CITY UPDATE FOR JANUARY 2026 - MAJOR CHANGES TO HOUSING AND REZONING AHEAD

Due to the holiday vacation time, most of January was quiet at City Hall. Here’s an update:

Council and Committee Meetings:

• City Council held only one meeting;

• Planning Commission met once; and

  
  

• Finance and Pension Advisory Committee also met.

  
  

If you want to skip to the item that will most likely have the most impact on your daily life, go to the Planning Commission New Business item near the bottom. The rezoning changes by the Planning Commission will result in increased traffic, reduced air quality, and impacts on infrastructure and public services, as well as the long-term fiscal consequences of these changes—all as voter-approval protections are weakened.

JANUARY 14 FINANCE AND PENSION ADVISORY COMMITTEE MEETING. All Committee members were present. Also in attendance were Carol Molina, Finance Director, and Peter Diminich, Finance Officer. No Council Liaisons attended the meeting.

he meeting offered a Zoom attendance option because the representative from Chandler Asset Management participated remotely. I chose to attend via Zoom. The only other member of the public in attendance appears to have been Jim Fitzpatrick, who attended in person.

DISCLOSURE: Earlier in the day, I exchanged several emails with Finance Department Secretary Dina Wild and Committee Chair Tom Arnold because the draft minutes were not included with the agenda. The agendas for this committee are posted differently from those of other committees, and the lack of accessible minutes and supporting materials is both frustrating and, in my view, a violation of the Brown Act. Any materials provided to Committee members must also be made available to the public. In this instance, several key documents—including the Investment Policy and the Investment Report—were not attached to the agenda before the meeting.

Although these items were added to the agenda after the meeting concluded, they did not address the accessibility issue in a meaningful way.

Postscript: The agenda for the subsequent meeting did include links to supporting documents; however, that meeting was canceled.

PUBLIC COMMENT. During public comment, I noted that the Zoom camera was pointed at the floor and that Committee members were not visible to remote attendees. Someone in the room adjusted the camera, but this is an issue that should be addressed by the IT Department prior to the start of the meeting.

Jim Fitzpatrick, who appeared to share my frustration with the lack of available information, also commented on the absence of links to agenda attachments. He repeated his assertion that the City has a “structural budget deficit” and stated that “you guys aren’t doing your job.” He further complained that Staff is “mushrooming,” which he defined as “sitting in the dark and feeding crap.” Fitzpatrick demanded that Committee Chair Tom Arnold take action and then called for Arnold’s resignation.

Fitzpatrick acknowledged that this is an important committee but characterized its work as irresponsible. He continued to berate those in attendance, stating that the Committee is supposed to represent taxpayers. He concluded with a pointed question: “How did you study this if you didn’t have the attachments? Members of the public didn’t get to study it.”

Reluctantly, I agree with Fitzpatrick’s underlying point. It appears that not only the public, but possibly the Committee itself, is being denied a meaningful opportunity to review materials because Staff is not providing the necessary information in advance. More on that later.

APPROVAL OF MINUTES. A motion to approve the minutes from the November 12 meeting was made by Ralph Taboada and seconded by Lisa Buchanan. This was followed by a general discussion regarding committee agendas and the content of the minutes. Although this discussion was not agendized, it proceeded nonetheless.

Taboada commented that the minutes indicated no action had been taken. Arnold responded that there was also no Staff recommendation included in the agenda and stated that he would like the minutes to contain more detail, emphasizing that Committee discussion is important. He added that he wants the minutes completed earlier—ideally within one week of the meeting.

Taboada agreed, stating that he prefers more expansive minutes that reflect greater dialogue. He asked whether Committee members’ comments were being recorded, to which Finance Department Secretary Dina Wild replied that they were.

The Chair then called for a vote. The motion passed with four votes in favor—Arnold, Taboada, Buchanan, and Callahan. Sean Healey voted no, stating that the minutes were incomplete because they did not reflect his comment regarding inadequate reserves. Morgan abstained.

NEW BUSINESS: This item was moved earlier on the Agenda due to time constraints for the consultant. The first topic was a brief discussion of the City’s Investment Policy. Committee members asked what the recommended action was, as none had been provided by Staff. They were told the intended action was to “receive and file,” but no formal action was taken. Instead, the Committee decided to continue the item to the next meeting.

Public Comment. During this portion of the meeting, Jim Fitzpatrick interrupted to ask about the availability of documents to the public. Chair Tom Arnold ruled him out of order. Fitzpatrick objected, but Arnold reiterated that he was out of order.

Unlike other committees and commissions, this committee does not allow public comment when an agenda item is taken up. As a result, public comment is limited to the beginning of the meeting. In this case, no documents had been provided in advance, meaning the public was expected to comment without access to materials, a staff report, or even a substantive description in the agenda.

This raises a fundamental question: how is the public expected to provide meaningful comment at the start of a meeting when no presentation, documentation, or explanatory information has been made available?

After the meeting, the link to the Investment Policy was provided: http://ftp.costamesaca.gov/costamesaca/council/agenda/2017/2017-06-06/CC-5-Attach-2.pdf 

The next item was a report by Karl Meng of Chandler Asset Management on second-quarter results for one of the City’s investment accounts. Like many investments over the past year, the account performed well (outperforming the benchmarks he provided), generating strong earnings despite the City’s conservative investment approach.

Committee members asked about the benchmarks used for comparison, specifically whether the City’s investment involved greater risk than the benchmarks—an important question, since a higher-risk investment would be expected to outperform more conservative benchmarks. Meng responded that he did not believe an apples-to-apples comparison was necessary. Committee members disagreed and requested that additional benchmarks be provided.

