Hermosa Beach City Council
February 3, 2026

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-16
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
28 1st Street and
PCH 4186-026-800 CC Community SPA-7
Specific Plan 25.1 33 0.5 Commercial
Parking - - 6 7 13
a credit union, cafeteria, executive offices,
technician desks and large number of phone
operator desks. The building currently
houses telephone/internet equipment in
approximately 20% of the building with only a
handful of employees. The owner has
recently approached the City to discuss
adaptive reuse of this Art Deco building, with
equipment consolidation and introduction of
housing uses. At least two affordable
housing developers have expressed interest
in working with the property owner to convert
a portion of the building into residential units.

Of 1.49 acres, about 0.62 acre (27,000 sq.
ft.) is a surface parking lot. An existing
building with a footprint of about 0.85 acres
(37,000 sq. ft.) A 20,000 square-foot portion
of the building is 2 stories tall and currently
vacant. There is potential for conversion to
residential use. This building is 80% vacant
and only has telecommunications switching
equipment inside.

Factors for Selection: a, d, e, f, g
19 1103 Aviation
Boulevard 4185-017-015 GC Gateway
C-3 General
and Highway
Commercial

25.1 33 1.3 Multi-tenant
Commercial 24 8 - - 32
FAR: 1.0
ILR: 0.34
Year Built: 1964
Height: 0 and 1
Older 1975 commercial site with multiple
tenant retail. Developer inquired about
adding residential uses to commercial
property. Low density residential is adjacent
to the rear of the property.

These parcels are currently functioning as an
integral site.

Y

KENNARD,BAR

BARA S TR

BARBARA S

KENNARD

TRUST AND

HOROWITZ,RAL
PH TR

HOROWITZ
TRUST
19 1209 Aviation
Boulevard 4185-017-014 GC Gateway
C-3 General
and Highway
Commercial

25.1 33 0.5 Commercial
Parking 6 5 - - 11 Y SELECTIVE API

ONE LLC

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-17
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
Factors for Selection: a, d, f, g, h
19 1062
AVIATION 4186-001-008 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.12 Retail - Nursery - - 3 - 3
FAR: 0.7
ILR: 0.11
Year Built: 1964
Height: 1
Factors for Selection: d, e, f, g, h
- MARIE

SOLYMOSI
19 1062
AVIATION 4186-001-007 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.11 Retail - Nursery - - 2 - 2
2 1732 Monterey
Boulevard 4183-016-028
MD Medium
Density/
No Change
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 0.07 1 Unit - 1 - - 1 FAR: 0.5
ILR: 0.56
Year Built: 1923-1968
Height: Average 1 (5 0-story, 4 1-story, 6 2-
story)
The St. Cross church site consists of 15
parcels, developed with a church sanctuary
and administrative offices, education building
(24,000 sq. ft. footprint), 18 residential units
(with about 7,000 sq. ft. of 2-story
construction), and surface parking lots. The
surface parking areas and underdeveloped
properties on the site create potential for
additional residential units.

These parcels are currently functioning as
one campus.

Leaders at St. Cross Church reached out the
City to explore ways to add additional units
to their property portfolio, which includes 15
lots with historic church, 18 existing units and
parking lots. The church seeks to add
housing units for the dual purpose of
providing affordable housing to the
community and market rate units to help
offset costs for affordable units. The church
has rented units to homeless veterans,
refugees, and formerly to a women’s shelter.

Y

RECTOR,

WARDENS AND

VESTRYMEMBE

RS ST CROSS
PARISH

HERMOSA
BEACH
2 1736 Monterey
Boulevard 4183-016-029
MD Medium
Density/
No Change
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 0.07 1 Unit - 1 - - 1
2 1818 Monterey
Boulevard 4183-016-040
MD Medium
Density/
No Change
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 1.2 Religious
Institution 27 - - - 27
2 302 19th Street 4183-016-033
MD Medium
Density/
No Change
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 0.07
5 Units and
Wireless Comm.

Site
- - - - -
1 1900 Monterey
Boulevard 4182-019-001
MD Medium
Density/
No Change
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.08 3 Units - - - - -
1 1908 Monterey
Boulevard 4182-019-002
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.06 Private Parking
Lot 1 1 - - 2
1 1914 Monterey
Boulevard 4182-019-003
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.06 2 units - - - - -
2 1718 Loma
Drive 4183-016-011
MD Medium
Density/
MD Medium
Density
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 0.06 2 Units - - - - -
2 1722 Loma
Drive 4183-016-012
MD Medium
Density/
MD Medium
Density
R-2 Two
Family
Residential
R-2A Medium
Density
Residential (22)
22 25 0.06 1 Unit - 1 - - 1

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-18
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
2 1730 Loma
Drive 4183-016-035
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.1 1 Unit 1 1 - - 2
It is recommended to explore options to help
add affordable units, including consideration
of SROs or a Planned Unit Development
(PUD). St. Cross Church wrote a letter of
support for Housing Element recommending
RHD zoning.

Factors for Selection: a, d, e, g, h
2 1734 Loma
Drive 4183-016-036
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.1 2 Units - 1 - - 1
2 Loma Drive and
19th Street 4183-016-037
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.09 Private Parking
Lot 1 1 - - 2
2 Loma Drive and
19th Street 4183-016-038
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.1 Private Parking
Lot 1 2 - - 3
2 1854 Loma
Drive 4183-016-039
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.1 Private Parking
Lot 1 2 - - 3
2 1902 Loma
Drive 4183-023-022
LD Low
Density/
MD Medium
Density
R-1 SingleFamily
Residential
R-2A Medium
Density
Residential (22)
22 25 0.1 Private Parking
Lot 1 2 - - 3
5 565 Pier
Avenue 4183-018-013 CC Community SPA-11 Specific Plan 25.1 33 0.24 Multi-tenant Commercial - - 3 3 6 FAR: 0.6ILR: 0.57 Year Built: 1957-1963
Height: Mostly 1
This 32,000 sq. ft. site is developed with
about 16,000 sq. ft. of building footprint. A
7,600 sq. ft. portion (0.037 acre) of the
building is currently two stories.

Property owner communicated to staff
regarding interest in redevelopment.

Factors for Selection: a, d, e, g, h
Y
555 PIER

AVENUE LLC

C/O RIVIERA

CENTER MGMT
CO
5 555 Pier
Avenue 4183-018-015 CC Community SPA-11
Specific Plan 25.1 33 0.49 Multi-tenant
Commercial - - 6 6 12

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-19
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
4 517 Pier
Avenue 4183-018-018 CC Community SPA-11
Specific Plan 25.1 33 0.07 Offices - - - 1 1
FAR: 0.6
ILR: 0.57
Year Built: 1957-1963
Height: 1
Factors for Selection: d, e, g, h
-

WRAY,RICHAR
D AND

DOLORES TRS

WRAY FAMILY
TRUST
4 513 Pier
Avenue 4183-018-017 CC Community SPA-11 Specific Plan 25.1 33 0.07 Offices - - - 1 1 FAR: 0.7
ILR: 0.37
Year Built: 1939-1957
Height: Mostly 1 (8 1-story and 1 2-story)
These parcels are all being accessed from
Oak Street behind the buildings with no
individual driveways. Shared access is
conducive to consolidation.

Factors for Selection: d, e, f, g, h
- BAKER AND
BURTON
4 509 Pier
Avenue 4183-018-016 CC Community SPA-11 Specific Plan 25.1 33 0.07 Multi-tenant Commercial - - - 1 1 - WWS PIER LLC 4 507 Pier
Avenue 4183-018-007 CC Community SPA-11 Specific Plan 25.1 33 0.07 Multi-tenant Commercial - - - 1 1 - 4 REFOUA LLC 445 Pier
Avenue 4183-018-006 CC Community SPA-11 Specific Plan 25.1 33 0.07 Multi-tenant Commercial - - - 1 1 4 433 Pier
Avenue 4183-018-005 CC Community SPA-11 Specific Plan 25.1 33 0.07 Restaurant - - - 1 1 4 425 Pier
Avenue 4183-018-004 CC Community SPA-11
Specific Plan 25.1 33 0.07 Multi-tenant
Commercial - - - 1 1 -

CAPALDI, DINO

AND LEA TRS D

AND L CAPALDI
TRUST
4 405 Pier
Avenue 4183-018-001 CC Community SPA-11
Specific Plan 25.1 33 0.07 Personal
Services - - - 1 1 -

DANESHMAND,

MEHDI K AND

ROSA TRS

DANESHMAND

FAMILY TRUST
4 337 Pier
Avenue 4183-018-026 CC Community SPA-11
Specific Plan 25.1 33 0.08 Restaurant - - 2 - 2 -

SACKLEY,STUA

RT H TR

SACKLEY

FAMILY TRUST
4 321 Pier
Avenue 4183-017-025 CC Community SPA-11
Specific Plan 25.1 33 0.17
Personal Service
ground floor and
residential on
second floor
- - 4 - 4 - HB 321 PIER

AVE LLC
4 419 Pier
Avenue 4183-018-003 CC Community SPA-11
Specific Plan 25.1 33 0.05 Multi-tenant
Commercial - - - 1 1
FAR: 0.6
ILR: 0.38
Year Built: 1955
Height: 1
Y 419 PIER

AVENUE LLC

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-20
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
Owner provided preliminary plans for 4
residential units on 2nd and 3rd floor.

Currently zoned commercial only. Zoning
development standards to be determined
with residential standards.

Factors for Selection: a, d, e, f, g, h
4 411 Pier
Avenue 4183-018-002 CC Community SPA-11
Specific Plan 25.1 33 0.07 Personal
Services - - - 1 1
FAR: 0.5
ILR: 0.42
Year Built: 1945
Height: 1
Owner interested in adding small residential
units on 2nd and 3rd floors.

Factors for Selection: a, d, e, f, g, h
Y

AESTHETIC

HORIZONS INC

C/O JONATHAN
DAVID
7 338 Pier
Avenue 4187-011-054 CC Community SPA-11
Specific Plan 25.1 33 0.17 Office - - 4 - 4
FAR: 3.84
ILR: 1.65
Year Built: 2010
Height: 2
While this parcel appears newer, it is located
between blocks of parcels that exhibit
potential for conversion into mixed use
development. Office buildings also often
have higher FAR and ILR. However, with
increased remoting working, this site can
present opportunity for redevelopment. This
is included only as a RHNA buffer site and is
not needed to accommodate the City’s
moderate income RHNA.

Factors for Selection: b, d
-
BLAKE

HOLDINGS LLC

C/O DAVID

MCGOVERN
8 400 Pier
Avenue 4187-019-037 CC Community SPA-11 Specific Plan 25.1 33 0.21 Offices - - 5 - 5 FAR: 1.0
ILR: 0.60
Year Built: 1915-2010
Height: Primarily 1 (2 1-story and 1 2-story)
Potential for office conversion.
-
BLAKE

HOLDINGS LLC

C/O DAVID

MCGOVERN
8 420 Pier
Avenue 4187-019-003 CC Community SPA-11 Specific Plan 25.1 33 0.11 Restaurant - - 2 - 2 -

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-21
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
8 422 Pier
Avenue 4187-019-022 CC Community SPA-11
Specific Plan 25.1 33 0.23 Multi-tenant
Commercial - - 5 - 5 Factors for Selection: d, e, f, g, h PIER

PROPERTIES
LLC
9 506 Pier
Avenue 4187-020-020 CC Community SPA-11 Specific Plan 25.1 33 0.1 Offices - - 1 - 1 FAR: 1.0ILR: 0.27 Age of Structure: 1925-1966
Height: Average 1 (1 0-story, 1 1-story, 1 2-
story)
Potential for office conversion.

Factors for Selection: d, f, g, h
- SAILFISH

HOLDINGS LLC
9 514 Pier
Avenue 4187-020-032 CC Community SPA-11 Specific Plan 25.1 33 0.1 Private Parking Lot - - 1 - 1 -
REDDY,

DAMODER P

AND SOUMITRI

TRS PATI

FAMILY TRUST
9 526 Pier
Avenue 4187-020-017 CC Community SPA-11
Specific Plan 25.1 33 0.08 Retail Business - - 2 - 2
3 301 Pier
Avenue 4183-017-001 CC Community SPA-11
Specific Plan 25.1 33 0.19 Retail Business - - 5 - 5
FAR: 0.6
ILR: 0.87
Year Built: 1959
Height: 1
Factors for Selection: d, e, g, h
-

SANDY FEET

LLC C/O
DONALD

ENGLISH
6 308 Pier
Avenue 4187-011-012 CC Community SPA-11 Specific Plan 25.1 33 0.09 Retail Business - - 2 - 2 FAR: 0.7ILR: 1.0 Age of Structure: 1923-1944
Height: 1
Common ownership; currently functioning as
one site.

Factors for Selection: d, e, g, h
-
VISION
HERMOSA 1 0
6 LLC 318 Pier
Avenue 4187-011-013 CC Community SPA-11
Specific Plan 25.1 33 0.11 Retail Business
and Residential - - 2 - 2
18 1214 Owosso
Avenue 4185-015-021 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.1 1 Unit - - 3 - 3
FAR: 0.1
ILR: 0.16
Year Built: 1923
Height: 1
Common ownership; currently functioning as
one site.

Factors for Selection: d, e, f, g, h
- CASNER,CRAIG
18 1055 Aviation
Boulevard 4185-015-024 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.05 Vacant Land - - 1 - 1
26 530 6th Street 4188-018-028 CI Light
Industrial
M-1 Light
Manufacturing 25.1 33 0.33 Self-Storage - 4 4 - 8 FAR: 1.4ILR: 0.97 - HUNT, PRISCILLA TR

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-22
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
26 6th and
Cypress (530
6th St.)
4188-018-027 CI Light
Industrial
M-1 Light
Manufacturing 25.1 33 0.12 Self-Storage - 1 2 - 3
Year Built: 1946
Height: 2
2-story warehouse building with self-storage
use in residential adjacent neighborhood.

This is expected to be developed due to
zoning changes now allowing residential
development. Warehouse building existed in
the 1950s when the freight line ran through
town.

The four parcels are under common
ownership that function as a cohesive site
with shared access. The property is located
in the M1 zone where residential has never
been permitted. Rezoning to allow residential
uses in M1 will increase redevelopment
potential. This rezoning is not comparable to
past Housing Element programs, since there
were no rezoning programs nor were nonresidential sites contemplated at that point.

As demonstrated in Table B-2
Redevelopment Trends in the South Bay,
there are examples of storage facilities (RV
parking, truck storage, equipment rental
yard, etc) being converted to housing
developments. There is currently also a selfstorage site in Carson, within the South Bay, marketed for housing.

Factors for Selection: d, f, g

PRISCILLA

HUNT TRUST

C/O HUNT

ENTERPRISES
INC 26 Valley Drive
(530 6th St.) 4188-018-031 CI Light Industrial
M-1 Light
Manufacturing 25.1 33 0.17 Self-Storage - 2 2 - 4
26 Valley Drive
(530 6th St.) 4188-018-008 CI Light
Industrial
M-1 Light
Manufacturing 25.1 33 0.05 Self-Storage - - 1 - 1
27 2nd Street and
Pacific Coast
Hwy
4186-025-029 CC Community SPA-7
Specific Plan 25.1 33 0.08 Auto Repair - - 2 - 2
FAR: 0.4
ILR: 0.16
Year Built: 1905-1925
Height: <1 (2 0-story, 2 1-story)
Common ownership; currently functioning as
one site.
-
GRAND

PROPERTY
GROUP LLC 27 204 Pacific
Coast Hwy 4186-025-028 CC Community SPA-7 Specific Plan 25.1 33 0.15 Auto Repair - - 4 - 4 27 210 Pacific
Coast Hwy 4186-025-027 CC Community SPA-7 Specific Plan 25.1 33 0.08 Auto Repair - - 2 2

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-23
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
27 2nd Street and
Pacific Coast
Hwy
4186-025-002 CC Community SPA-7
Specific Plan 25.1 33 0.05 Auto Repair - - 1 - 1 Factors for Selection: d, e, f, g, h 25 747 5th Street 4188-030-002 SC Service SPA-7
Specific Plan 25.1 33 1 Auto Repair 20 5 - - 25 FAR: 0.4 ILR: 0.29
Year Built: 1923-1978
Height: 1
Factors for Selection: d, e, f, g, h
-

SMILE LLC AND

MARDIKIAN,
GEORGE
25 715 5th Street 4188-030-001 SC Service SPA-7
Specific Plan 25.1 33 0.37
Auto
Repair/Fitness
Center
- - - 9 9 -

FISHER,

ANDREW AND

ELIZABETH

AND FISHER,

ANDREW W
22 635 Pacific
Coast Hwy 4187-032-027 SC Service SPA-7 Specific Plan 25.1 33 1 Lumber Yard 20 5 - - 25 FAR: 0.2
ILR: 0.04
Year Built: 1988
Height: <1 (5 0-story, 1 1-story)
Site 24 is part of Site 22 owned by the same
party. Currently, the two sites function as an
integral site.

Factors for Selection: d, e, f, g, h
-

LEARNED,

MICHAEL CO

TR LEARNED
TRUST
24 709 6th Street 4187-033-022 SC Service SPA-7
Specific Plan 25.1 33 0.06 Parking Lot/Lumber Yard 1 1 - - 2 24 721 6th Street 4187-033-021 SC Service SPA-7
Specific Plan 25.1 33 0.06 Parking Lot/Lumber Yard 1 1 - - 2 24 723 6th Street 4187-033-020 SC Service SPA-7
Specific Plan 25.1 33 0.06 Parking Lot/Lumber Yard 1 1 - - 2 24 Pacific Coast
Hwy and 6th
Street
4187-033-019 SC Service SPA-7
Specific Plan 25.1 33 0.06 Parking
Lot/Lumber Yard 1 1 - - 2
24 725 6th Street 4187-033-018 SC Service SPA-7
Specific Plan 25.1 33 0.06 Parking Lot/Lumber Yard 1 1 - - 2 23 600 Pacific
Coast Highway 4186-013-019 SC Service SPA-7 Specific Plan 25.1 33 0.36 Auto Repair 6 3 - - 9 FAR: 0.5ILR: 0.32 Year Built: 1923-1978
Height: Average 1 (1 0-story, 1 1-story, 1 2-
story)
Site 23 is 0.86 acre, consisting of three
parcels with two owners, currently
functioning as a cohesive site with shared
access, operating as interrelated auto
businesses. If consolidated, the site would
benefit from the City’s current lot
consolidation allowances. Most of the site is
automobile-related uses developed with only
surface automobile storage/parking or single-
- SMILE LLC
23 612 Pacific
Coast Highway 4186-013-018 SC Service SPA-7 Specific Plan 25.1 33 0.14 Fitness Studio 2 2 - - 4 23 620 Pacific
Coast Highway 4186-013-064 SC Service SPA-7
Specific Plan 25.1 33 0.36 Car Rental
Agency 6 3 - - 9 - NOOR ESTATE
LLC

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-24
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
story automobile-related buildings. There is
a two-story building with two small office
suites above. (At least one office was vacant
as of summer 2023). The two-story portion of
the building is approximately 1,400 square
feet.

Factors for Selection: d, e, f, g, h
13 1100 Pacific
Coast Highway 4185-011-039 GC Gateway
C-3 General
and Highway
Commercial

25.1 33 0.55 Retail Market 10 4 - 14
FAR: 0.7
ILR: 0.65
Year Built: 1977
Height: Average 1 (1 0-story, 1 2-story)
This is a 2.8-acre shopping center with one
owner and operating as a cohesive site and
would need to be consolidated for shared
access if redeveloped. About 0.9 acres are
occupied by buildings, with the rest (almost
two acres) being surface parking lot and
undeveloped land.

The site is developed with about 40,000
square feet of building area. All buildings are
single story with the exception of one 7,500
square foot portion which is two-story. This
two-story portion has been partially vacant
for over a year. This indicates that there are
no significant second-story encumbrances
on the development of the site for mixed use
or residential purposes.

The 2.8 acre center comprises two parcels.

One parcel is 0.55 acre, is coterminous with
the footprint of one building and is entirely
nestled (landlocked) in the 2.27 acre parcel.

As such, the entire site already functions as
one cohesive site with driveway access
points and internal circulation.

Y
BACON,

STEPHEN F CO

TR ROGER E

BACON DECD
TRUST 13 1100 Pacific
Coast Highway 4185-011-061 GC Gateway
C-3 General
and Highway
Commercial

25.1 33 2.27 Parking Lot/Pad
Shops 30 6 5 16 57

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-25
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
Factors for Selection: d, e, g, h
12 1601 Pacific
Coast Highway 4185-011-061 GC Gateway
C-2
Commercial
SPA-8

25.1 33 1.92
Personal
Services with
office space
24 8 8 8 48
FAR: 3.7
ILR: 1.80
Year Built: 1988
Height: 0
Given the high vacancy and the reliance on
one anchor (gym), there is a likelihood that
residential may be a viable conversion. The
building also has similar massing as other
nearby multi-family residential buildings (like
the adjacent one). This property has the
potential to redevelop through use of internal
conversion into residential.

Factors for Selection: b, d, g, h
-
1601 PCH LP

C/O SHAOUL
LEVY
14 900 AVIATION 4186-003-024 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.15 Retail - - 3 - 3
FAR: 0.8
ILR: 0.39
Year Built: 1940-1981
Height: <1 (6 0-story, 5 1-story, 1 2-story)
These sites are under common ownership
and is about 0.7 acres (30,000 sq ft). About
7,200 square feet of building footprint is two
stories.

Factors for Selection: d, f, g, h
- EDDIE TALBOT
TRUST
14 916 AVIATION 4186-003-030 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.21 Retail - - 5 - 5
14 950 AVIATION 4186-003-019 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.05 Parking Lot - - 1 - 1
14 950 AVIATION 4186-003-018 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.05 Parking Lot - - 1 - 1
14 950 AVIATION 4186-003-017 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.05 Parking Lot - - 1 - 1
14 950 AVIATION 4186-003-027 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.08 Parking Lot - - 2 - 2
14 950 AVIATION 4186-003-028 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.14 Multi-tenant
Commercial - - 3 - 3

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-26
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
15 1000
AVIATION 4186-002-020 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.07 Multi-tenant
Commercial - - 1 - 1
15 1014/1016
AVIAITION 4186-002-013 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.03 Multi-tenant
Commercial - - 1 - 1
15 1016
AVIAITION 4186-002-012 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.03 Parking Lot - - 1 - 1
15 1036
AVIATION 4186-002-011 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.03 Parking Lot - - 1 - 1
15 1036
AVIATION 4186-002-021 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.09 Multi-tenant
Commercial - - 2 - 2
16 1021
AVIATION 4185-014-015 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.11 Multi-family - - 2 - 2 FAR: 0.4
ILR: 0.57
Year Built: 1947-1962
Height: 1
Factors for Selection: d, e, g, h
- HBAVIATION
LLC 16 1029 AVAITION 4185-014-015 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.11 Multi-family - - 2 - 2
16 1035
AVAIATION 4185-014-001 CC Community
C-3 General
and Highway
Commercial

25.1 33 0.17 Multi-tenant
Commercial - - 4 - 4
29 824 1ST
STREET 4186-031-102 CC Community SPA-7
Specific Plan 25.1 33 0.13 Abandoned
Office Condos - - 3 - 3
FAR: 0.9
ILR: 0.18
Year Built: 1979
Height: 1
Factors for Selection: c, d, f, g, h
- KOCHDVPMT
LLC
21 700 Pacific
Coast Highway 4186-012-014 SC Service
C-3 General
and Highway
Commercial

25.1 33 0.33 Abandoned Auto
Repair - - 4 4 8
FAR: 0.4
ILR: 0.28
Year Built: 1945
Height: 1
Owner communicated to staff regarding
interest in redevelopment.

