Agenda packet — Capitola City Council, January 25, 2024

REVISED 1/25/2024 5:00 PM
City of Capitola
City Council Meeting Agenda
Thursday, January 25, 2024 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Kristen Brown
Vice Mayor: Yvette Brooks
Council Members: Joe Clarke, Margaux Morgan, Alexander Pedersen Closed Session – 5 PM
Closed Sessions are not open to the public and held only on specific topics allowed by State Law (noticed below). An announcement regarding the items to be discussed in Closed Session will be made in the City Hall Council Chambers prior to the Closed Session. Members of the public may, at this time, address the City Council on closed session items only. There will be a report of any final decisions in City Council Chambers during the Open Session Meeting.
i. CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code § 54957.6) Negotiator: Mark Wilson, Labor and Employment Practice, Burke, Williams, & Sorensen, LLP Employee Organizations: Association of Capitola Employees, Police Officers Association, MidManagement Employees, Confidential Employees, Police Captains, and Management Regular Meeting of the Capitola City Council – 6 PM
All correspondence received prior to 5:00 p.m. on the Wednesday preceding a Council Meeting will be distributed to Councilmembers to review prior to the meeting. Information submitted after 5 p.m. on that Wednesday may not have time to reach Councilmembers, nor be read by them prior to consideration of an item.

1. Roll Call and Pledge of Allegiance
Council Members Joe Clarke, Margaux Morgan, Alexander Pedersen, Yvette Brooks, and Mayor Kristen Brown.

2. Additions and Deletions to the Agenda

3. Presentations
Presentations are limited to eight minutes.

A. Presentation from Santa Cruz County Animal Services Authority

4. Report on Closed Session

5. Additional Materials
Additional information submitted to the City after distribution of the agenda packet.

A. Item 9B - Correspondence Received & Corrected Attachments 1 and 3

6. Oral Communications by Members of the Public
Oral Communications allows time for members of the Public to address the City Council on any “Consent Item” on tonight’s agenda, or on any topic within the jurisdiction of the City that is not on 1 City Council Meeting Agenda – January 25, 2024
City of Capitola Page 2
the “General Government/Public Hearings” section of the Agenda. Members of the public may speak for up to three minutes, unless otherwise specified by the Mayor. Individuals may not speak more than once during Oral Communications. All speakers must address the entire legislative body and will not be permitted to engage in dialogue. A maximum of 30 minutes is set aside for Oral Communications.

7. Staff / City Council Comments
Comments are limited to three minutes.

8. Consent Items
All items listed as “Consent Items” will be enacted by one motion in the form listed below. There will be no separate discussion on these items prior to the time the Council votes on the action unless members of the City Council request specific items to be discussed for separate review. Items pulled for separate discussion will be considered following General Government. Note that all Ordinances which appear on the public agenda shall be determined to have been read by title and further reading waived.

A. City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on January 11, 2024.

B. City Check Registers
Recommended Action: Approve check registers dated December 22, 2023, January 5, 2024, and January 12, 2024.

C. Capitola Wharf Resiliency Project Funding
Recommended Action: Adopt a resolution authorizing the acceptance of grant funds from the California Natural Resources Agency for the Capitola Wharf Resiliency and Public Access Project, authorizing the City Manager to execute the grant agreement on behalf of the City, and amending the FY 2023-24 Adopted Budget.

D. Community Center Renovation Project Funding
Recommended Action: Adopt a resolution authorizing the acceptance of grant funds from the California Natural Resources Agency (CNRA) for the Community Center Renovation Project, authorizing the City Manager to execute the grant agreement on behalf of the City, and amending the FY 2023-24 Adopted Budget.

E. Stockton Bridge Debris Mitigation Project Design
Recommended Action: Authorize the City Manager to execute a Professional Services Agreement with CSW/Stuber-Stroeh Engineering Group, Inc. in an amount not to exceed $125,343 to conduct a comprehensive feasibility study and create design documents for mitigating debris on Stockton Bridge in substantially similar form, as approved by the City Attorney, as the attached agreement.

9. General Government / Public Hearings
All items listed in “General Government / Public Hearings” are intended to provide an opportunity for public discussion of each item listed. The following procedure pertains to each General Government item: 1) Staff explanation; 2) Council questions; 3) Public comment; 4) Council deliberation; 5) Decision.

A. New Brighton Middle School Field Restoration Project Recommended Action: Receive presentation regarding New Brighton Middle School Field Restoration Project.

B. Conceptual Review for Senior Living Facility at 3720 Capitola Road and 1610 Bulb Avenue 2 City Council Meeting Agenda – January 25, 2024
City of Capitola Page 3
Recommended Action: 1) Provide feedback on the conceptual plans for a 93-unit senior assisted-living facility and assess the community benefits of the project pursuant to Capitola Municipal Code Chapter 17.88; and 2) authorize the Mayor to sign a letter of support for the annexation of 1610 Bulb Avenue into Capitola City limits to the Local Agency Formation Commission.

C. Transient Occupancy Tax Audit Update
Recommended Action: Receive report and provide direction to staff.

10. Adjournment - Adjourn to the next regularly scheduled City Council meeting on February 8, 2024, at 6:00 PM.
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How to View the Meeting
Meetings are open to the public for in-person attendance at the Capitola City Council Chambers located at 420 Capitola Avenue, Capitola, California, 95010.

Other ways to Watch:

Spectrum Cable Television channel 8
City of Capitola, California YouTube Channel
To Join Zoom Application or Call in to Zoom:

Meeting
link: https://us02web.zoom.us/j/83328173113?pwd=aVRwcWN3RU03Zzc2dkNpQzRWVXAydz09 Or dial one of these phone numbers: 1 (669) 900 6833, 1 (408) 638 0968, 1 (346) 248 7799 Meeting ID: 833 2817 3113
Meeting Passcode: 678550
How to Provide Comments to the City Council
Members of the public may provide public comments to the City Council in-person during the meeting.

If you are unable to attend in-person, please email your comments to [email protected] and they will be included as a part of the record for the meeting. Please be aware that the City Council will not accept comments via Zoom.

Notice regarding City Council: The City Council meets on the 2nd and 4th Thursday of each month at 6:00 p.m. in the City Hall Council Chambers located at 420 Capitola Avenue, Capitola.

Agenda and Agenda Packet Materials: The City Council Agenda and the complete Agenda Packet are available for review on the City’s website: www.cityofcapitola.org and at Capitola City Hall prior to the meeting. Agendas are also available at the Capitola Post Office located at 826 Bay Avenue Capitola. Need more information? Contact the City Clerk’s office at 831-475-7300.

Agenda Materials Distributed after Distribution of the Agenda Packet: Pursuant to Government Code §54957.5, materials related to an agenda item submitted after distribution of the agenda packet are available for public inspection at the Reception Office at City Hall, 420 Capitola Avenue, Capitola, California, during normal business hours.

Americans with Disabilities Act: Disability-related aids or services are available to enable persons with a disability to participate in this meeting consistent with the Federal Americans with Disabilities Act of 1990. Assisted listening devices are available for individuals with hearing impairments at the meeting in the City Council Chambers. Should you require special accommodations to participate in the meeting due to a disability, please contact the City Clerk’s 3 City Council Meeting Agenda – January 25, 2024
City of Capitola Page 4
office at least 24 hours in advance of the meeting at 831-475-7300. In an effort to accommodate individuals with environmental sensitivities, attendees are requested to refrain from wearing perfumes and other scented products.

Si desea asistir a esta reunión pública y necesita ayuda - como un intérprete de lenguaje de señas americano, español u otro equipo especial - favor de llamar al Departamento de la Secretaría de la Ciudad al 831-475-7300 al menos tres días antes para que podamos coordinar dicha asistencia especial o envié un correo electrónico a [email protected].

Televised Meetings: City Council meetings are cablecast “Live” on Charter Communications Cable TV Channel 8 and are recorded to be rebroadcasted at 8:00 a.m. on the Wednesday following the meetings and at 1:00 p.m. on Saturday following the first rebroadcast on Community Television of Santa Cruz County (Charter Channel 71 and Comcast Channel 25). Meetings are streamed “Live” on the City’s website at www.cityofcapitola.org by clicking on the Home Page link “Meeting Agendas/Videos.” Archived meetings can be viewed from the website at any time. 4 Santa Cruz County Animal Services JPA
Amber Rowland, General Manager
[email protected]
5 Item 3 A.

Key County Statistics
131,465
61,950
52,067
12,232
9,846
Population by Jurisdiction
Unincorporated County
Santa Cruz
Watsonville
Scotts Valley
Capitola
$89,986
Median Income vs $1,200,000
Median Home Price
445 sq. miles
267,560 Total
6 Item 3 A.
2023-24 Budget
Expenditures = $5.8 million
$3.7 million Salaries & Benefits
$1.6 million Services & Supplies
$508,000 Other
Revenues = $5.1 million
• $3.68 million JPA member jurisdictions
• $643,600 Dog Licenses
• $125,000 Fees & Merchandise
• $650,000 Donations
-15.00%-10.00%-5.00% 0.00% 5.00% 10.00%15.00%
FY 13-14
FY 15-16
FY 17-18
FY 19-20
FY 21-22
FY 23-24
JPA Budget
Increase/Decrease
7 Item 3 A.

Staffing

SHELTER
1 Manager
2 Supervisors

7.75 Workers
CLINIC
1 Veterinarian
1 RVT Supervisor

2.4 RVTs

ADMIN & CLIENT

SERVICES
1 Gen Manager
1 Admin Manager
1 Accountant
1 Supervisor

5.75 Client Services

ANIMAL CONTROL
1 Manager
1 Dispatcher
5 Officers

VOLUNTEERS
1 Supervisor
200+ Volunteers
SCCAS Foundation
General Representation = 26
Management = 5
Total Funded Positions = 31
8 Item 3 A.

Facilities & Vehicles
 2 Shelters, in Santa Cruz & Watsonville
 56 + 16 = 70 total dog kennels
 85 + 40 = 125 cat condos
 20+ rabbit/small pet pens
 Small barn
 9 Vehicles
 4 ACO trucks (2008 & 2011)
 1 SUV (2019)
 2 Outreach/Transport van (2017)
 1 Pickup (2006?)
 2 donated vehicles (unknown!)
9 Item 3 A.

Open Door
Philosophy  Socially-Conscious
Sheltering  We accept all animals
in need and provide
affordable end-of-life
services  6,304 animals in 2023
10 Item 3 A.
2023
Animal Statistics
6,304 animals IN
 24% Returned to family
 44% Adopted
 20% Transferred
 12% Euthanized
11 Item 3 A.

Thank You!
 What are your questions?
ADOPT or FOSTER
DONATE or VOLUNTEER

SPAY, NEUTER & IDENTIFY
www.scanimalshelter.org
12 Item 3 A.
1 Gautho, Julia
From: Mick <[email protected]>
Sent: Friday, January 19, 2024 4:47 PM
To: City Council
Cc: PLANNING COMMISSION
Subject: 1610 Bulb Ave
Follow Up Flag: Follow up
Flag Status: Flagged
City Council,
In Oct 2022, the Planning Commission determined the then proposed Senior Assisted Living did not include an eligible community benefit which would then allow an increased FAR.

The current proposal is simply a mirror image with increased height and more units.

None of the units are considered to be in the affordable range. It still has negative visual and privacy impacts on the adjacent neighborhood.

The undefined “eligible community benefit” language in the general plan is a catch-all phrase that is easily abused and can apply to anything at Council’s discretion. The Council should apply this catch-all phrase to only the most unique, special proposals that truly benefit the entire community. There is nothing special about or unique about this proposal.

There is no guarantee it would benefit any current Capitola residents. It does not help Capitola meet the state housing requirements.

Please reject the finding for eligible community benefit and increased FAR for this proposed project.

Mick Routh
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1 Gautho, Julia
From: Santa Cruz YIMBY <[email protected]>
Sent: Tuesday, January 23, 2024 1:35 PM
To: City Council
Subject: [PDF] Santa Cruz YIMBY support - Agenda #9.B - Jan 25,2024 Attachments: Santa Cruz YIMBY support - Capitola City Council - Agenda #9.B - Jan 25 2024.pdf Follow Up Flag: Follow up
Flag Status: Flagged
Mayor, Vice Mayor and Council Members,
Please find attached our input to Agenda #9.B on your Jan 25, 2024 meeting.

Sincerely,
Ryan Meckel
Janine Roeth
Rafa Sonnenfeld
Santa Cruz YIMBY
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1 Gautho, Julia
From: John <[email protected]>
Sent: Tuesday, January 23, 2024 4:24 PM
To: City Council; Gautho, Julia; PLANNING COMMISSION
Subject: Item 9B
Follow Up Flag: Follow up
Flag Status: Flagged
Hey folks,
I just read the leƩer Santa Cruz’s Yimby AcƟon chapter wrote in support of item 9B on the upcoming agenda and I couldn’t agree more with their policy statements. Specifically regarding objecƟve standards in all building codes. Vague outdated language about ‘community benefits’ is associated with sundowner towns and our community no longer should sustain racist policy language like it from our past. It also makes us a less aƩracƟve place to private investors and businesses, contribuƟng to the budgetary cliff we have trended towards for years now.

Upside the community benefits here are obvious. The greatest crisis in our county is the demographic one, and Capitola is ground zero for it. With only a hundred or so children under age 5 residing in the city and an average resident age of 50 years, senior housing is a pressing need.

Infrastructure projects take forever, especially in areas where older wealthy white homeowners object to even basic things with no downsides like roundabouts, and our town’s tax base is already shrinking as we hemorrhage full Ɵme residents, families and young people, whose labor and consumpƟon is the engine of healthy resilient economies.

Capitola peaked in populaƟon in 1990 and since Covid most of our home sales have been vacaƟon or investment homes.

Our local displacement is worse than 99% of ciƟes in the US, and seniors are parƟcularly affected because our city zoning codes have stymied all growth that isn’t mulƟ million dollar 3 bedroom or larger single family homes so when they seek to downsize to reflect their state in life they are unable to find local housing because it doesn’t exist.

This project is exactly the sort of thing one would expect a pro Democrat, pro housing, pro seniors and pro community city council to pass, I am curious to see what y’all will do. (To be fair our local GOP is dedicated to creaƟng senior housing and I imagine support this project as well).

Long way to say creaƟng economic accessibility starts with removing outdated, racist policies like ‘community benefits’ and I ask y'all to live up to your pledge in our current Housing Element y’all just created.

Remove the racist policy and do not let it be misinterpreted unƟl then by a small group of anƟ future residents who literally oppose everything. Even roundabouts. Again. Something with no downsides.

Warmly John
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1 Gautho, Julia
From: Susan Steely <[email protected]>
Sent: Tuesday, January 23, 2024 5:54 PM
To: City Council
Subject: 3720 Capitola Rd Development and 1620 Bulb Ave. Annexation Attachments: Bulb Ave and Capitola Rd..docx
Follow Up Flag: Follow up
Flag Status: Flagged
Dear Council Members,
Please review and submit my comments regarding this proposed annexation and development which will be discussed at your meeting this Thursday, January 25th. My letter is attached below.

Best regards,
Susan Steely
1475 Bulb Ave, Santa Cruz, CA 95062
To help protect your privacy, Microsoft Office prevented automatic download of this picture from the Internet.

Picture
17 Item 5 A.

January 23, 2024
AƩenƟon: Capitola City Council Members and Mayor Kristen Brown Re: Development of 3720 Capitola Rd., Capitola & AnnexaƟon of 1610 Bulb Ave., Santa Cruz Dear Council,
I am a resident of 1475 Bulb Ave and have previously submiƩed a leƩer of dissent that is included in the packet.

I have reviewed the new packet and have made the following observaƟons and arguments against the new design.
!. First, Bulb Ave has not changed in any way good since the previous discussion in 2022. It is not a legiƟmate 2 lane road. Vehicles must cross the middle line to traverse up and down because of the various widths of the road. The cut through speeding traffic to parts of Capitola has intensified. There are no conƟguous sidewalks down the street. An entrance/exit from Bulb Ave. for this 93-room facility would only cause further congesƟon, noise, and danger to the residents. Bulb Ave. cannot absorb the impact of medical staff, administraƟve staff, kitchen staff, cleaning staff, recreaƟonal staff, delivery trucks, ambulances, medical and recreaƟonal transportaƟon required by the residents, uber and Amazon deliveries and not least of all, waste management. This or any entrance and exit on Bulb is sƟll unacceptable and unworkable.

2. The “token guest parking”, for guests and residents, relocated to Capitola Rd. does absolutely nothing to reduce the impact to Bulb traffic. One must just” google” google maps from the Capitola Police Department, for example, to the facility and the fastest route is not up Capitola Rd and flip a u turn at Thompson Ave. No, google maps sends you up Brommer from 41st Ave. and down Bulb Ave. The same is true upon exiƟng to get to downtown Santa Cruz. Google maps will have you exit onto Bulb and go to Brommer. The traffic impact, before increasing to 93 units, was and remains unacceptable.

3. The new design does not show any design for the rear of the building with docks, entrances, and parking spaces. Is it very similar to the original and does this Bulb Entrance service most of traffic?

4. The new design sƟll does not meet Capitola Affordability Requirements, prove the Benefit to the Community, nor “Minimize Adverse Impact to Neighbor’s ProperƟes to the greatest extent possible”.

5. We know we have no say in the annexaƟon, but we hope our concerns will impact the acceptance of this design with any entrance/exit from Bulb Ave. to this facility.

Best regards,
Susan Steely,
18 Item 5 A.
1475 Bulb Ave. 831-713-8818
I hope that all the leƩer previously submiƩed will be included in this discussion. 19 Item 5 A.
1 Gautho, Julia
From: Shalom Dreampeace Compost <[email protected]> Sent: Wednesday, January 24, 2024 9:59 PM
To: City Council
Subject: Conceptual Review for Senior Living Facility at 3720 Capitola Road and 1610 Bulb Avenue tree concerns
Follow Up Flag: Follow up
Flag Status: Flagged
Whatever happens to the property at 3720 Capitola Road and 1610 Bulb Avenue I want to be sure that no harm is done to the redwood trees on the property.

I am guessing that they are 50 - 70 feet tall, I will try to get you some more exact measurements before tomorrow night's meeting.

Shalom Dreampeace Compost
106 Rey Ct
Santa Cruz CA 95062
Live Oak 2/10 mile from the proposed development
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1 Gautho, Julia
From: Angela Steely-Deans <[email protected]>
Sent: Thursday, January 25, 2024 4:55 PM
To: City Council
Cc: Angie Deans; Hillcah Deans; Keiser, Marguax; Brown, Kristen; Brooks, Yvette; Clarke, Joe; Pedersen, Alexander
Subject: 3720 Capitola Rd Development and 1620 Bulb Ave. Annexation Dear Council,
I am a resident and owner of a house on Bulb Ave. I have previously attended a meeting regarding this development and continue to monitor the movement. One of my concerns is the annexation of the 1610 Bulb Ave. I realize that we may have not have a say in what happens with the property and have been told that it is not really a loss to Santa Cruz because Santa Cruz Country will ultimately benefit. However, once Capitola takes property in a bullying fashion, the residents of Bulb Ave will no longer have a say in what happens on our street because we are Santa Cruz residents and can not vote.

I have reviewed the new packet and have made the following observations and arguments against the new design.

1. The design of the project has changed to accommodate one of our concerns, but it has failed to remove the entrance and exit of vehicles from Bulb Ave. Please see the pictures below that capture the width of the street and the fashion in which cars drive down the middle because it is not a standard size road. The last picture is actually of Capitola Road and the congestion that was present today at 4:19 PM. As it is many cars turn down Bulb Ave to avoid the traffic jam coming from Santa Cruz to 41st Ave.

2. The “token guest parking” for guests and residents, relocated to Capitola Rd. does absolutely nothing to reduce the impact to Bulb traffic. One must just” google” directions Capitola Police Department, for example, to the facility and the fastest route. Google maps will direct you up Brommer Ave from 41st Ave. and up Bulb Ave. to the facility and enter on the side entrance of the facility. The same is true upon exiting to get to downtown Santa Cruz. Google maps will have you exit onto Bulb and go to Brommer. The traffic impact, before increasing to 93 units, was and remains unacceptable.

3. The new design still does not meet Capitola Affordability Requirements, prove the Benefit to the Community, nor “Minimize Adverse Impact to Neighbor’s Properties to the greatest extent possible”. We are impacted no matter which way the builders try to spin it. There can not be any exit or entrance to the facility from Bulb Ave. If there is, then Bulb Ave must be blocked off at the top where Capitola/Santa Cruz lines meet so that we are not impact for this project. Our street can not handle the amount of traffic that will be imposed by this project.

4. The low income housing that the City just approved towards Capitola on Capitola Road (near Dharma') is 3 stories high, why are you so willing to allow these builders exceed the already existing height requirement? Clearly, they have a complete disregard for our community and the benefit to the community.

Below are pictures that I took today at 4:19 PM. The first few shots are cars coming and going down Bulb Ave. A pedestrian walking their dog down the street has to use the roadway because there is not a consistent sidewalk that go from the top to the end of Bulb Ave. Then there is a picture of the traffic congestion in front of Pono's and the projected location of this project. A picture is worth a thousand words and it clearly shows that our street is not equipped to handle this project and flow of traffic on Bulb Ave for this development. We are already facing an huge influx of speeding cars that turn down Bulb from Capitola Road to avoid the congestion. The safety of the residents is a high priority!
Thank you for taking our concerns into consideration! Bulb Ave residents are a tight knitted community and we will continue to advocate for our street.
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2 Respectfully,
Angie Deans
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Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: City Manager Department
Subject: City Council Meeting Minutes
Recommended Action: Approve minutes from the regular meeting on January 11, 2024.

Background: Attached for Council review and approval are the draft minutes from the regular City Council meeting on January 11, 2024.

Attachments:

1. Minutes
Report Prepared By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
34 Item 8 A.

City of Capitola
City Council Meeting Minutes
Thursday, January 11, 2024 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Mayor: Kristen Brown
Vice Mayor: Yvette Brooks
Council Members: Joe Clarke, Margaux Keiser, Alexander Pedersen Regular Meeting of the Capitola City Council – 6 PM

1. Roll Call and Pledge of Allegiance – The meeting was called to order at 6:00 PM. In attendance: Council Members Clarke, Keiser, Pedersen, Brooks, and Mayor Brown.

2. Additions and Deletions to the Agenda – None

3. Presentations
A. The Mayor presented a Proclamation to Soquel High School's Football Team in honor of their State Championship.

B. Deborah Osterman, Historical Museum Curator, provided a presentation on the history of Capitola's Incorporation.

C. The Mayor presented a Proclamation in honor of Capitola's 75th Anniversary of Incorporation.

4. Additional Materials
A. One email was received related to Item 8C.

5. Oral Communications by Members of the Public
 Gorin Klepich, resident, shared concerns about Jade Street Park maintenance.  James Whitman, resident, shared comments.

6. Staff / City Council Comments
 Public Works Director Kahn shared traffic safety updates with the City Council.  Council Member Keiser thanked Public Works and Police staff for their work during the December wave event.
 Mayor Brown reminded the public of a parade in Capitola Village on Saturday in honor of the Soquel High School’s Football State Championship.

7. Consent Items
A. City Council Meeting Minutes
Recommended Action: Approved minutes from the regular meeting on December 14, 2023.

B. City Check Registers
Recommended Action: Approved check registers dated December 8, 2023, and December 15, 2023.

C. FY 2022-23 Audit Report
Recommended Action: Received Fiscal Year 2022-23 Audit Report. 35 Item 8 A.

City Council Meeting Minutes – January 11, 2024
City of Capitola Page 2
Motion to approve the Consent Calendar: Council Member Keiser Seconded: Council Member Pedersen
Voting Yea: Council Members Clarke, Keiser, Pedersen, Vice Mayor Brooks, and Mayor Brown

8. General Government / Public Hearings
A. December 2023 Winter Storm Event
Recommended Action: Received an update regarding the December 2023 Winter Storm Event.

Public Works Director Kahn presented the staff report.

Public Comments:
 James Whitman, resident, shared concerns about the Wharf width.

City Council commentary included requests that staff prepare a storm response plan and share it with the City Council and that staff provide advance communication during storm events.

B. Unmanned Aircraft Systems (UAS) Drone Program
Recommended Action: Received a presentation regarding the new Unmanned Aircraft System (UAS) Drone Program.

Captain Kilroy and Sergeant Newton presented the staff report.

Public Comments:
 James Whitman, resident, shared concerns about the City’s drone usage.

C. Remote Public Participation
Recommended Action: Provided direction to staff about remote participation options for members of the public at City Council and Planning Commission meetings.

City Clerk Gautho presented the staff report.

Public Comments:
 James Whitman, resident, shared concerns about free speech.

Direction provided to staff to collect further data from California cities about recent occurrences of Zoom bombing and bring it back to the City Council during the first March meeting.

D. City Council Appointments to Advisory Bodies
Recommended Action: Reviewed, affirmed, and appointed City Council representatives to County and Regional Boards and Capitola advisory bodies.

City Clerk Gautho presented the staff report.

Public Comments:
 James Whitman, resident, shared concerns about free speech.

Motion to appoint the following to City and Regional Advisory Groups: Council Member Pedersen
Seconded: Vice Mayor Brooks
Voting Yea: Council Members Clarke, Keiser, Pedersen, Vice Mayor Brooks, and Mayor Brown
o FAC: Mayor Brown, Vice Mayor Brooks
36 Item 8 A.

