CC MINS 20040601MINUTES
RANCHO PALOS VERDES CITY COUNCIL
REGULAR MEETING
JUNE 1, 2004
The meeting was called to order at 6:00 P.M. by Mayor Gardiner at Fred Hesse
Community Park, 29301 Hawthorne Boulevard, and was immediately recessed to
closed session. At 7:01 P.M., the meeting was reconvened for regular session.
Roll call was answered as follows:
PRESENT: Clark, Long, Stern, Wolowicz, Mayor Gardiner
ABSENT: None
Also present were City Manager Les Evans; Assistant City Manager Petru; Assistant
City Attorney Carol Lynch; Director of Finance Dennis McLean; Director of Planning,
Building, and Code Enforcement Joel Rojas; Director of Public Works Dean Allison;
Associate Planner Blumenthal; City Clerk/Administrative Services Director Jo Purcell;
and Recording Secretary Denise Bothe.
FLAG SALUTE:
City Manager Evans led the flag salute.
MAYOR'S ANNOUNCEMENTS:
Mayor Gardiner congratulated Traffic Committee Chair Ava Shepherd and the
Committee members for the portion of their last meeting wherein public input was taken
regarding the Eastview Traffic Calming Program, expressing his belief that that portion
of the meeting went extremely well.
RECYCLE DRAWING:
None for May.
APPROVAL OF AGENDA:
Councilman Stern moved, seconded by Councilman Wolowicz, to approve the Agenda
as submitted. Without objection, Mayor Gardiner so ordered.
PUBLIC COMMENTS:
Lois Larue, 3136 Barkentine Road, commented on an invitation she received for a golf
event next Friday at Los Verdes Golf Course; and noted her opposition to Councilman
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June 1, 2004
Page 1 of 21
Wolowicz and Mayor pro tem Clark lending their names in connection with this event,
believing that all electeds should avoid potential conflict of interest with commercial
developments.
In response to Mrs. Larue's comments, Mayor pro tem Clark explained for the audience
members that Mrs. Larue is referring to a golf tournament sponsored by the Palos
Verdes Land Conservancy to promote its initiatives with respect to preserving and
maintaining open space; and advised that both he and Councilman Wolowicz were
approached to help out with the tournament. He expressed his belief that the
tournament is a worthwhile event and that is was appropriate for Council participation.
CITY MANAGER REPORTS:
None.
OLD BUSINESS:
Mayor Gardiner advised that old business items are available on the City's website.
NEW BUSINESS:
APPROVAL OF CONSENT CALENDAR:
Councilman Long requested pulling Item Nos. 4, Annual Appropriation Limit for FY 04-
05, and No. 9, Additional Grant funding for the Expansion of Point Vicente Interpretive
Center.
Mayor pro tern Clark requested pulling Item No. 2, the April 6 Minutes.
Councilman Long moved, seconded by Councilman Stern, to approve the Consent
Calendar as amended, removing Item Nos. 2, 4 and 9 for separate consideration.
Motion carried as follows:
AYES:
Clark, Long, Stern,
NOES:
None
ABSTAIN:
None
ABSENT:
None
Motion to Waive Full Reading.
Wolowicz, Gardiner
Adopted a motion to waive reading in full of all ordinances presented at this meeting
with consent of the waiver of reading deemed to be given by all Council Members after
the reading of the title.
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June 1, 2004
Page 2 of 21
Claim against the City by Kathy Izu. (303)
Rejected the claim and directed staff to notify the claimant.
ORDINANCE NO. 407: LANDSLIDE MORATORIUM EXCEPTION CLARIFICATION
AND REVISIONS. (1801)
ADOPTED ORDINANCE NO. 407, ADOPTING AMENDMENTS TO CHAPTER 15.20
(MORATORIUM ON LAND USE PERMITS) OF THE RANCHO PALOS VERDES
MUNICIPAL CODE AND RESCINDING URGENCY ORDINANCE NO. 406U. (This
ordinance was reintroduced at the May 18th meeting.)
Appointment of an ex offic90 member of the Emergency Preparedness Committee.
(106)
Appointed Jack Karp as an ex officio member of the Emergency Preparedness
Committee.
Professional Services Agreement - Community Development Block Grant
Program Administration. (601)
(1) Approved a three -year contract for professional services with Diana Cho and
Associates to administer the Community Development Block Grant Program not to
exceed the amount of $20,000 for FY 2004 -2005, and not to exceed the amount of
$20,000 for FY 2005 -2006, and not to exceed the amount of $20,000 for FY 2006-
2007; (2) Authorized the Mayor and City Clerk to execute the proposed Agreement with
Diana Cho and Associates.
Professional Services Agreement -Home Improvement Program Administration.
(601)
(1) Approved a three -year contract for professional services with MDG Associates to
administer the Home Improvement Program not to exceed the amount of $30,000 for
FY 2004 -2005, and not to exceed the amount of $30,000 for FY 2005- 2006, and not to
exceed amount of $30,000 for FY 2006 -2007; (2) Authorized the Mayor and City Clerk
to execute the proposed Agreement with MDG Associates.
April 2004 Treasurer's Report. (602)
Ordered received and filed.
Resol. No. 2004 -42: Register of Demands.
ADOPTED RESOL. NO. 2004 -42, A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES ALLOWING CERTAIN CLAIMS AND DEMANDS
AND SPECIFYING FUNDS FROM WHICH THE SAME ARE TO BE PAID.
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June 1, 2004
Page 3 of 21
Councilman Long moved, seconded by Councilman Stern, to approve the Consent
Calendar as amended, pulling Item Nos. 2, 4, and 9 for separate consideration. Motion
carried as follows:
AYES:
Clark, Long, Stern, Wolowicz, Mayor Garainer
NOES:
None
ABSTAIN:
None
ABSENT:
None
Councilman Wolowicz stated that he routinely attempts to confer with staff on various
agenda topics that he needs clarification on prior to the meetings, and he thanked staff
for their prompt and courteous response to those communications.
