COSTA MESA CITY COUNCIL MEETING. On Tuesday, August 6, 2024, the Costa Mesa City Council met. The agenda was full, in fact, too full. The meeting ran until the wee hours of the morning and some of the agendized items had to be postponed to the next meeting, which will be on September 3, 2024.
STORM DRAIN MASTER DRAINAGE PLAN DIDN’T FLOW. At the beginning of the public hearings, it was announced the Storm Drain Master Drainage Plan was removed from the agenda. The City received two letters, one from the Coastal Corridor Alliance (formerly Banning Ranch Conservancy) and the other from the Mountains Recreation and Conservation Authority, the owner of the new Randall Preserve property, both of which asked for a continuation of the matter. It seems they may be concerned that the City dumping untreated storm drain water onto the Randall Preserve may not be the best idea.
AFFORDABLE HOUSING ORDINANCE (AHO) AND IN-LIEU FEE. The goal of inclusionary housing ordinances is supposed to be to get affordable units built. If a developer wishes to use an in-lieu fee to avoid building units, setting the fee high will discourage the use of that option. Governmental agencies use in-lieu fees to further the development of affordable housing, either by actual production or by programs, such as assistance to first-time homebuyers.
WHY WAS THIS REVISITED? At the June 18, 2024, meeting the ordinance was to get a second reading, presumably for final approval, but it was postponed when Council Member Arlis Reynolds requested Staff to look at reducing the threshold from 50 dwelling units (dus) down to 30 dus. This also delayed the Council adopting an in-lieu fee resolution at that meeting.
Most of the cities in Orange County with inclusionary housing ordinances have a threshold closer to 10 dus. The threshold recommended by the City’s highly paid expert consultant, Kathe Head of Keyser Marsten Associates, was 20 units, and the in-lieu fee she recommended was $19.50 per sq ft of leasable area for developments of 60 du/ac or more. That fee was determined by analyzing the gap between the rent for affordable versus market-rate units. It is less than most of our neighbors, with Santa Ana being the exception. See the coverage of Santa Ana Planning Commission below.
Reynolds’s concern is that the high threshold caused fewer than half of the approximately 100 housing opportunity sites (HSOs) identified in the General Plan’s Housing Element to be subject to the AHO. Reducing the threshold to 30 dus would increase the number of HSOs to 81, increasing the odds that affordable housing would be built, or if in-lieu fees were paid by developers, more funds could accumulate in a housing trust that the City would use towards the construction of affordable units.
Council Member Don Harper brought up an important point, which is all of this can be circumvented by developers with a development agreement. That agreement is negotiated between the City and a developer and can allow the developer to pay the fee or pay very little. Or it may have to pay a lot. Again, see the Santa Ana Planning Commission below.
CONFUSION OVER HOUSING TRUST. Council Member Andrea Marr, along with Harper, questioned the $2.5 million that the City set aside in a housing trust. They were puzzled at how the funds could already be in the trust without the City Council having approved the AHO and in-lieu fee resolution. Several of the other Council Members expressed confusion on this point as well. Council Member Jeff Harlan threw the creation of the $2.5 million trust into a substitute motion on April 2. This sort of mix-up is what results from 11th-hour changes that aren’t on the agenda, which don’t get vetted by Staff, and don’t get much discussion, either by the public or the City Council and Staff. Some Council Members thought the vote to fund the housing trust was through the approval process of the AHO, but the City Manager and the Finance Director said it was through the budget process. Say what? Then why did Harlan throw it into his substitute motion on April 2? It seemed strange to me that there was a rush to get these funds moved into the housing trust until the City Manager said that if the City had not moved the money during the budget process, then it would have become part of the reserves. Ahh…the fog clears. The funds would be harder to touch if they were in the reserves.
MOTIONS. After public comment, Marr made a motion, seconded by Reynolds, to adopt the Staff/consultant recommendation for in-lieu fees but to reduce the threshold to 30 dus, which threshold would be reviewed every two years, and to agendize a review of the housing trust’s purpose and goals.
