hazardous waste collections, composting, and the continuance of recycling centers. [2000 GP Policy CON-1B.4 – Modified for 2015-2035 GP]
CON-2.A.11 Continue construction and demolition programs that require recycling and minimize waste in haul trips. [New Policy for 2015-2035 GP]
Goal CON-3:
Improved Water Supply and Quality
Pursue a multijurisdictional approach to protecting, maintaining, and improving water quality and the overall health of the watershed. A comprehensive, integrated approach will ensure compliance with federal and State standards, and will address a range of interconnected priorities, including water quality and runoff; stormwater capture, storage, and flood management techniques that focus on natural drainage; natural filtration and groundwater recharge through green infrastructure and habitat restoration; and water recycling and conservation. [New Goal for 2015-2035 GP]
Objective CON-3.A: Work towards the protection and conservation of existing and future water resources by recog nizing water as a limited resource that requires conservation. [2000 GP Objective CON-1B]
Water Supply
CON-3.A.1: Continue to consult with local water districts and the Orange County Water District to ensure reliable, adequate, and high-quality sources of water supply at a reasonable cost. [ 2000 GP Policy CON-1B.3 – Modified for 2015 -2035 GP]
Water Conservation
CON-3.A.2: Encourage residents, public facilities, businesses, and industry to minimize water consumption, especially during drought years. [2000 GP Policy CON- 1B.3 – Modified for 2015-2035 GP]
CON-3.A.3: Restrict use of turf in new construction and landscape reinstallation that requires high irrigation demands, except for area parks and schools, and encourage the use of drought -tolerant landscaping. [2000 GP Policy 1A.2 – Modified for 2015-2035 GP]
Water Recycling
CON-3.A.4: Consult with local water districts and the Orange County Water District to advance water recycling program for new and existing developments, including the use of treated wastewater to irrigate parks, golf courses, roadway landscaping, and other intensive irrigation consumers. [ 2000 GP Policy CON-1B.2 – Modified for 2015-2035 GP]
Water Quality and Urban Runoff
CON-3.A.5: Work with public and private property owners to reduce stormwater runoff in urban areas to protect water quality in storm drainage channels, the Santa Ana River, and other local water courses that lead to the Pacific Ocean. [New Policy for 2015-2035 GP]
CON-3.A.6: Continue to develop strategies to promote stormwater management techniques and storm drain diversion programs that collectively and naturally filter urban runoff. [2000 GP Policy CON-1E.5 – Modified for 2015-2035 GP]
CON-3.A.7: Continue to comply with the National Pollutant Discharge Elimination System Program (NPDES) by participating in the Countywide Drainage Area Management Plan (DAMP), which stipulates water quality requirements for minimizing urban runoff and discharge from new development and requires the provisions of applicable Best Management Practices (BMP). [ 2000 GP Policy CON-1A.3]
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CON-3.A.8: Require that all applicable development projects be reviewed with regards to requirements of both the on -site Water Quality Management Plan and State requirements for runoff and obtaining a Storm Water Pollution Prevention Plan (SWPPP) permit. [2000 GP Policy CON-1E.6 – Modified for 2015-2035 GP]
Municipal Sewer System
CON-3.A.9: Continue to consult with the Costa Mesa Sanitation District and the Orange County Sanitation District to modernize wastewater treatment facilities to avoid overflows of untreated sewage. [New Policy for 2015-2035 GP]
Goal CON-4:
Improved Air Quality
Take steps to improve and maintain air quality for the benefit of the health and vitality of residents and the local economy. In alignment with State emissions reduction goals and in cooperation with the South Coast Air Quality Management District, pursue regional collaboration to reduce emissions from all sources. [New Goal for 2015-2035 GP]
Objective CON-4.A: Pursue the prevention of the significant deterioration of local and regional air quality. [2000 GP Objective CON-1E]
Air Quality
CON-4.A.1: Support regional policies and efforts that improve air quality to protect human and environmental health, and minimize disproportionate impacts on sensitive population groups. [New Policy for 2015-2035 GP]
CON-4.A.2: Encourage businesses, industries and residents to reduce the impact of direct, indirect, and cumulative impacts of stationary and non -stationary pollution sources. [New Policy for 2015-2035 GP]
CON-4.A.3: Require that sensitive uses such as schools, childcare centers, parks and playgrounds, housing, and community gathering places are protected from adverse impacts of emissions. [New Policy for 2015-2035 GP]
CON-4.A.4: Continue to participate in regional planning efforts with the Southern California Association of Governments, nearby jurisdictions, and the South Coast Air Quality Management District to meet or exceed air quality standards. [2000 GP Policy CON-1E.1]
Climate Change
CON-4.A.5: Encourage compact development, infill development, and a mix of uses that are in proximity to transit, pedestrian, and bicycling infrastructures. [New Policy for 2015-2035 GP]
CON-4.A.6: Enhance bicycling and walking infrastructure, and support public bus service, pursuant to the Circulation Element’s goals, objectives, and policies. [New Policy for 2015-2035 GP]
CON-4.A.7: Encourage installation of renewable energy devices for businesses and facilities and strive to reduce community-wide energy consumption. [New Policy for 2015-2035 GP]
CON-4.A.8: Develop long-term, community-wide strategies and programs that work at the local level to reduce greenhouse gases and Costa Mesa’s “carbon footprint”. [New Policy for 2015-2035 GP]
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Noise Element
The goals, objectives, and policies that address noise are as follows:
Goal N-1:
Noise Hazards and Conditions
The City of Costa Mesa aims to protect residents, local workers, and property from injury, damage, or destruction from noise hazards and to work toward improved noise abatement. [2000 GP Goal N-1]
Objective N-1A: Control noise levels within the City for the protection of residential areas, park areas, and other sensitive land uses from excessive and unhealthful noise. [2000 GP Objective N-1A]
N-1.1: Enforce the maximum acceptable exterior noise levels for residential areas at 65 CNEL. [2000 GP Policy N-1A.2]
N-1.2: Give full consideration to the existing and projected noise environment when considering alterations to the City's circulation system and Master Plan of Highways. [2000 GP Policy N-1A.3]
N-1.3: Encourage Caltrans to construct noise attenuation barriers along I -405, SR-55, and SR -73 where these freeways adjoin residential and other noise -sensitive areas. [2000 GP Policy N-1A.4]
N-1.4: Ensure that appropriate site design measures are incorporated into residential developments, when required by an acoustical study, to obtain appropriate exterior and interior noise levels.
When necessary, require field testing at the time of project comp letion to demonstrate compliance. [2000 GP Policy N-1A.5]
N-1.5: Apply the standards contained in Title 24 of the California Code of Regulations as applicable to the construction of all new dwelling units. [2000 GP Policy CON-1C.2 and Policy N-1A.6]
N-1.6: Discourage sensitive land uses from locating within the 65 CNEL noise contour of John Wayne Airport. Should it be deemed by the City as appropriate and/or necessary for a sensitive land use to locate in the 65 CNEL noise contour, ensure that appropriate interior noise levels are met and that minimal outdoor activities are allowed. [2000 GP Policy N-1A.7]
N-1.7: Support alternative methods for the reduction of noise impacts at John Wayne Airport while continuing to maintain safety and existing limitations on aircraft daily departures. [2000 GP Policy N-1A.8]
N-1.8: Monitor the noise levels at OC Fair and Event Center and the Pacific Amphitheater, and continue to monitor the status of legally binding noise levels on the OC Fair and the Event Center and the Pacific Amphitheater. [New Policy for 2015 -2035 GP]
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Goal N-2:
Noise and Land Use Compatibility
Integrate the known impacts of excessive noise on aspects of land use planning and siting of residential and non-residential projects. [New Goal for 2015-2035 GP]
Objective N-2A: Plan for the reduction in noise impacts on sensitive receptors and land uses. [New Objective for 2015-2035 GP]
N-2.1: Require the use of sound walls, berms, interior noise insulation, double -paned windows, and other noise mitigation measures, as appropriate, in the design of new residential or other new noise sensitive land uses that are adjacent to arterials, freeways, or adjacent to industrial or commercial uses. [New Policy for 2015-2035 GP]
N-2.2: Require, as a part of the environmental review process, that full consideration be given to the existing and projected noise environment. [2000 GP Policy N-1A.1]
N-2.3: Consider alternative noise level standards for mixed -use projects that take into consideration the interaction of industrial operation noise impacts and the mixed - use developments planned for the Westside and SoBeca. [New Policy for 2015 - 2035 GP]
N-2.4: Require that all proposed projects are compatible with adopted noise/land use compatibility criteria. [New Policy for 2015-2035 GP]
N-2.5: Enforce applicable interior and exterior noise standards. [New Policy for 2015 - 2035 GP]
N-2.6: Allow a higher exterior noise level standard for infill projects in existing residential areas adjacent to major arteri als if it can be shown that there are no feasible mechanisms to meet the exterior noise levels. The interior standard of 45 dBA CNEL shall be enforced for any new residential project. [New Policy for 2015-2035 GP]
N-2.7: Encourage effective site planning in mixed -use areas that provides the optimal distance between source of excessive sound and residents. [New Policy for 2015- 2035 GP]
N-2.8: Require new mixed -use developments to site loading areas, parking lots, driveways, trash enclosures, mechanical equipment, and other noise sources away from the residential portion of the development and adjacent established residential development. [New Policy for 2015-2035 GP]
N-2.9: Limit hours and/or require attenuation of commercial/entertainment operations adjacent to residential and other noise sensitive uses in order to minimize excessive noise to these receptors. [New Policy for 2015-2035 GP]
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Safety Element
The goals, objectives, and policies that address safety are as follows:
Goal S-1:
Risk Management of Natural and Human-Caused Disasters
Minimize the risk of injury, loss of life, property damage, and environmental degradation from seismic activity, geologic hazards, flooding, fire, and hazardous materials. Promote a sustainable approach to reduce impacts of natural disasters, such as flooding and fire. [2000 GP Goal SAF-1]
Objective S-1A: Work to mitigate and prevent potential adverse consequences of natural and human-caused disasters. [2000 GP Objective SAF-1A]
Geologic and Seismic Safety
S-1.1: Continue to incorporate geotechnical hazard data into future land use decision - making, site design, and construction standards. [2000 GP Policy SAF-1A.1]
S-1.2: Enforce standards, review criteria, and ensure that structures on or adjacent to bluffs are set back sufficiently to preserve the natural contours and aesthetic value of the bluff line and to provide sufficient access for fire protection. [2000 GP Policy SAF-1A.2]
S-1.3: Require geologic surveys of all new development located on or adjacent to bluffs. [2000 GP Policy SAF-1A.3]
S-1.4: Encourage retrofitting of structures —particularly older buildings —to withstand earthquake shaking and landslides consistent with State and historical building codes. [2000 GP Policy SAF-1A.6 – Modified for 2015-2035 GP]
S-1.5: Enforce applicable building codes relating to the seismic design of structures to reduce the potential for loss of life and property damage. [New Policy for 2015 - 2035 GP]
S-1.6: Identify through a study the issue of unreinforced masonry buildings and soft stories and other structures not meeting earthquake standards in Costa Mesa.
Provide assistance if necessary to unreinforced masonry building owners once those buildings have been identified. [New Policy for 2015-2035 GP]
Liquefaction and Landslides
S-1.7: Continue to implement the Seismic Hazard Mapping Act, which requires sites within liquefaction hazard areas to be investigated for liquefaction susceptibility prior to building construction or human occupancy. [2000 GP Policy SAF-1A.5 – Modified for 2015-2035 GP]
S-1.8: Consider site soils conditions when reviewing projects in areas subject to liquefaction or slope instability. [ 2000 GP Policy SAF-1A.4 – Modified for 2015 - 2035 GP]
Localized Flooding
S-1.9: Continue to consult with appropriate local, State, and federal agencies to maintain the most current flood hazard and floodplain information; use the information as a basis for project review and to guide development in accordance with federal, State, and local standards. [ 2000 GP Policy SAF-1A.8 – Modified for 2015-2035 GP]
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S-1.10: Regularly review and update Article 10 - Floodway and Floodplain Districts of the City’s Municipal Code consistent with federal and State requirements. [New Policy for 2015-2035 GP]
S-1.11: Improve and maintain local storm drainage infrastructure in a manner that reduces flood hazards. [New Policy for 2015-2035 GP]
S-1.12: Continue to develop hazard preparedness plans to prepare for large storms that could bring flooding hazards and other related issues. [2000 GP Policy SAF-1A.8 – Modified for 2015-2035 GP]
S-1.13: Actively promote public education, research, and information dissemination on flooding hazards. [2000 GP Policy SAF-1A.8 – Modified for 2015-2035 GP]
Tsunami and Sea Level Rise
S-1.14: Minimize flood hazard risks to people, property, and the environment by addressing potential damage tsunamis and sea level rise. [New Policy for 2015 - 2035 GP]
S-1.15: Consult with regional agencies and study strategies that employ engineering defensive methods along the Santa Ana River that limit potential flooding hazards from sea level rise. [New Policy for 2015-2035 GP]
Dam Inundation
S-1.16: Develop emergency response, early warning notification, and evacuation plans for areas that are within dam inundation areas, where feasible. [New Policy for 2015- 2035 GP]
Aviation Safety and Protection
S-1.17: Utilize the John Wayne Airport Environs Land Use Plan (AELUP) as a planning resource for evaluation of land use compatibility and land use intensity in areas affected by airport operations. In particular, future land use decisions within the Safety/Runway Protection Zone will be evaluated in light of the risk to life a nd property associated with aircraft operations. [New Policy for 2015-2035 GP]
S-1.18: Comply with Federal Aviation Regulations (FAR) and the John Wayne AELUP requirements relative to Objects Affecting Navigable Airspace. [New Policy for 2015-2035 GP]
S-1.19: Use the Federal Aviation Regulations as a guideline to establish the ultimate height of structures as defined in FAR Part 77. [New Policy for 2015-2035 GP]
S-1.20: Minimize hazards to aeronautical operations by ensuring land uses do not emit excessive glare, light, steam, smoke, dust, or electronic interference in compliance with FAR regulations and the John Wayne AELUP. [New Policy for 2015-2035 GP]
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Goal S-2:
High Level of Police and Fire Services and Emergency Preparedness
Provide a high level of security in the community to prevent and reduce crime, and to minimize risks of fire to people, property, and the environment. [New Goal for 2015-2035 GP]
Objective S-2A: Plan, promote, and demonstrate a readiness to respond and reduce threats to life and property through traditional and innovative emergency services and programs. [New Objective for 2015-2035 GP]
Crime Prevention and Response
S-2.1: Promote crime prevention strategies and provide a high level of response to incidents. [New Policy for 2015-2035 GP]
S-2.2: Emphasize and prioritize crime prevention strategies, such as pedestrian -scale lighting in targeted areas. [New Policy for 2015-2035 GP]
S-2.3: Timely response to incidents and monitoring areas with high crime rates should be part of a comprehensive strategy to reduce crime in the community. [New Policy for 2015-2035 GP]
Police and Fire Level of Service
S-2.4: Provide a high level of police and fire service in the community. Secure adequate facilities, equipment, and personnel for police and fire. [New Policy for 2015-2035 GP]
S-2.5: Consult with neighboring jurisdictions and partner agencies to respond appropriately to emergencies and incidents in all parts of the City. [New Policy for 2015-2035 GP]
S-2.6: Require that water supply systems for development are adequate to combat structural fires in terms of location and minimum required fire-flow pressures. [New Policy for 2015-2035 GP]
S-2.7: Require development to contribute its fair share toward funding the provision of appropriate fire and emergency medical services as determined necessary to adequately serve the project. [New Policy for 2015-2035 GP]
Fire and Medical Servicers
S-2.8: Regularly update regulations that will protect the community from fire hazards. [New Policy for 2015-2035 GP]
S-2.9: Emphasize prevention and awareness of fire safety guidelines to minimize risk and potential damage to life, property, and the environment. In areas designated by the Costa Mesa Fire Department as having a high fire hazard, ensure adequate fire equipment, personnel, firebreaks, facilities, water, and access for a quick and efficient response in any area. [New Policy for 2015-2035 GP]
Emergency and Disaster Preparedness
S-2.10: Maintain staff and facilities that will continue to support a coordinated and effective response to emergencies and natural disasters throughout the City. [New Policy for 2015-2035 GP]
S-2.11: Consult with neighboring jurisdictions, local employers, and industries to ensure that emergency preparedness and disaster response programs equitably serve all parts of the City. [New Policy for 2015-2035 GP]
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S-2.12: Continue to maintain adequate police and fire staffing, facilities, equipment, and maintenance sufficient to protect the community. [New Policy for 2015-2035 GP]
Hazardous Materials Operations
S-2.13: Continue to consult with the County of Orange in the implementation of the Orange County Hazardous Waste Management Plan. [2000 GP Policy SAF-1B.1]
S-2.14: Ensure that appropriate in -depth environmental analysis is conducted for any proposed hazardous waste materials treatment, transfer, and/or disposal facility. [2000 GP Policy SAF-1B.2]
S-2.15: Continue to consult with the County of Orange to identify and inventory all users of hazardous materials and all hazardous waste generators, and prepare clean-up action plans for identified disposal sites. [2000 GP Policy SAF-1B.3]
S-2.16: Require the safe production, transportation, handling, use, and disposal of hazardous materials that may cause air, water, or soil contamination. [New Policy for 2015-2035 GP]
S-2.17: Encourage best practices in hazardous waste management, and ensure consistency with City, County, and federal guidelines, standards, and requirements. [2000 GP Policy SAF-1B.1 – Modified for 2015-2035 GP]
S-2.18: Consult with federal, State, and local agencies and law enforcement to prevent the illegal transportation and disposal of hazardous waste. [New Policy for 2015-2035 GP]
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Community Design Element
The goals, objectives, and policies that address community design are as follows:
PUBLIC REALM FOCUS
Goal CD-1:
Vehicular and Pedestrian Corridors
Strengthen the image of the City as experienced from sidewalks and roadways. [2000 GP Goal CD-1]
Objective CD-1A: Contribute to City beautification by enhancing the visual environment of Costa Mesa’s vehicular and pedestrian paths and corridors. [2000 GP Objective CD-1A]
CD-1.1 Implement the City of Costa Mesa Streetscape and Median Development Guidelines in all new streetscape corridor and parkway projects. Coordinate with new development adjacent to public rights-of-ways to integrate landscape features and design elements consistent with the streetscape standards and recommendations. [2000 GP Policy CD-1A.1]
CD-1.2 Coordinate street furniture elements (benches, bus shelters, newspaper racks, trash receptacles, kiosks, etc.) whenever possible. Develop design standards and guidelines for the street furniture within and adjacent to public rights -of-way to complement the specific recommendations provided for streets in the City of Costa Mesa Streetscape and Median Development Guidelines. [New Policy for 2015- 2035 GP]
CD-1.3 Promote treatments for walls and fences and utility cabinets along public rights-of- way that contribute to an attractive street and sidewalk environment. Require that new walls and fences complement the style and character of the local district an d adjacent buildings. Newly constructed or reconstructed walls and fences adjacent to sidewalks and roadways should incorporate architectural treatments such as pilasters, masonry, or wrought iron, and should integrate tiered plantings to soften their appearance. [2000 GP Policy CD-1A.3 – Modified for 2015-2035 GP]
CD-1.4 Promote a consistent landscape character along City streets to reinforce the unique qualities of each corridor and district, including the development of landscaped medians. Support implementation of the recommended street tree palette for each City street, as identified in the City of Costa Mesa Streetscape and Median Development Guidelines. [2000 GP Policy CD-1A.4]
CD-1.5 Encourage electric and communication lines to be placed underground and electrical substations and telephone facilities to be screened to minimize visual impacts from sidewalks, streets, and adjacent properties. Support utility undergrounding through conditions of project approval, preparation of undergrounding plans, and the formation of assessment districts. [2000 GP Policy CD-1A.5]
Objective CD-1B: Encourage clear connections between districts within the City. [2000 GP Objective CD-1B]
CD-1.6 Promote linkages between separate districts using bike trails, pedestrian paths, common medians or parkway landscaping, and other location-appropriate physical improvements. Through conditions of approval, public improvement projects, and other measures, support development of new connections and the enhancement of existing connections between districts. [New Policy for 2015-2035 GP]
Goal CD-2:
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Cohesive and Identifiable Districts
Enhance the existing character and strengthen the identity of Costa Mesa’s districts. [2000 GP Goal CD- 2]
Objective CD-2A: Encourage future development and redevelopment to reinforce district scale, identity, and urban form. [2000 GP Objective CD-2]
CD-2.1 Consider urban design guidelines for each identified district in Costa Mesa that recognizes, maintains, and enhances the character and identity of each district; integrate existing specific plans’ policies and design guidelines as applicable. [2000 GP Policy CD-2.1 – Modified for 2015-2035 GP]
CD-2.2 Support and seek land uses and development that correspond or enrich our existing districts. [New Policy for 2015-2035 GP]
Goal CD-3:
High Quality and Visually Interesting Nodes
Heighten the design quality and visual interest of nodes within Costa Mesa. [2000 GP Goal CD-3]
Objective CD-3A: Create a sense of arrival to Costa Mesa, and develop prominent community focal points at key nodes within the City. [2000 GP Objective CD-3]
CD-3.1 Introduce entry monument signs at key gateway locations, as identified in Figure CD-4. Utilize the standard design specifications for entry signs included in the City of Costa Mesa Streetscape and Median Development Guidelines. [2000 GP Policy CD-3.1]
CD-3.2 Reinforce a sense of arrival into the City by promoting architecturally significant development and significant landscape plantings at key nodes. Undertake a visioning process to develop specific design guidelines that articulate the desired character for each node within Costa Mesa. [2000 GP Policy CD-3.2]
CD-3.3 Design and development of entry and internal wayfinding signage to be located throughout the City in areas that correspond to the existing nodes and districts. [New Policy for 2015-2035 GP]
Goal CD-4:
Identifiable and Protected City Landmarks. [2000 GP Goal CD-4]
Objective CD-4A: Promote the maintenance, use, and improvement of landmarks to enhance the visual image and identity of Costa Mesa. [2000 GP Objective CD-4]
CD-4.1 Support efforts to introduce new monuments and landmarks, and preserve, maintain, and improve the condition of Costa Mesa landmarks. [2000 GP Policy CD-4.1]
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Goal CD-5:
Edges
Utilize Costa Mesa’s edges as opportunities to enhance the City’s image along its boundaries. [2000 GP Goal CD-5]
Objective CD-5A: Develop and implement programs that preserve and enhance City edges. [2000 GP Objective CD-5]
CD-5.1 Preserve and optimize natural views and open spaces in Costa Mesa. [2000 GP Policy CD-5.1]
CD-5.2 Control the visual impacts of new development on natural views of the coast and the wetlands. [2000 GP Policy CD-5.2]
CD-5.3 Develop open space corridors and trails along the edges of Costa Mesa where feasible and connect these trails to existing and potential future trails throughout the City. [2000 GP Policy CD-5.3]
CD-5.4 Continue to preserve natural open space, including restoration of the natural areas of Talbert Regional Park. [2000 GP Policy CD-5.4]
CD-5.5 Continue protection of Fairview Park as an open space and recreation area. [2000 GP Policy CD-5.5]
CD-5.6 Continue to work with Caltrans to improve the design quality of freeway edges. [2000 GP Policy CD-5.6]
PRIVATE PROPERTY FOCUS
Goal CD-6:
Image
Enhance opportunities for new development and redevelopment to contribute to a positive visual image for the City of Costa Mesa that is consistent with the district image. [2000 GP Goal CD-6]
Objective CD-6A: Establish development policies and design guidelines that create an aesthetically pleasing and functional environment. [ 2000 GP Objective CD-6]
CD-6.1 Encourage the inclusion of public art and attractive, functional architecture into new development that will have the effect of promoting Costa Mesa as the “City of the Arts”. [2000 GP Policy CD-6.1 – Modified for 2015-2035 GP]
CD-6.2 Encourage the use of creative and well-designed signs that establish a distinctive image for the City. [2000 GP Policy CD-6.2 – Modified for 2015-2035 GP]
CD-6.3 Continue to work with Code Enforcement to ensure continued maintenance of properties and compliance with adopted development standards. [2000 GP Policy CD-6.3]
Goal CD-7:
Quality Residential
Promote and protect the unique identity of Costa Mesa’s residential neighborhoods. [2000 GP Goal CD-7]
Objective CD-7A: Encourage excellence in architectural design. [ 2000 GP Objective CD- 7A]
CD-7.1 Ensure that new and remodeled structures are designed in architectural styles that reflect the City’s eclectic quality, yet are compatible in scale and character with existing buildings and the natural surroundings within residential neighborhoods.