Mayor Gardiner echoed those sentiments and urged the Council members that when
possible, to make a strong attempt to confer with staff prior to the meetings in obtaining
clarification on various topics, thereby not needing to take up valuable meeting time.
Approval of the Minutes —April 6, 2004. (301)
With respect to Page 29, paragraph 3, of the April 6 minutes, Mayor pro tern Clark
asked that the 8 years be changed to 12 on the first line and that the View Restoration
Committee be changed to "Commission" in that same paragraph. With regard to Page
34, paragraph 5, Mayor pro tem Clark requested that the following be added to the end
of the sentence, "and is also familiar and has met with Board Member Lansing on other
matters."
Councilman Stern moved, seconded by Councilman Long, to approve the April 6, 2004
Minutes as amended. Without objection, Mayor Gardiner so ordered.
Resol. No. 2004 -43: Annual Appropriation Limit for FY 04-05. (602)
Councilman Long asked for clarification on why the City Council is required to adopt this
state mandate on appropriations.
City Attorney Lynch stated that the City is required to adopt the expenditure limitations
established by state law, basically saying the City understands the state law, that City
staff has calculated the figure, and that it believes the figure to be correct.
For the benefit of the public, City Manager Evans explained that this item pertains to the
Gann limit, which limits how much revenue a city is legally authorized to generate; and
explained that each year, the City calculates the upper limit of the revenues it is allowed
to generate based on population and inflation; and noted that this year, the figure has
more than doubled.
Councilman Stern moved, seconded by Councilman Wolowicz, to approve staff
recommendation. Without objection, Mayor Gardiner so ordered.
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June 1, 2004
Page 4 of 21
Resol. No. 2004 -44: Additional Grant funding for the Expansion of Point Vicente
Interpretive Center. (1201 X 1204 X 602)
Councilman Long asked for clarification on the construction bids.
Director Allison stated that staff opened the bidding process on April 15, 2004; and that
a week after opening the bidding process, the lowest bidder called and indicated they
wanted to withdraw their bid and did not want to be part of the project. He explained
that staff is working with this contractor, reminding them of their legal responsibility to
follow through with the bid process; and advised that if all goes well, a staff report
should be before Council next month. He noted that the next lowest bidder was
approximately $1 million higherthan this low bidder.
Mayor Gardiner commented bn the increasing price of building materials and
questioned its impact upon bids.
Responding to Mayor Gardiner's inquiry regarding bids and the cost of materials,
Director Allison explained that the bids are good for 90 days; and noted that it is
common for a contractor to go through their own bidding process for supplies.
Councilman 'Stern moved, seconded by Mayor pro tem Clark, to approve staff
recommendation. Without objection, Mayor Gardiner so ordered.
PUBLIC HEARINGS:
Resol. No. 2004 -45: Adoption of the City Budget and Employee Salary Ranges for
Fiscal Year 2004 -2005. (602)
Assistant City Manager Petru and Director McLean presented staff report and the
recommendation to (1) ADOPT RESOLUTION NO. 2004 -45, APPROVING THE CITY
BUDGET FOR FISCAL YEAR 2003 -2004; and, (2)ADOPT RESOLUTION NO. 2004-
46, ESTABLISHING SALARY AND HOURLY RANGES FOR COMPETITIVE AND
MANAGEMENT EMPLOYEE JOB CLASSIFICATIONS.
Director McLean noted for Councilman Stern that the City is losing approximately $2
million in Vehicle License Fee revenues; stated that the unique deal that's been reached
with the Governor is for FY 04 -05 and FY 05 -06; explained that all but $350,000 of
contributions is being restored in the form of property taxes; that during FY 04 -05 and
05 -06, there will be a $350,000 contribution to solve the state budget crisis; and that,
thereafter, the full amount will be restored -- meaning, the $2.7 million will be received to
the extent of approximately $30-0,000 in VLF's and $2.4 in the form of property taxes.
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June 1, 2004
Page 5 of 21
Mayor pro tem Clark added that the r/LF backfill for this year would be restored in the
FY -06 budget as part of the deal, which was a restoration of backfill for this current year;
and that in this City's case, the calcuiation would be approximately $802,000.
Director McLean clarified that this is VLF revenue that has been *ost during this current
fiscal year. Director McLean clarified for Mayor Gardiner that the City still ends up
losing approximately $400,000 over the next two years and that the City is hopeful the
funds will be fully restored after the two years.
Councilman Wolowicz requested that he receive a copy of the schedule staff has used
for its calculations; and stated that it would be .helpful for staff to take the far right -hand
column of the chart and reflect the impact, indicating when the funds are due back to
the City.
Director McLean continued to express caution that even though the City had been
receiving VLF backfill through the course of FY 03 -04, there would be some risk of
demand for offset/repayment depending upon how the negotiations would go with local
agencies and the state; and that as each day passes, he stated that that might not
occur. He stated that the $11.2 million General Fund reserve b lance as of June 30,
2004, is based upon the mid -year report; and noted that if thd VLF backfill revenue
survives the fiscal year, the General Fund reserve will bu $1 million greater.
Councilman Wolowicz asked that sometime in the future, staff come back and indicate
where these items are located on Schedule C, items that are not included in the budget.