The discussion then turned to the City’s Investment Policy, which contains specific language requiring investments to be placed in certain types of accounts. Committee members noted that this rigidity would necessitate amending the Investment Policy if the City wished to use a different or newer type of investment vehicle. The Committee requested that this issue be agendized for the next meeting and that the item return for a vote, citing the fact that they had received the relevant information only that day.

You can find the report here: https://www.costamesaca.gov/home/showdocument?id=62194&t=639040656823849626

OLD BUSINESS: This item involved a discussion of the status of a proposed November ballot measure to increase the Transient Occupancy Tax (TOT) and the Business License Tax. Although Taboada has met with Travel Costa Mesa and Staff, there appears to have been little substantive progress on the measure. A presentation by the manager of Travel Costa Mesa is expected to be scheduled sometime in March.

Finance Director Carol Molina stated that any delay beyond March could jeopardize placement of the measure on the fall ballot. She also disclosed that the City has already hired a consultant to assist with the ballot measure(s) and is in the process of bringing that consultant on board. This announcement appeared to come as a surprise to Committee members (and to me). I was unable to locate a contract for such a consultant on the City’s website, nor was there any indication that the contract had been approved by the City Council.

Molina added that she would like a recommendation from the Committee.

There was an interesting comment by Committee member Quinn Callanan: “I think what's missing from this discussion is context. And the context that I'm thinking of is, you guys are hearing from the business community, ‘Woe is me, I'm paying so much taxes.’ However, the counterargument is, actually, your contribution to the total tax base in the city has dwindled over the last 10 years, and you are shifting expenses to the property owners who are currently paying a greater share of the tax base relative to you.” That comment is spot on.

Arnold asked Molina whether the subcommittee could meet with the consultant in the near future. Molina responded that it could not. She explained that the consultant is still being onboarded and that she could not guarantee a meeting would occur before March.

This response seemed peculiar, given that the City Council is expecting a recommendation from the Committee while the Committee itself does not yet have the information it needs to make one. Molina then outlined a list of projects currently being handled by the Finance Department that, she said, have prevented her from bringing additional information to the Committee.

There was also a brief discussion regarding the upcoming budget and when it would be presented to the Committee.

In addition, the City is working on revisions to the fee schedule (fees other than the TOT and business license)cd. This includes a Consumer Price Index (CPI)–based increase requested by the Committee, as well as the possibility of new fees proposed by certain departments. The fee schedule is currently under review by Terry Mattson of ClearSource.

The 2026 calendar for the Committee also received some discussion. It was not provided to the public until after the meeting concluded, and will return to the Committee at the next meeting for a vote.

FiPAC 2026 Schedule

Note that the January 14 meeting was supposed to have the “Work Program (Due to City Council in March)” on the agenda, but that didn’t happen. Also, the February 11 meeting was canceled at the last minute. Looking at the “Future Topics” I note that the Pension Liability Payoff Plan may be coming up. That is something that many of us have an interest in exploring.

COMMITTEE MEMBER AND DIRECTOR COMMENTS.

• Ralph Taboada suggested skipping the generic national economic news that the investment advisor includes in his presentation. He also wanted the slide deck reduced to 4 or 5 pages focused on Costa Mesa, its benchmark, and. “Let's localize it to Costa Mesa.”

  
  

• Daniel Morgan stated he agrees with the importance of receiving and providing linked agendas, and it needs to be made a priority to get Agendas and documents out in advance, and to the extent it isn’t prohibited by law, that there is some level of commentary included in the agendas. “Because, unless you attend the meetings, like super resident Cynthia McDonald, everything gets lost in the dialogue.” Thanks for the recognition, Dan.

  
  

• Sean Healey said he is a little bit discouraged by the benefit that FiPac adds to Costa Mesa. Over the past year, the Committee has made one recommendation (the OCPA), which he thinks was beneficial. Other than that, he feels the members argue amongst themselves, and it vanishes completely once they leave the meeting, because the minutes don’t reflect those discussions. He suggested recording the meetings and allowing the public and City Council to listen to them if they want. He feels the minutes don’t reflect what was actually said. He also pointed out that he has mentioned the reserves for over 12 months, and FiPac hasn’t even talked about it. He said he be contacting the City Council as a private citizen because he doesn’t feel the Committee will ever address some of the topics that have been brought up.

  
  

• Carol Molina said the audit was closed and that the City ended up in the black for the year. It was a small positive number, but it was positive. The budget process for 26-27 is already in full swing, and the long-overdue computer conversion is being implemented. The City Clerk is giving a class of nuts and bolts of compliance and is requesting that all members attend.

  
  

Since it was past 6:00 p.m., the meeting adjourned without further comment.

I hope the City Clerk gives a better review of the Brown Act than what I got years ago. There are serious compliance issues that are impeding the transparency of the City, and need to be corrected immediately.