Continue to update and maintain the Costa Mesa Residential Guidelines. [ 2000 GP Policy CD-7.1]
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CD-7.2 Preserve the character and scale of Costa Mesa’s established residential neighborhoods where possible; when new residential development is proposed, encourage that the new structures are consistent with the prevailing character of existing development in the immediate vicinity, and that new development does not have a substantial adverse impact on adjacent areas. [2000 GP Policy CD-7.2]
Objective CD-7B: Encourage the use of native plant palettes in the creation of landscaping plans used to establish a sense of place in neighborhood identification efforts. [New Objective for 2015-2035 GP]
CD-7.3 Ensure that California native plants are used to support the local ecology and save water. Develop landscaping guidelines that reflect the local community. [New Policy for 2015-2035 GP]
Goal CD-8:
Quality Commercial Development
Achieve a high level of design quality for commercial development. [2000 GP Goal CD-8]
Objective CD-8A: Encourage a high level of architectural and site design quality. [2000 GP Objective CD-8A]
CD-8.1 Require that new and remodeled commercial development be designed to reflect architectural diversity, yet be compatible with the scale and character of the district. [2000 GP Policy CD-8A.1 – Modified for 2015-2035 GP]
CD-8.2 Use distinctive commercial architectural styles to reinforce a positive sense of place. Commercial architectural design elements and materials must be of high quality and style as well as suitable for long -term maintenance. Consistent architectural design should be considered in choo sing materials, finishes, decorative details, color, accent features and include the following elements and materials appropriate for their context (see Table CD-3: Elements and Materials):
[2000 GP Policy CD-8A.2 – Modified for 2015-2035 GP]
Table CD-3: Elements and Materials
Design Elements Design Materials
• Simple, multi-planed pitched roofs
• Open rafters/tails with large overhangs
• Appearance of “thick” walls
• Courtyards, arcades, and intimate spaces
• Tile details
• Deep-set window and door openings
• Offset wall planes
• Fountains and other unique details
• Building masses with the incorporation of
one and two story architecture
• Sequencing of enclosed space/arches
• Stucco, smooth, sand or light lace
finish
• Wood, as an exposed structural
material
• Clay or concrete roof tiles
• Native fieldstone
• Wood window casements
• Wood, as an accent material
• Brick, as an accent material
• Wrought iron (rust proof; anodized
aluminum)
• Tile, as an accent material
• Slumpstone garden walls
CD-8.3 Encourage the use of entrance patios, courtyards, plazas, arcades, fountains, porches, tower elements, covered walks, and other features in commercial areas.
Promote pedestrian amenities. [2000 GP Policy CD-8A.3]
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CD-8.4 Ensure that common areas, walkways, driveways, and parking spaces be landscaped consistent with landscaping standards contained in the Planning, Zoning, and Development Code. Utilize landscaping to provide project amenities for new and remodeled commercial uses, and to screen parking and equipment areas. Landscaped areas generally should incorporate planting utilizing a three - tiered system: 1) grasses and ground covers, 2) shrubs and vines, and 3) trees. [2000 GP Policy CD-8A.4 – Modified for 2015-2035 GP]
CD-8.5 Ensure that site access, parking, and circulation for commercial uses are designed in a logical, safe manner. Parking should not dominate the site in areas adjacent to street, and should be well landscaped with a clear hierarchy of circulation.
Wherever possible, parking lots should be divided into a series of connected smaller lots utilizing walkways and raised landscape strips. Parking lots should also include landscaping that accents the importance of driveways from the street, frames the major circulation aisles, and highlights pedestrian pathways. [2000 GP Policy CD-8A.5 – Modified for 2015-2035 GP]
CD-8.6 Require that areas for outside equipment, trash receptacles, storage, and loading areas be located in the least conspicuous part of the site. Utility and mechanical equipment (e.g. electric and gas meters, electrical panels, and junction boxes) should be concealed from view from public streets, neighboring properties, and nearby higher buildings. Trash enclosures should be architecturally compatible with the project. Landscaping should be incorporated into the design of trash enclosures to deter graffiti. [2000 GP Policy CD-8A.6 – Modified for 2015 -2035 GP]
CD-8.7 Encourage decorative paving treatments to be incorporated throughout commercial developments, including driveway entries, pedestrian walkways , plazas, and other areas. The design, materials, and colors of decorative paving treatments (e.g., stamped concrete, stone, brick or granite pavers, exposed aggregate, or colored concrete) should complement the architectural style of the primary buildings and make a positive contribution to the aesthetic and function of the site. [2000 GP Policy CD-8A.7 – Modified for 2015-2035 GP]
CD-8.8 Require that exterior lighting on commercial properties be consistent with the architectural style of the commercial building. On each commercial site, all lighting fixtures should be from the same family of fixtures with respect to design, materials, color, fixture, and color of light. Lighting sources should be shielded, diffused or indirect to avoid spillover on adjacent properties, nighttime sky light pollution, and glare to pedestrians and motorists. To minimize the total number of freestanding light standards, wall-mounted and pathway lights should be utilized to the greatest extent possible. [2000 GP Policy CD-8A.8]
Objective CD-8B: Preserve the scale and character of established neighborhoods near commercial uses. [2000 GP Objective CD-8B]
CD-8.9 Ensure that new commercial development utilize site planning and design features that optimize compatibility with adjacent residential neighborhoods. The following guidance should be considered:
• When adjacent residential and nonresidential uses can mutually benefit from connection, appropriate linkages (e.g., walkways, common landscape areas, and building orientation) are encouraged. Successful interaction between commercial and residential uses may be achieved through adequate setbacks, landscape buffers, screening, decorative masonry walls, berms, building orientation, and limitations of commercial activities. • Loading areas, access and circulation driveways, trash and storage areas, and rooftop equipment should be located as far as possible from adjacent residences.
• Building orientation and landscaping of commercial buildings should minimize direct lines of sight into adjacent residential private open space. [2000 GP Policy CD-8B.1]
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Goal CD-9:
Mixed Use
Promote development of mixed-use projects that seamlessly integrate multiple uses both functionally and aesthetically. [2000 GP Goal CD-9]
Objective CD-9A: Design mixed use development projects to achieve a high quality character. [2000 GP Objective CD-9A]
CD-9.1 Require that mixed -use development projects be designed to mitigate potential conflicts between uses. Consider noise, lighting, and security. [2000 GP Policy CD-9A.1]
CD-9.2 Provide adequate parking, open space and recreational facilities to serve residents in mixed -use development projects. Design parking and other areas to acknowledge different users (residents versus shoppers) and to be compatible with the architectural character of the building(s). [2000 GP Policy CD-9A.2]
Objective CD-9B: Provide for the development of projects that integrate housing with commercial uses and other compatible uses. [2000 GP Objective CD-9B]
CD-9.3 Encourage mixed-use development along the east side of Newport Boulevard between Mesa Drive and Walnut Street. Establish incentives for the development of projects in planned development zones that integrate housing with retail and office uses. [2000 GP Policy CD-9B.1]
CD-9.4 Encourage the development of mixed-use urban villages along specified areas of West 17th Street, West 19th Street, and Superior Avenue that integrates residential with office, retail, business services, personal services, public spaces and uses, and other community amenities in a single building (vertical mixed -use development) or in proximity on the same site (horizontal mixed-use development). [New Policy for 2015-2035 GP]
CD-9.5 Promote new types of urban housing that could be target -marketed to people seeking alternative housing choices in proximity to a major commercial area. [New Policy for 2015-2035 GP]
CD-9.6 Support efforts to mix compatible uses and activities. Encourage the siting of community-oriented services, businesses, and amenities in and near mixed -use neighborhoods, including schools, libraries, open space, and parks. [ 2000 GP Policy CD-9B.2]
Goal CD-10:
Industrial and Business Parks
Promote quality design approaches for the redevelopment of existing industrial buildings, encourage the design to incorporate or provide flexibility for the needs of emerging types of industrial uses, and strive to match design with overall character of nodes, corridors, or districts if applicable. [2000 GP Goal CD-10 – Modified for 2015-2035 GP]
Objective CD-10A: Require that industrial and business park projects meet high -quality design standards. [2000 GP Policy CD-10A]
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CD-10.1 Require that industrial projects be designed to convey visual interest and a positive image. Architectural qualities and design elements encouraged for industrial uses are:
• Building modulation indentations and architectural details • Building entry accentuation
• Screening of equipment and storage areas
• Landscaping to soften building exteriors and to serve as a buffer between uses [2000 GP Policy CD-10A.1]
CD-10.2 Encourage that the design of industrial buildings considers the visual and physical relationship to adjacent uses. An industrial structure which dominates its surrounding environment by its relative size shall generally be discouraged. [2000 GP Policy CD-10A.2]
CD-10.3 Encourage adaptive reuse of existing industrial structures which results in rehabilitated buildings with distinctive and attractive architecture. [New Policy for 2015-2035 GP]
CD-10.4 Promote the use of materials and colors that produce diversity and visual interest in industrial buildings. The use of various siding materials (i.e., masonry, concrete texturing, cement, or plaster) can produce effects of texture and relief that provide architectural interest. [2000 GP Policy CD-10A.3]
CD-10.5 Require that landscaping be used to define areas such as entrances to industrial buildings and parking lots; define the edges of developments; provide transition between neighboring properties; and provide screening for outdoor storage, loading, and equipment areas. Landscaping should be in scale with adjacent buildings and be of an appropriate size at maturity to accomplish its intended purpose. [2000 GP Policy CD-10A.4]
CD-10.6 Require that the design of lighting fixtures and their structural support be of a scale and architectural design compatible with on -site industrial buildings. Large areas should be illuminated to minimize the visual impact and amount of spillover light onto surrounding projects. [2000 GP Policy CD-10A.5]
Objective CD-10B: Ensure that the development of industrial projects are positive additions to the City’s community setting and do not result in adverse impacts with adjacent uses. [2000 GP Objective CD-10B]
CD-10.7 Require industrial projects to incorporate landscape setbacks, screening walls, and/or other elements that mitigate negative impacts with adjacent uses. [2000 GP Policy CD-10B.1]
CD-10.8 Protect transitional areas between industrial and other uses. [New Policy for 2015- 2035 GP]
CD-10.9 Storage yards, parking areas, and service areas should be screened from public view. [2000 GP Policy CD-10B.2]
Goal CD-11:
Attractive Signs that Reflect Costa Mesa
Ensure that signs contribute positively to Costa Mesa’s image and overall economic development. [2000 GP Goal CD-13]
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Objective CD-11A: Facilitate the installation of signs that contribute to a positive image of the public realm. [2000 GP Objective CD-13]
CD-11.1 Encourage homeowners' associations and neighborhoods to maintain housing tract entrance signs in an attractive condition, and encourage the placement of such signs at the entrance of major developments which do not have such identification. [2000 GP Policy CD-13.1]
CD-11.2 Encourage the use of common design elements in signs for commercial and industrial centers through the development of planned sign programs to improve center identity by publicizing the benefits of such programs to developers and local business operators. [2000 GP Policy CD-13.2]
CD-11.3 Encourage citywide sign design guidelines that promote creativity and flexibility while upholding design quality. Design guidelines could include the design and placement of business signs, public street graphics, street signs, locational and directional signs, traffic signs, etc. [New Policy for 2015-2035 GP]
CD-11.4 Introduce distinctive entry signage within the Costa Mesa Streetscape and Median Development Guidelines which effectively announces arrival to unique districts and neighborhoods. [2000 GP Policy CD-13.3 – Modified for 2015-2035 GP]
CD-11.5 Develop and design signage that helps with way -finding throughout the City so visitors and residents can easily access destination locations and identify landmarks. [New Policy for 2015-2035 GP]
Goal CD-12:
Public Safety through Design
Use design approaches to enhance public safety. [2000 GP Goal CD-14 – Modified for 2015-2035 GP]
Objective CD-12A: Incorporate public safety considerations into community design. [ 2000 GP Objective CD-14]
CD-12.1 Decrease the opportunity for criminal activity by addressing high -risk circumstances (e.g., dark alleys, enclosed stairwells, and dark entrances). Involve the Police and Fire Departments in reviewing and making design recommendations during the project review process. [2000 GP Policy CD-14.1]
CD-12.2 Continue to implement and refine development standards and/or guidelines based on Crime Prevention Through Environmental Design (CPTED) for new development and redevelopment with emphasis on site and building design to minimize vulnerability to criminal activity. [2000 GP Policy CD-14.2]
CD-12.3 Continue to provide CPTED training to City staff and local planni ng and design professionals to optimize public safety through community design. [2000 GP Policy CD-14.3]
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Open Space and Recreation Element
The goals, objectives, and policies that address open space and recreation are as follows:
Goal OSR-1:
Balanced and Accessible System of Parks and Open Spaces
Provide a high-quality environment through the development of recreation resources and preservation of open space that meets community needs in Costa Mesa. [2000 GP Goal OSR-1]
Objective OSR-1A: Maintain and preserve existing parks, and strive to provide additional parks, public spaces, and recreation facilities that meet the community’s evolving needs. [2000 GP Objective OSR-1A]
Adequate Neighborhood and Community Park Recreational Facilities
OSR-1.1: Maintain a system of Neighborhood and Community Parks that provide a variety of active and passive recreational opportunities throughout the City. [New Policy for 2015-2035 GP]
OSR-1.2: Provide parks and recreation facilities appropriate for the individual neighborhoods in which they are located and reflective of the needs and interests of the population they serve. [New Policy for 2015-2035 GP]
Acquisition of New Parkland
OSR-1.3: Pursue the acquisition and development of pocket and neighborhood parks within park-deficient areas, as identified in Figure OSR -3: Planning Areas and Underserved Park Areas. [2000 GP Policy OSR-1A.3 – Modified for 2105 -2035 GP]
OSR-1.4: Prioritize the acquisition of land for parks in underserved neighborhoods. [2000 GP Policy OSR-1A.14 – Modified for 2015-2035 GP]
OSR-1.5: Maximize public space by requiring plazas and public gathering spaces in private developments that can serve multiple uses, including recreation and social needs. [New Policy for 2015-2035 GP]
OSR-1.6: Provide maximum visibility and accessibility for future public parks by locating facilities in close proximity to public streets. [2000 GP Policy OSR-1A.2]
OSR-1.7: Adjust and update development fee programs to accumulate funds for the acquisition and improvement of parks and recreation facilities commensurate with identified need and population growth. [New Policy for 2015-2035 GP]
Balance of Passive and Active Recreation
OSR-1.8: Require that parks and recreation facilities reflect new trends and population changes, and are developed with facilities appropriate to all ages, including athletic fields, active play areas, passive open space, tot lots, and picnic areas. [2000 GP Policy OSR-1A.15]
OSR-1.9: Conduct a sports facility study to review current outdoor facility locations and resources and a demographic study for future facility requirements as they relate to planned growth within the City. [New Policy for 2015-2035 GP]
OSR-1.10: Pursue additional community garden lots and spaces to meet demand and need by the community. [New Policy for 2015-2035 GP]
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Park Maintenance and Retrofit
OSR-1.11: Perform regular maintenance of facilities to ensure proper working order of all recreation facilities and equipment. [New Policy for 2015-2035 GP]
OSR-1.12: Retrofit parks and recreation facilities to provide disability access as required by law. [New Policy for 2015-2035 GP]
OSR-1.13: Design and reform parks to reflect the latest recreational features that respond to demographic changes and community needs. [New Policy for 2015-2035 GP]
OSR-1.14: Consult with law enforcement agencies, surrounding cities, community policing groups, and OC Parks to create a safe and healthy environment at Talbert Regional Park, Fairview Park, and along the Santa Ana River. [New Policy for 2015-2035 GP]
Long-Term Planning of Institutional Uses
OSR-1.15: Continue to pursue opportunities to create joint -use community space at facilities owned by private organizations such as private schools, faith -based groups, service clubs, and hospitals. [2000 GP Policy OSR-1A.10]
OSR-1.16: Continue to coordinate with the Newport -Mesa Unified School District to supplement City park facilities through joint -use agreements. [ 2000 GP Policy OSR-1A.10]
OSR-1.17: Consult with Orange County Fairgrounds in implementing OC Fair & Event Center Master Plan. [New Policy for 2015-2035 GP]
Level of Service and Access
OSR-1.18: Provide a minimum of 4.26 acres of parkland per 1,000 residents. [2000 GP Policy OSR-1A.1]
OSR-1.19: Update the Parks, Recreation and Open Space Master Plan every 10 years, as feasible. [2000 GP Policy OSR-1A.15]
OSR-1.20: Enhance pedestrian, bicycle, and transit linkages to meet the needs of residents and to provide better access to parks, recreation, and public spaces. [New Policy for 2015-2035 GP]
OSR-1.21: Provide opportunities for public access to all open space areas, except where sensitive resources may be threatened or damaged, public health and safety may be compromised, or access would interfere with the managed production of resources. [New Policy for 2015-2035 GP]
GOAL OSR-2:
Community Services Programs Meeting Community Needs
Enhancing the community through the delivery of innovative recreational programs, quality parks and facilities and services that promote social, physical, and emotional well-being. High-quality community services programs demonstrate the City’s commitment to providing opportunities for recreational, physical, and educational activities for residents of all ages. [New Goal for 2015-2035 GP]
Objective OSR-2A: Provide activities, classes, and a variety of programs to meet the year - round recreational needs of all residents: children, adult, seniors, and persons with special needs. [New Objective for 2015-2035 GP]
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High-quality Community Services
OSR-2.1: Prov ide high-quality community services programs that are flexible and responsive to the community’s changing needs. [New Policy for 2015-2035 GP]
OSR-2.2: Plan and conduct citywide special events that bring residents together to create an enhanced quality of life and promote economic development. [New Policy for 2015- 2035 GP]
OSR-2.3: Continue to consult with nonprofit sports organizations and recreational groups to support their offering of diverse recreational programs that complement and supplement those offered by the City. [New Policy for 2015-2035 GP]
OSR-2.4: Update existing facilities for senior citizens, youth, adults, and overall community use. [New Policy for 2015-2035 GP]
Community Services to Support Community Needs
OSR-2.5: Monitor and research the ever -changing community services needs of the community, and develop action plans to address those needs through partnerships with service agencies. [New Policy for 2015-2035 GP]
OSR-2.6: Continue to provide rental opportunities at commu nity facilities and parks for residents, nonprofit groups, and businesses to meet their recreational and professional needs. [New Policy for 2015-2035 GP]
OSR-2.7: Continue broad -based public outreach activities that inform residents of all available community services programs, and obtain input from the community regarding program and service needs. [New Policy for 2015-2035 GP]
OSR-2.8: Encourage resident input and utilize demographic data, partnerships, volunteers, and existing resources to identify the needs of community. [New Policy for 2015- 2035 GP]
OSR-2.9: Identify innovative funding and development opportunities to support and sustain a responsive community services network. [New Policy for 2015-2035 GP]
OSR-2.10: Continue and expand the development of community partnerships to offer both standard and innovative services to meet residents’ needs. [New Policy for 2015- 2035 GP]
OSR-2.11: Develop and implement community services programs and activities that meet the needs of specialized populations through the development of community partnerships. [New Policy for 2015-2035 GP]
OSR-2.12: Provide support for volunteer groups that conduct special activities open to the entire community. [New Policy for 2015-2035 GP]
GOAL OSR-3:
Conserved Open Space
Costa Mesa is committed to open space conservation to ensure that the network of parklands, trails, hillsides, and undeveloped natural areas remain viable for supporting biological communities and providing sanctuary for future generations. This commitment includes expanding public access to open space, where appropriate, and acquiring additional lands where feasible. [New Goal for 2015-2035 GP]
Objective OSR-3A: Preserve the City’s open space lands and provide additional community and neighborhood parkland in underserved areas. [New Objective for 2015-2035 GP]
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Open Space Preservation and Stewardship
OSR-3.1: Preserve open space areas along The Santa Ana River, large open space parks, and along the mesa formations to protect natural habitat and to maintain the integrity of the natural environment. [New Policy for 2015-2035 GP]
OSR-3.2: Encourage the preservation of coastal views from City and County parkland and public streets within Costa Mesa. [2000 GP Policy OSR-1A.13]
OSR-3.3: Identify current open space areas for protection, management, and potential enhancement to maintain and, if possible, increase its value as wildlife habitat. [New Policy for 2015-2035 GP]
Management and Maintenance of Open Space
OSR-3.4: Encourage the long -term maintenance and management of open space lands through open space easements, development rights transfers or acquisition, zoning regulations, and other incentives. [2000 GP Policy OSR-1A.6]
OSR-3.5: Encourage the greening and beautifying of the Santa Ana River. [New Policy for 2015-2035 GP]
OSR-3.6: Encourage opportunities for recreation, history, education, interpretive materials, and art associated with the Santa Ana River open spaces. [New Policy for 2015- 2035 GP]
OSR-3.7: Promote water quality strategies to improve water quality along the Santa Ana River. [New Policy for 2015-2035 GP]
Coordination and Organization Development
OSR-3.8: Consult with State and regional agencies and the California Native American Heritage Commission (NAHC), regarding open space planning efforts. [New Policy for 2015-2035 GP]
OSR-3.9: Consult with the Orange Coast River Park, Inc. and surrounding cities and other government agencies in maintaining and rehabilitating open space lands along the Santa Ana River. [New Policy for 2015-2035 GP]
OSR-3.10: Consult with OC Parks over the enhancements and management of Talbert Regional Park without adversely impacting surrounding residential neighborhoods. [New Policy for 2015-2035 GP]
GOAL OSR-4:
Extensive Arts and Culture Programs and Services
Provide comprehensive and multifaceted arts and culture programs and services that provide education and entertainment to the community and a broader audience. [New Goal for 2015-2035 GP]
Objective OSR-4A: Support performing and visual arts programs, facilities, and activities that stimulate the minds and intellectual thinking of community members to increase awareness of the City’s motto, “The City of the Arts.” [ New Objective for 2015-2035 GP]
Cultural Arts Venues
OSR-4.1: Continue to support the mission of the Segerstrom Center for the Arts and associate venues and facilities. [New Policy for 2015-2035 GP]
OSR-4.2: Support the development and operations of an arts museum at the Segerstrom Center for the Arts. [New Policy for 2015-2035 GP]
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OSR-4.3: Encourage additional indoor and outdoor facility spaces citywide to display public art and host arts and culture special events. [New Policy for 2015-2035 GP]
Leader in the Arts
OSR-4.4: Expand the City's role as a supporter of the arts. [New Policy for 2015-2035 GP]
OSR-4.5: Encourage financial support of the arts by supporting non -profit groups and foundations. [New Policy for 2015-2035 GP]
OSR-4.6: Consider preparation of an arts and culture master plan for the City. [New Policy for 2015-2035 GP]
OSR-4.7: Consult with local agencies and surrounding cities to address the creation and implementation of arts-friendly policies. [New Policy for 2015-2035 GP]
OSR-4.8: Enhance Costa Mesa’s position as a leader in the arts in Southern California and its recognition nationally as a city devoted to arts institutions of superior quality. [New Policy for 2015-2035 GP]
OSR-4.9: Engage community members in arts activities, and utilize the arts to provide educational and cultural awareness opportunities. [New Policy for 2015-2035 GP]
OSR-4.10: Continue the City’s commitment to its arts in cooperation with the private sector. [New Policy for 2015-2035 GP]
OSR-4.11: Provide opportunities for local artists to create and display their work. [New Policy for 2015-2035 GP]
Arts Programs and Events
OSR-4.12: Support arts activities, programs, events, and facilities for patrons to enjoy and share experiences, and that enhance the City’s economic vitality. [New Policy for 2015-2035 GP]
OSR-4.13: Designate Community Services Department staff with the responsibi lity for expanding and implementing activities related to recreational arts programming. [New Policy for 2015-2035 GP]
OSR-4.14: Pursue cooperative educational cultural programs enlisting the aid of public and private institutions. [New Policy for 2015-2035 GP]
Arts in Public Places and in Private Development
OSR-4.15: Continue to review adopting an Arts in Public Places Program. [New Policy for 2015-2035 GP]
OSR-4.16: Pursue the placement of public art in prominent locations, particularly along major travel corridors to enliven and beautify the public realm. [New Policy for 2015-2035 GP]
OSR-4.17: Develop incentives or programs that encourage art in new developments. [New Policy for 2015-2035 GP]
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Historical and Cultural Resources Element
The goals, objectives, and policies that address historical and cultural resources are as follows:
Goal HCR-1:
Historical, Archeological, and Paleontological Resource Preservation
The City of Costa Mesa supports focused efforts to provide residents with a sense of community and history through the protection and preservation of historical and cultural resources. [2000 GP Goal HCR- 1]
Objective HCR-1A: Encourage preservation and protection of the City’s archaeological, paleontological, and historical resources. [2000 GP Objective HCR-1A]
Preserving Historical Resources
HCR-1.1: Encourage protection and enhancement of the diverse range of historical sites and resources in the City for the benefit of current and future residents and visitors. [New Policy for 2015-2035 GP]
HCR-1.2: Encourage the preservation of significant historical resources (as identified in Table HCR-1) by developing and implementing incentives such as building and planning application permit fee waivers, Mills Act contracts, grants and loans, and implementing other incentives identified in the Historical Preservation Ordinance. [2000 GP Policy HCR-1A.4]
HCR-1.3: Promote context -sensitive design that respects and celebrates the history and historical character of sites and resources while meeting contemporary needs of the community. [New Policy for 2015-2035 GP]
HCR-1.4: Require, as part of the environmental review procedure, an evaluation of the significance of paleontological, archaeological, and historical resources, and the impact of proposed development on those resources. [2000 GP Policy HCR-1A.1]
HCR-1.5: Continue to identify local landmarks with markers and way-finding signage. Include informational signage about local history, utilizing maps to highlight locations of other historical resources at popular historical sites. [New Policy for 2015 -2035 GP]
HCR-1.6: Encourage development of an interpretive center for paleontological, archaeological, and historical resources at Fairview Park. The center may contain resources found in the park area as well as resources found throughout the City. [2000 GP Policy HCR-1A.6]
Preserving Archaeological Resources
HCR-1.7: Require cultural resources studies (i.e, archaeological and historical investigations) for all applicable discretionary projects, in accordance with CEQA regulations. The studies should identify cultural resources (i.e., prehistorical sites, historical sites, and isolated artifacts and features) in the project area, determine their eligibility for inclusion in the California Register of Historical Resources, and provide mitigation measures for any resources in the project area that cannot be avoided. Cultural resources studies shall be completed by a professional archaeologist that meets the Secretary of the Interior’s Professional Qualifications Standards in prehistorical or historical archaeology. [2000 GP Policy HCR-1A.2 and HCR-1A.3 – Modified for 2015-2035 GP]
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HCR-1.8: Comply with requirements of the California Environmental Quality Act regarding protection and recovery of archaeological resources discovered during development activities. [New Policy for 2015-2035 GP]
Preserving Paleontological Resources
HCR-1.9: Require paleontological studies for all applicable discretionary projects. The studies should identify paleontological resources in the project area, and provide mitigation measures for any resources in the project area that cannot be avoided. [2000 GP Policy HCR-1A.2 and HCR-1A.3 – Modified for 2015-2035 GP]
HCR-1.10: Comply with the California Environmental Quality Act regarding the protection and recovery of paleontological resources during development activities. [New Policy for 2015-2035 GP]
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Annual Review of Costa Mesa General Plan (7 th Edition) [Updated: 4/2/24]
Ap
pendix B
Housing Successor Annual Report
Fiscal Year 2022-2023
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COSTA MESA
FINANCING AUTHORITY
(A Component Unit of the
City of Costa Mesa)
Financial Statements
Year Ended June 30, 2023
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COSTA MESA FINANCING AUTHORITY
Table of Contents
Year Ended June 30, 2023
Page
Number
Independent Auditor’s Report 1 - 3
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 4
Statement of Activities 5
Fund Financial Statements:
Balance Sheet - Governmental Fund 6
Reconciliation of the Governmental Fund Balance
Sheet to the Statement of Net Position 7
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Fund 8
Reconciliation of the Governmental Fund Statement of
Revenues, Expenditures and Changes in Fund Balances
to the Statement of Activities 9
Notes to the Basic Financial Statements 10 - 17
Independent Auditor’s Report on Internal Control over
Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 18 - 19 -168-
382
INDEPENDENT AUDITOR’S REPORT
Board of Directors
Costa Mesa Financing Authority
Costa Mesa, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the governmental activities and the major fund of the Costa Mesa Financing Authority (the Authority), a component unit of the City of Costa Mesa, California, as of and for the year ended June 30, 202 3, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Authority, as of June 30, 2023, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of a Matter
As described more fully in Note 1A, the basic component unit financial statements present only the Authority and are not intended to present fairly the financial position and results of operations of the City of Costa Mesa, California in accordance with accounting principles generally accepted in the United States of America.