City Manager Evans stated that a couple meetings ago, staff asked the Council to
approve an overlay and slurry seal project utilizing funds of $1 million that were deferred
from previous years; explained that these funds were always in the budget but not
expended; that the proposed funds of $1.1 million, those are new funds that don't
appear in a budget, a new request, because there is no money for overlay or storm
drains going forward -- pointing out that this was one of the things taken out of the
budget to make sure that the City would keep its expenditures within the City's
revenues; and stated that staff is asking Council to use $1.6 million out of the reserves
to accomplish this project. City Manager Evans explained that Director McLean has
prepared extremely conservative revenue projections.
City Manager Evans noted for Councilman Wolowicz. that the $1 million the Council
approved several weeks ago is already included in the mid -year projection for the
reserve balance that it's already taken out of the $11.2 million balance.
City Manager Evans noted for Councilman Long it is staff's hope that in the future, the
revenues will increase to the point where the City can have a regular, on -going
pavement maintenance program as the City has had in the past -- pointing out that staff
is presenting the expense as a one -time capital expense, which also includes $500,000
for miscellaneous storm drain improvements. He pointed out that staff would not
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June 1, 2004
Page 6 of 21
present a budget to Council that is in excess of the City's revenues that are expected to
be generated.
With regard to the City's Storm Drain Master Plan, Phase 1 (lining), City Manager Evans
clarified for Mayor pro tem Clark that staff is. asking Council to budget that money;
advised that staff cannot expend the funds without permission from the Council for
capital projects; and mentioned that this is for purposes of planning. He stated that
before the Council would authorize any expenditure with respect to the revised Storm
Drain Master Plan, Council would be comprehensively briefed on a proposal; and noted
his expectation that Director Allison will be presenting a proposal at the Council's next
meeting.
Director McLean clarified for Mayor Gardiner that what Council is being asked to adopt
is what's in Column B, proposed FY 04 -05; and that the changes are incorporated in the
line, "Expenditures Proposed."
City Manager Evans stated that the only changes to the budget on Circle Page 3, staff
is adding the $1.1 million for the Residential Slurry Seal and Overlay Program to the
budget; $500,000 for Phase I of the Storm Drain Lining Program; $50,000 for the
Department of Planning, Building and Code Enforcement budget; and $3,500 for staff
promotion in the City Clerk's'Office.
Libby Aubrey, Rancho Palos Verdes, requested an increase in the grant for the School
of Champions; and she stated that it would be a small increase for operational
expenses. Ms. Aubrey explained that she is attempting to apply for over $700,000 in
Department of Education grants and that the additional funding would go towards the
grant writing process. She commented on the implementation of new programs to
further educate the youth on laws regarding roadway safety and educating the youth
leadership in civic practices.
Mayor Gardiner closed the public hearing.
Councilman Stern moved, seconded by Councilman Wolowicz, to approve staff
recommendation. Without objection, Mayor Gardiner so ordered.
9:30 PAUSE TO CONSIDER REMAINDER OF THE AGENDA
Without objection, Mayor Gardiner continued the meeting without pause.
CITY COUNCIL ORAL REPORTS:
Councilman Long commented on the following events he attended:
• May 23rd and 24th, attended the California Contract Cities conference; and noted
with interest the presentation by the Joint Powers Insurance Authority, stating
that the JPIA and the Liability Trust Fund have done an exceptional job in the
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June 1, 2004
Page 7 of 21
course of the last 3 to 4 years with.. reversing a s'itL ation in which the insurance
group JPIA gets its insurance from ryas reducea its aeficit from approximately $40
million down to $7 million. He stated that he met the new Los Angeles County
Assistant Fire Chief, Division 1; assignea to this area, Thom Glonchak, and
learned that while RPV has no high fire hazard areas, RPV does abut
unincorporated County areas wherein people need to pay attention to the danger
of brush; and advised that there is an area on the peninsula in the
unincorporated County area along CrenshaA Boulevard, near Academy Hill, that
is considered a fire hazard area. He notes that bec;a �se of this high -risk fire area
designation in the unincorporated County area, people who live in and near his
neighborhood are paying a higher fee for fire insurance. He urged everyone to
clear the brush near their homes, noting that the brush clearance deadline is
approaching.
• Attended the Memorial Day cerebration at Green Hills; stated that Tom Sullivan
was an inspirational speaker; that he met 9 members of the famous 442nd
Brigade; that he found out one of his neighbors, Colonel Willard Levin, was one
of those honored for flying several missions over Germany toward the end of
WWII. He stated that this was a remarkable event.
• He mentioned that Mayor pro tern Clark might be interested in attending the Los
Angeles American Planning Association awards dinner on June 9, noting that he
is not able to attend the event himself. He noted that the Los Angeles Air Force
Base project would be presented an award.
Councilman Stern noted that he attended the following events:
• Attended the California Contract Cities Conference;
• Attended the Green Hills Memorial Day celebration;
• He, Mayor pro tem Clark and the City Manager met this afternoon as the Ocean
Trails Liaison Committee; and stated that they will be meeting tomorrow with a
representative from Ocean Trails to address issues involving geology.
Mayor pro tem Clark noted that he attended the following events:
• Attended the California Contract Cities Conference; noted that one topic of
interest was a panel session which discussed the formation of a joint powers
authority for the County of Los Angeles to allow multiple
jurisdictions /municipalities to leverage the ability to replace aging infrastructures;
advised that other counties in the state are ahead of Los Angeles County in
respect to this approach; stated that the panel included several financial experts
and former California Governor Dukemajian; and stated that this is an area the
City should follow up on in terms of the initiative. He stated that the event was an
excellent opportunity to interact with fellow electeds;
• Attended the Green Hills Memorial event; stated that this was his first opportunity
to attend the event; noted that he came away inspired, having served this country
for the past 3 decades in defense matters for the Department of Defense; and he
encouraged everyone to attend this Memorial Day event in the future if the
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June 1, 2004
Page 8of21
opportunity arises. He highlighted the fact that Memorial Day is a day to observe
and recognize the sacrifices. this country's military has made throughout its
history. He commended the -keynote speaker and noted that veterans were
present from the following -wars: WWII, Korea, Viet Nam, and Iraq.