Council Member Manuel Chavez made a substitute motion, seconded by Harlan, to keep the threshold at 50 dus, set the in-lieu fee at $10, and to bring back the topic of the $2.5 million housing trust to the Council for discussion.
FAIRY TALE TIME. Chavez went on to espouse his belief that we must build more housing to bring the cost of housing down. This is a falsehood that has been debunked as many times as the claim the world is flat. Chavez always reminds us that he is the only renter on the dais, which is an attempt to convince us he is an expert in the rental real estate market (but later in the meeting he admitted he’s not). What he said about the rental market and rent control told me he was blasting air like a dragonfly, to the point I was surprised he didn’t rise out of his seat (Google dragonfly butt power).
When quizzed by Marr about the data, research, or analysis behind his choice of $10 for the in-lieu fee, he wouldn’t provide an answer other than “I think a lower fee attracts more development,” to which she responded, “So you just made it up?” He never could come up with anything to justify his choice, other than unsupported statements, which meant there was no science there.
Additionally, Chavez deflected critical statements by other Council Members by preferencing his excuses with “I know this comes from a genuine place,” which for me translates to “I don’t care what you think.”
Harlan let the cat out of the bag when he said “It makes more sense for developers to have a higher threshold. That’s a better incentive.” In other words, this isn’t about getting affordable units, and it isn’t about getting better planning than we saw in with the Righeimer regime, it’s about bending over (backwards) to developers to get them to build in Costa Mesa.
Mayor John Stephens claimed he provided some data on Santa Ana’s in-lieu fee at an earlier session, but that data obviously wasn’t provided to Marr. The Mayor stated it was on the record, but was it? I went back and watched hours of video, but I never caught it. Despite that, his argument that Santa Ana hasn’t had any projects built at the $15 per square foot is illusory. Yes, see Santa Ana Planning Commission below.
Notwithstanding the recommendations of the expert hired by the City, and the City Manager citing how other cities have done well with aggressive ordinances and in-lieu fees, this is where the AHO ended up. Paid expert Kathe Head said, “I will just candidly say, if you set it at $10 per square foot, you should just assume that 99 out of 100 will pay the fee.”
There was an exchange between Chavez and Council Member Loren Gameros, who asked the question of how 20 units per acre is going to make a difference. Chavez, obviously feeling the pressure, told him “This is the last time I’m going to answer the question.” He didn’t answer it the first time! Chavez admitted he assumed that any builder would build below the threshold to avoid having to get a General Plan Amendment (the irony that the hearing following this was for a project that requires a General Plan Amendment was lost on him).
Chavez’s substitute motion was passed on a vote of 4-3, with Stephens, Harlan, Harper, and Chavez voting “Yes”, and Reynolds, Marr, and Gameros voting “No.”
The adopted ordinance is weak and will not produce the desired affordable units. Every developer will want to use a development agreement to circumvent building affordable units and payment of the $10 in-lieu fee in its entirety. By setting the in-lieu fee so low, the City has NO BARGAINING CHIP with developers.
The rest of the meeting was predictable, except a few items got postponed, so I won’t give a blow-by-blow on that. One delayed item was the City Council’s gigantic raise for itself.
SANTA ANA PLANNING COMMISSION MEETING ON RELATED BRISTOL SPECIFIC PLAN. Why would anyone in Costa Mesa be concerned with this project in Santa Ana? Because it’s right on the border with Costa Mesa and its impacts will drift over the city boundary lines.
The August 12 meeting focused on one item, the Specific Plan for the Related Bristol project. The developer, Related Companies, is a nationwide builder that has been around since the 1970s. This is a 41-acre housing and commercial project on Bristol Street between MacArthur and Sunflower.
This area was rezoned during the Santa Ana General Plan update a few years ago. The changes to the General Plan were the result of years of cooperative visioning work by the City and an advisory committee comprised of residents and stakeholders, such as youth and senior groups, sports clubs, disabled persons, developers, and builders. One vision of the General Plan was to transform existing auto-oriented shopping plazas into walkable, mixed-use communities. This area is now zoned for buildings that are up to 25 stories (125 du/ac and 5.0 FAR).