Factors for Selection: a. c, d, e, f, g, h
Y

LOWENSTEIN,J

OSEPH R AND

GAIL TRS

LOWENSTEIN
TRUST

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-27
Site/
Area
No.

Address APN Existing/
Proposed GP
Existing
Zoning
Proposed
Zoning
Min.

Den.

Max.

Den.

Parcel
Size
(acres)
Existing Use
Capacity Based on Minimum Density
Factors for Selection
Owner/
Developer
Interest
Owners Very
Low Low Mod Above Mod Total
30 8 N PACIFIC
COAST HWY 4186-031-001 CC Community SPA-7 Specific Plan 25.1 33 0.14 Auto Related 2 2 0 0 4 FAR: 1.03ILR: 0.15 Year Built: 1955
Height: <1 (3 0-story, 1 1-story)
Owner submitted a letter of interest for
redevelopment.

Factors for Selection: a, d, f, g, h
Y
900 North PCH
LLC c/o Peter
Nolan
30 No Address 4186-031-002 CC Community SPA-7
Specific Plan 25.1 33 0.14 Auto Related 1 2 0 0 3
30 18 N PACIFIC
COAST HWY 4186-031-003 CC Community SPA-7 Specific Plan 25.1 33 0.25 Auto Related 3 3 0 0 6 30 26 N PACIFIC
COAST HWY 4186-031-036 CC Community
SPA-7
Specific Plan 25.1 33 0.21 Auto Related 2 3 0 0 5
31 1734 PACIFIC
COAST HWY 4185-002-007 CC Community SPA-8 Specific Plan 25.1 33 0.13 Retail 0 0 3 0 3 FAR: 0.14ILR: 0.29 Year Built: 1952
Height: 1
Only occupied by a 1-story single-family
home. Owner submitted a letter of interest
for redevelopment.

Factors for Selection: a, c, d, e, f, g, h
Y
Egerer, Joseph J
and Egerer,
31 Thomas C 1706 PACIFIC
COAST HWY 4185-002-014 CC Community
SPA-8
Specific Plan

25.1 33 0.17 Retail 0 0 4 0 4
Total 224 129 171 80 604
Notes:
*Income level assigned to lower for parcels at least 0.5 ac. and smaller parcels that can be consolidated, or moderate for other small parcels less than 0.5 ac.

Site 7 is excluded as a site to meet the RHNA as it only meet two of the five criteria for underutilization.

Hermosa Beach 2021-2029 Housing Element Appendix B – Land Inventory Housing Element Technical Report Adopted December 21, 2021 / August 8, 2023 CERTIFIED August 1, 2024 Revised January, May, June 2024 B-28
Figure B-1
Sites Inventory

Kosmont Companies
Mailing Address: 1601 N. Sepulveda Blvd., #382 (424) 297-1070 Physical Address: 2301 Rosecrans Ave, Ste. 4140 Manhattan Beach, CA 90266 www.kosmont.com El Segundo, CA 90245 October 5, 2023
Carrie Tai
Director
Community Development
City of Hermosa Beach
1315 Valley Drive
Hermosa Beach, CA 90254
Re: City of Hermosa Beach Land Value Recapture – Summary of Methodology Dear Ms. Tai,
The City of Hermosa Beach (“City”) retained Kosmont Companies (“Kosmont”) to evaluate potential provisions of the City’s proposed Land Value Recapture (“LVR”) program. The LVR program is intended to “capture” added land value on properties within certain commercial corridors on which the City is allowing residential development through rezoning actions. The LVR program is intended to incentivize the development of affordable housing within the City. To ensure that new developments result in production of affordable housing units in the City, the City proposes to levy this fee. Developments may be exempted from the fee if they include affordable housing. Fees paid would support the development of affordable housing units elsewhere in the City. The summary of methodology herein (“Summary”) highlights pertinent assumptions utilized in evaluating the potential number of affordable units to be required within a residential development in order to be exempt from the fee, as well as the potential amount of the fee that the City may desire to initially levy under the LVR program.

As summarized herein, Kosmont’s analysis (“Analysis”) generally indicates that requiring residential projects to include a set aside of 10% very low-income, 15% low-income, 20% moderate-income units, or alternatively, pay a fee of approximately $60 per net residential square foot may be justifiable for the initial implementation of the LVR program. It is expected that the City will need to regularly revisit the amount of the fee, and potentially the exemption set-aside requirements, as fundamental inputs to the Analysis highlighted in this Summary will change over time.

The figures presented in this Summary are based on an evaluation of the potential impact to value of requiring the various percentages of affordable housing in a given multifamily (rental) development versus an exclusively market rate development. The impact of requiring affordable housing as part of a for sale development is generally considered to be greater than the figures presented herein. Given current real estate market conditions, it is expected that the developer of a for sale project would likely opt to pay the fee rather than include affordable housing in such development. However, each development has unique economics.

City of Hermosa Beach
Land Value Recapture Analysis – Summary of Methodology
October 5, 2023
Kosmont Companies 2 | Page
(424) 297-1070
www.kosmont.com
The assumptions presented in this Summary represent one of many potential development scenarios evaluated as part of the Analysis completed, though could generally be considered a baseline set of assumptions. Finally, the assumptions herein are based on a review and modeling of inputs including real estate market conditions specific to the City, current affordable housing guidelines in the State of California (“State”), Los Angeles County Development Authority (“LACDA”) guidance on monthly housing expenditures for utilities, and the potential relationship between the LVR program and State Density Bonus Law (Government Code § 65915 – 65918).

Summary of Baseline Assumptions & Methodology

1. Maximum Housing Expenditures (Multifamily / For Rent) Maximum monthly affordable housing expenditures were calculated based on Health & Safety Code § 50053 which provides that very low-, low-, and moderate-income households shall not expend more than 30% of 50%, 60%, and 110% of the area median income (“AMI”) on housing, respectively. The AMI for Los Angeles County as published by the California Department of Housing and Community Development (“HCD”) is $98,200 for 2023. The calculated amounts were adjusted for unit sizes (bedrooms) and household size (persons) based on HCD guidance. To determine the maximum amount of monthly rent as a share of total housing expenditures, allowances for utilities as published by LACDA for the 2023 all electric schedule were deducted from the calculated amounts. The household size assumptions and utility allowances follow below.

Based on these factors, the maximum monthly rent for very low-, low-, and moderate-income households was calculated to be the amounts below.

2. Market Unit Size, Distribution, & Rent
Based on a review of data from sources including CoStar, Zillow, and the Los Angeles County Office of the Assessor, assumptions on the square footage of units of different sizes (bedrooms), Studio 1 2 3
Household Size (Persons) 1 2 3 4
Household Size Adjustment 70% 80% 90% 100%
Monthly Utility Allowance $ 193 $ 227 $ 262 $ 309
Bedrooms
Studio 1 2 3
Very Low $ 666 $ 755 $ 843 $ 919
Low 838 951 1,064 1,164
Moderate 1,697 1,933 2,168 2,392
Maximum Bedrooms
Monthly Rent

City of Hermosa Beach
Land Value Recapture Analysis – Summary of Methodology
October 5, 2023
Kosmont Companies 3 | Page
(424) 297-1070
www.kosmont.com
the ratio of unit sizes, and market rents were developed. A summary of these assumptions follows below. For reference, monthly market rents are based on rates of $4.75 / $4.50 / $4.00 / $3.75 per square foot for studio / one-bedroom / two-bedroom / three-bedroom units, respectively, and are considered moderately conservative relative to general market comparables in the City.

3. State Density Bonus Provisions
Density Bonus Law allows residential developments that include income restricted units to develop more units than may otherwise be provided under City code. The increase in total units allowed is based on the percentage and depth of affordability provided. The contemplated LVR program requirement of 10% very low-, 15% low-, or 20% moderate-income units would entitle a developer to increase the total number of units in a development by 32.5%, 27.5%, and 15.0%, respectively. Density Bonus Law applies to developments with five or more units, includes a roundup provision on calculations, and provides for other concessions by right including increases in height, and reductions in setback requirements.

As an example, assuming a 100-unit residential development, if 10 units were restricted to very low-income households, a total of 133 units could be developed; if 15 units were restricted to lowincome households, a total of 128 units could be developed; and if 20 units were restricted to moderate-income households, a total of 115 units could be developed. The calculations in this Summary assume that a development including enough affordable units to be exempt from the LVR fee would utilize the benefits of Density Bonus Law.

4. Impact on Rental Revenue
Despite the accretive provisions of Density Bonus Law, the inclusion of affordable units within a residential development was generally found to have a negative impact on overall rental revenue.

It is assumed that market and affordable units will have similar operating costs. The overall impact to blended gross rent is provided below. For reference, the figures are compared to assumed market rents illustrated above, and blended figures are weighted averages based on unit bedroom count distributions / ratios identified in Section 2 above. As an example, this calculation provides that a 115-unit residential development that included 20 units restricted to moderate income households with 15% studio / 45% one-bedroom / 35% two-bedroom / 5% three-bedroom units would realize an average reduction in gross revenue of $226 for each of the 115 units, each month.

Studio 1 2 3
Ratio 15% 45% 35% 5%
Square Feet 475 700 950 1,150
Market Rent $2,256 $3,150 $3,800 $4,313
Bedrooms

City of Hermosa Beach
Land Value Recapture Analysis – Summary of Methodology
October 5, 2023
Kosmont Companies 4 | Page
(424) 297-1070
www.kosmont.com

5. Capitalized Value
Multifamily real estate is generally valued based on capitalization (“cap”) rates that convert net annual rental income to a present value. Cap rates represent the initial rate of return on the total cost of project investment. Cap rates in the City are generally lower than other regional markets, indicating that investors are willing to pay more for properties in the City than they would for another property with the same income stream in an inferior market with more perceived risk. In this step of the Analysis, the impact of the inclusion of affordable housing units within a given development was evaluated on a present value basis utilizing a hypothetical 4.5% cap rate. This rate is higher than recent multifamily property transactions in the City, however is thought to be reasonable on a forward-looking basis as cap rates are increasing due to increases in interest rates and required rates of return. For reference, a lower assumed cap rate would increase the value impact per square foot discussed in Section 6 below.

Note: The value / cost impacts illustrated above are based on a 133-, 128-, and 115-unit development that included 10% very low-, 15% low-, or 20% moderate-income units, respectively.

6. Value Impact Per Square Foot
The final step of this method of evaluation is to consider the impact to value on a per square foot basis. The total leasable square footage, and impact to value on a per square foot basis are illustrated below. These figures reflect the unit square footages identified in Section 2 above, and the total unit counts identified in Section 3 above (e.g., a 133-, 128, and 115-unit development).

Average Rent Studio 1 2 3 Blended
Very Low $2,137 $2,970 $3,578 $4,057 $ 3,112
Low 2,090 2,892 3,479 3,944 3,030
Moderate 2,159 2,938 3,516 3,978 3,076
Delta From Market Studio 1 2 3 Blended
Very Low $ 120 $ 180 $ 222 $ 255 $ 190
Low 166 258 321 369 272
Moderate 97 212 284 334 226
Bedrooms
Bedrooms
Studio 1 2 3 Blended
Very Low $ 4,200,000 $ 6,400,000 $ 7,900,000 $ 9,100,000 $ 6,700,000 Low 5,700,000 8,800,000 10,900,000 12,600,000 9,300,000 Moderate 3,000,000 6,500,000 8,700,000 10,200,000 6,900,000 Capitalized Bedrooms
Impact to Value

City of Hermosa Beach
Land Value Recapture Analysis – Summary of Methodology
October 5, 2023
Kosmont Companies 5 | Page
(424) 297-1070
www.kosmont.com
Based on the blended rates in the table above, and given the assumptions identified herein, levying a fee of $66 – 94 per net (leasable) square foot of residential development would conceptually be considered economically equivalent to a developer as delivering affordable housing as part of a given development.

Findings
Based on the information presented in this Summary, a LVR fee of approximately $66 – 94 per net square foot of residential development is appropriate given a requirement for the inclusion of 10% very low-, 15% low-, or 20% moderate-income units as part of a residential development on eligible commercial properties in the City. In light of current real estate market conditions, and the infancy of the LVR program, Kosmont finds a fee of approximately $60 per net square foot of residential development is justifiable as an initial rate. The City should plan on revisiting the fee based both on the market response relative to the intent of the LVR program, and as the inputs to the calculation illustrated herein change over time.

Kosmont is available to further discuss its findings as desired at your convenience.

Yours truly,
Wil Soholt
Senior Vice President
Studio 1 2 3 Blended
Very Low 63,175 93,100 126,350 152,950 103,241
Low 60,800 89,600 121,600 147,200 99,360
Moderate 54,625 80,500 109,250 132,250 89,269
Studio 1 2 3 Blended
Very Low $ 67 $ 69 $ 62 $ 59 $ 66
Low 93 98 90 86 94
Moderate 55 81 80 77 76
Gross
Leasable SF
Value
Impact / SF
Bedrooms
Bedrooms

LAND VALUE RECAPTURE ANALYSIS

HERMOSA BEACH, CA

December 2023
Prepared By:

KOSMONT COMPANIES
1601 N. Sepulveda Blvd. #382
Manhattan Beach, CA 90266
Telephone: (424) 297-1070
www.kosmont.com

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS
Table of Contents

1.0 Background & Summary................................................................................................. 3

2.0 Fee Equivalency............................................................................................................. 4

2.1 Maximum Monthly Housing Expenditures (Multifamily / For Rent)................................ 4

2.2 Market Unit Size, Distribution, & Rent .......................................................................... 5

2.3 State Density Bonus Provisions ................................................................................... 5

2.4 Impact on Rental Revenue........................................................................................... 6

2.5 Capitalized Value......................................................................................................... 7

2.6 Value Impact Per Square Foot..................................................................................... 7

2.7 For Sale Developments ............................................................................................... 8

3.0 Market Capacity ............................................................................................................. 9

3.1 Incremental Value........................................................................................................ 9

4.0 Hypothetical Development Program Pro Forma.............................................................11

5.0 Appendices ...................................................................................................................21 Appendix A: Calculation of Maximum Monthly Housing Expenditures / Rent .........................22 Appendix B: Sample Rent & Unit Size Comparables .............................................................23 Appendix C: Estimated Value Impact Per Square Foot for Different Unit Counts...................25 Appendix D: Estimated Value Impact Per Square Foot for One to Four Units........................26 Appendix E: Hypothetical Development Pro Forma ...............................................................27 Index of Tables & Figures
Table 1: Household Size, Income Adjustment, & Monthly Utility Allowance Assumptions .......... 4 Table 2: Estimated Maximum Monthly Rent for Very Low-, Low-, and Moderate-Income Households................................................................................................................................ 5 Table 3: Assumed Unit Size & Distribution, Market Rent............................................................ 5 Table 4: Average Rent (Including Income Restricted Units) ....................................................... 6 Table 5: Delta Between Market & Average Rent ........................................................................ 7 Table 6: Estimated Capitalized Impact to Value of Including Income Restricted Units................ 7 Table 7: Gross Leasable Square Feet........................................................................................ 8 Table 8: Value Impact Per Square Foot ..................................................................................... 8 Figure 1: Hypothetical Small Site Pro Forma – Market Rate Project (LVR Fee Paid) ................12 Figure 2: Hypothetical Medium Site Pro Forma – Market Rate Project (LVR Fee Paid).............13 Figure 3: Hypothetical Medium Site Pro Forma – Project w/ Very Low-Income Unit(s)..............14 Figure 4: Hypothetical Medium Site Pro Forma – Project w/ Moderate-Income Unit(s)..............15 Figure 5: Hypothetical Medium Site Pro Forma –Very Low- & Moderate-Income Unit(s)...........16 Figure 6: Hypothetical Large Site Pro Forma – Market Rate Project (LVR Fee Paid)................17 Figure 7: Hypothetical Large Site Pro Forma – Project w/ Very Low-Income Unit(s) .................18 Figure 8: Hypothetical Large Site Pro Forma – Project w/ Moderate-Income Unit(s).................19 Figure 9: Hypothetical Large Site Pro Forma – Very Low- & Moderate-Income Unit(s) .............20

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 3

1.0 Background & Summary
The City of Hermosa Beach (“City”) retained Kosmont Companies (“Kosmont”) to evaluate potential provisions of the City’s proposed Land Value Recapture (“LVR”) program. The LVR program seeks to retain portions of land value added to properties within certain commercial corridors on which the City may allow residential development through rezoning actions. The LVR program is intended to produce affordable housing within the City. Under the LVR program, developments would pay a fee to support the development of affordable housing units elsewhere in the City or alternatively, include affordable housing within the project. This document (“Analysis”) summarizes the analysis completed in evaluating potential LVR program elements and includes three primary elements: (i) an analysis of the estimated equivalency of the fee versus the economics of including affordable units in a given project, (ii) a discussion of the proposed fee amounts and ability of the market to support the same, and (iii) order of magnitude pro forma for hypothetical developments illustrating the potential economics of the LVR program.

Pursuant to guidance from the City Council and City leadership, the LVR program evaluated herein is framed around a requirement that residential projects include a set-aside of (i) 15% very low-income units, (ii) 15% low-income units, (iii) 25% moderate-income units, or alternatively (iv), pay a fee of approximately $76 per net residential square foot for project with four or fewer dwelling units, or approximately $104 for developments with five or more dwelling units.

While every development is relatively unique, pursuant to the Analysis highlighted herein, these potential fee amounts are generally thought to be sufficient to induce some projects to include affordable housing units as part of a given development. Some projects would also be expected to elect to pay the fee rather than include affordable units. Additionally, the fee appears low enough so as not to obstruct the development of residential uses in newly eligible areas of the City. Finally, it is expected that the City will need to regularly revisit the amount of the fee, and potentially the exemption set-aside requirements, as fundamental inputs and calculations highlighted in this Analysis will change over time.

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 4

2.0 Fee Equivalency
The first element of the Analysis summarized herein is the calculation of the general economic equivalency of including a prescribed percentage and depth of (very low-, low-, or moderateincome) affordable housing within a given development versus a set fee. This calculation is not an evaluation of what the market can bear, but rather an estimate of the effective cost of requiring a development to restrict units to 15% very low-, 15% low-, or 25% moderate-income households.

The assumptions presented in this section represent one of multiple potential development scenarios evaluated as part of the Analysis completed, though could generally be considered a baseline set of assumptions. The assumptions herein are based on a review and modeling of inputs including real estate market conditions specific to the City, current affordable housing guidelines in the State of California (“State”), Los Angeles County Development Authority (“LACDA”) guidance on monthly housing expenditures for utilities, and the potential relationship between the LVR program and State Density Bonus Law (“Density Bonus”, Government Code § 65915 – 65918), including recent changes under Assembly Bill 1287 (“AB 1287”).

2.1 Maximum Monthly Housing Expenditures (Multifamily / For Rent) Maximum monthly affordable housing expenditures were calculated based on Health & Safety Code § 50053 which provides that very low-, low-, and moderate-income households shall not expend more than 30% of 50%, 60%, and 110% of the area median income (“AMI”) on housing, respectively. The AMI for Los Angeles County as published by the California Department of Housing and Community Development (“HCD”) is $98,200 for 2023. The calculated amounts were adjusted for unit sizes (bedrooms) and household size (persons) based on HCD guidance. To determine the maximum amount of monthly rent as a share of total housing expenditures, allowances for utilities as published by LACDA for the 2023 all electric schedule were deducted from the calculated amounts. It was assumed that the cost of trash service would be included in rent. The household size assumptions and utility allowances follow in Table 1 below.

Table 1: Household Size, Income Adjustment, & Monthly Utility Allowance Assumptions Source: HCD, LACDA, Kosmont (2023)
Based on these factors, the maximum monthly rent for very low-, low-, and moderate-income households were calculated as provided in Table 2 below. Additional details are provided in Appendix A: Calculation of Maximum Monthly Housing Expenditures / Rent on page 22.

Studio 1 2 3
Household Size (Persons) 1 2 3 4
Household Size Adjustment 70% 80% 90% 100%
Monthly Utility Allowance 151$ 185$ 220$ 267$
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 5
Table 2: Estimated Maximum Monthly Rent for Very Low-, Low-, and Moderate-Income Households Source: HCD, HSC § 50053, LACDA, Kosmont (2023)

2.2 Market Unit Size, Distribution, & Rent
Based on a review of data from sources including CoStar, Rent.com, Zillow, and the Los Angeles County Office of the Assessor, assumptions on the square footage of units of different sizes (bedrooms), the ratio of unit sizes, and market rents were developed. A summary of these assumptions follows in Table 3 below and additional information on sample comparables is provided in Appendix B: Sample Rent & Unit Size Comparables on page 23. For reference, monthly market rents are based on rates of $4.75 / $4.50 / $4.00 / $3.75 per square foot for studio / one-bedroom / two-bedroom / three-bedroom units, respectively, and are considered moderately conservative relative to general market comparables in the City.

Table 3: Assumed Unit Size & Distribution, Market Rent
Source: CoStar, Kosmont, Rent.com, Zillow (2023)

2.3 State Density Bonus Provisions
Density Bonus law allows residential developments that include income restricted units to develop more units than may otherwise be provided under City density regulations. The increase in total units allowed is based on the percentage and depth of affordability provided. Density Bonus law applies to developments with five or more units, includes a roundup provision on calculations, and provides for other concessions by right including increases in height, and reductions in setback requirements. For reference Density Bonus provisions for moderate income units generally only apply to for sale product, however, the City proposes to permit Density Bonus provisions to apply to moderate income for rent product as well.

The following are examples of how Density Bonus provisions can be applied, assuming a residential development with 100 “base” dwelling units:
• If 15 units were restricted to very low-income households, a total of 150 units could be developed.

Studio 1 2 3
Very Low 708$ 797$ 885$ 961$
Low 880 993 1,106 1,206
Moderate 1,739 1,975 2,210 2,434
Maximum
Monthly Rent
Bedrooms
Studio 1 2 3
Ratio 15% 45% 35% 5%
Square Feet 475 700 950 1,150
Market Rent $ 2,256 $ 3,150 $ 3,800 $ 4,313
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 6
• If 15 units were restricted to low-income households, a total of 128 units could be developed.
• If 25 units were restricted to moderate-income households, a total of 120 units could be developed.

The calculations in this Summary assume that a development including a sufficient number of affordable units to be exempt from the LVR fee would utilize the benefits of Density Bonus Law.

The contemplated LVR program requirement of 15% very low-, 15% low-, or 25% moderateincome units would entitle a developer to increase the total number of units in a development by 50%, 27.5%, and 20.0%, respectively.

For reference, AB 1287 was recently codified, and provides for additional increases in density should projects maximize very low-, low-, or moderate-income unit dedications and bonuses (15%, 24%, and 44% respectively). Under those circumstances additional bonuses for very lowor moderate-income units are permitted to be developed and additional bonuses are available.

Kosmont modeled the provisions of AB 1287 and found the provisions to be accretive for some of the hypothetical development programs. Ultimately the potential benefit of the new provisions may depend on the capacity to efficiently fit additional units on a given site.

2.4 Impact on Rental Revenue
Despite the accretive provisions of Density Bonus law, the inclusion of affordable units within a residential development was generally found to have a negative impact on overall rental revenue.

It is assumed that market-rate and affordable units will have similar operating costs. The overall impact to blended gross rent is provided below in Table 4. For reference, the figures are compared to assumed market rents illustrated above, and blended figures are weighted averages based on unit bedroom count distributions / ratios illustrated in Table 3 above.