• Last Thursday attended the South Bay Council of Governments Board of
Directors meeting; and stated that Councilman Wolowicz may be interested and
well suited to attend the state's 10 -year budget visioning workshop on Monday,
June 7, at the Torrance Marriott;
• Attended the South Bay COG ;meeting, wherein a presentation was given on
commercial real estate using GIS technology and of a related website for the
entire South Bay COG. He stated that the presentation was made by Barry
Waite, Chair of the GIS Support Group for COG. He -advised that other
municipalities have created a similar website which has increased commercial
business activity at a. dramatic rate. He noted his interest that a steering
committee be formed to address the creation of this website and stated that he
will provide more information when it becomes available.
Councilman Wolowicz commented on the following events he attended:
• May 23rd, attended the Contract Cities Conference; stated that he was impressed
with the panel discussions; and noted .the shortcomings with the County's budget
with regard to law enforcement availability; and stated that he will be meeting
with law enforcement officials to discuss its impact to RPV;
• Attended the Traffic Committee meeting at the end of May and had an
opportunity to listen to all the speakers' comments; stated that Traffic Committee
Chair Ava Shepherd did a fine job -with handling the meeting; and expressed his
belief that there is now a good springboard for making some good, positive
decisions. He stated that he was heartened by the comments from the
community;
• May 31 St attended the Memorial Day observation at Green Hills; stated that the
event reminded him of the great sacrifices this country's military has made and
how much we as a nation owe to those who have served this country.
Mayor Gardiner stated that over the weekend while out of town, he spoke with a
resident from another city about the use of granny flats as a way to count towards
affordable housing and suggested that RPV address the merits of this usage.
Director Rojas indicated that the City's Housing Element does address granny flats; and
that it does count towards meeting the affordable housing goal.
RECESS AND RECONVENE
Chairman Gardiner recessed the meeting at 8:26 P.M. and reconvened the meeting at
8:32 P.M.
City Council Minutes
June 1, 2004
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Page 9of21
REGULAR NEW BUSINESS:
Ocean Trails - Presentation of a proposed revision to Vesting Tentative Tract Map
No. 50666. (1411)
Recommendation to receive a presentation from Ocean Trails on a proposed revision to
Vesting Tentative Tract Map No. 50666,
Vinnie Stellio, representing the Trump Organization, with the aid of a power point
presentation, highlighted the history of the proposal for this property; stated that project
representatives have been able to speak with many residents about the project and to
hear their concerns. In Phase I of the housing plan, he stated that 5 homes are being
proposed; that Phase II has 11 residential lots, 8 which are two -story lots; commented
on the proposed duplex housing units: and stated that additional parking is being
provided in the lower area of the lots: Mr. Stellio advised that the golf villas will range
from approximately 450 square feet, 950 square feet and 1,200 square feet; stated that
these units will not be sold, that they will be for rent. With the use of the architect's
renderings, he highlighted the walkways from the cottages and the views out of the
villas to the ocean. He mentioned that everything being proposed is below the ridge
height of the previously approved project; and explained that the lots have been
reconfigured and /or eliminated to make room fof a driving range facility. He noted that
the originally approved plan was that the 28 lot homes averaged between 6,500 and
10,000 square feet, but that they are now proposing -13 lots, which would encompass 24
units between 4,000 and 5,500 square feet, sold as town homes; and the driving range.
He pointed out that the split -level helps to increase the views.
Mayor pro tem Clark requested a summary of the benefits the organization sees with
the proposed change to the Ocean Trails project.
Mr. Stellio stated that this proposed change will make this a destination resort, golf
course; noted that there are currently no other hotels in the area; stated that Ocean
Trails has a successful banquet facility; that the hotel facility will offer more self -
sufficiency for people who need a place to stay; and that the proposal will generate
transient tax revenue for RPV. Mr. Stellio explained that the architects had changed the
configuration /position of the cottages to lower the grade and position the cottages in
pockets /clusters to improve views.
Mayor pro tem Clark questioned the driving factor behind the 113 units and questioned
if density factors and impacts to land use were taken into consideration.
Mr. Stellio explained that they left it up to the architect to see how many units would
work in this area; noted that views were primarily taken into consideration; pointed out
that this is a preliminary plan and that they intend to work with staff on tweaking the
plans; and noted that these units will not be placed on one large flat pad. He stated that
the pools would accommodate the hotel guests and unit. owners.
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June 1, 2004
Page 10 of 21
Mayor pro tem Clark questioned if any other Trump resort properties have this same
sort of setup /amenity.
Mr. Stellio stated that no other resort property has this same style; noted the interest in
having hotel accommodations; b.ut stated that in order to provide a large number of units
with views, the villas appear to be more appropriate than one large hotel building.
Mayor pro tem Clark addressed the residents' concerns with inadequate parking.
Mr. Stellio explained that following construction of the entire project, there will be
adequate parking for day -to -day operations; and pointed out that this hotel concept
includes additional parking, approximately 175 spaces.
Councilman Long questioned if the applicant believes the market demand can support
the number of hotel rooms being proposed, along with the number of hotel rooms
already approved within the City which already has zoning for resort hotels.
Mr. Stellio expressed his belief that market studies indicate that the 113 units are not
considered to be excessive and can sustain a good rate of occupancy even with the
Long Point project. He added that they will be proactively marketing the project and that
a successful business is anticipated.