City Council Meeting Minutes – January 11, 2024
City of Capitola Page 3
o COE: Council Member Keiser
o Art & Cultural: Council Member Clarke
o MBARD: Recommend that the City Selection Committee appoint Council Member Pedersen
o Area Agency on Aging Advisory Council: Vice Mayor Brooks o Arts Council: Affirm the appointment of Roy Johnson
o Zone 5, Flood Control and Water Conservation District: Mayor Brown (Alternate – Council Member Clarke)
o Library Financing Authority: Mayor Brown (Alternate – Council Member Clarke)

9. Adjournment – The meeting was adjourned in honor of Jerry Bowles. Adjourned at 7:36 PM to the next regularly scheduled City Council meeting on January 25, 2024, at 6:00 PM. ____________________________
ATTEST: Kristen Brown, Mayor
____________________________
Julia Gautho, City Clerk
37 Item 8 A.

Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: Finance Department
Subject: City Check Registers
Recommended Action: Approve check registers dated December 22, 2023, January 5, 2024, and January 12, 2024.

Account: City Main
Date Starting Check # Ending Check # Payment
Count Amount
12/22/2023 105011 105094 90 $ 2,137,698.63
01/05/2024 105095 105163 76 $ 472,083.32
01/12/2024 105166 105249 84 $ 1,501,493.35
The main account check register dated December 15, 2023, ended with check #105010.

Checks #105164 and 105165 were misprinted and voided.

Account: Payroll
Date Starting
Check/EFT #
Ending
Check/EFT #
Payment
Count Amount
12/22/2023 5855 5856 1 $ 1701.86
01/05/2024 23971 24066 96 $ 205,598.79
01/12/2024 24067 24163 97 $ 206,194.05
The payroll account check register dated December 15, 2023, ended with EFT #23970.

Following is a list of payments issued for more than $10,000 and descriptions of the expenditures:

Check/
EFT Issued to Dept Description Amount
105018 Betz Works Inc PW Wharf Road Slip Out $ 35,000.00 105024 Cushman Contracting Corp
Escrow PW November Wharf Project Retainer $ 40,868.79
105025 Cushman Contracting
Corporation PW November Wharf Project Services $ 776,507.06 105043 McKim Corporation PW December Capitola RD
Pavement Rehabilitation $ 1,170,193.88
105049 Pacific Gas & Electric PW December Utilities $ 15,988.82 1640 CalPERS Member
Services Division CM PERS contributions PPE 12/9/23 $ 64,655.55 1641 Employment Development
Department CM State taxes PPE 12/9/23 $ 11,734.70
1642 Internal Revenue Service CM Federal taxes & Medicare PPE 12/9/23 $ 38,574.96
38 Item 8 B.
1645 Wells Fargo Bank Fin November Credit Card
Charges $ 11,920.02
105122 Instrument Technology
Corporation PW Sewer camera, locator, drill device $ 10,404.05 105132 Moffatt and Nichol PW Stockton Ave Bridge Repairs $ 16,165.99 105143 Santa Cruz Animal Shelter PW Quarterly Animal Services Contribution $ 17,558.60
105146 Santa Cruz Regional 911 PD FY23/24 Third Quarter Operating Contribution $ 149,093.25
1639 CalPERS Health Insurance CM January Health Insurance $ 78,333.79 1646 CalPERS Member
Services Division CM
PERS Contributions PPE
12/23/2023 $ 64,699.29
1647 Employment Development
Department CM State Taxes PPE 12/23/2023 $ 12,498.56
1648 Internal Revenue Service CM Federal taxes & Medicare PPE 12/23/2023 $ 40,529.47
105177 Boone Low Ratliff
Architects Inc PW December Community Center Renovation Design Services $ 31,409.23 105179 Burke Williams and
Sorensen LLP CM November Legal Services $ 44,775.99
105190 Eide Bailly LLP Fin FY22/23 Audit Services $ 38,000.00 105219 MBASIA CM Workers’ comp. & liability
insurance $ 626,498.50
105238 Terry Equipment Inc PW EV Street Sweeper $ 652,315.52 Attachments:

1. 12-22-23 Check Register

2. 01-05-24 Check Register

3. 01-12-24 Check Register
Report Prepared By: Luis Ruiz, Accountant I
Reviewed By: Julia Gautho, City Clerk and Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
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Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: Public Works Department
Subject: Capitola Wharf Resiliency Project Funding
Recommended Action: Adopt a resolution authorizing the acceptance of grant funds from the California Natural Resources Agency for the Capitola Wharf Resiliency and Public Access Project, authorizing the City Manager to execute the grant agreement on behalf of the City, and amending the FY 2023-24 Adopted Budget.

Background: The primary objective of the Wharf Phase 2 Project is to enhance the resilience of the most vulnerable section of the Wharf, which has suffered the most signifcant damage in the past. This involves widening the trestle portion and conducting structural repairs throughout. The project also addresses damages incurred during the storm event on January 5, 2023, particularly at the midspan and head of the structure, including decking, trestle, piles, lighting, and stairways. The widened trestle aims to mitigate future damage to the midspan of the Wharf. In July 2023, the City contracted Cushman Contracting to undertake the Wharf Resiliency Project, which began work in September and is currently underway.

Funding for the Wharf Phase 2 Project comes from various sources. The City secured grants for the project from the California Coastal Conservancy (CCC) in 2020 ($1.3M) and HUD in 2022 ($3.5M). The City's insurance claim payout for storm damage is estimated at $1M. The remaining project funds are budgeted from Measure F and the General Fund.

This summer, with support from State Senator John Laird, State Assembly Bill 102 was passed, allocating $500,000 for “Capitola Wharf Resiliency”.

Discussion: To accept the funding, which will be administered by the California Natural Resources Agency (CNRA), the City Council must adopt a resolution authorizing the City Manager to accept the funding and sign a grant agreement with CNRA. The grant funding will contribute to the construction costs associated with the project.

Fiscal Impact: This will increase State Grant Funding in the FY 2023-24 Capital Improvement Program Adopted Budget by $500,000. The adopted FY 2023-24 budget allocated $8.9M for completion of construction of this project, bringing total project funding to $9.4M.

There is no match associated with this grant funding. There are no fiscal impacts associated with the recommended action.

California Environmental Quality Act (CEQA): This action does not constitute a “project” pursuant to Section 15378 of the California Environmental Quality Act.

Attachments:

1. Resolution
Report Prepared By: Jessica Kahn, Public Works Director Reviewed By: Julia Gautho, City Clerk; Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
73 Item 8 C.

RESOLUTION NO. _______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA

APPROVING THE ACCEPTANCE OF GENERAL FUND GRANT FUNDS FOR THE CAPITOLA WHARF RESILIENCY PROJECT AND AMENDING THE FY 2023-24 ADOPTED BUDGET
WHEREAS, the Legislature and Governor of the State of California have approved a grant for the project shown above; and
WHEREAS, the California Natural Resources Agency has been delegated the responsibility for the administration of the grant project, setting up necessary procedures; and WHEREAS, said procedures established by the California Natural Resources Agency require the Grantee to certify by resolution the approval of a Project Information Package before submission of said package to the State; and
WHEREAS the Grantee will enter into an agreement with the State of California for the above project:

WHEREAS, it is necessary to amend the Fiscal Year 2023-24 Adopted Capital Improvement Program Budget to include $ 500,000 in grant funding from the California Natural Resources Agency.

NOW, THEREFORE, BE IT RESOLVED that the City of Capitola:

1. Approves the acceptance of a general fund allocation for local assistance for the above project(s); and

2. Certifies that said agency understands the assurances and certification in the Project Information Form; and

3. Certifies that said agency will have sufficient funds to develop, operate and maintain the project consistent with the land tenure requirements of the Grant Agreement; or will secure the resources to do so; and

4. Certifies that said agency will comply with the provisions of Section 1771.5 of the California Labor Code.

5. If applicable, certifies that the project will comply with any laws and regulation including, but not limited to, the California Environmental Quality Act (CEQA), legal requirements for building codes, health and safety codes, disabled access laws, environmental laws and, that prior to commencement of construction, all applicable licenses and permits will have been obtained.

6. Certifies that said agency has reviewed and understands the General Provisions contained in the sample Grant Agreement contained in the Procedural Guide; and 74 Item 8 C.

7. Appoints the City Manager as agent to conduct all negotiations, execute and submit all documents including, but not limited to the Project Information Form, agreements, payment requests and so on, which may be necessary for the completion of the aforementioned project(s).

8. Amend the Fiscal Year 2023-24 Capitola Wharf Resiliency and Public Access Project Capital Improvement Budget.

I HEREBY CERTIFY that the above and foregoing resolution was passed and adopted by the City Council of the City of Capitola at its regular meeting held on the 25 th of January, 2024 by the
following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________
Kristen Brown, Mayor
ATTEST:
_______________________
Julia Gautho, City Clerk
75 Item 8 C.
76 Item 8 C.

Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: Public Works Department
Subject: Community Center Renovation Project Funding
Recommended Action: Adopt a resolution authorizing the acceptance of grant funds from the California Natural Resources Agency (CNRA) for the Community Center Renovation Project, authorizing the City Manager to execute the grant agreement on behalf of the City, and amending the FY 2023-24 Adopted Budget.

Background: On November 22, 2022, the City Council authorized the City Manager to sign a Long-Term Use Agreement (LTUA) between the City of Capitola and Soquel Union Elementary School District for the Jade Street Park Property, including the Capitola Community Center. The agreement requires the City to complete certain specific infrastructure improvements to the Community Center within four years.

Additional “ancillary” improvements, such as replacement of flooring and partitions, are also specified as intended improvements to be made by the City. The City is currently under contract with Boone Low Ratliff Architects (BLRA) for the design of the remodel of the Community Center, inclusive of site analysis, preparation of conceptual design, and development of construction documents. The project received design approval from the Planning Commission on December 7, 2023.

On July 27, 2023, staff provided an update on the project budget, with a preliminary estimated construction cost of $5M. Phase A will consist of the infrastructure improvements specified in the LTUA.

These improvements are estimated at $2.3M. Phase B will consist of the ancillary improvements specified in the LTUA. Phase B will be structured so that some, or all, of the improvements can be constructed within Phase A dependent on additional funding and bid pricing.

With support from State Assembly Member Dawn Addis, State Assembly Bill 102 was passed this summer, which allocated an additional $1,000,000 for this project.

Discussion: To accept the additional funding, which will be administered by the California Natural Resources Agency (CNRA), the City Council must adopt a resolution authorizing the City Manager to accept the funding and sign a grant agreement with CNRA. The grant funding will contribute to the construction costs associated with the project.

In addition to State funding allocations, staff is in the process of preparing an application for Community Development Block Grant (CDBG) funding in a maximum amount of $3.5M. Staff anticipates the Notices of Funding Availability for 2024 will be issued in the coming week. If unsuccessful in the current round, the City may reapply this fall. As required by the CDBG program, a public hearing on the CDBG application will be held and a resolution brought to the City Council for approval before application submittal.

Fiscal Impact: This will increase State Grant Funding in the FY 2023-24 Capital Improvement Program Adopted Budget by $1,000,000. The adopted FY 2023-24 Budget allocated $1.65M for completion of design and construction of this project, bringing total project funding to $2.65M.

There is no match associated with this grant funding. There are no fiscal impacts associated with the recommended action.

California Environmental Quality Act (CEQA): This action does not constitute a “project” pursuant to Section 15378 of the California Environmental Quality Act.

Attachments:

1. Resolution
77 Item 8 D.

Report Prepared By: Jessica Kahn, Public Works Director Reviewed By: Julia Gautho, City Clerk; Jim Malberg, Finance Director Approved By: Jamie Goldstein, City Manager
78 Item 8 D.

RESOLUTION NO. _______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAPITOLA

APPROVING THE ACCEPTANCE OF GENERAL FUND GRANT FUNDS FOR THE COMMUNITY CENTER RENOVATION PROJECT AND AMENDING THE FY 2023-24

ADOPTED BUDGET
WHEREAS, the Legislature and Governor of the State of California have approved a grant for the project shown above; and
WHEREAS, the California Natural Resources Agency has been delegated the responsibility for the administration of the grant project, setting up necessary procedures; and WHEREAS, said procedures established by the California Natural Resources Agency require the Grantee to certify by resolution the approval of a Project Information Package before submission of said package to the State; and
WHEREAS the Grantee will enter into an agreement with the State of California for the above project:

WHEREAS, it is necessary to amend the Fiscal Year 2023-24 Adopted Capital Improvement Program Budget to include $1,000,000 in grant funding from the California Natural Resources Agency.

NOW, THEREFORE, BE IT RESOLVED that the City of Capitola:

1. Approves the acceptance of a general fund allocation for local assistance for the above project(s); and

2. Certifies that said agency understands the assurances and certification in the Project Information Form; and

4. Certifies that said agency will comply with the provisions of Section 1771.5 of the California Labor Code.

6. Certifies that said agency has reviewed and understands the General Provisions contained in the sample Grant Agreement contained in the Procedural Guide; and 79 Item 8 D.

8. Amend the Fiscal Year 2023-24 Community Center Renovation Project Capital Improvement Budget.

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________
Kristen Brown, Mayor
ATTEST:
_______________________
Julia Gautho, City Clerk
80 Item 8 D.
81 Item 8 D.

Capitola City Council
Agenda Report
Meeting: January 25, 2023
From: Public Works Department
Subject: Stockton Bridge Debris Mitigation Project Design Recommended Action: Authorize the City Manager to execute a Professional Services Agreement with CSW/Stuber-Stroeh Engineering Group, Inc. in an amount not to exceed $125,343 to conduct a comprehensive feasibility study and create design documents for mitigating debris on Stockton Bridge in substantially similar form, as approved by the City Attorney, as the attached agreement.

Background: The Stockton Avenue Bridge, constructed in 1934, is a beam bridge with three openings and two support piers. It spans Soquel Creek and is the furthest downstream bridge of the Creek. Soquel Creek is prone to large woody debris, which historically causes flooding by blocking bridges. Unlike the upstream bridges at Soquel Drive and Highway 1, the Stockton Avenue Bridge has smaller spans, increasing the risk of debris accumulation and flooding.

Due to its vulnerability, the Stockton Avenue Bridge is identified as a critical at-risk facility in the City's 2013 Local Hazard Mitigation Plan (LHMP). In 2016, a due diligence memorandum was completed to assess the potential impact of debris flow on the bridge during a catastrophic flooding event. The memorandum recommended the installation of debris fins to guide debris through the larger center span of the bridge.

The development of a debris mitigation project for the Stockton Avenue Bridge involves conducting a feasibility study and detailed site study, including a hydraulic model, evaluation of alternative debris control measures, consideration of permits, infrastructure requirements, and cost analysis. The FY 2022- 23 Budget allocated $350,000 for the initial phase of the "Stockton Bridge Reinforcement Project." With support from State Senator John Laird, State Assembly Bill 102 was passed this summer, which allocated $500,000 for this project.

Discussion: Staff issued a request for proposals (RFP) for a project engineer on December 5, 2023. The RFP was advertised on the City’s website, on industry sites, and through direct solicitation of experienced firms in order to solicit qualified consultants. CSW/Stuber-Stroeh Engineering Group, Inc. (CSW/ST2) submitted the only response by the January 11, 2024, deadline (Attachment 1). Staff interviewed the consultant and contacted their references. CSW/ST2 has successfully completed several similar projects along the coastal areas of California. CSW/ST2 is also the consultant completing the planning, permitting, and design services for the Cliff Drive Resiliency Project.

Fiscal Impact: On August 24, 2023, the City Council accepted $500,000 in grant funds from the California Department of Water Resources (CDWR) for the Stockton Bridge Debris Mitigation Project. The adopted FY 2022-23 budget allocated $350,000 for the initial phase of the "Stockton Bridge Reinforcement Project," bringing total project funding to $850,000. Sufficient funds are available for approval of this Professional Services Agreement.

California Environmental Quality Act (CEQA): This action does not constitute a “project” pursuant to Section 15378 of the California Environmental Quality Act.

Attachments:

1. Project Proposal CSW/ST2

2. Draft Agreement
Report Prepared By: Jessica Kahn, Public Works Director Reviewed By: Julia Gautho, City Clerk; Jim Malberg, Finance Director 82 Item 8 E.

Approved By: Jamie Goldstein, City Manager
83 Item 8 E.

WORK PLAN
Stockton Avenue Bridge is located in the lower reaches of the Soquel Creek Watershed, which is located between the cities of Santa Cruz and Watsonville. Soquel Creek watershed drains an area of approximately 42 square miles. The watershed is comprised of urban development, rural residential development, agriculture, parks and recreation, and mining and timber harvesting. The Village, a cultural and business center in Capitola, is located at the terminus of Soquel Creek, where it enters the Pacific Ocean.

The Stockton Avenue Bridge and low laying Capitola Village are located in the flood zone. Storm events can result in a significant amount of large woody debris (LWD), which can get blocked at the Stockton Bridge and further exacerbate flood conditions. LWD is important to the ecology of rivers and streams, however to mitigate and reduce the risk to flooding, LWD is typically removed. Removal is a costly and annual maintenance issue. To address flooding risks at Stockton Avenue Bridge, which has a history of LWD-related flooding, a LWD-passing approach rather than removal is suggested in the 2011 UC Berkeley study titled “Large Woody Debris in Urban Stream Channels: Redefining the Problem.” The study identifies the average tree length in the watershed is between 15 and 30 feet long. The narrows clear span of the bridge piers is 10 feet. This appears to cause buildup of debris that can span the whole creek width and cause significant flooding to the Capitola Village.

The 2016 Due Diligence memorandum, prepared by Kimley Horn, identified four potential debris control countermeasures: debris sweeper, debris fins, debris deflectors and bridge replacement.

Our scope of work generally follows the City’s proposed work plan, however, we have identified potential additional scope for environmental permitting that is not covered in our scope of work. Soquel Creek is both a water of the United States and California and located within the California Coastal Zone. Any work proposed below the ordinary high water line will require permits from both State and Federal agencies including:
84 Item 8 E.
 Central Coast Regional Water Quality Control Board Clean Water Act Section 401 Water Quality Certification.
 California Department of Fish and Wildlife Section 1602 Streambed Alteration Agreement  Army Corps of Engineers Rivers and Harbor Act Section 10 Permit  Based on the result of a habitat assessment, Biological Opinions may also be needed from United States Fish and Wildlife Service and National Marine Fisheries Service.  Coastal Development Permit
The following scope of work separates the project into two tasks which are summarize as follows:

Phase 1. Under this task we will evaluate the debris mitigation measures for constructability, cost, effectiveness, and hydraulics. We will develop reports and 35% conceptual plans depicting the preferred debris mitigation measure.

Phase 2. In this phase we will perform final design of the preferred debris mitigation measures sufficient for contract bidding. We assume that if bridge replacement is the preferred method of debris mitigation then the design work will be addressed under a separate contract and exclude it from this scope of work.

Our scope of work to support the debris mitigation at Stockton Street Bridge includes the following elements:

PHASE 1: Concept Design & Preliminary Design Engineering Services In this initial phase, our team will work with City staff to review project goals and develop a process for stakeholder outreach.

1.1 Project Kickoff. Key members of our team will meet with City staff to review the goals and objectives of the project. During this meeting, we will review opportunities to finalize the schedule for Phase 1.

1.2 Data Collection. Our team will perform a site visit to assess the existing conditions and review all documents prepared by Capitola, Santa Cruz County, FEMA and other agencies.

1.3 Hydraulic Model. The most recent modeling performed for Soquel Creek, according to the 2017 Federal Emergency Management Agency (FEMA) Flood Insurance Study (FIS) for Santa Cruz County, CA, was done in 1983 and consisted of the United States Army Corps of Engineers (USACE) Hydraulic Engineering Center (HEC) HEC-2 model, and was based upon 1978 aerial topography of 4’ contour interval. It will be more efficient and better suited to the goal of the analysis, to create a new model based on current available topographic elevation reflecting contemporary development and terrain conditions, rather than submitting a record request to FEMA for the 1983 model.

A 1D/2D model will be developed using the USACE Hydraulic Engineering Center River Analysis System (HEC-RAS) to evaluate hydraulic conditions upstream and downstream of the bridge, vertical clearance under the bridge, and possible floating debris flow paths. Channel information will be drawn from 2’- interval contours available from Santa Cruz County Geographic Information Services. Dimensions for the Stockton Bridge will be pulled from the 1933 structural plans. 10- and 100-year flow information and channel roughness from the FIS will be used.
85 Item 8 E.

1.4 Geotechnical Assessment. ENGEO will review the as-built bridge drawings and attend the site visit under Task 1.2. ENGEO will provide a geotechnical assessment of the four (4) debris counter measures and their associated geotechnical impact on the existing bridge. Phase 2 geotechnical work is assumed to be covered under a separate contract.

1.5 Structural Assessment. Biggs Cardosa Associates will review the as-built bridge drawings and attend the site visit under Task 1.2. They will prepare an assessment of the structural condition of the bridge to support the four (4) debris counter measures.

1.6 Biological Resources & Permitting Strategies. Denise Duffy & Associates will prepare a Biological Technical Memorandum and Wetland Delineation. The Biological Technical Memorandum will evaluate up to three potential debris mitigation solutions and will include a discussion of the applicable natural resource agency permits that may be required to construct the solutions. The Wetland Delineation will be of sufficient content to secure a jurisdictional determination from the Army Corps of Engineers.

Denise Duffy & Associates will prepare a memorandum outlining necessary environmental permits and strategies to obtain permitting, this scope assumes consultant services for environmental permitting will be covered under a separate scope.

1.7 Bridge Pier Debris Mitigation Feasibility Report. We will prepare a feasibility report summarizing the site conditions, debris control measure alternatives assessed, evaluation of the debris control measures, permitting requirements, infrastructure assessment, geotechnical assessment, and cost analysis.

1.8 Preliminary Engineering Design Report. We will prepare a report that summarizes our findings and recommendations outlined in the Bridge Pier Debris Mitigation Feasibility report completed as part of Task 1.4. The report will include analysis of each debris mitigation measure, cost estimate and 35% conceptual plan of the recommended debris mitigation measure.

1.9 Presentation to Council. Our team will present the findings of the Preliminary Engineering Design Report to the Council.

1.10Contract Management. CSW/ST2 will be responsible for overall management of our design team including the following:

A. Project Management. We will manage the design team as well as track progress, schedule, and budget. We will be responsible for documenting decisions and keeping an official record of the project. Furthermore, we will submit monthly progress reports identifying tasks completed, budget status, and issues status.

B. Quality Control/ Assurance. We will perform an independent quality control review of the team’s documents prior to submittal.

C. Meetings. In addition to the kickoff meeting, we will attend two meetings during this phase to coordinate the activity.

PHASE 2. Final Design
Objective: With the conclusion of the environmental review process, our team will prepare final documents for use in bidding and construction. We assume that if bridge replacement is the preferred method of debris mitigation then the final design will be addressed under a separate contract. 86 Item 8 E.

7.1 Final Design. Our team will prepare final documents at the 65%, 95%, and final level of design including the following:

A. Plans
i. Title sheet and vicinity map
ii. Resource Protection Plan
iii. Site Clearing Plan
iv. Debris Mitigation Layout Plan and Sections
v. Details
vi. Erosion Control Plan
B. Structural calculations, as needed
C. Specifications and bid schedule consistent with the Capitola’s standards with modifications for federal funding should it be available.

D. Recommended Construction Schedule
E. Storm Water Pollution and Prevention Plan, as needed F. Water Quality Management Plan, as needed
G. Cost estimate and bid schedule

7.2 Contract Management. CSW/ST2 will complete the tasks as defined in Task 1 as well as attend two (2) meetings during this phase.

Key Deliverables. We will provide electronic (PDF and native format) of the following documents:
a. Plans, specifications, and support documents in PDF and hardcopy formats b. Final documents in PDF, hardcopy, and AutoCAD format 87 Item 8 E.
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88 Item 8 E.

CITY OF CAPITOLA

PROFESSIONAL SERVICES AGREEMENT
Community Center Renovation Project
Boone Low Ratliff Architects, Inc.

THIS AGREEMENT is entered into on January 25, 2024, by and between the City of Capitola, a Municipal Corporation, hereinafter called "City" and CSW/Stuber-Stroeh Engineering Group, Inc., hereinafter called "Consultant".

WHEREAS, City desires certain services described in Appendix One and Consultant is capable of providing and desires to provide these services;
NOW, THEREFORE, City and Consultant for the consideration and upon the terms and conditions hereinafter specified agree as follows:

SECTION 1
Scope of Services
The services to be performed under this Agreement are for the Stockton Bridge Debris Mitigation Project and further detailed in Appendix One.

SECTION 2
Duties of Consultant
In providing services under this Agreement, Consultant shall perform, consistent with but limited to, that degree of skill and care ordinarily used by other reputable members of Consultants profession, practicing in the same or similar locality and under similar circumstances. (“Standard of Care”) Consultant makes no warranties, guarantees, express or implied, under this Agreement or otherwise in connection with consultants’ services except that the services will be performed consistent with the standard of care stipulated herein.”
Consultant shall not undertake any work beyond the scope of work set forth in Appendix One unless such additional work is approved in advance and in writing by City. The cost of such additional work shall be reimbursed to Consultant by City on the same basis as provided for in Section 4.

If, in the prosecution of the work, it is necessary to conduct field operations, security and safety of the job site will be the Consultant's responsibility excluding, nevertheless, the security and safety of any facility of City within the job site which is not under the Consultant's control.