JANUARY 20 CITY COUNCIL MEETING. At this meeting, the items acted on were:

• Ministerial Approval of Two-Unit Small Lot Ordinance (SLO) Projects and Adoption of Associated Fees

• Ordinance Requiring Staffing at Self-Service Checkout Stations at Retail Food Businesses

• Award of Contract for Shalimar Park Improvement Project

• Appropriation of Opioid Settlement Funds

• Urban Plan Master Plan Screening Request for a Proposed 34 Unit Live/Work and Residential Loft Development at 1626 Placentia Avenue

• Compensation, Classification and Staffing Updates and Adoption of Memorandum Of Understanding (MOU) and Salary Resolutions Between City and Costa Mesa City Employees Association (CMCEA), Costa Mesa Division Managers Association (CMDMA), Confidential Management Unit, Confidential Unit, Executive Employees, Part-Time Employees, and Police Recruits

WHAT WAS NOT ACTED ON: Memorandum of Understanding (MOU) with City of Irvine for Use of Beds at Costa Mesa Bridge Shelter. This item was pulled from the Agenda and no new hearing date was announced.

All members were present except Councilmember Arlis Reynolds, who was ill but participated remotely, and Councilmember Buley, who was supposed to attend remotely but was absent.

City Attorney Closed Session Report. Kimberly Hall Barlow reported that the City Council gave direction, but that no reportable action was taken.

Public Comment. There were sixteen public comments, which addressed a wide range of topics, including the following:

• A complaint regarding a neighboring remodeling project that now allows the neighbor to look directly onto the speaker’s property.

• Three speakers provided information about the Community Impact Team, a volunteer project associated with the Love Costa Mesa group, and described its community service efforts.

• Several speakers expressed appreciation for the City’s outreach to residents impacted by Immigration and Customs Enforcement (ICE) activity, while also raising concerns about the disposition of legal defense funds and requesting greater transparency on the City’s budget webpage regarding this issue.

• Two speakers requested information about the planned demolition of Shalimar Park and the adjacent building, scheduled to begin at the end of January. They emphasized the need to restore educational resources that were lost when the community center was closed.

• A request that the City’s website be updated to provide clearer and more accessible information on how residents can obtain City resources.

• Requests that the City Council adopt a resolution requiring the Police Department to act objectively and protect residents in situations where ICE may be acting unlawfully, and that the City submit Freedom of Information Act requests related to individuals subjected to ICE activity.

• A speaker expressed support for abolishing ICE and voiced support for actions taken by Minnesota residents in response to the killings of citizens there.

• A tennis player reported that the Costa Mesa Tennis Center has effectively shut down, noting that phones are disconnected, staff have not been paid by the operator (Top Seed), and Ball family coaches are no longer operating at the facility and have taken their services elsewhere. The speaker stated that the Center is not being operated in accordance with the contract between Top Seed and the City, and that the City would temporarily operate the Center while seeking a new operator.

• A speaker thanked the City for its efforts to support residents in the immigrant community, but alleged that Councilmember Mike Buley would be attending an Erica Kirk event in Riverside the following day, raising concerns about whether that appearance fairly represents the Costa Mesa community.

• I spoke about the core values adopted by the City Council in 2021 and urged the Council to revisit those values, emphasizing the need for greater transparency and more meaningful public engagement.

Councilmember Comments. Loren Gameros (District 2) said that 2026 looks to be a “wild road ahead” and agreed with a public comment that ICE needs to be abolished.

Andrea Marr (District 3) reported on her recent remarks at a Black Chamber of Commerce meeting, referencing Martin Luther King Jr.’s “I Have a Dream” speech and the FBI’s historical conclusion that King was viewed as a threat to the future of the United States. She stated that King made the FBI uncomfortable and suggested that his advocacy for immigrants, labor rights, and housing rights was a likely reason. Marr said these are the issues she intends to support in 2026. She added that she will also be focusing on the City’s infrastructure assessment and the ongoing upkeep of City facilities.

Arlis Reynolds (District 5) thanked City Staff and members of the community for their support of residents impacted by the actions of ICE and the Department of Homeland Security (DHS). She requested that Staff gather additional information on how these actions are affecting residents and emphasized the importance of ensuring that resources—particularly food assistance—are easy to locate and access.

Jeff Pettis (District 6) spoke about his goal of serving the community in 2026 and about attending the groundbreaking for new equipment at Brentwood Park. He recognized the work of the Love Costa Mesa group.

Manuel Chavez (District 4) read a comment submitted by Juana Trejo, a local activist who did not attend the meeting in person because she felt uncomfortable doing so due to recent ICE activity. He stated his belief that ICE should be abolished and said that the policies of the current administration in Washington, D.C., are destroying communities and families.

He thanked everyone who spoke about the challenges facing the community and said he would do everything within his power to help residents feel safe. He added that he would work to help the Shalimar community regain the resources that were lost. He also stated that the City is addressing the issues at the Tennis Center and is working to get it back up and running.

He concluded by thanking departing Fire Chief Dan Stefano for his years of service to the City.

John Stephens (Mayor) reported on several events from the previous month. He announced that he would be attending the U.S. Conference of Mayors meeting in Washington, D.C. He reassured the public that the Police Department is doing everything it can to keep residents safe.

Stephens also announced the passing of Joe Weber, an attorney who was active in the community for many years and will be remembered for his civic activism and sharp wit. In addition, he noted the death of former Police Chief Roger Neff, one of the first officers to serve Costa Mesa following its incorporation.

City Manager Comments. Cecilia Gallardo-Daly reported on the groundbreaking at Brentwood Park and announced that several other parks will get upgrades, including the skate park at TeWinkle Park. She announced that the Fire Department is recruiting new fire personnel.

City Attorney Comments. Kimberly Hall Barlow reported that the City had contracted with two providers for legal services for residents relating to immigration issues. Information is available on the City’s website. She said that the phone at the Tennis Center was out of service, but the City will be remedying that as soon as possible. If you have paid for services that haven’t been received, you should contact City Staff.