Mr. Stellio stated that they are still working on the grading plan, and he invited anyone
interested to visit the site to obtain more detailed input. He noted that this same
presentation has been provided. to interested homeowners. Mr. Stellio indicated that no
other entrances are being proposed than what has already been approved.
Mr. Stellio noted for Mayor Gardiner that he believes there will ultimately be enough
parking to sustain all activities on this site; and noted his anticipation that it will take
about a year to get through the approval process, including the Coastal Commission.
Mayor pro tern Clark asked what the revenue generation calculations are for this
proponent of the project, what kind of hotel rental revenue generation the applicant sees
it generating, and what kind of revenue tax the City will receive.
Mr. Stellio explained that there will be a percentage set as a City tax that other hotels
have to pay; and stated that the rental prices will be comparable to those of Pebble
Beach and Pelican Hill;. and that the hotel and housing accommodations will be large
enough to facilitate its residents and the public.
City Manager Evans stated that the tax is currently 10 percent.
Bill James, RPV, stated that he lives directly north of the project, on behalf of the Sea
Cliff Hills Homeowners Association, he noted support for the proposed project; stated
that the residents have waited a long time for this property to be developed and
completed; stated that the homeowners association would like to meet with the
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June 1, 2004
Page 11 of 21
applicant to discuss this new proposal, ana expressed a desire to see this project
completed in a timely manner.
Long Point Resort Hotel Project Status. (1203 X 1804)
Rob Lowe, Los Angeles, provided an update on the progress of the Long Point project
to the beginning of construction; ne reviewed the request for approval of the
modification to the ownership structure of the resort; and refreshed the audience on the
Long Point proposal with the aid of a video. He highlightea the model of the Long Point
resort and encouraged everyone to take some time to view the model. He stated that
the 32 villas that have been approved are above the 3 -hole training course and the
driving range facility; noted that the 50 casitas have ocean views on both sides of the
main part of the hotel; explained that the main hotel building cascades down the hillside
from a 2 -story building to a 4- to 5 -story building as the slope falls away. He mentioned
that the 20 bungalow units are between the main buildings.
Mayor pro tem Clark questioned if there are entitlements for everything described.
Mr. Lowe indicated that there are entitlements for everything described, both from the
City two years ago and the Coastal Commission;. advised that the City finalized the
approval in October following the Coastal Commission approval; and that the official
approval date of the City is October 2003.
Mr. Lowe stated that the villas represent 32 units; advised that the villas have a use
restriction and cannot be used as permanent residences; and explained that an owner
of a villa cannot use their villa more than 90 days a year or 29 days at a time. He noted
that there are 50 casitas, which break away as 150 rental keys; and stated that an
owner cannot use the casitas more than 60 days a year or 29 days at a time. He
advised that there are 20 bungalow units, which 'equate to 40 keys and then 360 keys in
the main building, which includes a mixture of regular hotel rooms and suites. He stated
this all totals 582 units.
As a point of interest, Mayor Gardiner questioned the length of time this project has
taken from the time of conception to the final approval.
Mr. Lowe estimated that it has taken 5 years and numerous meetings.
Mike Mohler, Los Angeles, representing the applicant, provided an overview of the site
from all angles; stated that the large model was generated from the same base maps as
the common source; stated that views were taken into consideration when positioning
all the buildings; and displayed an architectural perspective from the street elevation
and a series of photo renderings of several- perspectives on the property.
Mr. Lowe stated that since he had received final Council approval last October, he has
been focused on several steps to prepare Long Point for development; advised that he
first reviewed the development costs and confirmed that this is approximately a $300
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June 1, 2004
Page 12 of 21
million project; secondly, stated that they have updated the project operating pro formas
of the current market conditions; and, thirdly, that they have initiated negotiations with
several financial participants. He noted that he anticipates capitalizing the $300 million
project using only 50 or 55 percent debt, with the balance being raised as equity or
equity -like capital. He advised that they are on schedule. He stated that he anticipates
the financing effort to require 6 to 12' months; and following that, it would require another
9 to 12 months to complete the working drawings, draw City permits, and complete the
construction contracts to break ground. In spite of the difficult hospitality market and
significant reduction in new hotel development, he advised that they are making
significant progress with both the debt- and equity financing -- noting that they are
working with some extremely high quality and long -term investors; and stated that with
the City's help, they should be able to meet their schedule, breaking ground on Long
Point sometime next summer or fall.
Mr. Lowe stated that they are requesting an amendment to the CUP and the Coastal
Commission permit to allow the sale of an additional 50 hotel suites and guest rooms
and the 20 bungalow units to individual owner /investors; pointed out that this is strictly a
modification in their- financial structure and that it does not represent a change in the
project. He explained that in this current plan, there are 360 standard hotel rooms in the
main building and 20 bungalows, which would be owned by the hotel investor; and that
individual investors would own the 82 casitas and villas. He stated that the request
would add another 70 to those 82 units that could be owned by individual investors in
the individual units; that these 70 units would comprise the 20 bungalows and 50 suites
in the main building, 35 of which are multiple room suites, 15 of which would be
standard hotel rooms configured as studio units. He pointed out that there is no change
to the total number of keys, that both configurations have the 582 keys.
Mr. Lowe explained that they are seeking this amendment to facilitate financing to get
the resort under construction as soon as possible; and advised that the hotel industry is
still recovering from the recession and the impacts of 9/11. He stated that, generally,
the revenues do not support the cost to develop full - service, quality resorts in today's
climate; noted that individually financed units speed the return of capital, thereby
increasing returns to attract both the debt and equity financing; and pointed out that in
today's environment, this is a normal and customary financing strategy. He pointed out
that everything, except the financing structuring on these 70 units, stays exactly the
same, no change to the public access to the resort, no change to the physical plan, no
change in the operation of the full - service resort, no change to the restrictions in the
owner usage of the 82 units that have been approved, all public benefit facilities to be
developed and operated as has been committed, and the hotel to meet its substantial
tax revenues for the City. He stated that the 70 units being requested this evening
would have the same owner use restrictions as the casitas.
