August 6, 2024
City Council
First Amendment (DA-20-05) to
AAA Development Agreement (DA-94-01)
2 REQUESTS
• AAA requests a 20-year time extension that will expire October 31, 2044, to complete Phase II of the DA.
• To date, AAA has completed Phase I improvements, which total 235,825 square feet of the 500,000-square-foot
expansion.
• Amend setback related to a future parking structure
3 PROJECT LOCATION AND ZONING
4 EXISTING CONDITIONS
5 PROPOSED DEVELOPMENT
Future Parking
Structure
Phase II
Office
Building
6 FINDINGS
• Development Agreement is:
• Development Agreement will not:
o Be detrimental to the health, safety, and general welfare; and o Adversely affect the orderly development of property or the preservation of property values.
o Consistent with the objectives, policies, general land uses, and programs specified in the General Plan;
o Compatible with the uses authorized in, and the existing land use regulations prescribed for, the zoning district in which the real property is and will be located; and
o Is in conformity with and will promote public convenience, general welfare, and good land use practice.
7 ANALYSIS
• No change to the scope of work
• Consistent with the General
Plan policies and objectives
• Consistent with the existing
development north of the 405
Freeway
8 PLANNING COMMISSION RECOMMENDATION
• At the July 22, 2024 Planning Commission Hearing, the Planning Commission recommended that the City Council approve the proposed development agreement amendments and Ordinance.
• 5 commissioners voted. Resulting in 4 ayes, 1 nay, and 2 abstaining. • Comments in support:
• “AAA is an excellent local business” and “AAA facility has great employee amenities that attract high-quality jobs to the City.”
• Comments not in support:
• “The project is generally not consistent with certain General Plan Policies that encourage multi-modal transportation.”
9 • Find, pursuant to CEQA Guidelines Section 15162, that the project is within the scope of the June 20, 1994 - Certified Final Environmental Impact Report #1045 (State Clearinghouse No. 94021036)
• Ordinance adoption approving the First Amendment (DA-20-05) to the Automobile Club of Southern California Development Agreement (DA-94-01) to:
1. Allow for a 20-year time extension that would expire October 31, 2044.
2. Amend provisions pertaining to the rate and methodology for calculating traffic impact fees.
3. Amend provisions related to the setback of a future parking structure.
RECOMMENDATION
August 6, 2024
City Council
First Amendment (DA-20-05) to
AAA Development Agreement (DA-94-01)
11 BACKUP SLIDE 1
12 BACKUP SLIDE 2
13 BACKUP SLIDE 3
August 6, 2024
City Council
Affordable Housing Ordinance &
In-Lieu Fee Resolution
2 Background
• January 16, 2024 – City Council considered the Affordable Housing Ordinance and directed staff to return with an In-Lieu Fee.
• February 27, 2024 – In-Lieu Fee Study Session, comments included:
• Ensure Costa Mesa is competitive with nearby cities.
• Fee does not result in an impediment to the production of housing. • April 2, 2024 – City Council considered the In-Lieu Fee and requested it be brought back at a later date.
• Affordable Housing Ordinance applies to developments with 50 units or more. • Only applies to rental housing development, not ownership. • June 18, 2024 – City Council continued the Affordable Housing Ordinance and In-Lieu Fee resolution to July 16, 2024. Requested additional analysis for 30+ units threshold.
3 Affordable Housing Ordinance
• The proposed Affordable
Housing Ordinance requires
a percentage of affordable
housing to be provided with
rental housing projects.
• The applicability threshold
was previously set at 50+
rental units.
• June 16, 2024, the City
Council requested additional
information if the threshold
was set at 30+ units or more.