CONSENT CALENDAR. No items were pulled, so Stephens made a motion to approve the items, which was seconded by Chavez. The vote was 6-0, with Buley absent.

PUBLIC HEARINGS: There were two public hearings:

1.    First Reading of Ordinance Amending Title 13 of Municipal Code—Ministerial Approval of Two-Unit Small Lot Ordinance (SLO) Projects and Adoption of Associated Fees. A presentation was made by Chris Yeager, Senior Planner. This amendment will streamline the application process for two-unit SLO projects in multi-family zones by introducing ministerial approval—similar to the process already allowed for two-unit subdivisions in single-family (R1) zones under Senate Bill 9 (SB 9).

Proposed Changes:

• Ministerial Review: Amend Zoning Code sections to allow ministerial approval for two-unit SLO projects in multi-family zones. This means no public notice or hearings will be required.

• Design Review Exemption: Exempt two-unit SLO projects from design review requirements.

• Compliance Checklist: Introduce a Two-Unit SLO Checklist to ensure projects meet objective standards.

• Driveway Width Adjustment: Reduce driveway width for flag lots from 16 feet to 10 feet for single-unit access.

• Setback Clarification: Provide clearer setback requirements for development lots.

Fee Reduction: Transitioning to ministerial processing will significantly reduce fees for two-unit SLO projects—from $7,850.78 to $2,800—saving property owners both time and money. Additionally, a formal fee for urban lot splits under SB 9 will be adopted.

On December 8, 2025, the Planning Commission voted 5-2 in favor of the amendment. Commissioners who opposed expressed concerns about eliminating public notice and input under the ministerial approval process.

Councilmember Questions and Comments. Pettis asked about the requirement to notify neighbors and was told by Yeager that if a project complies with all development standards, then no notice is required.

Public Comments. The sole public comment was from Iggy Israel, who spoke in opposition to the amendment. He reminded the City Council that the first speaker at the meeting was a resident whose neighbor constructed a deck that looks directly into her living room without any prior notice. He cautioned that, as a result of the amendment, the City Council should expect to hear more complaints after projects are already under construction or have been completed.

Motion and Vote. Chavez moved to approve the Staff recommendation, which was seconded by Marr. The Motion carried: 5-1, with Pettis voting “No” and Buley absent.

2.    Ordinance Requiring Staffing at Self-Service Checkout Stations at Retail Food Businesses. The presentation was given by Jay Barkman, Government Affairs Manager, and Daniel Inloes, Economic Development Administrator. The proposed ordinance seeks to reduce retail theft and enhance customer and employee experiences. While it aims to improve safety and service, it may also limit store flexibility and affect consumer preferences.

The City Council gave direction at the November 4, 2025 meeting for Staff to draft an ordinance modeled after Long Beach’s ordinance.

Accordingly, the ordinance requires:

• One employee per three self-service checkout stations.

• Limits self-checkout to 15 items.

• Allows enforcement through civil action by employees or customers.

  
  

• Applicability: Food retail establishments over 15,000 sq. ft. and all drug retail establishments.

  
  

• Alternative Compliance: Stores may use design measures such as:

  • Barriers.

  • Strategic placement away from exits.

  • Dedicated staff in self-checkout areas.

    
    

• Enforcement: Civil action with penalties starting at $100 per violation per employee, increasing daily up to $1,000 per employee.

Senate Bill 442 (2025) proposes similar standards but does not mandate staffing ratios. It is currently under consideration in the Assembly, but it has stalled due to a postponed hearing.

United Food and Commercial Workers cite concerns about retail theft, understaffing, and poor customer experiences. Retailers argue the ordinance could lead to the closure of self-checkout lanes, increased costs, reduced convenience, and result in customer loss. The ordinance may reduce sales tax revenue if consumer behavior shifts.

Staff recommended that the ordinance be amended to remove provisions for food retail establishments over 85,000 sq. ft., as none exist in Costa Mesa; require public notice of the ordinance with signage and contact information for reporting violations; allow stores seven days to address violations before litigation; and permit alternative compliance through design elements and staffing.

Councilmember Questions and Comments. Pettis asked whether Staff was concerned that the ordinance could affect the City’s sales tax revenue. Barkman responded that it could have an impact, but that the extent of any impact is currently unknown. Pettis then asked whether Staff had attempted to bring grocery store management and union representatives together to discuss the ordinance. Barkman said that Staff had met with each group separately and believed that some of the parties had also spoken with one another.

Marr asked whether there was a correlation between self-checkout and shoppers choosing to shop in other cities. Barkman responded that the City has observed consumers shopping outside of Costa Mesa—for example, Costco in Fountain Valley—but said Staff does not know the reasons for this behavior. Marr pressed further, asking whether the City had any information on consumer attitudes toward self-checkout. Staff did not provide a definitive answer, noting that while some shoppers appear to have adjusted to self-checkout, it has also been observed to contribute to theft when items fail to scan and are taken without payment.

Gameros asked about a slide that listed stores with self-checkout and noted that some were highlighted. Barkman explained that the highlighted stores are those that would be required to comply with the ordinance.

Costa Mesa Stores

Gameros continued asking about the specifics of individual stores and was reminded that the ordinance applies only to food and drug stores. In the case of Northgate Market, Staff explained that because the store is using the alternative compliance measures outlined in the ordinance, it would not be required to comply with the standard provisions.