Table 4: Average Rent (Including Income Restricted Units) Source: Kosmont (2023)
Calculation: ((Market Rent x Market Units) + (Affordable Rent x Affordable Units)) / Total Units As illustrated in Table 5 below, this calculation provides that a 115-unit residential development that included 25 units restricted to moderate income households with 15% studio / 45% onebedroom / 35% two-bedroom / 5% three-bedroom units would realize an average reduction in gross revenue of $262 for each of the 115 units, each month.

Average Rent Studio 1 2 3 Blended
Very Low $ 2,101 $ 2,915 $ 3,508 $ 3,977 3,054$
Low 2,095 2,897 3,484 3,948 3,035
Moderate 2,149 2,905 3,469 3,921 3,040
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 7
Table 5: Delta Between Market & Average Rent
Source: Kosmont (2023)
Calculation: Market Rent – Average Rent

2.5 Capitalized Value
Multifamily real estate is generally valued based on capitalization (“cap”) rates whereby the present value of a given property is equal to the net annual rental income divided by the cap rate.

Cap rates represent the initial rate of return on the total cost of project investment. Cap rates in the City are generally lower than other regional markets, indicating that investors are willing to pay more for properties in the City than they would for another property with the same income stream in an inferior market with more perceived risk. In this step of the Analysis, the impact of the inclusion of affordable housing units within a given development was evaluated on a present value basis utilizing a hypothetical 4.5% cap rate. This rate is higher than recent multifamily property transactions in the City, however is thought to be reasonable on a forward-looking basis as cap rates are increasing due to increases in interest rates and required rates of return. For reference, a lower assumed cap rate would increase the value impact per square foot discussed in Section 2.6 below.

The total value / cost impacts based on a 150-, 128-, and 120-unit development that included 15% very low-, 15% low-, or 25% moderate-income units, respectively is provided in Table 6 below (figures have been rounded).

Table 6: Estimated Capitalized Impact to Value of Including Income Restricted Units Source: Kosmont (2023)
Calculation: Delta Between Market & Average Rent x Total Units

2.6 Value Impact Per Square Foot
The final step of this method of evaluation is to consider the impact to value on a per square foot basis. The total leasable square footage, and impact to value on a per square foot basis are illustrated in Table 7 and Table 8 below. These figures reflect the unit square footages identified Delta From Market Studio 1 2 3 Blended
Very Low $ 155 $ 235 $ 292 $ 335 $ 248
Low 161 253 316 364 267
Moderate 108 245 331 391 262
Bedrooms
Studio 1 2 3 Blended
Very Low $ 6,200,000 $ 9,400,000 $ 11,700,000 $ 13,400,000 $ 9,900,000 Low 5,500,000 8,600,000 10,800,000 12,400,000 9,100,000 Moderate 3,400,000 7,800,000 10,600,000 12,500,000 8,400,000 Capitalized
Impact to Value
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 8
in Table 3 above, and the total unit counts identified in Section 2.3 above (e.g., a 150-, 128-, and 120-unit development).

Table 7: Gross Leasable Square Feet
Source: Kosmont (2023)
Calculation: Unit Square Feet x Total Units
Table 8: Value Impact Per Square Foot
Source: Kosmont (2023)
Calculation: Capitalized Impact to Value / Gross Leasable Square Feet Based on the blended rates in Table 8 above, and given the assumptions identified herein, levying a fee of $86 – 92 per net (leasable) square foot of residential development would conceptually be considered economically equivalent to a developer as delivering affordable housing as part of a given development (assuming a 100-dwelling unit project before considering density bonuses). A table and chart showing the estimated equivalency for different project sizes / dwelling unit counts can be found in Appendix C: Estimated Value Impact Per Square Foot for Different Unit Counts on page 25. Additionally, figures for developments with one to four units for which Density Bonus provisions do not apply is provided in Appendix D: Estimated Value Impact Per Square Foot for One to Four Units on page 26.

2.7 For Sale Developments
The equivalency figures presented in this Summary are based on an evaluation of the potential impact to value of requiring the various percentages of affordable housing in a given multifamily (rental) development versus an exclusively market rate development. The impact of requiring affordable housing as part of a for sale development is generally considered to be greater than the figures presented herein. Given current real estate market conditions, it is expected that the developer of a for sale project would likely opt to pay the fee rather than include affordable housing in such development. However, each development has unique economics.

Studio 1 2 3 Blended
Very Low 71,250 105,000 142,500 172,500 116,438
Low 60,800 89,600 121,600 147,200 99,360
Moderate 57,000 84,000 114,000 138,000 93,150
Gross Bedrooms
Leasable SF
Studio 1 2 3 Blended
Very Low $ 87 $ 90 $ 82 $ 78 $ 86
Low 91 96 89 84 92
Moderate 60 93 93 91 88
Value
Impact / SF
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 9

3.0 Market Capacity
In this section the question of the market’s capacity to support an LVR fee is discussed. The City proposes to allow the development of residential use where such use is not currently permitted so long as such residential use either includes a component of affordable housing or an LVR fee is paid to support the development of affordable housing elsewhere.

The City is not considering requiring owners to develop residential uses on their property. Rather, the City is adding a right and value to certain areas of the City, with the condition that a portion of the incremental value conveyed be used to support affordable housing for residents of the City.

Every property and potential development is relatively unique. If adding residential use to a given property does not make economic sense, that property owner should not, and is not required to add such use. Regardless of the LVR fee ultimately levied, or amount of affordable housing required to be provided in a given development under the proposed policy, eligible properties and their owners would at worst be left at status quo. No existing property rights are proposed to be constrained or eliminated in any way. Property owners only have the potential to benefit from the LVR program, and the quantity of housing delivered within the City only has the potential to increase.

3.1 Incremental Value
As part of the Analysis, recent commercial and residential property transactions were reviewed.

In general, of the sales reviewed, most properties sold for between ~$700 - 1,500 per gross* square foot. Based on the data reviewed, values of $800 - 1,000 per gross square foot were considered indicative of typical market performance, and the higher end of this range could readily be ascribed to newer, quality product.

To evaluate the potential incremental value of the LVR program, the incremental value of newly permissible residential development (perhaps $800 to $1,000 per gross square foot, or more) can be compared to the cost of development. Construction costs can vary widely from project to project based on factors such as site prep required, construction type / materials, the quality of finishes, etc. Broadly, for the purposes of this analysis, a cost range of $400 to $600 per net square foot (excluding land) may be applicable, and this figure conceptually includes typical building permit fees, financing costs, and contractor overhead. It is possible to build many product types such as tract homes or basic additions for substantially less, and it can certainly cost substantially more to build high end or highly engineered product. *The conversion of gross to net square foot can vary substantially, but efficiency factors approaching 80% are common for larger buildings with interior corridors and indoor amenities, and higher ratios are possible for buildings with exterior corridors and without indoor amenities.

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 10
Given a potential value of $800 to $1,000 per gross square foot, and development costs of $400 to $600 per net square foot (excluding land), the net residual value or incremental value of adding residential use to a property could conceptually range from $400 to $600 per square foot of residential use, before accounting for net versus gross building area. The lower, or worst case from the assumptions above would yield $200 to $400 per square foot in new / incremental value before any potential adjustment for gross versus net square feet ($800 – $600 = $200, or $1,000 - $600 = $400).

For illustrative purposes only, should the City elect to levy an LVR fee of $100 per net square foot, the remaining incremental / residual value would be $100 to $300 per square foot of building area (given a building with a 100% gross to net efficiency). Assuming the owner of a small property was considering adding a single, 950 square foot two-bedroom unit above an existing commercial use, if the unit could be developed within a budget of $600 per square foot ($570,000), and the unit were valued at $900 per square foot ($855,000), the property owner would yield a net benefit of $190,000, after considering the LVR fee of $100 per square foot. This residual / new incremental value of $190,000 would be purely attributable to the City allowing residential uses in areas where such uses are not currently allowed. Thus, in this perhaps moderately conservative example, the City would retain $95,000 or 1/3rd of the value being conveyed (for the duration of the affordability covenants), and $190,000 or 2/3rds of the balance of the value being conveyed would be retained by the property owner (100% after the expiration of the affordability covenants).

Alternatively, a property owner could elect not to develop residential uses on their property and pursue the continuation of existing uses or other uses as currently permitted by right, without realizing any diminution in value.

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 11

4.0 Hypothetical Development Program
Pro Forma
In this section a series of high-level proforma are provided illustrating hypothetical development programs on a sample “small”, “medium”, and “large” site. For each hypothetical site, first a base case with all market rate units (wherein the LVR fee is paid) is evaluated, and subsequently hypothetical programs that include affordable housing are provided. Additionally, three hypothetical affordable housing pro forma were prepared for the medium and large site, and they evaluate the performance of a project with (i) very low-income units, (ii) moderate-income units, or (iii) a combination of very low- and moderate-income units as permitted under AB 1287.

The sites and programs presented are theoretical in nature, and prepared without the benefit of massing studies or order of magnitude construction cost estimates. They are intended to be for general demonstration purposes only. At the bottom of each pro forma, a “Return on Cost” figure is provided, and is one of many measures of potential profitability for a given project. In general, for projects of the scale evaluated herein, a Return on Cost of 8 – 12% or more would suggest a hypothetical development program may be financially feasible to a typical developer. Finally, the same pro forma for the medium and large sites are presented side-by-side in Appendix E:

Hypothetical Development Pro Forma on page 27 for easier comparison.

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 12
Figure 1: Hypothetical Small Site Pro Forma – Market Rate Project (LVR Fee Paid) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 3,250 SF
Existing Improvements 1,750 SF $ 900 /SF $ 1,575,000
Existing Parking 8 Stalls (Tandem)
Existing Value $ 1,575,000
Proposed Program
Description
Commercial 1,750 SF
Residential 1,650 SF
Parking 8 Stalls (Tandem)
Base Residential Units 2 DU
Affordable Units - DU
Density Bonus Units - DU
Total Units 2 DU (Two Bedroom Units)
Development Value
Commercial 1,750 SF $ 1,000 /SF $ 1,750,000
Market Rate Residential 1,650 SF 950 /SF 1,567,500
Affordable Residential - SF - /SF -
Total $ 3,317,500
Development Costs
Site Acquisition 1,750 SF $ 900 /SF $ 1,575,000
Commercial 1,750 SF 150 /SF 262,500
Residential 1,650 SF 600 /SF 990,000
Parking - SF - /SF -
LVR Fee 1,650 SF 76 /SF 125,400
Total $ 2,952,900
Net Margin 12.3% Return on Cost $ 364,600
Keep existing first floor commercial, add one
story of residential, no affordable units
Existing commercial / store front retail or office
use
Market Rate Project (LVR Fee Paid)

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 13
Figure 2: Hypothetical Medium Site Pro Forma – Market Rate Project (LVR Fee Paid) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 8,500 SF
Existing Improvements 5,000 SF $ 800 /SF $ 4,000,000
Existing Parking 15 Stalls
Existing Value $ 4,000,000
Proposed Program
Description
Commercial 5,000 SF
Residential 5,000 SF
Parking 15 Stalls
Base Residential Units 6 DU
Affordable Units - DU
Density Bonus Units - DU
Total Units 6 DU (One & Two Bedroom Units)
Development Value
Commercial 5,000 SF $ 900 /SF $ 4,500,000
Market Rate Residential 5,000 SF 950 /SF 4,750,000
Affordable Residential - SF - /SF -
Total $ 9,250,000
Development Costs
Site Acquisition 5,000 SF $ 800 /SF $ 4,000,000
Site Clearance - SF - /SF -
Commercial 5,000 SF 400 /SF 2,000,000
Residential 5,000 SF 500 /SF 2,500,000
Parking - SF - /SF -
LVR Fee 5,000 SF 104 /SF 520,000
Total $ 9,020,000
Net Margin 2.5% Return on Cost $ 230,000
Existing commercial / store front retail or office
use
Replace first floor commercial, add one story of
residential, no affordable units
Market Rate Project (LVR Fee Paid)

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 14
Figure 3: Hypothetical Medium Site Pro Forma – Project w/ Very Low-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 8,500 SF
Existing Improvements 5,000 SF $ 800 /SF $ 4,000,000
Existing Parking 15 Stalls
Existing Value $ 4,000,000
Proposed Program
Description
Commercial 5,000 SF
Residential 8,100 SF
Parking 15 Stalls
Base Residential Units 6 DU
Affordable Units 1 DU 17% Affordable
Density Bonus Units 3 DU
Total Units 9 DU (Two Bedroom Units)
Development Value
Commercial 5,000 SF $ 900 /SF $ 4,500,000
Market Rate Residential 7,200 SF 925 /SF 6,660,000
Affordable Residential 900 SF - /SF -
Total $ 11,160,000
Development Costs
Site Acquisition 5,000 SF $ 800 /SF $ 4,000,000
Site Clearance - SF - /SF -
Commercial 5,000 SF 400 /SF 2,000,000
Residential 8,100 SF 500 /SF 4,050,000
Parking 3,500 SF 125 /SF 437,500
LVR Fee 8,100 SF - /SF -
Total $ 10,487,500
Net Margin 6.4% Return on Cost $ 672,500
Project w/ Very Low-Income Unit(s)
Existing commercial / store front retail or office
use
Replace first floor commercial, add one or two
stories of residential, one very low unit

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 15
Figure 4: Hypothetical Medium Site Pro Forma – Project w/ Moderate-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 8,500 SF
Existing Improvements 5,000 SF $ 800 /SF $ 4,000,000
Existing Parking 15 Stalls
Existing Value $ 4,000,000
Proposed Program
Description
Commercial 5,000 SF
Residential 7,600 SF
Parking 15 Stalls
Base Residential Units 6 DU
Affordable Units 2 DU 33% Affordable
Density Bonus Units 2 DU
Total Units 8 DU (Two Bedroom Units)
Development Value
Commercial 5,000 SF $ 900 /SF $ 4,500,000
Market Rate Residential 5,700 SF 925 /SF 5,272,500
Affordable Residential 1,900 SF 425 /SF 807,500
Total $ 10,580,000
Development Costs
Site Acquisition 5,000 SF $ 800 /SF $ 4,000,000
Site Clearance - SF - /SF -
Commercial 5,000 SF 400 /SF 2,000,000
Residential 7,600 SF 500 /SF 3,800,000
Parking 3,500 SF 125 /SF 437,500
LVR Fee 7,600 SF - /SF -
Total $ 10,237,500
Net Margin 3.3% Return on Cost $ 342,500
Project w/ Moderate-Income Unit(s)
Existing commercial / store front retail or office
use
Replace first floor commercial, add one or two
stories of residential, two moderate units

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 16
Figure 5: Hypothetical Medium Site Pro Forma – Project w/ Very Low- & Moderate-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 8,500 SF
Existing Improvements 5,000 SF $ 800 /SF $ 4,000,000
Existing Parking 15 Stalls
Existing Value $ 4,000,000
Proposed Program
Description
Commercial 5,000 SF
Residential 9,900 SF
Parking 15 Stalls
Base Residential Units 6 DU
Affordable Units 2 DU 33%
Density Bonus Units 6 DU
Total Units 12 DU (One & Two Bedroom Units)
Development Value
Commercial 5,000 SF $ 875 /SF $ 4,375,000
Market Rate Residential 8,250 SF 950 /SF 7,837,500
Affordable Residential 1,650 SF 225 /SF 371,250
Total $ 12,583,750
Development Costs
Site Acquisition 5,000 SF $ 800 /SF $ 4,000,000
Site Clearance - SF - /SF -
Commercial 5,000 SF 400 /SF 2,000,000
Residential 9,900 SF 525 /SF 5,197,500
Parking 3,500 SF 125 /SF 437,500
LVR Fee 9,900 SF - /SF -
Total $ 11,635,000
Net Margin 8.2% Return on Cost $ 948,750
Project w/ Very Low- & Moderate-Income
Existing commercial / store front retail or office
use
Replace first floor commercial, add two stories
of residential, one very low, one moderate unit

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 17
Figure 6: Hypothetical Large Site Pro Forma – Market Rate Project (LVR Fee Paid) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 15,000 SF $ 250 /SF $ 3,750,000
Existing Improvements 5,000 SF
Existing Parking - Stalls
Existing Value $ 3,750,000
Proposed Program
Description
Commercial 3,500 SF
Residential 11,400 SF
Parking 30 Stalls
Base Residential Units 12 DU
Affordable Units - DU
Density Bonus Units - DU
Total Units 12 DU (Two Bedroom Units)
Development Value
Commercial 3,500 SF $ 900 /SF $ 3,150,000
Market Rate Residential 11,400 SF 925 /SF 10,545,000
Affordable Residential - SF - /SF -
Total $ 13,695,000
Development Costs
Site Acquisition 15,000 SF $ 250 /SF $ 3,750,000
Site Clearance 5,000 SF 50 /SF 250,000
Commercial 3,500 SF 400 /SF 1,400,000
Residential 11,400 SF 450 /SF 5,130,000
Parking 11,500 SF 100 /SF 1,150,000
LVR Fee 11,400 SF 104 /SF 1,185,600
Total $ 12,865,600
Net Margin 6.4% Return on Cost $ 829,400
Replace first floor commercial, add two stories
of residential, no affordable units
Market Rate Project (LVR Fee Paid)
Existing commercial / store front retail or office
use

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 18
Figure 7: Hypothetical Large Site Pro Forma – Project w/ Very Low-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 15,000 SF $ 250 /SF $ 3,750,000
Existing Improvements 5,000 SF
Existing Parking - Stalls
Existing Value $ 3,750,000
Proposed Program
Description
Commercial 3,500 SF
Residential 17,100 SF
Parking 30 Stalls
Base Residential Units 12 DU
Affordable Units 2 DU 17% Affordable
Density Bonus Units 6 DU
Total Units 18 DU (Two Bedroom Units)
Development Value
Commercial 3,500 SF $ 900 /SF $ 3,150,000
Market Rate Residential 15,200 SF 925 /SF 14,060,000
Affordable Residential 1,900 SF - /SF -
Total $ 17,210,000
Development Costs
Site Acquisition 15,000 SF $ 250 /SF $ 3,750,000
Site Clearance 5,000 SF 50 /SF 250,000
Commercial 3,500 SF 400 /SF 1,400,000
Residential 17,100 SF 450 /SF 7,695,000
Parking 11,500 SF 100 /SF 1,150,000
LVR Fee 17,100 SF - /SF -
Total $ 14,245,000
Net Margin 20.8% Return on Cost $ 2,965,000
Replace first floor commercial, add two or three
stories of residential, two very low units
Project w/ Very Low-Income Unit(s)
Existing commercial / store front retail or office
use

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 19
Figure 8: Hypothetical Large Site Pro Forma – Project w/ Moderate-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 15,000 SF $ 250 /SF $ 3,750,000
Existing Improvements 5,000 SF
Existing Parking - Stalls
Existing Value $ 3,750,000
Proposed Program
Description
Commercial 3,500 SF
Residential 14,250 SF
Parking 30 Stalls
Base Residential Units 12 DU
Affordable Units 3 DU 25% Affordable
Density Bonus Units 3 DU
Total Units 15 DU (Two Bedroom Units)
Development Value
Commercial 3,500 SF $ 900 /SF $ 3,150,000
Market Rate Residential 11,400 SF 925 /SF 10,545,000
Affordable Residential 2,850 SF 425 /SF 1,211,250
Total $ 14,906,250
Development Costs
Site Acquisition 15,000 SF $ 250 /SF $ 3,750,000
Site Clearance 5,000 SF 50 /SF 250,000
Commercial 3,500 SF 400 /SF 1,400,000
Residential 14,250 SF 450 /SF 6,412,500
Parking 11,500 SF 100 /SF 1,150,000
LVR Fee 14,250 SF - /SF -
Total $ 12,962,500
Net Margin 15.0% Return on Cost $ 1,943,750
Replace first floor commercial, add two stories
of residential, three moderate units
Project w/ Moderate-Income Unit(s)
Existing commercial / store front retail or office
use

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 20
Figure 9: Hypothetical Large Site Pro Forma – Project w/ Very Low- & Moderate-Income Unit(s) Source: Kosmont (2023)
Property Profile
Description of Improvements
Lot Area 15,000 SF $ 250 /SF $ 3,750,000
Existing Improvements 5,000 SF
Existing Parking - Stalls
Existing Value $ 3,750,000
Proposed Program
Description
Commercial 3,500 SF
Residential 19,800 SF
Parking 30 Stalls
Base Residential Units 12 DU
Affordable Units 4 DU 33% Affordable
Density Bonus Units 12 DU
Total Units 24 DU (One & Two Bedroom Units)
Development Value
Commercial 3,500 SF $ 875 /SF $ 3,062,500
Market Rate Residential 16,500 SF 950 /SF 15,675,000
Affordable Residential 3,300 SF 225 /SF 742,500
Total $ 19,480,000
Development Costs
Site Acquisition 15,000 SF $ 250 /SF $ 3,750,000
Site Clearance 5,000 SF 50 /SF 250,000
Commercial 3,500 SF 400 /SF 1,400,000
Residential 19,800 SF 450 /SF 8,910,000
Parking 11,500 SF 100 /SF 1,150,000
LVR Fee 19,800 SF - /SF -
Total $ 15,460,000
Net Margin 26.0% Return on Cost $ 4,020,000
Project w/ Very Low- & Moderate-Income
Existing commercial / store front retail or office
use
Replace first floor commercial, add three stories of
residential, two very low, two moderate units

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 21

5.0 Appendices

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 22
Appendix A: Calculation of Maximum Monthly Housing Expenditures / Rent 2023 Area Median Income $ 98,200
Income Thresholds
Very Low
Low
Moderate
Bedrooms Studio 1 2 3
Household Size 1 2 3 4
Household Size Adj. 70% 80% 90% 100%
Utility Allowance - 2023 Multifamily All Electric
Heating $ 14 $ 20 $ 25 $ 32
Cooking 7 10 13 16
Water Heating 14 19 25 31
Basic Electric 27 33 40 48
Water 73 82 91 109
Trash 42 42 42 42
Air Conditioning 10 15 20 25
Refrigerator 6 6 6 6
Total $ 193 $ 227 $ 262 $ 309
Allowed Monthly Housing Expenditures (Multifamily / For Rent) Bedrooms Studio 1 2 3
Very Low $ 666 $ 755 $ 843 $ 919
Low 838 951 1,064 1,164
Moderate 1,697 1,933 2,168 2,392
Percent of AMI
50%
60%
110%
Max Household Exp %
30%
30%
30%

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 23
Appendix B: Sample Rent & Unit Size Comparables
CoStar Properties (~July 2023)
Zillow & Rent.com Properties (~July 2023)
Address Bed Bath SF Rent $/SF Source
415 Herondo St - 1 360 $ 2,337 $ 6.49 Zillow
415 Herondo St - 1 408 2,331 5.71 Zillow
720 Monterey Blvd - 1 450 2,250 5.00 Zillow
415 Herondo St - 1 512 2,523 4.93 Zillow
415 Herondo St - 1 562 2,563 4.56 Zillow
Average 458 $ 2,401 $ 5.34
Median 450 2,337 5.00
Address Bed Bath SF Rent $/SF Source
1140 Hermosa Ave 1 1 400 $ 2,350 $ 5.88 Zillow
1346 Bayview Dr 1 1 400 2,500 6.25 Zillow
1821 Pacific Coast Hwy 1 1 550 2,495 4.54 Rent.com
707 Manhattan Ave 1 1 408 2,830 6.94 Zillow
2001 Pacific Coast Hwy 1 1 500 2,295 4.59 Zillow
2001 Pacific Coast Hwy 1 1 500 2,395 4.79 Zillow
2001 Pacific Coast Hwy 1 1 500 2,495 4.99 Zillow
2026 Hermosa Ave 1 1 500 2,850 5.70 Zillow
718 21st St 1 1 550 2,500 4.55 Zillow
454 Longfellow Ave 1 1 590 2,800 4.75 Zillow
2100 Hermosa Ave 1 1 600 3,550 5.92 Zillow
216 Hermosa Ave 1 1 630 3,200 5.08 Zillow
415 Herondo St 1 1 644 3,004 4.66 Zillow
137 27th St 1 1 650 3,500 5.38 Zillow
225 30th PL 1 1 750 3,300 4.40 Zillow
415 Herondo St 2 1 758 3,585 4.73 Zillow
415 Herondo St 2 1 855 3,047 3.56 Zillow
3101 Manhattan Ave 1 1 858 3,100 3.61 Zillow
Average 591 $ 2,878 $ 5.02
Median 570 2,840 4.77
One Bedroom Units
Studio Units