DRAFT AFFORDABLE HOUSING
ORDINANCE REQUIREMENTS
4 Housing Site Inventory and Affordable Housing
Ordinance Threshold Applicability
Affordable Housing
Ordinance Threshold
Number of Opportunity
Sites Included
% of Opportunity Sites
Included
Net Number of
Opportunity Dwelling
Units
50 units+ 47 48% 15,184 units
(91% of total units)
45 units+ 55 57% 15,422 units
(92% of total units)
40 units+ 63 65% 15,785 units
(95% of total units)
35 units+ 73 75% 16,154
(97% of total units)
30 Units+ 81 84% 16,375
(98% of total units)
25 units+ 87 90% 16,536
(99% of total units)
20 Units+ 89 92% 16,579
(99% of total units)
10 Units+ 94 97% 16,659
(99.9% of total units)
5 Parcels Versus Net Units
6 In-Lieu Fee
• The proposed Affordable Housing Ordinance requires a percentage of affordable housing, or an in-lieu fee, to be provided with qualifying rental housing projects (Gov Code, Sec 65850, 65850.01, & 65583(a)).
• The proposed fee is calculated to support future affordable housing production. • The City completed an Affordability Gap Analysis to ensure fee is commensurate with producing the affordable units required by the Ordinance. • Section 65583(a) requires the City to analyze potential and actual constraints placed on the housing development to ensure requirements do not create a constraint to housing development.
• Recommended fee is based on Costa Mesa specific data only. • Based on extensive analysis, Keyser Marston Associates (consultant), has recommended an In-Lieu Fee that meets City’s goal.
7 Proposed In-Lieu Fee
This fee is based on a housing development affordability gap and is divided into two categories: housing projects that are greater than 60 units per acre and housing projects that are less than 60 units per acre.
8 Comparison of Nearby Cities In-Lieu Fees
CITY REQUIREMENT
Santa Ana • 5-19 Units: $6-$12 per SF
• 20+ Units: $15 per SF
• Only applies to changes in land use and zoning designations • Set Aside: 5-15% Rental, & 5% Ownership
• Affordability Requirement: 15% low, or 10% very low, or 5% extremely low, or 5% very low + 5% low + 5% moderate
Long Beach • Rental: $38 per SF
• Ownership: $29.10 per SF
• Affordability Requirement: 11% very low (rental), 10% Moderate (ownership) Huntington Beach • 3-30 Units: $3.58-$35.80 per SF
• 30-100 Units: $35.80 per SF
• 100+ Units: Must build on-site
Mission Viejo • Threshold: 10+ Units
• Rental: $41.90 per SF
• Ownership: $58.20 per SF
• For rental projects, the in-lieu fee can only be paid for projects between 10 and 20 units. For projects exceeding 20 units, production is required to be on-site. Ownership, any project with 10 or more units can pay the in-lieu fee. 9 Comparison of Nearby Cities In-Lieu Fees
CITY REQUIREMENT
Encinitas • 1-6 Units: sliding scale
• 7+ Units: $23.79 per SF
• Affordability Requirement: 10% Very Low or 15% Low
Oceanside Fee: $20 per SF
Affordability Requirement: 10% Low (rental), 10% Moderate (ownership) San Diego • $25 per SF
• Affordability Requirement: 10% Very Low or Low (Rental), 10%-15% Moderate (Ownership)
Irvine • Formula: based on the cost of land and affordability gap for each project • Affordability Requirement: 5% Very Low + 5% Low + 5% Moderate Santa Monica • Rental: $35.70 per SF
• Ownership: $41.70 per SF
• Affordability Requirement: 5% to 30% Very Low, Low and Moderate 10 Comparison of Nearby Cities
City General Fund Budget
(FY 24-25) Population Property Tax Property Tax
(% of GF)
Property Tax
(per Capita)
Median Home
Price ZHVI
Costa Mesa $189,894,159 111,918 $60,473,546 32% $540.34 $959,800 $1,375,865 Santa Ana $400,217,738 310,227 $93,894,320 23% $302.66 $624,000 $818,774 Newport Beach $311,251,957 85,239 $149,296,403 48% $1,751.50 $2,000,001 $3,343,231 Huntington
Beach $299,995,281 198,711 $108,152,472 36% $544.27 $976,800 $1,396,820 Mission Viejo $74,127,778 93,653 $43,967,772 59% $469.48 $883,600 $1,245,826 Encinitas $100,052,992 62,007 $67,050,000 67% $1,081.33 $1,354,600 $2,038,064 Irvine $263,133,648 307,670 $97,919,816 37% $318.26 $1,025,700 $1,789,381 Long Beach $720,087,012 466,742 $161,710,432 22% $346.47 $709,700 $914,989 Oceanside $218,696,890 174,068 $89,742,690 41% $515.56 $644,600 $909,041 Santa Monica $458,615,156 93,076 $83,895,666 18% $901.37 $1,654,800 $2,491,267 San Diego $2,147,600,000 1,386,932 $817,400,000 38% $589.36 $783,300 $1,164,577 11 Next Steps
• Citywide rezoning efforts
• Develop policies and procedures manual
• Develop Inclusionary Housing agreement
templates
12 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. Adopt Ordinance No. 2024-02, approving the Affordable Housing Ordinance and amending Title 13 to establish the affordable housing requirements for certain new residential development projects.