Mr. Lowe stated that they are proposing in this structure some additional benefits to the
City; first, stated that it will allow them to begin to complete the financing and begin the
development of the* hotel in as rapid a manner as possible; secondly, that they are
suggesting a property resale transfer tax of 1 percent, which would be charged to the
City Council Minutes
June 1, 2004
Page 13 of 21
seller each time they resale, not only one of the 70 units they are asking to be modified
in the approval tonight, but they would apply that 1 percent property tax to the 82 units
the City has already approved; advised that a stabilized year adds additional revenues
in the range of $300,000 to $350,000 a year. funds that would go into a nonprofit entity,
which would benefit supplying funds to( other City, /public facilities or maintaining other
existing facilities. He stated that the third benefit of this new plan is the individually
owned units will most likely be asses.�ed at a higher Vague than the hotel units, thereby
increasing by a small amount the annual property tax revenue to the City. He noted his
belief that the actual impact would be a decrease of $80,000 to $85,000 in the annual
hotel occupancy tax, but stated that they are projecting an increase of $332,000
annually with this new 1 percent property transfer tax. He stated that he believes the
increase in the property tax revenue to the City will be approximately $30,000 a year;
and that the net increase to the City from this plan over a 5 -year period is expected to
be over $1.5 million. He reiterated that this is a very common financing strategy that is
utilized these days.
Councilman Wolowicz questioned the possibility of the City managing these nonprofit
funds.
Mr. Lowe explained that this is a way to ensure that the proceeds of the transfer tax will
be available for public benefited uses; pointed out that this financing program has been
done with other cities that set it up with an independent nonprofit group, utilizing very
restrictive uses; and stated that he would be open to discussing other options for this,
management of nonprofit funding.
Mr. Lowe explained for Councilman Wolowicz that the hotel entity will be in control of all
the property, will own the common areas, all the joint use facilities and will under
contract manage the individually owned units; and stated that there would be an
association, but that the individually owned units would directly contract one -by -one with
the hotel operator. He stated that there has been no request or approval of an interval
time -share program and that he does not anticipate any future request for one.
Mr. Lowe confirmed for Councilman Long that the owner occupied units should be
available to the general public more than 80 percent of the time due to the occupancy
restrictions.
Councilman Stern stated that he, Mayor pro tem Clark and City Manager Evans
received a preview of this proposal prior to the meeting; and that this applicant was
encouraged by the subcommittee to present the same information at tonight's meeting.
Phil Stukin, marketing representative for Long Point, stated for Mayor pro tern Clark that
the turnover of the units once every 6 years is based upon his experience with similar
projects within the industry and also comparing the average single- family home turnover
every 8 years. Mr. Stukin mentioned that the transient occupancy tax (TOT) still gets
charged with a renter; and expressed his belief that the units will be available for rent 90
percent of the time.
City Council Minutes
June 1, 2004
Page 14 of 21
City Manager Evans stated that the 10 percent TOT is an average throughout the
marketplace, but indicated that some South Bay cities are now charging 12 percent; and
advised that the percentage can only be changed by a ballot initiative approved by the
voters.
Mayor pro tem Clark questioned the. maturity of this concept in the industry and the
reliability of the information /data -in terms of forecasting the numbers.
Mr. Stukin explained that there have been hotels, particularly in the resort field, that
were financed in this manner in the 1970's; that it then became less popular, but that
because of the economic climate, it has made a comeback in recent years. He stated
that they do not have a huge amount of data, but that they are looking at not only the
data relevant to individually owned resort units, but also for sale of normal second -home
properties; and explained that even if they are wrong, the disparity of the additional
benefit in what the City is getting from the additional proposal is sufficiently great.
Councilman Wolowicz asked that the applicant provide finance staff with the basis for
their computations; and questioned if any of these financial changes will affect the
phasing of construction or delay any of the major elements.
With the approval of the proposed ,financing plan, Mr. Lowe stated that he expects to
develop the entire project sooner than if there had not been this proposed modification.
Mayor Gardiner stated that he had breakfast with Mr. Lowe and that they discussed this
matter; and stated that he would support this modification because there is no change in
the physical structure, no adverse change to the other dimensions, that it is only a
financial arrangement; and he suggested that staff look at the proposal and present a
report to City Council.
Councilman Stern noted his concurrence with Mayor Gardiner's request, and suggested
that he and Mayor pro tem Clark get together with staff to go over all the conditions
before staff report is presented to Council.
Mayor pro tem Clark noted his appreciation for the preview he received of this proposal
last week; and suggested that the FAC review the proposed financial changes for its
implications to the City.
Councilman Stern expressed his belief that it is immaterial at this point whether the TOT
is equal to or greater than the reduction of the TOT and that he does not believe the
FAC's time would be spent wisely in reviewing this matter once again.
Mayor pro tem Clark stated that it makes a difference for him to understand the
underlying assumptions associated with this modification; and stated that he would ask
that the FAC's review be done expeditiously.
City Council Minutes
June 1, 2004
Page 15 of 21
Councilman Wolowicz stated that he would not like to see this issue drag along, but
stated that he also would like the FAC to review the proposed numbers.
Councilman Long expressed his belief tnat the FAC has comprehensively looked at this
project before; stated that the private financing element of this is in the hands of the
developer; and explained that even if the amity were to lose all of the transient occupancy
tax for those rooms, he does not believe it would change the overall financial picture for
the City by a great deal. He stated that the loss in TOT would be less than 2 percent;
and pointed out that the FAC has a lot of things to do once they get the infrastructure
concerns in front of them; and added that the Council is going to be making a lot of
demands on the FAC and that he does not want them to spend more time on this. He
noted his support for getting this project in line for financing as soon as possible.