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 24
Address Bed Bath SF Rent $/SF Source
721 Manhattan Ave 1 2 560 $ 3,200 $ 5.71 Zillow
1154 Cypress Ave 1 2 690 3,600 5.22 Zillow
2011 Manhattan Ave 1 2 700 2,595 3.71 Zillow
2100 Hermosa Ave 1 2 700 3,800 5.43 Zillow
415 Herondo St 1 2 717 3,450 4.81 Zillow
950 1st St 1 2 759 2,875 3.79 Zillow
1821 Pacific Coast Hwy 2 2 900 3,125 3.47 Rent.com
404 Hermosa Ave 1 2 779 4,495 5.77 Zillow
2411 Prospect 2 2 855 3,395 3.97 Zillow
10 Meyer Ct 1 2 900 3,200 3.56 Zillow
1707 E Pacific Coast Hwy 2 2 974 3,598 3.69 Zillow
75 18th St 2 2 832 4,300 5.17 Rent.com
77 15th St 2 2 981 4,500 4.59 Zillow
1836 The Strand 2 2 1,000 5,995 6.00 Zillow
1652 Monterey Blvd 2 2 1,050 4,800 4.57 Zillow
1656 Monterey Blvd 2 2 1,050 4,800 4.57 Zillow
101 Monterey Blvd 2 2 1,074 3,300 3.07 Zillow
676 5th St 2 2 1,100 3,850 3.50 Zillow
1442 Bayview Dr 2 2 1,200 4,500 3.75 Zillow
1636 Palm Drive 2 2 1,200 5,995 5.00 Zillow
20 22nd St 2 2 1,276 6,000 4.70 Zillow
47 8th St 3 2 1,288 6,000 4.66 Zillow
408 Ocean View Ave 3 2 1,296 6,500 5.02 Zillow
743 24th PL 2 2 1,500 4,900 3.27 Zillow
Average 974 $ 4,282 $ 4.46
Median 978 4,075 4.58
Address Bed Bath SF Rent $/SF Source
639 1st St 3 3 1,200 $ 4,800 $ 4.00 Zillow
428 The Strand 2 3 1,846 9,500 5.15 Zillow
Average 1,523 $ 7,150 $ 4.57
Median 1,523 7,150 4.57
Two Bedroom Units
Three Bedroom Units

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 25
Appendix C: Estimated Value Impact Per Square Foot for Different Unit Counts *Dwelling unit counts are prior to use of density bonus provisions Units* Very Low Low Moderate
5 $ 107 $ 112 $ 121
6 95 98 106
7 156 143 94
8 143 131 85
9 123 121 106
10 115 112 98
11 101 105 91
12 95 98 85
13 86 93 99
14 123 118 94
15 112 112 89
16 107 107 85
17 99 103 96
18 95 98 92
19 89 94 92
20 86 91 88
30 95 98 91
40 86 93 88
50 92 97 90
60 86 92 88
70 90 95 90
80 86 93 88
90 89 94 89
100 86 92 88

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 26
Appendix D: Estimated Value Impact Per Square Foot for One to Four Units Studio 1 2 3 Blended
Very Low $ 869 $ 896 $ 818 $ 777 $ 859
Low 773 822 756 720 786
Moderate 290 447 446 436 423
Very Low $ 435 $ 448 $ 409 $ 389 $ 430
Low 386 411 378 360 393
Moderate 145 224 223 218 211
Very Low $ 290 $ 299 $ 273 $ 259 $ 286
Low 258 274 252 240 262
Moderate 97 149 149 145 141
Very Low $ 217 $ 224 $ 205 $ 194 $ 215
Low 193 205 189 180 197
Moderate 73 112 112 109 106
One Unit w/ One Affordable Unit (100% Affordable)
Two Units w/ One Affordable Unit (50% Affordable)
Three Units w/ One Affordable Unit (33% Affordable)
Four Units w/ One Affordable Unit (25% Affordable)
Value
Impact / SF
Bedrooms

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 27
Appendix E: Hypothetical Development Pro Forma

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 28
Hypothetical Medium Site Pro Forma
Property Profile
Description of Improvements
Lot Area 8,500 SF 8,500 SF 8,500 SF 8,500 SF
Existing Improvements 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ Existing Parking 15 Stalls 15 Stalls 15 Stalls 15 Stalls Existing Value 4,000,000 $ 4,000,000 $ 4,000,000 $ 4,000,000 $ Proposed Program
Description
Commercial 5,000 SF 5,000 SF 5,000 SF 5,000 SF
Residential 5,000 SF 8,100 SF 7,600 SF 9,900 SF
Parking 15 Stalls 15 Stalls 15 Stalls 15 Stalls
Base Residential Units 6 DU 6 DU 6 DU 6 DU
Affordable Units - DU 1 DU 17% Affordable 2 DU 33% Affordable 2 DU 33% Density Bonus Units - DU 3 DU 2 DU 6 DU
Total Units 6 DU (One & Two Bedroom Units) 9 DU (Two Bedroom Units) 8 DU (Two Bedroom Units) 12 DU (One & Two Bedroom Units) Development Value
Commercial 5,000 SF 900 $ /SF 4,500,000 $ 5,000 SF 900 $ /SF 4,500,000 $ 5,000 SF 900 $ /SF 4,500,000 $ 5,000 SF 875 $ /SF 4,375,000 $ Market Rate Residential 5,000 SF 950 /SF 4,750,000 7,200 SF 925 /SF 6,660,000 5,700 SF 925 /SF 5,272,500 8,250 SF 950 /SF 7,837,500 Affordable Residential - SF - /SF - 900 SF - /SF - 1,900 SF 425 /SF 807,500 1,650 SF 225 /SF 371,250 Total 9,250,000 $ 11,160,000 $ 10,580,000 $ 12,583,750 $ Development Costs
Site Acquisition 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ 5,000 SF 800 $ /SF 4,000,000 $ Site Clearance - SF - /SF - - SF - /SF - - SF - /SF - - SF - /SF - Commercial 5,000 SF 400 /SF 2,000,000 5,000 SF 400 /SF 2,000,000 5,000 SF 400 /SF 2,000,000 5,000 SF 400 /SF 2,000,000 Residential 5,000 SF 500 /SF 2,500,000 8,100 SF 500 /SF 4,050,000 7,600 SF 500 /SF 3,800,000 9,900 SF 525 /SF 5,197,500 Parking - SF - /SF - 3,500 SF 125 /SF 437,500 3,500 SF 125 /SF 437,500 3,500 SF 125 /SF 437,500 LVR Fee 5,000 SF 104 /SF 520,000 8,100 SF - /SF - 7,600 SF - /SF - 9,900 SF - /SF - Total 9,020,000 $ 10,487,500 $ 10,237,500 $ 11,635,000 $ Net Margin 2.5% Return on Cost 230,000 $ 6.4% Return on Cost 672,500 $ 3.3% Return on Cost 342,500 $ 8.2% Return on Cost 948,750 $ Project w/ Very Low- & Moderate-Income
Existing commercial / store front retail or office
use
Replace first floor commercial, add two stories
of residential, one very low, one moderate unit
Project w/ Moderate-Income Unit(s)
Existing commercial / store front retail or office
use
Replace first floor commercial, add one or two
stories of residential, two moderate units
Existing commercial / store front retail or office
use
Replace first floor commercial, add one story of
residential, no affordable units
Market Rate Project (LVR Fee Paid) Project w/ Very Low-Income Unit(s) Existing commercial / store front retail or office
use
Replace first floor commercial, add one or two
stories of residential, one very low unit

HERMOSA BEACH LAND VALUE RECAPTURE ANALYSIS 29
Hypothetical Large Site Pro Forma
Property Profile
Description of Improvements
Lot Area 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ Existing Improvements 5,000 SF 5,000 SF 5,000 SF 5,000 SF Existing Parking - Stalls - Stalls - Stalls - Stalls
Existing Value 3,750,000 $ 3,750,000 $ 3,750,000 $ 3,750,000 $ Proposed Program
Description
Commercial 3,500 SF 3,500 SF 3,500 SF 3,500 SF
Residential 11,400 SF 17,100 SF 14,250 SF 19,800 SF
Parking 30 Stalls 30 Stalls 30 Stalls 30 Stalls
Base Residential Units 12 DU 12 DU 12 DU 12 DU
Affordable Units - DU 2 DU 17% Affordable 3 DU 25% Affordable 4 DU 33% Affordable Density Bonus Units - DU 6 DU 3 DU 12 DU
Total Units 12 DU (Two Bedroom Units) 18 DU (Two Bedroom Units) 15 DU (Two Bedroom Units) 24 DU (One & Two Bedroom Units) Development Value
Commercial 3,500 SF 900 $ /SF 3,150,000 $ 3,500 SF 900 $ /SF 3,150,000 $ 3,500 SF 900 $ /SF 3,150,000 $ 3,500 SF 875 $ /SF 3,062,500 $ Market Rate Residential 11,400 SF 925 /SF 10,545,000 15,200 SF 925 /SF 14,060,000 11,400 SF 925 /SF 10,545,000 16,500 SF 950 /SF 15,675,000 Affordable Residential - SF - /SF - 1,900 SF - /SF - 2,850 SF 425 /SF 1,211,250 3,300 SF 225 /SF 742,500 Total 13,695,000 $ 17,210,000 $ 14,906,250 $ 19,480,000 $ Development Costs
Site Acquisition 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ 15,000 SF 250 $ /SF 3,750,000 $ Site Clearance 5,000 SF 50 /SF 250,000 5,000 SF 50 /SF 250,000 5,000 SF 50 /SF 250,000 5,000 SF 50 /SF 250,000 Commercial 3,500 SF 400 /SF 1,400,000 3,500 SF 400 /SF 1,400,000 3,500 SF 400 /SF 1,400,000 3,500 SF 400 /SF 1,400,000 Residential 11,400 SF 450 /SF 5,130,000 17,100 SF 450 /SF 7,695,000 14,250 SF 450 /SF 6,412,500 19,800 SF 450 /SF 8,910,000 Parking 11,500 SF 100 /SF 1,150,000 11,500 SF 100 /SF 1,150,000 11,500 SF 100 /SF 1,150,000 11,500 SF 100 /SF 1,150,000 LVR Fee 11,400 SF 104 /SF 1,185,600 17,100 SF - /SF - 14,250 SF - /SF - 19,800 SF - /SF - Total 12,865,600 $ 14,245,000 $ 12,962,500 $ 15,460,000 $ Net Margin 6.4% Return on Cost 829,400 $ 20.8% Return on Cost 2,965,000 $ 15.0% Return on Cost 1,943,750 $ 26.0% Return on Cost 4,020,000 $ Project w/ Very Low- & Moderate-Income
Existing commercial / store front retail or office
use
Replace first floor commercial, add three stories of
residential, two very low, two moderate units
Replace first floor commercial, add two stories
of residential, no affordable units
Replace first floor commercial, add two or three
stories of residential, two very low units
Replace first floor commercial, add two stories
of residential, three moderate units
Project w/ Very Low-Income Unit(s)
Existing commercial / store front retail or office
use
Project w/ Moderate-Income Unit(s)
Existing commercial / store front retail or office
use
Market Rate Project (LVR Fee Paid)
Existing commercial / store front retail or office
use

Agenda Item Name Comment Position Attachment URL

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Steve
Sanders
The Hb Chamber of Commerce continues to bleed money while at the same time giving themselves a raise.

In the old days, the Hb Chamber of Commerce was so flush with cash they could loan out funds to help local businesses but now they're repeatedly asking the City of Hermosa for financial assistance.

The recently released Tax Year 20204 IRS filings show that assets have declined by $150k in a single year. They have a net loss of $125k on operating activities & yet they paid themselves $60k more than in 2023!  A 31% pay increase from $189k to $249k!
By all accounts, the Hb Chamber of Commerce is a financial failure.

The Hb Chamber of Commerce VP of Finance recently resigned & now the past President/CEO is resigning.

This year the Chamber asked the City for funds to assist with the St. Patrick's Day Parade & most likely next year they'll ask too. In FEB 2025, shortly after they signed a contract to conduct the St. Patrick's Parade, they asked the city for
$15,000. The city generously obliged offering a 0% loan but that wasn't good enough so they set up a GoFund type account as they wanted free money & not money they had to pay back. Also, at that meeting the President of the Chamber presented their 2025 schedule of events but there was not one number mentioned: nothing about increase or decrease in spectators, attendee's, etc from 2023 to 2024. The presentation was Middle School level at best. In the back of the room was a representative of a major business from an adjacent city who had a $20,000 check & was prepared to present to the Chamber to cover the additional costs of the St. Patrick's Day Parade + $5,000 more for promoting their business. But after hearing the poor presentation that Chamber made to the Council he said he didn't feel the Chamber was a worthy cause to donate $20,000. I've attached 1 of 3 Tax forms as this system appears you can only attach 1 at a time. Thank you.

Against https://pubhermosabeach.es
cribemeetings.co
m/FileStream.ash
x?DocumentId=5
3292
City Council Meeting | January 27, 2026

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Steve
Sanders
Tax Form 2 of 3 Against https://pubhermosabeach.es
cribemeetings.co
m/FileStream.ash
x?DocumentId=5
3293

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Steve
Sanders
Tax Form 3 of 3 Against https://pubhermosabeach.es
cribemeetings.co
m/FileStream.ash
x?DocumentId=5
3294

PUBLIC COMMENT tonyhiggin
s
Interesting article on Mb employee salaries. It mentions City Manager Napolitano and looks at city salaries & total compensation in ways we might consider for a public hearing It also offers some interesting insights &recommendations. escribe requires cut & paste of the url below.
https://mbweekly.net/mb-weekly-01-22-2026/
No
Position

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
MC Guerry I do not object to you taking this action, but what I really want is for you to eliminate the Land Value Recapture Fee everywhere. We need more housing units and this fee discourages new development.

Against

Monday, Jan 26, 2027
Re: Missing Testimony from the 901 Hermosa Ave re-hearing to be in Council Jan 27, 2024 To: Hermosa Beach Community Development Director Allison, Dear Director:

Not necessarily of your making Ms Allison, however during the City Manager Suja Lowenthal era of the prior ~7 years, imv the Community Development Department since what I view as the unintended early retirement of former director Ken Robertson and the departure of many former employees of the department, and then the former City Clerk's imposition of imv the disastrous and amateurish eScribe agenda/minutes system in July of 2024, many staff reports of continued matters both from the Planning Commission to a future Planning Commission meeting, and then when reheard at the Council as in the case of the 901 Hermosa Avenue proposed-project (in both cases) FAILED to include all prior public testimony, both oral and via eComments, in some manner.

Only a couple of emails seem to be included with the prior Staff report of the 901 Hermosa Avenue matter which are included only in its PDF. The prior eScribe links to the full item with also eScribes convoluted system of attachments and eComments are not present and it's probably because of the fact that eScribe provides no means to extract a direct link to an agenda's particular item, a MAJOR DEFICIENCY OF eScribe. You can only include a direct link to an eScribe full meetings agenda and then you must reference the item # within same. With regard to the 901 Hermosa Avenue applications Public Hearing, I and Laura Pena had submitted eComments for the November Planning Commission meeting on the matter, with and without attachments. Those comments were not included, as prior to eScribe they always had been in the Granicus days, for both the December continuation of that item in the Planning Commission, nor for tomorrow's January 27 re-hearing at the Council. Only a couple email comments were as mentioned.

Would you review same and be sure to add as supplemental attachments the eComments of Laura Pena, and Howard Lee (with attachments) as made in the November meeting for the 901 Hermosa Avenue application thats being re-heard by the Council January 27, 2026. Also the link to the full eScribe videos should be included for review by the Council as to what went down in the two Planning C i i ti th tt i l di h t th li t d hi t ti t t d d i

ADOPT A

RESOLUTION

APPROVING A

PRECISE

DEVELOPMENT

PLAN AND LOT LINE

ADJUSTMENT TO

REMODEL AND ADD

A THIRD STORY TO

AN EXISTING

COMMERCIAL
BUILDING AT 901

HERMOSA AVENUE

IN THE DOWNTOWN

COMMERCIAL ZONE

AND COASTAL
ZONE - 26-CDD-011
Howard
Lee
Against

ADOPT A

RESOLUTION

APPROVING A

PRECISE

DEVELOPMENT

PLAN AND LOT LINE

ADJUSTMENT TO

REMODEL AND ADD

A THIRD STORY TO

AN EXISTING

COMMERCIAL
BUILDING AT 901

HERMOSA AVENUE

IN THE DOWNTOWN

COMMERCIAL ZONE

AND COASTAL
ZONE - 26-CDD-011
Howard
Lee month
correction
In my following eComment/letter to Director Becker, submitted earlier, I mistakenly indicated the November Planning Commission meeting. I meant the October 21st Planning Commission meeting, when the 901 Hermosa Avenue application was first heard, prior to the commission continuing the matter to a date uncertain, which became December 16 in their commission.

Against

Commission meetings on the matter, including what the applicant and his representatives stated during same. I'm sorry that, in my view, you had to pick up all of the mess of the Community Development Department which in my view was entirely created by the absentee and arrogant/ignorant operation of Suja Lowenthal, the prior disastrous HB City Manager, again imv.

Most Respectfully, Resident Howard Lee

Dear City Council
Hermosa Beach's per capita police costs appear to be several times higher than the median California city and substantially above the state average. This needs to be considered.

I welcome corrections but my understanding is that based on recent budget discussions and general fund allocations, Hermosa Beach dedicates approximately 50% to 60% of its general fund to police services.

With a population around 19,500 residents and a total city operating budget of approximately $53.6 million for the 2025-26 fiscal year, the per capita police spending can be estimated at roughly $1,300 to $1,600 per resident annually.

I believe the california average police cost per capita is around $700.

If our costs are nearly double the statewide average we need to be clear on why.

If it's in good-part because we are a tourist and bar town then a fair argument might be made that those that financially benefit from the most tourism and bar traffic should pay more for police services.

More business funded downtown private security might be a fair tradeoff.

If its because we have too many chiefs and not enough indians perhaps the city should look at partnering with Manhattan and/or Redondo.

Care needs to be taken to ensure the downtown business district bars and tourism doesn't leave police enforcement in residential neighborhoods paying more & more for a shorter & shorter end of the stick.

To that end the last comprehensive city business district(s) costs vs revenue analysis was in 2015 and it concluded that AT BEST it was a just breakeven on balance sheet. Thats worthy of consideration and that makes it all the more important that the businesses-mix add not detract from what makes hermosa special for our residents, our quality of life.

And as we approach the city forecasted fiscal challenges ($14 million in cumulative operating budget deficits by 2031 and $150 million in unfunded capital projects by the same date its high time we clearly understand whether the business district is a revenue or cost center for the city. 2centtony
PUBLIC COMMENT tony No
Position

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Jonathan
Edward
David
Please find aletter from Upper Pier Property Owners, who want to see the program eliminated from all downtown lots - past planning commissions recommendation of only the 1-2 unit exemption.

Against https://pubhermosabeach.es
cribemeetings.co
m/FileStream.ash
x?DocumentId=5
3295

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Cammie
Herbert
Mayor and Councilmembers,
I know we are required to bring in housing. I support small scale mixed use development in our commercial zones. Ive even thought the city could consider having residential at its city yard and encouraging the Hermosa Pavilion to convert their empty spaces to some studios.

However I do not support the Land Value Recapture program. There are no applications so It seems that the LVR is not only not creating housing, but stalling projects on small commercial lots. Which in turn seems to keep bringing us to higher density developments in residential neighborhoods.

I hope you will consider:
- removing 1-2 unit projects from the program
-eliminating fees on small mixed use projects.

Thank you for your time and consideration.

Against

The purpose of a Chamber of Commerce is to advocate for businesses. Unfortunately, our Chamber is really just a Chamber of Events and now they cannot even run events. At this point, it is time to do the chamber (and its members) a favor and not renew the contract for events. The city can put the Fiesta out to bid, and that money can fund other city events.

How many times has the council seen chamber board member(s) show up at a council meeting and provide thoughtful input? I dont believe I have ever seen board members take the time to attend meetings unless it was pertaining to their own business. Therein lies the problem. As long as the chamber has contractually obligated events as a continued distraction, they will never fulfill their mission and purpose. This is why you should not renew the contract not as a punishment, but to recognize that they need to focus on their mission.

However if you waiver in this belief, please recognize that if an entity behaves irresponsible and reckless with their finances, the last thing a municipality should do is hand over taxpayer money to that entity, thus getting intertwined. You should already be aware of the chambers financial negligence, but for the benefit of everyone reading this, below is a brief listing of their problems:

Since 2019 the chamber has been financially negligent and reckless in their decision making. The chamber has burned through nearly all of its working capital because the board and chamber president continue to assume that the city will serve as a financial backstop.

The chamber had a significant cash balance at the beginning of 2019, but that money has been methodically drained. Chamber staff have been paid high salaries while at the same time, most of them had (have) other jobs leading most of us to question how much of their time is even dedicated to the chamber. That question is also easily answered by simply looking at how much contract labor has skyrocketed since 2019 because chamber staff no longer does this work, they merely pay someone else to do their work.

Not only was staff given bonuses as the chamber lost money but money that should have accrued to the chamber was instead handed over to board members. It is well known that various board members have financially profited from their position on the board (beer garden at the fiesta), so again, it is no surprise that the chamber is running out of money and asking the city for financial support.

Th h b d d th th t f d d fit h k d th b d t th Fi t

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Carolyn
Petty
Against

The chamber even ended the program that funded non profits who worked the beer garden at the Fiesta with that money going into the pocket of a board member. How can the city council disregard this? It is an affront to everyone who understands the importance of those non profits in our community. However, the board seems to have no concern about the impropriety of their actions.

It is also important to note that lower sponsorship money has been the direct result of the ineptitude of the chamber staff. One of the long time /sponsors was personally insulted and walked away. How many other sponsors left due to the attitude of chamber staff? Shouldnt they be held accountable for lost revenues not use this poor performance metric as a sympathy play to get money from the taxpayers? When former board members / community members have expressed concerns which has happened numerous times over the years, those people have been ignored or silenced via threats. When a community member expressed concern about the actions of chamber board and staff, the board then used $10,000 of member funds to fund a personal lawsuit by the chamber president against that community member. How is that not a clear warning to anyone who dares to criticize the chamber? Not only is this an inappropriate use of member funds, but it also demonstrates their complete lack of concern for governance. Another reason why no taxpayer funds should go this chamber.

The chamber has had an entire year to address the parade, and instead waited until the last minute, backing the council into a corner. Do not let them box you in please be the leaders that you are, force them to get back to their mission of advocacy. This is not a punishment, it is something that needs to be done.

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Cammie
Herbert
Mayor and Councilmembers,
The City, its businesses and its residents have said businesses need help. I think Special Events bring a large group of people to town. And we hope it will bring them back when they see how awesome it is. With the rising costs of running an event, The City cannot do these events alone, just as the Chamber cannot.

Thanks for helping businesses!
For

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Elka
Worner
Staff has spent hundreds of hours developing the citys Land Value Recapture Program, a policy designed to incentivize affordable housing.