3. Adopt a fee resolution establishing the affordable housing In-Lieu Fee.
August 6, 2024
City Council
Affordable Housing Ordinance &
In-Lieu Fee Resolution
14 Fee Schedule Breakdown Based On Units
15 Staff Previous Proposed Fee Schedule
The amount was based on a different requirement, of 11% of low-income, or 7% of very low-income. Currently set at 10% of low-income, or 5% of very low-income. 16 In-Lieu Fee Analysis
17 Affordable Housing Ordinance Applicability
• City has 97 housing opportunity
sites identified in our Housing
Element.
• All sites are located in Measure K
Overlay.
• 47 of the 97 sites are anticipated to
have 50+ units.
18 City’s RHNA Allocation
AFFORDABILITY LEVEL TOTAL UNITS
Very-Low Income (<50% of AMI) 2,919
Low Income (50-80% of AMI) 1,794
Moderate Income (80-120% of AMI) 2,088
Above Moderate Income (>129% of AMI) 4,959
TOTAL 11,760
Very Low Low Moderate Above
Moderate
TOTAL
Total Units Towards RHNA 3,015 1,819 3,228 8,979 17,042 Capacity Over RHNA 103% 102% 155% 181% 145%
19 Mission Viejo Requirements – Approved 6/11/24
• The threshold project size is 10 units.
• For rental projects, the in-lieu fee can only be paid for projects with between 10 and 20 units.
• For ownership projects any project with 10 or more units can pay the in-lieu fee.
20 Developer Feedback on In-Lieu Fee Amounts
• Higher in-lieu fee amounts would encourage onsite
production, which is preferred and is best practice.
• Generally, preferred to pay the in-lieu fee at a flat rate versus a sliding scale based on project size.
21 Potential Alternative
• Incremental increase of In-Lieu Fee.
• Initially set a fee at a lower amount and increase
it over time.
Example: Evaluate a fee of $12 in Year 1, with
increases over a 3-year period ( or longer) to an
eventual amount of $19.50.
• Thereafter, consider an annual adjustment
based on an industry index such as changes in
new home value.