Mayor Gardiner noted his concurrence with the statements by Councilmen Long and
Stern; and expressed his belief that the benefits outweigh any potential downside. He
stated that he is supportive of the financing plan that will accelerate the opportunity for
financing and construction.
Director McLean explained that the FAC analyzed what revenues could be derived in
total; that the FAC assessed the proposed TOT rates as well as the room rates and
tried to make a representation as to whether the revenue streams being reported were
feasible; and he stated that finance staff, in conjunction with the FAC, does not have the
expertise to provide a detailed analysis of the applicant's computations. He expressed
his opinion that it would not be advantageous for the FAC to review the new proposal.
Having heard everyone's input on this discussion, Mayor pro tem Clark noted his
concurrence and withdrew his request to send this matter to the FAC.
Councilman Long moved, seconded by Councilman Stern, to instruct staff to receive an
application for an amendment to CUP 215, for staff to consult with the applicant and the
subcommittee, to formulate appropriate recommendations and agendize for Council
action the application as soon as reasonably possible. Without objection, Mayor
Gardiner so ordered.
RECESS AND RECONVENE
Mayor Gardiner recessed the meeting at 10:08 P.M. and reconvened the meeting at
10:17 P.M.
Code amendment initiation request to consider the prohibition of Portable on
Demand Storage Containers (Cargo Containers) as permanent storage units on
residential properties (Case No. ZON2004- 00265). (1203 X 1801)
Councilman Stern questioned if there are any existing storage containers on properties
in the City and whether there have there been any complaints.
City Council Minutes
June 1, 2004
Page 16 of 21
City Manager Evans stated that there are some that staff is aware of and that staff has
dealt with some complaints.
Councilman Wolowicz questioned if there are any state or county regulations in regard
to this matter.
Director Rojas stated that staff is not aware of any state or county regulations regarding
the use of these containers.
Mayor Gardiner asked for clarification that this only prohibits these storage units on
residential properties.
Director Rojas stated that the target is to prohibit the use of these permanent storage
units on residential properties. r
Mayor Gardiner noted that he does not wish for this code amendment to include schools
or playgrounds, that it only relate to residential neighborhoods.
Councilman Stern moved, seconded by Councilman Wolowicz, to concur with staff
recommendation. Without objection, Mayor Gardiner so ordered.
Code amendment initiation request to maintain an undeveloped area for the
keeping of horses on all properties within the Equestrian (Q) Overlay District
(Case No. ZON2004- 00264). (1203 X 1801)
Recommendation to provide direction to staff on whether to initiate development code
text amendments that would require every residential property located within an
Equestrian (Q) Overlay District to maintain a certain portion of their property as open
space, so as not to preclude future possible horse keeping.
Councilman Stern questioned if staff has any data on the number of homes that have
been built or modified that would run afoul of regulations such as what is being
proposed.
Associate Planner Blumenthal stated that staff does not have that data; and that staff
pulled the open permits within the Q District and that with new homes and proposed
additions, the number of homes involved was 20. He stated that staff is not aware of
how many would create a problem in terms of this measure.
Councilman Stern noted his concern that people are buying homes in these areas; that
they presumably know they have a right to maintain those facilities in the Q District, but
stated that he would like to have a sense of whether many people are finding it more
important not to have those facilities and are changing the use; and asked if staff has
seen any areas in the Q District that seem to be changed in terms of people not keeping
areas for the animals.
City Council Minutes
June 1, 2004
Page 17 of 21
Associate Planner Blumenthal stated that where the problem is being seen is primarily
in the Q District at the top of PVDE,
Councilman Stern asked if staff knows now many horses are in that area at the top of
PVDE.
Associate Planner Blumenthal indicated that the number of horses in that area is
unknown.
Councilman Stern stated that he is trying to get a sense of what seems to be the use
that people are paying money for with these properties.
Councilman Wolowicz asked if the City has similar regulations limiting what other
property owners can do.
Associate Planner Blumenthal stated that the City has various regulations for lot
coverage, setbacks, etc., standard building regulations, but no other places where
homeowners lack the ability to develop_
Director Rojas stated that the City does not have any regulations that cause someone to
keep an area undeveloped in anticipation of some potential future use.
Mayor Gardiner stated that he would like to know from the Equestrian Committee how it
formulated its opinion in regard to this, matter and how it projected that opinion into the
process; and stated that if this is approved, it should be mandatory to notify buyers of
this restriction on the property. He questioned if the City is taking any property rights
away from these homeowners.
City Attorney Lynch stated that yes, this does take some property rights away from the
property owners in these areas; but noted that in her opinion, it would not be an
unconstitutional impairment of someone's rights because it's analogous to setback
requirements, in that there is a mandatory open space requirement. She noted that
recent Supreme Court opinions are holding that a city can interfere with some property
rights as long as a city is not preventing the_use of the entire property.
Madeline Ryan stated that this code amendment would protect the future of horse
keeping in the Q District; explained that these parcels are the larger parcels that are
attractive to buyers that pay 15 to 20 percent more, home buyers who want to live in
lower density neighborhoods. She urged Council to support this proposal and to
support future horse keeping in RPV.
Councilman Stern stated that if there is a premium being asked for horse keeping
facilities, the City doesn't need to protect it from an ordinance because people will pay
the premium and keep the horse facilities unless the nature of the use of the property in
the area is changing to where the highest and best use dictates that they do not want to
keep horse facilities.