Responsibilities of Management for the Financial Statements
The Authority’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
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In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for one year after the date that the financial statements are issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a h igh level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, i ndividually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
Required Supplementary Information
Management has not presented the management’s d iscussion and analysis that accounting principles gener ally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.
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384
Report on Summarized Comparative Information
We have previously audited the Authority’s 202 2 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated December 30, 2022. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022 is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2023, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.
Irvine, California
December 21, 2023
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2023 2022
ASSETS:
Cash and investments with fiscal agent (Note 2) 7,278$ 4$ Lease interest receivable 254,763 254,763
Leases receivable (Note 3) 21,280,000 23,110,000
TOTAL ASSETS 21,542,041 23,364,767
LIABILITIES:
Interest payable 254,763 254,763
Noncurrent liabilities:
Due within one year (Note 3) 2,067,767 1,977,767
Due in more than one year (Note 3) 22,056,745 24,124,512 TOTAL LIABILITIES 24,379,275 26,357,042
NET POSITION:
Restricted for debt service 7,278 4
Unrestricted (2,844,512) (2,992,279)
TOTAL NET POSITION (2,837,234)$ (2,992,275)$
Governmental Activities
COSTA MESA FINANCING AUTHORITY
Statement of Net Position
June 30, 2023
(With comparative totals for June 30, 2022)
See accompanying notes to financial statements.
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Charges Operating Capital
for Grants and Grants and
Expenses Services Contributions Contributions 2023 2022 Governmental Activities:
Interest on long-term debt 825,533$ - - - (825,533)$ (914,783) Total governmental
activities 825,533$ - - - (825,533) (914,783) General revenues:
Investment income 980,574 1,062,553
Total general revenues 980,574 1,062,553
Changes in net position 155,041 147,770
NET POSITION AT
BEGINNING OF YEAR (2,992,275) (3,140,045)
NET POSITION AT END OF YEAR (2,837,234)$ (2,992,275) Program Revenues
Functions/Programs
Net (Expenses) Revenues
COSTA MESA FINANCING AUTHORITY
Statement of Activities
Year Ended June 30, 2023
(With comparative totals for the year ended June 30, 2022) See accompanying notes to financial statements.
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2023 2022
ASSETS:
Cash and investments with fiscal agent 7,278$ 4$ Leases receivable 21,280,000 23,110,000
TOTAL ASSETS 21,287,278$ 23,110,004$
DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE:
DEFERRED INFLOWS OF RESOURCES:
Unavailable lease revenue 21,280,000$ 23,110,000$
TOTAL DEFERRED INFLOW OF RESOURCES 21,280,000 23,110,000 FUND BALANCE:
Restricted for debt service 7,278 4
TOTAL FUND BALANCE 7,278 4
TOTAL DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCE 21,287,278$ 23,110,004$
Government Fund
Total
COSTA MESA FINANCING AUTHORITY
Balance Sheet
Governmental Fund
June 30, 2023
(With comparative totals for June 30, 2022)
See accompanying notes to financial statements.
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Fund balances for governmental fund 7,278$
Amounts reported for governmental activities in the Statement of Net Position are different because:
Accrued interest receivable for the current portion of interest due on lease payments has not been reported in the governmental funds.
Interest receivable 254,763
Long-term liabilities applicable to the Authority's governmental activities are not due and payable in the current period and, accordingly, are not reported as governmental fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position.
Revenue bonds (21,280,000)
Premium on bonds (2,844,512)
Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds.
Interest payable - revenue bonds (254,763)
Revenues relating to leases receivable are measurable but not available and, accordingly, are recorded as unavailable revenue in the governmental funds under the modified accrual basis of accounting. 21,280,000 Net position of governmental activities (2,837,234)$
COSTA MESA FINANCING AUTHORITY
Reconciliation of the Governmental Fund Balance Sheet
to the Statement of Net Position
June 30, 2023
See accompanying notes to financial statements.
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2023 2022
REVENUES:
Other interest 7,274$ 4$
Lease payments 2,803,300 2,802,549
TOTAL REVENUES 2,810,574 2,802,553
EXPENDITURES:
Debt service:
Principal 1,830,000 1,740,000
Interest 973,300 1,062,550
TOTAL EXPENDITURES 2,803,300 2,802,550
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 7,274 3
NET CHANGE IN FUND BALANCE 7,274 3
FUND BALANCE AT BEGINNING OF YEAR 4 1 FUND BALANCE AT END OF YEAR 7,278$ 4$
Total
Governmental Fund
COSTA MESA FINANCING AUTHORITY
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Fund
Year Ended June 30, 2023
(With comparative totals for the year ended June 30, 2022) See accompanying notes to financial statements.
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Net change in fund balances - total governmental fund 7,274$ Amounts reported for governmental activities in the Statement of Activities are different because:
The Statement of Net Position includes accrued interest on leases receivable.
The net change in accrued interest for the current period is reported on the Statement of Activities. 254,763
Repayment of long-term principal is an expenditures in the governmental and, thus, has the effect of reducing the fund balances because current funds resources have been used. For the Authority as a whole, however, the principal financial payments reduce the liabilities in the Statement of Net Position and do not result in an expense in the Statement of Activities.
Debt service principal 1,830,000
Amortization of bond premium 147,767
The Statement of Net Position includes accrued interest on long-term debt. The net change in accrued interest for the current period is reported on the Statement of Activities. (254,763)
Revenues relating to leases receivable that do not meet the "availability" criteria for revenue recognition and therefore are not reported as revenue in the funds. (1,830,000)
Change in net position of governmental activities 155,041$
COSTA MESA FINANCING AUTHORITY
Reconciliation of the Governmental Fund Statement of
Revenues, Expenditures and Changes in Fund Balances
to the Statement of Activities
Year Ended June 30, 2023
See accompanying notes to financial statements.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
Year Ended June 30, 2023
1. Reporting Entity and Summary of Significant Accounting Policies A. Description of the Reporting Entity:
The Costa Mesa Financing Authority (the Authority) was created by a joint powers agreement between the City of Costa Mesa (the City) and the Costa Mesa Housing Authority (the Housing Authority), dated August 1, 2017. It was created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title of the Government Code of the State of California (the “JPA Act”).
The Authority is an integral part of the reporting entity of the City. The financial activity of the Authority has been included within the scope of the basic financial statements of the City because the City Council of the City of Costa Mesa is the governing board over the operations of the Authority. Only the financial activity of the Authority is included herein, therefore, these financial statements do not purport to represent the financial position or results of operations of the City.
B. Basis of Accounting and Measurement Focus:
The basic financial statements of the Authority are composed of the following:
• Government-wide financial statements
• Fund financial statements
• Notes to the basic financial statements
Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the govern mental and business-type activities of the primary gover nment (including its blended component units), as well as its discretely presented component units. The Authority has no business-type activities or discretely presented component units.
Government-wide financial statements are presen ted us ing the economic resources measurement focus and the accrual basis of accounting. Measurement focus indicates the type of resources being measured. Under the economic resources measurement focus, all (both current and long -term) economic resources and obligations of t he reporting government are reported in the government-wide financial statements. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial state ments. Under the accrual basis of accounting, revenues, e xpenses, gains, losses, assets, and lia bilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchan ge transactions are recog nized in acc ordance with the requirements of Governmental Accounting Standards Board (GASB) Statement No. 33.
Program revenues include charges for services and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program.
Program revenues are netted with program expenses in the statement of activities to present the net cost of each program.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
1. Reporting Entity and Summary of Significant Accounting Policies (Continued):
Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are recorded as liabilities in the govern ment-wide financial state ments, rather than as other financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as reductions of the related liabilities, rather than as expenditures.
When both restricted and unrestricted resources are combined, expenses are considered to be paid first from restricted resources, and then from unrestricted resources.
Fund Financial Statements
The underlying accounting system of the Authority is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually and other govern mental funds in the aggregate for governmental funds. Fiduciary state ments include financial information for fiduciary funds and similar component units. Fiduciary funds pri marily represent assets he ld by the Authority in a custodial capacity for other individuals or organizations. The Authority has no fiduciary funds.
Governmental Funds
In the fund financial statements, governmental funds are presented usi ng the modified- accrual basis of accounting. Their revenues are recognized when they become measurable and available as fund balances. Measurable means that the amounts can be estimated, or otherwise deter mined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expendit ures accrued for the reporting period. The Authority uses a sixty-day availability period.
Unavailable revenues are reported as deferred inflows of resources in the governmental funds.
Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
1. Reporting Entity and Summary of Significant Accounting Policies (Continued):
In the fund financial statements, governmental funds are presented usi ng the current financial resources measurement focus. This means that only current assets, current liabilities and deferred inflows of resources are generally included on their balance sheets.
The reported fund balance is considered to be a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balances.
Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.
Noncurrent portions of long-term receivables due to governmental funds are reported on the balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered “available spendable resources,” since they do not represent available fund balance. Recognition of governmental fund type revenues represented by noncurrent receivables are reported as unavailable revenues. Noncurrent portions of other long-term receivables are offset by deferred inflows of resources - unavailable revenue.
Because of the spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing sources rather than as fund liabilities. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
C. Activities in Major Fund:
The following debt service fund is presented as a major fund in the acco mpanying basic financial statements:
2017 Lease Revenue Bonds Fund - To account for the accumulation of resources for the payments of debt service for lease revenue bond principal and interest relating to the 2017 Lease Revenue Bonds.
D. Cash and Investments:
Investments are reported in the accompanying financial statements at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly tran saction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as invest ment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
1. Reporting Entity and Summary of Significant Accounting Policies (Continued):
E. Net Position:
Restricted net position consists of constraints placed on net position use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints i mposed by law through constitutional provisions or enabling legislation. Unrestricted net position is the remaining balance of net position.
F. Deferred Outflow/Inflows of Resources:
In addition to assets, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until that. The Authority does not have any applicable deferred outflows of resources.
In addition to liabilit ies, the statement of net position and the govern mental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position th at applies to future periods and will not be recognized as an inflow of resources (reven ue) until that time. The Authority reports unavailable lease revenue as deferred inflows of resources in the governmental fund.
G. Budgetary Reporting:
Formal budgetary integration is not employed for the Authority because effective control is alternatively achieved through the debt indenture provisions.
H. Fund Equity:
The fund balances are reported in the fund statements in the following classification:
Restricted Fund Balance - this includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation. If the Board action limiting the use of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted.
I. Long Term Obligations:
In the government-wide financial statements, long term debt and other long term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts, as well as prepaid insurance costs related to bond issuance costs, are d eferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
1. Reporting Entity and Summary of Significant Accounting Policies (Continued):
J. Use of Estimates:
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of A merica requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
K. Fair Value Measurements:
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
• Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in markets that are inactive; • Inputs other than quoted prices that are observable for the asset or liability; • Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the Authority’s own assumptions about the inputs market participants would use in pricing the asset or liability (inclu ding assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the Authority’s own data.
L. Prior Year Data:
Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Authority’s prior year financial statements, from which this selected financial data was derived.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
2. Cash and Investments:
Cash and investments at June 30, 2023 are classified in the accompanying Statement of Net Position as follows:
Cash and investments with fiscal agent $ 7,278
Cash and investments held at June 30, 2023 consisted of the following:
Investments:
Money market mutual funds $ 7,278
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government code or the City’s investment policy. The table on the following page identifies the investment types that are generally authorized for invest ments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term invest ments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Maximum Maximum
Maximum Percentage Investment
Authorized Investments Maturity Allowed in One Issuer
United States Treasury Securities None None None
Federal Agency Securities 1 year None None
Banker’s Acceptances 30 days None
None
None
Commercial Paper 270 days None None
Money Market Mutual Funds None None None
Investment Agreements None None None
Interest-Bearing Time Deposits 30 days None None
Repurchase Agreements 270 days None None
Local Agency Investment Fund None None None
State Obligations None None None
Pre-refunded Municipal Obligations None None None
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
2. Cash and Investments (Continued):
Information about the sensitivity of the fair values of the Authority’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the Authority’s investments by maturity:
Remaining Maturity (in Months)
12 Months 13 Months
Investment Type or Less or More Total
Money market mutual funds $ 7,278 $ - $ 7,278
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where appli cable) the Cali fornia Gover nment Code, the City’s investment policy, or debt agreements, and the Standard & Poor’s actual rating as of year end for each investment type:
Minimum Legal Rating
Investment Type Rating Total AAA
Money market mutual funds AAA $ 7,278 $ 7,278
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in anyone issuer beyond that stipulated by the California Govern ment Code. No investments in anyone issuer (other than mutual funds and external investment pools) represent 5% or more of total investments by reporting unit (governmental activities or major fund).
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker- dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by the state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
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COSTA MESA FINANCING AUTHORITY
Notes to the Basic Financial Statements
(Continued)
3. Long-Term Liabilities:
The following is a summary of changes in long-term liabilities of the Authority for the year ended June 30, 2023:
2017 Lease Revenue Bonds:
On October 1, 2017, the Authority issued $29,735,000 in 2017 Lease Revenue Bonds to finance certain capital improvements of the City of Costa Mesa and to advance refund $16,765,000 of outstanding Costa Mesa Public Financing Authority 2007 Certificates of P articipation (2007 Certificates). The bond issue also included a bond premium of $3,694,172. The bonds mature from October 1, 2018 through October 1, 2042 in annual installments ranging from $570,000 to $2,220,000. Interest is payable se mi-annually on April 1 and October 1 of each year, commencing on April 1, 2018 at a rate ranging from 2.0% to 5.0%. As of June 30, 20 23, the principal outstanding is $21,280,000 and the unamortized bond premium balance is $2,844,512.
The lease agreement requires the City to make lease payments to the Authority on each April 1 and October 1 preceding the debt service payment date, commencing April 1, 20 18. Lease payments are paid by the City directly to the Trustee.
The Authority’s source of payment on the certificates will be from lease payments received from its lease with the City. This lease receivable has been recorded on the balance sheet of the related debt service fund. Unavailable revenue has been recorded in an equal amount in the fund financial statements because this lease revenue, although measurable, is not considered available to finance expenditures of the fiscal year reported upon. Lease revenues are pledged toward payment of these bonds. The amount of anticipated future lease payments is equal to the amount of future principal and interest installments due on the debt.
Future debt requirements for the 2017 Lease Revenue Bonds are as follows:
Amount Amount Due
Balance at Balance at Due Within Beyond
July 1, 2022 Additions Reductions June 30, 2023 One Year One Year 2017 Lease Revenue
Bonds 23,110,000$ -$ (1,830,000)$ 21,280,000$ 1,920,000$ 19,360,000$ 2017 Bond Premium 2,992,279 - (147,767) 2,844,512 147,767 2,696,745 Total 26,102,279$ - $ (1,977,767)$ 24,124,512$ 2,067,767$ 22,056,745$ Year Ending
June 30 Principal Interest Total
2024 1,920,000$ 879,550$ 2,799,550$
2025 2,015,000 781,175 2,796,175
2026 2,115,000 677,925 2,792,925
2027 2,220,000 569,550 2,789,550
2028 570,000 499,800 1,069,800
2029-2033 3,320,000 2,029,000 5,349,000
2034-2038 4,185,000 1,166,531 5,351,531
2039-2043 4,935,000 411,206 5,346,206
Total 21,280,000$ 7,014,737$ 28,294,737$
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Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Board of Directors
Costa Mesa Financing Authority
Costa Mesa, California
We have audited, in accordance with the auditing standards generally accepted in the United States of A merica and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, financial statements of the governmental activities and the major fund of the Costa Mesa Financing Authority (the Authority), as of and for the year ended June 30, 20 23, and the related notes to the basic financial statements, which collectively comprise of the Authority’s basic financial statements, and have issued our report thereon dated December 21, 2023.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressi ng an opinion on the effectiveness of Authority’s internal control. Accordingly, we do not express an opinion on the e ffectiveness of Authority’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal contr ol that we consi der to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
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The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
December 21, 2023
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-1-
PLANNING COMMISSION
AGENDA REPORT
MEETING DATE: April 8, 2024 ITEM NUMBER: NB-1
SUBJECT: 2023 ANNUAL REVIEW OF THE COSTA MESA 2015-2035 GENERAL PLAN
FROM: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/
PLANNING DIVISION
PRESENTATION BY: PHAYVANH NANTHAVONGDOUANGSY, PRINCIPAL
PLANNER AND CAITLYN CURLEY, ASSISTANT PLANNER
FOR FURTHER
INFORMATION
CONTACT:
PHAYVANH NANTHAVONGDOUANGSY
714-754-5611
[email protected]
RECOMMENDATION:
Staff recommends that the Planning Commission review the 2023 Annual Progress Report for the 2015-2035 Costa Mesa General Plan, and recommend City Council approve the requisite documentation for submittal to the State Office of Planning and Research (OPR) and the State Department of Housing and Community Development (HCD).
BACKGROUND / ANALYSIS:
The General Plan “Annual Progress Report” (APR) provides an overview of the actions taken by the City during the 2023 calendar years to implement the City’s General Plan programs and policies, including the City’s Housing Element.
State Land Use and Zoning Law, Government Code section 65000 et seq., requires that an APR from the City’s legislative body be submitted to the State each year for review.
The State uses the General Plan APR to identify statewide trends in land use decision- making, and how local planning and development activities relate to statewide planning goals and policies. A Housing Element APR is also required and is used by HCD to track the progress of the implementation of a jurisdiction’s Housing Element, and requires its submission as a threshold for several State Housing Funding Programs.
The attached APRs address implementation of the City’s 2015-2035 General Plan, which was adopted in July 2016. The City’s current APR submittal also addresses the City’s adopted General Plan Housing Element and includes a 2023 APR for the 6 th Cycle Housing Element, which was adopted November 2022 and covers the RHNA planning period between October 2021 and 2029.
ATTACHMENT 2
402
-2-
Pursuant to State Law, the Annual Progress Reports include the following elements:
An overview of the City’s General Plan implementation status and its consistency with State general plan guidelines; and
A review of the City’s progress in meeting the Regional Housing Needs Allocation (RHNA) objectives and a summary of local efforts towards development, preservation and rehabilitation of housing.
As summarized in the attached 2023 APR, the City continues to implement General Plan programs and is progressing towards meeting its 6th Cycle RHNA obligation. As required by the State, the APR specifically addresses the following topics. General Plan Implementation: The degree to which the General Plan complies with the General Plan guidelines developed and adopted by the State Office of Planning and Research pursuant to section 65040.2. This information is included in Table 1 of the General Plan Annual Review. Housing Element APR Form: The 2023 Housing Element APR is attached to the General Plan Annual Review as Attachment 1. The form is formatted by State HCD and requires the City to report the following information:
a. The City’s progress in meeting its share of the RHNA allocation; b. The number of housing development applications received over the prior year and the number of housing units included in these applications;
c. The number of housing units approved and disapproved in the prior year;
d. A listing of sites rezoned to accommodate the City’s share of regional housing need; and
e. The number of net new housing units provided thus far in the housing element cycle.
City’s General Plan Consistency with the State OPR General Plan Guidelines The City of Costa Mesa’s General Plan consists of seven elements that are required by State statutes and three optional elements. The seven required elements include: Land Use, Circulation, Housing, Conservation, Open Space and Recreation, Noise, and Safety.
The City’s General Plan provides goals and policies that addresses these categories consistent with the State General Plan statutes. The optional elements address additional topics that are of particular local significance and include: Growth Management, Community Design, and Historic and Cultural Resources.
As shown through various City actions and approved projects that are summarized in the General Plan APR, the City’s General Plan serves as an effective guide for orderly growth and development, preservation and conservation of open space and natural resources, and efficient expenditure of public funds.
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Note that to implement the 6 th Cycle Housing Element and specifically to accommodate the City’s RHNA allocation, future General Plan updates will be necessary to ensure that the City’s General Plan will remain internally consistent and remain an effective guiding document for orderly growth. The future updates will also address other topics that are prompted by various State statutes, including incorporating “Environmental Justice” policies and incorporating reference to the recently adopted Local Hazard Mitigation Plan, in accordance with the State OPR General Plan Guidelines.
Below are a list of 2023 City actions and project examples that help achieve the goals and objectives of the General Plan. The list below is not exhaustive and the attached annual report notes further specific projects, efforts, and details. 2023 General Plan Implementation Highlights
Land Use Element
Adoption of Ordinance No. 2023-03, an ordinance that amends various sections of the Zoning Code to modify existing accessory dwelling unit (ADU) provisions and modify standards to be consistent with State ADU laws, specifically Assembly Bill 2221 and Senate Bill 897. (Implements Land Use Element Goal LU-1 – “A Balanced Community with a Mix of Land Uses to Meet Resident and Business Needs”).