Stephens asked about the potential financial impacts of the ordinance, noting that it might not require hiring additional employees, since existing staff could be reassigned to assist at self-checkout stations during peak periods. Barkman responded that he had only anecdotal information from Long Beach City Staff, which is currently considering revisions to its own ordinance. According to that information, no increase in staffing had been observed, though Barkman emphasized that no data was available to support that observation.

Stephens then asked whether Staff had analyzed the potential costs associated with lawsuits against employers for labor code violations. Staff indicated that no such analysis had been conducted and that Long Beach Staff was not aware of any related data. Stephens also asked whether self-checkout stations had been shut down in Long Beach, but Staff said it did not have concrete information on that issue.

Stephens further inquired whether any other municipalities have adopted a similar ordinance. Staff responded that none have. He then asked whether Costa Mesa has any comparable ordinance with the same regulatory control, excluding the cannabis ordinance. Both Staff and the City Attorney replied that there is no directly analogous ordinance, though the City does regulate certain industries, such as smoke shops and massage parlors. Marr noted that Northgate Market is already subject to significant regulation.

Public Comments. The twenty-eight public comments were equally divided between supporting and opposing the proposed ordinance.

Motion and Vote. Gameros moved to approve the Staff recommendation, with the following exceptions: Change the cure to 30 days; return the item to the City Council for review in one year; and the ordinance shall apply to all stores, with no exceptions. That motion was seconded by Marr, but she requested that the motion be changed to include the 85,000 sq. ft. language, and that notice would include store management in addition to corporate, and that any alternative compliance would be removed. Gameros changed the cure period to seven days. The Motion carried: 3-2, with Pettis and Stephens voting “No” and Buley and Reynolds absent.

Why did Marr put the 85,000 sq. ft. language back in when we have no stores of that size? Also, this ordinance will apply to all stores, so the small CVS on Baker Street, which has two self-checkouts, will have to have them staffed, and Northgate Market, despite having a good alternative, would still have to comply.

NOTE: This item must come back to the City Council for a second reading.

OLD BUSINESS:  None.

NEW BUSINESS:  There were only four new business items, since Item 2, the shelter agreement with Irvine, had been pulled from the Agenda:

1.     Award of Shalimar Park Improvement Project. The presentation was made by Seung Yang, City Engineer. The Shalimar Park Improvement Project will deliver significant enhancements, including new playground equipment and swings, a multi-use court, upgraded landscaping and irrigation, improved lighting, and a bulb-out feature with a new crosswalk for safer pedestrian access.

Funding for the project includes $1 million from the State Budget and $1 million from the City’s Capital Improvement Funds. The work will be completed under a Public Works Agreement. Thirteen bids were received, and the winning bid went to Micon Construction, Inc. The total project cost will be $1,426,315 (including a 10% contingency of $129,665). Construction management services: $100,000 under a separate contract with Interwest, Inc. The funding comes from a State Grant Fund ($894,333) and the Capital Improvement Fund ($968,397).

Public Comment. None.

Motion. Chavez moved to approve the item, which was seconded by Marr. The motion passed 4-0, with Buley and Reynolds absent.

3.     Appropriation of Opioid Settlement Funds (OSF). Nationwide settlements in 2021 and 2022 resolved opioid litigation against major pharmaceutical distributors, manufacturers, and pharmacy chains. A presentation was given by Nate Robbins, Neighborhood Improvement Manager. Total Allocation to Costa Mesa is $4,620,166 over 15 years, with the funds received to date totaling $1,660,063. Requirements for the usage of the funds include that at least 85% must be used for opioid abatement activities,  and up to 15% may be allocated for attorney fees.

Staff recommended that the City Council approve the use of OSF to cover legal fees and fund opioid remediation services for people experiencing homelessness. The City has outstanding attorney fees of $167,137.19 and will receive ongoing OSF allocations over 15 years. Appropriating these funds will help cover legal fees and support opioid remediation efforts.

Public Comment. None.

Motion and Vote. Stephens made a motion to approve the item, which was seconded by Chavez. The motion was passed on a vote of 5-0, with Buley and Reynolds absent.

4.     Urban Plan Master Plan Screening Request for a Proposed 34 Unit Live/Work and Residential Loft Development on 1.4 Acres Located within Mesa West Bluffs Urban Plan at 1626 Placentia Avenue. A presentation was made by Chris Yeager, Senior Planner. The purpose of screening requests is for the City Council to provide comments on the overall merits and appropriateness of proposed projects before the formal entitlement applications are filed. Screenings are advisory only and are not final approval. The applicant can refine the project based on Council feedback before submitting a formal application.

The project is proposed by the Crede Group, a nationwide real estate developer, which will use its Warmington Residential for the project. Warmington has been building homes in California since the 1920’s. The project consists of 34 live/work and residential loft units on a 1.4-acre site. Units range from 1,432 to 1,667 sq. ft., each with three bedrooms, a two-car garage, and 200 square feet of private open space. About half of the garage parking is tandem. The Maximum height is 37 feet 11 inches.

The developer is utilizing the California Density Bonus Law (CDBL) to reserve two units for very low-income households, allowing a 20% density bonus. Note: It is unclear how this will be enforced (likely a deed restriction). The Distance between buildings is six inches less than what is required, and open space is deficient by five percent, both of which require a waiver by the City.

The site is located within the Mesa West Bluffs Urban Plan on Placentia Avenue, surrounded by industrial and commercial uses. It is presently developed with two warehouses used for industrial and office purposes and is currently zoned as “General Industrial District” with a General Plan Land Use Designation of “Light Industrial.” It is close to food and beverage establishments, a grocery store, and a gym, and approximately one mile from public parks and schools.