Consultant shall meet with Public Works Director, called “Director," or other City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant's services described in Appendix One. Such meetings shall be held at the request of either party hereto. Review and City approval of completed work shall be obtained monthly, or at such intervals as may be mutually agreed upon, during the course of this work.

SECTION 3
Duties of the City
City shall make available to Consultant all data and information in the City's possession which City deems necessary to the preparation and execution of the work, and City shall actively aid and assist Consultant in obtaining such information from other agencies and individuals as necessary.

The Director may authorize a staff person to serve as his or her representative for conferring with Consultant relative to Consultant's services. City shall not control or direct the manner in which the services are to be performed. However, the work in progress hereunder shall be reviewed from time to time by 89 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 2 ends

City at the discretion of City or upon the request of Consultant. If the work is satisfactory, it will be approved.

If the work is not satisfactory, City will inform Consultant of the changes or revisions necessary to secure approval.

SECTION 4
Fees and Payment
Payment for the Consultant's services shall be made upon a schedule and within the limit, or limits shown, upon Appendix Two. Such payment shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in carrying out the work. If Consultant is compensated on an hourly basis, Consultant shall track the number of hours Consultant, and each of Consultant’s employees, has worked under this Agreement during each fiscal year (July 1 through June 30) and Consultant shall immediately notify City if the number of hours worked during any fiscal year by any of Consultant’s employees reaches 900 hours. In addition, each invoice submitted by Consultant to City shall specify the number of hours to date Consultant, and each of Consultant’s employees, has worked under this Agreement during the current fiscal year.

SECTION 5
Changes in Work
City may order major changes in scope or character of the work, either decreasing or increasing the scope of Consultant's services. No changes in the Scope of Work as described in Appendix One shall be made without the City's written approval. Any change requiring compensation in excess of the sum specified in Appendix Two shall be approved in advance in writing by the City.

SECTION 6
Time of Beginning and Schedule for Completion
This Agreement will become effective when signed by both parties and will terminate on the earlier of:
 The date Consultant completes the services required by this Agreement, as agreed by the City; or  The date either party terminates the Agreement as provided below.

Work shall begin on or about February 15, 2024.

In the event that major changes are ordered or Consultant is delayed in performance of its services by circumstances beyond its control, the City will grant Consultant a reasonable adjustment in the schedule for completion provided that to do so would not frustrate the City's objective for entering into this Agreement.

Consultant must submit all claims for adjustments to City within thirty calendar days of the time of occurrence of circumstances necessitating the adjustment.

SECTION 7
Termination
City shall have the right to terminate this Agreement at any time upon giving ten days written notice to Consultant. Consultant may terminate this Agreement upon written notice to City should the City fail to fulfill its duties as set forth in this Agreement. In the event of termination, City shall pay the Consultant for all services performed and accepted under this Agreement up to the date of termination. 90 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 3 ends

SECTION 8
Insurance
Consultant shall procure and maintain for the duration of the contract and for ___ years thereafter, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Consultant, his agents, representatives, or employees.

Minimum Scope of Insurance
Coverage shall be at least as broad as:

1. Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 0001, or insurer’s equivalent).

2. Insurance Services office Form Number CA 0001 covering Automobile Liability, Code 1 (any auto) , or insurer’s equivalent.

3. Workers’ Compensation insurance as required by the State of California, and Employer’s Liability Insurance.

4. Professional (Errors and Omissions) Liability insurance appropriate to the consultant’s profession. Architects’ and engineers’ coverage shall include limited contractual liability.

Minimum Limits of Insurance
Consultant shall maintain limits no less than:

1. General Liability:
(including operations,
products and completed
operations)
$1,000,000 per occurrence and $2,000,000 in
aggregate (including operations, for bodily injury,
personal and property damage.

2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.

3. 4.

Employer’s Liability Insurance
Errors and Omissions
Liability:

Limits
$1,000,000 per accident for bodily injury and
property damage.
$1,000,000 per claim and $2,000,000 in the
aggregate.

Other Insurance Provisions
91 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 4 ends

The commercial general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:

1. The City of Capitola, its officers, officials, employees and volunteers are to be covered as additional insured’s as respects: liability arising out of work or operations performed by or on behalf of the Consultant or automobiles owned, leased, hired or borrowed by the Consultant.

2. For any claims related to this project, the Consultant’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees and volunteers.

Any insurance or self-insurance maintained by the City, its officers, officials, employees or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it.

3. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled except after prior written notice has been given to the City.

4. If Consultant has no owned autos, Code 8 (hired) and Code 9 (non-owned) satisfies the requirement.

Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.

Waiver of Subrogation
Contractor hereby agrees to waive rights of subrogation which any insurer of Contractor may acquire from Contractor by virtue of the payment of any loss. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City of Capitola for all work performed by the Contractor, its employees, agents and subcontractors.

Verification of Coverage
Consultant shall furnish the City with original certificates and amendatory endorsements affecting coverage by this clause. The endorsements should be on forms provided by the City or on other than the City’s forms provided those endorsements conform to City requirements. All certificates and endorsements are to be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications at any time.

SECTION 9
Indemnification
For General Services: To the fullest extent permitted by law, Consultant agrees to indemnify, defend, and hold harmless the City, its directors, officers, employees from and against any and all claims, demands, actions, liabilities, damages, judgments, or expenses (including attorneys’ fees and costs) arising from the acts or omissions of Consultant’s employees or agents in any way related to the obligations or in the performance of services under this Agreement, except for design professional services as defined in Civil Code § 2782.8, and except where caused by the sole or active negligence, or willful misconduct of the City.

For Design Professional Services under Civil Code §2782.8: To the fullest extent permitted by law, Consultant agrees to indemnify, defend, and hold harmless the City, its directors, officers, and employees 92 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 5 ends

from and against any and all claims, demands, actions, liabilities, damages, or expenses (including attorneys’ fees and costs) but only to the extent actually caused by the negligence, recklessness, or willful misconduct of the Consultant, Consultant’s employees, or agents in any way related to the obligations or in the performance of design professional services under this Agreement as defined in Civil Code §2782.8, except where caused by the sole or active negligence, or willful misconduct of the City. The costs to defend charged to the Consultant relating to design professional services shall not exceed the Consultant’s proportionate percentage of fault per Civil Code §2782.8.and against all claims, damages, losses, and expenses including attorney fees arising out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of the Consultant, Consultant’s employees, agents or subcontractors, except where caused by the active negligence, sole negligence, or willful misconduct of the City.

SECTION 10
Civil Rights Compliance/Equal Opportunity Assurance
Every supplier of materials and services and all consultants doing business with the City of Capitola shall be in compliance with the applicable provisions of the Americans with Disabilities Act of 1990, and shall be an equal opportunity employer as defined by Title VII of the Civil Rights Act of 1964 and including the California Fair Employment and Housing Act of 1980. As such, consultant shall not discriminate against any person on the basis of race, religious creed, color, national origin, ancestry, disability, medical condition, marital status, age or sex with respect to hiring, application for employment, tenure or terms and conditions of employment. Consultant agrees to abide by all of the foregoing statutes and regulations.

SECTION 11
Legal Action/Attorneys' Fees
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees in addition to any other relief to which he or she may be entitled. The laws of the State of California shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.

SECTION 12
Assignment
This Agreement shall not be assigned without first obtaining the express written consent of the Director after approval of the City Council.

SECTION 13
Amendments
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City Council, or an officer of the City when the City Council may from time to time empower an officer of the City to approve and authorize such amendments. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Appendix Two. Such authority is retained solely by the City Council. Unless expressly authorized by the City Council, Consultant's compensation shall be limited to that set forth in Appendix Two. 93 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 6 ends

SECTION 14
Miscellaneous Provisions

1. Project Manager. Director reserves the right to approve the project manager assigned by Consultant to said work. No change in assignment may occur without prior written approval of the City.

2. Consultant Service. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.

3. Licensure. Consultant warrants thereby represents that he or she has an established trade, occupation, or business in the same nature of services Consultant is performing under this Agreement.

Consultant warrants that he or she has complied with any and all applicable governmental licensing requirements.

4. Other Agreements. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter, and no other agreement, statement or promise related to the subject matter of this Agreement which is not contained in this Agreement shall be valid or binding.

5. Ownership of Material. Any reports and other material prepared by or on behalf of CONSULTANT under this Agreement (collectively, the "Documents") shall be and remain the property of CONSULTANT, and made available to the City upon request. All Documents not already provided to CITY shall be delivered to CITY on the date of termination of this Agreement for any reason. The Documents may be used by CITY and its agents, employees, representatives, and assigns, in whole or in part, or in modified form, for all purposes CITY may deem appropriate without further employment of or payment of any compensation to CONSULTANT. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information and reference in connection with the City's use and/or occupancy of the project. The drawings, specifications, records, documents, and Consultant's other work product shall not be used by the Consultant on other projects, except by agreement in writing and with appropriate compensation to the City.

6. Consultant's Records. Consultant shall maintain accurate accounting records and other written documentation pertaining to the costs incurred for this project. Such records and documentation shall be kept available at Consultant's office during the period of this Agreement, and after the term of this Agreement for a period of three years from the date of the final City payment for Consultant's services.

7. Independent Contractor. In the performance of its work, it is expressly understood that Consultant, including Consultant's agents, servants, employees, and subcontractors, is an independent contractor solely responsible for its acts and omissions, and Consultant shall not be considered an employee of the City for any purpose. Consultant expressly warrants not to represent, at any time or in any manner, that Consultant is an employee of the City.

8. Conflicts of Interest. Consultant stipulates that corporately or individually, its firm, its employees and subcontractors have no financial interest in either the success or failure of any project which is, or may be, dependent on the results of the Consultant's work product prepared pursuant to this Agreement.

9. Notices. All notices herein provided to be given, or which may be given by either party to the other, shall be deemed to have been fully given and fully received when made in writing and deposited in the United States mail, certified and postage prepaid, and addressed to the respective parties as follows:
94 Item 8 E.

Professional Services Agreement January 25, 2024
Stockton Bridge Debris Mitigation Project
CSW/Stuber-Stroeh Engineering Group, Inc

Page 7 ends

CITY CONSULTANT

CITY OF CAPITOLA
420 Capitola Avenue
Capitola, CA 95010
831-475-7300
Boone Low Ratliff Architects
2837 Mission Street,
Santa Cruz CA 95060
831-423-1316
By:__________________________________
Benjamin Goldstein, City Manager
By:__________________________________

Dated:________________________________ Dated:_______________________________ Approved as to Form:
_______________________________
Samantha W. Zutler, City Attorney
95 Item 8 E.

APPENDIX ONE
Scope of Services
96 Item 8 E.

APPENDIX TWO
Fees and Payments
For the services performed, City will pay consultant on a not-to-exceed, lump sum basis upon satisfactory completion of the services and delivery of work products. Payments will be issued monthly as charges accrue.

Consultant hereby represents and warrants, based upon Consultant’s independent determination of the time and labor, which will be required to perform said services, that Consultant will provide all said services at a cost which will not exceed the maximum price set forth in this agreement for Consultant’s services. Consultant hereby assumes the risk that Consultant will perform said services within this maximum price constraint and Consultant acknowledges that its inability to do so shall not excuse completion of the services and shall not provide a basis for additional compensation.

Expenses may include travel, meals and lodging while traveling, materials other than normal office supplies, reproduction and printing costs, equipment rental, computer services, service of subconsultants or subcontractors, and other identifiable job expenses. The use of Consultant’s vehicles for travel shall be paid at the current Internal Revenue Service published mileage rate.

In no event shall the total fee charged for the scope of work set forth in Appendix One exceed the total budget of $ 125,343 (One Hundred Twenty-Five Thousand Three Hundred Forty-Three Dollars and Zero Cents), without specific, written advance authorization from the City.

Payments shall be made monthly by the City, based on itemized invoices from the Consultant which list a brief description of the services performed, the date the services were performed, the hours spent and by whom, and a brief description of the actual costs and expenses incurred. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Such payments shall be for the invoice amount. The monthly statements shall contain the following affidavit signed by a principal of the Consultant’s firm:
"I hereby certify as principal of the firm of Verde Design, Inc, that the charge of $125,343 as summarized above and shown in detail on the attachments is fair and reasonable, is in accordance with the terms of the Agreement dated January 25, 2024 and has not been previously paid." 97 Item 8 E.

Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: City Manager Department
Subject: New Brighton Middle School Field Restoration Project Recommended Action: Receive presentation regarding New Brighton Middle School Field Restoration Project.

Background: The Soquel Union Elementary School District (District), and New Brighton Middle School (NBMS) specifically, pride themselves in holistically supporting child development.

Physical fitness and athletic competition opportunities constitute part of the “whole child” education mindset.

The Physical Education (PE) Team at NBMS is an award-winning team of teachers. The NBMS Athletic Director spearheads interscholastic opportunities in multiple competitive sports for NBMS students of all ages and genders. With all this in mind, the District seeks to continuously improve their facilities. In recent years, the gymnasium has been refurbished and they have added modern locker rooms for PE classes.

Discussion: The District’s next planned improvement aimed at physical fitness is to create a modern playing field at NBMS. The fields at NBMS were prioritized as all the District’s students eventually attend NBMS and the school supports interscholastic competitive sports programs.

The District has developed a conceptual design for a field renovation project, which includes a regulation sized all-weather soccer field and running track. The project is expected to involve the utilization of a few thousand square feet of the City’s Monterey Park. The City and the District are in discussions about how best to facilitate this partnership project, including potentially swapping portions of property.

At the City Council meeting, District staff will present information about the nuts and bolts of the field project, outline the input received on the project, and describe plans to share information and seek input moving forward.

Fiscal Impact: None, this item is informational only.
.

Attachments:

1. New Brighton Middle School Field Restoration Project Overview Report Prepared By: Jamie Goldstein, City Manager
Reviewed By: Julia Gautho, City Clerk
Approved By: Jamie Goldstein, City Manager
98 Item 9 A.
99 Item 9 A.

NEW BRIGHTON FIELD RESURFACING
C I T Y O F C A P I T O L A M E E T I N G – J A N U A R Y 2 5 T H 2 0 2 4 100
Item 9 A.

AGENDA
I n t r o d u c t i o n s
E a r l y P l a n n i n g – 2 0 1 6
P r e c e d e n t s
F i e l d M a t e r i a l
A t h l e t i c P r o g r a m
S i t e A n a l y s i s
S c h e m a t i c D e s i g n
O u t r e a c h
AGENDA
I n t r o d u c t i o n s
E a r l y P l a n n i n g – 2 0 1 6
P r e c e d e n t s
F i e l d M a t e r i a l
A t h l e t i c P r o g r a m
S i t e A n a l y s i s
S c h e m a t i c D e s i g n
O u t r e a c h

P S A S C H O O L N E W L I B R A R Y B U I L D I N G
101
Item 9 A.

COMMITMENT
& LEGACY
102
Item 9 A.
2106 BOND FACILITIES MASTER PLAN

E A R L Y P L A N N I N G

P O R T A B L E R E P L A C E M E N T

S M A L L F I E L D
U N F U N D E D I N 2 0 1 6
103
Item 9 A.

EA HALL

RIBBON CUTTING
P R E C E D E N T R E V I E W 1

T I G H T B U D G E T

A R T I F I C I A L F I E L D

W I T H A S P H A L T T R A C K

D E S I G N E D T O A L L O W

F O R F U T U R E T R A C K
104
Item 9 A.

SHORELINE MS

NEW FIELD
P R E C E D E N T R E V I E W 2 :

C O M P E T I T I O N F I E L D
2 P R A C T I C E F I E L D S

J O G G I N G T R A C K

L I G H T S
105
Item 9 A.

OCEAN VIEW JNR H

TRACK & FIELD

N E W T R A C K
P R E C E D E N T R E V I E W 3 :

F I E L D

S I X L A N E T R A C K
1 0 0 - M E T E R D A S H
106
Item 9 A.

C O R K U N D E R L A Y M E N T R E C Y L E D M A T E R I A L 107
Item 9 A.

ATHLETIC PROGRAM
 Soccer field: 330’ x 195’
 Practice soccer fields (2): 195’ x 135’
 Jogging Track: 3 lanes, 4’ wide lanes
 Sprint 100 Meter track: 5 lanes at 42” per lane.
 Multi-Use courts (2) 30’ x 60’ EA (Volleyball and PE)  Long Jump Pit, High Jump, Circuit Training
 Four sets of bleachers under the solar array
 Scoreboard at opposite site of soccer field along the halfway line  Practice diamond (future)
108
Item 9 A.

SITE ANALYSIS

B E R M R E M O V A L S O L A R S H A D E S

C O M M U N I T Y A C C E S S S C H O O L A C C E S S
109
Item 9 A.

PREPARATION OF FMP UPDATE
110
Item 9 A.
111
Item 9 A.

OUTREACH
 Fri, Oct 13, 2:00: New Brighton MS Athletic Dept.
 Thu, Dec 14, 6:00: Supt Town Hall (virtual)
 Wed, Dec 20, 6:30: SUESD Board Meeting (SUESD Board Room)  Thu, Jan 24, 6:00: Capitola City Council Meeting Wed,  Jan 31, 6:30: SUESD Community Forum (NBMS PAC)
112
Item 9 A.

DEDICATED TO PROJECTS THAT ENRICH THE COMMUNITY

THANK YOU
113
Item 9 A.

Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: Community Development Department
Subject: Conceptual Review for Senior Living Facility at 3720 Capitola Road and 1610 Bulb Avenue
Recommended Action: 1) Provide feedback on the conceptual plans for a 93-unit senior assisted-living facility and assess the community benefits of the project pursuant to Capitola Municipal Code Chapter

17.88; and 2) authorize the Mayor to sign a letter of support for the annexation of 1610 Bulb Avenue into Capitola City limits to the Local Agency Formation Commission.

Background: On July 6, 2022, the Community Development Department received a complete conceptual review application for an assisted-living facility with integrated memory care at 3720 Capitola Road and 1610 Bulb Avenue. The property at 3720 Capitola Road is located within the Community Commercial (CC) zoning district. The property at 1610 Bulb Avenue is located within the County of Santa Cruz and is currently zoned residential.

The applicant sought an increase to the maximum floor area ratio (FAR) and height standards in accordance with Capitola Municipal Code Chapter 17.88: Incentives for Community Benefits. With a qualified community benefit, the C-C zone maximum height can increase from 35 feet to 50 feet and the maximum floor area ratio can increase from 1.0 to 2.0. Such increases require the City Council to find the project provides community benefits that advance the goals of the General Plan, can be accommodated by existing public services and infrastructure, and minimizes adverse impacts to neighboring properties. The applicant is seeking an increase in the FAR to approximately 1.65 and the height to 50 feet.

All incentives for community benefit applications require conceptual review prior to a formal entitlement application. Following the conceptual review, the planning commission will review the formal entitlement application request submitted by the applicant and provide recommendation to the City Council on the proposed project and requested incentives.

The original 2022 application was for an assisted living facility that included 80 rooms within a four-story building. The building was situated toward the front of the property, along the frontage of Capitola Road, with an outdoor patio and trellised entryway adjacent to the sidewalk. Parking was proposed behind the building, with vehicle access from Bulb Avenue, a residential street.

City staff sent the 2022 application to RRM Design for a third-party review of conformance with Capitola’s design criteria.

The Planning Commission reviewed the application and provided feedback to the applicant during a special meeting held on October 20, 2022. There was significant public comment in opposition to the project which included concerns about vehicle noise (ambulances), traffic, privacy, tree removal, and general incompatibility with a single-family neighborhood. The Planning Commission provided feedback that the project did not appear to include an eligible community benefit. The Planning Commission meeting minutes are included as Attachment 5.

In advance of the Planning Commission meeting, staff received eight public comment letters were received in opposition to the project and are included as Attachment 6.

Following the Planning Commission meeting, the applicant put the project on hold to assess the feedback and make changes. The architect has now reversed the building orientation by moving the surface parking and primary entrance toward Capitola Road (away from the neighborhood). The rear façade of the building is now located closer to the adjacent residential property, however the design now includes a stepped back third and fourth story. The interior layout of the building was modified, and the room count 114
Item 9 B.
increased from 80 rooms to 93 rooms. The current proposal includes 93 units in an approximately 70,000 square-feet, four-story building. The facility can accommodate 97 residents within the 93 units.

Discussion: As a conceptual review application, the plans provide the City with a broad understanding of the intent of the use and future site planning, but do not include many of the details necessary for a complete formal application. A complete application will require a land survey, landscape plans, complete elevations, CEQA compliance, stormwater plans, architectural design review, third-party reports (traffic study), and more.

It should be noted that the current application does not include enough detail to determine compliance with all development standards and objective standards of the City Code, which will be required for an official entitlement application. Attachment 4 is a table of the C-C Zone’s development standards relative to the proposed project. The updated plans were not reviewed by RRM Design for conformance with the City’s design review criteria or objective design standards but will be if the applicant submits a formal application. The current application is to fulfill the conceptual review requirement, as well as receive authorization from the City Council for the proposed annexation of 1610 Bulb Avenue into Capitola city limits. The reoriented design, which puts the parking lot between the building and Capitola Road, is a response by the applicant to address feedback from the public regarding traffic and activity associated with the parking lot. However pursuant to Objective Standards in Municipal Code Chapter 17.82.060 buildings are supposed to face the street and parking lots are to be behind buildings.

Assisted living units that do not have separate eating and living facilities within the unit do not count toward the City’s Regional Housing Needs Assessment (RHNA). The same is true for single room occupancy housing, dorms, and group housing. There are no affordability requirements associated with this project. The applicant reportedly explored the possibility of including affordable units within this project but concluded that privately owned assisted living facilities with affordable units are not compatible for the business model.

Incentives for Community Benefits: Pursuant to Chapter 17.88: Incentives for Community Benefits, the applicant is seeking an increase to the maximum floor area ratio (FAR) and height standards in exchange for the community benefit of a senior assisted living facility. FAR is the ratio of a building’s total floor area to the size of the piece of land upon which it is built. The maximum FAR in the C-C Zone is 1.0. The applicant is seeking an increase in the maximum FAR from 1.0 to approximately 1.65, and an increase in maximum height from 35 feet to 50 feet.

The purpose of Chapter 17.88: Incentives for Community Benefits is to establish incentives for applicants to locate and design development projects in a manner that provides substantial benefits to the community. These incentives are intended to facilitate the redevelopment of underutilized properties consistent with the vision for the 41st Avenue corridor as described in the General Plan. The City may grant incentives only when community benefits or amenities are offered that are not otherwise required by the City’s code. A community benefit must significantly advance the General Plan or incorporate a project feature that substantially exceeds the City’s minimum requirements.

Properties located in the C-C zoning district that fronts Capitola Road between Clares Street and 42nd Avenue are eligible for incentives. Section 17.88.040 lists ten eligible project types that are considered Community Benefits, including, but not limited to, public open space, public infrastructure, pedestrian and bicycle facilities, low-cost visitor-serving amenities, childcare facilities, and more. The list does not include assisted-living facilities; however, it allows for “other community benefits not listed, as proposed by the applicant that are significant and beyond normal requirements”. The applicant is seeking feedback from the Council as to whether the Council would consider the proposed 93-unit assistant living facility as a public benefit under the “other community benefits” provision.

All incentives for community benefit applications require conceptual review by the Planning Commission and City Council in which the applicant receives nonbinding input as to whether the request for incentives is potentially acceptable (17.88.070.B). Pursuant to Capitola Municipal Code Chapter 17.88.080, the City Council may approve the requested incentives for eligible projects only if all the following underlined findings can be made in addition to the findings required for any other discretionary permit required by 115
Item 9 B.
the zoning code. Although no action will be taken to approve or deny the project during the conceptual review process, staff has provided analysis following each finding. The applicant provided a project narrative and market demand study, included as Attachments 2 and 3.

1. The proposed amenities will provide a substantial benefit to the community and advance the goals of the General Plan.

Staff Analysis: The General Plan Housing Element highlights elderly households as a special needs group that is of important concern in Capitola. The elderly may have different needs related to housing construction, often requiring ramps, handrails, lower cupboards, and counters to allow for greater access and mobility. Fifteen percent of Capitola’s residents are 65 years of age or older (1,539 residents). Capitola has several age-restricted and financially-assisted housing developments and programs that serve as resources for elderly residents, but there are currently no memory care facilities within the City.

The following goals and policies are from the recently adopted Capitola General Plan Housing Element and are supportive of senior assisted living facilities:

Goal 3.0 Housing for Persons with Special Needs - Accessible housing and appropriate supportive services that provide equal housing opportunities for special needs populations: Capitola is home to people with special housing needs due to income, family characteristics, disabilities, or other issues.

These groups include, but are not limited to, seniors, families with children, people with disabilities, single-parent families, and people who are homeless or at risk of becoming homeless. Capitola is dedicated to furthering a socially and economically integrated community and therefore is committed to providing a continuum of housing and supportive services to help address the diverse needs of its residents.

Policy 3.1: Support and facilitate programs that address the housing needs of special needs groups, including the elderly population, homeless persons, single-parent headed households, large households, extremely low-income households, and persons with disabilities, including developmental disabilities.

Policy 3.3: Support the development of accessible and affordable housing that is designed to serve all ages and is readily accessible to support services.

Policy 3.6: Encourage the integration of special needs housing in residential environments, readily accessible to public transit, shopping, public amenities, and supportive services.

Policy 3.7: Encourage the provision of supportive services for persons with special needs to further the greatest level of independence and equal housing opportunities.