August 6, 2024
220 Victoria Place
Screening for 40 Residential Units
City Council
2 SCREENING REQUEST
• Applicant proposes to redevelop a 1.77 acre site within the General Commercial Land Use district with 40 residential units at 220 Victoria Place through a General Plan Amendment
• City Council Policy 500-2 establishes a procedure for processing privately-initiated General Plan amendments. This procedure involves a City Council screening of these requests prior to their acceptance for formal processing
• General Plan Screening is the first step in the process of amending the General Plan Land Use element for the proposed residential development with a density of 22.6 du/acre
• The General Plan Screening is not a public hearing but direction from City Council to proceed with the General Plan Amendment application
3 SCREENING REQUEST
1. General Plan Amendment
• Add the Residential Incentive Overlay to the project site
2. Review and comment on project components
• Design
• Site Plan Layout
• Building Architecture
4 SCREENING REQUEST
The project referred to as “Victoria Place” would involve:
• General Plan Amendment
• Rezone
• Master Plan
• Tentative Tract Map
• CEQA Environmental Review
5 PROJECT SITE
Victoria Street
Victoria Place
Fairview Road
• 1.77 Acre Site
• General Commercial Land Use
• C2 General Business Zoning
• Measure K site
• Nearby residential development
6 GENERAL PLAN LAND USE ELEMENT POLICY 1.3
Policy:
"Strongly encourage the development of residential uses and owner-occupied housing (single-family detached residences, condominiums, townhouses) where feasible to improve the balance between rental and ownership housing opportunities." 7 SURROUNDING DEVELOPMENT
Jiffy Lube
Newport Victoria
Plaza
Lido Apartment
Homes
Victoria Garden
Villas
Armstrong Garden
Centers
8 GENERAL PLAN AMENDMENT SCREENING
• Updates maps, figures, text, and tables to include property in the Residential Incentive Overlay District
• General Commercial land use designation will not change Existing Proposed
9 RESIDENTIAL INCENTIVE OVERLAY
• September 2016: City Council adopted Residential Incentive Overlay District
• Existing zoning does not allow residential development • Overlay helps achieve other city goals on top of existing zoning • Residential Incentive Overlay District allows a maximum of 30 dwelling units per acre
• Measure K site
• Property’s base zoning will not change
10 EXISTING RESIDENTIAL INCENTIVE OVERLAY
DISTRICT
11 CONCEPT DESIGN – SITE PLAN
12 PARKING
Requirement Minimum
Requirements
Proposed
Tenant Parking 140 102
Guest Parking 20 8
Total 160 110
13 CONCEPT DESIGN - FLOOR PLANS
Duplex Unit Detached Unit
14 CONCEPT DESIGN - ARCHITECTURE
15 CONCEPT DESIGN
• Project must exhibit excellence
in design
• Meets goals and policies of the
General Plan
• Location is appropriate for
residential
• Increases ownership housing
opportunities
16 NEXT STEPS
• City Council to discuss project and provide feedback concerning:
- Overall design
- Potential deviations
- Other comments/concerns
• Planning Commission reviews the Master Plan and associated applications
• City Council final approval for the General Plan Amendment and Rezoning
August 6, 2024
220 Victoria Place
Screening for 40 Residential Units
City Council
18 EXISTING ZONING AND LAND USE
Zoning – C2 General Business Land Use – General Commercial N N
19 DEVELOPMENT STANDARDS
Requirement C2 General
Business
Residential
Incentive Overlay
District
Requirement
Proposed
Max Residential
Density
NA 30 DU/acre 22.6 DU/acre
Max Height 2 Stories (30 ft) 3 Stories 3 Stories (approx. 39 ft)
Min Perimeter
Open Space
NA 20 ft abutting
PROW
20 ft abutting
PROW
Min Open Space NA 40%
Unknown
20 SOUTH ELEVATION
Shalimar Park
Renovation
August 6, 2024
CITY COUNCIL
Background Information
• Shalimar Park is located at 782
Shalimar Drive, Costa Mesa.
• The park was dedicated in 1999
and consists of a playground
featuring elements for young
children, trees, seating area, and
benches.
• Its area is less than a half-acre,
approximately 0.16 acre, but
despite its small size, it provides a
vital recreational amenity to this
underserved community.
HISTORY AND PARK
AMENITIES
• Funds received through state Senator David
Min in the amount of $1.0 million for
Shalimar Park upgrades and recreation
amenities.
• Other funding sources include $1.3 million
in other City funds budgeted in prior fiscal
years.
• Altogether, approximately $2.3 million
allocated for the Shalimar Park upgrades.
FUNDING SOURCES
• City contracted in 2023 with Pat West, LLC and
City Fabrick to conduct several community
outreach meetings for major park upgrades.
• Preliminary park design options and renderings
were discussed with the Parks and Community
Services (PACS) Commission on August 10,
2023.
• City staff conducted a comprehensive Request
for Proposals (RFP) in which the City Council
selected Community Works Design Group
(CWDG) as design consultant on January 16,
2024.