The project will contain 3,750 market-rate apartments, 350,000 sq ft of commercial space, 200 senior living units, 250 hotel rooms (about 150,000 sq ft) and up to 13.1 acres of park space for the community at large. The owner of the land will continue to use a long-term ground lease arrangement. The developer will build a police substation and update infrastructure around the project, including an electrical grid and some new waterlines (but not on Sunflower), traffic improvements at several intersections to achieve a better level of service (LOS), a storm drain from Plaza Drive to Bristol, along with contributing about $10 million towards sidewalks and active transportation improvements. One rendering showed a protected bike lane on Bristol that would involve removal of a traffic lane. The parking will be podium style (underground). The highest intensity of use would be along Bristol Street closest to South Coast Plaza.
The project will be built in three phases. Phase 1, which is the area closest to South Coast Plaza starts in 2026 and will continue for four years. Completion of the entire project will be in 2036.
THE BENEFITS OF A DEVELOPMENT AGREEMENT. Here is where Costa Mesa and Santa Ana stand apart and why we need to pay close attention to what our City gives away or asks for in development agreements.
Besides the costs listed above, the developer is committed to giving $22 million to the City of Santa Ana for community benefits. Because it is providing those funds, the affordable housing in-lieu fee was reduced from $15 per sq ft to $5 per sq ft. The City of Santa negotiated this deal because it has nearly satisfied the affordable units under its RHNA and wants the benefits of parkland. While the 13.1 acres of parkland (which is 32.75% of the 40 acres of project land) is less than Santa Ana’s desired three acres per 1,000 residents, the $22 million will go a long way towards providing other amenities to the residents near the project.
Comparing the open space provided at Related Bristol to the three options the City of Costa Mesa is proposing on the 80 acres at Fairview Developmental Center, the three options don’t look so great. Those options would either provide 14.1, 18 or 7.9 acres (18%/22%/10%) of parkland.
There were comments by the public about not allowing construction traffic along MacArthur east of the project and specifically asking that construction traffic go on Bristol to the 405 or Bear Street to the 73. The developer didn’t object to that. What construction traffic would that be? Any demolition debris must be removed, and since parking is going to be underground, a fair amount of dirt will be hauled out as well. Since some of the buildings will be tall, cranes, heavy equipment, and building materials will need to be brought in.
The northbound ramp at the intersection of Bear Street and the 73 in Costa Mesa is forecast to operate at unacceptable LOS E in the evening peak hour. Proposed improvements would be restriping of the existing westbound left-turn lane to provide a shared left/right-turn lane and modification of the existing traffic signal as necessary. Since the fair-share cost estimate to be paid by the developer of Related Bristol would be 6.31%, does that mean the rest falls on the City of Costa Mesa? Or OCTA?
THE CITY OF COSTA MESA DID NOT REQUEST TRAFFIC IMPACT FEES FROM SANTA ANA DURING THE GENERAL PLAN UPDATE PROCESS. Will the traffic filter onto Costa Mesa streets from this project? Of course it will. Not all of the approximately 8,000 new residents are going to walk, bike or use public transit. The City of Costa Mesa also did not comment on the draft Environmental Impact Report for the project itself, therefore there are no mitigation measures aimed at any other impact areas in Costa Mesa.
After hours of mostly favorable comment by the public, and many questions of Staff and the developer by the Planning Commissioners, a motion was made to follow Staff’s recommendation to send the project to the City Council. There were two recommendations added:
(1) Staff would look at the need to increase the in-lieu fee in the event the senior housing would be converted from assisted living to apartments in the future.
(2) That the City Council form an oversight committee made up of an odd number of citizens, one appointed by each of the seven City Council Members, and a representative of the developer, which committee would be changed with assuring the $22 million in community benefit funds are used in accordance with law and that they don’t get lost in the general fund.