Policy 3.8: Investigate and encourage the development of a variety of housing options for seniors including congregate housing, continuing care retirement communities (CCRCs), assisted living, mobile home parks, co-housing, accessory dwelling units, and independent living.

2. There are adequate public services and infrastructure to accommodate the increased development potential provided by the incentive.

Staff Analysis: The site is serviced by the City of Santa Cruz Water Department and the County of Santa Cruz Sanitation Department. Both entities provided will-serve letters noting that adequate public services and infrastructure are available to accommodate the assisted living facility. The proposed facility would be located on Capitola Road which can accommodate the intensification of use.

3. The public benefit exceeds the minimum requirements of the zoning code or any other provisions of local, state, or federal law.
116
Item 9 B.

Staff Analysis: Not applicable. Assisted living facilities are not a requirement of the zoning code or local, state, or federal law. This criterion was put in place for public benefits which have a minimum requirement in the zoning code.

4. The project minimizes adverse impacts to neighboring properties to the greatest extent possible.

Staff Analysis: As explained in the background section of the report, the site layout has been modified since the Planning Commission review to minimize adverse impacts to neighboring properties. The proposed assisted-living facility is sited with the structure located toward the rear of the property relative to the Capitola Road frontage with the surface parking area between the road and the building. During the Planning Commission meeting, there were many complaints about traffic and noise on Bulb Avenue related to the proposed use. By moving the vehicle access, parking, and main entrance to the front of the building, the project now minimizes the impacts of vehicles on the adjacent residential neighborhood.

The project complies with the setback requirements of the C-C Zone. Along the front and street side property line, the building is at least 15 feet from the curb or street edge and the building placement allows for a minimum 10 foot sidewalk along the property frontage. The C-C zone has a no setback requirement for interior side or rear yards, unless adjacent to a residential zoning district. The property behind 3720 Capitola Road is residential, therefore a 20 rear foot set back is required. The building is proposed with 65 foot front setback, a 15 foot street side yard setback from the curb along Bulb Avenue, and a five foot setback on the interior side yard.

The architect has introduced design elements to mitigate adverse impacts to neighboring properties that include step backs in massing on the third and fourth floors, windows recessed behind balconies that face the single-family neighborhood, and no guestroom windows facing the neighborhood on the fourth floor. The conceptual design also complies with daylight plane requirements in order to not shadow adjacent residential. Additionally, most residents will not have vehicles onsite.

5. If in the coastal zone and subject to a coastal development permit, the project enhances coastal resources.

Staff Analysis: The property is not located in the Coastal Zone.

Design Review: New multi-family residential structures require a Design Permit according to §17.120.030 and compliance with the Objective Design Standard for Multifamily according to §17.82.040 – 17.82.090.

The City contracted with architecture and landscape firm RRM Design Group to provide a comprehensive peer review of the assisted living facility. RRM reviewed the original application in 2022 relative to the Design Permit Criteria and the Objective Standards and provided in-depth analysis and a summary list of items to be further addressed in future revisions (Attachment 5). RRM reviewed the original 2022 version of the plan. If the City Council provides feedback indicating that it believes the proposed use provides a community benefit, the updated design will again be reviewed by RRM Design. The parking lot orientation toward Capitola Road will be further evaluated at that time and the applicant may need to request a deviation from the Objective Standards pursuant to Municipal Code Chapter 17.82.030.

The prior design review is no longer applicable to the project. The primary focus of the City Council review of the conceptual review application is to determine whether the assisted living facility qualifies as a public benefit and whether or not the City will support annexation of 1610 Bulb Avenue.

Annexation: The Local Agency Formation Commission (LAFCO) will not process an annexation request unless it is clear the City is in support and willing to provide services to the subject area. If in favor of the assisted-living facility concept and annexation, the City Council should authorize the Mayor to send a letter of support to LAFCO.

Fiscal Impact: None.

Attachments:

1. Conceptual Plan

2. Applicant’s Project Narrative
117
Item 9 B.

3. Applicant’s Market Demand Study

4. Development Standards Table

5. Planning Commission Meeting Minutes 10/20/2022

6. Written Public Comments
Report Prepared By: Brian Froelich, Senior Planner
Reviewed By: Julia Gautho, City Clerk; Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
118
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
Architectural Site Plan
A1
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln 123456789
10 11
12 13
14 15
16 17
18 19
DN
UP
1/2" 160'-4
cant.
2'-6"
20'-0"

SETBACK
5'-0"

SETBACK
17,563 sq ft
line of floor above

BULB AVENUE
4 Story
Assisted Living and
Memory Care

AL COURTYARD

MC COURTYARD
1,064 SF
Patio
361 SF
Patio
208 SF
walk
15'-0"

TO CURB

SETBACK
5'-0"
TO PL
10'-0"

SIDEWALK
@

FRONTAGE
85'-1/2" 155'-6 1/2"
140'-4"
25'-0"drive 25'-0"drive
Porte Cochere
Patio
P
P
PPPP
P
P
PPPP
P
CC
C
PP
PPP
ADA
ADA
P

PPPPPCC
P
C
DRIVE
TRASH
241 SF
LOADING/DELIVERY Gross Area Calcs
GROSS - 1STGROSS - 2NDGROSS - 3RDGROSS - 4TH
Area (SF)
17,562
17,53816,92915,01267,041 sq ft
Parking CountADACP
Qty
26 2533
UNIT MIX AL=Assisted Living MC= Memory CareALMCSITE
Unit NameAL-0AAL-0cAL-1AAL-2MC-1bDeckDeckDeckDeckDECK
Unit TypeASSISTED LIVING - STUDIOASSISTED LIVING - STUDIOASSISTED LIVING - 1 BEDASSISTED LIVING - 2 BEDMEMORY CARE - STUDIO A -1 BEDHARDSCAPEHARDSCAPEHARDSCAPEHARDSCAPEHARDSCAPE Beds
1112
67 1
24 111116
97 Qty
17 5
37 4
63 2424
111216
93 Area (SF)
415385538794
256
838492
105443
Total (SF)
7,0551,925
19,906
3,176
32,062 sq ft
6,144
6,144 sq ft
838492
210443
912 sq ft
39,118 sq ft
119
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
First Floor Plan
A2
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 DN
UP
0403
cant.
2'-6"
5'-0"

SETBACK
5'-0"

SETBACK

SECTION A

CAPITOLA ROAD

BULB AVENUE

AL COURTYARD

MC ADMIN
150 SF

CTRY KITCH
161 SF

MC LIVING
314 SF
MC Laundry
118 SF
Jan
37 SF

MC COURTYARD
1,064 SF
HK
48 SF
Jan
48 SF
Patio
361 SF
Patio
208 SF
walk
#
A6
#
A6
#
A6
PORTE

COCHERE

KITCHEN
1,072 SF
FR
29 SF
P
Living
694 SF
MECH
146 SF
Mail SF 32
P
P
P
P
P
P P
P
RR
57 SF RR
59 SF
ADMIN
145 SF
Reception
97 SF
BOM
133 SF
Work
282 SF
MRKTG
116 SF
Closing/conf.
248 SF
ELEC
135 SF
Beauty
204 SF
P
P
P
P
C
STAIR
201 SF
STAIR
134 SF
C
C
P
P
P
P
P
ADA
ADA
bar
396 SF

ACTIVITY
364 SF
Egress
2,094 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF
1 OCC
MC-1b
256 SF

MC DINING
669 SF
Library
236 SF
P
P
P
P
P
P
C
C
P
C
ELEV EQ.
78 SF
EL ELEV EQ. 60 SF 69 SFEL
60 SF
0 OCC
Chef
DRIVE
TRASH
241 SF

LOADING/DELIVERY

AL DINING
1,128 SF
LOBBY
712 SF
120
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
Second Floor Plan
A3
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln DN
0403

SECTION A

ROOF BELOW
ROOF
BELOW

THEATRE
646 SF
Jan
36 SF
LOBBY
48 SF
EL
60 SF
RR
61 SF
EL
60 SF
LOBBY
48 SF
121
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
Third Floor Plan
A4
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln DN
0403

SECTION A

ROOF BELOW
ROOF
BELOW

ROOF BELOW
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
4 OCC
AL-2
794 SF
1 OCC
Deck
105 SF
Activity
252 SF
Med
320 SF
HK
89 SF
Activity
445 SF
Storage
277 SF
1 OCC
Deck
105 SF
0 OCC
Deck
92 SF
0 OCC
Deck
84 SF
0 OCC
Deck
83 SF
2 OCC
AL-0c
385 SF
2 OCC
AL-0c
385 SF
2 OCC
AL-0c
385 SF
2 OCC
AL-0c
385 SF 2 OCC
AL-0c
385 SF
#
A6
#
A6
#
A6
DN
STAIR
217 SF
STAIR
202 SF
Cor
2,604 SF
Jan
36 SF
LOBBY
48 SF
EL
60 SF
RR
61 SF
Storage
220 SF
EL
60 SF
LOBBY
48 SF
122
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
Fourth Floor Plan
A5
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln 0403

SECTION A

ROOF BELOW
ROOF
BELOW

ROOF BELOW

ROOF BELOW
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
2 OCC
AL-0A
415 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
3 OCC
AL-1A
538 SF
Activity
253 SF
4 OCC
AL-2
794 SF
Med
100 SF
Activity
445 SF
Storage
277 SF
Office
114 SF
Storage
321 SF
#
A6
STAIR
171 SF 213
Jan
36 SF
LOBBY
48 SF
EL
60 SF
Cor
RR
61 SF
EL
60 SF
LOBBY
48 SF
HK
136 SF
STAIR
229 SF
123
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
Exterior Elevations
A6
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln +50'6 Max Height+42'5 Roof+33'4 Fourth Floor+22'-6"3 Third Floor+12'2 Second Floor±0"1 First Floor 12'-0" 10'-6" 10'-6" 9'-0"
TRIM SHINGLE ROOF FASCIA SIDING 1 TRIM

STONEVENEER TRIM TRIM METAL ROOF STUCCO
STUCCO
BOARD
AND
BATTEN
SIDING 1
TRIM
STUCCO
CORBEL SIDING 1

METALRAILING
+50'6 Max Height+42'5 Roof+33'4 Fourth Floor+22'-6"3 Third Floor+12'2 Second Floor±0"1 First Floor 13'-6"
CLEAR, MIN.
14'-5"
provided
SIDING 1 TRIM
TRIM

SHINGLE ROOF SHINGLE ROOF SHUTTER

STONEVENEER
FASCIA

METALRAILING CORBEL
BOARD
AND
BATTEN

METALROOF
STUCCO
TRIM
+50'6 Max Height+42'5 Roof+33'4 Fourth Floor+22'-6"3 Third Floor+12'2 Second Floor±0"1 First Floor 12'-0" 10'-6" 10'-6" 9'-0" 8'-0"
SHINGLE ROOF CORBEL SIDING 1

METALROOF TRIM METAL RAILING

BOARDANDBATTEN

STONEVENEER

STONEVENEER
CORBEL SIDING 1 TRIM 2 FASCIA

DECORATIVEBEAM
STUCCO
STUCCOCOLUMN SIDING 1 METAL ROOF
SIDING 1
+50'Max Height+42'Roof+33'Fourth Floor+22'-6"Third Floor+12'Second Floo±0"First Floor 20'-0"
25'-0"
3'-6"
guardrail

PROPERTY
LINE
45 Degree
Angle
Dormer beyond
Dormer

SETBACK
DECK

CORRIDORCORRIDOR

CORRIDOR

CORRIDOR
Front Elevation - SouthSCALE: 1/8" = 1'-0"Right Elevation - EastSCALE: 1/8" = 1'-0"Rear Elevation - NorthSCALE: 1/8" = 1'-0" Section A.SCALE: 1/8" = 1'-0"
STONE VENEER ELDORADO STONE CUT COURSE STONE, COLOR: SEASHELL

BOARD AND BATTEN

DUNN EDWARDS
DE 6241 LUNAR LANDING

ROOF SHINGLES
OWENS CORNING DURATION SHINGLE COLOR: DRIFTWOODSTUCCO 1 BODY DUNN EDWARDS DE 6277 PEBBLE WALK SIDING 1 HORIZONTAL

DUNN EDWARDS
DET 606 MEEK MOSS GREEN

ROOF METAL

TAYLOR METAL PRODUCTS

GRAPHITE BLACK
ACCENT 1 ENTRY DOOR, SHUTTERS

DUNN EDWARDS
DE 5775 IRON CREEK
TRIM 1 FASCIA, TRELLIS, BEAMS,

CORBELS, BRACES
DUNN EDWARDS DE 6061 RIVER ROCKS
TRIM 2 WINDOW & DOOR TRIM,

COLUMNS, BANDING
DUNN EDWARDS DET 647 TRADE WINDS
124
Item 9 B.
245 Fischer Avenue, Suite B-2 Costa Mesa CA 92626
(714) 557 2448 www.ipaoc.com

ARCHITECTURE PLANNING CONSULTING
Capitola Senior Living
Zurite LLC
3720 Capitola Rd.

Capitola, CA 95010
3D Views
A7
PROJECT NO: 22003
PLOT DATE: 2/15/2023
22003 Zurite Capitola - Prelim Planning SD FOR GREG REDESIGN 3.pln

OVERALL

BULB AVENUE REAR - NORTH

FRONT - SOUTH
125
Item 9 B.
3720 Capitola Road and 1610 Bulb Avenue
Senior Assisted Living Project
Project Description
The proposed project is a 97 bed, 4-story, 67,041 square foot Craftsman-style Senior Assisted Living and Memory Care building with on-site parking to be located on the combined parcels of 3720 Capitola Road, Capitola and 1610 Bulb Avenue, Santa Cruz, California.

Owners’ Background and Experience:

The two parcels are owned by Frank and Shana DeBernardo and Nicholas and Kristen Joutz.

Frank DeBernardo, who will be the project manager, has over 27 years of Real Estate and development experience having worked for his family’s construction and development company, DeBernardo Construction, Inc. since childhood. DeBernardo Construction successfully developed over 17 Santa Cruz County subdivisions providing the local community with approximately 200 housing units since 1975. Frank worked closely on the approval, development and construction of several single family home subdivisions, townhome developments and apartment developments including projects on Silvana Lane in Live Oak, Chanticleer Avenue in Santa Cruz, Paradiso Court in Soquel, and Calabria Street in Aptos. The DeBernardo Family also owns and operates office and retail buildings in Capitola along 41st Avenue and Capitola Road.

Nicholas and Kristen Joutz own and operate a financial services company and have provided mortgages to thousands of Californians since 2005.

Project Team:

Architect: The designer and architect of the Capitola Senior Assisted Living Project is renowned California architect, Greg Irwin, Irwin Architectural Group (IPA). IPA has been involved with over 3,000 senior housing projects that range from 55+ housing to skilled nursing facilities across the country. Greg’s mentor and father Carl Irwin essentially wrote the code for Senior Assisted Living architecture in the 1980’s. Together with their clients IPA has received numerous awards and recognition for their innovation and creativity. IPA’s projects have been continually recognized as outstanding projects within the senior community and in 2018 Greg received NAHB Associate of the Year Award for his knowledge and experience.

Assisted Living Operator: The operator of the Capitola project will be Paradigm Senior Living (PSL). PSL is owned and operated by industry leader, Lee Cory. Since 1983, members of the PSL Team have been instrumental in the development, operation, and marketing of more than 75 successful senior living communities. PSL’s experience encompasses more than 8,500 units, 126
Item 9 B.
including continuum-of care, retirement, assisted living, Alzheimer's care and congregate care communities. Lee Cory has been a nationally recognized speaker and educator for many regional and national seniors housing and health care associations including the National Association for Senior Living Industry Executives (NASLIE), Member and Past Board Member – Assisted Living Federation of America (ALFA), Advisory Member The American Seniors Housing Assn. (ASHA), AIC Conferences, and The American Health Care Association (AHCA).

Funding, Financing and Ability to Complete Project:

The property owners have enlisted the services of a national leader in Senior Assisted Living capital to secure financing upon approval of the conceptual review and final entitlement approvals.

Why Does Capitola Need a Senior Assisted Living Project:

The property owners invested in a robust and detailed analysis report (please see attached Market Demand Analysis For Senior Housing in Capitola, CA by Paradigm Senior Living dated 1/04/2024) researching the demand specifically for Senior Assisted Living units in Capitola in 2022. The report focused on a 7-mile radius from the project location.

In addition, the property owners reviewed the City of Capitola Housing Element of the General Plan 2023-2031 Adopted November 9, 2023 and determined there is a significant unmet demand for Assisted Living projects.

Here are the highlights of our findings:
1) According to the “City of Capitola’s latest Housing Element Update Report dated November 9, 2023”, chapter 2, 2-4, explicitly addresses the need for Assisted Living: “If a city has a substantial elderly population, special housing types or services may be needed, such as assisted living facilities, housing rehabilitation programs, paratransit, meals on wheels, and home health care services, to enable seniors to remain in the community.” Further citing “While most age groups declined between 2010 and 2020, (Capitola City residents from 2010 to 2020) age 65 to 74 increased by almost 200% (from 490 residents to 1,427)”.
2) According to the Paradigm study, Capitola is in desperate need of between 169 to 211 assisted living and memory care units as of 2021. And the deficit of needed units will increase by approximately 17% to between 198 and 247 by the year 2026. 3) There are presently 4,027 households that meet the qualifications for the need of Assisted Living within the 7 mile radius from the project. 4) The number of households in potential need for assisted living care is expected to increase 17% to 4,724 households by 2026.
127
Item 9 B.
5) The fastest growing segment of this population are those aged 75+. There are currently approximately 11,269 seniors aged 75+ within the 7 mile radius and that number will exceed 10.7% growth to 12,478 by 2026. While at the same time the general population of all ages in the same area will only increase by 1.67%. 6) Seniors aged 75+ who live within 7 miles of the Capitola project will increase in population by a rate that is over 6 times the general population.

And currently there is little to no plan for Capitola to accommodate for these Seniors who may likely be in need of assisted living or memory care. Currently, Capitola residents would need to relocate to surrounding cities such as Aptos, Santa Cruz, Santa Clara or San Jose to receive such care.

Current Supply and Demand of Senior Assisted Living Units:

There are approximately only 354 total senior assisted living and memory care units in and around Santa Cruz with an occupancy rate of 89%. Santa Cruz has a near 10% higher occupancy rate than the rest of the country given the higher demand and lack of units near the coast.

More popular and well located facilities such as Aegis of Aptos and Dominican Oaks of Santa Cruz are currently at 100% and 96% capacity respectively with many of the area’s best facilities boasting long waitlists.

Benefit Zone “Why is this Project a Benefit to Capitola” 1) The project lies inside the City of Capitola’s current benefit zone. Please see City Benefit “Community” Section 17.88.080 (incentives for Community Benefit). 2) Although Senior Care is not explicitly listed as one of the community benefits, Child Care is currently listed as well as “Other”. We believe this gives an applicant the ability to propose that caring for the elderly should be considered as important as caring for our youth as both are in need of full-time care.
3) This project will seek to house, care-for, and protect patients with Alzheimers, Memory Loss, Dementia, and various other conditions that affect the elderly and make it dangerous for them to remain at home without professional care. Many elderly who suffer from these conditions and do not reside in Assisted Living very often injure themselves in household accidents, die while being unattended or can wander outside of the home and into the streets without recognition of their own well being. We believe this is a benefit to the entire community to provide a safe and local solution to their care needs.
4) If the argument can be made for children who require the same supervised care as a “benefit” to the community, then we respectfully believe that age should not be a discriminating factor in determining community benefit and that caring for a child in need is the same benefit to Capitola as caring for an elderly person with memory care needs. 128
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Both are great benefits and thus we feel it is imperative to approve this project with Community Benefit status.

Parking and Traffic
Comments from the initial public meeting in 2022 focused on traffic and parking. Here are some answers and responses to those comments on this subject:
1) Assisted Living facilities are actually one of the least impacted types of housing projects with an expected 6-7 cars parking per day. These typically include cars from staff and food service providers.
2) The actual residents of the Assisted Living Facility do not drive. 3) Residents at Assisted Living facilities are almost always 100% beyond the ability to operate a vehicle, thus remaining on property the majority of their stay, except for organized outings or family visits which are usually leisurely walks around the property, the courtyard or nearby restaurants and shops that Capitola will offer. 4) Staff turnover during the day is light, usually limited to 2-3 shifts. Shifts are longer than most other occupations and it is anticipated that many employees will be able to take public transportation, walk or bike to the Capitola Road location. 5) In comparison, other commercial projects that could be developed on the CC Zoned property, such as a Liquor Store, a Laundry Mat, an Auto Repair facility, an Auto Service facility or a Restaurant, have much higher parking demand and much higher in-and-out traffic rates.

Affordability:

Assisted Living facilities are labor intensive and the majority of the expense to the residents is the full time care provided. It is not typical or possible to offer “affordable” or “income restricted” units to residents, because even if a unit is designated as affordable, it is not possible to discount the labor cost to the employees in California. Meaning that a rent restricted unit would still require full labor expense for the staff and skilled nurses tending to the resident.

Conclusion
In conclusion, we believe the City of Capitola will greatly benefit from our proposed Senior Assisted Living project. Based upon the facts listed above, we encourage the city to recognize the project as worthy of the incentives afforded by the Community Benefit Zone not solely by virtue of the property being located squarely inside the Benefit Zone, but also by virtue of the fact that it is incumbent upon all of the City to care for and provide assisted living housing options for our local seniors in need.
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Lee Cory - President
www.psliving.com
Market Demand Analysis
For Senior Housing in Capitola, CA
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ...............................................................................................3 METHODOLOGY..........................................................................................................5 PROJECT DESCRIPTION-IMMEDIATE LOCAL AREA................................................6 PROJECT LOCATION...................................................................................................7 DEFINITION OF TARGET MARKET..............................................................................9 IDENTIFICATION OF PRIMARY MARKET AREA BOUNDARIES...............................10 PRIMARY MARKET AREA (PMA) DEFINITION.....................................................10 LENGTH OF STAY & ABSORPTION...........................................................................16 HOUSING VALUES IN THE MARKET AREA ..............................................................22 APPENDIX..................................................................................................................28 131
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EXECUTIVE SUMMARY
Zurite LLC, “the client” has engaged Paradigm Senior Living to analyze and review market conditions and demand analysis for additional senior living housing units in the primary market area of Capitola, CA.

For this scope of service, the client has identified a parcel of land located at 3720 Capitola Rd. Santa Cruz, CA 95062. The client is considering the development of a senior living community which may include assisted living, and memory care rental apartments with care services.

The purpose of this analysis is to identify the existing and near-term elder demographic conditions and trends within the Primary Market Area (PMA) for the development site. The trends were then compared to the existing supply of elder housing options in the target market area to determine if any opportunities exist for the development of additional senior housing units.

Our analysis of demand involves estimation of current demand using Environics 2021 estimates and projections of future demand using 2026 demographic projections. If developed, it is likely that the proposed project would open in 2022 or later, and the current dynamics in the market, we believe that the 2021 projections and estimates of demand are the most conservative and relevant to this discussion/analysis.

Study Objectives & Approach
In our approach, we evaluated a variety of market factors and issues including, without limitation, the following:
• We defined the Primary Market Area (PMA) as a 7-mile radius from the subject site. We assumed that 80% of the units in the community would originate from within the primary market area. A more detailed discussion of the impact of secondary market demand, and the influence of “affluent adult children” living in the PMA on penetration rates, will be found later in the report. • What is the age, income, household, and housing demographic trends in the market area for seniors aged 75+ with annual incomes of $50,000+? ( overall median annual income in the PMA is $91,850) • What are the number “adult children” of seniors seeking senior-living housing and services, those ages 45-64 with above median household incomes ?
• From what geographic area, would The Project be likely to capture most of its residents? • Is the site on which The Project is to be developed suitable for this use? • What are the characteristics (demographic) of the elderly population in the defined geographic? market area(s) and what will be the profile of the most likely residents of The Project? • What competition does the Project face, and what impact would competition have on its future potential for success?
• Are the characteristics of the target market and its depth suitable to allow each component of the project to fill up, given the project site and prevailing market rate? Also, what will be the pace of absorption?
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This report presents a summary of these results, with specific findings and recommendations that emerged from the analysis.

GROSS DEMAND for Assisted Living that could be expected to be drawn exclusively from the PMA is sufficient to support an estimated 169-211 (2021) increasing to 198-247 units (2026) of market rate Assisted Living & Memory Care units. When one factors in the impact of those originating from outside of the PMA and the impact of “affluent adult children” aged 45-64 with above median annual incomes, 2021 estimates suggest that there may be 9,533 households within the PMA that meet these criteria, increasing to 10,561 by year 2026. Conservatively estimating penetration rates of 2-3% of this segment of the population could conceivably create demand for up to an additional 143 units at present, increasing to up to 158 additional units by 2026.

It is important to note that much of the gross demand is attributed to this sector of the population. If there is intergenerational crossover between the seniors 75+, and the affluent adult children 45-64 years old, the estimate of demand could be reduced.

There are currently 354 comparable/competitive assisted living & memory care units and 157 competitive/comparable independent living units within the current PMA. Additional comments regarding its status will be found later in the report.

Considering the demographics and the competitive set within the PMA, we believe the best option would be to develop 75-80 units, with an emphasis on Assisted Living, Memory Care and possibly an additional component of High Acuity Assisted Living within that model.