The update to the zoning code modified definitions, ADU maximum size standards, setback requirements, and height requirements primally to implement State development standards for ADU. The amendment satisfies Housing Element Program 3E which specifies that the City will review and revise the ADU provisions as necessary to comply with State law. The amendment also clarifies provisions to improve permitting processing. Zoning Code Amendment PCTY- 23-0002 , the City reviewed and proposed revisions to various sections of Costa Mesa Municipal Code (CMMC) to allow temporary outdoor dining areas that were approved during the pandemic to become permanent. The outdoor dining areas are subject to compliance with development standards and a streamlined approval process for the installation of new outdoor dining areas. (Implements Land Use Element Goal LU-1 – “A Balanced Community with a Mix of Land Uses to Meet Resident and Business Needs”).
In the 2023/2024 City Budget, the financing Director appropriated 2.4 million dollars to implement a City rezoning effort in compliance with the City’s required RHNA. An additional 2.6 million dollars is anticipated to be appropriated in the 2024/2025 City Budget. During 2023, staff began preparing a request for proposal (RFP) to contract with a planning consultant to prepare objective design standards, a rezone plan to increase density generally along the City’s commercial corridors, update the City’s General 404
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Plan (including the Land Use Element) and to prepare the necessary environmental documentation to plan for the development 11,760 housing units. The RFP is expected to be distributed in 2024.
Circulation Element
Bicycle Wayfinding Signage – With input from the community and the Active Transportation Committee, the City has approved designs for the Bicycle Wayfinding Signage Program. Installation of the signs are anticipated to be installed in 2024. (Circulation Element Goal C-1 – “Implement “Complete Streets” Policies on Roadways in Costa Mesa” and Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”). Placentia Avenue, West 19th street and east 17th Street Pavement Rehabilitation – The City approved plans, specifications, and working details for the Placentia Avenue, West 19th street and east 17th Street Pavement Rehabilitation, Bicycle Facility and Striping Improvement Project.
Improvements are consistent with City’s Active Transportation Plan in achieving bicycle connectivity and expanding the City’s continuing expansion of bicycle networks. Street rehabilitation will include removal and reconstruction of damaged pavement section, milling and overlaying with new asphalt; slurry sealing; adjustment of utility and manhole covers to grade; and implementation of traffic control. (Circulation Element Goal C-1 – “Implement “Complete Streets” Policies on Roadways in Costa Mesa” and Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
Traffic signal located at West 19th Street and Wallace Avenue and HAWK Signal installations at Lions Park and Wilson Creek – The City approved plans, specifications, and working details for the traffic signal located at West 19th Street and Wallace Avenue and HAWK Signal installations at Lions Park and Wilson Creek. New traffic signal at west 19th Street and Wallace Avenue will help alleviate congestion, improve mobility, promote safe pedestrian traffic crossing, and facilitate the efficient flow of travel along West 19th Street. New concrete curb bulb-outs will be installed to enhance visibility, shorten crossing distances, and encourage motorists to drive at slower speeds. The new HAWK signal installation at Lions Park and Wilson Park will improve walk and bike access to adjacent parks. (Circulation Element Goal C-1 – “Implement “Complete Streets” Policies on Roadways in Costa Mesa” and Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
The Fairview Road Active Transportation Improvements – The City contracted TDG Engineering, Inc. for professional engineering design 405
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services for Fairview Road Active Transportation Improvements. The project will improve bicycle and pedestrian access and mobility along Fairview Road and Fair Drive to Newport Boulevard. The Fairview Road Active Transportation Improvements project will design a Class IV bicycle facility on Fairview Road by reducing the number of vehicle lands from six lanes to four lanes from Fair Drive to Wilson Street. From Wilson Street to Newport Boulevard, the project will design bicycle facility improvements including buffered bike lanes. The pedestrian design improvements will include high- visibility crosswalks, a midblock pedestrian hybrid beacon between Wilson Street and Fair Drive with a pedestrian refuge island, and bus boarding islands to improve pedestrian connectivity and safety. (Circulation Element Goal C-1 – “Implement “Complete Streets” Policies on Roadways in Costa Mesa” and Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
Adams/Pinecreek Intersection Improvements – This project will design intersection improvements to provide improve pedestrian and bicycle access to Orange Coast College. The design plans are now completed and Caltrans issued Authorization to Proceed. Construction will start in 2024. (Circulation Element Goal C-1 – “Implement “Complete Streets” Policies on Roadways in Costa Mesa” and Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
Adams Avenue Multipurpose Trail – This project will improve vehicular, bicycle, and pedestrian improvements with a raised center median and Class I multi-use path with landscaped buffer from the Santa Ana River to Royal Palm Drive. The City is coordinating efforts with Southern California Edison to underground utilities. A street rehabilitation project that will precede the utility undergrounding project is currently underway. The resurfacing project will include restriping the roadway with improved bicycle facilities and green conflict striping. (Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
Installation of New Pedestrian Signals – The City completed constructions of new pedestrian signals located at West 18 th Street at Lions Park Playground HAWK Signal, West 19th Street at Wallace, and Wilson Street at Wilson Park to facilitate pedestrian crossings. (Circulation Element Goal C-8: “Create a Safer Place to Walk and Ride a Bicycle”).
Transit Stop Improvements – The City improved transit stops and constructed new transit shade structures located at: Fairview Road north of Arlington Drive, Harbor Boulevard north of Wilson Street, and Placentia Avenue south of West 19th Street. (Circulation Element Goal C-4 – “Promote Transportation Demand Management, Transit, and Efficiency”).
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Pedestrian Master Plan (PMP) – The City initiated General Plan Amendment to the Circulation Element (PGPA-23-0001) in 2023. The draft PMP complements the City’s 2018 Active Transportation Plan (ATP) by providing pedestrian programs, pedestrian infrastructure toolbox, and policy recommendations to improve the pedestrian experience in the City. The proposed project will update the Circulation Element to incorporate the PMP by reference and will include policies to ensure that future projects will consider and include street design elements to enhance pedestrian mobility. The proposed General Plan Amendment and Draft Pedestrian Master Plan has been reviewed by the Planning Commission and will be reviewed and considered by City Council in 2024. (Circulation Element Goal C-7: “Promote a Friendly Active Transportation System in Costa Mesa”).
Housing Element
Below is a summary of the 2023 Housing Element APR.
a. The City’s progress in meeting its share of the RHNA allocation:
Staff completed, released for public review, and submitted the City’s 6th Cycle draft Housing Element to the State in 2021. The City Council adopted the Housing Element on February 1, 2022. Following revisions that were made to respond to State comments, the City Council re-adopted the 6th Cycle Housing Element on November 15, 2022; and on May 9, 2023, HCD issued a letter acknowledging that the City’s Housing Element is completed and meets the statutory requirements of State Housing Element Law. The 6 th Cycle Housing Element planning period is between October 15, 2021 through October 15, 2029. The City’s 6th Cycle RHNA allocation is 11,760 total units including 6,801 lower income units (2,919 very-low, 1,794 low and 2,088 moderate-income units) and 4,959 above moderate-income units.
Building Permits Issued during the 6 th Cycle Housing Element (thus far) and Building Permits Issued during 2023:
From October 15, 2021 (start of the 6 th Housing Element Cycle) to December 31, 2023, the City issued building permits for a total of 209 residential units, including 183 affordable units and 26 above moderate-income units. (See General Plan APR Attachment 1 - Table B). All 183 affordable units were accessory dwelling units (ADU’s) with 34 ADU’s in the very low-income category, 117 ADU’s in the low-income category and 32 ADU’s in the moderate- income category. These permitted housing units are all within existing residential neighborhoods.
Specifically, for calendar year 2023, the City issued 91 housing unit building permits, and 81 of the building permits were issued for ADUs (28 ADUs completed construction in 2023). No building permits were issued in 2023 for 407
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single-family attached (SFA) units; however, one SFA completed construction (these housing unit applications were submitted during previous years).
Seven building permits were issued for single-family detached (SFD) units in 2023 and five completed construction.
6th Cycle Planning Applications for Housing Development with Five or More Residential Units:
Thus far for the 6 th Cycle Housing Element, the City approved two new housing development with five or more residential units. Both projects are located within an urban plan area that allows live/work development. The combined number of residential units is 17.
The City processed a General Plan Amendment Screening application to convert an existing office space campus located at 3333 Susan Street into a mixed-use residential development in August 2023. The site is known as the Hive and a portion of the 14.25-acre project site is identified as a Housing Opportunity Site. The project applicant is proposing to demolish the existing office complex and develop 1,050 residential units, 2,500 square feet of retail space, and 5.05 acres of open space in three phases. The planning applications for the land use entitlements was submitted in December 2023.
Affordable housing is being contemplated as a component of the project.
The City also processed an Urban Master Plan Screening application for a 60-unit senior housing project located at 695 West 19th Street. Jamboree Housing Corporation is proposing to develop a 60-unit senior housing development on approximately 0.90-acre portion of the parking lot at the Senior Center. The screening was presented to City Council in February 2024 and the applicant anticipates submitting land use entitlement applications in the following months.
b. The number of housing development applications received over the prior year and the number of units included in these applications:
For calendar year 2023, the City received a total of 152 housing applications for a total of 1,222 housing units. The 2023 HCD Housing Element APR Form is attached to the General Plan APR as Attachment 1.
Since the adoption of Urgency Ordinance No. 2021-21 that implements Senate Bill (SB) 9 in 2021, the City received five (5) SB 9 applications and approved four. SB 9 projects are approved ministerially and provides additional opportunities for housing. A single SB 9 project can include either a parcel map or proposed residential units, or it can include both a parcel map and residential units. The residential units are tracked in the APR Table A. For calendar 2023, the City received three SB 9 applications and approved four SB 9 applications.
The approved SB 9 applications included one application for the creation of one 408
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new parcel, one application that allowed an additional residential unit, and two applications that created two new parcels with a residential unit on each parcel. c. The number of units approved and disapproved in the prior year:
For the calendar year 2023, the City approved 91 residential units and no housing units were denied.
d. A listing of sites rezoned to accommodate the City’s share of regional housing need:
The City’s 6th Cycle Housing Element includes several housing programs that require updating zoning for specific areas in the City to accommodate housing on housing opportunity sites (“candidate sites”) based on the City’s share of the “regional housing need”. At this time, the City has not yet completed its rezoning of candidate sites that were identified in the 6 th Cycle Housing Element; however, the City has assembled a staff team to work on the effort, secured project funding, and will be initiating the community visioning and re- zoning effort in Summer of 2024.
In addition, on August 1, 2023, the City Council authorized an agreement with a planning consultant (PlaceWorks) to prepare a Specific Plan, General Plan Amendment and Environmental Impact Report to guide the reuse of the Fairview Developmental Center (FDC). The planning process is being funded through a $3.5 million grant from the State pursuant to Senate Bill 188. The FDC is designated as a Housing Opportunity Site in the City’s Housing Element. The Housing Element envisions 2,300 units on this site, with 40% of the units affordable to low- and very-low income households. e. The number of net new housing units provided thus far in the housing element cycle:
For the calendar year 2023, 34 total housing units completed construction and received building permit final. These units include one single family attached (SFA) unit, five single-family detached (SFD) units, and 28 ADUs.
The City has also progressed towards completing the following Housing Element Programs:
Affordable Housing (Inclusionary) Ordinance [Program 2A] The City initiated the affordable housing ordinance effort in 2021, retaining Keyser Marston Associates (KMA). Since then, KMA have completed the required Financial Evaluation and the City has conducted 17 stakeholder meetings, two joint Council/Planning Commission Study Sessions and completed the draft Ordinance. The Ordinance was presented to the Planning Commission on November 13, 2023 with a second discussion 409
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occurring on December 11, 2023. The Affordable Housing Ordinance (Ordinance No. 2024-02) was approved for first reading by City Council on April 2, 2024.
The Affordable Housing Ordinance will require residential developments with 50 units or more to include an affordable housing component. The residential development must set aside a portion of the residential units as affordable, or provide a land dedication, or construct off-site affordable units, or pay in-lieu fees. To implement the Affordable Housing Program, the City would rezone non-residentially zoned properties located along major corridors to allow for higher density housing with reduced parking requirements and the allowance of affordable rents for low income units to be calculated based on 80% of the area median income (AMI) where 60% is required under state density bonus law. Adding residential development as an allowed use at higher densities creates land value and incentivizes housing production overall.
Parking Standards for Residential Development [Program 2M] The City has retained LSA to review and analyze the residential parking provisions of the zoning code. The project will revise the zoning code’s requirement for residential off-street parking for multi-family projects to facilitate the development of multi-family housing, specifically affordable housing. The proposed revision is anticipated to be completed by Fall 2024.
Senior Housing Development at the Senior Center [Program 2D] Senior residents, generally defined as those over 65 years of age, make up approximately
10.7 percent of the population in Costa Mesa. As part of the candidate housing sites analysis, the City has identified the City’s Senior Center parking lot as a candidate housing site. In 2023, City staff continued to work with an affordable housing developer (Jamboree Housing) to submit an application for development of the site with 60 low-income age restricted (55+) apartment units (with one onsite manager’s unit). The application was reviewed in concept (“masterplan screening”) by the City Council in February of 2024 with a determination for the application to continue as proposed through the application process. The proposed building would be four-story (approximately 57 feet) in height and include parking at the ground level under the new building. Each apartment unit would be one bedroom and one bathroom with sizes ranging between 566 and 614 square feet and would include access to a private patio or deck. A portion of the housing units will be dedicated to supportive housing.
Fairview Developmental Center [Program 3B]
The City initiated the Fairview Developmental Center (FDC) Project in December of 2022.
The FDC site is one of the City’s housing opportunity sites. The City executed an agreement with the State of California, providing for $3.5 million in State funds to the City for community outreach and land use planning efforts for the re-use of the Fairview Developmental Center for mixed use/mixed income housing. The City has contracted PlaceWorks to assist in the planning and environmental review process. The City is currently in the community outreach phase of the project that was launched in October 410
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2023. The Housing Element envisions 2,300 units on this site, with 40% of the units affordable to low- and very-low income households.
Promote the Development of Accessory Dwelling Unit [Program 3E] In February 2023, City Council considered and adopted Ordinance No. 23-03 an amendment to various sections of the Zoning Code to streamline the development of Accessory Dwelling Units (ADUs) in compliance with State Housing Law. The City has a dedicated webpage to assist property owners in the ADU permitting process: The webpage includes a development standard table and FAQ document. It will be updated as needed to highlight grant funding opportunities, when available. https://www.costamesaca.gov/government/departments-and-divisions/economic-and- development-services/planning/accessory-dwelling-units-adu Explore Opportunities to implement Motel Conversions Through Project Homekey [Housing Program 3F]
Project Homekey - Motel Conversion to Permanent Supportive Housing -In 2022, the City of Costa Mesa and County of Orange were awarded over $10 million in State “Homekey” funds to acquire and convert the Motel 6 located at 2274 Newport Boulevard into permanent supportive housing. The conversion of the motel will occur in two phases.
Phase 1 includes converting 40 units to Homekey-assisted units with wraparound services for individuals earning 30% or less than Area Median Income (30 of which are permanent supportive housing units serving homeless veterans and 10 of which are set aside for homeless individuals who meet the Mental Health Services Act eligibility criteria). The leasing office and interior/exterior common area spaces will be updated, as well as performing necessary improvements as required by the Americans with Disabilities Act (ADA). A 2-bedroom manager unit will be added. Phase 1 was completed in December 2023. Phase 2 will convert the remaining 48 non-Homekey units into permanent supportive housing with wraparound services for seniors (62+) earning 50% or less of the Area Median Income. The courtyard at the south-end of the property will be updated and additional design elements will be added. Phase 2 will commence once additional funding resources are identified.
Tenant Protection Program Fair Housing [Program 4A]
The City approved a Tenant Protection Program that progresses the City’s Fair Housing goals adopted in the City’s Housing Element. The City’s Tenant Protection Program includes adoption of the Urgency Ordinance No. 2023-04 amending various section of CMMC, allocation of funds to support the program and create three full time staff positions to implement, monitor and enforce the Ordinance, and conduct outreach to landlords. Since adoption of the urgency Ordinance, staff has made specific changes to the City’s permitting process to require an applicant for a building permit to inform staff when a tenant eviction will occur. When staff is notified of a potential eviction, staff evaluates the building permit scope of work to determine the appropriate tenant 411
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protection process. A similar process is also included when staff is notified by a tenant who is being evicted.
Bridges Homeless Shelter [Program 4F]
In April 2021, the City of Costa Mesa completed the construction of its permanent Bridge Shelter within the city. Construction of the Bridge Shelter, as well as the organization and operation of the temporary Bridge Shelter at Lighthouse Church, and the ongoing efforts of the City’s Street Outreach Team represent Costa Mesa’s commitment to assisting vulnerable residents currently experiencing homelessness. With the shelter in full operation, the City is able to assist up to 72 residents at one time and connect these residents with services and assistance toward permanent housing solutions.
On June 6, 2023, the City Council approved a capacity increase of 16 beds bringing the Shelter’s total capacity to 88 beds. On August 1, 2023, the City Council approved the submission of a joint application with the Orange County Health Care Agency to the State Department of Health Care Services for funding to add 15 behavioral health beds and associated services at the Shelter. The City has since received an award of $4.2 million dollars to implement the additional beds, which are anticipated to be available for occupancy by April 2024.
This increase will bring the Shelter’s total capacity to 100 beds. On December 7, 2023, the CalOptima Board of Directors selected Costa Mesa as one of two cities to receive their innovative Street Medicine Program, which delivers primary and behavioral health care to both sheltered and unsheltered homeless people. Street Medicine is projected to launch at the Bridge Shelter in July 2024.
ENVIRONMENTAL DETERMINATION:
The 2023 Annual Progress Report for the 2015-2035 Costa Mesa General Plan and Housing Element is not subject to the provisions of the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15378(b)(2), as this report and review is not a project as defined by this section.
ALTERNATIVES:
1. Recommend City Council approval of the 2023 Annual Progress Reports for the 2015-2035 Costa Mesa General Plan and adopted Housing Element. Once approved by the City Council, staff will then forward to the State Office of Planning and Research and the State Department of Housing and Community Development for their review; or
2. Suggest modifications to the 2023 Annual Progress Reports for the 2015-2035 Costa Mesa General Plan and adopted Housing Element. The Planning Commission may recommend modifications to the Annual Progress Report for City Council consideration.
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LEGAL REVIEW:
The report has been approved as to form by the City Attorney’s Office.
PUBLIC NOTICE:
There is no public notice requirement for the Annual Report.
CONCLUSION:
As required by the Government Code, the Annual Progress Report for 2023 provides a status of the City’s General Plan and the City’s progress in its implementation for the calendar year (including progress toward meeting Housing Element goals and regional housing needs). Following City Council approval, the final annual report will be submitted to the State Office of Planning and Research and the State Department of Housing and Community Development, as required by State law.
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CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 24-188 Meeting Date: 5/7/2024
TITLE:
SECOND READING AND ADOPTION OF ORDINANCES TO AMEND TITLE 13 (PLANNING, ZONING AND DEVELOPMENT) AND TITLE 9 (LICENSES AND BUSINESS REGULATIONS) OF THE COSTA MESA MUNICIPAL CODE TO MODIFY THE CITY’S RETAIL CANNABIS
PROVISIONS AND FIND THIS PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES
DEPARTMENT/PLANNING DIVISION
PRESENTED BY: MICHELLE HALLIGAN, SENIOR PLANNER
CONTACT INFORMATION: MICHELLE HALLIGAN, SENIOR PLANNER, 714-754-5608 RECOMMENDATION:
Staff recommends the City Council:
1. Find that the project is categorically exempt from the California Environmental Quality Act (CEQA), Section 15061(b)(3) (“General Rule”).
2. Give second reading to and adopt Ordinance No. 2024-03 amending Title 13 (Planning, Zoning and Development) and Ordinance No. 2024-04 amending Title 9 (Licenses and Business Regulations) of the Costa Mesa Municipal Code to modify the City’s retail cannabis provisions.
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City of Costa Mesa
Agenda Report
77 Fair Drive
Costa Mesa, CA
92626
Item #: 24-188 Meeting Date: 05/07/2024
TITLE: SECOND READING AND ADOPTION OF ORDINANCES TO AMEND TITLE 13 (PLANNING, ZONING AND DEVELOPMENT) AND TITLE 9 (L ICENSES AND BUSINESS REGULATIONS) OF THE COSTA MESA MUNICIPAL CODE TO MODIFY THE CITY’S RETAIL CANNABIS PROVISIONS
AND FIND THIS PROJECT TO BE CATEGORICALLY EXEMPT FROM CEQA
DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/PLANNING
DIVISION
PRESENTED BY: MICHELLE HALLIGAN, SENIOR PLANNER
CONTACT INFORMATION: MICHELLE HALLIGAN, SENIOR PLANNER, 714-754-5608
RECOMMENDATION:
Staff recommends the City Council:
1. Find that the project is categorically exempt from the California Environmental Quality Act (CEQA), Section 15061(b)(3) (“General Rule”).
2. Give second reading to and adopt Ordinance No. 2024-03 amending Title 13 (Planning, Zoning and Development) and Ordinance No. 2024-04 amending Title 9 (Licenses and Business Regulations) of the Costa Mesa Municipal Code to modify the City’s retail cannabis provisions.
BACKGROUND:
At the March 19, 2024, City Council meeting, the City Council considered the Planning Commission’s recommendations, as well as other issues raised by members of the cannabis industry and the public.
The City Council passed nine motions for staff to modify and return with revised Ordinances for “first reading”. The March 19, 2024, City Council report and video are linked below:
March 19, 2024 City Council Agenda Report:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=6576096&GUID=EF1D8EE8-A9A0-4153- 82A6-19FFB634CE53
Video: https://costamesa.granicus.com/player/clip/4107?view_id=14&redirect=true
At the April 2, 2024, City Council meeting , the Council considered the follow-up draft ordinance modifications, heard public comment, and voted 6 -1 to give first reading of Ordinance 2024 -03 and Ordinance 2024 -04 without modifications, and conduct the second reading at the next regularly scheduled City Council meeting.
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Item #: 24-188 Meeting Date: 05/07/2024
April 2, 2024 City Council Agenda Report:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=6606557&GUID=9BC36605-449D-4FC2- B4C0-2D06126BE2B6
Video: https://costamesa.granicus.com/player/clip/4112?view_id=14&redirect=true
At the April 16, 2024 City Council meeting, the Council considered modifications to Ordinance 2024-03 and Ordinance 2024-04, heard public comment, and gave new first reading to the ordinance as revised by a 6-1 vote. The Council provided specific direction that staff: (1) remove the proposed requirement for financial interest holders to obtain a Ci ty business license; and ( 2) return with additional information regarding the establishment of a City-issued storefront informational emblem. Although not part of the motion, the City Council also discussed CMMC Section 9 -494.5 which permits subsequent can nabis business permits (CBPs) to be issued for ownership changes of cannabis storefronts approved to operate.
April 16, 2024 City Council Agenda Report:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=6634614&GUID=338D3CD3-22B3-42E8- B5E6-4FD2ECFDDC81
Video: https://costamesa.granicus.com/player/clip/4120?view_id=14&redirect=true
ANALYSIS:
Remove Requirement for Financial Interest Holders to Obtain/Maintain a City Business License
Municipal Code Sections 9-493 and 9-495(a)(5) have been modified consistent with its April 16th first reading to remove the requirement of a financial interest holder to obtain and maintain a City business license.
City-Issued Storefront Informational Emblem
At the April 16, 2024 , City Council meeting, the Council directed staff to return with information regarding a potential City-issued informational emblem to help the public identify licensed cannabis storefronts before entering. The City of Long Beach and County of Los Angeles issue 8.5 by 11-inch approximately sized window sticker emblems to all licensed retail storefronts so consumers can distinguish permitted storefronts from unpermitted ones. Both example emblems feature a QR code linking to the jurisdictions’ cannabis webpage, as shown in the below Image 1.
Image 1 - Emblem Examples
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Item #: 24-188 Meeting Date: 05/07/2024
Staff has determined that a City-issued informational emblem to help identify a permitted cannabis facility is not a business sign or advertisement; therefore, establishing a City-issued emblem program, similar to the above Long Beach and Los Angeles County examples, would not be inconsistent with the CMMC or State cannabis laws . The issuance of such an informational emblem would be an administrative procedure that would be established in the City’s Cannabis Administrative Regulations, and no Municipal Code modifications would be necessary. If directed by the City Council, staff would draft design options for City Manager review and approval.
Cannabis Business Permit (CBP) Issuance for Ownership Changes
At the April 16, 2024 hearing, the City Council expressed concern that the draft Ordinance language in Title 9 -494.5 could be interpreted as prohibiting the City from issuing subsequent cannabis business permits (CBPs) for changes in ownership at cannabis storefronts. During the meeting, the City Attorney confirmed that the proposed language in Title 9-494.5 would not prohibit approved cannabis storefront operations from obtaining CBPs following approved changes in ownership.
