for the first 15 feet of height and a 60-degree clear zone after the 15 feet of height for portions adjacent to residential zones for mixed use projects. The applicant is requesting relief from these setbacks. The project at the rear facing the alley and residences beyond still provides the minimum two-foot setback off of the alley and will provide step backs but not at the 60-degree clear zone.
Attachment Nos 6 and 7, Table 1 and Concessions diagrams show how height and setbacks are affected by the concessions.
Parking: State Density Bonus Law allows developers to ask for parking based on State Density Bonus Law ratios for the residential portion of the project. State law further prescribes that a City cannot deny this request; the parking request is in addition to and separate from the two concessions noted above. State parking ratios for the entire residential portion do not require guest spaces and do not base parking on size of units as well as number of bedrooms (as Culver City’s ordinance does). The ratios are simple:
• Zero to One bedroom - One parking space
• Two to Three Bedrooms - Two Parking spaces.
The project includes four one-bedroom units and there are four parking spaces provided; there are 33 two- and three-bedroom units and two parking spaces per each of these 33 units are provided. Consistent with State Density Bonus Law there are no guest spaces.
Financial Analysis as Part of Concessions Request
The Applicant provided a financial analysis which has been reviewed by the City’s financial consultant, Keyser Marston Associates (KMA), to determine if the development concessions are needed to reduce the costs of providing the affordable housing. The applicant’s financial analysis is a pro forma detailing expected costs and profits for the project. The KMA analysis concluded the following:
1. Costs associated with providing three very-low income units are estimated at $1.42 million; and
2. The value of the 35% affordable housing density bonus and the two concessions being requested by the Developer is estimated at $1.86 million.
Given that the value of the density bonus and concessions exceeds the cost of providing the affordable housing units, the City may not need to grant the specific concessions being requested by the Developer. However, the following issues should be considered in the evaluation process:
1. While the City is not required to provide the specific concessions being requested by the Developer, the City must provide two concessions to the project that result in identifiable, financially sufficient cost reductions (Government Code Section 65915 (k) (3)).
2. Government Code Section 65915 (e) (1) requires the City to demonstrate that denying the specific concessions being requested by the Developer will not physically preclude the project from receiving the statutorily established 35% density bonus.
It is KMA’s opinion that it may not be physically possible to achieve the statutorily established 35% density bonus, in a financially feasible manner, if the concessions being requested by the Developer are not provided. KMA concludes that under the financial evidence requirements imposed by Government Code Section 65915 (d) (1) (A), there is insufficient support to reject the specific concessions being requested by the Developer.
KMA has also noted that if the City wishes to receive both the 21 public parking spaces as a Community Benefit and the three very-low income units, it will be necessary to allow the Applicant to apply both the Mixed Use Ordinance density bonus incentives and the density bonus allowed under State Density Bonus Law.
Community Benefits and Metered On-Site Public Parking
On March 10, 2008, the City Council established a Community Benefit Incentive Program in connection with Section 17.400.065 of the Zoning Code - Mixed Use Development Standards. This Section of the Culver City Municipal Code (CCMC) allows mixed use developments on certain commercially zoned property at a base residential density of 35 du/ac, but allows the density to increase to 50 du/ac, and up to 65 du/a in a Transit Oriented Development Zone (TOD Zone), provided the project incorporates community benefits as established by the City Council.
A community benefit is defined in the Ordinance and related Community Benefit Resolution as a project amenity that achieves a particular community goal and mitigates impacts resulting from the increased density. The list of community benefits outlined in the Resolution includes, but is not limited to, the following:
A. Streetscape Improvements as part of an Area Improvement Plan (AIP)
B. Pocket Parks and Public Open Space (minimum 5,000 sq. ft.) in addition to park space otherwise required by the CCMC
C. Metered On-Site Public Parking-in excess of code required project parking (Minimum 10 public parking spaces and applies only to project sites of 20,000 sq. ft. or greater).
D. Utility Undergrounding as part of an Undergrounding District Plan.
E. Other Community Benefits as approved by City Council.
Approval of a Community Benefit District and the boundaries for said District are established by the City Council through adoption of a resolution. On December 14, 2015, the City Council approved a Community Benefit District for this project. The boundaries of the approved District are those of the Project, bounded by Washington Boulevard to the south, Meier Street to the east, Moore Street to the west and the alley north of and running parallel to Washington Boulevard.