Given the state and reputation of the current supply of professionally managed, competitive senior living housing in the PMA, if the client were to proceed with development of this community, we would recommend a medium-sized unit-count community, weighting the unit mix heavily towards strictly private pay Assisted Living/ Memory Care (ALZ) units. Furthermore, it would be prudent to conservatively estimate the lease up through stabilization period to be 18-24 months.

Assisted Living / Memory Care 2021 2026
Estimated Total Demand AL/ALZ within the PMA 169-211 198-247 Estimated Total Demand outside the PMA 42-53 49-62
Estimated Adult Children Demand 95-143 106-158
Estimate of GROSS DEMAND 306- 407 353-468
Given the results of this preliminary market feasibility analysis and PSL’s significant national experience in evaluating successful senior living communities, it is our opinion that there may be demographics to support additional units within the PMA.

While this report focuses on demand for rental assisted and memory care units, our recommendations, depending on site planning and zoning limitations, should include one or more of the following product types:
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45-50 Market Rate Assisted Living – including high acuity, requiring assistance with more than three activities of daily living, (ADLs) and low acuity, requiring assistance with 1-3 ADLs. AL units characterized by private occupancy, kitchenette, 3-fixture bathroom, independent environmental control units and services including: 24-hour supervision, three meals per day, medication management, weekly housekeeping, personal laundry/linens, social activities, assistance with bathing, dressing, grooming etc. and emergency call systems.
20-30 Market Rate Memory Care in a secured environment characterized by private occupancy, 3-fixture bathroom, and services including: 24-hour supervision, three meals per day, medication management, weekly housekeeping, personal laundry/linens, specialized according to ability---social activities, assistance with bathing, dressing, grooming etc. and emergency egress systems. These units are specifically for residents with Alzheimer’s-type dementia, who require specialized care and 24-hour supervision for cognitive impairments.

TOTAL UNITS: 75-80
We believe the key competitive elements for the success of a project in this marketplace include:
• Offer all units on a pay as you go rental basis.
• Develop private apartments with “higher-end” finishes for AL & Memory Care • Offering “next generation” common areas & amenities that are catered toward the frailer elderly and memory loss clientele
• Innovative programs, therapies for Memory Care
• Larger square footage assisted living apartments with private washer/dryer to set yourself. apart from competitors’ offerings
Should the developer proceed, if the project were to be successful in pre-leasing 15% of its total units (11) prior to the completion of construction, and experience net absorption of 3-4 units per month thereafter, the project would achieve stabilized occupancy (93%) 15-20 months of opening. The Client should plan on 24 months and set aside significant amount of reserve funding during lease up.

For the purposes of this report, it is assumed that the subject facility will be 100% private pay.

Our conclusions and recommendations in this report are based on more than 30 years of experience in the senior housing industry and an understanding of the location, site amenities, market dynamics, and population trends of senior housing communities across the country.

METHODOLOGY
This report presents a detailed description of these results, with specific findings and recommendations that emerged from the analysis.

The following data was collected, reviewed, analyzed, and/or compiled into relevant tables and a narrative:
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1. General population and household demographics and trends in the market area for 2000, 2021, 2026, from Environics, Inc. and the 2000 US Census.

2. 75+ population and household demographics and trends in the market area from Environics, Inc. and the US Census for 2000, and estimates/projections from Environics, Inc. for 2021 and 2026.

3. Nearly 30 years’ experience of market analysis and marketing senior living communities throughout the US.

4. Current market data collected by personal site visits, senior housing directories, websites, and affiliations with industry associations.

5. Industry publications:
• Seniors Housing Digest, American Seniors Housing Association, 2001-2019 • National Housing Survey of Adults Age 60+, National Investment Center for Senior living and Long-Term Care Industries, 1999-2010
• Understanding Senior Housing – Into the Next Century, American Association of Retired Persons
• NIC National Survey of Adult Children: How They Influence Their Parents’ Housing and Care Decisions, ProMatura Group/National Investment Center for Senior Living, and Long-Term Care Industries
• State of Seniors Housing, American Seniors Housing Association, 2001-2020 • Senior Housing & Care Insights, CBRE National Senior Housing, 2019

PROJECT DESCRIPTION-IMMEDIATE LOCAL AREA
Every neighborhood has a dynamic quality of its own. This quality can be described as the life cycle of the neighborhood. There are four stages that a neighborhood will typically encounter. These phases, in the order in which they typically appear, are defined below:
• Growth – a period during which the neighborhood gains public favor and acceptance. • Stability – a period of equilibrium without marked gains or losses. • Decline – a period of diminishing demand
• Revitalization – a period of renewal, modernization, and increasing demand.

The complementary land uses that comprise a neighborhood typically evolve around these stages.

These stages describe the neighborhood in a general way and are not a specific guide to market trends. No set number of years is assigned to any of the cycles and a neighborhood can remain in a cycle for many years.
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The subject’s area is projected to see a modest increase in population (1.67%) between 2021 and 2026. On a positive note, the 75+ segment of the population is projected to increase by 11% over the same time frame. The rate of increase for those seniors over seventy-five with incomes of $50,000 or greater, is expected to increase by 17% over the same time frame.

This bodes well for future demand for senior housing.

A neighborhood is affected by social factors that will determine why people reside and work in the area. Potential residents and workers are attracted or put off from a neighborhood based upon its status, physical environment, services, affordability, safety, and convenience.

The potential site is in Santa Cruz, CA, a city located within Santa Cruz County, approximately 1.2 miles from the nearest direct competitors, Valley Haven and 1.3 miles from Paradise Villa. These two closest competitors only have 30 and 29 apts, respectively, with Valley Haven being the newer of the two, licensed since 2013, while Paradise Villa is much older, open since 1978. While counted as a competitor, given the size and age, these would attract a different clientele than this proposed project. Paradise Villa needs updating and repairs before it would truly compete. Given the condition, location, and approach to marketing, it is our opinion that they will be focusing on the lower end of the market.

Many of the sales directors we met in the Santa Cruz area indicated that they do not “pull” from the San Jose nor Monterey markets and that most people, particularly seniors, like to stay closer to home.

In our opinion Santa Cruz/Capitola would support a new community in the market and with modern amenities, close ties to the community referral sources and strong operations, a new community should be able to pull from the older existing facilities as well as surrounding areas within the Secondary Market.

Governmental considerations relate to the laws, regulations, and taxes that are imposed on the neighborhoods’ properties. The more desirable these attributes are, the more desirable the neighborhood becomes to prospective residents. Real estate tax rates appear to be in‐line with neighboring communities, and do not pose an adverse effect on the neighborhood. Regulations regarding zoning and land use are dictated by the city. There appears to be no adverse effects on the neighborhood due to governmental considerations.

PROJECT LOCATION
Located behind the Capitola Mall, on Capitola Rd. off of 41st Avenue which is a busy street with substantial amounts of routine drive by traffic, will provide easy access for potential families and visitors to the proposed community. That combined with street front signage, advertising, and outreach by staff, should provide ample foot traffic and awareness of the local community. The site is located just behind the Capitola Mall but has quick access to Dominican Hospital and other surrounding medical offices, which bodes well for a potential project at this location. 136
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Covering the market to include Santa Cruz, Aptos, Capitola and Soquel, there are numerous current competitors; some are doing well in terms of occupancy, others have decreased as of the last 2 years due to covid but anticipate occupancy trending up in the coming 6 months. After visiting the competitors in the market, the nicest project in our opinion is Atria Aptos. It is 100% occupied, well maintained, and located, and are without any current covid cases.

The area around the site consists primarily of retail businesses and single-family housing. The recommendations of project size should be determined through site-density analysis, architectural design, local zoning restrictions, and other planning considerations. The recommendations in this report are also taking into consideration the ongoing operations and marketability of a senior living community.

OVERVIEW – CAPITOLA , CA
According to local news sources, Capitola is built on the location of an Indian village that existed for more than a thousand years. The Native inhabitants were removed to the Mission Santa Cruz when it was established in 1791. The village area was originally founded as a resort, “Camp Capitola,” in 1869 and was incorporated as a city in 1949, the third city in Santa Cruz County. As settlers engaged in logging and agriculture, the beach became a busy shipping point known as Soquel Landing. Santa Cruz County was formed in 1850, shortly before German immigrant Frederick Hihn—a pioneer credited with developing much of the county’s early industry—acquired the site of present-day Capitola Village. 137
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Capitola is located near the center of Santa Cruz County. The city lies on Hwy 1 between the towns of Santa Cruz and Aptos, approximately 35 miles south of San Jose. According to the United States Census Bureau, the city has a total area of just under 2.0 square miles.

Communities neighboring Capitola include Live Oak, Soquel, Pleasure Point, Aptos, Rio Del Mar, and Twin Lakes.

HOSPITALS/MEDICAL CENTERS NEAR PROPOSED COMMUNITY
Dominican Hospital (Santa Cruz, CA) – Emergency Services Available – Approx. 2 miles from site Sutter Health (Santa Cruz, CA) - Non-emergency services only – Approx 1.7 miles from site East Cliff Family Health Center (Santa Cruz, CA) – Non-emergency services only – Approx 2.3 miles from site Palo Alto Medical Foundation (Santa Cruz, CA) – Non-emergency services only – Approx 2.2 miles from site

ECONOMY
Capitola has an unemployment rate of 8.1%. The US average is 6.0%. Capitola has seen the job market increase by 1.8% over the last year. Future job growth over the next ten years is predicted to be 31%, which is lower than the US average of 33.5%.

Tax Rates for Capitola
- The Sales Tax Rate is 9%. The US average is 7.3%.
- The Income Tax Rate is 9.3%. The US average is 4.6%.

Income and Salaries for Capitola
- The average income of a resident is $37,940 a year. The US average is $28,555 a year. - The Median household income in 2019 was $69,016 a year. The US average was $53,482 a year.

As of October, on average, homes in Capitola, CA sell after 35 days on the market with a median home sold price of $660K.

DEFINITION OF TARGET MARKET

PRIMARY MARKET AREA
To define the market for senior assisted and senior living, the best methodology is to examine credible national sources of information on the resident profiles of such facilities. ALFA, the Assisted Living Federation of America, studied the independent living market for the first time ever.

In conjunction with their Overview of the Assisted Living Industry, they surveyed eighty-three properties in thirty states, representing 8,992 units and about 8,470 residents.

Of the responding properties, 69.5% were in metropolitan areas and 30.5% were in non-metropolitan areas.

Most the responding properties were for-profit operations. What ALFA found were the following important statistics relating to the location of metropolitan residents (cities over 50,000 populations):
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• 76.4% relocated from a private residence.
• 14.9% relocated from living with family.
• Only 19.4% relocated from within a 5-mile radius, 37.7% from within fifteen miles. • 25.8% relocated from more than twenty-five miles’ distance. • 50.4% of family members live within fifteen miles of the facility.

Studying these statistics in detail, it appears that the adult children of seniors are also a factor with assisted living & memory care. In assisted living, per the same ALFA survey, 14% of metropolitan seniors relocated from outside a 25-mile radius and 54% lived within fifteen miles of the facility, while 58% of family members lived within fifteen miles.

The much greater percentage of relocations from greater distances with independent living coupled with only a slightly smaller percentage of family residents from within fifteen miles, implies more relative deciding power in the hands of adult children than the seniors in the choice of location, or perhaps a greater emphasis on family “closeness” in the location decision.

IDENTIFICATION OF PRIMARY MARKET AREA BOUNDARIES
For the reasons previously mentioned, and for the purposes of this study, we have defined the primary market area as encompassing a 7.0-mile radius from the site, which is consistent with our definition of many “coastal/suburban” markets nationwide. We did factor in that there would be some migration to Capitola within the 20% Secondary Market Area assumptions.

Given the way things are trending in the market in terms of growth and normal distances people are routinely willing to drive to visit a loved one, we have narrowed down the PMA radius to the above 7-mile radius, as people have several current options wherever they live in the area. A map depicting the approximate boundaries of this PMA is shown below.

The rationale for selection of this market area includes:
• The location of similar properties – including recently built communities. • Transportation patterns in the area and likely times and distances people are willing to travel for healthcare services
• The location of shopping, work, and other area destinations

PRIMARY MARKET AREA (PMA) DEFINITION
For this analysis, as noted above, we have assumed that approximately 80% of these senior living units will be absorbed (or occupied) by senior households originating in this PMA. The remaining 20% are expected to come from secondary and tertiary market areas as in-migration from outside the PMA or even outside of Santa Cruz County. This in-migration is primarily driven by the actions of the adult children/decision influencers attempting to bring their aging parents closer to them in the later stages of their life. If feasible demand levels for a proposed project can be proven within a conservatively defined area, the need to exactly define and analyze secondary and tertiary markets is reduced. 139
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There are no physical or logistical factors that will decrease or increase the available market to the proposed project from that strictly defined by PMA radius. It is our opinion that the proposed project will primarily draw from within the PMA as defined as a 7-mile radius from the proposed development site as defined in this report.

SECONDARY MARKET
It is conservatively estimated that 80% of the proposed units will be filled from within the primary market area. It is also expected that some of the remaining 20% of the proposed units will be filled by those living in communities directly adjacent to the market area, or other parts of the region.

Another secondary market typical for senior housing is those seniors who do not live in the primary market area, but whose adult children live in the primary market area or are relocating to Santa Cruz County for work or retirement. It is anticipated that the bulk of those from secondary markets will be the parents of those who already live in the market area. This is consistent with our experience in managing and marketing senior living communities over the past 30 years.

TARGET AUDIENCE
As mentioned above, we have defined the target audience for all senior housing product types to be those seniors aged 75+ with annual incomes more than $50,000, ( overall 2022 median income for the PMA was $91850) .
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TABLE ONE
Senior Life Demographic Analysis
Capitola, CA
7 Mile Radius from Subject
Site

SENIORS AGED
75+
TOTAL
75+ % OF TOTAL
City, State Area Age 75+
Age
75+ Age 75+
ALL
AGES %T
INCOME
QUAL
Capitola, CA < $50K > $50K TOTAL 75+
2026 Projection 7,754 4,724 12,478 161,876 7.71% 37.86% 2021 Estimate 7,242 4,027 11,269 159,215 7.08% 35.74%
Growth Rate 2021-2026 7.07% 17.31% 10.73% 1.67%
SOURCE :

Environics
Paradigm Senior
Living
Our research indicates that there are presently 4,027 households that meet the qualifications. This is expected to increase 17% to 4,724 households by 2026.

It is important to note that the fastest growing segment of this population are those aged 75+ with incomes in excess of $150,000 at 41%, followed by those with annual incomes between $100K and $150K$ at 15%.

ELDERLY POPULATION: DERIVED PREVALENCE FACTOR ANALYSIS
Another available method of estimating senior living demand is the application of prevalence factors derived from the National Health Statistics compiled by the National Center for Health Statistics. The assisted living definition utilized in that analysis is similar to the definition applied by the Assisted Living Federation of America (ALFA).

Assisted living is defined as requiring assistance with two or more of the activities of daily living. The study measured the number of people receiving assistance with self-care and/or mobility limitations.

When applied against the entire age group, a prevalence factor is derived.

Our experience tells us that (conservatively) 35% of households comprised of individuals aged seventyfive and over are unable to carry out at least two ADL's or have mobility limitations “prevalence factor.” By applying the actual prevalence ratio against the target population (75+; $50,000+) total private-pay demand within the primary market can be estimated.
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The Environics data indicates that in 2021 there are an estimated 1,409 senior households aged 75+, with qualifying incomes , that have some self-care or mobility limitation, increasing to 1,653 by 2026. (17% increase) This is a positive indicator as the general population in the PMA is projected to increase by less than 2% during the same period.

This trend indicates a growing and relatively affluent aging population and bodes well for future demand for both Assisted Living and Independent housing in the area.

TABLE TWO
Capitola
CA
7 Mile Radius from
Subject Site
Senior Life
Demographics
PMA Total 35.00%
Population
Age
75+
Age
75+
Age
75+
Age
75+
Age
75+
Age
Income ( ALF) ( ILF)
$50K-
$75K
$75-
$$100K
$100K-
$150 $150K+ Qualified Qualified Qualified
2026 Projection 161,876 1,226 798 1,119 1,581 4,724 1,653 3,071 2021 Estimate 159,215 1,176 750 976 1,125 4,027 1,409 2,618 GROWTH
RATE 2021-2026 1.67% 4.25% 6.40% 14.65% 40.53% 17.31%

SENIOR HOUSING LIVING INDUSTRY
Within the senior housing industry, there are three general categories of housing types available to the senior population. These include congregate care or independent living, assisted living (including memory care) and nursing facilities. The following overviews will focus on assisted living and memory care specifically as that is those care types that we believe would best suit this potential location; skilled nursing facilities are more specialized, and care driven.

ASSISTED LIVING OVERVIEW
ALFA (Assisted Living Federation of America) and Price Waterhouse Coopers annually report on the state of Assisted Living via the publication: Overview of the Assisted Living Industry, which paints a picture of steady growth over the past few years and continued acceptance of Assisted Living by seniors as follows:
 The median length of stay in months, for stand-alone assisted living communities was 22.4 in 2019; those with just memory care was 16.6. For reference, independent living was 37.3 months.  The average age of an assisted living resident in 2019 was 87 years old with a requirement for help with 3-4 ADLs versus 83.7 in 2000 with a requirement for help with 2-3 ADLs.  Some 52.1% of residents have some level of Alzheimer’s or Dementia.  Median net operating income (NOI) per resident per day in 2019, for AL only communities was $51.26; for AL with ALZ was $53.58.
 Median square footage for standalone memory care communities in 2019 is 276 SF.  Nationally, the median resident turnover in stand-alone memory care in 2019 was 72.5% 142
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 Average monthly base rental fee in 2018 for Assisted Living alone across the country was $3,564, and communities offering both assisted living and memory care was $4,744.  Nationally, the Memory Care average monthly base fee per occupied unit, with average Level of Care (LOC) Fees included, was $7,104 in 2019.
 The median assisted living apartment square footage size in 2019 was 386, median independent. was 577 square feet, and independent with assisted living was 666 square feet.

While there are vast inconsistencies between how each defines Assisted Living facilities, there are certain basic service offerings which generally characterize this senior housing type. These include: 24‐hour on‐ site supervision, provision of two or three meals per day, housekeeping services, regular snacks, provision of some level of daily personal care, recreational activities, transportation services, social services, and a personalized health care plan to address each resident’s health needs.

Memory Care monthly fees generally entail a fixed amount which covers housing costs, utilities, meals, snacks and often some level of reminders. Many memory care facilities now are moving towards a more all-inclusive care model, where the base rate covers the care as well.

Care needs are generally measured by the extent to which residents require assistance with regular activities of daily living (ADLs). ADLs may include activities such as: dressing, showering, walking, eating, or toileting. A clinician measures dependency by determining whether the individual is at risk of not meeting an essential daily need unless outside help is provided. While residents generally have at least one ADL dependency, many residents will have up to three or four ADL needs. It should also be noted that ADL dependencies do not imply a greater need for medical care, as ADLs are associated with personal care services rather than medical care.

In California, Assisted Living Communities are regulated by the Department of Social Services. All adult residential care facilities for the elderly (RCFEs) (also known as board and care facilities, assisted living facilities (ALFs), personal care homes, shelter care homes, foster homes, and other names) must be licensed, including facilities or agencies owned or operated by any governmental, profit, non-profit, private, or church organization. California also has two other license types for senior living, Residential Care Facilities for the Chronically Ill, as well as Continuing Care Retirement Communities (CCRC), but this report focuses solely on RCFEs.

A link to the state regulations can be found in the appendix of this report.

STAFFING TRENDS
Stand-alone memory care facilities have higher staffing ratios than their independent living and CCRC counterparts. In 2019, according to State of Senior Housing, average staff-to-resident ratios range from about 0.21 (meaning, one full-time-equivalent employee for every five residents) in freestanding independent living communities, to approximately 0.41 (that is, two FTEs for every five residents) when assistance with activities of daily living is involved, up to 0.80 where Alzheimer’s care is involved.

An FTE (full time equivalent) is a unit of 2,080 hours worked in one year, whether by one full‐time employee or multiple employees. Roughly 20% of the staffing need within the Assisted Living setting comes from dietary and cafeteria staff, and half of the staffing demand is for Assisted Living care professionals who provide non‐medical assistance with daily activities. Another 13.5% of the staffing 143
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breakdown arises from skilled nursing professionals which provide some level of professional medical care to the Assisted Living residents.

DESIGN-CONSTRUCTION TRENDS
Across the board, new Assisted Living & Memory Care facilities are beginning to favor independent living (IL) environments in terms of amenity offerings, interior and exterior finishes, and spaciousness.

Observed trends in personal living space allocation are as follow:
• Individual units are roughly 100 to 150 square feet (SF) larger in new construction. • New construction Memory Care (ALZ) private apartments ranging from 300-400+ SF. • Developers are further accentuating spaciousness by incorporating higher 9‐footceilings, generous window openings for more light into the apartment. • Fully accessible, ADA approved three-fixture bathrooms are also becoming the standard as the aging population seeks to maintain a sense of privacy and independence. • Other popular features include walk-in closets with organizers and personal linen closets to reduce clutter and create a home-like atmosphere.
• Like other senior housing property types, warm colors, rich molding, plush carpet, and other home-like finishes are defining features within the modern Senior Living space Even for memory care, the residents’ adult children (and staff) who visit them are also more tech savvy and wish to remain connected to family and the outside world through technology. To meet this demand, many communities are now offering broadband connections, computers with stimulating software, and wireless internet.

Though many new upscale features and design trends are emerging, balancing consumer demand for larger units and increased amenities with affordability constraints, has proven to be quite challenging.

Special attention will need to be paid to the cost versus benefit decision of each option as it pertains to each facility’s projected resident profile.

DEMENTIA/ALZHEIMER/MEMORY CARE UNITS
According to the 2019 Alzheimer’s disease Facts and Figures, published by the Alzheimer’s Association, an estimated 5.5 million people in the U.S. are afflicted with some form of Alzheimer’s disease. Of this total,

5.3 million people aged sixty-five and older are afflicted, while the 200,000-remaining people have early onset Alzheimer’s. That works out to approximately 1 in 10 people aged 65+ having Alzheimer’s dementia.

Women are more likely to have Alzheimer’s disease than men.

It is anticipated that by 2025, the number of people sixty-five and older who have Alzheimer’s disease will grow to 7.1 million, which represents more than a 50% increase over those currently afflicted. Between 2019 and 2025 every state across the country is expected to experience an increase of at least 14 percent in the number of people with Alzheimer’s due to increases in the population age 65 and older. 144
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Recent improvements in dementia unit design have centered on mitigating various components of Alzheimer’s and dementia ailments. For added comfort and security, many facilities offer shelving to display and/or store familiar personal effects such as pictures or sentimental items.

New facilities are being laid out to allow spontaneous and frequent access to an outdoor environment, often dedicated exclusively to dementia residents.

Where appropriate, those residents who are not prone to behavioral outbursts are urged to participate in social activities with the larger assisted living community. Likewise, these lower acuity residents are extended access to the full amenity offerings available to assisted living residents.

Modern facilities offer comprehensive technological integration that extends beyond traditional medication management and other skilled nursing applications. Among pertinent applications, nurses and administrators can be alerted to deviations from regular movements and routines of the residents, as well as entrance/exit activities among residents from a central station.

OCCUPANCY PATTERNS
Median senior housing occupancy rates continue to display softening occupancy patterns across all facility types. Per the National Investment Center for Seniors Housing (NIC), for the 2 nd quarter of 2021, overall
occupancy across all senior living communities in 31 major markets, hit a record low of 78.7% However, for reference, in the 2019 “The State of Seniors Housing” industry report, median occupancy for stand-alone, private, for-profit memory care facilities was 84.7% while those with strictly assisted living units were 89.9% and those with AL/ALZ were 90.2%. Though most professionals in this industry project that covid-19 is not a forever issue affecting senior living occupancy, these past 2 years have seen a dramatic decrease in overall occupancy; with covid vaccines now widely available, project owners across the country anticipate an increase in occupancy over the coming years.

This trend is also due in large part to the influx of new construction and new units coming into already busy markets; plus, the trend that seniors are waiting longer to make the move into communities such as these until their medical needs are much more advanced to save money, and their length of stays are therefore decreasing.

Facilities which cater to higher acuity residents and those which require a greater level of personal care have fared better than the non‐need driven facilities. However, it often is tied to shorter lengths of stay and therefore more frequent unit turnover.

While adding levels of care (i.e., assisted living within an independent living setting or Alzheimer’s care in assisted living) has not proven to boost occupancy levels, it may curb declines in communities that would have otherwise suffered more during the fallout since the housing bubble burst.

LENGTH OF STAY & ABSORPTION
Per the most recent “The State of Seniors Housing, 2019,” among all senior housing types, annual turnover was highest for stand-alone Memory Care residences; with a median rate of 72.5%. This is consistent with the purpose of these facilities, as their residents are often frail and vulnerable to illness when they are admitted, which generally leads to shorter life expectancies and thus, shorter stays.

In the same 2019 report, the median length of stay for a resident in a strictly Assisted Living facility was roughly 22.4 months. This is approximately seventy-five percent of the length for independent living (37.3 months) and approximately 43% of the CCRC rate (71.5). The standalone Assisted Living facility had a 145
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median annual resident turnover rate of 53.5%. There was a 1.3% differential between Assisted Living facilities which offer memory care, versus those who do not. Additional length of stay observations for each property type is represented in the graph below:

SENIOR HOUSING GROSS PENETRATION RATES – TRENDS AND BENCHMARKS Project “capture rate” is defined as the percentage of the age and income qualified prospects an individual senior housing community will have to attract or capture to achieve stabilized occupancy. The required capture rate for a senior housing community is calculated by dividing the number of units to be absorbed from within the PMA, by the number of net potentials, age-, income- and health-qualified prospects residing in that market area.