City Council Minutes
June 1, 2004
Page 18 of 21
Ms. Ryan noted that there are currently granny flats being built instead and stated that
any time someone is building onto their home, the horse keeping property is being
diminished; and she stated that all she is asking for is that the City not entirely diminish
the properties from having a horse for the future and that so many feet be set aside for
horse keeping purposes. She pointed out that the other peninsula cities do protect the
horse properties.
Councilman Long noted that the City has zoning rules that essentially restrict people
from building certain facilities; and questioned if it is Ms. Ryan's concern that as there is
pressure to build increasingly larger houses, horse properties will be lost forever
through this demand for larger homes.
Ms. Ryan stated that that is her concern; and stated that there are 26 properties that
have been grandfathered in for horse keeping in RPV.
Councilman Long moved, seconded by Mayor pro tem Clark, to adopt staff Alternative
No. 1, "Direct staff to initiate code amendment for the request, thereby requiring public
hearings to be held by the Planning Commission and City Council for review of the
actual code language," with the instruction that the public hearings be held by the
Planning Commission and not the Equestrian Committee.
By seconding the motion, Mayor pro tem Clark noted his understanding that Council
would not be advocating a change at this point, merely initiating the process to study a
possible change, and that the Equestrian Committee should feel free to provide its input
at the Planning Commission meetings.
Mayor Gardiner stated that he would support the motion, but noted his concern that one
by one, the equestrian properties will disappear; and that barring something similar to
what is being proposed, he questioned if there is anything else that would maintain an
equestrian community.
Councilman Long echoed that same concern.
Councilman Wolowicz noted his. concern with infringing on someone's property rights,
noting that property owners have certain expectations to use their properties to the
fullest extent.
Councilman Long noted that every zoning regulation interferes with property rights;
stated that land use is a balance of a property owner's rights with that of a community's
needs; and stated that the peninsula would lose its rural feel if the horse keeping
properties were eliminated.
Councilman Wolowicz asked that staff find out the number of homeowners involved in
this issue.
City Council Minutes
June 1, 2004
Page 19 of 21
Councilman Stern stated that there is a cenefii in protecting the equestrian community;
but expressed his desire to get a sense of what the data shows, stating that he does not
know how to evaluate the wisdom of this proposal, or whether there is a perceived
problem here.
Without objection, Mayor Gardiner so ordered.
Border Issues Status Report. (310)
Councilman Long requested that a new border issue be included in the report having to
do with the entire unincorporated county area on Crenshaw Boulevard and PVDN, the
area that is designated as a very high fire hazard area; and that staff address this
situation with the County, questioning why this area appears to be the only area on the
peninsula that is designated as a high fire area. He noted that this designation is
causing people who live near this area to pay high premiums or consider inferior
insurance coverage for fire protection.
Mayor pro tem Clark expressed his desire to start prescreening workshops for major
projects, to be put before the City's elected leadership, staff and the community so that
applicants can get a fair sense of where they ultimately might end up with respect to
issues that could fundamentally take an applicant down a path of success or failure.
Resol. No. 2004 -47: Los Angeles County Sheriffs Contract. (1206)
City Manager Evans noted for Councilman Stern that the base year is the previous year
and he noted for Mayor pro tem Clark that the City can opt out of the contract if the
County changes the rules. He stated that there was a motion before the Board of
Supervisors to study the billing practices, but he mentioned that any changes would not
take place until after the year 2005 -2006. He added that the City might have some
other options to consider at that time.
Assistant City Manager Petru advised that the draft contract specifies that if the City
chooses to terminate the contract prior to Jury Vt of the year or if the City receives
notice from the County that it will be increasing the City's rates, the City can terminate
the contract within 60 days; and that if the City wishes to take action after July 1 st, then
the City has to give 180 days' notice to terminate.
Councilman Stern moved, seconded by Councilman Wolowicz, to approve staff
recommendation. Motion carried as follows:
AYES:
Clark, Long, Stern, Wolowicz, Mayor Gardiner
NOES:
None
ABSTAIN:
None
ABSENT:
None
City Council Minutes
June 1, 2004
Page 20 of 21
City Council Policy on written communications among Council members and
members of City Commissions and Committees about agenda items. (306)
Councilman Stern questioned the motivation -for this policy.
City Attorney Lynch stated that this is intended to address Brown Act concerns because of
the communications that ask for staff input, stating that the communications should be
shared with all Council members or Committee members. She explained that in order to
not constitute a Brown Act violation, the communications must be shared /distributed with
the agenda or held until the meeting; and noted that last minute communications make it
very difficult for staff to adequately address and that it creates the potential for Brown Act
violations. She stated that all communications should be treated in the same manner in
order to avoid any conflict.
Councilman Wolowicz moved, seconded by Mayor pro tem Clark, to approve staff
recommendation.
Councilman Stern urged everyone to pay attention to this rule.
Without objection, Mayor Gardiner so ordered.
COUNCIL DISCUSSION OF FUTURE AGENDA ITEMS & SUGGESTION OF FUTURE
AGENDA ITEMS:
None indicated.
CLOSED SESSION REPORT:
City Attorney Lynch noted that with respect to the negotiations with Cox Communications,
Councilman Long recused himself and was not present during discussion of this item;
stated that Council gave continuing direction to the City's negotiator with respect to this
issue. With respect to the issue regarding anticipated litigation, there was a report from
Mayor pro tem Clark about a conversation he had with Mr. Trump on Thursday, May 27th,
wherein Mr. Trump threatened litigation against the City, but noted that the Council took no
action. With regard to the last action, City Attorney Lynch stated that direction was given to
staff as to how to attempt to negotiate a resolution to a potential litigation.
ADJOURNMENT:
At 11:02 P.M., the meeting was adjourned to 9:30
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City Clerk
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June 1, 2004
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