The applicant proposed an increase in the base density from 35 du/a (19 units) to 50 du/a (27 units), an increase of 8 units. The applicant’s proposed community benefit is the inclusion of 21 ground level metered public parking spaces in the Project in addition to the full complement of Code-required parking for the proposed Project.
The commercial uses along Washington Boulevard in the vicinity of the Project Site were developed long ago with less parking than the CCMC requires today. As a result, many of these older commercial buildings have inadequate parking available for employees and patrons. The lack of available on site parking creates potential impacts on surrounding residential and commercial neighborhoods. The proposed public parking community benefit would provide some relief for the lack of commercial parking in the area. The capital costs and all related maintenance for the 21 ground level metered public parking spaces will be absorbed by the Developer.
Subdivision - Tentative Tract Map
Submitted with the project is a request for a Tentative Tract Map. Tentative Tract Map No. 65473 (Attachment No. 5) is a proposed one lot subdivision to create 37 residential condominiums and two commercial condominiums. The Public Works Department reviewed the proposed subdivision and found it to be in compliance with the State Subdivision Map Act and the CCMC subdivision ordinance (Title 15 of the CCMC). The applicant intends to rent the dwelling units for several years but wants to have the map ready should market forces result in the need to sell rather than rent the units. A project condition will require a covenant against the three affordable units that assures they are occupied for at least 55 years by households meeting the very low income criteria.
ENVIRONMENTAL REVIEW:
Pursuant to the California Environmental Quality Act (CEQA) guidelines the Planning Commission adopted a Negative Declaration on July 27, 2016, determining the project will not have a significant adverse impact on the environment. Density Bonuses and Other Bonus Incentives and Tentative Tract Map (P2015-0127-DOBI and TTM) are within the scope of the adopted Negative Declaration (ND) and the circumstances under which the ND was prepared have not significantly changed and no new significant information has been found that would impact the ND; therefore, no new environmental analysis is required.
CONCLUSION:
The City has partnered and worked closely with the Applicant over a number of years to redevelop the Project Site. The proposed mixed use Project fulfills a number of Project goals including revitalizing the Washington Boulevard commercial corridor with the introduction of ground level retail and restaurant uses; providing new housing stock including affordable housing, and addressing the lack of parking in the neighborhood by providing 21 public parking spaces. In addition, the Project will provide various public right-of-way improvements to the benefit of the area. Although the Project exceeds certain development standards via the allowable DOBI concessions, staff has worked closely with the applicant on the architectural design of the Project to ensure that the building respects the surrounding commercial and residential neighborhood and the immediately abutting properties. The Project’s articulated design above the ground level, its pedestrian orientation with extensive store front glazing, residential amenities such as a center open air well facing all units and private opens spaces and decks, and reconstruction of significant portions of public streets result in a pedestrian friendly environment for both Project residents and Project commercial users. Redevelopment of the underutilized property will be a marked improvement to the area and add to the on-going revitalization of the West Washington corridor by adding 7,206 square feet of ground floor retail commercial use and 37 residential units resulting in economic revitalization of the project site. In addition, the public parking and streetscape and roadway improvements will provide benefits to the immediate neighborhood. Based on the analysis and conclusion contained herein staff recommends the City Council approve the Density Bonus and Subdivision requests.
FISCAL IMPACT:
There is no fiscal impact associated with the adoption of the proposed resolution.
ATTACHMENTS:
1) Proposed Resolution
2) Planning Commission Resolution No. 2016-P009 with Exhibit A - Conditions of Approval
3) July 27, 2016 Planning Commission Staff Report (without attachments)
4) Preliminary Development Plans Dated March 18, 2016
5) Tentative Tract Map No. 65473
6) Table 1 - Developer Concessions and Density Bonus
7) Concessions Diagrams
8) July 27, 2016 Planning Commission Minutes
RECOMMENDED MOTION(S):
That the City Council:
Adopt a resolution approving Density Bonuses and Other Bonus Incentives and Tentative Tract Map (P2015-0127-DOBI and TTM), subject to the Planning Commission Conditions of Approval referenced in the proposed resolution in order to allow construction of three affordable dwelling units and subdivision of the project into commercial and residential air space units.