While there have been various industry standards for acceptable capture rates, 12% to 16% are recognized as the acceptable capture rate ranges for an individual assisted living community in a specific market area.

Although there are several unique approaches to calculating capture and penetration rates, this range is generally recognized by other senior housing industry professionals including market feasibility consultants/appraisers and senior housing trade associations including ASHA, NIC and ALFA.

WHAT ARE THE BASIC COMPONENTS OF A PENETRATION RATE CALCULATION?

PRIMARY MARKET AREA DEFINITION
The primary market area (PMA) for senior living services is typically defined as the geographic area from which most prospective residents reside, prior to assuming occupancy at a project.

The PMA for a project is typically determined by the origin of its depositors, the historical experience of the provider (if applicable) and/or the experience of existing providers in the PMA.

PERCENT OF SENIORS ORIGINATING FROM THE PMA
Once the PMA is determined, the percentage draw from the PMA is applied to estimate how many ages 146
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and income-qualified persons would originate from the PMA, versus other areas. This number can be subjective and can vary based on the firm and/or the individual performing the calculation. Industry experience and data suggests that the draw from the PMA typically ranges from 60% to 80%.

The percentage draw from the PMA can be lower if a project is in an area considered to be a retirement destination. We used a rate of 80% for this report.

Number of Existing and Planned Units in the PMA
Determining the number of existing and planned units to include in a penetration rate is one of the more subjective components affecting the calculation. While there may be several existing and planned units in the PMA, it is important to consider which units are comparable to a project. Do the units have a similar pricing structure and income qualification? What are the product and service offerings at the community? We typically use a conservative approach and consider all units with similar services to be competing for the same pool of age and income-qualified persons.

Number of Units Available Due to Attrition
To calculate the net market penetration rate, the number of units to be absorbed in each year must be determined. Available units could enter the marketplace via planned communities and through the turnover of existing units in the PMA. Therefore, it is necessary to take into consideration the number of existing units in the PMA that would be vacated due to attrition.

Age and Income Qualification
To qualify for residency at a senior living community, a prospective resident must meet an age requirement – generally 62 years of age – and demonstrate sufficient financial resources to pay the required monthly service fees and other expenses not provided by a project.

Accordingly, management typically establishes certain criteria to identify prospective residents who would be eligible to reside in an independent living unit at the project (i.e., annual income from all sources and assets of approximately 1.25 to 1.5 times the annualized monthly service fee at the project).

For quantifying the number of age-qualified persons in the PMA, management of a project typically assumes that persons aged seventy-five or older are most likely to move to a senior living community. In 2010 the average age of residents moving into a senior living community was 79 years old; however, in 2019, CBRE reported in their 2nd quarter senior housing report that the average age when moving into assisted living was 87 years old indicating people are waiting longer to move into these types of communities, and often time arrive with much higher care needs, which results in shorter lengths of stay.

How are industry penetration rates calculated?
While there are multiple penetration rates, each one has a different purpose and set of components.

They all intend to paint a picture of the estimated market demand for senior living units. Although terminology varies within the industry, we have found the methodologies applied for feasibility studies to be generally consistent.

We have analyzed the penetration rate methodologies of BB&T Capital Markets (BB&T), Fitch Ratings (Fitch), the National Investment Center for the Seniors Housing and Care Industry (NIC) and Ziegler 147
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Capital Markets Group (Ziegler). BB&T, Fitch and Ziegler calculate penetration rates using similar methodologies. BB&T refers to its calculations as “project saturation rates” and “market saturation rates.” Fitch and Ziegler refer to their calculations as “penetration rates” and “saturation rates.” Regardless of the industry term used to describe these calculations, project penetration rates show a project’s inventory of units relative to market depth, whereas market penetration and saturation rates show the market’s total inventory of units relative to market depth.

These calculations assume that all communities in the market are competing for the same or similar pool of age and income-qualified persons.

A penetration rate is a simple ratio between the number of ALF units in each market area and age-income qualified households in the same area. Historical average penetration rates for Assisted Living have averaged 12% to 16% in underserved markets.

Using these rates would suggest that there is sufficient unmet demand in the PMA for additional assisted living and independent units. The proposed project would need to capture a slightly above average number of income qualified seniors with self-care or mobility limitations to fill to stabilization within a reasonable timeframe.

Under normal conditions this would be difficult to achieve, however given the high historical penetration rates for Assisted Living and Memory Care units, and the lack of larger units in the area, we can safely assume one or more of the following to be true:
• More residents may be originating from outside the boundaries of the Primary Market Area than the 20% that we assumed.
• Many residents may not meet the $50,000 income qualifier but may still afford community living due to income and assets from other sources, as well as financial assistance from their affluent adult children who reside in the PMA.
• Possible pent-up demand in the marketplace.

Therefore, it is our opinion that the capture rates assumed in this report are within the minimum acceptable range for assisted living & memory care.

Judging from the older competitive properties offering assisted living and memory care housing, it seems likely that if the project were to proceed, providing a new, more modern purpose-built community would help set itself apart in a meaningful way and provide a better option than most of the current supply in the market.

It is reasonable to assume that by offering large units at a reasonable price point, specifically in memory care, it would absorb more than its share of new customers in the market and should draw from neighboring communities.
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TABLE THREE PENETRATION RATES
Capitola, CA
Absolute Market Penetration
Market Rate Assisted Living & Memory Care
Total Existing and Planned Units in PMA
Occupancy
Total Units Total Vacant Rate
Proposed Subject (80% Drawn From PMA) 57 0 57 0.00%
Paradise Villa 29 25 4 85.00%
Dominican Oaks 49 47 2 96.00%
Valley Haven 30 24 6 80.00%
Aegis Aptos 88 88 0 100.00%
Sunshine Villa 107 91 16 85.00%
Westwind ALZ 51 43 8 84.00%
Totals (existing and pipeline) 354 317 93 89.68%
Total income eligible households ( > $50,000) 2021 2026 within the Primary Service Area 1409 1653
Historical Penetration Rate 22.53% 19.20%
Penetration Rate Req.to Fill Proposed Project/ Mkt Vacancies 6.60% 5.62% 149
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Capitola, CA Market Rate Assisted Living
Dynamic Penetration Rate Analysis
Total Existing and Planned Units Total Occupied Vacant Occupancy in Primary Service Area Units Units Units Rate
Competitive Units 354 317 36.52 89.68%
Proposed Project ( from PMA) 57 0 57 0.00%
Total 411 317 93 77.28%
Units requiring re marketing annually 89
@40% per year ( Occupied Units X 40%)
2021 2026
Net Total Units to Market ( from PMA) 182 182
Total Age and Income Qualified Seniors 1,409 1,653
With Care or Mobility Limitations
Dynamic income and Age Penetration Ratio 13% 11%
( Net Units/ Eligible Households)
SOURCE :

US Census Bureau-Claritas Nielsen
The penetration rate required to fill the proposed project is well within acceptable norms for both 2021 and 2026 projections.

Even when one factors in demand from annual turnover at existing facilities , the project’s projected penetration rates are well within acceptable industry norms.

The historical penetration rate within the PMA is 23%. This combined with a probability that La Posada caters to a lower income clientele and will probably never really compete with a new private pay community, mitigates the higher overall penetration rate within the PMA.

AVERAGE INCOMES IN THE MARKET AREA
It is also important to look at median incomes and income trends in the market area as shown in the tables below. The 2020 average household income for households of all ages in the market area was estimated at $106,894. While it remains average when compared to other parts of the state and the nation, it is expected to grow significantly to $120,295 by year 2026. 150
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The 2021 median income for seniors ages 75+ the PMA is illustrated in the chart below:

TABLE FOUR
Age Group 2000 Median
Household Income
2021 Median
Household Income
2026 Median
Household Income
75-84 $33,435 $59,436 $67,137
85+ $25,900 $39,291 $45,068
All Households $40,376 $60,728 $65,575
This illustrates that while median incomes for seniors in the PMA are considerably below those of comparison to younger wage earners, they are, by comparison, like comparable markets in the region as is the overall average household income for the PMA.

HOUSING VALUES IN THE MARKET AREA
As noted previously, the median home sale price for homes in Capitola was $660K. The average size for an apartment is 669 square feet, but this number varies greatly depending on unit type, with an average rent of $2,324/mo. as of November 2021.

Capitola Occupied Housing Units
• Renter-occupied Households 46%
• Owner-occupied Households 53%
2,053 or 46% of the households in Capitola are renter-occupied while 2,408 or 53% are owner-occupied.

Because most people over the age of seventy-five own their houses free and clear, this increase in housing values will have minimal impact on seniors’ net worth, and hence their ability to pay for service enriched housing.

POTENTIAL IMPACT OF “ADULT CHLADREN” ON MARKET DEMAND
As most professionals in this field are aware, projections about seniors and their behavior are less than accurate if they do not consider the local economy and the likely behavior of adult children. If the local economy is strong, adult children typically stay and care for their parents and other senior relatives. 151
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WILLINGNESS OF ELDERLY TO MOVE AND REASONS FOR MOVING
It is typical for the elderly to have strong emotional ties to remaining in their homes. These ties are based on the memories and family histories associated with the home and are related to an elderly person's desire and ability to continue to maintain an image of independence and self-reliance.

Our interviews indicate that the elderly in this market area tend to remain in their homes for as long as possible and move only after some type of crisis has occurred, or when their family has intervened.

For those who choose to remain in their original homes, if possible, the move that is eventually made is frequently to a senior care facility or a nursing home.

These moves are generally precipitated by a change in health status and/or increased frailty that results in the inability to maintain the home, the death of a spouse, or the desire for more security, companionship, and activities.

The adult children reflect the pressures of the “sandwich” generation, caring for both elderly relatives and their own children. Adult children of seniors are more likely to have their own children under eighteen living at home, are more likely to be employed full-time, have a greater number of living parents, have fewer siblings with whom to share the responsibility for the senior, and have a higher proportion of elder relatives for whom they are responsible.

Upon retirement, some parents of adult children relocate to be closer to their children and their grandchildren. Adult persons aged 45-64 comprise the age group considered most likely to have parents in the age 75+ category, which are those people considered most likely to move to retirement or assisted living communities.

In 2021 it is estimated that there are 39,395 households in the 45 to 64 age group; this number is projected to decrease to 37,803 by 2026.

Experience has shown that people with incomes above the median are most likely to select senior living communities as an option for their parents and are most likely to be able to assist with payment if necessary.

Of those households 45-64, it is estimated that there are 9,533 households that meet the income criteria of $150,000+ annually within the PMA. By year 2026 that number is expected to increase by an additional 27% to an estimated 10,561 households. This is particularly important is it is this demographic cohort that typically assists with or manages to care for their elderly relatives.

This is a positive trend considering the total population is only expected to grow by less than 2% over the same period, indicating an above average affluent “caregiver” or adult child demographic in the PMA.

The 45-64 population is expected to decrease over the next 5 years. The population of the more affluent members of that group is expected to increase.

This bodes well for senior living, specifically assisted living as the adult children influences or direct the decision to move to a senior living environment.
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A likely percentage of these adult children will have parents and/or in-laws that reside “outside” of the PMA (so, they are not counted in penetration rate analysis). Many of these adult children are in the work force and may seek out local housing/care provisions for their geographically displaced senior parents, due to wanting them nearby. Doing this will help to ensure that they reduce disruptions in their own lives, and simply be within comfortable driving distance for regular visitation.

How large of a possible demand source will these adult children be in the subject’s primary target market? DEMAND – PARENTS OF ADULT CHILDREN RESIDING IN SULPHUR

TABLE FIVE
Potential Adult Children Demographics Above average Income Aged 45-64 cohort Age 45-64 %T
Capitola, CA Tot. Hshlds Income $150K+
2026 161,876 10,561 6.52%
2021 159,215 9,533 5.99%
Growth Rate 27%
SUGGESTED PENETRATION RATES Potential Impact on Unit Demand ( Units) Those Actively Seeking Shelter for Parents
Capture Rate 1.00% 1.50%
2021 95 143
2026 106 158
While this chart conservatively indicates that if only 1% of these households are seeking housing for their parents or elderly relatives at any given time, they could impact demand by up to 95 additional units in 2021 and 106 units in 2026 because of the “caregiver effect” in the PMA alone.

Nonetheless, they are a positive indicator of both current and future demand for service-enriched housing. Considering this data, the analyst foresees above average growth in the affluent adult children population in the PMA through the year 2026.

The data indicates that the average annual population growth rate over the next 5 years expected among the senior population will likely be matched by the growth in the adult children population. In summary, high concentrations of affluent caregivers within a PMA are an excellent indicator of both current and future senior housing demand.
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COMPETITIVE ANALYSIS
As noted previously, Capitola has six truly competitive /comparable senior living communities offering some form of assisted living, and or memory care: Sunshine Villa, Dominican Oaks, Aegis Aptos, Valley Haven, Paradise Villa and Westwind, which combine for a total of 511 apts. They are reporting occupancy rates of 85, 96, 100, 80, 80%, respectively. (Paradise Villa would not disclose their occupancy) Though built in 1999, Aegis of Aptos in our opinion is the best competitor in the market and would be the benchmark in terms of amenities, quality of care, apartment features, pricing, etc. for assisted living. While Dominican Oaks offers a small contingent of assisted living apartments, which are nearly fully occupied, their primary product type (157 out of 209 units) is independent living. Though a much older project, built in 1989, this has direct ties to Dominican Hospital; it also offers government low-income financial assistance as a payment method to some residents. Westwind, a strictly memory care community, is the newest built of all the communities. It shares an entrance driveway with the Elks Club and has views of the cemetery just down the street. It would be the benchmark to compare for the memory care side of this potential project.

Competitive Units in the Primary Market Area
A summary of unit sizes and rental rates can be found in the Appendix of this report the design and the interiors are dated, and the feel was institutional and uninspiring. Any new project if designed to “next generation” standards will have a distinct competitive edge.

REGULATORY INFORMATION
As noted previously in the report, California is overseen by the California Department of Social Services.

More information can be found at: https://www.cdss.ca.gov/inforesources/senior-care-licensing 154
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CONCLUSION
Paradigm Senior Living believes that this analysis accurately depicts demand for senior living (including assisted living, and memory care) in the Capitola, CA primary market area, as defined in this report.

Analysis based upon that methodology suggests that from a purely senior income demographic standpoint, and penetration rate analysis there is sufficient demand to support the development of a 75- 80 unit assisted living community within this market. Gross demand is somewhat dependent upon the affluent adult child 45-64 with above average household incomes.

The senior life report section of this report illustrates the factors of the senior population most important to the operation of a senior housing development. The raw demographics for the primary market areas can be found in the back of this report.

Operational/financial feasibility for the proposed project can only be determined through a more indepth compilation and analysis of local development cost assumptions, absorption trends, rental rates, wage rates and other operating variables.

ABOUT THE CONSULTANT
Paradigm Senior Living is a professional management and consulting firm that specializes exclusively in the development, marketing, and management of Senior Living Communities. Presently, PSL has communities under development or management and has ongoing consulting relationships with clients across the US.

PSL was established in 1994 and its principals’ experience in the Senior Living Industry spans nearly 30 years. Our clients include private investors, hospitals, banks, and not-for-profit organizations.

Over that time, the company has been instrumental in the acquisition, development, marketing, and ongoing operation of more than 75 Senior Living Communities throughout the United States including:

Continuum of Care Retirement Communities, Age-Restricted Housing, Assisted Living, and Memory Care communities totaling more than 6,000 living units and valued at more than $750MM. PSL has been involved as Management Agent for $150 MM of HUD- 232 insured loans.

Additionally, PSL has performed financial feasibility, investment, and underwriting analysis for more than two hundred proposed senior housing projects, in more than thirty-five states. Our work has been accepted and highly regarded by HUD, conventional lenders, and equity investors.

Lee E. Cory is the founder and President of Paradigm Senior Living. Prior to beginning his involvement with senior housing in 1983, Mr. Cory spent several years in the field of Hotel and Restaurant Management. Mr.

Cory earned a BS Degree from Michigan State University in 1979.

He has been a nationally recognized speaker and educator for many regional and national senior housing and health care associations including: The National Association for Senior Living Industry Executives (NASLIE), Member and Past Board Member – Assisted Living Federation of America (ALFA), Advisory Member of The American Seniors Housing Assn. (ASHA), AIC Conferences, and The American Health Care Association (AHCA). Mr. Cory’s viewpoints and insights have been published in numerous trade periodicals including Assisted Living Success, Journal of Property Management, Retirement Community Business, Contemporary Long-Term Care, Assisted Living Business, and Assisted Living Today. 155
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ACKNOWLEDGEMENT
Information estimates and opinions contained herein were obtained from sources believed to be reliable and are believed to be true and correct. No single item of information was completely relied upon to the exclusion of any other. However, Paradigm Senior Living “PSL” assumes no responsibility for accuracy.

The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal, unbiased professional analyses, opinions, and conclusions. Neither PSL, nor its principals have a present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved.

Our compensation is not contingent upon the reporting of a predetermined result or direction that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event.

I do not authorize the out-of-context quoting from or partial reprinting of this market study report.

Further, neither all nor any part of this market study report shall be disseminated to the public using media for public communication without the prior written consent of the consultant signing this market study report.

Furthermore, neither the consultant nor Paradigm Senior Living assumes any responsibility for the business decisions of those who become aware of this feasibility study.

November 15, 2021
Lee E. Cory
Paradigm Senior Living
1673 SW Montgomery Dr. Unit F
Portland, OR 97201
503-222-6868
ww.psliving.com
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APPENDIX
➢ RAW DEMOGRAPHIC DATA
➢ COMPETITIVE ANALYSIS DATA
➢ SITE MAPS
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APPENDIX
➢ RAW DEMOGRAPHIC DATA
➢ COMPETITIVE LISTINGS SUMMARY
➢ PMA MAP
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Pop-Facts® Senior Life Demographics | Summary
Trade Area:Capitola Project - 7 mi Radius
Population
2000 Census 148,357
2010 Census 152,737
2021 Estimate 159,215
2026 Projection 161,876
Population Change (%)
Growth 2000 - 2010 2.95
Growth 2010 - 2021 4.24
Growth 2021 - 2026 1.67
Benchmark: USA © 2021 Claritas, LLC. All rights reserved. Source: ©Claritas, LLC 2021 . (https://claritas.easpotlight.com/Spotlight/About/3/2021) 159
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Pop-Facts® Senior Life Demographics | Population & Race Trade Area:Capitola Project - 7 mi Radius
2000*/2010** 2021 2026
Census % Estimate % Projection %
Total Population**
Total Population 152,737 100.00 159,215 100.00 161,876 100.00 Age 45 - 54 22,459 14.70 18,686 11.74 18,520 11.44
Age 55 - 64 21,813 14.28 20,709 13.01 19,284 11.91
Age 65 - 74 9,886 6.47 19,430 12.20 23,228 14.35
Age 75 - 84 5,586 3.66 7,786 4.89 8,902 5.50
Age 85 and over 3,214 2.10 3,483 2.19 3,576 2.21
Age 65 and over 18,686 12.23 30,699 19.28 35,707 22.06
Age 80 and over 5,889 3.86 6,503 4.08 7,179 4.43
Population by Single - Classification Race** White Alone 121,645 79.64 120,297 75.56 119,290 73.69 White Alone: Age 65 and over 17,371 14.28 27,768 23.08 31,788 26.65 Black/African American Alone 1,970 1.29 2,302 1.45 2,459 1.52 Black/African American Alone: Age 65 and over 126 6.40 270 11.73 337 13.71 American Indian/Alaskan Native Alone 1,107 0.72 1,299 0.82 1,371 0.85 American Indian/Alaskan Native Alone: Age 65 and over 72 6.50 152 11.70 190 13.86 Asian Alone 8,034 5.26 10,125 6.36 11,073 6.84
Asian Alone: Age 65 and over 574 7.14 1,216 12.01 1,605 14.49 Native Hawaiian/Pacific Islander Alone 243 0.16 271 0.17 288 0.18 Native Hawaiian/Pacific Islander Alone: Age 65 and over 17 7.00 33 12.18 46 15.97 SomeOther Race Alone 12,170 7.97 15,361 9.65 16,895 10.44 SomeOther Race Alone: Age 65 and over 309 2.54 744 4.84 1,027 6.08 Two or More Races 7,568 4.96 9,560 6.00 10,500 6.49
Two or More Races: Age 65 and over 218 2.88 516 5.40 714 6.80 Population by Hispanic or Latino**
Hispanic/Latino 26,931 17.63 32,843 20.63 35,593 21.99
Hispanic/Latino: Age 65 and over 1,058 3.93 2,282 6.95 3,054 8.58 Not Hispanic/Latino 125,806 82.37 126,372 79.37 126,283 78.01 Total Population, Male**
Total Population, Male 75,411 49.37 78,038 49.01 79,344 49.02 Male: Age 45 - 54 11,042 14.64 9,346 11.98 9,198 11.59
Male: Age 55 - 64 10,772 14.28 9,983 12.79 9,347 11.78
Male: Age 65 - 74 4,662 6.18 9,433 12.09 11,257 14.19
Male: Age 75 - 84 2,204 2.92 3,401 4.36 3,852 4.86
Male: Age 85 and over 1,043 1.38 1,126 1.44 1,199 1.51
Male: Age 65 and over 7,909 10.49 13,960 17.89 16,308 20.55 Male: Age 80 and over 2,066 1.35 2,400 1.51 2,702 1.67
Total Population, Female**
Total Population, Female 77,326 50.63 81,177 50.99 82,532 50.98 Female: Age 45 - 54 11,417 14.77 9,340 11.51 9,322 11.29 Female: Age 55 - 64 11,041 14.28 10,726 13.21 9,936 12.04 Female: Age 65 - 74 5,224 6.76 9,997 12.31 11,971 14.51 Female: Age 75 - 84 3,382 4.37 4,386 5.40 5,051 6.12
Female: Age 85 and over 2,171 2.81 2,356 2.90 2,377 2.88 Female: Age 65 and over 10,777 13.94 16,739 20.62 19,398 23.50 Female: Age 80 and over 3,823 2.50 4,102 2.58 4,477 2.77 Benchmark: USA
*2000 Census generated data/**2010 Census generated data © 2021 Claritas, LLC. All rights reserved. Source: ©Claritas, LLC 2021 . (https://claritas.easpotlight.com/Spotlight/About/3/2021) 160
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Pop-Facts® Senior Life Demographics | Household Income
Trade Area:Capitola Project - 7 mi Radius
2000*/2010** 2021 2026
Census % Estimate % Projection %
Householder Age 45 - 54*
Householder Age 45 - 54 14,628 28.35 10,210 16.41 9,900 15.56 Income Less than $15,000 1,038 7.10 383 3.75 314 3.17
Income $15,000 - $24,999 899 6.15 177 1.73 153 1.55
Income $25,000 - $34,999 873 5.97 462 4.53 360 3.64
Income $35,000 - $49,999 1,968 13.45 542 5.31 376 3.80
Income $50,000 - $74,999 2,939 20.09 939 9.20 773 7.81
Income $75,000 - $99,999 2,348 16.05 1,026 10.05 842 8.51 Income $100,000 - $124,999 1,880 12.85 1,052 10.30 872 8.81 Income $125,000 - $149,999 894 6.11 1,002 9.81 946 9.56 Income $150,000 - $199,999 950 6.49 1,388 13.60 1,361 13.75 Income $200,000 or more 838 5.73 3,240 31.73 3,903 39.42 Median Household Income -- 71,272.89 -- 137,676.93 -- 187,007.73 Householder Age 55 - 64*
Householder Age 55 - 64 7,197 13.95 12,175 19.57 11,078 17.42 Income Less than $15,000 755 10.49 726 5.96 559 5.05
Income $15,000 - $24,999 491 6.82 322 2.65 249 2.25
Income $25,000 - $34,999 723 10.05 636 5.22 495 4.47
Income $35,000 - $49,999 898 12.48 777 6.38 509 4.59
Income $50,000 - $74,999 1,226 17.04 1,235 10.14 976 8.81 Income $75,000 - $99,999 910 12.64 1,271 10.44 1,027 9.27 Income $100,000 - $124,999 714 9.92 1,160 9.53 943 8.51 Income $125,000 - $149,999 526 7.31 1,142 9.38 1,023 9.23 Income $150,000 - $199,999 499 6.93 1,442 11.84 1,359 12.27 Income $200,000 or more 456 6.34 3,463 28.44 3,938 35.55 Median Household Income -- 64,111.58 -- 124,122.72 -- 143,786.72 Householder Age 65 - 74*
Householder Age 65 - 74 4,987 9.66 12,153 19.53 14,172 22.28 Income Less than $15,000 714 14.32 754 6.20 763 5.38
Income $15,000 - $24,999 707 14.18 698 5.74 705 4.97
Income $25,000 - $34,999 753 15.10 792 6.52 791 5.58
Income $35,000 - $49,999 741 14.86 1,012 8.33 971 6.85
Income $50,000 - $74,999 907 18.19 1,746 14.37 1,820 12.84 Income $75,000 - $99,999 492 9.87 1,467 12.07 1,592 11.23 Income $100,000 - $124,999 235 4.71 1,207 9.93 1,358 9.58 Income $125,000 - $149,999 198 3.97 924 7.60 1,118 7.89 Income $150,000 - $199,999 155 3.11 1,258 10.35 1,609 11.35 Income $200,000 or more 83 1.66 2,295 18.88 3,446 24.32 Median Household Income -- 40,683.43 -- 92,847.88 -- 107,718.78 Householder Age 75 - 84*
Householder Age 75 - 84 4,678 9.07 5,277 8.48 5,873 9.23 Income Less than $15,000 1,027 21.95 546 10.35 555 9.45 Income $15,000 - $24,999 789 16.87 553 10.48 560 9.54
Income $25,000 - $34,999 613 13.10 604 11.45 614 10.46
Income $35,000 - $49,999 834 17.83 593 11.24 584 9.94
Income $50,000 - $74,999 652 13.94 830 15.73 871 14.83
Income $75,000 - $99,999 310 6.63 526 9.97 575 9.79
Income $100,000 - $124,999 190 4.06 414 7.84 469 7.99
Income $125,000 - $149,999 77 1.65 338 6.41 407 6.93
Income $150,000 - $199,999 71 1.52 340 6.44 431 7.34
Income $200,000 or more 114 2.44 532 10.08 806 13.72
Median Household Income -- 33,435.31 -- 59,436.23 -- 67,137.64 Householder Age 85 and over*
Householder Age 85+ 1,230 2.38 2,449 3.94 2,481 3.90
Income Less than $15,000 370 30.08 373 15.23 352 14.19
Income $15,000 - $24,999 230 18.70 429 17.52 396 15.96
Income $25,000 - $34,999 144 11.71 327 13.35 305 12.29
Income $35,000 - $49,999 192 15.61 273 11.15 262 10.56
Income $50,000 - $74,999 143 11.63 346 14.13 355 14.31
Income $75,000 - $99,999 55 4.47 224 9.15 223 8.99
Income $100,000 - $124,999 32 2.60 115 4.70 121 4.88
Income $125,000 - $149,999 21 1.71 109 4.45 122 4.92
Income $150,000 - $199,999 20 1.63 101 4.12 125 5.04
Income $200,000 or more 24 1.95 152 6.21 219 8.83
Median Household Income -- 25,900.18 -- 39,291.89 -- 45,068.64 Benchmark: USA
*2000 Census generated data/**2010 Census generated data © 2021 Claritas, LLC. All rights reserved. Source: ©Claritas, LLC 2021 . (https://claritas.easpotlight.com/Spotlight/About/3/2021) 161
Item 9 B.