PRELIMINARY DESIGN AND CONSULTANT
SELECTION
Community Outreach &
Engagement
Shalimar Park Improvement Project
• Initial Community Engagement
• May/June 2023 – 3 pop-up events
• Pat West LLC
• City Fabrick
• Survey Feedback
• Better visibility and lighting
• More play area
• Space for families and community to gather
• Multi-purpose, active space for back area (i.e.
soccer, basketball)
• Vertical and overhead climbers
Shalimar Park Improvement
Project
• Project Website
• Neighborhood Canvassing
• Community Partners
• Social Media
• E-notifications & Newsletters
• Local School
• Costa Mesa Minute
• Park Posting
• Survey
Conceptual Option A.1
Conceptual Option A.2
Conceptual Option B
Outreach Event
May 17, 2024
• 100+ Participants
• Feedback activities were facilitated
in English and Spanish.
Board #1: Amenity Options / Summary of Results
Board #2: Amenity Options - Summary of Results
Board #3: Amenity Options - Summary of Results
Board #4: Amenity Options - Summary of Results
Parks and Community
Services Commission Meeting
• On July 27, 2024, our team presented
the City staff -recommended Conceptual
Plan Option B to the Parks and
Community Services Commission for
approval.
• The PACS Commission voted for
approval of Option B with a note to
review the potential for a restroom
facility to be reviewed by City Staff.
Conceptual Plan B
Renderings
Plan B
Entry Arbor
Plan B
Cul-De-Sac Improvements
Plan B
Front Entry
Plan B
Playground
Plan B
Mini-Pitch Soccer with Handball Court
Plan B
Mini-Pitch Soccer with Handball Court
Plan B
Security Lighting
Plan B
Security Lighting
Plan B
Playground
Questions?
COSTA MESA
CHAMBER OF COMMERCE
REQUEST
City Council Meeting
Tuesday, August 6, 2024
2 Background
• 2020: COVID-19 pandemic established a state of emergency across the nation, with mandatory social distancing and limiting gatherings.
• 2020 - Early 2022:
Continued mandates
to socially distance
and limit event
attendance, according
to the County levels of
Coronavirus.
3 Prior Financial Assistance to Businesses
• $2.0 million in Small Business Grants funded by ARPA
• Two rounds of funding in Fiscal Year 2021
• A total of $600,000 in financial relief for Travel Costa Mesa due to loss of hotel tax revenue
• Approximately $164,000 per year for Fiscal Years 2020, 2021, 2022, and 2023
• A total of $80,000 in financial relief to the LA Chargers due to closed training practices
• For Fiscal Years 2021 and 2022
4 Analysis: Loss of Revenue
• COVID-19 pandemic affected the Chamber’s two primary
sources of revenue, membership dues and events registration. • While the Chamber received the annual $25,000 contribution from the City during these years, there was still significant losses due to the pandemic.
• Actual losses amounted to $252,570 in both 2020 and 2021. • Events revenue was decreased by 84% in 2020.
• Membership revenue was decreased by 44% in 2020.
• The Chamber of Commerce is asking the City for a one-time support payment of $123,759.
• Recent leadership changes delayed the processing of this request until this time.
5 Analysis: Loss of Revenue
CHAMBER EVENTS Yr to Yr Diff Yr to Yr Diff
Combined
Loss
2019 2020 2021 2019 - 2020 2019 - 2021 2020 &
2021
Gross Income $210,704 $30,899 $114,190 ($179,805) ($96,514) Total Expense $99,518 $13,147 $29,008 ($86,371) ($70,510) Net (Total) $111,187 $17,752 $85,182 ($93,435) ($26,005) ($119,439) MEMBERSHIP Yr to Yr Diff Yr to Yr Diff
Combined
Loss
2019 2020 2021 2019 - 2020 2019 - 2021
2020 &
2021
Total Revenue $215,375 $120,233 $177,385 ($95,142) ($37,990) ($133,131) 6 Staff recommends the City Council authorize
financial support from losses using eligible
funding sources to provide relief to the Costa
Mesa Chamber of Commerce due to the
financial impacts of COVID-19 and the
resultant revenue.
Recommendations