ENVIRONMENTAL DETERMINATION:
The proposed Ordinances are exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (“General Rule”) in that the updates to the City’s Municipal Code provisions for retail cannabis storefronts will not have a significant impact on the environment.
ALTERNATIVES:
The City Council may give second reading and adopt the Ordinances as proposed, modify the Ordinances, or not adopt the Ordinances. If the City Council chooses to make s ubstantive modifications to the Ordinances after introduction, the modified Ordinances would need to be brought back at a future meeting for adoption.
FISCAL REVIEW:
The adoption of the proposed Ordinances is not anticipated to have any fiscal impact on the City’s budget.
LEGAL REVIEW:
The draft Ordinances and staff report have been prepared in conjunction with and reviewed by the City Attorney’s Office.
CITY COUNCIL GOALS AND PRIORITIES:
This item supports the following City Council Goal:
Achieve long-term fiscal sustainability.
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Item #: 24-188 Meeting Date: 05/07/2024
CONCLUSION:
The proposed retail cannabis ordinance amendments are intended to address issues of potential over concentration, land use compatibility, as well as improving economic and business conditions.
The City Council’s proposed amendments to the retail cannabis p rovisions are reflected in the attached exhibits.
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ATTACHMENT 1
Ordinance No. 2024-03 Page 1 of 4
ORDINANCE NO. 2024-03
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, AMENDING TITLE 13 (PLANNING, ZONING, AND DEVELOPMENT) , CHAPTER IX (SPECIAL LAND USE REGULATIONS), ARTICLE 21 (LOCATION OF
CANNABIS DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT,
TESTING LABORATOIES, RETAIL STORERONT AND RETAIL NONSTOREFRONT
USES) OF THE COSTA MESA MUNICIPAL CODE OF THE COSTA MESA MUNICIPAL
CODE PERTAINING TO CANNABIS STOREFRONTS
THE CITY COUNCIL OF THE CITY OF COSTA MESA , CALIFORNIA DOES HEREBY FIND AND DECLARE AS FOLLOWS:
WHEREAS, in November 2020, the Costa Mesa voters approved Measure Q; which allows for storefront and non-storefront retail cannabis uses on commercially zoned properties meeting specific location requirements, and non-storefront retail cannabis uses on Industrial Park (MP) and Planned Development Industrial (PDI) zoned properties; WHEREAS, Measure Q authorizes the City Council to adopt ordinances to regulate cannabis retail uses;
WHEREAS, on June 15, 2021, the City Council adopted Ordinance No. 21-08 and No. 21-09 to amend Titles 9 and 13 of the Costa Mesa Municipal Code (CMMC) to establish regulations for cannabis retail uses;
WHEREAS, at the July 18, 2023 City Council meeting, a Councilmember requested that an item be agenized to discuss the potential for exploring amendments to the City’s cannabis ordinances in response to public input; WHEREAS, on September 5, 2023, the City Council directed the Planning Commission to explore potential amendments to the City’s cannabis retail storefront provisions specific to eight topics;
WHEREAS, the Planning Commission discussed p otential amendments to the City’s cannabis retail storefront provisions at the November 27, 2023, December 11, 2023, and January 22, 2024, Planning Commission meetings; WHEREAS, the City Council considered the Planning Commission’s recommended amendments to the City’s cannabis retail storefront provisions at the March 19, 2024, April 2, 2024, April 16, 2024, and May 7, 2024 City Council meetings;
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Ordinance No. 2024-03 Page 2 of 4
Now, therefore, THE CITY COUNCIL OF THE CITY OF COSTA MESA , CALIFORNIA DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Title 13, of the Costa Mesa Municipal Code is hereby amended to read as specified in Exhibit A, attached hereto and incorporated herein by this reference.
Section 2. Compliance with CEQA. Pursuant to the California Environmental Quality Act (CEQA), the project is exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15061(b)(3) (“General Rule”), as this action will not have any significant effect on the environment.
Section 3. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.
Section 4. Severability. If any chapter, article, section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance or its application to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, article, section, subsection, subdivision, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more subsections, subdivi sions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional.
No portion of this Ordinance shall supersede any local, State, or Federal law, regulation, or codes dealing with life safety factors.
Section 5. Effective Date. This Ordinance shall take effect thirty (30) days after its final passage.
Section 6. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law.
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Ordinance No. 2024-03 Page 3 of 4
PASSED AND ADOPTED this ___day of _____, 2024.
_____________________________
John Stephens, Mayor
ATTEST: APPROVED AS TO FORM:
________________________ _____________________________ Brenda Green, City Clerk Kimberly Hall Barlow, City Attorney
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Ordinance No. 2024-03 Page 4 of 4
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing Ordinance No. 2024-03 was duly introduced for first reading at a regular meeting of the City Council held on the ____day of _________ 2024, and that thereafter, said Ordinance was duly passed and adopted at a regular meeting of the City Council held on the ___ day of _________, 2024, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this ___ day of ___________, 2024.
__________________________
Brenda Green, City Clerk
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ATTACHMENT 2
Ordinance No. 2024-04 Page 1 of 4
ORDINANCE NO. 2024-04
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, AMENDING TITLE 9 (LICENSES AND BUSINESS REGULATIONS) OF
THE COSTA MESA MUNICIPAL CODE PERTAINING TO CANNABIS BUSINESSES
THE CITY COUNCIL OF THE CITY OF COSTA MESA , CALIFORNIA DOES HEREBY FIND AND DECLARE AS FOLLOWS:
WHEREAS, in November 2020, the Costa Mesa voters approved Measure Q; which allows for storefront and non-storefront retail cannabis uses on commercially zoned properties meeting specific location requirements, and non-storefront retail cannabis uses on Industrial Park (MP) and Planned Development Industrial (PDI) zoned properties; WHEREAS, Measure Q authorizes the City Council to adopt ordinances to regulate cannabis retail uses;
WHEREAS, on June 15, 2021, the City Council adopted Ordinance No. 21-08 and No. 21-09 to amend Titles 9 and 13 of the Costa Mesa Municipal Code (CMMC) to establish regulations for cannabis retail uses;
WHEREAS, at the July 18, 2023 City Council meeting, a Councilmember requested that an item be agenized to discuss the potential for exploring amendments to the City’s cannabis ordinances in response to public input; WHEREAS, on September 5, 2023, the City Council directed the Planning Commission to explore potential amendments to the City’s cannabis retail storefront provisions specific to eight topics;
WHEREAS, the Planning Commission discussed potential amendments to the City’s cannabis retail storefront provisions at the November 27, 2023, December 11, 2023, and January 22, 2024, Planning Commission meetings and made recommended modifications for City Council consideration;
WHEREAS, the City Council considered the Planning Commission’s recommended amendments to the City’s cannabis retail storefront provisions at the March 19, 2024, April 2, 2024, April 16, 2024, and May 7, 2024 City Council meetings; Now, therefore, THE CITY COUNCIL OF THE CITY OF COSTA MESA , CALIFORNIA DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Title 9, of the Costa Mesa Municipal Code is hereby amended to read as 423
Ordinance No. 2024-04 Page 2 of 4
specified in Exhibit A, attached hereto and incorporated herein by this reference.
Section 2. Compliance with CEQA. Pursuant to the California Environmental Quality Act (CEQA), the project is exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15061(b)(3) (“General Rule”), as this action will not have any significant effect on the environment.
Section 3. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and n o further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.
Section 4. Severability. If any chapter, article, section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance or its applicatio n to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, article, section, subsection, subdivision, sentence, clause, phrase or portion thereof, irrespective of the fact that any one or more subsecti ons, subdivi sions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional.
No portion of this Ordinance shall supersede any local, State, or Federal law, regulation, or codes dealing with life safety factors.
Section 5. Effective Date. This Ordinance shall take effect thirty (30) days after its final passage.
Section 6. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law.
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Ordinance No. 2024-04 Page 3 of 4
PASSED AND ADOPTED this ___day of _____, 2024.
_____________________________
John Stephens, Mayor
ATTEST: APPROVED AS TO FORM:
________________________ _____________________________ Brenda Green, City Clerk Kimberly Hall Barlow, City Attorney
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Ordinance No. 2024-04 Page 4 of 4
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing Ordinance No. 2024-04 was duly introduced for first reading at a regular meeting of the City Council held on the ____day of _________ 2024, and that thereafter, said Ordinance was duly passed and adopted at a regular meeting of the City Council held on the ___ day of _________, 2024, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this ___ day of ___________, 2024.
__________________________
Brenda Green, City Clerk
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ATTACHMENT 3
EXHIBIT A
CHAPTER IX. SPECIAL LAND USE REGULATIONS. ARTICLE 21. LOCATION OF
CANNABIS DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT,
TESTING LABORATORIES, RETAIL STOREFRONT AND RETAIL NON-
STOREFRONT USES
13-200.90. Purpose.
The purpose of this article is to regulate the location of and standards for cannabis distributing facilities, manufacturing sites, research and development laboratories, testing laboratories, retail storefront and retail non-storefront uses in order to promote the health, safety, morals and general welfare of the residents and the businesses within the city by maintaining local control over the ability to authorize and regulate the location of cannabis businesses.
13-200.91. Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to criminal prosecution under the Compassionate Use Act of 1996. (b) All the provisions of this article shall apply to all property, public and private, within the city.
(c) All the provisions of this article shall apply indoors and outdoors. (d) Unless otherwise provided herein or in this title, the terms used in this article shall have the meaning ascribed to them in Title 9, Chapter VI of this Code.
13-200.92. Cannabis distributing facilities, manufacturing sites, research and development laboratories, and testing laboratories.
(a) Cannabis distribution, manufacturing, research and development and testing is prohibited in all zone districts within the city, except for those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection (the “Green Zone”).
(b) A conditional use permit shall be required and may be issued to allow the location of any business engaged in the distribution, manufacturing, researching and developing, or testing of cannabis in the MP or PDI zones pursuant to subsection (a) of this section, subject to the following conditions:
(1) The requirements of Chapter III of this title have been met; (2) The findings for granting a conditional use permit in accordance with section 13- 29(g) are met;
(3) The applicant obtains a cannabis business license pursuant to Chapter VI of Title 9 of this Code; and
(4) The use is conducted in compliance with all applicable state and local laws. (c) No person shall engage in any use set forth in this article unless that use is specifically authorized by Chapter VI of Title 9 of this Code.
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13-200.93. Cannabis retail storefront and non-storefront uses. (a) Cannabis retail storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts.
(b) Cannabis retail non-storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts and within the Green Zone. (c) The following planning application shall be required for cannabis retail uses:
(1) A conditional use permit shall be required for retail storefronts and non-storefronts; and
(2) An amendment to the approved conditional use permit shall be required for existing licensed cannabis distribution or manufacturing businesses to operate a retail non-storefront under the existing business and within the same licensed premise. The amendment shall be processed as a minor conditional use permit. (d) A conditional use permit may be issued to allow the location of a retail cannabis use pursuant to subsections (a) and (b) of this section, subject to the following conditions:
(1) The requirements of Chapter III of this title have been met; (2) The findings for granting conditional use permit pursuant to section 13-29(g) are met;
(3) The applicant obtains a cannabis business licensed for the location pursuant to Chapter VI of Title 9 of this Code; and
(4) The use is conducted in compliance with all applicable state and local laws, regulations, and all applicable conditional use permit conditions of approval. (e) Cannabis retail storefront location.
(1) No cannabis retail storefront use shall be located within one-thousand (1,000) feet from a K-12 school, playground, child daycare, homeless shelter, or youth center, that is in operation at the time of submission of a completed Cannabis Business Permit application, or within two hundred fifty (250) feet from a property zoned for residential use;
i. For the purpose of identifying separations from cannabis storefronts and properties zoned for residential use, properties zoned for residential use are within the following zoning districts: R1 Single-Family Residential District, R2-MD Multiple-Family Residential District, Medium Density, R2-HD Multiple-Family Residential District, High Density, R3 Multiple- Family Residential District, TC Town Center District, PDR-LD Planned Density Residential—Low Density, PDR-MD Planned Development Residential—Medium Density, PDR-HD Planned Development
Residential—High Density, and PDR-NCM Planned Development Residential—North Costa Mesa.
ii. Where a non-residential property was developed for residential or mixed residential use in accordance with an overlay, urban plan, or specific plan, and the residential development and use remains, the property would be considered residential when establishing a separation from cannabis storefronts.
iii. Where an overlay, urban plan, or specific plan allows residential development on a property zoned for residential use, but residential 428
development has not been constructed, such property would not be considered a property zoned for residential use pursuant to this provision. iv. Where a legal nonconforming residential unit or units have been developed on a property zoned for non-residential use, the property would not be considered residential when establishing a separation from cannabis storefronts.
(2) All distances referenced in (e)(1) shall be measured in a straight line from the premises where the cannabis retail use is to be located to the closest property line of a K-12 school, playground, child daycare, homeless shelter, youth center or property zoned for residential use.
i. For purposes of this sub-sub-section, the property line of a playground shall be a thirty (30) foot radius from the exterior physical boundaries of the playground equipment area;
(3) All distances shall be measured without regard to the boundaries of the city and and/or intervening structures or other barriers;
(4) At a property as for which the zoning administrator, director or planning commission determines, based on a preponderance of the evidence, that unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing has taken place at any time in the 365 days preceding an application under this Article. If an unpermitted and/or illegal cannabis activity has existed on a property no cannabis business may be permitted on that property unless 365 days has elapsed since that unpermitted and/or illegal cannabis activity has vacated the property, and the owner of that property has compensated the City for any and all expenditure of public funds and resources, including all costs, expenses (including but not limited to the salaries of peace and/or code enforcement officers) and/or attorney’s fees, incurred in investigating, abating or attempting to abate the unpermitted use or uses, whether or not any type of civil, criminal or administrative proceedings have been commenced against the property, provided however if the owner of the property is required to evict that use, the 365 days shall begin to run from the date of the filing of an unlawful detainer complaint, in which case a permit may be issued after the 365 days had elapsed and that use is no longer occupying the property. (5) A determination and/or finding under sub-section (e)(4) is subject to the appeal provisions of Chapter IX of Title 2 of this Code.
(6) The nonconforming provisions contained in Chapter X of this Code pertain to cannabis uses except as follows:
i. When an approved retail cannabis storefront conditional use permit location which lawfully met separation requirements at the time of the submission of a cannabis business permit application for the subject property does not conform to the separation and the permitted cannabis retail operation is discontinued or abandoned for more than one hundred eighty (180) days, or when a permitted cannabis use is replaced in whole or part for any period of time by any other use, the conditional use permit shall be null and void after the permittee has had an opportunity for a hearing before the issuing officer as provided in Chapter II of Title 9. (f) Retail storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9:
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(1) Opaque window coverings unless required by the City for security purposes are prohibited;
(2) Permanent security or safety bars shall not be placed on any interior or exterior windows or door, unless required by the City for security purposes; (3) Directional signage to the use including but not limited to A-frame signs, sandwich board signs, banners, or flags are prohibited;
(4) No use shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the premises of the commercial cannabis business or elsewhere including, but not limited to, the public right-of- way;
(5) Uses shall comply with the landscaping requirements set forth in Chapter VII of this title including bringing the site landscaping into conformance when feasible as determined by the director;
(6) Parking requirements shall be subject to Section 13-89; (7) The hours of operation may be established as part of the planning application subject to the final review authority and may be more restrictive than those set forth in Chapter VI of Title 9. Modification of operation hours when established as part of the planning application shall be subject to an amendment of the planning application;
(8) Drive-through services or walk-up window services are prohibited; (9) Outdoor seating or patio areas are prohibited;
(10) Special events that include live entertainment, dancing, and/or amplified music, or that are otherwise visible and/or audible from the public right-of-way, are prohibited;
(11) All cannabis products shall be secured after business hours in a locked container under 24-hour video surveillance; and
(12) For uses within two hundred (200) feet of a residential zone, all exterior lighting shall be shielded and/or directed away from residential areas. In addition, trash facilities shall be screened from view and designed and located appropriately to minimize potential noise and odor impacts to adjacent residential areas. (g) Non-storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9:
(1) Uses may operate independently from a retail storefront or as a part of, and in conjunction with, a permitted storefront, distribution, or manufacturing facility; (2) Parking requirements shall be subject to Section 13-89 and shall also include sufficient parking spaces for delivery vehicles;
(3) All deliveries to customers shall be completed by 10:00 p.m.; and (4) The general public shall not be permitted to enter the premises of a non-storefront retail use.
(h) Except as specifically authorized in this article, all other cannabis retail uses such as but not limited to lounges and cafes are expressly prohibited in the city. (i) No person shall engage in any use set forth in this article unless that use is specifically authorized by Chapter VI of Title 9 of this Code.
(j) Any cannabis use, including but not limited to those involving sale, delivery and/or dispensing, that is not permitted, licensed and otherwise in full compliance with all applicable provisions of this Code and state and local law, shall not be considered a 430
legally non-conforming use pursuant to, and notwithstanding any contrary provisions of, Chapter IX of this title.
13-200.94. Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained, moved, or operated contrary to the provisions of this article, is hereby declared to be unlawful and a public nuisance and may be abated by the city through civil and/or administrative proceedings by means of a restraining order, preliminary or permanent injunction, or in any other manner provided by law for the abatement of such nuisances.
13-200.95. Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16 in addition to any other remedy available at law or in equity.
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ATTACHMENT 4
EXHIBIT A
CHAPTER VI. CANNABIS BUSINESS PERMITS
9-481. Purpose and intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing, processing, research and development, retail sale, testing and transporting of cannabis and cannabis -related products in a manner which is responsible, which protects the health, safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations consistent with state law. In part to meet these objectives, a permit shall be required in order to own and/or to operate a cannabis business within the c ity. Nothing in this chapter is intended to authorize the possession, use, or provision of cannabis for purposes which violate state or federal law. The provisions of this chapter are in addition to any othe r permits, licenses, and approvals which may be r equired to conduct business in the city, and are in addition to any permits, licenses and approvals required under state law.
9-482. Legal authority.
Pursuant to Section s 5 and 7 of Article XI of the California Constitution and the provisions of Division 10 of the Business and Professions Code, the city is authori zed to adopt ordinances that establish standards, requirements and regulations for local licenses and permits for cannabis and cannabis-related activity.
9-482.5 Authority of the City Manager
The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter as may be necessary to administer and enforce the provisions of this Chapter and any other ordinances, regulations or laws relating to and affecting the permitting and operations of commercial cannabis businesses.
The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process for permit applications and requests for permit changes or modifications pursuant to this Chapter, and the implementation and administration of social equity programs.
9-483. Cannabis business activities prohibited unless specifically authorized by this chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing, laboratory testing, labeling, transporting, dispensing, furnishing, distribution, delivery, or sale of cannabis or a cannabis product is expressly prohibited in the city.
9-484. Compliance with laws.
It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder.
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9-485. Definitions.
Unless otherwise defined in this chapter or in chapte r I of Title 13, the words used in this chapter shall have the same definitions ascribed to them in Division 10 of the Business and Professions Code or the definitions of the Health and Safety Code applicable to school and child daycare. Any reference to California statutes includes any regulations promulgated thereunder and is deemed to include any successor or amended version of the referenced statute or regulatory provision.
Cannabis means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from marijuana. “Cannabis” also means marijuana as defined by section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. “Cannabis” does not include the mature stalks of th e plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, “cannabis” does not mean industrial hemp as that term is defined by section 81000 of the California Food and Agricultural Code or section 11018.5 of the California Health and Safety Code.
Cannabis business permit means a regulatory permit issued by the city pursuant to this chapter to a cannabis business, and is required before any cannabis activity may be conducted in the city.
Cannabis goods means cannabis and/or cannabis products.
Cannabis product or manufactured cannabis product or product means cannabis that has undergone a process whereby the plant material is transformed into a concentrate for internal consumption or topical application, including, but not limited to, concentrated cannab is, an edible cannabis product, or a topical cannabis product containing cannabis or concentrated cannabis in combination with other ingredients.
Caregiver or primary caregiver has the same meaning as that term is defined in section 11362.7 of the California Health and Safety Code.
City manager shall mean the city manager of the city or designee.
Director shall mean the city’s Director of the Economic and Development Services department or designee, unless otherwise specified.
Dispensing means any activity involving the retail sale of cannabis or cannabis products.
Distributor means a person or entity th at engages in distribution. The direct and/or retail sale, distribution, or furnishing of any cannabis or cannabis product to any consumer or end user by a distributor is expressly prohibited, unless otherwise authorized pursuant to this chapter.
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Edible cannabis product means manufactured cannabis that is intended to be used, in whole or in part, for oral human consumption including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the California Food and Agricultural Code. An edible cannabis product is not considered food as defined by California Health and Safety Code Section 109935 or a drug as defined by California Health and Safety Code Section 109925.
Financial interest holder shall have the same meaning as set forth in Title 4, Division 19, section 15004 of the California Code of Regulations.
Free sample means any amount of cannabis goods provided to a patron of a business or member of the public without cost or payment or exchan ge for any other thing of value.
Green Zone means those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection.
Homeless shelter has the same meaning as emergency shelter.
Labor Peace Agreement has the same meaning set forth in Business and Professions Code section 26001.
Manufacturing site means a location where cannabis products are manufactured.
Marijuana means “cannabis,” as that term is defined in this chapter.
Marijuana activity and/or cannabis activity includes manufacture, processing, laboratory testing, research and development, transporting, delivery, dispensing, distribution, furnishing, giving away or sale, or arranging and/or directing any of the foregoing, or any other activity involving cannabis or a cannabis product.
Marijuana business and/or cannabis business means any business or operation which engages in any marijuana or cannabis activity.
Marijuana business permit has the same meaning as cannabis business permit.
Patient or qualified patient shall have the same definition as California Health and Safety Code section 11362.7 et seq., as it may be amended, and which means a person who is entitled to the protections of California Health and Safety Code section 11362.5. For purposes of this chapter, a qualified patient shall include a person with an identification card as that t erm is defined by California Health and Safety Code section 11362.7 et seq.
Person with an identification card shall have the meaning given that term by California Health and Safety Code section 11362.7.
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Playground shall mean and include both a public playground located in a city park and a private playground. A private playground shall mean a privately-owned outdoor recreation area, including a tot lot, containing playground equipment or amenities such as swings, slides, sandboxes, or similar installations designed for use by minors and serving either the general public or residents of a development where the playground equipment is located, including residential subdivisions and/or developments such as apartments, townhomes and/or condominium complexes, mobile home parks or other similar residential uses, as well as playground equipment serving registered guests at hotels and motels. A private playground does not include a playground or playground equipment installed at a single -family residence, or play equipment that is part of a privately -owned commercial business or place of worship, or a playground that is access -controlled during operating hours or does not have direct access from the public right -of-way. A private playground does not include areas designated for use as a playing field or court, pool, or skate facility.
Premises shall have the same meaning as set forth in Business and Professions Code section 26001 sub-section (ap) for purposes of measuring the required distance from retail storefront uses to those uses set forth in section 13-200.93(e)(1).
Processing and processor shall have the same meaning as manufacturing and manufacturer, respectively.
Property shall mean any single development lot that has been subdivided bearing its own assessor’s parcel number or with an approved subdivision map or condominium map unless the context clearly indicates a different meaning.
Research and development laboratory means a facility, entity, or site in the cit y that performs research into and/or the development of cannabis or cannabis products, where cannabis in any amount is located on-site, and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons involved in the cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and operated by a person issued a valid cannabis business permit for laboratory testing from the city and is currently in compliance with all applicable state and local laws and regulations pertaining to the cannabis business and cannabis activities.
South Coast Collection or SoCo means all properties located at 3303 through 3323, inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as “SoCo” or “SOCO.”
State means the State of California, including any of its departments, divisions, and/or bureaus.
State license means a permit or license issued by the state to engage in cannabis activity.
Youth center means any public or private facility that is primarily used to host recreation or social activities for minors, specifically private youth membership organizations or clubs, social services teenage club facilities, video arcades where ten (10) or more games or game mac hines or devices 435
are operated or similar amusement park facilities, but does not include dance studios, tutoring, martial arts studios or similar type of uses.