Pop-Facts® Senior Life Demographics | Housing & Households Trade Area:Capitola Project - 7 mi Radius
2000*/2010** 2021 2026
Census % Estimate % Projection %
Households by Household Income*
Total Households 58,500 100.00 62,221 100.00 63,605 100.00 Income Less Than $15,000 6,893 11.78 5,336 8.58 4,647 7.31 Income $15,000 - $24,999 5,558 9.50 3,459 5.56 3,137 4.93 Income $25,000 - $34,999 5,904 10.09 3,584 5.76 3,244 5.10 Income $35,000 - $49,999 8,546 14.61 4,614 7.42 3,963 6.23 Income $50,000 - $74,999 10,893 18.62 7,295 11.72 6,776 10.65 Income $75,000 - $99,999 7,453 12.74 6,705 10.78 6,191 9.73 Income $100,000 - $124,999 5,213 8.91 5,972 9.60 5,693 8.95 Income $125,000 - $149,999 2,811 4.80 4,867 7.82 5,050 7.94 Income $150,000 - $199,999 2,669 4.56 6,519 10.48 7,101 11.16 Income $200,000 - $249,999 1,209 2.07 4,241 6.82 5,019 7.89 Income $250,000 - $499,999 962 1.64 5,320 8.55 6,901 10.85 Income $500,000 or more 378 0.65 4,310 6.93 5,882 9.25
Average Household Income -- 73,650.00 -- 147,047.00 -- 168,574.00 Median Household Income -- 54,691.96 -- 100,462.28 -- 116,591.08 Age 55+ Median Household Income -- 44,246.64 -- 92,110.18 -- 105,668.63 Age 65+ Median Household Income -- 35,729.57 -- 75,622.83 -- 88,515.37 Owner-Occupied Housing Units by Value*
Value Less Than $20,000 309 0.91 323 0.93 328 0.93
Value $20,000 - $39,999 567 1.68 95 0.27 79 0.22
Value $40,000 - $59,999 643 1.90 94 0.27 100 0.28
Value $60,000 - $79,999 477 1.41 79 0.23 75 0.21
Value $80,000 - $99,999 710 2.10 176 0.51 86 0.24
Value $100,000 - $149,999 1,129 3.34 419 1.21 448 1.27
Value $150,000 - $199,999 1,480 4.38 237 0.68 285 0.81
Value $200,000 - $299,999 4,937 14.60 552 1.59 472 1.33 Value $300,000 - $399,999 7,540 22.30 738 2.13 705 1.99 Value $400,000 - $499,999 6,901 20.41 1,087 3.14 934 2.64 Value $500,000 - $749,999 6,319 18.69 5,794 16.73 5,024 14.20 Value $750,000 - $999,999 1,808 5.35 8,935 25.80 7,667 21.66 Value $1,000,000+ 969 2.87 -- -- -- --
Value $1,000,000 - $1,499,999 -- 0.00 10,185 29.41 10,771 30.43 Value $1,500,000 - $1,999,999 -- 0.00 3,597 10.39 4,932 13.94 Value $2,000,000+ -- 0.00 2,322 6.71 3,486 9.85
Median All Owner-Occupied Housing Unit Value -- 388,298.76 -- 964,404.95 -- 1,055,556.42 Group Quarters by Population Type**
GroupQuarters Population 9,469 6.20 12,486 7.84 12,485 7.71 Correctional Facilities 352 3.72 460 3.68 460 3.68
Nursing Homes 469 4.95 611 4.89 611 4.89
Other Facilities 7 0.07 9 0.07 9 0.07
Juvenile Facilities 50 0.53 67 0.54 67 0.54
College Dormitories 6,698 70.74 8,824 70.67 8,822 70.66 Military Quarters 5 0.05 7 0.06 7 0.06
Other Noninstitutional Quarters 1,888 19.94 2,509 20.09 2,510 20.10 Occupied Housing Units by Tenure*
Owner-Occupied 33,788 53.28 34,632 55.66 35,392 55.64
Renter-Occupied 24,683 38.92 27,588 44.34 28,212 44.35
2000*/2010** 2021 2026
Census % Estimate % Projection %
Households by Tenure by Age of Householder**
Total Households 59,878 100.00 62,221 100.00 63,605 100.00 Owner-Occupied 33,346 55.69 34,632 50.34 35,392 50.41
Householder Age 55 - 64 9,571 28.70 8,504 24.55 7,571 21.39 Householder Age 65 - 74 5,054 15.16 9,359 27.02 10,903 30.81 Householder Age 75 - 84 2,977 8.93 3,976 11.48 4,366 12.34 Householder Age 85 and over 1,483 4.45 1,518 4.38 1,551 4.38 Renter-Occupied 26,532 44.31 27,588 44.34 28,212 44.35
Householder Age 55 - 64 3,690 13.91 3,671 13.31 3,507 12.43 Householder Age 65 - 74 1,341 5.05 2,793 10.12 3,269 11.59 Householder Age 75 - 84 917 3.46 1,301 4.72 1,508 5.34
Householder Age 85 and over 832 3.14 931 3.38 930 3.30
Benchmark: USA
*2000 Census generated data/**2010 Census generated data © 2021 Claritas, LLC. All rights reserved. Source: ©Claritas, LLC 2021 . (https://claritas.easpotlight.com/Spotlight/About/3/2021) 162
Item 9 B.

Report Details
Name: Pop-Facts® Senior Life Demographics 2021
Date / Time: 10/18/2021 2:52:51 PM
Workspace Vintage: 2021
Trade Area
Name Level Geographies
Capitola Project - 5 mi Radius 5 mi Radius N/A
Capitola Project - 7 mi Radius 7 mi Radius N/A
Capitola Project - 10 mi Radius 10 mi Radius N/A
Benchmark
Name Level Geographies
USA Entire US United States
DataSource
Product Provider Copyright
Claritas Pop-Facts® Premier 2021 Claritas ©Claritas, LLC 2021 (https://claritas.easpotlight.com/Spotlight/About/3/2021#2 SPOTLIGHT Pop-Facts® Premier 2021,
including 2000 and 2010 US Census, 2021
estimates and 2026 projections
Claritas ©Claritas, LLC 2021
(https://claritas.easpotlight.com/Spotlight/About/3/2021#2 163
Item 9 B.

Location: Date: 11/22/2021
inDirect Competitor #1 Competitor #1 Competitor #2 Competitor #3 Competitor #4 Competitor #5 Competitor #6 Name La Posada Retirement
Community Paradise Villa Dominican Oaks Valley Haven Aegis Living Aptos Sunshine Villa Westwind ALZ Address 609 Frederick St
Santa Cruz, CA 95062
2177 17th Ave
Santa Cruz, CA 95062
3400 Paul Sweet Road
Santa Cruz, CA 95065
2266 Chanticleer Ave
Santa Cruz, CA 95062
125 Heather Terrace
Aptos, CA 95003
80 Front St
Santa Cruz, CA 95060
160 Jewell St Santa Cruz,
CA 95060
Phone 831-429-9230 831-475-1380 831-462-6257 831-818-8372 831-706-2977 831-226-1879 831.421.9100 Website Address laposadaretirementcom
munity.com
paradisevillaassistedlivin
g.com
https://www.dominican
oaks.com/
http://www.valleyhave
ncare.com/home
https://www.aegislivin
g.com/aegis-living-ofhttps://www.merrillgardens.com/seniorhttps://www.westwindmemorycare.com/ Marketing Director Sam Sunday Cheir Harty Jennifer Andronico Kathleen Gleitsmann Ricardo de la Cruz General Manager Erin Wiley Josephine Arcilla Tami Ojwang City / Miles from property 2.3 1.3 2.5 1.2 4.4 3.9 4.4
# of Units 150 29 206 30 88 107 51
Profit/Not-For-Profit HUD - Section 8 Profit NFP Profit Profit Profit Profit Care Type Offered IL - 62+ AL / ALZ IL/AL AL/ALZ AL / ALZ IL/AL/ALZ ALZ Date Opened 1980 1978 1989 2013 1999 1990 2017
Current Occupancy 100% would not divulge AL - 96% 80% 100% 85% 84% Accept Medicaid Yes No Yes No No No No
Direct Competitor? No Yes Yes Yes Yes Yes Yes
Deposit Amount n/a $2,500 2500* 1500 $2,500 1 mo rent 2000 Date of Last Increase
IL Studio 3495
IL 1 Bdrm 5580-5940
IL 2 Bdrm 6510-6900
AL Studio $3,890 $6,448 3495
AL 1 Bdrm $7,843
AL 2 Bdrm
ALZ - Semi Private
ALZ - Private 6300
ALZ - Companion 4995 5750
Cottage/Villa
Buy-In (Y/N) No No No No
2nd Person Fee $400 $1,200 $1,500
Care Cost Method (if applicable)
All Inclusive, Points, Levels,
Hybrid
Points Levels
IL - Studio
IL - 1 Bdrm 640
IL - 2 Bdrm 850-980
AL - Studio 225 377 320
AL - 1 Bdrm 425-575 640 650 490-576
AL - 2 Bdrm 850-980
ALZ - Semi Private
ALZ - Private 312
ALZ - Companion 330
Meals (#/day) 2 3 3 3 3 3 3
Housekeeping (x's/wk.) 1 1 1 1 1 1 1
Laundry (#/wk) 1 1 1 1 1 1 1
Utilities (yes/no) yes yes yes yes Yes Yes yes
Cable TV (yes/no) yes yes yes yes Yes yes yes
Telephone (yes/no) no yes no yes yes yes no
Internet (yes/no) no yes no yes Yes yes yes
Furniture (yes/no) No no no no No no no
Care (yes/no) No no no no No no no
Managed By
Dominican Hospital
Group Aegis Living Merrill Gardens
Photo of Bldg Exterior
Observations / Notes Low-income HUD
project. With private pay
option. Has heated
swimming pool and
jacuzzi
residential feel. Needs
lots of improvements and
updates. Not a true
competitor
located next to dominican
hospital. Older building,
primarily IL. Currently
being updated as it looks
very dated interior.

Accepts low income for
some rooms
very residential feel, like
large homes.

Respite is 10 day
minimum, $300-
350/day. Sold in 2018
for $80M
close proximity to
wharf/beach. Good views
from top of hill location.

Entry very dark, low
ceilings.
stand alone ALZ. Shares
driveway with Elks club.

On hill, overlooking
cemetery. Nice new
interior and common
areas
Completed by/Title: Karl Drucks
SIZES (sq. ft.)
COMMENTS/MARKET PULSE INFORMATION: In this section provide a "snap shot" of activity/information about the competitor - i.e. "just opened", "20 residents" or "low occupancy due to high staff turnover" or "under new management", etc.

OTHER

SERVICES INCLUDED IN RATE

COMPETITOR ASSESSMENT AND CARE CAPABILITIES
CURRENT STREET RATE in $ (monthly or daily)

COMPETITIVE ANALYSIS
3720 Capitola Rd. Santa Cruz, CA 95062
164
Item 9 B.

Pop-Facts® Senior Life Demographics | Map
Trade Area:Capitola Project - 7 mi Radius
Benchmark: USA © 2021 Claritas, LLC. All rights reserved. Source: ©Claritas, LLC 2021 . (https://claritas.easpotlight.com/Spotlight/About/3/2021) Leaflet (http://leafletjs.com) | TomTom | Powered by Esri (https://www.esri.com) | USGS, NOAA 165
Item 9 B.

Development Standards: The following table includes the development standards for the Community Commercial zoning district relative to the proposed assisted living project at 3720 Capitola Road.

Development Standards
Building Height
CC regulation Proposed
40 feet – Up to 50 feet with Community Benefit 53 feet (Not in compliance) Floor Area Ratio
C-C Regulation Proposed

1.0 – Up to 2.0 with a Community Benefit 1.65
Setbacks
C-C Regulation Proposed
Front Buildings shall be set back from
the front and street side
property line so that:

1. The building is at least fifteen
feet from the curb
or street edge;

2. Building placement allows for
a minimum ten-foot sidewalk
along the property frontage.

Building is 15 feet from curb.

Building placement allows a
ten-foot sidewalk along
property frontage
Street Side 15 feet from curb
Rear 0 ft. unless adjacent to a
residential zoning district (see
Section 17.24.030(E))
20 feet
Interior Side 0 ft. unless adjacent to a
residential zoning district (see
Section 17.24.030(E))
5 feet
Landscaping
Required Proposed
5% and Where a commercial or industrial zoning district abuts a residential zoning district a landscaped planting area, extending a minimum of ten feet from the property line, shall be provided along all residential property lines. A tree screen shall be planted in this area with trees planted at a minimum interval of fifteen feet
A ten-foot-deep landscape
strip must be be included at
the rear property line. A tree
screen with trees planted at a
minimum interval of 15 feet
must be planted along the rear
property.
166
Item 9 B.

Parking
Residential Care Facility
for the Elderly
.5 spaces per bed plus 1
space per 300 sq. ft. of
office and other nonresidential areas
Required Proposed
54 spaces total
49 Residents (97 beds x 0.5)
5 Office Space
33 spaces total
0 covered
32 uncovered
Does Not Comply –
Requires parking study
Electric Vehicle Parking
Required Proposed
25 – 49 Parking Spaces
requires 1 EV Space.
5 EV Spaces TBD
Bicycle Parking
Multifamily Dwellings and
Group Housing:
 Short-Term
spaces: 10% of
required automobile
spaces, minimum 4
spaces
 Long-Term
spaces: 1 per unit
Required Proposed
98 Spaces Total
5 Short-Term Spaces
93 Long-Term Spaces
Does not comply – Pending
Parking Study
167
Item 9 B.

City of Capitola
Special Planning Commission Meeting
Minutes
Thursday, October 20, 2022 – 6:00 PM
City Council Chambers
420 Capitola Avenue, Capitola, CA 95010
Chairperson: Peter Wilk
Commissioners: Courtney Christiansen, Ed Newman, Susan Westman, Mick Routh

1. Roll Call and Pledge of Allegiance
Commissioners Mick Routh, Courtney Christiansen, Ed Newman, Susan Westman, Peter Wilk

2. Oral Communications
A. Additions and Deletions to the Agenda
Director Herlihy reported ten additional written public comment were submitted for item 3.B.

B. Public Comments
C. Commission Comments
Commissioner Westman thanked the city for putting on the fireworks.

Chair Wilk informed the Commission of a recent Committee on the Environment meeting in which a representative from AMBAG reported out on the City’s climate action plan. Commission Wilk suggested the city could consider creating incentives for EV charging stations.

D. Staff Comments

3. Public Hearings
A. 2022 Zoning Code Amendments
Permit Number: #22-0441
APN: All Zoning Districts
Project description: Draft ordinance to adopt clean-up amendments to the Zoning Code. The proposal involves development within the Coastal Zone and is not effective unless certified by the California Coastal Commission.

Environmental Determination: Categorically Exempt under Section 15061(b)(3) Property Owner: Effects all Zoning Districts
Representative: Ben Noble, Ben Noble Planning
Recommendation: Accept presentation on the Zoning Code Clean-up Amendments and consider forwarding a positive recommendation on the ordinance to the City Council.

Director Herlihy introduced Ben Noble of Ben Noble Planning to present on the Zoning Code update. Mr. Noble highlighted 10 topics of the Zoning Code with recommended updates to be compliant with state law.

Nara Dahlbacka, representing the Apothecarium, provided support for amended code.

DocuSign Envelope ID: 18A0E3FE-D977-4887-AB8D-D451B79FD3DB 168
Item 9 B.

Special Planning Commission Meeting Minutes – October 20, 2022 City of Capitola Page 2
The Planning Commission provided the following direction on the items discussed:

1. Large Retail Uses. Accepted amendments as proposed.

2. Cannabis Retail Signs. Remove all cannabis-specific sign standards. Cannabis signs to be regulated the same as any retail sign.

3. Pergolas. Accepted amendments as proposed.

4. Accessory Dwelling Units. Accepted amendments as proposed plus new statement about conformance with changing state law.

5. Parking in R-1 Front Setback Area. Rejected proposed changes. Keep existing language.

6. Outdoor Showers. Revise Table 17.4-2 to clarify rule for outdoor showers.

Motion: Continue the item for a second reading to the November 3, 2022, Planning Commission meeting.

Result: Passed, 5-0 (Unanimous)
Mover: Commissioner Westman
Seconder: Commissioner Newman
Yea: Commissioner Wilk, Commissioner Westman, Commissioner Christiansen, Commissioner Newman, Commissioner Routh
B. Monarch Cove Inn – Code Amendments
Project Number: #21-0267
Location: 620 El Salto Drive, Parcel Numbers 036-143-31, 036-142-27, and 036-142-28 Project Description: Draft ordinance to adopt amendments to the Zoning Code, Zoning Map, and General Plan Land Use Map to change the Monarch Cove Inn property from a Visitor Serving base zone to R-1 Single-Family Residential base zone with a Visitor Serving overlay zone. The proposal involves development within the Coastal Zone and is not effective unless certified by the California Coastal Commission.

Environmental Determination: Categorically Exempt under Section 15061(b)(3) Property Owner: Bob and Lonna Blodgett
Senior Planner Froelich presented a staff report
Recommended Action: Accept presentation on the Zoning Code, Zoning Map, and General Plan Map Amendments and consider forwarding a positive recommendation to the City Council.

No public comments.

Planning Commission Deliberation and Feedback:

Commissioner Newman acknowledged the Planning Commission has reviewed this before.

Motion: Positive recommendation to City Council for amendments to the Zoning Code, Zoning Map, and General Plan Land Use Map related to the Monarch Cove Inn.

Result: Passed, 5-0 (Unanimous)
Mover: Commissioner Routh
Seconder: Commissioner Westman
Yea: Commissioner Wilk, Commissioner Westman, Commissioner Christiansen, Commissioner Newman, Commissioner Routh
C. 3720 Capitola Road & 1610 Bulb Avenue
Permit Number: #22-0149
APN: 034-18-114 and 031-12-139
Conceptual Review for (1) future annexation of 1610 Bulb Avenue into Capitola City limit and (2) Community Benefit Application for Senior Living facility at 3720 Capitola Road and 1610 Bulb Avenue in the Community Commercial (CC) Zoning District.

DocuSign Envelope ID: 18A0E3FE-D977-4887-AB8D-D451B79FD3DB 169
Item 9 B.

Special Planning Commission Meeting Minutes – October 20, 2022 City of Capitola Page 3
Environmental Determination: To be determined
Property Owner: Zurite LLC and Capitola Land Ventures LLC Representative: Zurite LLC and Capitola Land Ventures LLC Commissioner Newman recused due to proximity.

Director Herlihy presented a staff report.

Rafael Ortiz from Zurite LLC spoke about the project and the community benefits it offers. Intention to provide senior housing, create jobs, property tax, and generates visitors to the commercial area.

Greg Irwin, project Architect, explained there is no by-right for senior housing land use. Explained they are seeking an annexation and feedback on the conceptual review.

Chair Wilk asked if the project would contribute to the City’s RHNA requirements. Director Herlihy responded that it would not count toward RHNA because the proposed units do not have kitchens.

Commissioner Routh asked if the applicant has completed preliminary traffic analysis, to which applicant said they had not.

Susan Steely, Bulb Avenue resident, expressed her opposition to the project and disagreed with the edibility of substantial benefit as well as the proposed project siting on Bulb Avenue.

Marilyn, Bulb Avenue resident, also criticized the project, citing traffic issues as a concern.

Community member stated this is a residential area and they do not want to live across the street from a business. Concern for no sidewalks.

Vic Clouser, Bulb Avenue resident, expressed concern for facilities like this on the block, citing the lack of affordability of the new units and increased traffic impacts.

Rebecca Russell inquired as to the monthly rates of the new units but was not against the idea of a senior living facility or affordable housing for seniors.

Angie, nearby resident, expressed concern that the project would impact County residents more than Capitola residents and was opposed to a vehicular entrance on Bulb Avenue.

Scott, Bulb Avenue resident, lives directly next door to the proposed project and expressed opposition to the location and size of the project.

Donna Jensen Lewis expressed concerns regarding emergency vehicle traffic up and questioned whether the development met the criteria for a community benefit project.

Christina Scheer questioned if the development would receive tax incentives if they apply as a community benefit project and expressed concerns for corporate development.

Doug expressed concern that the intersection at Bulb Avenue and Capitola Road is not sufficient to accommodate the changes in traffic.

Michael expressed concerns regarding traffic, noise, property value, and pedestrian safety.

Jason expressed concerns regarding traffic and pedestrian safety.

Rich expressed concern for future residents of the facility so close to the busy Capitola Road. He also expressed concerns regarding emergency vehicle noise.

Jennifer expressed opposition to the project and stated that many nearby properties cannot vote on the City Council because they are County residents.

Theresa Stolaroff spoke against the annexation.

Commissioner Routh did not believe the project qualified as a community benefit. Mr. Routh further felt that Bulb Avenue lacked the road infrastructure necessary and that the current proposal did not sufficiently address adverse impacts to the neighborhood. He stated the emergency vehicle traffic DocuSign Envelope ID: 18A0E3FE-D977-4887-AB8D-D451B79FD3DB 170
Item 9 B.

Special Planning Commission Meeting Minutes – October 20, 2022 City of Capitola Page 4
and access would need to be addressed and that the current proposal would not protect the integrity of the neighborhood as required by the General Plan.

Commissioner Westman did not believe the project qualified as a community benefit but acknowledged a local need for more assisted living facilities. Commissioner Westman felt that the project could be eligible as a true community benefit if it provided affordable units. She also expressed an interest in the units including kitchens so as to qualify towards the City RHNA requirements. She also felt the project massing should be stepped towards Capitola Road and expressed concern for impacts to Bulb Avenue. Commissioner Westman expressed interest in the prospect of annexation as it would provide a larger site to help mitigate impacts.

Commissioner Christiansen agreed that the annexation could benefit the city but expressed concern for the site of the project relative to the lots. She felt a four-story design would not benefit the community and stated they did not have enough information to determine if the site access and traffic impacts were acceptable. Commissioner Christiansen suggested increasing the building articulation and including additional information on the traffic and ingress/egress.

Chair Wilk explained after looking through the list of allowed public benefits, he does not believe the use fits within the community benefit. No justification for allowing a variance to the code, regardless of the design or other support for the project. Does not support annexation because the county residents do not have representation.

Director Herlihy clarified that the Conceptual Review is for non-binding input from the Commission.

No vote is necessary. City Council will review at their next meeting Thursday, October 27 at 7pm.

All letters to PC will be included in the packet for City Council.

4. Director's Report

5. Commission Communications

6. Adjournment
The meeting was adjourned at 8:32 pm to the next Regular Meeting of the Planning Commission on November 3, 2022.
_____________________________________________________
ATTEST:
____________________________
City Clerk’s Office
DocuSign Envelope ID: 18A0E3FE-D977-4887-AB8D-D451B79FD3DB 171
Item 9 B.
1 Herlihy, Katie ([email protected])
From: Angela Deans <[email protected]>
Sent: Wednesday, October 19, 2022 4:21 PM
To: City Council; PLANNING COMMISSION; Hillcah Deans
Cc: [email protected]
Subject: Opposition to the annex of 1610 Bulb Ave.