But since the ordinance went into effect in 2024, no one has submitted an affordable housing project or paid the LVR fee. Zero applications. Smart development in our commercial areas makes sense, especially for our Housing Element. I agree with the proposal set forth by the Planning Commission and am confident you will also take into consideration the position of the local property owners. Thank you.

No
Position

Dear Mayor & City Council - After reviewing all the reports, data, and policy plan documents; I recommend an exemption for small downtown lots from our Land Value Recapture (LVR) Program. The evidence we now have from an economic, legal, and market based perspective shows that continuing to apply LVR to these parcels is no longer aligned with feasibility, and in fact has become a government imposed constraint under state housing law.

I want to highlight guidance from the Citys own consultant that is especially relevant today. In October 2023, Kosmont advised that the City should plan on revisiting the fee based on both market response relative to the intent of the LVR program. That guidance is difficult to ignore because the inputs underlying their analysis have shifted dramatically: construction costs are higher, financing is far more expensive, lender risk tolerance has declined, return expectations have increased, and broader economic uncertainty continues.

Most importantly, the market response has been unequivocal. Since LVR was introduced, analyzed, adopted, and implemented, the City has seen zero applications, zero inquiries, and zero interest on small lots, the very properties relied upon in the Housing Element. When a consultant advises that fees should be revisited based on market response, and that response is complete silence, the conclusion is not ambiguous. The market has rejected the program.

Under state housing law, a city may not maintain policies that render its Housing Element sites infeasible to develop. Doing so constitutes a government imposed constraint and is now among the clearest triggers for legal challenge under both HCD review and recent case law. The Redondo Beach appellate ruling reinforced this principle, making clear that cities may not rely on theoretical capacity or paper zoning where actual feasibility is blocked by local policy.

Small commercial lots in our City, typically 3,000 to 5,000 square feet with 30-foot height limits are already difficult to develop. The addition of a significant fee did not capture value; it eliminated interest altogether. Because these parcels represent a meaningful share of our Housing Element inventory, the LVR fee is now impairing our compliance.

A fee that produces zero projects, zero interest, and zero applications is not an incentive, it is a barrier.

And under state law, that barrier constitutes a governmental constraint.

F th I tf ll d ti ll d t l t f th L d V l

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Laura
Pena
Against

For these reasons, I respectfully recommend exempting small downtown lots from the Land Value Recapture fee and seriously considering removal of the program in its entirety. This approach aligns with current economic conditions, the Housing Elements requirement to avoid government imposed constraints, and the clear market evidence from the past several years.

If there is concern that LVR has not been in effect long enough to evaluate, that view overlooks the Citys own Housing Element history. LVR was adopted in December 2021 and included from the outset of Housing Element discussions, long before the ordinance took effect in 2024. For nearly three years, property owners, architects, and lenders have been evaluating its feasibility impacts. The policy signal has been clear and the response has been consistent.

The LVR program now sits at the intersection of rapidly evolving state housing law, including changes that explicitly protect small scale infill and mixed income development. When a local ordinance appears to conflict with that framework, and when the Citys own analysis shows widespread infeasibility on small sites, the legal risk is no longer theoretical.

I encourage the Council to view reform of the LVR program not as a retreat from values, but as an act of responsible governance one that aligns local policy with state law, protects taxpayers, and reduces avoidable legal exposure while still advancing thoughtful, incremental housing in our commercial corridors.

I believe this Council wants to leave our City stronger, more resilient, and better aligned with the laws that govern us. Thoughtful reform is an opportunity to demonstrate stewardship, rebuild trust with small property owners, and direct staff to work collaboratively on incentives that genuinely support incremental, small-scale infill development. I am hopeful you will choose a path forward that reflects both our shared values and sound governance.

Thank you for your consideration.

Laura Pena

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Michelle
Crispin
See attached Against https://pubhermosabeach.es
cribemeetings.co
m/FileStream.ash
x?DocumentId=5
3296

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
adam
malovani
Dear Mayor and Members of the City Council,
I am a Hermosa Beach resident who cares deeply about preserving the character of our City. I do support thoughtful, small scale mixed-use development in our commercial zones, projects that add a few homes above shops, strengthen local businesses, and bring incremental, well-designed growth to our downtown without overwhelming it.

I am concerned that the Land Value Recapture (LVR) program, as currently structured, is discouraging exactly the kind of modest mixed-use projects many residents support. Instead of producing housing, it appears to be stalling projects on small commercial lots and creating pressure for larger developments or future density shifts into residential neighborhoods.

I believe our City should focus housing growth where it makes the most sense:

In commercial areas
Through small, incremental mixed-use, not large or disruptive projects For these reasons, I respectfully ask the Council to:

Remove 12 unit projects from the LVR program
Eliminate fees on small mixed-use projects
Create incentives, not punitive fees that make projects infeasible Thoughtful mixed-use in our commercial districts can strengthen downtown, add housing gradually, and help protect the character of our neighborhoods. I urge you to course correct the LVR program so that the outcome remains possible.

Thank you for listening and for considering a balanced approach that reflects how many residents feel.

For

REPORT ON

PLANNING

COMMISSIONS

REVIEW OF LAND

VALUE RECAPTURE

ORDINANCE, AND

ADOPT A

RESOLUTION

AMENDING THE

CITY MASTER FEE

SCHEDULE TO

AMEND FEES FOR

THE LAND VALUE

RECAPTURE

PROGRAM FOR

AFFORDABLE

HOUSING
Randy
Balik
Hello City Council,
I am a 30-year Hermosa Beach resident who cares deeply about preserving the character of our City, and this character we all speak of can be preserved even with some thoughtful, small scale mixed-use development in our commercial zones. Some seem to continue to be opposed to this even though such projects can add a few homes above shops, which would both strengthen local businesses, and be incremental in terms of well-designed growth to our downtown without overwhelming it.

The Land Value Recapture (LVR) program, as currently structured, is discouraging what many of us residents support. The LVR program is literally stalling projects on small commercial lots and creating pressure for larger developments or future density shifts into residential neighborhoods. Such developments are the antithesis of "preserving" our Hb character.

HB should focus housing growth where it makes the most sense, which does include the commercial areas, though small, incremental mixed-use, not large or disruptive projects For these reasons, I respectfully ask the Council to remove 12 unit projects from the LVR program, eliminate fees on small mixed-use projects, and create incentives, not punitive fees that make projects infeasible.

Thoughtful mixed-use in our commercial districts can strengthen downtown, add housing gradually, and help protect the character of our neighborhoods. I urge you to course correct the LVR program so that the outcome remains possible. This balanced approach reflects how many residents feel. Thank you. -

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Ira Ellman I favor the City subsidizing the St. Patricks' Day Parade due to increasing security costs. Any incremental sponsor money received should be used to cover the city's share first. In addition, I am against a second Fiesta (Labor Day Weekend). It has been excellent having this three day weekend free of the Fiesta takeover of downtown. One each year is enough.

For

APPROVAL OF AN

AGREEMENT WITH

THE HERMOSA

BEACH CHAMBER

OF COMMERCE

AND VISITORS

BUREAU AND

HERMOSA BEACH

CHAMBER

FOUNDATION FOR

ITS SPECIAL EVENTS
IN 2026 THROUGH
2028 - 26-CR-012
Kathleen
Knoll
Dear Mayor Saemann and Council members, I’m writing in regard to the St. Patrick’s Day Parade. I think we all agree this has become a wonderful tradition in the City of Hermosa Beach, and truly hope to see it continue this year. We are asking the City to help with some of the fees the Chamber has requested, as this event should be a partnership between the City and the Chamber. I am a current Chamber board member and I want to assure you that we are evaluating all events to ensure they align with our mission and are financially responsible. The Chamber is actively course-correcting past oversight. As Board members, we are volunteers like you who all care deeply about Hermosa Beach and its business community. Over the past several years, the Chamber took on many events when the City was no longer able to manage them, I believe this shift began when the city was dealing with the Macpherson lawsuit.

This led to a very event-heavy model which is no longer sustainable. The Board is now hitting reset—streamlining operations, improving financial oversight, and recommitting to transparency. A review of event finances shows that rising costs like insurance, security, and barricades have significantly reduced net revenue, making it difficult for the Chamber to sustain these events on its own.

Our hope is that the City will partner with us to help preserve important community traditions like the St.

Patrick’s Day Parade while supporting the long-term health of the Chamber and our local businesses.

These events are good for our community and our businesses. Thank you for listening to my opinion on this matter. Sincerely, Kathy Knoll.

For

Hermosa Beach City Council
1315 Valley Drive
Hermosa Beach, CA 90254
Subject: Request for Removal of Upper-Pier Housing Element Sites from Land Value Recapture Program
Dear Mayor and Councilmembers,
As long-standing local commercial property owners, we represent a majority portion of the Upper-Pier downtown housing-element sites. We have been deeply invested in the success of Hermosa Beach for many decades. Our businesses and properties are part of the fabric of this community, and we are committed to its economic vitality and future growth.

The Upper-Pier corridor serves as a critical gateway to our downtown, and we strongly believe it holds the key to fostering the kind of investment and energy needed to enhance the resilience of our entire downtown area. However, despite our willingness to invest in mixed-use development that aligns with the city’s goals, economic and regulatory realities—particularly development standards and the Land Value Recapture Program—have created significant barriers to progress.

The City Progress reports reveal a complete lack of movement on our downtown’s Housing Element sites, and as long as these sites remain subject to Land Value Recapture, we fear this stagnation trend will continue. The added financial burden discourages small-scale projects that could otherwise bring much-needed housing and vibrancy to our community.

Moreover, we do not want to see Upper-Pier change hands to large developers whose projects could alter the unique character of our town. As long-standing local business owners, we are the best custodians of this important downtown gateway. We are committed to responsible, thoughtful development that enhances Hermosa Beach while preserving its small-town charm.

We support the Hermosa City Council's desire to remove small-development from the Land Value Recapture program and respectfully request removing all Upper-Pier lots from the Land Value Recapture program. They are all suitable for small, mixed-use development that could open the door for meaningful reinvestment while still retaining our community character and broader planning objectives.

We appreciate your time and consideration and look forward to working together to ensure a prosperous future for Hermosa Beach.

Sincerely,
Mike Granis (US Postal Office, Hermosa Professional Building, Miss Bee’s Tutoring, Skin Medix) Albro Lundy (Baker, Burton & Lundy, The Source, Redwood Pizza) Chris Bredenson (Rockefeller, State Farm, The Bike Shop, Door to Door Cleaners)

Peter Nolan (338 Pier Ave – 404 Pier Ave)
Ed Hart (Maximus Salon)
Brian and Brea (Hook & Plow, Breck & Brix)
Jon David (Pier Medical Aesthetics)
Mike Daneshmand (Mimosa Salon)
Mark Kernen (Uncorked, Off-Set Coffee, Fritto Misto)

November 17, 2025
City of Hermosa Beach
1315 Valley Drive
Hermosa Beach CA 90254
RE: Mixed-use and Land Value Recapture
Dear City Council and Mayor:

The Hermosa Beach Chamber of Commerce and Visitors Bureau supports mixed-use development as a strategy to strengthen downtown vitality, enhance foot traffic, and attract private investment into our commercial corridors throughout the year. However, since the Land Value Recapture (LVR) Program was adopted in 2023, no mixed-use applications have been submitted on the small downtown lots subject to the fee. This lack of investment underscores that the program, as currently structured, has created a barrier to redevelopment rather than an incentive.

These small parcels face physical and financial limitations that make new construction challenging even before the fee is applied. Even a reduced LVR fee would continue to make these projects infeasible. Smaller sites cannot offset the cost through economies of scale or density bonuses, nor can they blend affordable and market-rate units to balance returns. As a result, the program has stalled all reinvestment interest in these small commercial lots.

Both Manhattan Beach and Redondo Beach do not impose a Land Value Recapture fee on mixed-use development, placing our City at a competitive disadvantage when it comes to attracting investment and achieving long-term revitalization goals.

To better align the City’s housing, economic development, and sustainability objectives, the Chamber respectfully recommends that the City:

1. Exempt Small Downtown Lots from the LVR fee entirely. a. This exemption recognizes the unique physical and financial constraints of our City’s small downtown lots, which cannot utilize density bonuses or achieve the scale needed to make development feasible.

b. It also aligns with City Council’s recent direction to the Planning Commission to exempt our small downtown commercial lots from an LVR fee.

2. Streamline the Review Process for small mixed-use projects by allowing qualifying proposals to undergo Administrative Review.
a. Expediting approvals for small, low-impact projects would reduce costs and delays, making these developments more achievable.
b. Streamlining is consistent with the City’s Economic Development Strategy #28, which emphasizes increasing certainty and reducing approval times through improved efficiency. c. This approach would promote reinvestment while maintaining appropriate design oversight
Together, these actions would strike the right balance, protecting public interests while unlocking the potential of small lots that have remained underutilized for years.

The Chamber appreciates the City’s continued collaboration in fostering downtown revitalization while preserving our City’s character and local business base. By exempting small lots and streamlining their review, our City can remove barriers to progress, encourage local reinvestment, and demonstrate leadership in practical, community-based economic development
Thank you for your consideration and continued partnership with our business community.

Thank you for your consideration,
Board of Directors
Hermosa Beach Chamber of Commerce & Visitors Bureau

LAND VALUE RECAPTURE
FEES
City Council
February 3, 2026

BACKGROUND
 January 2024 - Land Value Recapture (LVR) Ordinance
adopted

 August 2024 - HCD certified Housing Element and LVR
Ordinance went into effect
– HCD established LVR program to be reevaluated every 2 years.  March 2025 - City Council directed the Planning Commission review of LVR Ordinance as it pertain to “small lots”
 October 2025 – Planning Commission Reviewed LVR Ord. and Fees

What is Land Value Recapture?
• Infrastructure
Improvements
• Rezoning

GOVERNMENT ACTION LAND VALUE

INCREASE
$$  $$$$
• Community
Benefit

VALUE CAPTURE

BACKGROUND

HOUSING ELEMENT
Program 7: Land Value Recapture
PROGRAM DESCRIPTION: value recapture policy
requires a portion of increase value caused by rezoning be dedicated to a public benefit, such as affordable
housing.

BACKGROUND
• HE Overlay added
residential capacity to
properties on the Housing
Element Sites Inventory

LVR ORDINANCE
Applicability: HE Overlay Zoned properties when
developing residential uses.
 Exempt if developed with non-residential uses only
 Exempt if affordable housing is developed on site
Minimum Capacity Very-Low Low - Moderate5 or more units 15% 15% 25% 4 or fewer units 1 unit

CURRENT LVR FEE
Applicability: when only market
rate residential units are
constructed or only a portion of
the affordable unit(s) required

LVR TIERS FEE
Tier 1 – Minimum
Density 4 or fewer
residential units
(“Small Lots”)
$76 per square foot
Tier 2 – Minimum
Density 5 or more
residential units
$114 per square foot
 LVR Fee equivalent cost of
developing affordable unit
 Fees collected would be
used to fund development of
affordable housing locally
– DEVELOPMENT SUBSIDIES
– FUNDING FOR CONVERSION OF

EXISTING MARKET RATE UNITS
– HOUSING TRUST

PC RECOMMENDATION
LVR Fee Amendment

LVR TIERS FEE
Tier 1 –
(“Small
Lots”)
Density 1-2
Units
No Fee
Density 3-4
Units
24 mo. reduction from
$76 to $40
Tier 2 – Minimum
Density 5 or more
residential units
$114 per square foot
(no change)
Zoning Amendments
 Direct staff to explore zoning
incentives that encourage
development on “small lots” on
the HE inventory list.

CEQA & Public Notice
 CEQA
Exempt from California Environmental Quality Act “Commons Sense Exemption” (Section 15061(b)(3) of State CEQA Guidelines)  Public Notice
- Legal ad published in Easy Reader
- Notice on website
- Posted in 3 locations

Recommendation

1. Determine the action is exempt from review under
the California Environmental Quality Act (“CEQA”);

2. Adopt a Resolution amending the fee schedule,
amending LVR fees for small lots; and

3. Direct staff to explore zoning regulations that
encourage development of residential units on
“small lots”

Contact us.

Alexis Oropeza, Planning Manager
310-318-0242
[email protected]
THANK YOU!

LAND VALUE RECAPTURE
RHNA and LVR TIER I
Affordability
RHNA
(2021-2029)
Very
Low
Low Moderate Above
Moderate
Total
RHNA
(2021-2029)
232 127 106 93 558
Tier 1 – Minimum
Density 4 or
fewer units
16 27 84 10 137
• Small lots comprise a little under a quarter of the housing inventory sites.

City of Hermosa Beach | Page 1 of 3
Meeting Date: February 3, 2026
Staff Report No. 26-CDD-012
Honorable Mayor and Members of the Hermosa Beach City Council

ECONOMIC DEVELOPMENT STRATEGY PROGRESS REPORT
Continued from January 27, 2026
(Community Development Director Alison Becker)
Recommended Action:

Staff recommends City Council:

1. Receive and file this report; and

2. Retire the 2022 Economic Development Strategy
Background:

The Economic Development Strategy (Attachment 1) is the result of two years of collective efforts by the Economic Development Committee and the Stakeholders Advisory Working Group to identify Economic Development objectives and actions which commenced on April 28, 2020. For two years, the Economic Development Committee met monthly, and the 20-person Stakeholders Advisory Working Group met bimonthly, to explore and discuss Hermosa Beach business-related topics. An Economic and Market Study was also prepared to inform development of the Economic Development Strategy. At its July 12, 2022 meeting, City Council adopted the Economic Development Strategy.

The Economic Development Strategy includes 30 strategic actions divided into shortterm (1st year), mid-term (2–3 years) or long-term (3+ years) implementation. The actions are divided into five categories: Citywide Beautification; Downtown; Municipal Code Amendments; Business Outreach; and City Economic Development work program. The Economic Development Strategy is the work plan for implementation, beginning with the identified action priorities.

The Economic Development Strategy identified a multi-disciplinary complement of City Departments (City Manager’s Office, Community Development, Public Works, Community Resources, Police Department, and Human Resources), the Chamber of Commerce, and professional subject matter experts. Implementation work was anticipated to be completed by staff, the Hermosa Beach Chamber of Commerce, and occasionally with contracted subject matter expert assistance.

The Economic Development Strategy includes an action item to report to the City

City of Hermosa Beach | Page 2 of 3
Council twice annually to monitor progress, prioritize actions, and consider new opportunities. The following report informs City Council and the community of the activities undertaken by City staff that are aligned with the Strategy.

Past Commission and Council Actions
Meeting Date Description
March 4, 2020 A joint meeting of the City Council and Planning Commission was held to discuss a vision for the Downtown District, among other topics. At that meeting, it was
suggested that a subcommittee be formed, comprised of
two City Councilmembers and two Planning Commissioners
to focus on Economic Development.

April 28, 2020 City Council selected Councilmembers Campbell and Detoy to serve on the Downtown Economic Development
Committee with Planning Commission Chairperson Peter
Hoffman and Commissioner David Pedersen.

June 1, 2020 Economic Development Committee held its first monthly meeting to begin work on short-term economic recovery
goals and long-term Economic Development goals to
benefit the Downtown and citywide business districts. It was determined that a Stakeholders Advisory Group should be formed to represent a variety of businesses and commercial districts.

September 28, 2021 City Council received a One-Year Progress Report on the Economic Development Committee and Economic
Development Strategy initial actions approved.

May 2, 2022 Economic Development Committee held its final meeting and approved the Economic Development Strategy.

July 12, 2022 City Council adopted Economic Development Strategy and First Year Implementation Priorities.

January 24, 2023 City Council received first progress report July 25, 2023 City Council received second progress report.

February 27, 2024 City Council received third progress report.

July 9, 2024 City Council received fourth progress report.

February 25, 2025 City Council received fifth progress report.

Discussion:

Staff evaluated all strategic action items of the Economic Development Strategy Report, as well as ongoing initiatives not identified in the Economic Development Strategy initially adopted in 2022. Staff identified numerous initiatives that further the City’s efforts in supporting the business community in improving the environment in which to do business.

City of Hermosa Beach | Page 3 of 3
The 6th progress report (Attachment 2) incorporates all action items from the past three and a half years and presents the entire Economic Development Strategy in a comprehensive way. This allows the community, City Council, and staff to focus on this effort in totality. The action items are presented in the following table in numerical order as identified in the Economic Development Strategy. The letter symbol (S, M, L) indicates whether the action item was to be initiated in the short-term (Year 1), mid-term (Year 2– 3), or long-term (Year 3+). The table identifies prior actions and provides current updates.

The table also identifies initiatives that do not currently have staff and funding resources.

The progress reports demonstrates that the City has successfully aligned its work program to support most of the strategic actions identified in the plan. Actions which have not progressed are constrained by budgetary and staff resources. Given that this Economic Development Strategy is reaching the limits of its useful life, staff recommends retiring this reporting cycle. Staff will continue advancing the strategic actions until they are renewed or replaced with other priorities identified through a new strategic planning participatory process.

Fiscal Impact:

There is no fiscal impact associated with the recommended action to receive and file the Economic Development Strategy progress report.

Attachments:

1. Link to Economic Development Strategy

2. 6
th Progress Report on the Economic Development Strategy Respectfully Submitted by: Alison Becker, AICP, Community Development Director Noted for Fiscal Impact: Brandon Walker, Administrative Services Director Approved: Steve Napolitano, City Manager

1 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update

1. (S)
Wayfinding Signs
(CMO/PW)
Both City "Walk Your Bike"
sticker decals (25) and the
Chamber of Commerceprovided "Shop Eat Truly
Hermosa" sticker decals
(16) on the sidewalk in the
downtown areas were
replaced in May and June
2024. CIP 111 was
reassigned to one of the
new Senior Engineers and
scheduled to resume in
June 2024 per the revised
Estimated Capital
Improvement Program
(CIP) Project Scheduled
presented to City Council at
the CIP Study Session on
April 18, 2024. The tentative
schedule shows completion
of this preliminary design
effort concluding in
November 2024. The
adopted budget for Fiscal
Year 2024–25 identifies the
next phase of the project
under the Deferred and
Unfunded Future Project list
and would need to be
Project timeline extended due to
staffing availability and contract
agreement expiration. Staff
procured a new contract
agreement in fall 2024, that was
then executed in December 2024.

Staff since completed a more
detailed existing conditions
inventory assessment and
finalized initial comments on the
draft preliminary designs that have
been sent to the design consultant
for consideration. Staff is actively
working to negotiate a task order
agreement under the new contract
to finalize the preliminary design
effort which is anticipated to take
approximately 4 to 6 months to
complete.

The adopted budget for Fiscal
Year 2024–25 identifies the next
phase of the project under the
Deferred and Unfunded Future
Project list and would need to be
considered for funding as part of a
future budget cycle; CIP 111 is a
preliminary design only and does
The City has received a donation
of $500,000 from former Mayor
Chuck Sheldon and his wife
Missy to fund the design,
installation, construction, and
maintenance of new monument
signage within the City. The
primary use of the funds will be
for a new digital monument sign
at the Community Center near
Pier Avenue and Pacific Coast
Highway; any remaining funds
may be directed toward
additional gateway monument
signs at other locations in the
City. The City previously
received a $50,000 contribution
for the electronic sign from the
Chamber of Commerce in 2014.

Staff is exploring the potential for
the funds to be reallocated to the
remaining unfunded elements in
the project including the
downtown wayfinding signage
and the gateway signage.

Staff is preparing preliminary
designs, and further evaluating

2 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update considered for funding as
part of a future budget
cycle; CIP 111 is a
preliminary design only and
does not include any
funding for implementation.
not include any funding for final
design or implementation.

permitting requirements, and
anticipates bringing an item to
City Council in early 2026.