9-486. Type of authorized cannabis businesses permitted. (a) One (1) or more of the following types of adult (A -license) and/or medical (M -license) cannabis business may be permitted to operate within the city:
1. Cannabis distributor (includes license classification type 11);
2. Cannabis manufacturer (includes license classification type 6 and 7);
3. Cannabis testing laboratory (includes license classification type 8);
4. Cannabis retail - storefront (includes license classification type 10);
5. Cannabis retail - non-storefront (includes license classification type 9); and
6. Cannabis research and development laboratory.
(b) Businesses permitted pursuant to this chapter shall not engage in the retail sale, delivery or dispensing of cannabis, cannabis product, hemp or hemp products unless expressly permitted to do so pursuant to the terms of their cannabis business permit. (c) No person may engage in any type of cannabis business that is not specifically authorized pursuant to this section and this code, including, but not limited to, cultivating cannabis. (d) The City Council may by resolution limit and/or restrict the number of cannabis retail permits available for issuance and/or renewal.
9-487. Cannabis business permit required to engage in a cannabis business.
No person may engage in any cannabis business or in any cannabis activity within the city including manufacturing, processing, lab oratory testing, transporting, dispensing, distribution, or sale of cannabis or a cannabis product unless the person: 1) has a valid cannabis business permit from the city that authorizes the specific business and activity at specific location; 2) has a va lid business license issued to the entity that is listed on the cannabis business permit; and 3) is currently in compliance with all other applicable state and local laws and regulations pertaining to the cannabis business and cannabis activity. All cannabis business permits shall include a copy of a written notice to any existing tenant of the proposed business premises from the owner of the property of the intent to file a cannabis business permit application for those premises.
9-487.3. Disclosure of Financial Interest Holders Required.
Any and all financial interest holders must be disclosed to the City as part of any application for issuance and/or renewal of a cannabis business permit.
9-487.5. Change in business name.
No operator shall operate, conduct, manage, engage in, or carry on a cannabis business under any name other than the business name specified in the permit and/or any “doing business as” or “DBA”, or “fictitious business name” or “FBN”, provided in the permit application and/or business license.
Proof of the “DBA” or “FBN” filing with the County Clerk Recorder shall be required. Any approved changes and/or updates to the permit may require payment of fees as set by resolution of the City Council.
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9-488. Term of permit-Fees.
(a) A cannabis business permit shall be valid for two (2) years from the date of issue, unless otherwise suspended or revoked, and may be renewe d bi-annually thereafter, provided the permittee and application for renewal are in compliance with all of the provisions of this chapter as well as all administrative regulations adopted pursuant to section 9-497. (b) Cannabis business permit application fees and renewal fees shall be established by resolution of the city council as may be amended from time to time. Failure to timely submit fees and/or comply with the administrative regulations governing applications an d/or renewals shall be grounds for denial of application and/or renewal.
9-489. Effect of state license suspension, revocation, or termination.
Suspension of a license issued by the State of California, or by any of its departments or divisions, shall immediately suspend the ability of a cannabis business to operate within the city, until the State of California, or its respective departments or divisions, reinstates or reissues the State license within 90 days. Should the state license remain suspended for 90 days or longer, any permit issued pursuant to this chapter shall expire and be of no further force and effect. Should the State of California, or any of its departme nts or divisions, revoke or terminate the license of a cannabis business, such revocation or termination shall also revoke or terminate the ability of a business permitted pursuant to this chapter including the persons and entities set forth in section 9-490(c) to operate any cannabis business within the city for a period of five years from the date of such revocation or termination.
9-490. Denial and revocation.
(a) Revocation. A cannabis business permit may be revoked and/or suspended pursuant to the procedures of section 9 -120, and/or deemed abandoned or forfeited pursuant to the procedures of section 9 -495, for failing to comply with the terms of the permit, the applicable provisions of this chapter, this Code, city regulations, state law or regulations and/or any conditions of any other permit issued pursuant to this Code. (b) Denial. An application for a cannabis business permit may be denied where it fails to provide all required information, documentation and/or fees and/or where it does not or would not be able to comply with the applicable provisions of this chapter, this Code, city regulations and/or state law or regulations and/or where the applicant is otherwise ineligible for such permit.
(c) Effect of revocation and denial. Whenever an application for a permit is denied, no other similar application by such applicant or permittee will be considered for a period of one (1) year from the date of the denial of an application. Whenever a permit has been revoked, no other similar application by such permittee shall be considered for a period of five (5) years from either the date the notice of the permit revocation was mailed or the date of the final decision of the city to revoke the permit, whichever is later. The prohibitions of this subsection shall also apply to the following:
1. Any individual whose permit was revoked or whose application was denied who later becomes a director or officer of a corporation, profit or nonprofit, or a member 437
of a partnership or a person owning or possessing any portion of the shares of a corporation seeking to obtain a new permit.
2. A corporation, profit or nonprofit, whose permit was revoked, or application was denied, to any of its directors or officers or to any person who owned any portion of its shares, who attempts by way of a new corporation or using their individual names or becoming a member of a partnership or a director or officer or a person owning or possessing any por tion of the shares in another corporation seeking to obtain a new permit.
(d) Ineligibility. In addition to any other law, no person or entity shall be eligible for and/or receive a cannabis business permit if that person or entity, or any director or officer of that entity or a person who owned any portion of that entity’s shares, or any financial interest holder of that entity, engaged or engages in unpermitted and/or illegal cannab is activity involving sales, delivery and/or dispensing in the city, or had an ownership interest in any property set forth in section 13 -200.93(e)(5), in the five (5) years preceding an application under this chapter or during the application process. A determination of ineligibility under this sub -section (d) may be made by the City Manager and shall be based on the preponderance of the evidence . This prohibition shall not apply to a natural person who would otherwise be ineligible based on a criminal co nviction that has been dismissed, withdrawn, expunged or set aside or is otherwise exempted pursuant to sections 9 - 495(g)(10) and/or 9-496(b).
9-491. Appeals.
Notwithstanding any other provision of this code, only a decision by the city manager to suspend, revoke or deny a cannabis business permit under this chapter shall be subject to appeal, which shall be governed by the procedures set forth in Chapter IX of Title 2 of this code.
9-492. Prohibition on transfer of cannabis business permits.
In the event a permit holding cannabis business sells or transfers the business to a new owner and/or operates the business under a new entity and/or name not listed on the permit, the new owner must obtain a new cannabis business permit and business license prior to commencing or continuing operations. A cannabis business shall be deemed to have tran sferred to a new owner within the meaning of this section if person(s) or entities with controlling interest at the time the permit was first issued cease(s) at any time to possess controlling ownership interest and/or hold an ownership interest of less than fifty-one (51) percent.
9-493. City business license required.
Prior to commencing operations, a cannabis business shall obtain and thereafter maintain a valid city business license pursuant to Chapter I of this title. Failure to hold a valid business license at all times shall render the cannabis business permit invalid.
9-494. Conditional use permit required.
No cannabis business permit shall be issued, and no person shall conduct a cannabis business unless a conditional use permit has been issued therefore pursuant to the provisions of Title 13, Chapter IX, Article 21 of this C ode. Approval of a conditional use permit shall not waive any other requirements of State or local law or regulation, including, but not limited, to the requirement to 438
obtain a building permit, certificate of occupancy, cannabis business permit and/or city business license.
9-494.5 Maximum cannabis retail storefront cannabis business permits.
A maximum of thirty -five (35) storefront retail cannabis business permits may be issued by the City; provided, however, that the City will only process applications w hich have passed the pre - application phase as of the effective date of this ordinance . Thereafter, no further storefront retail cannabis business permits for new locations may be issued by the City until the total number of operating licensed storefront r etail establishments fall s below ten (10), after which time the City may issue further cannabis business permits not to exceed ten (10) total active storefront retail cannabis business permits operating at one time.
9-495. Operating requirements for all cannabis businesses permitted under this chapter. (a) Records and recordkeeping.
1. Each owner and operator of a cannabis business shall maintain accurate books and records, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than a quarterly basis or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number of sales by the cannabis business during the previous three (3) month period (or shorter period based upon the timing of the request), provided on a per -month basis. The statement shall also include gross sales for each month, and all applicable taxes paid or due to be paid.
Each owner and operator shall keep and preserve for a period of no less than seven (7) years, all records as may be necessary to determine the amount of such tax the operator may have been liable to collect and remit to the city.
2. Each owner and operator of a cannabis business shall maintain a current register of the names and the contact information (including the name, address, telephone number, a copy of that person’s government issued identification, and email address) of anyone owning or holding an interest in the cannabis business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request.
3. All cannabis businesses shall maintain an inventory control and reporting system that accurately documen ts the present location, amounts, and descriptions of all cannabis and cannabis products for all stages of the production or manufacturing, laboratory testing and distribution processes.
4. Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA), each cannabis business shall allow city officials to have access to the business’s books, records, accounts, together with any other data or documents relevant to its permitted cannabis activities, for the purpose of co nducting an audit or examination. Books, records, accounts, and any and all relevant data or documents will be produced no later than twenty -four (24) hours after receipt of the city’s request, unless otherwise stipulated by the city.
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5. Each owner and operator of a cannabis business shall disclose to the City the names and addresses of each and every financial interest holder of that business within ten (10) calendar days of that person becoming a financial interest holder of the cannabis business, and the reafter shall notify the City within ten (10) business days if that person or entity ceases to be a financial interest holder.
(b) Security measures.
1. A permitted cannabis business shall implement sufficient security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the cannabis business. These security measures shall include:
a. Establishing limited access areas acc essible only to authorized cannabis business personnel;
b. All cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault, and shall be kept in a manner as to prevent diversion, theft, and loss;
c. Sensors shall be installed to detect entry and exit from all secure areas; d. Having a professionally installed, maintained, and monitored alarm system; e. Any bars to be installed on the windows or the doors of the cannabis business for security purposes, if perm itted by the city, shall be installed only on the interior of the building;
f. Security personnel if utilized must be licensed by the State of California Bureau of Security and Investigative Services Personnel, shall comply with the requirements of Ca lifornia Business and Professions Code Chapters 11.4 and 11.5 of Division 3, and have a valid business license from the city; and g. Each cannabis business shall have the capability to remain secure and operational during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage.
2. Each cannabis business shall identify a designated security representative/liaison to the city, who shall be rea sonably available to meet with the city manager regarding any security related measures or and operational issues.
3. A cannabis business shall notify the city manager within twenty-four (24) hours after discovering any of the following:
a. Significant discrepancies identified during inventory, as set forth in the city’s administrative regulations;
b. Diversion, theft, loss, or any criminal activity involving the cannabis business or any agent or employee of the cannabis business; or
c. The loss or unauthorized alteration of records related to cannabis, registering qualifying patients, primary caregivers, or employees or agents of the cannabis business and/or cannabis sales.
(c) Restriction on alcohol sales. No person shall cause or permi t the sale, dispensing, or consumption of alcoholic beverages on or about the premises of the cannabis business. (d) Compliance with laws. It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable 440
state and local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be construed as authorizing any actions which violate state law or local law with respect to the operation of a cannabis business or any site -specific, additional operating procedures or requirements which may be imposed as conditions of approval of the location of the cannabis business.
(e) Taxes. All cannabis businesses authorized to operate under this c hapter shall pay all sales, use, business and other applicable taxes, and all license, registration, and other fees required under federal, state and local law. Each cannabis business shall cooperate with the city with respect to any reasonable request to audit the cannabis business’s books and records for the purpose of verifying compliance with this section, including, but not limited to, a verification of the amount of taxes required to be paid during any period. (f) Insurance. Permittee shall obtain and maintain at all times during the term of the permit comprehensive general liability insurance and comprehensive automotive liability insurance protecting the permittee in an amount of not less than one million dollars ($1,000,000.00) per occurrence, combined single limit, including bodily injury and property damage and not less than one million dollars ($1,000,000.00) aggregate for each personal injury liability, products-completed operations and each accident, issued by an insurance provider rated at least A -:VIII in A.M. Best and Company’s Insurance Guide and either admitted and authorized to do business in California or is listed on the California Department of Insurance’s List of Approved Surplus Line Insurers.
(g) Miscellaneous operating requirements.
1. Restriction on consumption. Cannabis shall not be consumed on the premises of any cannabis businesses or elsewhere in the city other than within private residences.
2. No cannabis or cannabis products or graphics depicting cannabis or cannabis products shall be visible from the exterior of any property issued a cannabis business permit, or on any of the vehicles owned or used as part of the cannabis business except as otherwise expressly allowed by this chapter. No outdoor storage of cannabis or cannabis products is permitted at any time.
3. Reporting and tracking of product and of gross sales. Each cannabis business shall have in place a point-of-sale tracking system to track and report on all aspects of the cannabis business including, but not l imited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and by sale). The cannabis business shall ensure that such information is compatible with the city’s record -keeping systems.
The system must have the capability to pro duce historical transactional data for review by the city manager.
4. All cannabis and cannabis products sold, distributed or manufactured shall be cultivated, manufactured, and transported by licensed facilities that maintain operations in full conformance with all state and local regulations.
5. There shall not be a physician located in or around any cannabis business at any time for the purpose of evaluating patients for the issuance of a cannabis prescription or card.
6. Signage, notices, and advertising.
a. In addition to the requirements otherwise set forth in this section, business identification signage for a cannabis business shall conform to the requirements 441
of this Code, including, but not limited to, seeking the issuance of a city sign permit.
b. Each entrance to a cannabis retail business shall be visibly posted with one clear and legible notice up to twelve (12) inches by eighteen (18) inches in size, indicating that smoking, ingesting, or otherwise consuming cannabis on the premises or i n the areas adjacent to the cannabis business is prohibited. The word “cannabis” is allowed to be used up to two times on each of these specific notices. Letter height in the notice shall be limited to up to two (2) inches in size. All notice lettering shall be the same font and color. c. Business identification signage shall be limited to that needed for identification only.
d. The business shall at all times comply with the advertising and marketing restrictions of Business and Professions Code sect ions 26150 -26156, in addition to the requirements of this code.
e. Cannabis business advertising and/or marketing materials in the city shall comply with advertising, marketing and merchandising restrictions provided in California Code of Regulations sections 15040 -15041.1 and California Business and Professions Code sections 26150-26156.
7. Minors.
a. Persons under the age of twenty -one (21) years shall not be allowed on the premises of a cannabis business, except as otherwise specifically provided for by state law. It is unlawful and a violation of this chapter for any person to employ any person at or for a cannabis business who is not at least twenty -one (21) years of age.
b. The entrance to the cannabis business shall be clearly and legibly posted with a notice that no person under the age of twenty-one (21) years of age is permitted to enter upon the premises of the cannabis business except as specifically provided for herein.
8. Odor control. Odor control devices and techniques shall be incorporated in all cannabis businesses to ensure that odors from cannabis are not detectable off-site.
9. Display of permit and city business license. The original copy of the cannabis business permit issued by the city pursuant to this chapter and the city -issued business license shall be posted inside the cannabis business in a conspicuous location.
10. Background check. Every owner, manager, supervisor or employee of th e cannabis business must submit fingerprints and other information deemed necessary by the city manager for a background check by the Costa Mesa police department to verify that person’s criminal history. No person shall be issued a permit to operate a cannabis business who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance.
Exempted from this prohibition is a conviction for a felony involving can nabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized 442
pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law.
11. Loitering. The owner and/or operator of a cannabis business shall prohibit loitering by persons outside the facility both on the premises and within fifty (50) feet of the premises.
12. Permits and other approvals. Prior to the establishment of any cannabis business or the operation of any such business, the person intending to establish a cannabis business must first obtain all applicable planning, zoning, building, and other applicable permits from the relevant governmental agency which may be applicable to the zoning district in which such cannabis business intends to operate.
13. Free samples. No cannabis business shall provide or cause to be provided any free sample of cannabis goods to any person within the city.
14. A licensed retailer may only sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials.
(h) Additional operating requirements for retail sale (storefront) businesses. In addition to every other requirement of this section, other than those set forth in subsection (i) ( retail sale, non-storefront) that are expressly inapplicable, every business that sells cannabis as a storefront retailer shall comply with the following requirements:
1. All cannabis retail storefront operators are encouraged to have a licensed private security guard present at the premises twenty -four (24) hours per day. The security plan shall include at least one (1) licensed private security guard or guards who shall be present at the premises at all times during operations, deliveries of any cannabis product to or from the premises, and transportation of cash to or from the premises, exterior lighting, and continuous video monitoring and recording of the interior and exterior of the premises. Video surveil lance recordings must also include video of all entryways and exits of the premises.
All video recordings shall be maintained for a minimum of ninety (90) days. At the request of the Chief of Police or designee, based upon site-specific concerns or safety incidents, at least one (1) licensed private security guard or guards may be required to be present at the premises twenty-four (24) hours per day.
2. Both the private security guard and the business personnel shall monitor the premises and the immediate vicinity of the premises to ensure that patrons immediately leave the premises and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot, and shall ensure that persons do not loiter, linger, or otherwise congregate within fifty (50) feet of the premises.
3. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on -site consumption of food, alcohol, cannabis or tobacco by patrons.
4. Hours of operation shall be limited to: 7:00 a.m. to 10:00 p.m. daily , unless further restricted by conditions of approval. No licensed retail business shall be open to the public between the hours of 10:01 p.m. and 6:59 a.m. of any day.
5. The cannabis retail business shal l notify patrons of the following both verbally and through posting of a sign in a conspicuous location:
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a. Unlawful sale, barter or distribution of cannabis is a crime and subject to a fine or arrest.
b. Loitering on and around the retail premises is prohibited by California Penal Code section 647 and that patrons must immediately leave the premises and not consume cannabis in the vicinity and/or on the property or in the parking lot.
c. A warning that patro ns and/or employees may be subject to prosecution under federal cannabis laws, if applicable.
d. That the use of cannabis may impair a person’s ability to drive a motor vehicle or operate machinery and that doing so is illegal.
6. No one under the age of twenty-one (21) shall be allowed to enter the premises of a cannabis business unless the business holds a retail medical cannabis license (M - license) issued by the State.
7. No person shall be permitted to enter the premises without government -issued identification, and cannabis goods may not be provided to any person, whether by purchase, trade, gift, or otherwise, who does not possess a valid government-issued identification and who does not meet the age requirements of this Chapter.
8. Electronic age verification device required. Proof of age of every person other than employees entering the business shall be verified with an electronic age verification device, prior to entry of the retail area or delivery to that person. The electronic age verification device may be mobile or fixed, and shall be able to retain a log of all scans that includes the following information: date, time, and age. Said log shall be kept for a minimum of one hundred eighty (180) business days and all records shall be made available to t he City Manager upon request.
9. Point-of-sale tracking required. The business shall facilitate the sale, making available, furnishing and/or delivery of cannabis goods with a technology platform that uses point -of-sale technology to track, and database techn ology to record and store, the following information for each transaction involving the exchange of cannabis goods between the business and consumer:
a. The date and time of transaction.
b. The first name and employee number of the employee who processed the sale of cannabis goods on behalf of the business.
c. A list of all the cannabis goods purchased, including the quantity purchased. d. The total amount paid for the sale, including the individual prices paid for cannabis or cannabis products purchased, and any amounts paid for taxes.
10. Cannabis retail businesses shall also record on the video surveillance system point - of-sale areas and areas where cannabis goods are displayed for sale.
11. Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.
12. Shipments of cannabis goods may only be accepted during regular business hours.
13. Inventory shall be secured using a lockable storage system during non -business hours.
14. No cannabis product shall be visible from the exterior of the business.
15. All required labelling shall be maintained on all product, as required by State law, at all times.
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16. A permitted commercial cannabis retail business shall have one hundred eighty (180) days after permit issuance by the city to commence operations, after which the permit shall be void and of no further force and effect. A cannabis retail business shall be considered nonoperational and abandoned after failing to report income and/or reporting no income to the city in any one quarter, ceasing to operate, losing the right to occupy the permitted premises or otherwise failing to maintain an on - going permitted business at the premises for a total of ninety (90) days in any twelve (12) month period. A notice of determination of abandonment shall be delivered to the premises of the retail business and is subject to appeal pursuant to Chapter IX of Title 2. The forgoing notwithstanding, a permitted commercial cannabis business may temporarily suspend operations for a period of time not to exceed ninety (90) days as may be reasonably required to affect upgrades, modifications, repairs, and/or to remedy other real property related problems, as approved in writing by the director or city manager.
17. Obtain and maintain at all times during the term of the permit the insurance required pursuant to subsection (f) of this section in the minimum amounts of two million dollars ($2,000,000.00), and enter into an agreement approved by the city attorney to defend, with attorneys of city’s choosing, indemnify, release and hold harmless the city, its city council, boards, commissions, officers and employees from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, p enalties, liabilities, costs and expenses (including, without limitation, attorneys’ fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the permittee or the perm ittee’s activities. This indemnification shall include, but not be limited to, damages awarded against the city, if any, costs of suit, attorneys’ fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by the permittee, city, and/or the parties initiating or bringing such proceeding, and shall not be limited by the types and/or amounts of insurance required herein;
18. For an applicant with two or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement as otherwise required by Business and Professions Code section 26105.5.
(i) Additional operating requirements for retail sale (non -storefront) delivery businesses. In addition to every other requirement of this section, except only for subsection (h)(1) through (5) and (10) (retail sale, store-front), every business that sells and/or delivers cannabis as a non-store front retailer shall comply with the following requirements:
1. Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in compliance with this chapter, and in compliance with all State regulations.
2. All employees who deliver cannabis shall have valid identification and a copy of the retail business' cannabis business permit and State license at all times while making deliveries.
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3. All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law.
4. Deliveries may only take place during normal business hours of the commercial cannabis retail business.
5. During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law.
6. A licensed delivery em ployee shall not leave the State of California while possessing cannabis products while performing his or her duties for the cannabis retailer.
7. A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivere d to, the amount and type of product delivered, and any other information required by the State.
8. A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours.
9. Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient).
10. Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information:
a. Name and address of the commercial cannabis retail business. b. The name of the employee who delivered the order.
c. The date and time the delivery request w as made.
d. The complete delivery addresses.
e. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested.
f. The total amount paid for the delivery including any fees or taxes. g. At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery.
h. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement.
i. Inspections by an authorized City representative may be conducted anytime during regular business hours.
11. Delivery must be made to a physical address that is not on publicly owned land, a school, a day care, or a youth center.
12. The delivery employee shall not carry cannabis goods valued in excess of $5,000 at any time with no more than $3,000 of cannabis goods that are not already part of a customer order that was processed prior to leaving the premises.
13. Delivery must be made in person by a direct employee of the licensed retailer. An independent contractor, third -party courier service, or an individual employed through a staffing agency would not be considered directly employed by the licensed retailer.
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9-496. Cannabis employees.
(a) Any person who is an employee or who otherwise works within a cannabis business must be legally authorized to do so under applicable state law. (b) No cann abis business or owner thereof may employ any person who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. (c) All employees must wear an identification badge while on the premises of the business, in a format authorized by the city manager. Any person employed by a single employer at multiple locations in the City may be required to obtain only one identification badge.
9-497. Promulgation of administrative regulations.
(a) The city manager is also authorized to establish any additional administrative rules, regulations, policies, procedures and/or standards governing the issuance, denial or renewal of cannabis business permits, or concerning any other subject necessary to carry out the purposes of this chapter.
(b) Regulations promulgated by the city manager shall become effective upon the date of publication. Cannabis businesses shall be required to comply with all state and local laws and regulations, including, but not limited to, any rules, regulations policies, procedures and/or standards adopted by the city manager. (c) Such administrative rules, regulations and/or standards may include establishing standards and timing for application processing, including but not limited to providing priority for existing licensees in good standing.
9-498. Inspection and enforcement.
(a) The city manager is charged with enforcing the provi sions of the Costa Mesa Municipal Code, or any provision thereof, and may enter the location of a cannabis business at any time during the hours of operation without notice, and inspect the location of any cannabis business as well as any recordings and records required to be maintained pursuant to this title or under applicable provisions of state law. (b) It is unlawful for any person having responsibility for the operation of a cannabis business, to impede, obstruct, interfere with, or otherwise not to allow, the city to conduct an inspection, review or copy records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface , damage, or falsify any records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law.
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9-499. Violations.
(a) Violations declared a public nuisance. Each and every violation of the provisions of this chapter is hereby deemed unlawful and a public nuisance. (b) Each violation a separate offense. Each and every violation of this chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by the Costa Mesa Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be subject t o injunctive relief, any permit issued pursuant to this chapter being deemed null and void, disgorgement and payment to the city of any monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy av ailable at law or in equity. The city may also pursue any and all remedies and actions available and applicable under state and local laws for any violations committed by the cannabis business or persons related to, or associated with, the cannabis activit y. Additionally, when there is determined to be an imminent threat to public health, safety or welfare, the city manager, or the chief of police, may take immediate action to temporarily suspend a cannabis business permit issued by the city, pending a hear ing before the city council.
(c) Criminal penalties. Each and every violation of the provisions of this chapter may be prosecuted as a misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars ($1,000.00) or imprisonment i n the County Jail for a period of not more than twelve (12) months, or by both such fine and imprisonment. Each day a violation is committed or permitted to continue shall constitute a separate offense. (d) Remedies cumulative and not exclusive. The remedies provided herein are not to be construed as exclusive remedies. The city is authorized to pursue any proceedings or remedies provided by law.