Eighty parking spaces are provided, exceeding the required 67 spaces. The project includes an internal pedestrian sidewalk system and access to public transportation and bike lanes.

It aligns with the Mesa West Bluffs Urban Plan objectives, promoting urban housing and live/work units, and is consistent with the General Plan, Zoning Code, and Urban Plan standards. The project will contribute to the City’s Regional Housing Needs Allocation (RHNA) with two very low-income units. Because the project uses CDBL, the waivers for open space and the reduced distance between buildings can be given because they are an incentive under that law.

The project lacks residential amenities, which are not required, but could be considered. While it is located near some amenities, the site is surrounded by industrial uses and is distant from parks and schools. Additional private open space may be necessary due to the distance from public parks. Staff suggests adding rooftop decks.

Depiction of Warmington Project

The project may reduce sales tax revenue but could increase property tax revenue for the General Fund. The Agenda Report did not indicate the anticipated cost to provide services, such as police and fire, so it is not known if the revenue would be eaten up by the cost of services.

The applicant gave a short presentation. Stephens asked about the waivers and received the explanation for why those can be given.

Public Comment. None.

Comment and Suggestions by City Council. Chavez suggested maximizing open space by using rooftop decks. He also commented that garages need to be able to accommodate the new three bin trash system. Marr commented that it would be okay with her if the units were just “live units” and she liked the parking plan. Stephens commented that no public comments were made, and he took that to be an evolution in the minds of the residents of Costa Mesa. I took it to mean that this item was heard at 10:30 p.m. when most of us were heading to bed.

5.     Compensation, Classification and Staffing Updates and Adoption of Memorandum Of Understanding (MOU) and Salary Resolutions Between City and Costa Mesa City Employees Association (CMCEA), Costa Mesa Division Managers Association (CMDMA), Confidential Management Unit, Confidential Unit, Executive Employees, Part-Time Employees and Police Recruits. The presentation was given by Kasama Lee, Human Resources Manager. This is to revise the MOU to include updated language for compliance with laws such as PERL, PEPRA, and CCR.

Public Comment. None.

Motion and Vote. Marr made a motion to approve the Staff recommendation, which was seconded by Chavez. The motion was passed on a vote of 5-0, with Buley and Reynolds absent.

JANUARY 26 PLANNING COMMISSION MEETING. All Commissioners were present, except Rob Dickson (District 5). Three items required action, and one item was a presentation (no vote required):

• Conditional Use Permit to Convert Two Existing Two-Story Office Buildings into a Church

• Time Extension for a Major Amendment to Avenue of the Arts Hotel Master Plan

• Six-Month Review of Cannabis Conditional Use Permit (CUP) Condition Of Approval

• Overview of Proposed Zoning Code Amendments

Public Comment. Wendy Simao spoke about the ongoing early morning noise coming from The 12 Gym on 17^th Street. She said that the gym operators told her to move out of Costa Mesa.

Commissioner Comments. David Martinez (District 5) announced upcoming events. He asked Staff for an update on the pre-approved ADU program.

Information about pre-engineered ADUs can be found here: https://www.costamesaca.gov/government/departments-and-divisions/economic-and-development-services/planning/accessory-dwelling-units-adu/pre-engineered-adus 

Angely Andrade (District 4) thanked City staff for providing resources and information to a local community aid effort, including access to legal aid and food assistance. She encouraged the public to participate in Orange County’s Point-in-Time Count, a biannual effort to assess unhoused residents.

Karen Klepack (District 1) welcomed everyone back for the first meeting of the year.

Jon Zich (District 1) wished everyone a Happy New Year. He expressed frustration at having to repeatedly listen to public comments regarding noise complaints related to The 12 Gym, stating that there is a straightforward solution. He noted that while the gym’s Conditional Use Permit (CUP) does not address noise, newer CUPs do. He also pointed out that the City’s current noise ordinance focuses on decibel levels and does not adequately address high-pitched or low-frequency bass noise.

Zich suggested that the CUP be modified to address the noise issues. He added that, to his knowledge, no one from the City has instructed the business to keep its rear door closed. He offered to meet with the property owner to help resolve the matter and stated that if no action is taken, he will continue to raise the issue from the dais.

Jeff Harlan (At Large) agreed with Zich’s assessment about the ongoing noise issues and encouraged Simao to go to the City Council, get them involved, and perhaps she’ll get a resolution.

CONSENT CALENDAR: The sole item on the Consent Calendar was approval of the minutes from the December 8, 2025 meeting. Martinez moved to approve the minutes, which was seconded by Zich. The motion carried on a vote of 6-0, with Dickson absent.

PUBLIC HEARINGS: There were two public hearings:

1.     Conditional Use Permit to Convert Two Existing Two-Story Office Buildings into a Church. Jeffrey Raimando, Assistant Planner, gave the presentation. Grace Fellowship Church requested approval to convert two existing two-story office buildings located at 3146 and 3152 Red Hill Avenue into a church facility. The proposal included a 195-square-foot addition to each building to accommodate elevators, equipment, and storage rooms. The site has 177 parking spaces, exceeding the required 174 spaces.

Commissioner Questions. Martinez asked whether the roadway entering the project site was a standard design. Seung Yang, City Engineer, said it was likely a standard design when the project was first built. Martinez asked if it could be reviewed, and Yang replied, “Yes” it could be.