2. (L)
Façade Improvement
Program for commercial
districts (CD)
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

3. (S)
Beautification Program,
including Gateway Entries
and Corridors
(CMO/CD/PW)
The street banner program
continues to be managed
by the Chamber of
Commerce and provides
timely and aesthetically
pleasing event/community
information. The planned
City gateway sign at the
Skechers project at
Longfellow Avenue and
PCH is scheduled for
installation in July 2024.

The installation of the
permanent ring lights on the
palm trees also included
lights along the roof line of
the Community Center and
are in operation year-round.

The street banner program
continues to be managed by the
Chamber of Commerce and
provides timely and aesthetically
pleasing event/community
information.

PW installed the new droughttolerant landscaping along the center median of Gould in July
2024.

The Chamber of Commerce
conducted a site walk on Upper
Pier Avenue with local businesses
and City staff in September 2024.

Greenbelt Trail improvements are
underway, and they will be
City Council formed a Downtown
Lighting and Beautification
Subcommittee at its May 13
2025 meeting. Staff has made
recommendations to the
subcommittee for consideration
and is working to schedule a
meeting to discuss further.

The City has received a
promised donation of $500K
from a former Mayor for
installation of a new monument
sign at Pier Ave and PCH with
the remaining funds to be spent
on entryway signs.

3 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update Public Works is currently in
process of adding new
drought tolerant
landscaping along the
center median of Gould
Avenue that will enhance
that gateway entrance to
the City. The Chamber of
Commerce conducted a site
walk with local businesses
and provided feedback for
Pier Avenue between
Hermosa Avenue and
Manhattan Avenue. Public
Works will schedule a
follow-up walk with the
Chamber to better
understand the requests.
completed in February 2025. The
improvements include new
landscaping, accessible paths and
ramps, and new fitness equipment.

New trash receptacles were
installed throughout the
Downtown.

4. (S)
Beautification Awards
(CMO)
No additional update on this
item.

No additional update on this item
for the current review period,
however, an award is planned
during the upcoming State of the
City.

Beautification Awards were
presented to the following
businesses at the April 10 2025
State of the City:
• David Caskey (Caskey Real
Estate) – renovated historic Pier
Ave. building.

4 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update • Shady Fahim (Abe’s Liquor) –
major store and landscaping
transformation

5. (L)
Consider Arts in Public
Places Program
There is currently no
funding or staffing
resources to initiate this
item. However, the recent
utility box beautification and
Skate Park art installation
added original art in public
spaces.

There is currently no funding or
staffing resources to initiate this
item.

The Public Works Department
continues to install art on utility
boxes. Artwork was added to six
more boxes within the right-of-way.

There is currently no funding or
staffing resources to initiate this
item. An Arts in Public Places
program would establish a
requirement on certain private
developments to provide public
art on private property.

Alternatively, developers could
pay a fee which would then be
used to create public art by the
City.

6. (L)
Placemaking Community
Forum
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item. However, regulations
promoting placemaking will be
included in the zoning ordinance
updates in 2025.

While a forum was not
established, given funding and
staffing constraints, the City does
endeavor to activate
underutilized spaces, improve
area attractiveness for all ages
and abilities, and includes the
community in decision making.

The accessible pathway in the
Greenbelt is one recent example
of this.

5 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update

7. (L)
Placemaking Project
Design
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

City staff involves community
stakeholders in decision-making
when neighborhood
enhancement opportunities
arise.

8. (S)
Include Beautificationrelated projects in the City
budget and CIP to add
value and for residents and
visitors to enjoy.
(PW)
CIP 109, created to
enhance the aesthetics of
utility boxes throughout the
City is in progress and was.

Public Works staff is
actively working in
coordination with a local
artist collaborative to
advance the installation of
painted or wrapped art on
utility boxes. The first art
installation was completed
in parking Lot A in early
June. To celebrate the 25th
anniversary of the Hermosa
Skatepark, the City
completed a maintenance
and beautification project at
the facility including design
and installation of new
signage provided by local
artist collaborative. Three
new artistic signs were
CIP 109, created to enhance the
aesthetics of utility boxes
throughout the City is in progress.

Public Works staff is actively
working in coordination with a local
artist collaborative to complete
installations throughout the City of
painted or wrapped art on utility
boxes. Several of the locations are
in the downtown.

To celebrate the 25th anniversary
of the Hermosa Skatepark, the
City completed a maintenance and
beautification project at the facility
including design and installation of
new signage provided by local
artist collaborative. Three new
artistic signs were unveiled at the
June 8, 2024 celebration. In
preparation, Public Works
conducted extensive beatification
work on the park including
The FY 25-26 Budget included
$100,000 funding for various
beautification projects throughout
the City. City Council formed a
Downtown Lighting and
Beautification Subcommittee at
its May 13, 2025 meeting.

Other recent improvements
include:

CIP 109, created to enhance the
aesthetics of utility boxes
throughout the City is nearing
completion. Public Works staff is
actively working in coordination
with a local artist collaborative to
complete installations throughout
the City of painted or wrapped
art on utility boxes. Several of
the locations are in the
downtown.

6 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update unveiled at the June 8,
2024 celebration. In
preparation, Public Works
conducted extensive
beatification work on the
park including concrete
repair, signage
replacement, repainting of
retaining walls, refreshment
of pavement markings, and
weed abatement. Public
Works staff is also in
process of repairing the
fencing and the damaged
wind screens. In
cooperation with Hermosa
Beach Little League, the
playing surface at Clark
Field Home Plate was
replaced with artificial turf.

This effort required
coordination and completion
of an Amendment to the
existing Memorandum of
Understanding between
Hermosa Beach Little
League and the City, design
review, construction
oversight and inspection by
concrete repair, fence repair,
signage replacement, repainting of
retaining walls, refreshment of
pavement markings, and weed
abatement.

In cooperation with Los Angeles
County Beaches and Harbors, the
City coordinated the County’s sand
grading operations in December
2024 on the beach from near 18th
Street. This effort required
extensive coordination by Public
Works staff with the County,
adjacent residents, the Community
Resources team, and the
volleyball court users to ensure the
effort was completed.

CIP 113 will be kicking off in
2026 that will lead to the removal
of 170 single space meters and
be replaced by 11 multi-space
meters on Pier Ave and Lot D.

This will reclaim public right-ofway along Pier Ave and Lot D that would otherwise be taken up
by parking meters.

7 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update Public Works staff. In
cooperation with Los
Angeles County Beaches
and Harbors, the City
completed sand grading on
the beach from Herondo
Avenue to 14th Street. This
effort required extensive
coordination by Public
Works staff with the County,
adjacent residents and
businesses, the Community
Resources team, and the
volleyball court users to
ensure the project was
completed in advance of the
busy spring season. The
work also required
significant work by the City
to remove and replace all
impacted volleyball courts.

9. (S)
Work with Business
Community to Explore
Formation of a Downtown
Business Improvement
District (BID).
(Chamber)
The Chamber indicated that
it is still pursuing a Tourism
Improvement District.

The Chamber of Commerce
indicated it continues to work on
establishing a Tourism
Improvement District.

This project is still in progress.

The Chamber hopes to bring the
item to Council in early 2026.

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Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update

10. (M)
Focused Update of
Downtown Revitalization
Strategy, including
Preservation of Downtown
Retail and Restaurants
and Other Active Uses on
1st Floor.
(CMO/CD)
The City recently secured
the professional assistance
of Lee Andrews to conduct
a 12-month outreach phase
of the Civic Facilities
discussion. PLAN Hermosa,
the City’s General Plan,
identified the civic center as
a catalyst for downtown
revitalization strategies.

Community support and
interest in Civic Center
investment is a means of
downtown revitalization.

In reviewing the City’s
Housing Element-related
zoning changes, California
Housing and Community
Development (HCD)
identified guest parking for
multi-family residential as a
governmental constraint.

The City Council recently
approved a Zone Text
Amendment eliminating
guest parking requirement
for development of three or
more units, including in
The Chamber of Commerce
conducted a site walk on Upper
Pier Avenue with local businesses
and City staff in September 2024.

The City recently engaged Lee
Andrews to lead a 12-month
outreach phase for the Civic
Facilities discussion, which has
resulted in valuable community
input on facility priorities.

Following Advisory Group
recommendations and Council
direction, the focus has shifted to
revitalizing the City’s Public
Works Yard.

Ground floor uses will be a topic
of discussion in the upcoming
planning process in 2026
focused on commercial zones as
a part of the City’s Zoning Code
Update.

9 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update mixed use development.

Mixed-use development
was identified as an
improvement strategy for
Downtown.

In April 2024, City Council
requested a discussion on a
potentially prohibiting office
uses on the ground floor of
commercial areas. After
discussion, City Council
provided guidance that
incentives should be
included in the Zoning Text
Amendment to encourage
pedestrian-oriented uses on
the ground floor in
commercial districts.

11. (S)
Develop Identity/Vision for
the Downtown (Objective:

Incorporate City brand with
marketing and future
improvements).
(CMO/PW)
The street pole banner
program and logo licensing
agreements are ongoing.

The street pole banner program
and logo licensing agreements are
ongoing.

There was no additional activity
related to this strategic action in
2025.

12. Comprehensive Downtown
Lighting Evaluation with
Complete Photometric
The estimated project
schedule for CIP 621 was
changed as part of the FY
The estimated project schedule for
CIP 621 was changed as part of
As part of the FY 25-56 budget
process, the project schedule is

10 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update (S) Study, Design and
Installation
(PW)
24–25 budget process with
the start delayed until June
2026 due to the need to
advance other high priority
deferred maintenance,
safety, and critical
infrastructure projects in the
CIP. The schedule for the
start of this remains
contingent of the completion
of other high priority
projects and staff availability
with the project timeline to
be revisited as part of the
next budget cycle. The
current funding supports the
preliminary design phase
only and additional funding
will be necessary for final
design and installation as
part of a future CIP once
the scope of work and costs
are more clearly defined.

During the interim period,
the City replaced the string
lighting on palm trees along
Pier Avenue and Hermosa
Avenue with new ring lights,
as well as new lighting
the FY 24–25 budget process with
the start delayed until June 2026
due to the need to advance other
high priority deferred maintenance,
safety, and critical infrastructure
projects in the CIP. The schedule
for the start of this remains
contingent of the completion of
other high priority projects and
staff availability with the project
timeline to be revisited as part of
the next budget cycle for FY 25-

26. The current funding supports
the preliminary design phase only
and additional funding will be
necessary for final design and
installation as part of a future
unfunded CIP once the scope of
work and costs are more clearly
defined. During the interim period,
the City replaced the string lighting
on palm trees along Pier Avenue
and Hermosa Avenue with new
ring lights, as well as new lighting
along the roofline of the
Community Center, for enhanced
aesthetic, to provide a more
permanent installation, and ease in
not anticipated to begin before
Spring/Summer 2026 due to
other project priorities and
staffing availability. As scoped,
the CIP currently only includes
funding for conceptual design
and does not have adequate
funding for final design or
installation. City Council formed
a Downtown Lighting and
Beautification Subcommittee at
its May 13 2025 meeting to help
further flesh out the scope of
work on this project as it is not
well defined.

11 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update along the roofline of the
Community Center, for
enhanced aesthetic, to
provide a more permanent
installation, and ease in
maintenance. These more
permanent fixtures were
installed in December 2023
and will be used all year
long and can change colors.
maintenance. These more
permanent fixtures were installed
in December 2023 and will be
used all year long and can change
colors.

13. (L)
Introduce and Facilitate
Downtown Experiences
(CMO/CR)
The City continues to
support Special Events
downtown. During this
reporting period, the City’s
support of the Los Angeles
RAMs draft event was
heralded as spotlighting
Hermosa Beach and its
beach-adjacent downtown.

The City continues to support
Special Events downtown.

A zone text amendment updating
temporary minor special events
regulations for events on private
property was considered by the
Planning Commission at a study
session in December 2024 and in
a public hearing on February 18,
2025. These standards would be
implemented citywide and would
also apply in the downtown area.

Between the months of May and
September: Fiesta Hermosa, You
Are Enough 5K, Smackfest
Volleyball Tournaments,
JVA/BVCA Tournaments, AAU
Volleyball Tournaments, AVP
Junior National Championships,
International Surf Festival,
Triathlon, CBVA Volleyball
Tournaments, Hermosa Beach
Open, Hermosa Beach Concert
Series, Movies at the Beach,
Locale 90254
On June 10, 2025, the City
Council approved a
Zone Text Amendment that

12 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update updated the regulation for
temporary events. This update
provides greater flexibility for
both indoor and outdoor events
in support of businesses and the
creation of temporary
experiences.

14. (S)
Permanently Allow Outdoor
Dining Areas and Lane
Reconfigurations.
(PW/CMO)
Council approved
guidelines for the on-street
outdoor dining program in
February 2024. Staff is
currently finalizing a Coastal
Development Permit to be
submitted to the Coastal
Commission in Summer
2024.

Council approved lane
reconfigurations and guidelines for
the on-street outdoor dining
program in February 2024. Staff is
continuing to work with the
California Coastal Commission to
obtain a Coastal Development
Permit.
13 businesses are currently
permitted for on-street outdoor
dining. A CDP application for
Coastal Commission is in
progress and should be
submitted in early 2026.

15. (S)
Long-term Allowance of
Outdoor Music in Business
Locations
(CD)
The on-street outdoor
dining guidelines approved
in February 2024 allow onstreet dining areas to have
music in the encroachment
areas.

The Hermosa Beach Concert
Series returned in 2024 on the two
Sundays following Labor Day
weekend, September 8, 2024 and
September 15, 2024, attracting
5,000 attendees total over the
Zoning regulations pertaining to
entertainment on private property
would be addressed as a part of
the zoning update in the first half
of 2026.

13 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update course of the two concerts. It will
continue on the same weekends in
2025.

16. (M)
Program to Allow Outdoor
Music in Public Spaces
(CMO/CD)
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

This action item contemplates a
code amendment to Title 12.

17. (M)
Regular Communication
with Key Property Owners
to Encourage
Reinvestment and Provide
Support as Needed.
(CMO/CD)
City staff conduct regular
meetings with the Chamber
of Commerce
representatives, as well as
any business owner(s)
seeking support. During this
period of notable retail
space turnover, the City’s
Planning staff has assisted
prospective business
owners and representatives
to discuss potential uses.

City staff conduct regular meetings
with the Chamber of Commerce
representatives, as well as any
business owner(s) seeking
support. During this period, the
City’s Planning staff has assisted
prospective business owners and
representatives and has
processed a number of
entitlements and tenant
improvements for businesses.

City staff routinely meets with the
Chamber of Commerce and
business owners seeking
assistance.

18. (M)
Develop
Business Visitation
Program.
(CMO/Chamber/PD/CD)
Chamber of Commerce
continued with “Walk N
Talks,” a program to
connect City elected and
appointed officials with
various businesses. A
The Chamber of Commerce
continued with “Walk N Talks,” a
program to connect City elected
and appointed officials with various
businesses. A third walk was
conducted in September 2024 in
The Police Department has
continued the WTF events
throughout the city. During this
calendar year, the Police
Department has hosted the
following events:

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Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update second walk was continued
in April 2024 of Lower Pier
Avenue, resulting in
beautification
recommendations. In
addition to the Coffee with a
Cop program, the Police
Department started What
the Fuzz (WTF) meetings to
create meaningful
engagements with the
community and businesses.

WTF is not limited to
businesses and could be
done in any neighborhood
or private residence. When
scheduling WTF meetings,
the Police Department
requests the host suggest
the best day and time and
possible topics. The City
has conducted multiple
successful WTF meetings
and plans to hold them
monthly. Businesses are
scheduled through all of
2024 and into 2025 and the
department continues to
receive requests from
the Upper Pier area. A fourth walk
is anticipated in areas of outside of
downtown in Spring of 2025.

In addition to the Coffee with a
Cop program, the Police
Department started What the Fuzz
(WTF) meetings to create
meaningful engagements with the
community and businesses. WTF
is not limited to businesses and
could be done in any
neighborhood or private residence.

When scheduling WTF meetings,
the Police Department requests
the host suggest the best day and
time and possible topics. The City
has conducted multiple successful
WTF meetings and plans to hold
them monthly. Businesses are
scheduled through 2025 and the
department continues to receive
requests from businesses and
other groups.

The Police Department regularly
participates in the monthly
Chamber of Commerce to provide
updates on events and crime
trends affecting businesses.
1/15/25 - Coffee with a Cop at
Starbucks (1107 PCH)
2/5/25 - What the Fuzz at Bolt
3/13/25 - What the Fuzz at
Starbucks (1303 Hermosa Ave)
4/29/25 - What the Fuzz at
Gitana (5k run/walk)
5/29/25 - What the Fuzz at
Paisanos (Pizza w/the Police)
6/30/25 - What the Fuzz w/
Beach Cities Health District
(Yoga on the Beach)
7/22/25 - What the Fuzz at
Mickey's Deli (Hoagie w/a Hero)
8/21/25 - What the Fuzz at
Baked Bear (Cookie w/a Cop)
10/1/25 - Coffee w/a Cop at Java
Man
11/5/25 - What the Fuzz at
Pavilions (Shop w/a Cop)
12/12/25 - Santa Sleigh
Ride/Movie Night
The Police Department
continues to participate in the
monthly Chamber of Commerce
to provide updates on events

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Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update businesses and other
groups. City Council and
City staff are invited to, and
attend, ribbon cuttings and
other events organized by
the Hermosa Beach
Chamber of Commerce. In
April 2024, the City of
Hermosa Beach co-hosted
a Lunch and Learn for
Hermosa Beach businesses
to obtain information about
how to prepare their
business and employee for
natural disasters.

City Council and City staff
participate in ribbon cuttings and
other events organized by the
Hermosa Beach Chamber of
Commerce.
and crime trends affecting
businesses.

In September 2025, The City cohosted a BE READY: Emergency Preparedness for Businesses
lunch meeting with the Chamber
of Commerce to help businesses
prepare for natural disasters.

19. (M)
Annual Commercial
Property Owner and
Brokers Forum
(CMO / Chamber)
City staff-initiated
discussions with the
Chamber of Commerce on
this item.

City staff-initiated discussions with
the Chamber of Commerce on
this item.

Downtown business forum/tours
have been hosted by the
Chamber when interest
warranted.

20. (S)
Shop Local Program
(CMO / Chamber)
The collaboration between
the City and Chamber of
Commerce on the Shop
Local Program continues. A
Summer 2024 shop local
social media campaign
The City continues to promote the
Shop Local Program. Free
parking was provided during the
holiday shopping season.

City staff brought forward the
complimentary holiday parking
program review to City Council in
October 2025. Council elected to
continue the program for the
2025 holiday season from
December 3rd – December 25th.

16 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update aimed at the City’s 23,000
followers is forthcoming.

21. (S)
Provide Hermosa Beach
Business Information to
Event Promoters to
Encourage Use of Local
Vendors and Distribution to
Participants.
(CR / Chamber)

Completed. Completed. Staff provides Hermosa Beach
business information to event
producer(s) to encourage use of
local restaurants and businesses
from participants & crew.

Included is a link to the
Chamber’s business directory to
share or utilize for lunch or
catering needs Shop - Truly
Hermosa

22. (M)
Retail Attraction
Program for
Competitive, Strengthened
Retail
(CMO / Chamber / CD)
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

The Chamber of Commerce
established a subcommittee
focused on Retail Businesses.

The Chamber has created a
Retail Committee and meets
monthly.

23. (S)

Partnership with Chamber
of Commerce to Enhance
Visitors Bureau to Develop
And Promote the Hermosa
Beach Brand and Provide
Visitor Resources
(CMO/Chamber)
The agreement with the
Hermosa Beach Chamber
of Commerce to allow for
the sale of souvenirs and
decorative items bearing
the City logo to promote the
Hermosa Beach brand and
to generate revenue to
The agreement with the Hermosa
Beach Chamber of Commerce to
allow for the sale of souvenirs and
decorative items bearing the City
logo to promote the Hermosa
Beach brand and to generate
revenue to support tourism
activities remains in place.

Truly Hermosa magazine is
distributed to a variety of
business locations and a Truly
Hermosa Instagram page was
created.

17 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update support tourism activities
remains in place.

24. (M)
Periodic Community
Survey to Determine What
Types of Shops or Goods
Are Desired and Residents
to Drive out of Town to
Patronize (CMO /
Chamber)
There is currently no
funding or staffing
resources to initiate this
item.

There is currently no funding or
staffing resources to initiate this
item.

The Chamber has created a
Retail Committee and meets
monthly.

25. (M)
Explore Music Events and
Activities to Celebrate
Hermosa Beach Music
History and Provide
Musical Experiences for
Community and Visitors.
(CMO / CR / Chamber)
The Hermosa Beach
Concert Series will take
place on the two concerts
on the beach in 2024, south
of the Pier, on the two
Sundays following Labor
Day weekend, September
8, 2024 and September 15,
2024. The title of the event
is general, not specific to a
location (such as beach
concerts, for example) so
there are opportunities to
consider expanding the
concerts, such as to the
parks in the off-season.

The Hermosa Beach Concert
Series took place on Sunday,
September 7, and Sunday,
September 14.

MindTravel Live-to-Headphones
'Silent' Piano Concert event
occurred on August 19 and
October 19:
https://www.mindtravel.com/

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Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update

26. (M)
Development Assistance
Committee/ Development
Review Committee (CD)
The department convenes
bi-weekly development
review meetings internally
to identify project
requirements early in the
process. The requirements
are conveyed to applicants,
which frequently are
business owners, so they
can decide how to proceed.

The department continues to
convene bi-weekly development
review meetings internally to
identify project requirements for
applicants early in the process and
to improve department
coordination for streamlining of the
development review process
overall. The requirements are
conveyed to applicants, which
frequently are business owners, so
they can decide how to proceed.

In 2025, the inter-departmental
teams reviewed 45 development
projects and discussed 25 topics
of mutual interest that improve
inter-departmental coordination.

27. (M)
Provide Customer Service
Training to All City Staff to
Build on Culture of
Excellent Customer
Service. (CMO)
In May of 2024, the City
facilitated in-person
customer service training
for all City employees. The
training will be offered again
in the future for new
employees. The training
focused on understanding
the needs of the customer
while balancing staff morale
and workload.

In May of 2024, the City facilitated
in-person customer service
training for all City employees. The
training will be offered again in the
future for new employees. The
training focused on understanding
the needs of the customer while
balancing staff morale and
workload.

There was no additional activity
related to this strategic action in
2025.

28. (L)
Continuous improvements
to streamline processes
and reduce approval times
for permit processes. (CD)
In May 2024, the
Community Development
Department secured an
additional plan review firm
to meet plan review volume
In August 2025, Community
Development updated its plan
check review process from a linear
review process to a concurrent
review. Plan checks are reviewed
The City continues to streamline
development review and reduce
permit approval times. Two new
plan check firms have been
approved to handle increased

19 of 19
Economic Development Strategy—Implementation Priorities and Status Strategic Action July 2024 Progress Update February 2025 Progress Update January 2026 Progress Update and complexity. The
department also updated
application forms and
handouts and changed
internal protocols to funnel
communications to group
emails for more
comprehensive coverage
and response assignment.
concurrently by Building and
Safety and Planning staff reducing
the time from plan check to permit
issuance.
volume and project complexity.

Concurrent plan review is now in
place among Building and
Safety, Public Works, and
Planning. The City is also
expanding use of Accela Citizen
Access, which currently supports
online solar permits, to include
all permit types by early 2026—
allowing online submittal, fee
payment, and real-time status
tracking.

29. (S)
Continue Staff Member
Assigned as Business
Liaison. (CMO)
Complete. Complete. The City maintains an assigned
Business Liaison within the City
Manager’s Office.