Attention: City of Capitola Planning Commission
RE: 3720 Capitola Rd.&1610 Bulb Ave.

Permit # 22-0149
APN:034-18-114 and 131-12-139
We are owners of a property on Bulb Ave and have resided in this community for over 15 years. We are concerned about this very intrusive development, especially the annex of 1610 Bulb Ave, which is a residential property of Santa Cruz. We are a very tight net community, established relationships, and involved in the welfare of our community. As a community member, it has been very difficult to get information and to actively participate in discussions regarding this massive project. Our concerns are as follows:

1. Facility: This facility is way out of proportion to the existing facilities/buildings in Capitola and is far from blending into the community. The structural plans grossly exceed the norm of the community and to propose that it is put in a residential neighborhood is outrageous.

2. Traffic: Currently, the traffic flow is already very congested at Capitola Road and Blub Ave. There is a heavy flow of cars that already use Bulb Ave to circumvent the traffic that is backed up on Capitola Road heading towards Capitola. It is already a very unsafe corner for pedestrians as the cars turn onto Bulb Ave. The primary objections are the physical street size, lane width, and inconsistency of the width of the street. The neighborhood of families uses the street for parking and it is often impossible for two cars to pass without one moving to the side.

3. Serving Senior Population: To slightly even suggest that this would serve the population of Capitola senior citizens is highly misleading and a far deception of the truth. I would like to see the actual data of how many senior citizens in the City of Capitola would benefit from the facility and compare it to the currently existing facilities that are serving the senior population.

4. Community Benefit: The residents of Blub Ave would not benefit from this project as suggested by the developers. We are residents of Santa Cruz, not Capitola. There is zero benefit to the residents of Bulb Ave.

5. Entrance and Exit: To have the only entrance and exit to this facility is on Bulb Ave, not Capitola Road is a huge disregard to the safety of all the residents on Bulb Ave. All the ingress and egress is planned to enter the facility from Bulb Ave. is beyond feasible or acceptable to the residents. This is a neighborhood with a population of families of small children (directly across the street from the planned driveway), kids on bikes, wheelchair neighbors, kids playing basketball, and riding bikes. There are no continuous sidewalks so to go from Capitola Rd to Brommer St. and anyone of these examples will have to enter the street at some point.
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Item 9 B.
2 6. Trees- Has any consideration been made about the 4-5 well developed Redwood trends that would be removed? Conversations have been started about the environmental impact and the need to preserve these very old Redwood trees at the corner of Bulb and the 1610 Bulb Ave property.

Please take these concerns into consideration and the impact to the residential neighborhood. 1610 Bulb Ave must remain a residential property. The design of this facility is not congruent to the community and clearly the residents of Santa Cruz will be impacted, not the City of Capitola.

We appreciate your serious consideration of facts that have been erroneously overlooked in the project developers and that it does not “minimize adverse impacts to neighboring properties to the greatest extent possible….” as stated in the proposal.

Sincerely,
Angela and Hillcah Deans
Sent from my iPhone
173
Item 9 B.
1 Herlihy, Katie ([email protected])
From: Ron Goad <[email protected]>
Sent: Thursday, October 20, 2022 1:36 PM
To: PLANNING COMMISSION
Cc: Herlihy, Katie ([email protected])
Subject: 3270 capitola rd,1610 bulb
Hello
I’m a neighbor 1560 bulb of proposed project and it will impact me directly as loss of privacy in a residential neighborhood.the upper floors will look right in my backyard ,I’m not against the use but size and vehicles,bulb ave isn’t wide enough for 2 vehicles at one time . The noise from heating and cooling devices ,delivery trucks will impact my neighbors 24/7 .this commercial project has no place on top of us ,it should be at the mall where access and transportation are optimal .

Ron Goad
1560 bulb ave
831/247/1372
RG
174
Item 9 B.
1 Herlihy, Katie ([email protected])
From: Zerreniah Tran <[email protected]>
Sent: Wednesday, October 19, 2022 9:54 PM
To: PLANNING COMMISSION
Subject: Bulb Ave - Concerned project (APN: 034-18-114 and 031-12-139) Dear Council Members and Planning Commission,
I am an owner and resident at 1478 Bulb Ave. I've reviewed the proposed plans at 3720 Capitola Road & 1610 Bulb Ave (APN: 034‐18‐114 and 031‐12‐139). I am not opposed of the use of the project itself, however, I have a few concerns:

1. The size of this project (Four story, 80+ units) is extremely large for a residential neighborhood.

2. Bulb Ave is a quiet street filled with cars parked along the streets most evenings. Only a handful of homes have an actual sidewalk. The street is not wide enough to allow two passing cars ‐ we typically have to pull to the side to let another car pass us. The street is not equipped to handle the extra traffic. Additionally, a lot of children play on the streets in this neighborhood and the extra traffic can create a safety concern for them.

3. We are concerned about the increase in noise level ‐ extra traffic, generators, ambulances, etc.

I hope that we can address these concerns before any approval of construction on the property.

Thank you,
Zerreniah Tran
175
Item 9 B.

October 18, 2022
City of Capitola – Planning Department
420 Capitola Ave.

Capitola, CA 95010
Re: 3720 Capitola Road & 1610 Bulb Avenue
Permit Number: 22-0149
APN: 034-18-114 & 031-12-139
Dear Council Members and Planning Commission,

I am the homeowner and resident at 1484 Bulb Avenue, and I have concerns with the proposed development. In the 45 years I have lived here I have watched as our street has become too small for the traffic that passes through. Most of the time there isn’t room for two cars to pass so we must wait like a one-way street. Seeing as the proposed development calls for ingress and egress on Bulb Avenue this is going to significantly impact the residents. Due to the median, it isn’t possible to turn left on Capitola Road which would direct traffic right down Bulb Ave. This could be remedied by blocking off Bulb just past the parking lot so there wouldn’t be cars coming up and down our street. I think that would be a reasonable accommodation. Bulb Avenue should not be affected by this project. Changing the property to the “City of Capitola” does not change the fact that this is a residential area that barely accommodates the residents it currently houses.

Thank you for your consideration,
Marilyn McCallum-White
1484 Bulb Ave
Santa Cruz, CA 95062
831-295-3253

176
Item 9 B.

October 9, 2022
Scott Barnes
1574 Bulb Ave.

Santa Cruz, CA 95062
City of Capitola – Planning Commission
420 Capitola Ave.

Capitola, CA 95010
Re: 3720 Capitola Road & 1610 Bulb Avenue
Permit Number: #22-0149
APN: 034-18-114 and 031-12-139
Dear Council Members and Planning Commission,
I am owner and reside at 1574 Bulb Ave. The property adjacent to the proposed project mentioned above. Although I am not opposed to the proposed use for the project. I do have some serious concerns and hope that considerations will be afforded to me and other Bulb residents prior to approving this very intrusive project.
1) Footprint and height of the building: A four-story, 80+ units building is taller than anything that currently exists in the city and is outrageous to suggest one should be built in a residential neighborhood.
2) Bulb Ave. even at the section closest to Capitola Rd. cannot absorb the ingress and egress of a commercial parking lot – as per the plans. The parking lot is not accessed via Capitola Rd. It is accessed entirely on Bulb Ave.
a. Bulb Ave. is a quiet residential street on which there are only a few lots that have sidewalks. At most hours of the day the street is full of on street parked cars. Drivers coming from opposite directions need to stop, pull to the side and wait for the on coming car to pass, then pull back into the roadway. This street cannot absorb any more traffic.

The landscaped center median on Capitola Rd. opposite the intersection of Bulb and Capitola Rd. inhibits left turns from Capitola Rd. on to Bulb as well as left turns from Bulb onto Capitola Rd. This creates a situation where every car turning out of the development, who wished to travel in the North/West direction, would turn left on Bulb, then drive down Bulb to Brommer. Turning Bulb into a one-way street in the Brommer to Capitola Rd. direction would cause all vehicles on Bulb who wish to drive in the North/West direction to turn right on Capitola Rd. (as there is no left turn), then make a U turn on 41st Ave. OR travel South, down 38th Ave. down Brommer, and to 30th Ave. to access the traffic light at 30th and Capitola Rd.

Ingress and Egress must be designed on the Capitola Rd. portion of the project and not on Bulb Ave.
3) Noise: Parking, garbage, generator, ambulance access on Bulb Ave. is unacceptable.

DocuSign Envelope ID: 9637E779-A0B0-4D72-BE58-6528BB7A33D7 177
Item 9 B.
4) We will require, at the developer’s expense to construct a stucco wall between my property and the project that would mitigate sound and as much of view of the project as possible. 5) The current initial design also displays a Generator and Dumpster enclosures at the rear of the property directly next to my back yard. What is so worrisome is that had the designer spent one minute walking the property before creating the design, they would know that they had placed the dumpster enclosure and generator at the worst possible location as far as neighbor disturbance. My bedroom is only a few yards from these enclosures.

Lastly, it is time for Capitola to open its public meetings to the public, in person. Create a hybrid meeting so that those who remain fearful of COVID 19 may interact electronically. The website question feature is too unreliable – we attempted to speak at the October 6 meeting, but the feature was not available, and the audio was not working.

Thank you,
Scott Barnes
(831) 818-5067
[email protected]
cc: Manu Koenig
701 Ocean St. #500A
Santa Cruz, CA 95060

DocuSign Envelope ID: 9637E779-A0B0-4D72-BE58-6528BB7A33D7 178
Item 9 B.

October 18, 2022
Susan Steely
1475 Bulb Avenue
Santa Cruz, CA 95062
Attention: City of Capitola Planning Commission
RE: 3720 Capitola Rd.&1610 Bulb Ave.

Permit # 22-0149
APN:034-18-114 and 131-12-139
Dear Planning Commission and Council Members,
I am an owner on 1475 Bulb Ave. and have reviewed the development packet and have concerns that need to be addressed before annexation of 1610 Bulb Ave by Capitola and the development of this intrusive project into our residential neighborhood.

1. First of all, I am of that age group, 65 and older, to which that this development is purportedly to be a “substantial benefit to the community. However, no one has taken into consideration that this age group are dominantly long-time homeowners who will make the improvements necessary to live their lives in their own homes and have no need for this facility. I believe that it is a stated goal of Capitola to help to seniors to maintain their homes.

2. The proposed height and land dominance of 80+ units is ludicrous to say it will not have an aesthetic impact on a single family residence street.

3. The primary objections is that the physical street size, lane width, inconsistency of contiguous sidewalks, is proof that Bulb Ave is not adequate to handle increased traffic density in both directions. The neighborhood of families uses the street for parking and it is often impossible for two cars to pass without one moving to the side.

4. Not only will the street be impacted by shuttles, cars, deliveries, emergencies, etc., the idea that ALL this ingress and egress is planned to enter the facility from Bulb Ave. ONLY is beyond feasible or acceptable to the residents. This is a neighborhood with a population of families of small children(directly across the street from the planned driveway), kids on bikes, wheelchair neighbors, kids playing basketball, and riding bikes. Remember, there are no continuous sidewalks so to go from Capitola Rd to Brommer St., anyone of these examples will have to enter the street at some point. Therefore, any further addition of traffic, is a definite safety issue to us.

5. This location is also a physically unacceptable location for such a facility because of the landscaped center median on Capitola Rd.at the corner of Bulb inhibits left turns from Capitola onto Bulb. This creates the obvious scenario that every vehicle leaving the facility would traverse the ENTIRE block of Bulb in order to head NW on Capitola Rd and go around the block and affect traffic density on Thompson Ave. or any other road connecting to Capitola Rd. 179
Item 9 B.

6. Not mentioned at all is the impact of becoming a busy street with added traffic beyond the resident traffic, cut through traffic from Jade St and Capitola Rd going toward the beach, Lucky’s large food trucks, and our normal delivery/mail/garbage trucks, on the real estate values. As a real estate broker of 30+ years, it is a given fact that families with children do not want to live on busy streets. Period. Therefore, this special cohesive neighborhood of block parties and neighborhood sharing will decrease in value to prospective family homebuyers.

I appreciate your serious consideration of facts that have been overlooked in the project analysis and the primary fact that it does not “minimize adverse impacts to neighboring properties to the greatest extent possible….” as stated in the proposal.

Sincerely,
Susan Steely
831-713-8818
180
Item 9 B.

October 18, 2022
Capitola Planning Commision/Capitola City Council
RE: 3720 Capitola Rd & 1610 Bulb Ave
#22-0149
APN: 034-181-14, 031-12-139
Dear representatives of Capitola, my family and I are residents on Bulb Avenue. We have seen the conceptual plans for the proposed senior living facility and have concerns that it, as currently designed, will create a negative impact on our neighborhood.

Although the property owner claims this facility will have a minimal impact on the community, they must be referring to the Capitola community only and not the residents of Bulb Avenue. Let’s be clear, the footprint of this campus is mostly on Bulb Ave and not on Capitola Rd. As well, there are no city residents close to this property. Only the residents of Live Oak. Please give our concerns some credence as you make your decisions on this building and design request.

1. The intersection of Bulb Ave and Capitola Rd is and has always been problematic. The AT&T building located there is built out to the sidewalk and obscures the right turn onto our street. Because it is already narrow; anyone making that turn has to hope there are no cars coming down Bulb as this creates a head on collision possibility. Any parked vehicles will greatly exacerbate the situation.

Increased traffic associated with the care facility will cause traffic congestion and could cause an increase in vehicle accidents.

2. Traffic coming from Brommer will most assuredly increase. There are many young families that reside here. You can often see kids playing in the street, people walking their dogs, or residents strolling down the middle of the street. This is not 41st avenue as the brochures have tried to suggest. It is actually quite narrow to the point that two cars cannot travel past each other without one pulling to the side and waiting for the other to pass. Any additional traffic load would strain the functionality of our street.

3. Not to be ignored is the visual impact of the facility on neighbors. As proposed, the building and parking area are visually overbearing. There is no attempt in the design to blend it with adjacent buildings and homes. No one wants to walk out their front door and feel that they live in the middle of a hospital campus. Obscuring the building and parking area with landscaping and fencing would go a long way to make this project more palatable to the people that live here. 181
Item 9 B.

4. Community benefit. Will the senior citizens of Capitola really be able to afford to live in this care facility or is this another high-priced senior residence that will only cater to those lucky enough to have healthy bank accounts. It is not uncommon that senior care facilities charge $10,000 or more per month per resident. It is mostly beneficial to the property owner and the city that receives the tax revenue.

Thank you for taking the time to consider these points of concern.

Tony and Georgina Ainsworth
1535 Bulb Avenue
Santa Cruz, CA
Cc: Manu Koenig
701 Ocean St. #500A
Santa Cruz, CA 95060
182
Item 9 B.

October 19, 2022
The city received a letter from Alison and Tim Knox on October 19, 2022. The archived digital file was damaged and unrecoverable. The original email that delivered the comment letter was also deleted pursuant to the City’s email retention policy.
183
Item 9 B.

Conceptual Review
Incentives for
Community Benefit
Annexation Request
Community Benefit:

Senior Living and
Care Facility
184
Item 9 B.

1. Processes
a) Conceptual Review
b) Annexation

2. Site Overview

3. Background - Planning Commission Review

4. Updated Design

5. Community Benefit Analysis

6. Annexation Request
Presentation Overview
185
Item 9 B.

Community Benefit Review Process
Step 1: Conceptual Review Application submitted
Step 2: Planning Commission Conceptual Review
Step 3: City Council Conceptual Review
Step 4: Applicant submits formal application for
entitlements
Step 5: PC hearing and recommendation
Step 6: City Council Action (approve/deny)
Conceptual
Review:

Nonbinding input
from the PC and
City Council as to
whether project
qualifies as a
Public Benefit
and eligible for
incentives.
186
Item 9 B.

Annexation Process – 9-12 Months
Step 1: Applicant initiation request to LAFCO
Step 2: LAFCO requests authorizing to proceed from agencies (first 30 days) Step 3: City Pre-zoning, LAFCO prepares recording documents Step 4: City / County revenue neutrality agreement
Step 5: LAFCO Hearing (approval/denial)
Notes: Agencies can pull support for annexation at anytime prior to recording.

Annexation can be conditioned to hold recording until project approved. 187
Item 9 B.

Site Plan
Annexation
Request
3720 = 27,094 sf
1610 = 13,416 sf
Total = 40,510 sf
Capitola Road Bulb Avenue
TARGET
3720
1610 38th Avenue
PacBell
188
Item 9 B.

Sphere of Influence Map
Sphere of
Influence
City
Boundary
Project
Vicinity
189
Item 9 B.
1610 Bulb Ave 38th Ave
Zoning and City Boundary
3720
City Boundary
Road
Santa Cruz
County 41st Ave
190
Item 9 B.

Site Overview
191
Item 9 B.

Site Overview
Bulb Avenue
3720 Capitola Rd.
192
Item 9 B.

Bulb Avenue
1610 3720
Site Overview
193
Item 9 B.

Background/Planning Commission Review
• Heard on October 20, 2022 – Four Commissioners suggested not eligible for Public Benefit
• Neighborhood comments: parking, narrow street, noise, traffic, incompatible use
• Applicant placed project on hold
• Reversed layout
• Objective Design Standards: Buildings along primary frontage with parking behind
194
Item 9 B.

Bulb Avenue Capitola Road
(previous) Site Plan 195
Item 9 B.

Bulb Avenue Capitola Road
(current) Site Plan 196
Item 9 B.
(p) Front
Capitola Road
197
Item 9 B.
(p) Bulb Side
198
Item 9 B.
(p) Rear
199
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Project Fact Sheet
Lots Size 40,510 sf
Units/Beds 87/91
Building Size 67,041 sf
Building Height 50 feet
33*
54 required
*Parking Study
Parking Spaces
Front Setback (North) 60+ feet
Rear Setback (South) 20 feet
Interior Side (East) 5 feet
15 feet from
curb
Street Side (West)
-3rd and 4th
floor step backs
-3rd floor decks
-4th floor
corridor facing
R-1
Design Mitigations
200
Item 9 B.

Chapter 17.88: Incentives for Community Benefits
Purpose: Establishes incentives for projects that provide substantial benefits to community
• Intended to facilitate redevelopment of underutilized properties consistent with general plan along 41st Avenue and Capitola Road corridor
• Must significantly advance general plan goals and policies. 201
Item 9 B.

Eligible Projects - 17.88.040 A

1. Public Open Space

2. Public Infrastructure

3. Pedestrian and Bicycle Facilities

4. Low-Cost Visitor Serving Amenities

5. Transportation Options

6. Historic Resource Preservation

7. Public Parking

8. Green Building

9. Public Art

10. Child Care Facility

11. Other Community Benefit – proposed by the applicant that are significant and substantial beyond normal requirements. 202
Item 9 B.

Community Benefit Required Findings:

1. Provides a substantial benefit to the community and
advance the goals of the general plan.

2. There are adequate public services and infrastructure to accommodate.

3. The public benefit exceeds the minimum requirements
of the zoning code or any other provisions of local,
state, or federal law.

4. Minimizes adverse impacts to neighboring properties to the greatest extent possible.

5. Enhances coastal resources, if in Coastal Zone (N/A) 203
Item 9 B.

Allowed Incentives
Community
Benefit
Increased
Height
Increased
Floor Area

1.0 to 2.0 35 ft to 50 ft
204
Item 9 B.

General Plan – Housing Element
Goal 3.0 Housing for Persons with Special Needs - opportunities for seniors and people with disabilities.

Policy 3.1: Support housing needs of special needs groups, including the elderly population.

Policy 3.3: Support the development of accessible and affordable housing that is designed to serve all ages.

Policy 3.6: Encourage special needs housing readily accessible to public transit, shopping, public amenities, and supportive services.

Policy 3.7: Encourage supportive services for persons with special needs.

Policy 3.8: Encourage the development of a variety of housing options for seniors including assisted living, mobile home parks, co-housing, accessory dwelling units, and independent living. 205
Item 9 B.

Staff Recommendation:

Provide applicant with nonbinding input on eligibility for Public Benefit – no vote required
If there is general support for the project concept, provide preliminary design feedback – no vote required
Authorize Mayor to sign a letter of support for annexation of 1610 Bulb Avenue into Capitola City limits to the Local Agency Formation Commission – vote required
206
Item 9 B.

Capitola City Council
Agenda Report
Meeting: January 25, 2024
From: Finance Department
Subject: Transient Occupancy Tax Audit Update
Recommended Action: Receive report and provide direction to staff.

Background: In January 2022 HdL Lodging Tax began administering the City’s Transient Occupancy Tax (TOT) program. HdL’s services include processing registrations, tax returns, and payments, monitoring short-term rental sites, and conducting audits. HdL’s first audit was conducted in 2022.

Discussion: During 2023 HdL audited five hotel properties for the three years between January 2020 and July 2023. The hotels were provided with a three week notice to gather requested documentation and an opportunity to meet virtually with HdL following a review of the submitted documents.

Four of the hotel operators were responsive to the requests and the auditors were able to complete the audit of those properties. One operator has requested several extensions and HdL and staff continue to work with the operator to complete the fifth audit.

Of the four completed audits, one property was found to be completely compliant, while the other three had various charges that were not properly taxed. The Capitola Municipal Code defines Rent as “the consideration, whether or not received, for the occupancy of space in a hotel, valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever.” The charges that were not taxed included items such as cancellation fees, pet fees, room upgrades, extra person charges, smoking, and cleaning fees, as well as exempt and compensated rooms. A summary of the audit findings is as follows:

Property Finding TOT Penalties Interest Total
Hotel 1 Untaxed guest charges 6,448 1,290 2,206 $9,944
Hotel 2 Untaxed guest charges 14,377 2,875 4,458 $21,710 Hotel 3 Untaxed guest charges,
exemptions, comp rooms
10,678 2,136 4,324 $17,138
Totals 31,503 6,301 10,988 $48,792
It should be noted the TOT was not collected by the hotels and the penalties and interest are calculated from the date the TOT was due if it had been collected as a portion of the rent charged. 207
Item 9 C.

HdL has provided three options for the City to consider regarding the audit findings:

1. Require hotels to provide all requested documents to confirm tax-exemptions. Hotels unable to provide all requested documents will have exemptions become taxable rent with uncollected TOT charges, penalties, and interest.

2. Follow option one but waive penalties and interest.

3. Allow hotel exemptions to stand during the audit period. Require hotels to use updated forms with a standard checklist as provided by the City beginning with a specified filing period.

HdL is recommending option 1, however, staff would like to use the audit as an educational opportunity and is recommending option 3 beginning with the January 2024 filing period due March 11, 2024. This item was presented to the Finance Advisory Committee (FAC) on January 16th and the FAC concured with staff’s recommendation.

Fiscal Impact: Option 1 would result in additional one-time revenue of $48,792 and an estimated on-going annual revenue of $10,000; Option 2 would result in additional one-time revenue of $31,503 and an estimated on-going annual revenue of $10,000; and Option 3 would result in estimated additional on-going annual revenue of $10,000.

Report Prepared By: Jim Malberg, Finance Director
Reviewed By: Julia Gautho, City Clerk, Samantha Zutler, City Attorney Approved By: Jamie Goldstein, City Manager
208
Item 9 C.
2023 TOT
Audit
Update
209
Item 9 C.
2023 TOT Audit
• HdL audited 5 hotels
• Completed 4 audits, still working on 5th
• One hotel in 100% compliance
• Three hotels with audit findings
• Untaxed charges such as cleaning fees, cancellation fees, compensated rooms, etc.
• Unconfirmed exempted rooms
• Summary of findings:

Property Finding TOT Penalties Interest Total
Hotel 1 Untaxed guest charges 6,448 1,290 2,206 9,944
Hotel 2 Untaxed guest charges 14,377 2,875 4,458 21,710 10,678 2,136 4,324 17,138 Untaxed guest charges,
exemptions, comp rooms Hotel 3
Totals 31,503 6,301 10,988 48,792210
Item 9 C.
2023 TOT Audit
• HdL provided 3 options for consideration

1. Require hotels to provide all requested documents to confirm tax-exemptions. Hotels unable to provide all
requested documents will have exemptions become
taxable rent with uncollected TOT charges, penalties, and interest.

2. Follow option one but waive penalties and interest.

3. Allow hotel exemptions to stand during the audit period.

Require hotels to use updated forms with a standard
checklist as provided by the City beginning with a
specified filing period.
211
Item 9 C.
2023 TOT Audit
• Fiscal Impact
• Option 1 would result in additional one-time revenue of $48,792 and estimated on-going annual revenue of $10,000 • Option 2 would result in in additional one-time revenue of $31,503 and estimated on-going annual revenue of $10,000 • Option 3 would result in estimated additional on-going annual revenue of $10,000.
• HdL recommends Option 1
• Staff recommends Option 3
• Use audit as educational, not punitive
• Hotels did not actually collect TOT
212
Item 9 C.
2023 TOT Audit
• Finance Advisory Committee (FAC)
• Presented to the FAC Jan. 16, 2024
• FAC concurred with staff’s recommendation of Option 3 • Beginning February 2024
• Hotels
• Staff advised all 3 hotel operators of tonight’s agenda item • Operators noted that other agencies in SC County exempt some charges from TOT that Capitola includes
213
Item 9 C.
2023 TOT Audit
• Recommended Action:
• Authorize staff to waive amount due based on
audit.
• Direct staff to work with hotel operators regarding
future TOT collections.
214
Item 9 C.

Capitola City CouncilJanuary 25, 2024

Capitola City Council
January 25, 2024