Zich asked about the use of the outdoor area for special events and whether a permit would be needed for that. Raimando said “Yes,” that one would be required for special events. Zich then read from the Conditions of Approval, which seemed to contradict that. Martina Caron, a planning manager, said that Staff would correct the Conditions of Approval.

Andrade asked about the Condition of Approval regarding childcare. Staff told her that the services were only available during adult activities, and that the daycare would not be independent of church activities.

Public Comment. None.

Motion and Vote. Martinez moved to approve the item, which was seconded by Andrade. Zich requested a friendly amendment to include the correction that Staff had indicated they needed to make, which amendment was accepted. The motion was approved by a vote of 6-0, with Dickson absent.

2.     Time Extension for a Major Amendment to Avenue of the Arts Hotel Master Plan. The presentation was given by Chris Yeager, Senior Planner. Applicant Rosanna, Inc., is requested a three-year extension for a previously approved Major Amendment to the Avenue of the Arts Hotel Master Plan at 3350 Avenue of the Arts. The extension is sought to allow additional time for site modifications. The applicant cited the reasons for the delay as being (i) elevated interest rates for commercial construction loans; (ii) tariff-related uncertainty impacting construction costs; and (iii) ongoing supply chain disruptions and labor shortages. Martinez, Andrade, Klepack, and Rojas met with the Applicant.

Public Comment. None.

Motion and Vote. Martinez moved to receive and file, which was seconded by Harlan. The motion was approved by a vote of 6-0, with Dickson absent.

OLD BUSINESS: There was one item, a Six-Month Review of Cannabis Conditional Use Permit (CUP) Condition of Approval. Raimando gave the presentation. This is a six-month review of the CUP for the retail cannabis storefront "420 Flower Factory" located at 2332 Newport Boulevard. The Planning Commission approved the CUP in November 2022, allowing the operation of a retail cannabis storefront without delivery services. Between April 18, 2025, and December 31, 2025, there were nine calls for service to the Costa Mesa Police Department, including audible alarms, suspicious activity, and burglary. No noise complaints or code violations were reported. Staff site visits confirmed compliance with operational conditions, including parking management, gate closure, and monitoring of the parking lot. The business is current on tax returns and payments for 2025/2026. Staff indicated that no modifications to business operations or conditions of approval are deemed necessary at this time.

Public Comment. None.

Motion and Vote. Martinez moved to approve the item, and Andrade seconded the motion. The motion was approved by a vote of 6-0, with Dickson absent.

NEW BUSINESS: There was only one New Business item, but it was the meat and potatoes of the meeting:

1.    Overview of Proposed Zoning Code Amendments. This was a study session and no action by the Planning Commission is required at this time. A presentation was given Senior Planner, Michelle Halligan, who was joined by other Planning Department Staff and consultants from Dudek. It provided an overview of proposed amendments to:

• Rezone Sixth Cycle (2021–2029) Housing Element sites

• Implement Housing Element programs to encourage and facilitate housing development in compliance with State requirements

• Amend the North Costa Mesa Specific Plan for consistency with Housing Element rezoning

Background: Senate Bill (SB) 131, effective July 1, 2025, provides CEQA exemptions for certain housing and infrastructure projects. The City determined that rezoning Housing Element sites qualifies for CEQA exemption under SB 131, meaning an Environmental Impact Report (EIR) may not be required. However, the City has already initiated preparation of an EIR to cover both Housing Element and Measure K site rezoning efforts.

The rezoning process is divided into two tracks: (1) an expedited pathway for Housing Element sites to obtain certification from the Department of Housing and Community Development, and (2) a longer timeline for non-Housing Element Measure K sites, including studying ADDITIONAL housing opportunities on non-Housing Element Measure K sites.

Proposed Amendments:

• Housing Element Sites: Rezone to allow densities of 20–90 units per acre and establish objective design standards.

  
  

• Zoning Code Updates: (i) Add new definitions, (ii) streamline development review processes, (iii) update land use matrices, (iv) reduce parking requirements, and (v) revise regulations for motels and emergency shelters.

  
  

• North Costa Mesa Specific Plan: (i) Permit residential development at higher densities (up to 90 units per acre) on Housing Element sites; and (ii) building height limitations can be superseded by the Mixed-Use Overlay District (MUOD).

What is an “overlay?” Per City, it is a “zoning district that applies another set of zoning provisions to a specified area within an existing zoning district. The overlay zone supersedes the zoning regulations of the base zoning district, unless otherwise indicated.” CMMC Section 13-83.51; see https://ecode360.com/42616379 It is important to note that the current "Overlay" Urban Plans will not be sunsetted at this time.

The only items presented were the zoning changes to the Housing Element sites. New Case law, New Commune DTLA, LLC v. City of Redondo Beach, created a requirement that 50% of Housing Element sites be zoned for housing at a density of at least 20 dwelling units per acre (most of the rezoning is at a higher density of 40, 50, and 90 dwelling units per acre). Therefore, the MUOD has been revised to conform to this requirement.

Rezoning Map

Next Steps: A public hearing was held on February 9, 2026, where the Planning Commission recommended proposed amendments to the City Council. I have already written about that meeting (the one where the bombshell was dropped by the Segerstroms) and you can find that missive here: https://www.costamesa1st.com/post/planning-commission-meeting-bombshell Outreach for Measure K site rezoning will begin in March.

Commissioner Questions. Zich asked about the removal of additional parking requirements for bedroom additions. Staff responded that this change is required to comply with a new state law, which eliminated that requirement.