30. Regular City Council
Review
Ongoing. Ongoing. Ongoing.

ITEM 17.E
Economic Development Strategy Progress Report

Background
The City’s Economic Development
Strategy was adopted in July 2022 after
two years of monthly committee
engagement and bimonthly working
group meetings.

Background
The strategy includes 30 actions arranged by
implementation timeframe within five broad
categories: Citywide Beautification,
Downtown, Municipal Code Amendments,
Business Outreach, and City Economic
Development Work Program.

CITYWIDE BEAUTIFICATION
Accomplishments for this reporting period:
▪ Funding secured from a major donor for a new gateway
monument sign on the Community Center campus at Pier
and PCH
▪ Downtown Lighting and Beautification Sub-Committee was formed by CC to recommend a spending plan for $100,000
set aside
▪ Two Beautification Awards were presented in April 2025 ▪ The accessible pathway in the Greenbelt was completed ▪ 24 utility boxes have been wrapped with art created by locals

DOWNTOWN
Accomplishments for this reporting period:
▪ The Chamber of Commerce is pursuing the necessary
support to establish a Tourism Improvement District
▪ Downtown Lighting and Beautification Sub-Committee was formed by CC to recommend a spending plan for $100,000
set aside
▪ Between the months of May and September, the City
hosted 13 major special community events
▪ Thirteen businesses have secured permits for on-street outdoor dining.
▪ The complementary holiday parking program was
renewed

MUNI CODE AMENDMENTS
Accomplishments for this reporting period:
▪ In June, 2025, the City Council updated regulations for temporary special events
▪ The business license application process was streamlined

BUSINESS OUTREACH
Accomplishments for this reporting period:
▪ The Police Department held eleven What the Fuzz events with support from local businesses
▪ The City Manager attended a business roundtable
organized by Upper Pier Business and Property Owners
▪ The City collaborated with the Chamber of Commerce on several events, including a workshop on Emergency
Preparedness for Businesses

CITY WORK PROGRAM
Accomplishments for this reporting period:
▪ The Development Review Committee reviewed 45 projects and discussed 25 topics of mutual interest in 2025
▪ Concurrent plan review is now in place among Building and Safety, Planning, and Public Works.
▪ The electronic permitting system, Accela, has been
improved so that many activities – submittals, fee payment and real-time status tracking – will be available online this year.

The City has successfully
aligned its work
program to support
most of the strategic
actions in the plan.

Given that this Strategy
is reaching the limits of
its useful life, staff
recommends retiring
this reporting cycle.

SUMMARY

ECONOMIC DEVELOPMENT

STRATEGY PROGRESS REPORT
Item 17.e

City of Hermosa Beach | Page 1 of 3
Meeting Date: February 3, 2026
Staff Report No. 26-PD-006
Honorable Mayor and Members of the Hermosa Beach City Council

APPROVAL OF MILITARY EQUIPMENT USE BY THE HERMOSA BEACH POLICE DEPARTMENT PURSUANT TO ASSSEMBLY BILL 418
(Police Chief Landon Phillips)
Recommended Action:

Staff recommends City Council:

1. Review and renew Ordinance No. 22-1446, an ordinance of the City of Hermosa Beach adopting Military Use Equipment, in accordance with Assembly Bill 481; and

2. Receive and file the Annual Military Equipment Report.

Executive Summary:

Pursuant to Assembly Bill 481 (AB 481) City Council is required to review and renew the Military Equipment Policy, renew the ordinance at a regular meeting, and receive an annual report prepared by the Hermosa Beach Police Department to continue to use military equipment within the City.

Background:

Effective January 1, 2022, California State Assembly Bill 481 (AB 481) established requirements for the funding, acquisition, and use of items defined as “military equipment” by local and state law enforcement agencies. This bill intended enforceable safeguards, including transparency, accountability, and oversight, to protect the public’s welfare, safety, civil rights, and civil liberties. AB 481 requires law enforcement agencies to adopt policies for military equipment use, raising funds for, or acquiring military equipment.

At its April 26, 2022 meeting, City Council introduced and waived the first reading of an ordinance adopting a Military Use Equipment Policy pursuant to AB 481. At its May 10, 2022 meeting, City Council waived the full second reading and adopted by title Ordinance No. 22-1446 (Attachment 1), adopting a compliant policy. Pursuant to AB 481, the police department shall publish an Annual Military Equipment Report for each type of military equipment approved by the Hermosa Beach City Council, for as long as this military equipment is available for use.

City Council reviewed and renewed Ordinance 22-1446 and received and filed the Annual Military Equipment report in 2024 and 2025 in compliance with AB 418.

City of Hermosa Beach | Page 2 of 3
Past Council Actions
Meeting Date Description
April 26, 2022 City Council introduced and waived first reading of an ordinance adopting a military use equipment policy
pursuant to Assembly Bill 481.

May 10, 2022 City Council waived the full second reading and adopted by title Ordinance No. 22-1446 of the City of Hermosa Beach adopting a military use equipment policy.

September 10, 2024 City Council reviewed and renewed Ordinance No. 22-1446 of the City of Hermosa Beach adopting a Military Equipment Policy and received and filed the Hermosa Beach Police
Department Annual Military Equipment Report.

February 25, 2025 City Council reviewed and renewed Ordinance No. 22-1446 of the City of Hermosa Beach adopting a Military Equipment Policy and received and filed the Hermosa Beach Police
Department Annual Military Equipment Report.

Discussion:

Law enforcement situations are often unpredictable and complex, requiring strategic responses to ensure safety for everyone involved. In some cases, specialized equipment, tools, or resources are essential to de-escalate violent or tense scenarios, minimizing harm to community members, involved individuals, and officers while increasing the likelihood of a positive resolution. Military equipment, as defined by statute, includes items such as drones, unstaffed ground vehicles, armored vehicles, pepper balls, less-lethal 40mm projectile launchers, and distraction devices. These tools, proven effective in realworld conditions, are used to enhance community and officer safety and reduce the need for force escalation. Their use is considered best practice in law enforcement.

HBPD is committed to utilizing equipment that safeguards the community and minimizes the risk of escalating volatile situations to potentially lethal encounters. The Department has not identified any other alternatives that provide the same level of effectiveness in ensuring the safety of both community members and officers. Preparation and publication of the Annual Military Equipment Report (Attachment 2) further reinforce the City’s dedication to transparency and compliance with California State law.

Since the adoption of Ordinance No. 22-1446, HBPD has not received community complaints, concerns, or initiated internal investigations regarding its use. On March 5, 2025, the Department purchased eight (8) 40mm Tactical Single Launchers and details about this purchase can be found in the equipment report. The Annual Military Equipment Report covers the period from January 1, 2025 to December 31, 2025.

Policy 706—Military Equipment was posted on the City’s website on September 11, 2024 and remains available for public view. In addition, the Annual Military Equipment Report

City of Hermosa Beach | Page 3 of 3
became publicly available on the City’s website on January 27, 2025. This staff report, along with the accompanying presentation at the Council meeting, fulfills AB 481’s requirement to provide a public forum for questions and input on the Military Equipment Policy.

Staff recommends City Council review and renew Ordinance 22-1446 and receive and file the Annual Military Equipment Report to meet the requirements of AB 481.

Fiscal Impact:

There is no fiscal impact associated with the update of the equipment list and completion of this report. Any purchase of listed equipment to maintain acceptable inventory levels is included in the Police Department’s operating budget for Fiscal Year 2025–26.

Attachments:

1. Ordinance No. 22-1446

2. Annual Military Equipment Report
Respectfully Submitted by: Joanne Loeza, Management Analyst Concur: Landon Phillips, Police Chief
Noted for Fiscal Impact: Henry Chao, Finance Manager
Concur: Brandon Walker, Administrative Services Director Legal Review: Jason Baltimore, Interim City Attorney
Approved: Steve Napolitano, City Manager

ORDINANCE NO. 22-1446

AN ORDINANCE OF THE CITY OF HERMOSA BEACH ADOPTING A

MILITARY USE EQUIPMENT POLICY, IN ACCORDANCE WITH
ASSEMBLY BILL 481.

THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Recitals.

A. On September 30, 2021, Governor Newsom signed into law Assembly Bill (“AB”) 481 to address the funding, acquisition, and use of military equipment, as that term is defined by Government Code section 7070(c).

B. AB 481 requires adoption of a military use equipment policy (“Policy”) by the City Council before the Hermosa Beach Police Department (“Department”) may take action to request military equipment; seek funds (such as grants or in-kind donations) for acquiring military equipment; actually acquire military equipment, either permanently or temporarily by owning, borrowing, or leasing; collaborate with other law enforcement agencies to deploy or use military equipment in the agency’s territorial jurisdiction; use new or existing military equipment in a manner not previously subject to AB 481’s scope; solicit or respond to a proposal for, or enter into an agreement with, any person or entity to seek funds for, apply for, acquire, use, or collaborate in using military equipment; or to acquire military equipment through any other means not specifically detailed in the statute.

C. In accordance with AB 481, the proposed Policy was made available on the website on the Department website at least thirty (30) days prior to the public hearing by the City Council to adopt the Policy.

D. In accordance with AB 481, the Policy is on the agenda as an open session item at a regular meeting of the City Council, and public comment on the item will be allowed in accordance with the Brown Act.

E. This Ordinance will be reviewed by City Council at least annually and based on an annual military equipment report that will be submitted to the City Council pursuant to AB 481.

SECTION 2. Findings. Pursuant to Government Code section 7071(d)(1), as may be amended or renumbered from time to time, the City Council hereby makes the following findings in support of its adoption of the Policy:

A. The military equipment identified in the Policy is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

B. The proposed Policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.

DocuSign Envelope ID: 9A5AC44F-1F69-41EE-8269-F8594FABDCCD

C. If the Department purchases military equipment pursuant to the Policy, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

D. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.

SECTION 3. Adoption of the Military Equipment Policy. The City Council hereby adopts the Military Use Equipment Policy, which are all attached hereto as Exhibit “A”.

SECTION 4. Environmental Review. The City Council finds that adoption and implementation of this ordinance is not a “project” for purposes of the California Environmental Quality Act (CEQA), as that term is defined by CEQA guidelines (Guidelines) sections 15061(b)(3), and 15378(b)(5). The effect of the proposed amendment will be to maintain the status quo. No new development will result from the proposed action. No impact to the physical environment will result. The City Council also alternatively finds that the adoption and implementation of this ordinance is exempt from the provisions of CEQA as an administrative activity by the City of Hermosa Beach, that will not result in any direct or indirect physical change in the environment, per sections 15061(b)(3), and 15378(b)(5) of the CEQA Guidelines, as well as CEQA Guidelines section 15064(e) (economic regulations).

SECTION 6. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional.

SECTION 7. Pursuant to California Government Code section 36937, this ordinance shall take effect thirty (30) days after its final passage.

SECTION 8. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Hermosa Beach’s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and cause it to be published or posted in accordance with California law.

PASSED, APPROVED and ADOPTED this 10th day of May, 2022 by the following vote:

AYES: Councilmembers Campbell, Massey, Mayor Pro Tem Jackson, and Mayor Detoy.

NOES: None.

ABSTAIN: None.

ABSENT: None.

DocuSign Envelope ID: 9A5AC44F-1F69-41EE-8269-F8594FABDCCD

______________________________________________________________________________ PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, California ATTEST: APPROVED AS TO FORM:
_________________________________ ____________________________________ Myra Maravilla, Michael Jenkins,
City Clerk City Attorney
DocuSign Envelope ID: 9A5AC44F-1F69-41EE-8269-F8594FABDCCD

Policy
706
Hermosa Beach Police Department
HBPD Policy Manual
Copyright Lexipol, LLC 2025/11/06, All Rights Reserved.

Published with permission by Hermosa Beach Police
Department
Military Equipment - 1
Military Equipment
706.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
706.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body – City Council of the City of Hermosa Beach ("City Council").

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers.

However, police versions of standard consumer vehicles are specifically excluded from this policy.
• High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this Policy.
• Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. "Flashbang" grenades and explosive breaching tools, "tear gas" and pepper balls, excluding standard, service-issued handheld pepper spray.
• Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray. (see above)
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).

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Military Equipment
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Published with permission by Hermosa Beach Police
Department
Military Equipment - 2
• The following projective launch platforms and their associated munitions: 40mm projectile launchers, "bean bag", rubber bullet, and specialty impact munition (SIM) weapons.
• Kinetic energy weapons and munitions.
• Any other equipment as determined by City Council to require additional oversight. 706.2 POLICY
It is the policy of the Hermosa Beach Police Department that members of this department comply with the provisions of Government Code § 7071 with respect to military equipment. 706.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually, and or prior to preparing the annual military equipment report. This inventory includes the aggregate cost and quantity for each type of ammunition controlled by this policy that was purchased since the submission of the previous year's annual military equipment report.
(d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Hermosa Beach Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting, within thirty (30) days of submitting and publicly releasing an annual military equipment report. This will include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the department's funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website within thirty (30) days of submission (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner. The Military Equipment Coordinator may be used as a subject matter expert if a complaint involves the possession or use of military equipment.

Hermosa Beach Police Department
HBPD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2025/11/06, All Rights Reserved.

Published with permission by Hermosa Beach Police
Department
Military Equipment - 3
706.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:

The Department's inventory of military equipment is attached to this policy as Exhibit "A" and is incorporated into this policy by this reference. Exhibit "A" will be updated annually during preparation for the annual equipment report, and its updated version will be replaced within this policy prior to the annual equipment report being submitted to the City Council. 706.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 706.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment used by any member of this Department shall be approved for use in accordance with this Policy. Military equipment used by other jurisdictions that are providing mutual aid to the City of Hermosa Beach, or otherwise engaged in law enforcement operations in the City, shall comply with their respective military equipment use policies in rendering mutual aid or carrying out a law enforcement function related to a criminal matter under their investigation. 706.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment

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Military Equipment - 4
approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory.

The annual military equipment report shall, at a minimum, include the following information:
(a) A summary of how the military equipment was used and the purpose of its use. (b) A summary of any complaints or concerns received concerning the military equipment. (c) The results of any internal audits, any information about violations of this policy, and any actions taken in response.
(d) The total annual cost of each type of military equipment. This will include acquisition, personnel, training, transportation, maintenance, storage, upgrades, and other ongoing costs. This will also include from what source the funds will be provided for the military equipment in the calender year following the submission of the annual military equipment report.
(e) The quantity possessed for each type of military equipment. (f) If the Department intends to acquire additional military equipment in the next year, the report will include the quantity sought for each type of military equipment. 706.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.
706.9 ISSUING AUTHORITY
Effective Date Updated Date
W. Paul LeBaron, Chief of Police March 28, 2022 September 11, 2024

Hermosa Beach Police Department
Annual Military Equipment Report
2025
This Annual Military Equipment Report provides available data for each type of military equipment approved for use by the Hermosa Beach Police Department (“Department”), from January 1st, 2025 to December 31st, 2025.

Effective January 1st, 2022, California State Assembly Bill (AB) 481 established requirements for the funding, acquisition, and use of items defined as “military equipment” by local and state law enforcement agencies (Gov’t Code § 7070(c)). This bill intended to install enforceable safeguards, including transparency, accountability, and oversight, to protect the public’s welfare, safety, civil rights, and civil liberties. AB 481 requires law enforcement agencies to adopt military equipment use policies, and to obtain approval from their governing bodies prior to purchasing, raising funds for, or acquiring military equipment (Gov’t Code § 7071(a)(1)).

On May 10th, 2022, the City of Hermosa Beach’s City Council adopted Hermosa Beach City Ordinance #22-1446 approving the military equipment use policy set forth in Department Policy #S2.31. This policy was updated to Lexipol Policy 706, and its most recent version is dated 9-11-

24. Pursuant to AB 481, the Department will publish an Annual Military Equipment Report for each type of military equipment approved by the Hermosa Beach City Council, for as long as this military equipment is available for use (Gov’t Code § 7072(a)).

The Annual Military Equipment Report must include the following information for each type of military equipment, for the immediately preceding calendar year:
(1) A summary of how the military equipment was used, and the purpose of its use:
- Remotely piloted aerial vehicles have been used throughout the year to assist patrol, traffic, and detective operations with tactical incidents and incident scene documentation. - The 2019 Chevy Tahoe, “HB01,” Watch Commanders’ vehicle is used 24/7 as the standard patrol vehicle for our on duty watch commanders. - The Lenco BearCat G2 tactical armored vehicle we share with other departments was not used by HBPD.
- Assault weapons as defined in Sections 30510 and 30515 of the Penal Code were fired during firearms training throughout the year, but were not fired during any actual tactical situations.
- Rifle ammunition was expended during training, but were not fired during any actual tactical situations.
- Projectile launch platforms and their associated munitions (12 gauge beanbag launcher & 40mm launcher) were trained with throughout the year, but were not fired during any actual tactical situations.
- See updated military equipment inventory for further information. (2) A summary of any complaints or concerns received concerning the Department’s military equipment:

- No complaints or concerns have been received concerning the Department’s military equipment.
(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.
- Internal audits of equipment are conducted throughout the year, and all military equipment is accounted for.
- There have been no reported violations of this military equipment policy; requiring no actions to be taken in response.
(4) The total annual cost for each item of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report:
- See updated military equipment inventory.
(5) The quantity possessed for each type of military equipment:
- See updated military equipment inventory.
(6) If the law enforcement agency intends to acquire additional military equipment in the next year, and the quantity sought for each type of military equipment:
- Other than rifle and non-deadly projectile ammunition purchased to recuperate expended ammunition, there are no foreseen pending acquisitions of military equipment at the time this document was submitted for review to the Hermosa Beach City Council.

Within 30 days of submitting and publicly releasing an Annual Military Equipment Report pursuant to this section, a law enforcement agency shall hold at least one well-publicized and conveniently located community engagement meeting, at which the general public may discuss and ask questions regarding the Annual Military Equipment Report, and the law enforcement agency’s funding, acquisition, or use of military equipment (Gov’t Code § 7072(b)).

The community engagement meeting related to this Annual Military Equipment Report will be publicized using the city’s existing internet based communication resources.

This year’s Annual Military Equipment Report is comprised of this document to serve as an overview, the Department’s Military Equipment Policy (706), and the Department’s Updated 2025 Military Equipment Inventory.

Corresponding documents have been attached for reference:

HBPD EXHIBIT “A” - Inventory: 1-1-25 to 12-31-25.

Landon Phillips
Chief of Police

HERMOSA BEACH POLICE DEPARTMENT

MILITARY EQUIPMENT INVENTORY
This inventory reflects the military equipment possessed or used by the Hermosa Beach Police Department as of 12-31-25.

The following equipment is necessary because there are no reasonable alternatives to these types of items that can achieve the same objective of officer and civilian safety. This equipment will help safeguard the public’s welfare, safety, civil rights, and civil liberties. This equipment is reasonably cost effective compared to available alternatives that can achieve the same or similar objectives of officer and civilian safety. The Hermosa Beach Police Department has a consistent history of complying with policies related to the below-listed types of equipment.

GC 7070(c)(1): Unmanned, remotely piloted, powered aerial or ground vehicles. 1) Item #1: Unmanned, remotely piloted, powered aerial vehicles. 2 a) Description, purposes, & capabilities: A UAS (Unmanned Aerial System) is an unmanned aircraft that is capable of sustaining directed flight, whether pre-programmed or remotely controlled, and is used for gathering information from its attached sensor(s)/camera(s). A UAS can support first responders by providing real-time information from an aerial perspective; and they can be helpful with search and rescue, high-risk tactical situations, disaster response, and video and photographic documentation of crime scenes.
2 b) HBPD operates one (1) Da-Jiang Innovations (DJI) Matrice 30 which is owned by the “Flying Lion, Inc.” drone service provider. The DJI Matrice 30’s max flight time is 41 min, its max speed is 51.45 mph, its max service ceiling above sea level without payload is 22,965 feet, and its operating temperature is -4° f to 122° f. This UAS can be “hot-swapped” landed for new batteries. 3) Quantity: One (1) Da-Jiang Innovations (DJI) Matrice 30 4) Expected lifespan: The DJI Matrice 30’s batteries can support up to 400 charge cycles. This means that the batteries can be charged and recharged up to 400 times before needing to be replaced.

The DJI Matrice 30 drone's lifespan is approximately 5 years, which varies depending on use and maintenance. Low use and proper maintenance can extend the drone's lifespan. 5) Initial costs: $0 spent by the City of Hermosa Beach. This Unmanned Aerial Systems was purchased by Flying Lion (https://flyinglioninc.com/). Flying Lion estimated they spent the following amount for the UAS: a) UAS Aircraft / Law Enforcement kit - $27,000. b) Batteries - $329.00 each x (8) included in kit.
c) Misc. Equipment - $1,000
6) HBPD has a contract with Flying Lion for $18,000 per year that allows HBPD to carry and deploy Flying Lion’s UAS. The HBPD has officers that are trained, and FAA certified, to fly UAS; and Flying Lion’s personnel are also able to remotely fly these drones while HBPD officers and/or Flying Lion’s personnel maintain line of sight. This contract also covers maintenance costs, and any other expenses that might arise.
7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policy 606 (Unmanned Aerial System).

GC 7070(c)(2): Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision.
1) Item #1: Lenco BearCat G2 tactical armored vehicle.
2) Description, purposes, & capabilities: The Lenco Bearcat tactical armored vehicle operates on a standard Ford F-550 truck chassis, which has been upgraded into a steel armored vehicle that is fourwheel drive with a V8 diesel engine and has enough space to seat 10 to 12 fully equipped officers. The BearCat can support first responders in any high-risk incident which would benefit from having a vehicle that provides a high level of ballistic protection; including active shooters, armed or barricaded suspects, hostage situations, high-risk tactical operations, and disaster response. The HBPD often utilizes the armored vehicle at highly visible locations during large events and activities in our city. It is also utilized for community engagement and relations. 3) Quantity: 1 vehicle.
4) Expected lifespan: Approximately 20 years depending on operational usage and wear. 5) Initial costs: $0 spent by the City of Hermosa Beach. On 8-7-07, the cities of El Segundo, Gardena, Hawthorne, Hermosa Beach, Inglewood, Manhattan Beach, Palos Verdes Estates, Redondo Beach, and Torrance entered into a contract whereby the City of Redondo Beach coordinated the purchase of this Lenco BearCat for no more than $245,000 using a grant from the CA Governor's Office of Homeland Security (OHS) through the FY2006 Homeland Security Grant Program (HSGP). 6) Estimated annual costs: The annual cost for routine maintenance on this vehicle is estimated at approximately $500. This amount, and any maintenance in excess of this amount, is divided equally among the participating cities; therefore, the HBPD’s annual maintenance expenditure is approximately $56, plus the cost of fuel used during the HBPD’s deployments. 7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 307 (Officer Response to Calls), 702 (Vehicle Maintenance), & 703 (Vehicle Use).

GC 7070(c)(5): Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. 1) Item #1: 2019 Chevy Tahoe, “HB01,” Watch Commanders’ vehicle. 2) Description, purposes, & capabilities: Black and white colored sport utility vehicle outfitted with equipment to help the Watch Commander lead a patrol shift and respond to emergencies. 3) Quantity: 1 vehicle.
4) Expected lifespan: Approximately 7 years.
5) Initial costs: a) Vehicle was purchased in December 2018 for $41,640.65 b) Vehicle was outfitted with equipment for $35,988.93. c) Total cost: $77,629.58.
6) Estimated annual costs: Approximately $5,000.
7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 307 (Officer Response to Calls), 421 (Watch Commanders), 702 (Vehicle Maintenance), & 703 (Vehicle Use).