SANTA ANA KNOWS THE IMPORTANCE OF TRANSPARENCY AND INPUT. The continued engagement by the public by both the City of Santa Ana and the developer is heartening. Santa Ana realizes the importance of citizen involvement. Will the City of Costa Mesa evolve to that mindset one day?
COSTA MESA PLANNING COMMISSION. The Costa Mesa Planning Commission also met on August 12. The only item on the agenda involved modifications to an existing Conditional Use Permit (CUP) for a bar on Randolph Street, Arena OC (formerly The Commissary), to allow dancing, a change in the hours of operation, and to approve a change to a new type of liquor license that ALLOWS 18- to 20-YEAR-OLDS TO MINGLE WITH THOSE 21 AND OVER.
QUESTION: What could go wrong?
The maximum occupancy of the bar is 296 people and 48 parking spaces are required, but some of those aren’t available right now due to a storage building and picnic tables taking up spots. There is street parking on Randolph, but those spots are also used by patrons of other businesses, (such as the breweries).
The Commissioners asked some good questions of Staff and the applicant, but then went off on a tangent discussing AB 2097 which provides that businesses within ½ mile of a transit stop can’t be required to provide parking. Per this new State law, the City doesn’t have the ability to require parking, but this isn’t a new CUP, so the carryover from the prior entitlement applies to parking.
A motion was made by Planning Commission Chair Adam Ereth to approve Staff’s commendation, however, there were two amendments to that recommendation, one concerning that any employee parking and the other that the CUP get a six- and twelve-month review. In addition, the club will not allow those under 21 years of age on Halloween, New Year’s Eve, and the Fourth of July.
ANSWER: Commissioner Russell Toler answered the question above when he said “To enable 18- and 19-year-old girls into environments where there is a bunch of drinking men is unwise. We know why men go to nightclubs. And we know what peer pressure is. And we know what the outcomes are going to be. So, everything is fine about this—the type 90 transfer—so that they can get minors in there with everybody makes me nervous, so I’m not in support of the motion.” Commissioner Jon Zich said, “It sends the wrong message.”
Now, I like to go out and have a few drinks and listen to music, but I agree with Toler and Zich. Once I was an 18-year-old girl who snuck into bars with guys older than me, who bought me drinks and we had fun dancing. Now that I’m older, and the world is a lot rougher, I know how lucky I was I didn’t get myself into a terrible predicament.
Looking at the Instagram page, I would hope the City of Costa Mesa would be concerned whether those images are what it wants its brand to be.
The CMPD obviously doesn’t like the new type of liquor license and the neighboring business owners don’t feel this business is a good fit. Zich nailed it when he said “Is it detrimental to the health, safety and welfare of the public? It absolutely is.”
Commissioner Karen Klepach stated, “Eighteen and up women are adult women and I don’t think we should be telling adult women what’s good for them.” Except we do tell them they aren’t supposed to drink alcohol at a bar.
The motion carried 5-2, with Toler and Zich voting “No.” The decision is final unless appealed to the City Council within seven days. I requested the City Council pull it for review. Let’s hope one of them does.
WHAT’S COMING UP? This Wednesday, August 21, 2024, at 6:00 p.m. the Fairview Park Steering Committee meets at 6:00 p.m. in the Community Room at City Hall (enter at the back). The only item on that agenda https://www.costamesaca.gov/home/showpublisheddocument/57888/638593365935700000, besides approval of minutes, is the Master Plan update. On Monday, August 26, 2024, at 6:00 p.m. the Planning Commission will meet. The agenda is not available yet; however, I saw a public notice for a 24-hour emergency veterinary clinic at 2800 Harbor Boulevard. That is the corner of Harbor and Adams, which has been vacant for some time. Hooray! It’s not another pot shop! Also look for a Community Workshop for the Fairview Park Master Plan Update on Wednesday, September 4, 2024, from 6:00 to 8:00 p.m. at the Senior Center, and a City Council Study Session on September 24 on the topic of rezoning. No mention of an advisory committee for that.
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