Zich then turned to the rezoning of Measure K sites and asked Halligan why the City is undertaking the rezoning itself, rather than requiring property owners to pursue a General Plan Amendment at the time they propose a project that necessitates rezoning. Halligan responded that the City wanted to complete the Environmental Impact Report (EIR) at this stage. As a result, property owners would receive a General Plan Amendment, including rezoning, along with an environmental review that can cost $1.5 million or more, without bearing those costs themselves. Halligan added that the City is also preparing for the next Regional Housing Needs Allocation (RHNA), which is expected to be released soon.

Zich asked what was meant by “removing barriers” to the development process and specifically whether that meant reducing or eliminating public participation. Staff responded that it did. Planning Manager Anna McGill attributed this approach to the HCD, stating that HCD views many local planning requirements as impediments to housing production.

Andrade asked about the difference between a streamlined project and one that must undergo development review. Staff explained that projects meeting certain criteria would not be subject to the more intensive review currently required, as long as they comply with objective standards. These streamlined, or “by-right,” projects must include 20 percent low-income housing and conform to the California Density Bonus Law. Staff noted that this process applies only to Housing Element sites and that Measure K sites may be subject to a different review process.

Staff characterized Housing Element sites as being well received by property owners and developers. However, it was later noted that this is not universally the case, as the Segerstrom family and several other property owners have requested that their properties be removed from the Housing Element. The February 23 Planning Commission meeting will be a must watch!

Martinez asked whether adoption of the rezoning would result in certification of the City’s Housing Element by the HCD. McGill responded that she was confident the City’s actions would be viewed favorably by HCD, but acknowledged that she could not guarantee certification. The HCD has said that much more than the rezoning needs to be done. The City must complete ALL the 40+ programs in the Housing Element, not just the rezoning, in order to get certification. I don’t know why Magill was trying to mask that fact.

Additional questions from Commissioners included whether the development standards applicable to Housing Element sites would also apply to Measure K sites (currently unknown, as those standards have not yet been finalized), the consistency of standards across sites (described as somewhat consistent), and questions related to parking requirements and setback distances.

Public Comment. The first public commenter wasn’t really intelligible because the audio was garbled due to feedback. The Zoom feed has not been working well for the City lately. He later made another attempt, but it still had feedback. I believe that the speaker was concerned about additional bike lanes being provided, given all this upzoning.

I was the second public commenter and experienced the same audio issues as the previous speaker. I noted that the changes proposed that evening represent only the first step toward significantly upzoning the City and will result in an increase in population by 40-50,000 residents. That is like dropping a new town into the middle of Costa Mesa. I raised concerns about increased traffic, reduced air quality, and impacts on infrastructure and public services, as well as the long-term fiscal consequences of these changes—particularly as voter-approval protections are weakened.

I also emphasized that the lack of transparency, limited public outreach and notification, and the growing reliance on by-right approvals without public hearings risk further disenfranchising Costa Mesa residents. I pointed out that the public still has no clear understanding of what is being planned for Newport Boulevard. I urged the City to provide clearer information and ensure meaningful opportunities for public participation.

Commissioner Comments. Martinez got into some ministerial changes and then tried to encourage that the standards be something that make people want to live in housing with those standards. He encouraged more public open space (something the public has repeatedly advocated for). He wanted what is typically allocated to common and private open space to be public open space. He wants heights and density to be consistent so that adjoining parcels have the same standards applied. Martinez, again, requested getting rid of parking standards.

Zich acknowledged Staff’s intelligence and diligence but stated that the proposed rezoning is a response to mandates from Sacramento rather than to the wishes of the broader Costa Mesa community. He also commented on the lack of resident participation at these meetings, noting that he has asked neighbors what they know about the City’s planning effort—referred to as “Neighborhoods Where We All Belong.” He said the responses he received were largely blank stares and described that lack of awareness as troubling, adding that many residents do not understand what the program entails.

Zich went on to criticize the removal of parking requirements, stating that it is viewed by many residents as unrealistic, but acknowledged that state policymakers are largely indifferent to local concerns. He questioned the assumption that making development easier necessarily aligns with community needs, asking instead, “What do developers actually want to build?” He noted that not all property owners are interested in constructing the type of housing envisioned by the state. Zich must have had a crystal ball because we now know that the Segerstroms don’t want to build housing, at least the kind that Sacramento wants them to build.

He further observed that, in his experience, no realtor has ever been asked to find a single‑family home on a busy street, though apartments in such locations may be more marketable.

Harlan objected to Councilmember Zich’s comments regarding apartments versus single-family homes and appeared to reinterpret Zich’s remarks in a way that went beyond what was actually stated. The exchange reflected a degree of tension that was noticeable from the dais and was an unfortunate display given Harlan’s role as Chair of the Planning Commission.

Harlan stated that his primary concern is housing quality rather than housing production numbers. Funny, he said the opposite when he was trying to get Measure K passed. He emphasized the importance of finalizing design standards early so that developers can begin the entitlement process without delay, and he expressed concern about a potential lag in housing production between Housing Element sites and Measure K sites.

He reiterated that he does not want a slowdown in development as the City transitions from Housing Element implementation to Measure K projects, underscoring the ongoing emphasis on production.

Motion and Vote. Martinez moved to receive and file, which was seconded by Harlan. The motion passed by a vote of 5-1, with Zich voting “No,” and Dickson absent.

Again, the report on the Planning Commission February 9 meeting, with the Segerstrom bombshell, can be found here: https://www.costamesa1st.com/post/planning-commission-meeting-bombshell