GC 7070(c)(10): Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, except for standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency. 1) Item #1: Assault weapons as defined in Sections 30510 and 30515 of the Penal Code. 2) Description, purposes, & capabilities: Shoulder fired, magazine fed, semi-automatic and/or select-fire weapons using either rifle or pistol ammunition. These weapons offer a greater magazine capacity, and better accuracy at longer distances, than standard handguns or shotguns. Weapons using rifle ammunition (.223 & .308 caliber) are better able to penetrate body armor and strike targets at longer distances, and weapons using pistol ammunition (9mm) may be a better choice for close targets because they offer the same increased magazine capacity and accuracy, while offering less penetrative power through a target and/or a backdrop.
3) Quantity: 58 rifles.
(16) Colt AR-15 Carbine, 5.56mm / .223 caliber.
4) Expected lifespan: Barrel life rated to approximately 12,000 rounds. 5) Initial costs: Approximately $1,000 per rifle.
6) Estimated annual costs: Cleaning is approx. $50 or less per rifle. (26) US M16A1 rifle, 5.56mm / .223 caliber.
4) Expected lifespan: Unknown.
5) Initial costs: $0 / US Government Surplus.
6) Estimated annual costs: $0. These weapons were acquired free of charge from the US government, and then never fielded for use by our agency. They remain locked in a gun-safe, and the HBPD intends on returning them to the US Government. (7) US M14 rifle, 7.62mm / .308 caliber.
4) Expected lifespan: Unknown.
5) Initial costs: $0 / US Government Surplus.
6) Estimated annual costs: These weapons were acquired free of charge from the US government, and then never fielded for use by our agency. They remain locked in a gun-safe, and the HBPD intends on returning them to the US Government.
(1) HK MP5 submachine gun, 9mm.
4) Expected lifespan: Barrel life rated for approx. 50K+ rounds. 5) Initial costs: Unknown. Purchased over 20+ years ago. 6) Estimated annual costs: $0. This weapon is no longer fielded for use, but may be issued for specific situations or assignments.
7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 305 (Firearms).
1) Item #2: Rifle ammunition of less than .50 caliber, except for standard issue service ammunition.
2) Description, purposes, & capabilities: Rifle ammunition can strike targets at longer distances, with greater penetrative power through a target, than ammunition used by standard handguns or shotguns. 3) Quantity: Approximately 9,020 rounds.
(1,740 rounds) .223 caliber, Winchester, RA556B, 64 grain Bonded Soft Point. 4) Expected lifespan: Approximate 10-year shelf life.
5) Initial costs: Approximately $1.50 per round.
6) Estimated annual costs: TBD based on ammunition expended. (200 rounds) .223 caliber, Winchester, Q3131, 55 grain Full Metal Jacket.

4) Expected lifespan: Approximate 10-year shelf life.
5) Initial costs: Approximately $0.35 per round.
6) Estimated annual costs: TBD based on ammunition expended. (1,940 rounds) .308 caliber, Winchester, S308J, 168 grain Nosler HPBT Match. 4) Expected lifespan: Approximate 10-year shelf life.
5) Initial costs: Approximately $2.22 per round.
6) Estimated annual costs: TBD based on ammunition expended. 7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 305 (Firearms).

GC 7070(c)(14): The following projectile launch platforms and their associated munitions: 40mm projectile launchers, “bean bag,” rubber bullet, and specialty impact munition (SIM) weapons. 1) Item #1: LMT Defense, single shot, 40mm launcher; each w/Aimpoint - Patrol Rifle Optic 2) Description, purposes, & capabilities: A single shot Extended Range Impact Weapon (ERIW) launcher capable of firing a variety of ammunition, including specialty impact munitions (SIM), chemical agents, or combined SIM and chemical agent rounds. These weapons offer a non-deadly alternative when responding to a threat at a distance beyond the reach of a baton or Taser. Each launcher is equipped with an electronic red dot optic for better accuracy. These 40mm launchers replaced the older Defense Technology 40mm launchers.
3) Quantity: 8 launchers
4) Expected lifespan: No lifespan indicated by manufacturer 5) Initial costs: Approximately $1,642.40 each with optic. 6) Estimated annual costs: $0
7) Source of funding: HBPD Asset Seizure/Forfeiture Budget 8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 302 (Control Devices and Techniques). 1) Item #2: Defense Technology, single shot, 40mm projectile launchers. 2) Description, purposes, & capabilities: A single shot Extended Range Impact Weapon (ERIW) launcher capable of firing a variety of ammunition, including specialty impact munitions (SIM), chemical agents, or combined SIM and chemical agent rounds. These weapons offer a non-deadly alternative when responding to a threat at a distance beyond the reach of a baton or Taser. These launchers were replaced for standard carry by the newer LMT Defense launchers; however, they are being retained in our inventory in case operational requirements someday necessitate their deployment. 3) Quantity: 2 launchers.
4) Expected lifespan: No lifespan indicated by manufacturer. 5) Initial costs: Approximately $985.00 each.
6) Estimated annual costs: $0.
7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 302 (Control Devices and Techniques). 1) Item #3: “Bean bag” shotgun.
2) Description, purposes, & capabilities: This is a standard Remington Model 870, 12-gauge shotgun, which has been modified with an orange stock and orange fore-end and is designated for use with only non-deadly bean bag ammunition.
3) Quantity: 3 “Bean bag” shotguns.

4) Expected lifespan: The Remington 870 Police Magnum has a limited lifetime warranty. 5) Initial costs: Repurposed patrol shotguns. They would cost approx. $500 to $1,000 new. 6) Estimated annual costs: $0.
7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 302 (Control Devices and Techniques). 1) Item #4: 12 gauge “bean bag” ammunition.
2) Description, purposes, & capabilities: This ammunition offers a non-deadly alternative when responding to a threat at a distance beyond the reach of a baton or Taser, and it can be used in limited instances during civil unrest when objectively reasonable to defend against a threat to life or serious bodily injury, or to bring an objectively dangerous and unlawful situation safely and effectively under control. See Penal Code 13652.
3) Quantity: Approximately 175 rounds.
(25) Defense Technology, 3027, 12-gauge beanbag, “Drag Stabilized Round.” 4) Expected lifespan: 5-year warranty. 5-year shelf life. 5) Initial costs: Approximately $5.11 per round.
6) Estimated annual costs: TBD based on ammunition expended. (150) Safariland, 12-gauge beanbag, “Drag Stabilized Round” (same as DT 3027). 4) Expected lifespan: 5-year warranty. 5-year shelf life. 5) Initial costs: Approximately $5.11 per round.
6) Estimated annual costs: TBD based on ammunition expended. 7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 302 (Control Devices and Techniques). 1) Item #5: Rubber Bullets and Specialty Impact Munition (SIM) weapons ammunition. 2) Description, purposes, & capabilities: This ammunition offers a non-deadly alternative when responding to a threat at a distance beyond the reach of a baton or Taser, and it can be used in limited instances during civil unrest when use would be objectively reasonable to defend against a threat to life or serious bodily injury, or to bring an objectively dangerous and unlawful situation safely and effectively under control. See Penal Code 13652.
3) Quantity: Approximately 43 rounds.
(177) Defense Technology, 6325, “eXact iMpact” 40mm blue sponge SIM round. 4) Expected lifespan: 5-year warranty. 5-year shelf life. 5) Initial costs: Approximately $25.31 per round.
6) Estimated annual costs: TBD based on ammunition expended. (12) Defense Technology, 6097, “Stinger” 40mm (18x60-Cal. Rubber Balls) SIM round. 4) Expected lifespan: 5-year warranty. 5-year shelf life. 5) Initial costs: Approximately $27.12 per round.
6) Estimated annual costs: TBD based on ammunition expended. 7) Source of funding: HBPD Budget.
8) Authorized uses, legal and procedural rules governing use, and training requirements: Refer to HBPD Policies 300 (Use of Force) and 302 (Control Devices and Techniques).

APPROVED.

Landon Phillips
Chief of Police

APPROVAL OF MILITARY

EQUIPMENT USE BY THE HERMOSA

BEACH POLICE DEPARTMENT
PURSUANT TO AB 481
February 3, 2026

EXECUTIVE SUMMARY
• Pursuant to Assembly Bill 481, City Council is
required to review and renew the Military Use
Policy, renew the ordinance at a regular
meeting, and receive an annual report
prepared by HBPD to continue the use of military
equipment.

BACKGROUND
• Effective January 1, 2022, CA State AB 481
established requirements for funding,
acquisition, and use of items defined as
“military equipment” by local and state law
enforcement agencies.
• Requires law enforcement agencies to adopt
policies for military equipment use, raising
funds, or acquiring military equipment.

BACKGROUND
• At its April 26, 2022 meeting, City Council
introduced and waived the first reading of
Ordinance 22-1446 adopting a Military Use
Equipment Policy pursuant to AB 481.
• Since then, the Ordinance and the Annual
Military Equipment has been reviewed and
renewed.

DISCUSSION
• Since the adoption of Ordinance No. 22-1446, HBPD
has not received community complaints, concerns, or
initiated internal investigations regarding its use.
• Policy 706 – Military Equipment was posted on the
City’s website on 9/11/24 and remains available for
public view.
• The Annual Military Equipment Report covers the
period of January 1, 2025 to December 31, 2025.
o On March 5, 2025, HBPD purchased eight 40mm Tactical
Single Launchers

RECOMMENDED ACTIONS

1. Review and renew Ordinance No. 22-1446, an
ordinance of the City of Hermosa Beach
adopting Military Use Equipment, in accordance
with Assembly Bill 481; and

2. Receive and file the Annual Military Equipment
Report.

City of Hermosa Beach | Page 1 of 1
Meeting Date: February 3, 2026
Staff Report No. 26-CMO-007
Honorable Mayor and Members of the Hermosa Beach City Council

TENTATIVE FUTURE AGENDA ITEMS
Attached is the current list of tentative future agenda items for Council’s information.

The tentative future agenda provides a preliminary preview of topics planned for discussion at upcoming City Council meetings over a specified period, typically the next three months. The items listed in this document are "tentatively" scheduled, meaning they are subject to change and should not be considered final until the official agenda for each meeting is posted. This document is a work in progress and offers a glimpse into the City's priorities and planned discussions, allowing stakeholders to anticipate and prepare for potential topics of interest.

Key Features of a Tentative Future Agenda Document:

1. Tentative Schedule: Each agenda item is assigned a tentative date, indicating when it is expected to be discussed. These dates are provisional and may be adjusted based on various factors.

2. Work in Progress: The document is continuously updated as new items emerge, priorities shift, or additional information becomes available. This flexibility ensures City Council can address the most pressing issues in a timely manner.

3. Transparency and Communication: By publishing a tentative future agenda, the City aims to maintain transparency with residents, businesses, and other stakeholders. It helps the community stay informed about potential topics of discussion and provides an opportunity for public engagement and preparation.

4. Fluid Scheduling: The scheduling of agenda items is fluid until the official agenda for a specific City Council meeting is posted. Changes can occur due to various reasons, such as new developments, additional preparatory work required, or changes in workload or priority.

Attachment:

Tentative Future Agenda Items

January 29, 2026
Honorable Mayor and Members Regular Meeting of
of the Hermosa Beach City Council February 3, 2025

TENTATIVE FUTURE AGENDA ITEMS
FEBRUARY 24, 2026 @ 5:00 PM INITIAL

DATE CLOSED SESSION
FEBRUARY 24, 2026 @ 6:00 PM

PRESENTATIONS

ELECTION OF MAYOR AND MAYOR PRO TEMPORE

CONSENT CALENDAR
City Council Minutes City Clerk Ongoing
Check Registers Administrative Services Director Ongoing Cash Balance Report for December 2025 Administrative Services Director Ongoing Revenue Report, Expenditure Report, and CIP Report by Project for December 2025
Administrative Services Director Ongoing
City Treasurer’s Report for January 2026 City Treasurer Ongoing Approval of Agreement with the Arc South Bay for Use of Community Center Rooms 15 and 17
Parks and Recreation Director Staff Request
Jan. 29, 2026

PUBLIC HEARINGS
Approval of Impact Level III New 2026 Special Event: After Dark Tour LA 2026 (To be continued to March 10, 2026)
Parks and Recreation Director Staff Request
Jan. 28, 2026

INFORMATIONAL ITEMS
Los Angeles County Fire and Ambulance Monthly Report for December 2025 Emergency Management Coordinator
Ongoing
Parking Citation and Revenue Report – January 2026 Senior Management Analyst Ongoing Police Crime Statistics for January 2026 Police Chief Ongoing Action minutes of the Parks and Recreation Advisory Commission Meeting of January 6, 2026
Parks and Recreation Director Ongoing
(RECEPTION TO FOLLOW MEETING)

2 MARCH 10, 2026 @ 5:00 PM INITIAL

DATE CLOSED SESSION
MARCH 10, 2026 @ 6:00 PM

PRESENTATIONS

PROCLAMATION RECOGNIZING RED CROSS MONTH
PROCLAMATION RECOGNIZING WOMEN’S HISTORY MONTH

CONSENT CALENDAR
City Council Minutes City Clerk Ongoing
Check Registers Administrative Services Director Ongoing Cash Balance Report for December 2025 Administrative Services Director Ongoing Revenue Report, Expenditure Report, and CIP Report by Project for December 2025
Administrative Services Director Ongoing
City Treasurer’s Report for February 2026 City Treasurer Ongoing Public Convenience or Necessity Finding Community Development Director Staff Request Jan. 29, 2026

PUBLIC HEARINGS
Zoning Text Amendment - Accessory Dwelling Units Community Development Director Staff Request Jan. 29, 2026
Approval of Impact Level III New 2026 Special Event: After Dark Tour LA 2026 (Continued from February 24, 2026)
Parks and Recreation Director Staff Request
Jan. 28, 2026

MUNICIPAL MATTERS
Possible support for the establishment of the South Bay Housing Trust Community Development Director Staff Request Dec. 22, 2025
Informational Item:

Assessment of cost, staffing, operational requirements for PD to establish a more consistent/visible presence along the Strand, beach, and parks.

Designated officers focused on visibility, proactive engagement, education, and enforcement in our most heavily used public spaces. (supported by: Jackson and Detoy)
AND
Discussion of contract officers as discussed at the Safety Forum. (supported by: Saemann and Keegan)
AND
Discussion of PD resources that have been devoted to safety on The Strand and plan for future allocation of PD resources on The Strand. (supported by: Francois and Keegan)
Police Chief Council Direction
Oct. 28, 2025
and
Dec. 9, 2025
and
Jan. 27, 2026
Award of Contract to Geosyntec for Professional Stormwater Consulting Services
Environmental Programs Manager Staff Request
Nov. 20, 2025
FUTURE AGENDA ITEMS – CITY COUNCIL
Future Agenda Items City Manager Ongoing

INFORMATIONAL ITEMS
Action minutes of the Parks and Recreation Advisory Commission Meeting of February 10, 2026
Parks and Recreation Director Ongoing
Parking Citation and Revenue Report – February 2026 Senior Management Analyst Ongoing

3 MARCH 24, 2026 @ 5:00 PM INITIAL

DATE CLOSED SESSION
MARCH 24, 2026 @ 6:00 PM

CONSENT CALENDAR
City Council Minutes City Clerk Ongoing
Check Registers Administrative Services Director Ongoing Cash Balance Report for January 2026 Administrative Services Director Ongoing Revenue Report, Expenditure Report, and CIP Report by Project for January 2026
Administrative Services Director Ongoing
City Treasurer’s Report for March 2026 City Treasurer Ongoing PUBLIC HEARINGS – 6:30 PM
Zoning Code Update - Administrative Procedures Community Development Director Staff Request Jul. 23, 2025

MUNICIPAL MATTERS
Dog Park Proposal Review (supported by City Council) Parks and Recreation Director Council Direction Mar 11, 2025
FUTURE AGENDA ITEMS – CITY COUNCIL
Future Agenda Items City Manager Ongoing

INFORMATIONAL ITEMS
Action minutes of the Public Works Commission Meeting of January 21, 2026
Parks and Recreation Director Ongoing
Los Angeles County Fire and Ambulance Monthly Report for January 2025 Emergency Management Coordinator
Ongoing
Police Crime Statistics for February 2026 Police Chief Ongoing Action minutes of the Planning Commission Meeting of February 17, 2026 Community Development Director Ongoing APRIL 14, 2026 @ 5:00 PM INITIAL

DATE CLOSED SESSION
APRIL 14, 2026 @ 6:00 PM

PRESENTATIONS
RECOGNIZING APRIL AS EARTH MONTH AND APRIL 22 AS EARTH DAY

CONSENT CALENDAR
City Council Minutes City Clerk Ongoing
Check Registers Administrative Services Director Ongoing Cash Balance Report for February 2026 Administrative Services Director Ongoing Revenue Report, Expenditure Report, and CIP Report by Project for February 2026
Administrative Services Director Ongoing
City Treasurer’s Report for April 2026 City Treasurer Ongoing FUTURE AGENDA ITEMS – CITY COUNCIL
Future Agenda Items City Manager Ongoing

INFORMATIONAL ITEMS
Action minutes of the Parks and Recreation Advisory Commission Meeting of March 3, 2026
Ongoing
Parking Citation and Revenue Report – March 2026 Senior Management Analyst Ongoing

4 PENDING NEW ITEMS

STATUS /

TENTATIVE MEETING DATE
(Updated 12/29/25)
Approval of the Municipal Lease Policy
Initiated by: Staff Request Jun. 12, 2018
Parks and Recreation
Director
Awaiting professional building
assessment of the Kiwanis
Building, Rotary Building, and
Lawn Bowling Club to
determine the level of
maintenance, repairs, and
future upgrades that may be
needed and required by the
City.

Landscape and Street Lighting District Assessment Adjustment (mail-in election authorization)
Initiated by: Council Direction Jul. 9, 2019
Public Works Director Pending staff availability. If
council agrees to advance the
adjustment, it will need to go to
a citywide ballot in compliance
with Proposition 218.

Emergency Services Municipal Code Chapter 2.56 Update Emergency Management
Coordinator
Waiting for State to review
proposed language changes
Consideration of licensing agreement/fees for use of City logo Initiated by: Council Direction Jun. 9, 2020
City Attorney The City will develop a
licensing agreement for
commercial uses of the City
logo as part of a comprehensive
Administrative Memorandum
(AM) on City Branding and
Logo Use by City Staff. City
staff will begin drafting the
AM after finalizing the City’s
style guide and filing its “Intent
to Use” trademark application
for the City logo with the
USPTO. As part of developing
a Licensing Agreement for the
Commercial Use of the City
Logo, staff will establish a
process for reviewing and
handling these requests. This
process will likely include the
negotiation of royalties and as
well as the preparation of a
staff report to obtain Council
approval to enter into the
agreement. Only after the City
receives the issuance of a
Notice of Allowance from the
USPTO can it begin approving
applications for commercial
uses of the logo.

Parks, Recreation, and Community Resources Advisory Commission Volleyball Court Use Subcommittee was formed to review all aspects of the beach volleyball courts located in the residential area Initiated: 2021
Parks and Recreation
Director To be completed in the first
quarter of 2026.

PLAN Hermosa 5-year check-in on milestones
(Supported by Massey, Campbell, Armato, Jackson)
Initiated by: Council Direction October 26, 2021
Community
Development
Director/Environmental
Program Manager
The next update to City
Council will be in 2026
Consideration of rules that would govern operation of off-sale alcohol establishments in downtown and consideration of queuing for on-sale alcohol establishments. (supported by Massey, Saemann and Detoy) Initiated by: Council Direction June 13, 2023
Community
Development/Police
Chief/Deputy City
Manager
Ordinance to be established to
address items.

Citywide Engineering and Traffic Survey and review of provisions in California Assembly Bill 43 that are anticipated to become effective on or about June 30, 2024.

Public Works Director Pending staffing availability
and completion of other
previously requested future

5 Initiated by: Unanimous Council Direction July 25, 2023 agenda items. Targeting Summer 2026.

Request Public Works Commission to review fines and other consequences involved with illegal tree removal and return to Council as an action item for discussion and deliberation. (supported by Saemann, Francois, Detoy) Initiated by: Council Direction August 13, 2024
Public Works Director Pending staffing availability
and completion of other
previously requested future
agenda items.

Explore Best Practices for Undergrounding. (supported by: Detoy, Saemann, and Jackson)
Initiated by: Council Direction November 12, 2024
Public Works Director Pending staffing availability
and completion of other
previously requested future
agenda items. Staff will also
need to request funding in the
future budget cycle to support
bringing in appropriate
consulting expertise on this
item.

Refer the public pool discussion to the Parks, Recreation, and Community Resources Advisory Commission for review prior to City Council. (supported by Saemann, Detoy, and Jackson)
Initiated by: Council Direction June 24, 2025
Parks and Recreation
Director Pending Commission Review
Request for Staff to prepare an item outlining the Hermosa Beach Lawn Bowling Club’s (HBLBC) operations, including maintenance, membership, and legal considerations relevant to its current use and management, and to have the item be presented to the Parks, Recreation, and Community Resources Advisory Commission prior to City Council.
(supported by Jackson, Detoy, and Keegan)
Initiated by: Council Direction June 24, 2025
Parks and Recreation
Director/Public Works
Director/City Attorney To be reviewed by Parks & Rec
Commission in February 2026
and by City Council in March
2026
Consider adding another accessible mat, extending the "T" to the water line, and seek grant funding to study a permanent solution to the current accessible mat setup.
(supported by: Francois, Saemann and Jackson)
Initiated by: Council Direction August 26, 2025
Public Works Director Pending staffing availability
and completion of other
previously requested future
agenda items. Targeting early
Spring 2026.

Agendize discussion on Rosenberg’s Rules of Order and Robert’s Rules of Order at the next City Council Retreat
(supported by: Detoy and Jackson)
Initiated by: Council Direction September 9, 2025
City Manager The next City Council Retreat
will be scheduled once a
permanent City Manager is
appointed
Informational Item to discuss identification requirements for alcohol-serving establishments, and if feasible, include input from the Alcoholic Beverage Control, and include available technology that is available to combat fake identifications
(supported by: Jackson and Detoy)
Initiated by: Council Direction September 9, 2025
Community
Development
Director/Planning
Commission
Informational Item expected in
March 2026.

Informational Item for Public Works Commission to study maximizing and expanding the street parking inventory through the analysis of the City's red curb standard to include studying golfcart parking spaces for reduced streets and studying the Driveway Parking Permit Program.
(supported by: Jackson and Saemann)
Initiated by: Council Direction September 9, 2025
Public Works Director Pending staffing availability
and completion of other
previously requested future
agenda items.

Informational Item to review the feasibility of collecting Transient Occupancy Tax (TOT) for short-term vacation rentals that are out of compliance, and of collecting unpaid fines from illegal short-term vacation rentals.
(supported by: Jackson and Saemann)
Initiated by: Council Direction September 9, 2025
Administrative Services
Director Staff will come back to Council
in the next few months for an
update.

Informational Item to delineate available options for licensing, registration, or other regulatory tools to support e-bike safety and compliance. (supported by: Jackson and Saemann)
Initiated by: Council Direction December 9, 2025
City Attorney/Police
Chief

CITY MANAGER UPDATE
February 3, 2026

Update for February 3, 2026
• Residential Parking Permits: On Sale Now
➢ Permits may be purchased online (fastest option), by mail, via the dropbox outside City Hall or in-person on Tuesdays and Wednesdays from 7 am to 3 pm • Presidents Day Holiday – Monday, Feburary 16
➢ City Hall and Community Center Offices closed. Police and Public Works will remain available. Police non-emergency line is 310-524-2750. ➢ Street sweeping and PCH parking enforcement suspended. All other parking regulations remain in effect.
➢ No construction work permitted
➢ Trash will be collected as scheduled