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ATTACHMENT 5
CHAPTER IX. SPECIAL LAND USE REGULATIONS. ARTICLE 21. LOCATION OF
CANNABIS DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT,
TESTING LABORATORIES, RETAIL STOREFRONT AND RETAIL NON-
STOREFRONT USES
13-200.90. Purpose.
The purpose of this article is to regulate the location of and standards for cannabis distributing facilities, manufacturing sites, research and development laboratories, testing laboratories, retail storefront and retail non-storefront uses in order to promote the health, safety, morals and general welfare of the residents and the businesses within the city by maintaining local control over the ability to authorize and regulate the location of cannabis businesses.
13-200.91. Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to criminal prosecution under the Compassionate Use Act of 1996. (b) All the provisions of this article shall apply to all property, public and private, within the city.
(c) All the provisions of this article shall apply indoors and outdoors. (d) Unless otherwise provided herein or in this title, the terms used in this article shall have the meaning ascribed to them in Title 9, Chapter VI of this Code.
13-200.92. Cannabis distributing facilities, manufacturing sites, research and development laboratories, and testing laboratories.
(a) Cannabis distribution, manufacturing, research and development and testing is prohibited in all zone districts within the city, except for those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection (the “Green Zone”).
(b) A conditional use permit shall be required and may be issued to allow the location of any business engaged in the distribution, manufacturing, researching and developing, or testing of cannabis in the MP or PDI zones pursuant to subsection (a) of this section, subject to the following conditions:
(1) The requirements of Chapter III of this title have been met; (2) The findings for granting a conditional use permit in accordance with section 13- 29(g) are met;
(3) The applicant obtains a cannabis business license pursuant to Chapter VI of Title 9 of this Code; and
(4) The use is conducted in compliance with all applicable state and local laws. (c) No person shall engage in any use set forth in this article unless that use is specifically authorized by Chapter VI of Title 9 of this Code.
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13-200.93. Cannabis retail storefront and non-storefront uses. (a) Cannabis retail storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts.
(b) Cannabis retail non-storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts and within the Green Zone. (c) The following planning application shall be required for cannabis retail uses:
(1) A conditional use permit shall be required for retail storefronts and non-storefronts; and
(2) An amendment to the approved conditional use permit shall be required for existing licensed cannabis distribution or manufacturing businesses to operate a retail non-storefront under the existing business and within the same licensed premise. The amendment shall be processed as a minor conditional use permit. (d) A conditional use permit may be issued to allow the location of a retail cannabis use pursuant to subsections (a) and (b) of this section, subject to the following conditions:
(1) The requirements of Chapter III of this title have been met; (2) The findings for granting conditional use permit pursuant to section 13-29(g) are met;
(3) The applicant obtains a cannabis business licensed for the location pursuant to Chapter VI of Title 9 of this Code; and
(4) The use is conducted in compliance with all applicable state and local laws, regulations, and all applicable conditional use permit conditions of approval. (e) Cannabis retail storefront location.
(1) No cannabis retail storefront use shall be located within one-thousand (1,000) feet from a K-12 school, playground, child daycare, homeless shelter, or youth center, that is in operation at the time of submission of a completed Cannabis Business Permit application, or within two hundred fifty (250) feet from a property zoned for residential use;
i. For the purpose of identifying separations from cannabis storefronts and properties zoned for residential use, properties zoned for residential use are within the following zoning districts: R1 Single-Family Residential District, R2-MD Multiple-Family Residential District, Medium Density, R2-HD Multiple-Family Residential District, High Density, R3 Multiple- Family Residential District, TC Town Center District, PDR-LD Planned Density Residential—Low Density, PDR-MD Planned Development Residential—Medium Density, PDR-HD Planned Development
Residential—High Density, and PDR-NCM Planned Development Residential—North Costa Mesa.
ii. Where a non-residential property was developed for residential or mixed residential use in accordance with an overlay, urban plan, or specific plan, and the residential development and use remains, the property would be considered residential when establishing a separation from cannabis storefronts.
iii. Where an overlay, urban plan, or specific plan allows residential development on a property zoned for residential use, but residential development has not been constructed, such property would not be considered a property zoned for residential use pursuant to this provision. 450
iv. Where a legal nonconforming residential unit or units have been developed on a property zoned for non-residential use, the property would not be considered residential when establishing a separation from cannabis storefronts.
(2) All distances referenced in (e)(1) shall be measured in a straight line from the premises where the cannabis retail use is to be located to the closest property line of a K-12 school, playground, child daycare, homeless shelter, or youth center or property zoned for residential use.
i. For purposes of this sub-sub-section, the property line of a playground shall be a thirty (30) foot radius from the exterior physical boundaries of the playground equipment area;
(3) All distances shall be measured without regard to the boundaries of the city and and/or intervening structures or other barriers;
(4) At a property as for which the zoning administrator, director or planning commission determines, based on a preponderance of the evidence, that unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing has taken place at any time in the 365 days preceding an application under this Article. If an unpermitted and/or illegal cannabis activity has existed on a property no cannabis business may be permitted on that property unless 365 days has elapsed since that unpermitted and/or illegal cannabis activity has vacated the property, and the owner of that property has compensated the City for any and all expenditure of public funds and resources, including all costs, expenses (including but not limited to the salaries of peace and/or code enforcement officers) and/or attorney’s fees, incurred in investigating, abating or attempting to abate the unpermitted use or uses, whether or not any type of civil, criminal or administrative proceedings have been commenced against the property, provided however if the owner of the property is required to evict that use, the 365 days shall begin to run from the date of the filing of an unlawful detainer complaint, in which case a permit may be issued after the 365 days had elapsed and that use is no longer occupying the property. (5) A determination and/or finding under sub-section (e)(4) is subject to the appeal provisions of Chapter IX of Title 2 of this Code.
(6) The nonconforming provisions contained in Chapter X of this Code pertain to cannabis uses except as follows:
i. When an approved retail cannabis storefront conditional use permit location which lawfully met separation requirements at the time of the submission of a cannabis business permit application for the subject property does not conform to the separation and the permitted cannabis retail operation is discontinued or abandoned for more than one hundred eighty (180) days, or when a permitted cannabis use is replaced in whole or part for any period of time by any other use, the conditional use permit shall be null and void after the permittee has had an opportunity for a hearing before the issuing officer as provided in Chapter II of Title 9. (f) Retail storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9:
(1) Opaque window coverings unless required by the City for security purposes are prohibited;
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(2) Permanent security or safety bars shall not be placed on any interior or exterior windows or door, unless required by the City for security purposes; (3) Directional signage to the use including but not limited to A-frame signs, sandwich board signs, banners, or flags are prohibited;
(4) No use shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the premises of the commercial cannabis business or elsewhere including, but not limited to, the public right-of- way;
(5) Uses shall comply with the landscaping requirements set forth in Chapter VII of this title including bringing the site landscaping into conformance when feasible as determined by the director;
(6) Parking requirements shall be subject to Section 13-89; (7) The hours of operation may be established as part of the planning application subject to the final review authority and may be more restrictive than those set forth in Chapter VI of Title 9. Modification of operation hours when established as part of the planning application shall be subject to an amendment of the planning application;
(8) Drive-through services or walk-up window services are prohibited; (9) Outdoor seating or patio areas are prohibited;
(10) Special events that include live entertainment, dancing, and/or amplified music, or that are otherwise visible and/or audible from the public right-of-way, are prohibited;
(11) All cannabis products shall be secured after business hours in a locked container under 24-hour video surveillance; and
(12) For uses within two hundred (200) feet of a residential zone, all exterior lighting shall be shielded and/or directed away from residential areas. In addition, trash facilities shall be screened from view and designed and located appropriately to minimize potential noise and odor impacts to adjacent residential areas. (g) Non-storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9:
(1) Uses may operate independently from a retail storefront or as a part of, and in conjunction with, a permitted storefront, distribution, or manufacturing facility; (2) Parking requirements shall be subject to Section 13-89 and shall also include sufficient parking spaces for delivery vehicles;
(3) All deliveries to customers shall be completed by 10:00 p.m.; and (4) The general public shall not be permitted to enter the premises of a non-storefront retail use.
(h) Except as specifically authorized in this article, all other cannabis retail uses such as but not limited to lounges and cafes are expressly prohibited in the city. (i) No person shall engage in any use set forth in this article unless that use is specifically authorized by Chapter VI of Title 9 of this Code.
(j) Any cannabis use, including but not limited to those involving sale, delivery and/or dispensing, that is not permitted, licensed and otherwise in full compliance with all applicable provisions of this Code and state and local law, shall not be considered a legally non-conforming use pursuant to, and notwithstanding any contrary provisions of, Chapter IX of this title.
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13-200.94. Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained, moved, or operated contrary to the provisions of this article, is hereby declared to be unlawful and a public nuisance and may be abated by the city through civil and/or administrative proceedings by means of a restraining order, preliminary or permanent injunction, or in any other manner provided by law for the abatement of such nuisances.
13-200.95. Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16 in addition to any other remedy available at law or in equity.
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ATTACHMENT 6
EXHIBIT A
CHAPTER VI. CANNABIS BUSINESS PERMITS
9-481. Purpose and intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing, processing, research and development, retail sale, testing and transporting of cannabis and cannabis -related products in a manner which is responsible, which protects the health, safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations consistent with state law. In part to meet these objectives, a permit shall be required in order to own and/or to operate a cannabis business within the c ity. Nothing in this chapter is intended to authorize the possession, use, or provision of cannabis for purposes which violate state or federal law. The provisions of this chapter are in addition to any othe r permits, licenses, and approvals which may be r equired to conduct business in the city, and are in addition to any permits, licenses and approvals required under state law.
9-482. Legal authority.
Pursuant to Section s 5 and 7 of Article XI of the California Constitution and the provisions of Division 10 of the Business and Professions Code, the city is authori zed to adopt ordinances that establish standards, requirements and regulations for local licenses and permits for cannabis and cannabis-related activity.
9-482.5 Authority of the City Manager
The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter as may be necessary to administer and enforce the provisions of this Chapter and any other ordinances, regulations or laws relating to and affecting the permitting and operations of commercial cannabis businesses.
The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process for permit applications and requests for permit changes or modifications pursuant to this Chapter, and the implementation and administration of social equity programs.
9-483. Cannabis business activities prohibited unless specifically authorized by this chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing, laboratory testing, labeling, transporting, dispensing, furnishing, distribution, delivery, or sale of cannabis or a cannabis product is expressly prohibited in the city.
9-484. Compliance with laws.
It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder.
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9-485. Definitions.
Unless otherwise defined in this chapter or in chapte r I of Title 13, the words used in this chapter shall have the same definitions ascribed to them in Division 10 of the Business and Professions Code or the definitions of the Health and Safety Code applicable to school and child daycare. Any reference to California statutes includes any regulations promulgated thereunder and is deemed to include any successor or amended version of the referenced statute or regulatory provision.
Cannabis means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from marijuana. “Cannabis” also means marijuana as defined by section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. “Cannabis” does not include the mature stalks of th e plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, “cannabis” does not mean industrial hemp as that term is defined by section 81000 of the California Food and Agricultural Code or section 11018.5 of the California Health and Safety Code.
Cannabis business permit means a regulatory permit issued by the city pursuant to this chapter to a cannabis business, and is required before any cannabis activity may be conducted in the city.
Cannabis goods means cannabis and/or cannabis products.
Cannabis product or manufactured cannabis product or product means cannabis that has undergone a process whereby the plant material is transformed into a concentrate for internal consumption or topical application, including, but not limited to, concentrated cannab is, an edible cannabis product, or a topical cannabis product containing cannabis or concentrated cannabis in combination with other ingredients.
Caregiver or primary caregiver has the same meaning as that term is defined in section 11362.7 of the California Health and Safety Code.
City manager shall mean the city manager of the city or designee.
Director shall mean the city’s Director of the Economic and Development Services department or designee, unless otherwise specified.
Dispensing means any activity involving the retail sale of cannabis or cannabis products.
Distributor means a person or entity th at engages in distribution. The direct and/or retail sale, distribution, or furnishing of any cannabis or cannabis product to any consumer or end user by a distributor is expressly prohibited, unless otherwise authorized pursuant to this chapter.
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Edible cannabis product means manufactured cannabis that is intended to be used, in whole or in part, for oral human consumption including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the California Food and Agricultural Code. An edible cannabis product is not considered food as defined by California Health and Safety Code Section 109935 or a drug as defined by California Health and Safety Code Section 109925.
Financial interest holder shall have the same meaning as set forth in Title 4, Division 19, section 15004 of the California Code of Regulations.
Free sample means any amount of cannabis goods provided to a patron of a business or member of the public without cost or payment or exchan ge for any other thing of value.
Green Zone means those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection.
Homeless shelter has the same meaning as emergency shelter.
Labor Peace Agreement has the same meaning set forth in Business and Professions Code section 26001.
Manufacturing site means a location where cannabis products are manufactured.
Marijuana means “cannabis,” as that term is defined in this chapter.
Marijuana activity and/or cannabis activity includes manufacture, processing, laboratory testing, research and development, transporting, delivery, dispensing, distribution, furnishing, giving away or sale, or arranging and/or directing any of the foregoing, or any other activity involving cannabis or a cannabis product.
Marijuana business and/or cannabis business means any business or operation which engages in any marijuana or cannabis activity.
Marijuana business permit has the same meaning as cannabis business permit.
Patient or qualified patient shall have the same definition as California Health and Safety Code section 11362.7 et seq., as it may be amended, and which means a person who is entitled to the protections of California Health and Safety Code section 11362.5. For purposes of this chapter, a qualified patient shall include a person with an identification card as that t erm is defined by California Health and Safety Code section 11362.7 et seq.
Person with an identification card shall have the meaning given that term by California Health and Safety Code section 11362.7.
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Playground shall mean and include both a public playground located in a city park and a private playground. A private playground shall mean a privately-owned outdoor recreation area, including a tot lot, containing playground equipment or amenities such as swings, slides, sandboxes, or similar installations designed for use by minors and serving either the general public or residents of a development where the playground equipment is located, including residential subdivisions and/or developments such as apartments, townhomes and/or condominium complexes, mobile home parks or other similar residential uses, as well as playground equipment serving registered guests at hotels and motels. A private playground does not include a playground or playground equipment installed at a single -family residence, or play equipment that is part of a privately -owned commercial business or place of worship, or a playground that is access -controlled during operating hours or does not have direct access from the public right -of-way. A private playground does not include areas designated for use as a playing field or court, pool, or skate facility.
Premises shall have the same meaning as set forth in Business and Professions Code section 26001 sub-section (ap) for purposes of measuring the required distance from retail storefront uses to those uses set forth in section 13-200.93(e)(1).
Processing and processor shall have the same meaning as manufacturing and manufacturer, respectively.
Property shall mean any single development lot that has been subdivided bearing its own assessor’s parcel number or with an approved subdivision map or condominium map unless the context clearly indicates a different meaning.
Research and development laboratory means a facility, entity, or site in the cit y that performs research into and/or the development of cannabis or cannabis products, where cannabis in any amount is located on-site, and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons involved in the cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and operated by a person issued a valid cannabis business permit for laboratory testing from the city and is currently in compliance with all applicable state and local laws and regulations pertaining to the cannabis business and cannabis activities.
South Coast Collection or SoCo means all properties located at 3303 through 3323, inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as “SoCo” or “SOCO.”
State means the State of California, including any of its departments, divisions, and/or bureaus.
State license means a permit or license issued by the state to engage in cannabis activity.
Youth center means any public or private facility that is primarily used to host recreation or social activities for minors, specifically private youth membership organizations or clubs, social services teenage club facilities, video arcades where ten (10) or more games or game mac hines or devices 457
are operated or similar amusement park facilities, but does not include dance studios, tutoring, martial arts studios or similar type of uses.
9-486. Type of authorized cannabis businesses permitted. (a) One (1) or more of the following types of adult (A -license) and/or medical (M -license) cannabis business may be permitted to operate within the city:
1. Cannabis distributor (includes license classification type 11);
2. Cannabis manufacturer (includes license classification type 6 and 7);
3. Cannabis testing laboratory (includes license classification type 8);
4. Cannabis retail - storefront (includes license classification type 10);
5. Cannabis retail - non-storefront (includes license classification type 9); and
6. Cannabis research and development laboratory.
(b) Businesses permitted pursuant to this chapter shall not engage in the retail sale, delivery or dispensing of cannabis, cannabis product, hemp or hemp products unless expressly permitted to do so pursuant to the terms of their cannabis business permit. (c) No person may engage in any type of cannabis business that is not specifically authorized pursuant to this section and this code, including, but not limited to, cultivating cannabis. (d) The City Council may by resolution limit and/or restrict the number of cannabis retail permits available for issuance and/or renewal.
9-487. Cannabis business permit required to engage in a cannabis business.
No person may engage in any cannabis business or in any cannabis activity within the city including manufacturing, processing, lab oratory testing, transporting, dispensing, distribution, or sale of cannabis or a cannabis product unless the person: 1) has a valid cannabis business permit from the city that authorizes the specific business and activity at specific location; 2) has a va lid business license issued to the entity that is listed on the cannabis business permit; and 3) is currently in compliance with all other applicable state and local laws and regulations pertaining to the cannabis business and cannabis activity. All cannabis business permits shall include a copy of a written notice to any existing tenant of the proposed business premises from the owner of the property of the intent to file a cannabis business permit application for those premises.
9-487.3. Disclosure of Financial Interest Holders Required.
Any and all financial interest holders must be disclosed to the City as part of any application for issuance and/or renewal of a cannabis business permit.
9-487.5. Change in business name.
No operator shall operate, conduct, manage, engage in, or carry on a cannabis business under any name other than the business name specified in the permit and/or any “doing business as” or “DBA”, or “fictitious business name” or “FBN”, provided in the permit application and/or business license.
Proof of the “DBA” or “FBN” filing with the County Clerk Recorder shall be required. Any approved changes and/or updates to the permit may require payment of fees as set by resolution of the City Council.
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9-488. Term of permit-Fees.
(a) A cannabis business permit shall be valid for two (2) years from the date of issue, unless otherwise suspended or revoked, and may be renewe d bi-annually thereafter, provided the permittee and application for renewal are in compliance with all of the provisions of this chapter as well as all administrative regulations adopted pursuant to section 9-497. (b) Cannabis business permit application fees and renewal fees shall be established by resolution of the city council as may be amended from time to time. Failure to timely submit fees and/or comply with the administrative regulations governing applications an d/or renewals shall be grounds for denial of application and/or renewal.
9-489. Effect of state license suspension, revocation, or termination.
Suspension of a license issued by the State of California, or by any of its departments or divisions, shall immediately suspend the ability of a cannabis business to operate within the city, until the State of California, or its respective departments or divisions, reinstates or reissues the State license within 90 days. Should the state license remain suspended for 90 days or longer, any permit issued pursuant to this chapter shall expire and be of no further force and effect. Should the State of California, or any of its departme nts or divisions, revoke or terminate the license of a cannabis business, such revocation or termination shall also revoke or terminate the ability of a business permitted pursuant to this chapter including the persons and entities set forth in section 9-490(c) to operate any cannabis business within the city for a period of five years from the date of such revocation or termination.
9-490. Denial and revocation.
(a) Revocation. A cannabis business permit may be revoked and/or suspended pursuant to the procedures of section 9 -120, and/or deemed abandoned or forfeited pursuant to the procedures of section 9 -495, for failing to comply with the terms of the permit, the applicable provisions of this chapter, this Code, city regulations, state law or regulations and/or any conditions of any other permit issued pursuant to this Code. (b) Denial. An application for a cannabis business permit may be denied where it fails to provide all required information, documentation and/or fees and/or where it does not or would not be able to comply with the applicable provisions of this chapter, this Code, city regulations and/or state law or regulations and/or where the applicant is otherwise ineligible for such permit.
(c) Effect of revocation and denial. Whenever an application for a permit is denied, no other similar application by such applicant or permittee will be considered for a period of one (1) year from the date of the denial of an application. Whenever a permit has been revoked, no other similar application by such permittee shall be considered for a period of five (5) years from either the date the notice of the permit revocation was mailed or the date of the final decision of the city to revoke the permit, whichever is later. The prohibitions of this subsection shall also apply to the following:
1. Any individual whose permit was revoked or whose application was denied who later becomes a director or officer of a corporation, profit or nonprofit, or a member 459
of a partnership or a person owning or possessing any portion of the shares of a corporation seeking to obtain a new permit.
2. A corporation, profit or nonprofit, whose permit was revoked, or application was denied, to any of its directors or officers or to any person who owned any portion of its shares, who attempts by way of a new corporation or using their individual names or becoming a member of a partnership or a director or officer or a person owning or possessing any por tion of the shares in another corporation seeking to obtain a new permit.
(d) Ineligibility. In addition to any other law, no person or entity shall be eligible for and/or receive a cannabis business permit if that person or entity, or any director or officer of that entity or a person who owned any portion of that entity’s shares, or any financial interest holder of that entity, engaged or engages in unpermitted and/or illegal cannab is activity involving sales, delivery and/or dispensing in the city, or had an ownership interest in any property set forth in section 13 -200.93(e)(5), in the five (5) years preceding an application under this chapter or during the application process. A determination of ineligibility under this sub -section (d) may be made by the City Manager and shall be based on the preponderance of the evidence . This prohibition shall not apply to a natural person who would otherwise be ineligible based on a criminal co nviction that has been dismissed, withdrawn, expunged or set aside or is otherwise exempted pursuant to sections 9 - 495(g)(10) and/or 9-496(b).
9-491. Appeals.
Notwithstanding any other provision of this code, only a decision by the city manager to suspend, revoke or deny a cannabis business permit under this chapter shall be subject to appeal, which shall be governed by the procedures set forth in Chapter IX of Title 2 of this code.
9-492. Prohibition on transfer of cannabis business permits.
In the event a permit holding cannabis business sells or transfers the business to a new owner and/or operates the business under a new entity and/or name not listed on the permit, the new owner must obtain a new cannabis business permit and business license prior to commencing or continuing operations. A cannabis business shall be deemed to have tran sferred to a new owner within the meaning of this section if person(s) or entities with controlling interest at the time the permit was first issued cease(s) at any time to possess controlling ownership interest and/or hold an ownership interest of less than fifty-one (51) percent.
9-493. City business license required.
Prior to commencing operations, a cannabis business and any financial interest holder therein shall each separately obtain and thereafter maintain a valid city business license pursuant to Chapter I of this title. Failure to hold a valid business license at all times shall render the cannabis business permit invalid.
9-494. Conditional use permit required.
No cannabis business permit shall be issued, and no person shall conduct a cannabis business unless a conditional use permit has been issued therefore pursuant to the prov isions of Title 13, Chapter IX, Article 21 of this Code. Approval of a conditional use permit shall not waive any other 460
requirements of State or local law or regulation, including, but not limited, to the requirement to obtain a building permit, certificat e of occupancy, cannabis business permit and/or city business license.
9.-494.5 Maximum cannabis retail storefront cannabis business permits.
A maximum of thirty -five (350) storefront retail cannabis business permits may be issued by the City; provided, however, that the City will only process applications which have passed the pre - application phase as of the effective date of this ordinance . Thereafter, no further storefront retail cannabis business permits for new locations may be issued by the City until the total number of operating licensed storefront retail establishments falls below tenfifteen (105), after which time the City may issue further cannabis business permits not to exceed tenfifteen (105) total active storefront retail cannabis business permits operating at one time.
9-495. Operating requirements for all cannabis businesses permitted under this chapter. (a) Records and recordkeeping.
1. Each owner and operator of a cannabis business shall maintain accurate books and records, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than a quarterly basis or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number of sales by the cannabis business during the previous three (3) month period (or shorter period based upon the timing of the request), provided on a per -month basis. The statement shall also include gross sales for each month, and all applicable taxes paid or due to be paid.
Each owner and operator shall keep and preserve for a period of no less than seven (7) years, all records as may be necessary to determi ne the amount of such tax the operator may have been liable to collect and remit to the city.
2. Each owner and operator of a cannabis business shall maintain a current register of the names and the contact information (including the name, address, tel ephone number, a copy of that person’s government issued identification, and email address) of anyone owning or holding an interest in the cannabis business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request.
3. All cannabis businesses shall maintain an inventory control and reporting system that accurately documents the present location, amounts, and descriptions of all cannabis and cannabis products for all stages of the production or manufacturing, laboratory testing and distribution processes.
4. Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA), each cannabis business shall allow city officials to have access to the business’s books, records, accounts, together with any other data or documents relevant to its permitted cannabis activities, for the purpos e of conducting an audit or examination. Books, records, accounts, and any and all relevant data or documents 461
will be produced no later than twenty -four (24) hours after receipt of the city’s request, unless otherwise stipulated by the city.
5. Each owner and operator of a cannabis business shall disclose to the City the names and addresses of each and every financial interest holder of that business within ten (10) calendar days of that person becoming a financial interest holder of the cannabis business, and thereafter shall notify the City within ten (10) business days if that person or entity ceases to be a financial interest holder. Each financial interest holder shall obtain a business license pursuant to section 9 -493 within thirty (30) days of becoming a financial interest holder of that business.
(b) Security measures.
1. A permitted cannabis business shall implement sufficient security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the cannabis business. These security measures shall include:
a. Establishing limited access areas accessible only to authorized cannabis business personnel;
b. All cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault, and shall be kept in a manner as to prevent diversion, theft, and loss;
c. Sensors shall be installed to detect entry and exit from all secure areas; d. Having a professionally installed, maintained, and monitored alarm system; e. Any bars to be installed on the windows or the doors of the cannabis business for security purposes, if permitted by the city, shall be installed only on the interior of the building;
f. Security personnel if utilized must be licensed by the State of California Bureau of Security and Investigative Services Personnel, shall comply with the requirements of California Business and Professions Code Chapters 11.4 and 11.5 of Division 3, and have a valid business license from the city; and g. Each cannabis business shall have the capability to remain secure and operational during a power outage and shall ensure that all access doors are not solely controlled by an electron ic access panel to ensure that locks are not released during a power outage.
2. Each cannabis business shall identify a designated security representative/liaison to the city, who shall be reasonably available to meet with the city manager regarding any security related measures or and operational issues.
3. A cannabis business shall notify the city manager within twenty-four (24) hours after discovering any of the following:
a. Significant discrepancies identified during inventory, as set forth in the city’s administrative regulations;
b. Diversion, theft, loss, or any criminal activity involving the cannabis business or any agent or employee of the cannabis business; or
c. The loss or unauthorized alteration of records related to cannabis, r egistering qualifying patients, primary caregivers, or employees or agents of the cannabis business and/or cannabis sales.
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(c) Restriction on alcohol sales. No person shall cause or permit the sale, dispensing, or consumption of alcoholic beverages on or about the premises of the cannabis business. (d) Compliance with laws. It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be construed as authorizing any actions which violate state law or local law with respect to the operation of a cannabis business or any site -specific, additional operatin g procedures or requirements which may be imposed as conditions of approval of the location of the cannabis business.
(e) Taxes. All cannabis businesses authorized to operate under this chapter shall pay all sales, use, business and other applicable taxes, and all license, registration, and other fees required under federal, state and local law. Each cannabis business shall cooperate with the city with respect to any reasonable request to audit the cannabis business’s books and records for the purpose o f verifying compliance with this section, including, but not limited to, a verification of the amount of taxes required to be paid during any period. (f) Insurance. Permittee shall obtain and maintain at all times during the term of the permit comprehensive general liability insurance and comprehensive automotive liability insurance protecting the permittee in an amount of not less than one million dollars ($1,000,000.00) per occurrence, combined single limit, including bodily injury and property damage and not less than one million dollars ($1,000,000.00) aggregate for each personal injury liability, products-completed operations and each accident, issued by an insurance provider rated at least A -:VIII in A.M. Best and Company’s Insurance Guide and eith er admitted and authorized to do business in California or is listed on the California Department of Insurance’s List of Approved Surplus Line Insurers.
(g) Miscellaneous operating requirements.
1. Restriction on consumption. Cannabis shall not be consumed on the premises of any cannabis businesses or elsewhere in the city other than within private residences.
2. No cannabis or cannabis products or graphics depicting cannabis or cannabis products shall be visible from the exterior of any property issued a cannabis business permit, or on any of the vehicles owned or used as part of the cannabis business except as otherwise expressly allowed by this chapter. No outdoor storage of cannabis or cannabis products is permitted at any time.
3. Reporting and tracking of product and of gross sales. Each cannabis business shall have in place a point-of-sale tracking system to track and report on all aspects of the cannabis business including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and by sale). The cannabis business shall ensure that such information is compatible with the city’s record -keeping systems.
The system must have the capability to produce historical transactional data for review by the city manager.
4. All cannabis and cannabis products sold, distributed or manufactured shall be cultivated, manufactured, and transported by licensed facilities that maintain operations in full conformance with all state and local regulations.
5. There shall not be a physician located in or around any cannabis business at any time for the purpose of evaluating patients for the issuance of a cannabis prescription or card.
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6. Signage, notices, and advertising.
a. In addition to the requirements otherwise set forth in this section, business identification signage for a cannabis business shall conform to the requirements of this Code, including, but not limited to, seeking the issuance of a city sign permit.
b. Each entrance to a cannabis retail business shall be visibly posted with one clear and legible notice up to twelve (12) inches by eighteen (18) inches in size, indicating that smoking, ingesting, or otherwise consuming cannabis on the premises or in the areas adjacent to the cannabis business is prohibited. The word “cannabis” is allowed to be used up to two times on each of these specific notices. Letter height in the notice shall be limited to up to one (1) two (2) inches inch in size. All notice lettering shall be the same font and color. c. Business identification signage shall be limited to that needed for identification only.
d. The business shall at all times comply with the advertising and marketing restrictions of Business and Professions Code sections 26150 -26156, in addition to the requirements of this code.
e. Cannabis business advertising and/or marketing materials in the city shall not encourage persons under 21 years of age to consume cannabis or cannabis products and shall not depict and/or suggest in any way the consumption of cannabis or c annabis products comply with advertising, marketing and merchandising restrictions provided in California Code of Regulations sections 15040-15041.1 and California Business and Professions Code sections 26150 - 26156.
7. Minors.
a. Persons under the age of twenty -one (21) years shall not be allowed on the premises of a cannabis business, except as otherwise specifically provided for by state law. It is unlawful and a violation of this chapter for any person to employ any person at or for a cannabis b usiness who is not at least twenty -one (21) years of age.
b. The entrance to the cannabis business shall be clearly and legibly posted with a notice that no person under the age of twenty-one (21) years of age is permitted to enter upon the premises of the cannabis business except as specifically provided for herein.
8. Odor control. Odor control devices and techniques shall be incorporated in all cannabis businesses to ensure that odors from cannabis are not detectable off-site.
9. Display of perm it and city business license. The original copy of the cannabis business permit issued by the city pursuant to this chapter and the city -issued business license shall be posted inside the cannabis business in a conspicuous location.
10. Background check. Every owner, manager, supervisor or employee of the cannabis business must submit fingerprints and other information deemed necessary by the city manager for a background check by the Costa Mesa police department to verify that person’s criminal history. N o person shall be issued a permit to operate a cannabis business who has been convicted of a felony within the past seven (7) years, 464
unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance.
Exempted from this proh ibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law.
11. Loitering. The owner and/or operator of a cannabis business shall prohibit loitering by persons outside the facility both on the premises and within fifty (50) feet of the premises.
12. Permits and other approvals. Prior to the establishment of any cannabis business or the operation of any such business, the person intending to establish a cannabis business must first obtain all applicable planning, zoning, building, and other applicable permits from the relevant governmental agency which may be applicable to the zoning district in which such cannabis business intends to operate.
13. Free samples. No cannabis business shall provide or cause to be provided any free sample of cannabis goods to any person within the city.
14. A licensed retailer may only sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials.
(h) Additional operating requirements for retail sale (storefront) businesses. In addition to every other requirement of this section, other than those set forth in subsection (i) ( retail sale, non-storefront) that are expressly inapplicable, every business that sells cannabis as a storefront retailer shall comply with the following requirements:
1. All cannabis retail storefront operators are encouraged to have a licensed private security guard present at the premises twenty -four (24) hours per day. The security plan shall include at least one (1) licensed private security guard or guards who shall be present at the premises at all times during operations, deliveries of any cannabis product to or from the premises, and transportation of cash to or from the premises, exterior lighting, and continuous video monitoring and recording of the interior and exterior of the premises. Video surveillance recordings must also include video of all entryways and exits of the premises.
All video recordings shall be maintained for a minimum of ninety (90) days. At the request of the Chief of Police or designee, based upon site-specific concerns or safety incidents, at least one (1) licensed private security guard or guards may be required to be present at the premises twenty-four (24) hours per day.
2. Both the private security guard and the business personnel shall monitor the premises and the immediate vicinity of the premises to ensure that patrons immediately leave the premises and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot, and shall ensure that persons do not loiter, linger, or otherwise congregate within fifty (50) feet of the premises.
3. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on -site consumption of food, alcohol, cannabis or tobacco by patrons.
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4. Hours of operation shall be limited to: 7:00 a.m. to 10:00 p.m. daily , unless further restricted by conditions of approval. No licensed retail business shall be open to the public between the hours of 10:01 p.m. and 6:59 a.m. of any day.
5. The cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location:
a. Unlawful s ale, barter or distribution of cannabis is a crime and subject to a fine or arrest.
b. Loitering on and around the retail premises is prohibited by California Penal Code section 647 and that patrons must immediately leave the premises and not consume cannabis in the vicinity and/or on the property or in the parking lot.
c. A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws, if applicable.
d. That the use of cannabis may impair a person’s ability to drive a motor vehicle or operate machinery and that doing so is illegal.
6. No one under the age of twenty -one (21) shall be allowed to enter the premises of a cannabis business unless the business holds a retail medical cannabis license (M - license) issued by the State.
7. No person shall be permitted to enter the premises without government -issued identification, and cannabis goods may not be provided to any person, whether by purchase, trade, gift, or otherwise, who does not possess a valid government-issued identification a nd who does not meet the age requirements of this Chapter.
8. Electronic age verification device required. Proof of age of every person other than employees entering the business shall be verified with an electronic age verification device, prior to entry of the retail area or delivery to that person. The electronic age verification device may be mobile or fixed, and shall be able to retain a log of all scans that includes the following information: date, time, and age. Said log shall be kept for a minimum of one hundred eighty (180) business days and all records shall be made available to the City Manager upon request.
9. Point-of-sale tracking required. The business shall facilitate the sale, making available, furnishing and/or delivery of cannabis goods with a technology platform that uses point -of-sale technology to track, and database technology to record and store, the following information for each transaction involving the exchange of cannabis goods between the business and consumer:
a. The date and time of transaction.
b. The first name and employee number of the employee who processed the sale of cannabis goods on behalf of the business.
c. A list of all the cannabis goods purchased, including the quantity purchased. d. The total amount paid for the sale, including th e individual prices paid for cannabis or cannabis products purchased, and any amounts paid for taxes.
10. Cannabis retail businesses shall also record on the video surveillance system point - of-sale areas and areas where cannabis goods are displayed for sale.
11. Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.
12. Shipments of cannabis goods may only be accepted during regular business hours. 466
13. Inventory shall be secured using a lockable storage system during non -business hours.
14. No cannabis product shall be visible from the exterior of the business.
15. All required labelling shall be maintained on all product, as required by State law, at all times.
16. A permitted commer cial cannabis retail business shall have one hundred eighty (180) days after permit issuance by the city to commence operations, after which the permit shall be void and of no further force and effect. A cannabis retail business shall be considered nonoper ational and abandoned after failing to report income and/or reporting no income to the city in any one quarter, ceasing to operate, losing the right to occupy the permitted premises or otherwise failing to maintain an on - going permitted business at the premises for a total of ninety (90) days in any twelve (12) month period. A notice of determination of abandonment shall be delivered to the premises of the retail business and is subject to appeal pursuant to Chapter IX of Title 2. The forgoing notwithstandi ng, a permitted commercial cannabis business may temporarily suspend operations for a period of time not to exceed ninety (90) days as may be reasonably required to affect upgrades, modifications, repairs, and/or to remedy other real property related problems, as approved in writing by the director or city manager.
17. Obtain and maintain at all times during the term of the permit the insurance required pursuant to subsection (f) of this section in the minimum amounts of two million dollars ($2,000,000.00), and enter into an agreement approved by the city attorney to defend, with attorneys of city’s choosing, indemnify, release and hold harmless the city, its city council, boards, commissions, officers and employees from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys’ fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the permittee or the permittee’s activities. This indemnification shall include, but not be limited to, damages awarded against the city, if any, costs of suit, attorneys’ fees, and other expenses i ncurred in connection with such claim, action, or proceeding whether incurred by the permittee, city, and/or the parties initiating or bringing such proceeding, and shall not be limited by the types and/or amounts of insurance required herein;
18. For an applicant with two or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement as otherwise required by Business and Professions Code section 26105.5.
(i) Additional operating requirements for retail sale (non -storefront) delivery businesses. In addition to every other requirement of this section, except only for subsection (h)(1) through (5) and (10) (retail sale, store-front), every business that sells and/or delivers cannabis as a non-store front retailer shall comply with the following requirements:
1. Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in complian ce with this chapter, and in compliance with all State regulations.
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2. All employees who deliver cannabis shall have valid identification and a copy of the retail business' cannabis business permit and State license at all times while making deliveries.
3. All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law.
4. Deliveries may only take place during normal business hours of the commercial cannabis retail business.
5. During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law.
6. A licensed delivery employee shall not leave the State of California while possessing cannabis products while performing his or her duties for the cannabis retailer.
7. A commercial cannabis retail business sha ll maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the State.
8. A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours.
9. Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient).
10. Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information:
a. Name and address of the commercial cannabis retail business. b. The name of the employee who delivered the order.
c. The date and time the delivery request was made.
d. The complete delivery addresses.
e. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested.
f. The total amount paid for the delivery including any fees or taxes. g. At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery.
h. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement.
i. Inspections by an authorized City representative may be conducted anytime during regular business hours.
11. Delivery must be made to a physical address that is not on publicly owned land, a school, a day care, or a youth center.
12. The delivery employee shall not carry cannabis goods valued in excess of $5,000 at any time with no more than $3,000 of cannabis goods that are not already part of a customer order that was processed prior to leaving the premises.
13. Delivery must be made in person by a direct employee of the licensed retailer. An independent contractor, third -party courier service, or an individual employed 468
through a staffing agency would not be considered directly employed by the licensed retailer.
9-496. Cannabis employees.
(a) Any person who is an employee or who otherwise works within a cannabis business must be legally authorized to do so under applicable state law. (b) No cannabis business or owner thereof may employ any person who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged o r set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. (c) All employees must wear an identification badge while on the premises of the business, in a format authorized by the city manager. Any person employed by a single employer at multiple locations in the City may be required to obtain only one identification badge.
9-497. Promulgation of administrative regulations.
(a) The city manager is also authorized to establish any additional administrative rules, regulations, policies, procedures and/or standards governing the issuance, denial or renewal of cannabis business permits, or concerni ng any other subject necessary to carry out the purposes of this chapter.
(b) Regulations promulgated by the city manager shall become effective upon the date of publication. Cannabis businesses shall be required to comply with all state and local laws and regulations, including, but not limited to, any rules, regulations policies, procedures and/or standards adopted by the city manager. (c) Such administrative rules, regulations and/or standards may include establishing standards and timing for application processing, including but not limited to providing priority for existing licensees in good standing.
9-498. Inspection and enforcement.
(a) The city manager is charged with enforcing the provisions of the Costa Mesa Municipal Code, or any provision thereof, and may enter the location of a cannabis business at any time during the hours of operation without notice, and inspect the location of any cannabis business as well as any recordings and records required to be maintained pursuant to this title or under applicable provisions of state law. (b) It is unlawful for any person having responsibility for the operation of a cannabis business, to impede, obstruc t, interfere with, or otherwise not to allow, the city to conduct an inspection, review or copy records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any 469
records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law.
9-499. Violations.
(a) Violations declared a public nuisance. Each and every violation of the provisions of this chapter is hereby deemed unlawful and a public nuisance. (b) Each violation a separate offense. Each and e very violation of this chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by the Costa Mesa Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be subje ct to injunctive relief, any permit issued pursuant to this chapter being deemed null and void, disgorgement and payment to the city of any monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remed y available at law or in equity. The city may also pursue any and all remedies and actions available and applicable under state and local laws for any violations committed by the cannabis business or persons related to, or associated with, the cannabis act ivity. Additionally, when there is determined to be an imminent threat to public health, safety or welfare, the city manager, or the chief of police, may take immediate action to temporarily suspend a cannabis business permit issued by the city, pending a hearing before the city council.
(c) Criminal penalties. Each and every violation of the provisions of this chapter may be prosecuted as a misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars ($1,000.00) or imprisonme nt in the County Jail for a period of not more than twelve (12) months, or by both such fine and imprisonment. Each day a violation is committed or permitted to continue shall constitute a separate offense. (d) Remedies cumulative and not exclusive. The remedies provided herein are not to be construed as exclusive remedies. The city is authorized to pursue any proceedings or remedies provided by law.
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CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 24-141 Meeting Date: 5/7/2024
TITLE:
DE NOVO PUBLIC HEARING REGARDING PLANNING APPLICATION 22-08 FOR A CONDITIONAL USE PERMIT TO OPERATE A RETAIL CANNABIS STOREFRONT BUSINESS WITH DELIVERY LOCATED AT 2490 NEWPORT BOULEVARD (“NEWPORT WELLNESS”)
DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES
DEPARTMENT/PLANNING DIVISION
PRESENTED BY: MICHELLE HALLIGAN, SENIOR PLANNER
CONTACT INFORMATION: MICHELLE HALLIGAN, SENIOR PLANNER, (714) 754-5608 RECOMMENDATION:
Staff recommends the City Council conduct a de novo hearing regarding Planning Application 22-08 and make findings regarding the final disposition of the application.
471
City of Costa Mesa
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
Item #: 24-141 Meeting Date: 5/7/2024
TITLE: DE NOVO PUBLIC HEARI NG REGARDING PLANNING APPLICATION 22-08 FOR A
CONDITIONAL USE PERM IT TO OPERATE A RETA IL CANNABIS STOREFRO NT BUSINESS WITH DELIVERY LOCATED AT 2490 NEWPORT BOULEVARD (“NEWPORT WELLNESS”)
DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/PLANNING
DIVISION
PRESENTED BY: MICHELLE HALLIGAN, SENIOR PLANNER
CONTACT INFORMATION: MICHELLE HALLIGAN, SENIOR PLANNER, (714) 754-5608 RECOMMENDATION:
Staff recommends the City Council conduct a de novo hearing regarding Planning Application 22 -08 and make findings regarding the final disposition of the application.
APPLICANT OR AUTHORIZED AGENT:
The applicant/authorized agent is Sean Maddocks on behalf of “ Newport Wellness” and the property owner, Anne Trostle Johnson.
BACKGROUND:
The subject site is a 16,000-square-foot property located at 2490 Newport Boulevard, on the southwest corner of Newport Boulevard and Monte Vista Avenue. The site is zoned C1 (Local Business District) and is surrounded by C1 zoned properties to the south and east, the State Route 55 to the west, and residential properties, zoned R3 (Multiple-Family Residential District, High Density) located to the east.
The site has a General Plan Land Use Designation of “Commercial Residential”. Vehicular ingress/egress is obtained from a driveway located on Monte Vista Avenue. The subject property is located on one of the City’s primary corridors paralleling State Route 55. Existing uses in the area include, but are not limited to, specialty stores, salons, restaurants, m ini warehousing, automobile services, a hotel, and multi-family and single-family homes. See Figure 1 – Project Aerial 472
Item #: 24-141 Meeting Date: 5/7/2024
Figure 1- Project Aerial
Figure 2 - Site Photo
The subject property is developed with a 2,076-square-foot one-story multi-tenant commercial building and approximately 1,300 -square-feet of unpermitted commercial structures, and two detached residential units. See Figure 2 – Site Photo. As proposed, the unpermitted commercial structures would be demolished . The 2,076-square-foot commercial structure and two residential units would remain. The proposed use is a retail cannabis storefront with delivery establishment (“ Newport Wellness”) that would occupy all the commercial building following significant improvements . See Figure 3 – Proposed Site Plan. The application includes updating the structure to comply with current building and safety standards, and enhancing the building façade, landscaping, walls, and fences. See 473
Item #: 24-141 Meeting Date: 5/7/2024
Figure 4 – Proposed Elevation. Parking on site is considered legal -nonconforming with 12 parking spaces proposed (including credit for one bike rack). As proposed, the cannabis retail establishment would operate Monday through Sunday, between the hours of 7 AM and 10 PM, subject to conditions of approval as well as State and local laws pertaining to cannabis retail uses.
Figure 3 - Proposed Site Plan
Figure 4 - Proposed Elevation
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Item #: 24-141 Meeting Date: 5/7/2024
ANALYSIS:
Pursuant to Costa Mesa Municipal Code (CMMC) Sections 13-28(B) and 13-200.93(c)(1), subject to the approval of the Planning Commission, a Conditional Use Permit ( CUP) is required for the establishment of cannabis retail storefronts and non -storefronts (delivery) in a commercial zone. To obtain a CUP, an applicant must demonstrate that the proposed use is substantially compatible with surrounding developments, is consistent with the applicable General Plan provisions/policies, and will not be detrimental to the health, safety, and welfare of the public or otherwise injurious to property in the immediate area.
A detailed description of the proposed use, operations, and improvements to the property are described in the March 25, 2024 Planning Commission staff report (provided as Attachment 7) and attachments, linked below:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=6600444&GUID=124AEE41-6B92-49A2- B68D-6C39DCF99C84
The Planning Commission meeting minutes are provided as an attachment to this report and the meeting video is linked below:
https://costamesa.granicus.com/player/clip/4109?view_id=14&redirect=true
Public Comment
Fourteen public comment letters were submitted to the Planning Commission opposing the proposed use. Members of the public, in written and spoken testimony, stated concerns that the use would result in negative impacts to the public, as well as over-concentration of cannabis storefronts on Newport Boulevard. The Planning Commission public comment letters are provided in Attachment 6.
Planning Commission Review
The application was heard by the Planning Commission on March 25, 2024 . After receiving staff’s presentation and recommendation for approval, the Planning Commission asked questions of staff and then opened the public hearing. The applicant provided a pres entation and responded to questions asked by members of the Planning Commission. The Planning Commission then heard and considered public comments before closing the public hearing. After closing the public hearing, the Planning Commissioners further discussed the proposed use. Two of the Commissioners stated concerns with the cannabis storefront site lighting potentially impacting nearby residential uses , and the incompatibility of the proposed cannabis storefront with the two on -site residential unit s in regard to hours of operation and potential traffic and noise . Three Commissioners noted that the proposed building and property improvements represented a significant investment in the property and its appearance. They identified that proposed conditions of approval, improvements to the commercial building and grounds, and added security would allow the proposed use to operate in a manner that meets the required CUP findings and applicable General Plan policies. Ultimately, the Planning Commission voted 3-2 to approve the CUP application, subject to the conditions of approval.
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Item #: 24-141 Meeting Date: 5/7/2024
With the approval, the Planning Commission added the following two additional operational conditions of approval:
27. Any proposed modification to operational condition of approval No. 4 (which requires a security guard to be present at the subject property 24 hours per day) shall be reviewed by the Planning Commission for approval or denial.
28. A parking attendant shall be required to monitor the parking lot during business hours for at least the first three months from business opening, and after that time, the applicant may request that staff consider eliminating this requirement if parking conditions do not war rant the further need for the attendant.
The Planning Commission Resolution for approval is provided as Attachment 1.
Calls for Review
On April 1, 2024, Councilmember Harper submitted an application to call up for review the Planning Commission decision to consider potential impacts on residential uses, specifically related to hours of operation, parking, noise, signage, and lighting. On April 1, 2024, Councilmember Marr also submitted an application to call up for review the Planning Commission decision to consider land use compatibility and compliance with the General Plan. The filed applications for review are provided as Attachment 2.
City Council “De Novo” Hearing
Pursuant to CMMC Chapter 9, Appeal and Review Procedures, the City Council shall conduct a new or “de novo” review of the matter. The City Council may exercise its independent judgment and discretion in making a decision, and the call for review hearing is not limited to the grounds stated for the review or the evidence that was previously presented to the Planning Commission. The City Council’s decision on the matter is the final decision.
Findings and Review Criteria
Pursuant to the CMMC 13 -29(g)(2), approval of the application must be based on evidence in the administrative record that substantially supports the following findings:
The proposed development or use is substantially compatible with developments in the same general area and would not be materially detrimental to other properties within the area;
Granting the conditional use permit will not be materially detrimental to t he health, safety and general welfare of the public or otherwise injurious to property or improvements within the immediate neighborhood; and
Granting the conditional use permit will not allow a use, density or intensity which is not in accordance with the general plan designation and any applicable specific plan for the property.
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Item #: 24-141 Meeting Date: 5/7/2024